Adaptive Technologies and Business Integration Social, Managerial and Organizational Dimensions by zaj33745

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									       MGT. 5391
Open Systems Theory (OST)
      An Overview

       Session 2a

   Dr. Barry A. Macy
                   Inputs                                                                                                          Outputs
                 Environmental
                                                              TRANSFORMATION
                    Drivers                                      (Execution)                                                        Outcomes/Results From High
                                                                                                                                     Performance / Exemplar
                  1. External/ Global
                     Business                                                                                                             Organizations
                     Environment (15)
                                                      THE ORGANIZATION DESIGN PUZZLE (9)
                  2. Internal                                                       1. Macro                                             Organizational
                     Businesses                                                    Organizational
                     Environment :                                                                                                      Effectiveness (5):
                                                                                   Structures (4)
                     Corporate &                                                                                                         The Balanced
                     Business (8)                      8. Shared Leadership                                                            Scoreboard (KPI’s)
                    A. Core                              & Decision Making                                2. The Job/Work
                       Capabilities &
                       Competencies
                                                     7. Recognition and                                                           1. Customers
                    B. Culture(s)
                                                     Financial Reward                 “FIT”                  3. Technologies
                                                          Systems                                                                 2. Employees
                                                        6. People and
                    C. Vision Direction                                                                 4. Information and        3. Organizational     5. Financial/
                       (12): (VDSP)                     Human Resource
                                                                                                            Knowledge Systems        Innovation            Business
                                                           Systems
                                                                                                                                  4. Societal
                    D. Organizational
                       Strategies:                                          5. Micro: Team Design


                    E. Goals/
                       Objectives (for
                       the 5 KPI’s)                  9. Organizational Processes (Individual, Group, Organizational and
                                                         Business Processes (Total Quality, Business Processes, etc.)
                    F. Business Models

                    G. Mutuality: Sup-
                       pliers,Customers                                                         (Feedback)
                       & Employees &
                       (Union – if
                        present)
                                                                             Figure 1.
                    F. Transformation/           Overall Class Model: Overall open systems theory (OST) model for
                       Change Processes
                                                               Organizational Analysis and Diagnosis
________________
Source: Modified from Macy, et al., (1995). Presented to the National Academy of Management, Vancouver, Canada, August.         D/Macy Class/Class Master 2 #101
                                             Enterprise Development Model                                                                                1
                                                                                                       Global, Regional,
       Strategic                  Technologies
                                                       Global           Global          Global         & Local Markets           Core
                                                                                                                                              Ecology
                                                      Economy          Societies        Politics             and               Competition
       Context                                                                                          Key Customers

                                               Alignment Challenge: Reading, Understanding,
                                               and Valuing the Strategic Context



      Navigation                   Strategy/Strategic Intent         Competencies
                                                                                             Market Position &
                                                                                                                      Alliances/Formal
                                                                                              Key Customer                                   Financing
      System                          &Vision Direction              & Capabilities           Relationships             Partnerships


                                                   Design Challenge: Enacting the Intentions
                                                                                     “Fit”

                                                                                                        Organizational Design
                                                     Market Offerings                                       •Basic Units
                                                   •Products/Mix/Price                              (GBU’S, SBU’S, P/L Centers)
                                               •Services (talent, capabilities)                              •Geography
                                                    •Unique Attributes                                   •Value Chain: Both              Management
                                             (speed, costs, quality, talent, etc.)                    Demand and Supply Sides            Challenge:
       Firm/Business                                     •Channels                                      •Processes/Procedures
                                                                                                                                         Achieving
                                                                                     “Fit”                   •Structures
       Management                                                                                     •Integration Mechanisms            excellence in
                                                                                                                                         individual
       Systems                                         Technical Systems
                                                     •Information Systems                          Human Systems and Leadership          and team
                                                      (CAD,CAM, SAF, etc.)                                      •Culture                 elements and
                                                  •Production methods/layout                                   •Selection                their
Source: B.A. Macy, Successful Strategic                     •R&D                                   •Staffing/Training/ Development
                                                                                                             •Work Design
                                                                                                                                         interactions
Change, San Francisco, CA: Berrett-Koehler         •Supporting Technologies
Publishers (forthcoming).                                                                                       •Teams
          TRANSFORMATION
 INPUT       PROCESS /      OUTPUTS
           KEY INTERRUPTS




             FEEDBACK




The Basic Open Systems (OST) Model
   An Organization As A System
    Inputs                      Transformations         Outputs/
                •Capabilities                           Results
Resources                      • Rewards/Recognition
                •Competencies          •Skills
Environment
                 •Vision           •Processes
                                                       •Customers
• Market &        Direction
  Customers      •Culture(s)
                                                       •Employee
                                    •Systems
• Competitors                                           Engagement
• Regulators    •Strategic Intent •Technologies

                •Strategies         •Structures        •Innovation
• Other                         •Shared Leadership/    •Societal
               •Success
  Stakeholders Factors/           Style
                 Goals          •Decision Making/
                                                       •Financial/
• Suppliers     •Business         Participation
                                                       Business
                 Models
History           •Etc.             Infrastructure
         Open System Theory
                     Business Environment             • Rapid change
                                                      • Turbulence
                            Suppliers                 • Unpredictability
                Customers               Competition
                                    Reward
    Senior                 T.Q.M   & Recog.   Regulatory
  Management                         Sys. H.R. Bodies
                                           Sys.


                IS        Technical System        Technologies

Input                  Transformation              Output
• Materials                                        • Product
                             Processes
• Information                                      • Service
• People
                            Social System         People

                Renewal                     Groups Teams
                Process                     (Micro Structure)
                              Feedback
 Open Systems Theory
 Why Org. Models Are Useful :
 Predict Change and Diagnosis
           Problems!
• The need to understand Causes of behavior

• Problems of existing models

• Information as a system component
         SOME COMMON PROBLEMS WITH
          TRADITIONAL ORGANIZATIONS
A. INADEQUATE RESPONSE TO THE BUSINESS
  ENVIRONMENT
B. OVER-SPECIALIZATION / FUNCTIONALIZATION
C. DIFFICULTY WITH COORDINATION / CONTROL
D. UNDERUTILIZATION OF HUMAN RESOURCES
E. INEFFECTIVE DESIGN/IMPLEMENTATION OF
  TECHNOLOGIES
F. INADEQUATE PROCESSES FOR MAKING CHANGE/
 TRANSFORMATION
G.POOR TO AVERAGE CUSTOMER SATIFACTION
H. NOT GROWING!!! NOT PROFITABLE!!!
 Assumptions/Characteristics
      of Organizations

• Dynamic/ Feedback

• Org. behavior Exists at multiple levels

• Behavior does not occur in a vacuum

• Org. are social-technical systems
          Dimensions of System Inputs
                                                                                                               Past Managerial
          Environment                                                    Resources                                Behavior
     External environment                                                 Capital                          Goals/Objectives (for the KPI’s)
                                                                                                           - explicit goals
     - markets
                                                                          Raw Materials                    - implied goals of the
     - government                                                                                            managerial subsystem
     - financial institutions                                             Technologies
     - competitors                                                                                         Plans and policies
     - suppliers                                                          People
     - labor unions                                                                                        - strategies
     - the larger culture, etc.                                           Intangibles
     Internal environment                                                                                  Critical decisions in the
                                                                                                           past
     - the immediate supra-systems
       Environmental                                                                                       Core Values/Philosophies/
        characteristics                                                                                    Principles (Vision Direction)

       - stability
       - homogeneity
Barry A. Macy, Successful Strategic Change, Berrett-Koehler Publishers, San Francisco, CA. (forthcoming)
  External Environmental Analysis
The external environmental analysis process should be
conducted on a continuous basis. This process includes
four activities:

Scanning      Identifying early signals of environmental
              changes and trends

Monitoring Detecting meaning through ongoing observations
              of environmental changes and trends

Forecasting Developing projections of anticipated outcomes
              based on monitored changes and trends

Assessing     Determining the timing and importance of
              environmental changes and trends for firms'
              strategies and their management
 Dimensions of Transformation Components
    Tasks/Jobs/         Individuals/People/        Organizational                  Informal
    The Work            Human Resources            Arrangements                   Organization
- extent and nature     Demographics          Macro-structure                 Group Functioning
  of interdependence                           - Control & Information        - informal as distinct
                        - education                System                       from formal structures
- level of complexity   - age                  - division of labor            - communication
                        - skill levels         - grouping of tasks and          patterns
    (required skill)
                        - ethnic background      individuals
                                                                              - norms, values
                                               - anatomical dimensions
- certainty             - urban/rural                                         - informal goals
                                                 of organization
                        - etc.                 - centralization               - actual decision-
- autonomy/control                             - formalization                  making
                        Personality
                                               - decision-making              - power distribution
                        differences            - integrating mechanisms
- extent of feedback                                                          Inter-group relations
                                               - physical location of areas
                        - need strength        - Leadership
- variability                                                                 - information flow
                        - self-esteem
                                                                                (quality)
                        - internal/external
- meaning fullness                             Political processes            - conflict / cooperation
                        - perceptual biases
                                               and structures                   perceptions
                           etc.
- informational
   requirements                                - networks, cliques,
                                                 coalitions
               Systems Model
Inputs   2 Key Transformations                        Outputs
         1.   “Macro” Structures (4)
              a. G.O./Corp. Office
              b. GBU/SBU
              c. Value Chain
              d. Business Models

         9. Organizational Processes: TQM, Value Chain, Etc.
                         OST
          Eight TRANSFORMATION Categories - 1
MACRO STRUCTURE
1. CORPORATE Office
2. S.B.U. (Global and Regional)
   and Business/Product Teams
3. Value Chain: Demand and
     Supply sides
4. Business Model
5. Enterprise Teams

Concepts:
•Coordination/interface
• Communication
• Power & Control (Decision Making)-
   Redistribution of Power & Control
• Reporting
• Capabilities
• Conflict
• Complexity
• Information
• Centralization
• Span of Control
• Division of Labor
•Vertical and/or Horizontal
• Others
              Shared Leadership and
                 Decision Making


• Everyone is expected to be
  a leader (work without) a
  Supervisor/Manager/Boss)

• Everyone is expected to perform
  Leadership roles.

•Re-distribution of Power and
  Control (Shared Decision
  Making)
•Others
    OPEN SYSTEMS ASSESSMENT MODEL:
 SOME OTHER OUTCOMES / RESULTS / OUTPUTS
                 Three types of Results       Organizational     Effectiveness
KEY
STAKEHOLDERS     FIRST ORDER              SECOND ORDER THIRD ORDER
                 • Productivity           •   Profitability      • Market Share
BUSINESS         • Product/Service        •   Innovation         • Stock Price
                   Quality                •   Return on Assets
                 • Costs                  •   ROCI
                 • Time to Market
                 • Delivery

                 Behaviors:                   • Trust
PEOPLE /         • Lateness                                       • Employees’
                                              • Flexibility
EMPLOYEE’S       • Absences                   • Commitment
                                                                    Growth &
                 • Accidents (Safety)                               Development
QUALITY OF       • Turnover                                       • Employee
WORK LIFE        • Grievances                                       Learnings
                 • Attitudes
                 • Job Security
                 • Job Satisfaction
                 • Pay Satisfaction
SOCIETY          • Environmental          • Adopt a “School”     Societal Learning
                   “Spills”               • Community            Societal Growth &
(SOCIAL)                                    Philanthropies
                  Air/ Water Quality                             Development
RESPONSIBILITY
     OTHER OUTPUT DIMENSIONS OF SYSTEM

ORGANIZATIONAL EFFECTIVENESS    HUMAN RESOURCES

   SHORT-TERM                   ABSENCES
        PRODUCT QUALITY         LATENESS
        PRODUCTIVITY            TURNOVER
        DELIVERY / TURNAROUND   SAFETY
        COSTS                   HOUSEKEEPING
                                GROWTH &
   MID-RANGE                      DEVELOMPENT
                                JOB SECURITY
         GOAL ATTAINMENT        SATISFACTION
         ADAPTABILITY
         COOPERATION
         INNOVATION

   LONG-TERM
         PROFITABILITY
         SURVIVAL
THE NATURE OR ORGANIZATIONS
ORGANIZATIONS ARE--

     • COMPLEX SYSTEMS
     • OPEN SYSTEMS (I       T     O)
        -External Business Environment
        -Internal Business Environment (6 elements)
     • DESIGNED TO SERVE A PURPOSE
        (MISSION DRIVEN)
     • TRANSFORMATION SYSTEMS - (8 elements)
     • RESULTS (5 types)
     • BASED UPON CHOICES
     • ADAPTIVE CULTURES
     • FLEXIBILITY
     • ADAPTIVE TO CHANGING BUSINESS
        ENVIRONMENT
   FORCES FROM THE “STRATEGIC”
      BUSINESS ENVIRONMENT
                                                                 Markets
          Workforce           The Industry
           Trends

        Social Trends                               Customers

 Special Interests

                                                        Competition
  Labor Supply
                       THE ORGANIZATION
 The Global
Competitive                                           Vendor/Suppliers
Environment
                                                    Physical Setting
      Technology
                                                    The Corporation
           Governments                       Financial      Stockholders
                                                            Wall Street
                                             Stakeholders
                     The Economy                            Owners
                            (Local/ National)
 The Internal Business Environment
• Culture/History

• Core Capabilities

• Vision Direction: Core Values, Philosophies, Principles and
   the other 9 Dimensions

• Strategies (corporate and business)

• Key Success Factors/Goals

• Business Models

• Mutuality

• Transformational Change Processes
Organizations Are:

A.    Complex Systems

      1. An organization is made up of an array of interrelated (inter-
         dependent) parts that act together in a consistent fashion.

      2. Organization effectiveness depends not only upon the excellence
         of each part of the system but equally upon how well all these
         elements work together. Any dominant element may diminish
         the necessary balance.

      3. Significant organization improvement requires that all the parts
         change together so they support one another. Any unchanged
         element will serve to hold the organization in its original
         condition. A major improvement in performance is not gained by
         changing a single element – although this is a common approach.
B. Open Systems
   1. An organization, to survive, must successfully accomplish a
      series of transactions with the significant groups in its business
      environment, e.g., products/services, in exchange for materials,
      capital, people, information and other resources.

   2. An organization is strongly affected by the expectations and
      contributions of these external groups, e.g., customers, suppliers,
      regulators, etc. The organization must understand these
      requirements and opportunities and must respond appropriately.

   3. The organization must stay in tough with the shifting forces in the
      business environment and understand their implications. Above
      all, it must not get blind-sided.

   4. The organization must be flexible enough internally to adapt
      quickly and effectively to both predictable and unpredictable
      external changes.
C. Designed to Serve a Purpose

  1. Organizations are purposeful, goal-directed; establishing the
     basic business purpose or mission is critical.

  2. The purpose may well shift over time; this necessitates a periodic
     re-examination of mission.

  3. There is no single, all-purpose, off-the-shelf organization that fits
     all circumstances.

  4. Each organization must be custom designed; all its parts must
     contribute to accomplishing the basic purpose.

  5. The design must focus on what the organization must be able to
     accomplish in the future.
C. Designed to Serve a Purpose

  1. Organizations are purposeful, goal-directed; establishing the
     basic business purpose or mission is critical.

  2. The purpose may well shift over time; this necessitates a periodic
     re-examination of mission.

  3. There is no single, all-purpose, off-the-shelf organization that fits
     all circumstances.

  4. Each organization must be custom designed; all its parts must
     contribute to accomplishing the basic purpose.

  5. The design must focus on what the organization must be able to
     accomplish in the future.
D. Transformation Systems

  1. Organizations transform (or convert) Inputs (materials,
     information, people) into Outputs (product, service).

  2. How effectively the technology and the people mesh, within the
     business context, is the point of focus.

  3. Technical System Analysis

        a. Technical System: Product, Process, Equipment, Layout

        b. Analysis Process determines:

              1. Important disruptions in the normal operating
                 process

              2. Causes and consequences

              3. How this condition is controlled and results

              4. Better approaches
4. Social System Analysis

           a. Social System: People, Roles, Organization,
              Activities, Relationships

           b. Analysis Process determines:

              1. The extent to which current jobs provide a good
                 quality of working life for individuals

              2. How effectively people work together

              3. Ideas for improvement
E. Based Upon Choices

  1.   Organizations are human inventions; conscious design can
       produce desired outcomes:

          -   High levels of innovation, flexibility and commitment from
              members

          -   Effectiveness in both economic and human terms

  2.   There are always choices or options in the design or
       organizations (and technology). Different forms of organization
       can operate a given technology.

  3.   Organization design reflects the values and beliefs of the
       designers. Examples of HPO beliefs:

          -   People are capable of self-management under the right
              conditions.

          -   Technology design should take into account the needs and
              capabilities or the operators.

          -   People who must live under a new organization should
              have some say in its design.

 4. The objective is to create a High Performance Organization (HPO) that
          achieves an optimum balance in meeting the interdependent
     requirements of the Business Environment, the Technical System and
      the Social System. (In traditional organizations, some requirements
                           usually dominate the others.)
The Evolution of
Management Models
                                               Organization
                                                Flexibility




            Internal Environment                               External Environment




                                             Power & Control




Source: Quinn et. al., Becoming a Master Manager (2003)
                                                                           Macro Structure #26
The Evolution of
Management Models
                                               Organization
                                                Flexibility
                           Human Relations                    Open Systems
                               Model                             Model

                                                                  

            Internal Environment                                        External Environment



                                                                   $
                           Internal Process                    Rational Goal
                                Model                             Model
                                          Power &
                                            Control



Source: Quinn et. al., Becoming a Master Manager (2003)
                                                                                    Macro Structure #27
The Evolution of
Management Models
                                                 Organization
                                                  Flexibility
                           Human Relations                                        Open Systems

                                                 Commitment,
                                                                   Innovation,
                                                                   Adaptation
                                                                                          
                                                  Morale



                                           Participation,                   Growth,
                                           Openness                         Resource

            Internal Environment                                                              External Environment
                                                                            acquisition

                                Documentation,                           Productivity,
                                          Information                    Accomplishment
                                          management


                                                      Stability,   Direction,


                                                                                          $
                                                      Control      Goal clarity
                                     
                           Internal Process                                        Rational Goal

                                                        Power &
                                                        Control



Source: Quinn et. al., Becoming a Master Manager (2003)
                                                                                                         Macro Structure #28
The Evolution of                                           Toward
                                                      de-centralization,
Management Models                                      differentiation



                                                      Organization
                                                       Flexibility

                                  Human Relations                               Open Systems
                                                            Innovation,                 
                                                 Commitment, Adaptation
                                                 Morale


                                           Participation,                  Growth,




                                                                                                           position of system
                                           Openness                        Resource




                                                                                                               competitive
                                                                           acquisition
                          Internal                                                           External




                                                                                                                 Toward
                                          Documentation,              Productivity,
                          Environment     Information                 Accomplishment         Environment
                                          management


                                                      Stability, Direction,
                                                      Control    Goal clarity


                                                                                  $
                                  Internal Process                          Rational Goal

                                                            Power &
                                                            Control


                                                            Toward
                                                        Centralization,
                                                          integration

Source: Quinn et. al., Becoming a Master Manager (2003)
                                                                                                                         Macro Structure #29
The Evolution of                                            Toward
                                                       de-centralization,
Management Models                                       differentiation



                                                        Organization
                                                         Flexibility

                                  Human Relations                                     Open Systems
                                      Model                                              Model
                                                                     Innovation,
                                                 Commitment,
                                                  Morale
                                                                     Adaptation
                                                                                               
                                           Participation,                       Growth,




                                                                                                              position of system
                                           Openness                             Resource
                                                                                acquisition        External




                                                                                                                 competitive
                            Internal




                                                                                                                    Toward
                                          Documentation,                      Productivity,        Environ-
                            Environ-                                          Accomplishment
                                          Information
                                                                                                   ment
                            ment          management


                                                      Stability,     Direction,
                                                      Control        Goal clarity



                                                                                        $
                                  Internal Process                                 Rational Goal
                                       Model                                          Model
                                                              Power &
                                                              Control


                                                               Toward
                                                            Centralization,
                                                             integration

Source: Quinn et. al., Becoming a Master Manager (2003)
                                                                                                                                   Macro Structure #30
              In the new economy, human

              capital, perhaps more than any

              other asset, is your organization’s

              greatest competitive advantage!

B.A. Macy, Successful Strategic Change, Berrett-Koehler Publishers, San Francisco, CA (forthcoming)

								
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