Chapter 7: Management and management models Flashcards
Which are the environmental spheres?
- Societal
- Natural
- Technological
- Economic
What is the relevance of the Stakeholders?
They are key to the organization’s relationship with its environmental spheres.
Their participation is necessary for the company’s survival.
The most important task of management is therefore to ensure cohesion among stakeholder groups (in doing so also moderate conflicting goals between these groups)
Which are the stakeholders?
Suppliers,
Competitors,
Inventors,
Customers,
Employees,
Media,
Government
What is the definition of interaction issues?
Those topics that an organisation negotiates with ist stakeholders and that represent the organisation’s interrelations with ist respective environmental spheres
Examples:
○ natural resources are at stake when a company needs more land to pursue an expansion project
○ Norms or values are at stake when a company negotiates leadership principles and ist future strategic direction with employees
○ State concerns and interest vis-à-vis investors are at stake when stock corporation law is under review and thus the voting rights of individual shareholder categories
Which are the interaction issues?
- Resources
- Norms and Values
- Concerns and interests
What is the definition of a process?
Sequences of activities
Which processes are embedded in the SGMM?
Management Processes
Business processes and business model
Support processes
What does a business model include (not on the SGMM but also relevant)?
- Service creation processes
- Service innovation processes,
- and customer processes
Customer processes are included in business processes. What does customer processes include? (Not in the SGMM but also relevant)
- Customer acquisition
- customer loyalty
- Reputation processes
What are management processes?
Management processes include those processes that serve to steer the company as a system as well as ist relationship with the environment
==> These require communication and decision-making skills and techniques
What are support processes?
Support processes are functions that indirectly support business processes
Example: financial management processes and human resources processes
Which development modes are embedded in the SGMM?
Two types of organizational change are distinguished:
○ Continuous optimizing of current operations
○ Renewing the organization or parts of it by challenging the status quo
What is the difference between the two development modes? How are they tied together?
Difference: Optimization presupposes an existing structure - renewal also involves structural change
Example: A production line can be improved step by step by fine-tuning the individual production steps. It can only be changed fundamentally (e.g. adapted and converted to a new technology such as electric drive) at considerable expense and time
Companies often switch between these two modes
If a value creation system has been reconfigured (renewal), it subsequently requires a phase of optimization and structural stability
==> In management, these two modes often occur in parallel
Optimization decisions must be taken while questioning the status quo!
What are structuring forces? (Part of the SGMM)
Ensure the necessary basic order in the form of
○ Governance
○ A development direction defined by the strategy
○ An organisational form geared toward strategy implementation
○ And a system of norms and values defined by the culture
What does Governance mean?
Ensures the prerequisites for management and strategic capability by defining a
- suitable company purpose,
- management resources,
- division of powers
- and processes
==> Governance defines the roles, rights and duties of managment as well as an organisation’s normative orientation (its vision and mission)
What does strategy mean as part of the structuring forces?
Strategy
Can be designed only if an organisation’s long-term purpose is clear
Example: A sports infrastructure facility needs to determin whether it is a health or a leisure company
What is the purpose of a strategy?
The purpose: ensure competitiveness
How are success factors developed? (Part of strategy)
Sucess factors are developed either
- Within (inside-out –> Core competencies)
- Or outside the company (outside-in –> market positionings)
What does structure that is part of the structuring forces in the SGMM have to be aligned with?
Must be aligned with the strategic success factors according to which the organisation needs to define its processes and to design it s strategy to optimally support these processes
Example: a company wants to optimise meeting their customer’s needs -> it will focus on customer-oriented sercive processes -> the company will need to align itself according to customer groups, possibly by defining it s main departments according to customer groups
What does Culture as part of the structuring forces in the SGMM correlate with?
Correlates with structure
==> example: a strong hierarchical organisation results in a culture of control which in turn impacts the organisation’s functioning
The culture in turn must be consistent or at least compatible with the company’s purpose
The considerations and the logic of the SGMM lead to several basic management tasks that every organisation must fulfill. Which are they?
- Organization of Value creation system (incl. Primary and Secondary Processes)
- Continuous Questioning, Reflection, and Further Development of an Organization
- Responsible and Sustainable Design of Relationships with the Environmental spheres
- Ensuring Stakeholder Cohesion
What does Integrative Management mean?
the design and steering of an organisation as a purpose-oriented socio-technical system that consciously and responsibly handles significant force fields and conflicting goals
What are the force fields and conflicting goals?
- Different perspectives of the individual corporate functions
- Different stakeholder expectations
- Deliberation between short-term - operational and long-term - strategic views
==> An integrated execution of all management tasks (analysis, planning, control)
How can Management be seen as a profession?
Management can be seen as a profession because of it s characteristics of a typical profession: an independent language, independent rituals, and professional values
Because there are many management tasks, there needed to be a divison of labour made and so the specialisation of management (HR, marketing, strategy management, financial management…)
Today we are in the VUCA age, what does this abbreviation mean? What relevance does this have?
Today we’re in the VUCA age (Volatility, Uncertainty, Complexity and Ambiguity)
==> Integrative management is needed more than ever
What are the reasons/causes of the Complexity in Management?
Complexity in Management has different reasons/causes:
- The speed of today’s world (development are volatile)
–> creates uncertainty
- Contradictory goals
–> low cost production, environmental protection
–> Demand for high-performance teams and achieving work-life balance
- Information flow between departments
==> Management needs to deal with these force fields and define integrative solutions and approaches
What are approaches to promoting a more inclusive view?
- Using certain practices and tools (for example guided future workshops) or working tools (business planning or management models like the SGMM)
- Highlighting the importance of asking the right questions (identify the REAL problem and approaching the solution of this one)
- Working in groups
–> these should be as diverse as possible (company members representing different functional areas, as well as culture and genders etc.)
==> overly focusing on group needs or harmony should be avoided, instead they should exchange ideas about each other’s perspectives on the problem at hand
Ahby’s law is another outcome of systematic approaches. What does Ashby’s law say?
In order to deal properly with the diversity of problems the world throws at you, you need to have a repertoire of responses which are (at least) as nuanced as the problems you face.
==> Variety absorbs variety
What is the difference between system thinking and process thinking?
System thinking: claims to enable interdisciplinary perspectives
Process thinking: is intended to interconnect individual functions
==> That is why thinking in systems and processes is important while working with the SGMM
Many companies are also no longer organized by functions but by performance processes which enables overcoming functional thinking silos
What is the definition of a system?
System Definition: ordered totality of elements between which relationships of some sort exist or can be established.
==> These elements can be represented by graphs in which arrows show the relationships between the elements
Types of Networks:
What are Star Networks?
- They are centered on one element that controls the network
- Network development also depends on the capacities of this central element
Examples:
management consulting teams or classical structure of
Types of Networks:
What are Mesh Networks?
- Relationships exist between different elements
- In extreme cases, every element is connected with others
==> This basic idea also underpinned the development of the World Wide Web
What are the Advantages and disadvantages of Mesh Networks?
Advantage:
Their redundancy
==> If one element fails, it s functions can be performed by other elements (see World Wide Web)
Downside:
These systems are difficult to control because the central node through which everything could be controlled is missing.
Every organisation consists of different system levels. Which levels are these?
- A logistical level
- An information level
- A financial level
- A hierarchical level
- A social level
Systems can be distinguished between trivial or complex.
What is a trivial system?
characterized by their stability
==> the same relations always exist between the same elements
THUS: one element has a stable effect on another
Example: if one element grows the other element also grows (many logistic systems are trivial systems - a firmly coupled value chain supplying glasses and involving a stable relationship between the suppliers of semi-finished products, manufacturing and delivery to retailers
These systems can be easily analysed and controlled
Applying Ashby’s law: their variety is low, meaning the entire system can be controlled with individual interventions
Systems can be distinguished between trivial or complex.
How are complex systems characterized?
- Openness
complex systems constantly receive external impulses
as a socio-technical system, a company is affected for example by cultural values changing in ist social environment which in turn change employee behaviour - Structural instability
The system restructures itself continuously as individual elements or relationships emerge or disintegrate - Tilting effects
The relationship between the elements is nonlinear, allowing tilting effects to occur
This happens for example when a management relationship is too strongly focused on performance and control and intrinsic motivation suddenly vanishes as a result - Multilayeredness
The elements change their mode of action and behaviour especially if they are affected by changes on another impact level by another system
==> if a manufacturing department reduces maintenance due to cost-cutting measures (impact of the financial level) and malfunctions become more frequent as a result this in turn impacts the system’s logistical level - Historicity
complex or nontrival systems are historical
their current state and way of operating needs depends - among other aspects - on their past
==> the behaviour and development of complex systems are very difficult to predict
Which are aspects of value creation processes that are of interest from a management perspective?
- Value chains tend to be restructed on an ongoing basis
Example: Environmental changes mean that activities need to be carried out differently- Value chains tend to become increasingly differentiated and specialized as a result of the underlying economies
- Additional value is created beyond primary value creation
Which criteria can be used to typify organizations?
- By dominant environmental sphere
- By profit orientation
- By size
- By legal form
- By phase in the business cycle
Typifying environmental spheres:
Which typifications exist?
- Businesses (Economy)
- Public Enterprises (Economy and Politics)
- Public Organizations (Politics and Law)
- Nongovernmental Organizations NGO (Public and Ethics)
- Nonprofit Organizations NPO (Society)
- Pluralistic Organizations (several environmental spheres simultaneously)
How can you typify a organizatoin by size?
- Small < 50 employees
- Medium < 250 employees
- Large >250 employees
Which typifications exist by legal form?
- Sole proprietorship
- Partnerships
- Corporations (GMBH, AG)
- Cooperatives
- Associations
- Foundations
Which typifications exist by phase in the business cycle?
- Seed
- Startup
- Early Growth
- Expansion
What are “public-private partnerships”?
Typically these often incolve profit-seeking and nonprofit-seeking companies coming together
==> for example the cooperative members of the Swiss Society for Hotel Credit include the hotel industry, the banking sector, the federal government and individual cantons
Distinction by phase in the business cycle:
What are Seeds?
They need support with building the business.
Potential Partners are Business Angels, Incubators
Funding through seed funding
Distinction by phase in the business cycle:
How are Startups characterized by need for support, potential partners and fundings?
Support with launching the first product
Financial investor, venture capitalist (VC)
First Round of VC Funding
Distinction by phase in the business cycle:
How are Early Growth Companies characterized by need for support, potential partners and fundings?
Support growth through access to the customer base of other companies
Strategic partner
Further funding roungs
Distinction by phase in the business cycle:
How are Companies in the expansion phase characterized by need for support, potential partners and fundings?
Support expansion of core business into new product groups
Strategic Partner, Investment Bank
Initial Public Offering
How do companies change their strucutre?
Companies change their structure not only through endogenous development processes but also through interactions with other companies
Which are forms of corporate ties? (Structured from loose to intensive)
- Cooperation
- Consortium
- Strategic alliance
- Joint Venture
- Merger
What are Consortiums?
Purpose-bound, long-term, usually temporary association; companies carry out joint business transactions (example banking consortium)
What are Strategic Alliances?
Long-term, contractual cooperation on strategic projects (example develop specific country markets)
What are Joint Ventures?
Independent companies in relation to markets; companies serving specific purpose
What are Mergers?
Mergin into a new entity
What does Classical Management theory assume?
Assumes that business studies should provide insights that support management and managers
What does the trend toward more scientifc approaches in business studies lead to?
Leads to a differentiation into functional subdisciplines (e.g. human resources and marketing), and to specialization according to management functions
How does a system approach help?
A system approach helps to understand management as the reflective design of value creation systems in organizations, which in turn can be understood as socio-technical systems providing services to third parties.
- Thinking in terms of systems makes it easier to grasp the developmental dynamics of organization-environment interactions.
How does thinking in terms of processes help?
Thinking in terms of processes makes it easier to understand complex operations such as projects or service provision
