The boundary of the organization defines what is inside the organization and what is outside.

The user must define the boundary of the organization for an OrgCon  analysis as appropriate for the situation.

For a divisional manager his/her own division might be the relevant organization (unit of analysis) with other divisions within the same legal entity, may be considered outside and part of the environment. Similarly, any organizational unit: department, region, group, team, etc. can be included within the organization for design and managerial purposes.

Within a boundary, you may include sub-units of a larger legal entity or an organization spanning several legal entities. This situation would typically occur in a joint venture, a strategic alliance, a partnership, a shared project, or an industry task force. In these situations, the organizational boundary spans a number of entities that might be separate organizations for other purposes.

The inside, the boundary, and the outside together define the unit of analysis. In the model they are interrelated: to change one, changes the others. If these elements are defined in a fuzzy manner, the result is a confusing diagnosis, which cannot be interpreted.