Transcript Environment

ENGM 742: Engineering
Management and Labor Relations
Session Two – 17 January 2017
• Systems Thinking
• Innovation
• Technology Cycles
Modified Nadler-Tushman Open-Systems
Model
Boundary
Internal
Formal Organization
Structure
Technical Systems
Inputs
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•
•
•
Organization Level
Department Level
Individual Level
Information Systems
• Vertical
• Horizontal
• Standard Operating
Procedures
• Formal Reward
System
Human Resources
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•
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•
Informal
Organization
• Culture
• Politics
• Interdepartmental
Relations
Selection
Roles
Personal Dynamics
Employee Needs
Positive and Negative Feedback
Outputs
Stake
Holders
KEY ELEMENTS OF O.S THEORY
•
Boundary
•
Purpose/Goals
•
Inputs
•
Transformation/Throughput
–Technical System
–Formal Organizational Structure
–Informal Organization
–Human Resource System
•
Outputs
•
Feedback (Positive & Negative)
•
Environment
Definitions
• Environment – All factors existing outside the
boundary of the organization that have a
potential impact on all or part of the organization.
• Environment Sectors – Subdivisions of the
external environment that contain similar
elements.
– Task Environment – Sectors with which organization
interacts directly and that have a direct impact on the
organizations ability to achieve its goals.
– General Environment – Sectors that may not have a
direct impact on the operations of the firm but
indirectly influence it.
An Organization’s
Environment
(a) Competitors, industry size and
competitiveness, related issues
(b) Suppliers,
manufacturers, real
(i)
estate, services
Sociocultural
(c) Labor market,
Sector
employment agencies,
universities, training
schools, employees
(h)
Government
in other companies,
Sector
unionization
(d) Stock markets,
(g)
banks, savings and
Economic
loans, private
Conditions
Sector
investors
(e) Customers, clients,
potential users of products
and services
(f) Techniques of production, science,
computers, information technology
(g) Recession, unemployment rate,
inflation rate, rate of investment,
(j)
(a)
economics, growth
International
Industry
(h) City, state, federal laws
Sector
Sector
and regulations, taxes,
(b)
services, court system,
DOMAIN
Raw Materials
political processes
Sector
(i) Age, values, beliefs,
education, religion,
(c)
Human
work ethic, consumer
Resources
ORGANIZATION
and green
Sector
movements
(j) Competition from
(d)
Financial
and acquisition by
Resources
foreign firms,
Sector
(e)
entry into overseas
(f)
Market
markets, foreign
Technology
Sector
Sector
customs, regulations,
exchange rates
Analytic Questions based on O.S. Model
•
What is apparent purpose and goals of system?
•
What are key outputs and how is the system linked to
its customer systems?
•
What are key conversion and transformation
processes and how effectively are they balanced?
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What are they key inputs and how is the system
linked to its supply systems?
•
What feedback is attended to and how is it used?
Dynamic Processes of a System
•
Information Filtering and Coding
•
Steady State or Dynamic Homeostasis
(Self-preservation of character of system)
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Negative Entropy
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Equifinality (Self-regulating)
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Specialization
Analytic Questions based on Dynamic Processes
•
Info. Coding--Does the system obtain the needed
info. inputs and appropriately block unneeded
info.?
•
Steady State--Is the system able to maintain its
operation within limits of tolerance?
•
Negative Entropy--Is the system able to import
more than it exports by appropriately changing
its purpose, goals, and practices to meet
emerging environmental demands?
•
Equifinality--Is there capacity for spontaneous
self-regulation by individuals and groups to
achieve needed results?
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Specialization--Does the system grow and
expand appropriately without becoming
overspecialized?
Open-Systems Theory
Best
OrganizationEnvironment Fit
Organizational
Effectiveness
--Customers
--External Stakeholders
--Employees
Internal
Social and
Technical Systems Fit
MACHINE PARADIGM
OPEN-SYSTEMS PARADIGM
World view:
World view:
1. Divide whole into parts: mechanical
1. Indivisible whole: organic model
model
2. Linear chain of cause and effect
2. Joint causation: subsystems interact
3. Slow, predictable environmental change
3. Fast, uncertain environmental change
As Applied to organizations:
1. Imperative: Optimize technology
2. People as extensions of machines
3. People as expendable, replaceable parts
4. Maximum task breakdown: simple,
narrow jobs
5. Staff and line separated
6. Tall organization: autocratic
7. Competition, gamesmanship
8. Organization’s purposes only
As Applied to organizations:
1. Imperative: joint optimization
2. People as complementary to machines
3. People as investments in valuable
resources
4. Optimum task grouping, multiple,
broad skills
5. Staff and line interdependent
6. Flat organization: participative
7. Collaboration, collegiality
8. Members’ and society’s purposes
Environments
• External Environment
– forces outside the organization that have the
potential to significantly influence the likely
success of products or services
• Internal Environment
– the general conditions that exist within an
organization
• Organizational Culture
– a system of shared values, assumptions,
beliefs, and norms that unite the members of an
organization
External Environments
Mega-Environment
Task
Environment
Culture of
Organization
External Environments
Mega-Environment
Legal-Political
Element
Mega-Environment
• Technological Element
– reflects the current state of knowledge regarding
the production of products and services
• Economic Element
– the systems of producing, distributing and
consuming wealth, e.g.
• capitalist economy is governed by market forces and
the means of production are privately owned
• socialist economy in which the means of production are
owned by the state and economic activity is coordinated
by the plan
• international economies have significant impact on
operations
Mega-Environment
• Legal-Political Element
– the legal and governmental systems within
which an organization must function
• Clean Air and Clean Water Act
• Occupational Health and Safety Act
• SEC computerized tracking for illegal insider
trading
Mega-Environment
• Sociocultural Element
– the attitudes, values, norms, beliefs, behaviors, and
associated demographic trends that characteristic of
a given area
– McDonald’s allows menu modifications in foreign
countries
– American trends
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delay marriage
aging of large baby boomer group
growing birth rate
growing diversity of work force
Mega-Environment
• International Element
– the developments in countries outside an
organization’s home country that have the
potential to influence the organization
– North American Free Trade Agreement
Xerox Environments
International
Fuji-xerox
Rank xerox
Xerox Canada
International
Competition
Mega-Environment
Technological
Smart copiers
Robotics
Color copiers
Xerox
Economic
Sociocultural
Global capital markets
Employee Involvement
Growth of service sector
Globalization of Mgmt.
Low US inflation
Home use of machines
Sluggish economy
Older consumers
Legal-Political
and workers
Patent laws
Trade restraints
Deregulation of financial services
Task Environment
Mega-Environment
Task
Customers & Clients
Government
Competitors
Agencies
Culture of
Organization
Labor
Suppliers
Task Environment
• Customers & Clients
– those individuals and organizations that
purchase an organization’s products and
services
• Competitors
– other organizations that either offer or have a
high potential of offering rival products or
services
– benchmarking
Task Environment
• Suppliers
– organizations and individuals that supply the
resources an organization needs to conduct its
operations
– trend is towards fewer more dependable suppliers
• Labor Supply
– those individuals who are potentially employable
by an organization
– Bureau of Labor Statistics: increasingly diverse
workforce
– KFC’s Designate program
Task Environment
• Government Agencies
– agencies hat provide services or monitor
compliance with laws and regulations at local,
state or regional, and national levels
Xerox Task Environment
Customers & Clients
AT&T
DuPont
Sun Microsystems
DOD
Government
Internal Revenue
EEC Commission
SEC
EPA
Xerox
Competitors
Canon
Ricoh
Kodak
IBM
Labor
Suppliers
Amalgated Clothing
Reell Precision
and Textile Workers
Rogers Corp
Other Unions
Nationwide Precision
Varying labor markets
Organization/Environment
• Population Ecology Model
– focuses on populations or groups of organizations
and argues that environmental factors cause
organizations with appropriate characteristics to
survive and others to fail
– natural selection model
– of 100 largest companies in 1917, only 22 remained
in 100 largest category in 1987 (Forbes, 1987)
– managerial actions are of limited consequence in
dealing with the environment
Organization/Environment
• Resource Dependent Model
– highlights organizational dependence on the
environment for resources and argues that
organizations attempt to manipulate the
environment to reduce that dependence
– organizations attempt to be as independent
as possible by controlling critical resources
– managers have strategic choices that
influence organizational success
Environmental Uncertainty
• Environmental Uncertainty
– A condition in which future environmental
circumstances affecting an organization cannot be
accurately assessed and predicted
– function of complexity and dynamism
• Environmental Complexity
– the number of elements in an organizations
environment and their degree of similarity
• homogeneous
• heterogeneous
Environmental Uncertainty
• Environmental Dynamism
– the rate and predictability of change in the
elements of an organization’s environment
Stable
Unstable
Environmental Dynamism
Environmental Complexity
Low Uncertainty
Moderately Low
1. small # of
1. large # of
similar elements
dissimilar elem.
2. elements change 2. elements change
slowly
slowly
funeral homes
Insurance
Moderately High
High Uncertainty
1. small # of
1. large # of
similar elements
dissimilar elem.
2. elements change 2. elements change
rapidly
rapidly
Women’s Apparel
Software Co.
Homogeneous
Hetergeneous
Environmental Complexity
Environmental Munificence
• Environmental Munificence (capacity)
– the extent to which the environment can
support sustained growth and stability
– organizations operating in rich environments
can build up internal resources; capital,
equipment, experience
– organizations operating in rich environments
can also attract competition
Managing Environmental Elements
• Adapt to existing environmental conditions
• attempt to influence environmental
elements
• shift domain of operations away from
threatening environmental conditions
James D. Thompson
Adaptation
• Buffering
– stockpiling either inputs or outputs from a process
in order to cope with environmental fluctuations
• Smoothing
– taking actions aimed at reducing the impact of
fluctuations given the market
• Forecasting
– predict future environmental conditions
• Rationing
– providing limited access to a product or service
that is in high demand
Favorability Influence
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Advertising/Public Relations
Boundary Spanning
Recruiting
Negotiating
Co-oping
Joint Ventures
Trade Associations
Political Activity
Domain Shifts
• Changes in the mix of products and
services offered so that an organization
will interface with more favorable
environmental elements.
Organizational Culture
•
Factors Impacting Corporate Culture
Direction
the degree to which a culture supports reaching
organizational goals
Pervasiveness
the extent to which a culture is widespread
among members
Strength
degree to which members accept the values and
other aspects of a culture
Manifestations of Culture
• Symbol
– object, act, event that serves as a vehicle for
conveying meaning
– Corning quapple (Q pin)
• Stories
– a narrative based on true events which sometimes
may be embellished to highlight the intended value
– B-52 vs F15 - shut down two engines
• Rites & Ceremonials
– elaborate planned set of activities to convey cultural
values
Changing Culture
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Surfacing actual norms
Articulating new directions
Establishing new norms
Identifying culture gaps
Closing culture gaps
Definitions
• System – A set of interacting elements that
acquires inputs from the environment, transforms
them, and discharges outputs to the external
environment.
• Subsystem – Elements within a system that
perform the specific functions required for
organizational survival.
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Production & service
Boundary spanning
Adaptation
Maintenance
Management
Definitions
• Closed system – A system that exists without
dependence on its environment.
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Autonomous / Independent
Enclosed / Non-interactive with external envt.
Stable
Internal focus
• Open system – A system that must interact with
the environment to survive.
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Contingent / Dependent
Resource consumption and exportation
Dynamic
External focus
Open Systems Paradigm
• Contingency Theory
– Perspective which states that effective orgs. must
have a “goodness of fit” b/w structure and
conditions in the external environment.
– “It depends” – no such thing as one best way.
– Ex: stable/unstable environment 
bureaucratic/flexible control
Open systems theory IS a contingency
theory.