Scope defines a boundary or context for sets of economic events, commitments, and intents. This can be for purposes of:
- distributing income
The scope is where work is done, where processes live, where value is created and exchanged. Economic events and commitments can reference an organization (an agent) as an entity that defines their scope. It may be a formal or informal organization, and will include the network(s) themselves. Or economic events and commitments can reference a geographic area (a city, a bioregion, etc.), or a community, or a loose network, or a less formal shorter lived project, or any other bounded concept that is useful for grouping economic events.
An economic event or commitment can reference any number of entities to define scopes it belongs to. It is not required that events, commitments, or intents designate a scope. In fact, sometimes the scope is the same as the provider or recipient agent. Or sometimes there is no useful scope.
A scope is different than an agreement, although sometimes something that is a scope will have agreements that define some of the economic governance of that scope.
For functions that require traversing value flows, often the value flow will cross from one scope to another. For example, perhaps another network or organization makes a component that you consume when making your product. When this happens, there are some options.
- Standing agreements can govern what happens.
- A conversation for action might be required to determine what should occur for the specific instance.
Accounting is usually done for an agent or other bounded scope. Where a computer system supports one enterprise, this is simple. When a computer system supports many organizations or there is a distributed network of economic activity, it is useful to be able to segregate the accounting using scope. It basically enables multi-party accounting in a networked scenario.
Sometimes a generic recipe will cross scope boundaries for particular agents. For example one agent could produce a resource that consumes a component made by another agent. In this case, can the first agent schedule the production of the component by the second agent? Possibly yes, if there are agreements in place for that, and the first agent has verified that inventory does not already exist. Or possibly, based again on agreements, the first agent can assume the second agent will provide the component, with the second agent taking responsibility for checking if it is onhand, and if not, scheduling it for production. Or possibly, the first agent plans only to source the component in some way.
Some organizations distribute income backwards on value flows, based on people's contributions to the resources that generated the income. When traversing the value chain, it is useful to know when the traversal has crossed a scope boundary, because it is possible that the rules for distributing the income will change for a different scope. If the rules change or the rules are unknown, the income can be passed on to the other scope for them to distribute.