Relationships

General

For our purposes, a Relationship describes how any two Entities/People/Places interact with each other during the conduct of business or for which recognition of the Relationship can aid in performing analysis of business data. In addition to the actors involved in a Relationship, we also limit the scope of any single Relationship to some specific area of business concern or purpose.

A well defined Relationship describes the terms, conditions, and understandings of the two parties involved in the Relationship when transacting business in the subject area of the Relationship.

Refined Definition

More specifically, a Relationship as defined in our model is the uni-directional Relationship of a Subject to an Object. A Subject is the first party Entity, Place, or Person. The Object is the second party Entity, Place, or Person. The Relationship between the Subject and Object indicates a Relationship of a specific business nature or “kind”. We can therefore say: the Subject has a Relationship of a certain kind with the Object.

Consider an example Relationship where “Our Co.” sells products to “Their Co.”. In this case “Our Co.” would be the Subject (seller) , the Relationship in question would be a Sales Relationship, and the Object (customer) in the Relationship would be “Their Co.”.

We can see that both Subject and Object have well defined and distinct roles relative to the Relationship. It should also be obvious that even though “Our Co.” sells products to “Their Co.”, it doesn’t necessarily mean the reverse is true and thus the Relationship is uni-directional; if “Their Co.” also sold products to “Our Co.”, we would have to acknowledge that as a different Relationship that was parallel to the Sales Relationship described above.

Subordinate Relationships

Defined Relationships between Entities/People/Places can also act as either the Subject or Object of a secondary or “Subordinate Relationship” in some cases.

To illustrate this let’s consider a different hypothetical scenario where “Our Co.” buys products from “Their Co.” This would constitute a Purchasing Relationship where the Relationship Subject (buyer) is “Our Co.” and “Their Co.” is the Relationship Object (vendor).

For a variety of reasons, some businesses sell their accounts receivable to a kind of third party company known as a “factoring company”. The factoring company will buy the accounts receivable of the vendor at a discount, generally speaking, and then the factoring company receives the full payment from the customer and accepts the risk of non-payment by the customer.

Let’s extend our Purchasing Relationship scenario such that “Their Co.” sells their accounts receivable to “Collect Co.”, a factoring company. In this case, while “Our Co.” will purchase products from “Their Co.” under the terms established by the Purchasing Relationship, when “Our Co.” pays the invoice for the product, they’ll pay it to “Collect Co.”

This is where the Subordinate Relationship exists. The Purchasing Relationship itself now extends to a third party for a narrow, but important aspect of purchasing. We can allow for this in our model by defining a “Payables Relationship” between the Purchasing Relationship (Relationship Subject) and the Entity “Collect Co.” (Object Relationship).

We wouldn’t directly establish a Relationship between “Our Co.” and “Collect Co.” because the Relationship is unique to the Purchasing Relationship between “Our Co.” and “Their Co.” and isn’t generalizable beyond that Purchasing Relationship, even if other “Our Co.” vendors use the same factoring company.

Roles

So far we’ve discussed rich Relationships in which the description of the Relationship itself requires us to specify the nature of the Relationship’s terms, conditions, and understandings in addition to recognizing that the Relationship exists. But not all Relationships need to be thought of in such detail. Some Relationships are simple enough that we can just recognize that the Relationship exists without greater embellishment. In our mental model we’ll use the term Roles to refer to Relationships which are of this simple variety.

Most frequently Roles will relate Subjects made of Entities, Places, or rich Relationships to People acting as Relationship Objects. These Roles can be simple because their full meaning will require contextual inferences from the Subject of the Role. For Example, a Purchasing Relationship may require us to know who our account manager is with our vendor.

Simultaneity

Because we limit the scope of our Relationship and Role definitions to a single purpose, we should expect that between any two Subject/Object actors, that multiple Relationships may exist between them at the same time. Less common, but still feasible for some kinds of Relationships is the possibility for more than one Relationship of the same kind to exist.

• A Subject Entity may simultaneously have a Sales Relationship with an Object Entity in some transactions while having a Purchasing Relationship with the same Object Entity in other transactions.

• An Object Entity representing a large company or organization may have divisional or departmental purchasing organizations which act fully independently. Each of these divisional purchasing organizations may also have their own, independent Sales Relationship with the Subject Entity as the terms, conditions, and people involved in transactions may vary across the Object Entity’s divisions.