- Published: October 31, 2021
- Updated: October 31, 2021
- University / College: Case Western Reserve University
- Language: English
- Downloads: 18
Research in management has been an area of interest for decades and the application of complexity theory seems to provide a clear understanding. Complexity theory was developed from chaos theory which represents the body of research concerning systems that have complex characteristics. Chaos theory explains the behavior of unstable, non-linear systems that never settle into a regular sequence of values and it involves using a set of evolutionary equations to predict behavior of complex systems (Stapleton 2000). Complexity theory as defined by Johnson and Burton (1994) is a system which is non-linear, unpredicted and is more complex than systems that are linear, predicted and periodic. Business organizations are termed to be social, complex and therefore have unpredictable relationship. In this report, complexity theory is used to give a detailed viewpoint on how IT strategic managers achieve their goals and objectives when faced with more conflicting goals to a demand manage by means of timing, learning and flexibility.
COMPLEXITY, TIMING, EVENT PACING
Complexity and timing is one of the six business applications of complexity theory. Eisenhardt and Brown (1998) defined time pacing as an approach taken by most companies to actively compete in the market with different approach. IT managers tend to use this approach in creating new products and services according to the calendar in order to create predictable rhythm for change in a company.Time pacing is a more creative way of running business through deadlines in which IT managers synchronizes the speed and intensifies their efforts. This strategy tends to have a psychological impact within a company to always compete in the market.Case StudyA good example of an organization that practice time pacing is Intel Corporation. Back in the year 1965, Gordon Moore a cofounder of Intel corporation prophesied that the capacity of the microprocessor computer chip would double every 18 months. Intel has generated an astounding increase in revenue over the past few decades and up till date adds a new fabrication facility to its operation every nine months. Time pacing strategy has helped Intel managers anticipate change and actively compete in a market that won’t stand still.Two critical but often neglected processes for changing market are: managing transitions and managing rhythms. These steps are often ignored but involve executing and integrating changes into the company which is a major decision by the manager.
In Event pacing, IT managers tend to change or adopt a linear pattern to their operations and are driven by events. Eisenhardt and Brown (1998) defined event pacing as creating a new product when a promising technology comes out, entering a new market in response to a move by a competitor, or making an acquisition because an attractive target becomes available. In event pacing, managers tend to deviate from a plan only when the overall performance weakens. Event pacing is a more traditional way of responding to events, seasons and a more reactive and often erratic strategy.Case StudyA good example of an organization that practiced event pacing this year is Samsung mobile due to the fact that Sony released a new product early this year. Samsung mobile had to release the new S4 months before the required time so as to compete in the market with Sony.
COMPLEXITY AND LEARNING
Complexity and learning is another method in business applications of complexity theory. According to Mitleton-kelly (2005), a learning organization is one that can change its behaviors and approaches as a result of experience i.e. learn from other companies, ability to create a learning environment that facilitates the achievement of a specific goal. Argyris and Schon (1978) define learning as the detection and correction of error. Generally, it is also suggested that when something goes wrong, IT managers’ next call of action is to look for another strategy that will address the situation and work among the governing variables. With complexity and learning, these managers tend to approach various situations as a result of experiences that have been gained in order to achieve its objectives.
Adaptive and Generative Learning
Senge (1990) defined learning as an organization that is continually expanding its capacity to create its future. In this process an organization must combine the two types of learning which he proposed: survival or adaptive learning with generative learning. Generative learning according to Senge (1990) enhances the organization’s capacity to create, and it’s also associated with a high tolerance management style. Organizations that practice generative learning require a structural framework where they anticipate the future environment. Adaptive learning on the other hand is where the organization just responds to the changing external environment (i.e. command and control). Adaptive learning is partially driven by realization that tailored learning cannot be achieved on a large scale using traditional approaches (Senge 1990).
Single Loop and Double Loop Learning
Argyris and Schon (1978) claim that IT managers tend to use single loop and double loop learning in an organization. Single loop learning is all about following a particular rule while correcting a problem. According to Heracleous (2003) single loop learning occurs when there is a match between the organization’s design for action and the actual outcome when such mismatches are corrected by changing actions but without critical examination of the governing variables for action. An example is a thermostat that learns when it is too hot or cold. The thermostat can perform its task because it can receive information about the room temperature and take corrective action. While in Double-loop, Argyris and Schon (1978) suggested that learning occurs when an error is detected and corrected in ways that involve the modification of an organization’s underlying norms, policies and objectives. In this process, an organization examines the cause of action and takes steps to correct the problem. An example is a supplier that fails to meet an organization’s target. Double loop occurs when the organization sits down the supplier to inquire reasons why the target was not met and devise ways in which will satisfy both parties.MatchGoverning variablesActionConsequenceMismatchSingle loopDouble loop(Source: www.doubleloopconsulting.com)Hence in order to promote learning, IT managers can either increase survival anxiety or decrease learning anxiety. But increasing survival anxiety tends to create a strong resistance to learning (Schein 2004).
COMPLEXITY AND FLEXIBILITY
Flexibility in an organization is the ability to adapt to changes in the internal and external environment. Flexibility is important for a business because changes must be made from time to time from plans to strategies. There is considerable evidence from complexity theory to suggest that adaptation is most effective in systems whose pieces are connected but only partially connected (Eisenhardt and Brown 1999). An example is the use of traffic lights in a town. A moderate number of lights create some structure among motorist. Without any lights, traffic would be chaotic but too many would result to grid lock. Thus the key to effective flexibility is to stay poised on the edge of chaos. Eisenhardt and Brown (1998) claim that the edge of chaos is somewhere between the equilibrium and chaos and is in a state of bounded instability.
Dynamic adjustment is the strategic process by which corporate executives routinely remap businesses to changing market opportunities in form of adding, splitting, transferring, exiting, or combining chunks of businesses (Eisenhardt and Brown 1999). IT managers dynamically adjust to the market in order to concentrate on more potential business than the less promising ones. By doing this, they create more economic values for the organization.
Coupling in complexity involves how various units or departments of an organization integrate within an organization to achieve the set goals. Coupling in an organization refers to how different units rely on each other to deliver set goals.
In summary, complexity theory termed to be a system which is non-linear, unpredicted and more complex can be applied to the three listed business applications which are timing, learning and flexibility. With the evolution of complexity theory in management, IT managers tend to manage complexity by timing which enables a predictable approach for change either by time pacing or event pacing, learning from past experience and ability to adapt to changes in its environment. The applications of these components will not only improve business goals in an organization but will also create an avenue for organizations to actively improve products and services offered in order to achieve ultimate success.
Stakeholder theory was developed by Richard Freeman in 1984 and has since been used in business practice relating to strategic management, corporate social responsibility and corporate governance. Stakeholder theory contains theories of how managers or stakeholders should act and should view the purpose of organization, based on some ethical principle (Fontaine et al 2006). The stakeholders of an organization form a key group for the survival of an organization ad also an effective corporate social responsibility. In order to promote an effective corporate social responsibility, stakeholder management is key to aid an organization’s objectives and guide what the organization stand for to the consumers.
Stakeholders by definition are any group or individual who can affect or is affected by the achievement of the organization’s objectives (Freeman 1984). These include employees, customers, management, shareholders, suppliers and distributors, local communities etc. the stakeholders are vital to its sustainability, success and survival of an organization. Branco and Rodrigues (2007) describe the stakeholder perspective of CSR as the addition of all groups or constituents in managerial decision making related to the organization’s activities. Stakeholder perspective form a key component in most organizations today as these organization are been motivated to become socially responsible and address the community issues that are relevant. There are two types of stakeholder which are the primary and secondary stakeholders.
Stakeholders can be further differentiated as ‘primary’ or ‘secondary’ depending on the type of resources they provide to the organization. Argenti (2003) defined primary stakeholders as those who provide resources that are vital to the operation of the organization. Primary stakeholders have a direct interest in the organization and are often updated regularly on the way the organization progresses. These stakeholders benefit from or are affected by a particular business activity such as the distribution of a product or a change to service agreement and will intervene if certain interests are neglected by the organization. Examples include: staffs, senior management, shareholders etc
Secondary stakeholders are those who provide less significant resources to the organization (Argenti 2003). Charles Eesly and Michael Lenox (2005) stated that secondary stakeholders are groups of people who affect or are affected by the organization behavior but are not officially part of the corporation. This particular group provides little or no resources to the survival of the organization. Examples of secondary stakeholders include Non-governmental organizations, activists, churches, neighbors, and government agencies.
Shareholders form a part of an organization’s stakeholders. Shareholders are people that legally own shares or stock in an organization and are granted special privileges depending on the type of shares. Shareholders are also regarded as owners of a company as they have the potential to profit if the company does well.
STAKEHOLDER POWER MATRIX
Stakeholder analysis provides the relative importance of each stakeholder group in order to manage strategy process. It identifies people, groups and other institution that may have interest in an organization and take steps to manage their interest in order for the organization to run smoothly. Winstanley et al (1995) developed a simple tool to identify the degree of influence from a particular stakeholder group. The power matrix can be used to understand where a stakeholder group might hold and seek to exercise power. The power matrix is made up of four quadrants which are arm’s length power, comprehensive power, disempowered power and operational power.AArm’s length powerBComprehensive powerDDisempowered powerCOperational powerFig. 1 – Stakeholder Power Matrix(Adapted from Winstanley et al. (1995)Quadrant A: Arm’s length powerIn this quadrant, stakeholders have little direct power but some indirect power i.e. power over rules of the game. Typical examples are parents, guardians or people who fund a student’s university education.Quadrant B: Comprehensive powerThese are the major shareholders of a firm. These stakeholders have a lot of power and influence in the organization. An example is the board members of an organization.Quadrant C: Operational powerThis is where a stakeholder has some power within certain constraints. They include key groups of employees or suppliers of key materials and services.Quadrant D: Disempowered powerStakeholders in this quadrant, have little or no power in the organization. These could include end customers for a niche product or staff with unmarketable skills.
CORPORATE SOCIAL RESPONSIBILITY, COPORATE GOVERANCE AND ENVIRONMENTAL MANAGEMENT.
Corporate Social Responsibility
Corporate social responsibility referred to as social responsibility in early writing has a long history. Corporate social responsibility is defined as obligations of businessmen to pursue those polices to make those decisions, to follow those lines of action which are desirable in terms of objectives and value to the society (Bowen (1953) as cited in Carroll (1999, p. 2)). Corporate social responsibility can also be viewed as an organization giving back to the society. Just as society expects business to make a profit (as an incentive and reward) for its efficiency and effectiveness, society expects business to obey the law. The law represents the basic “rules of the game” by which business is expected to function (Carroll 1979, p. 500).An example of an organization giving back to the society is Toms shoes. Toms shoes is one of the most popular shoes today with over 12% of the world population wearing its brand. The organization has committed its brand to helping children with no shoes. Toms shoes decided to give a free pair of shoes to the needy for every pair bought worldwide. With this initiative, Toms shoes have decided to put smiles on these poor kids all over the world.In order for an organization to perform its social responsibility to the society, the stakeholder management is a process which must be guided by underlying principles through the appropriate management of their objectives. Corporate social responsibility is not a threat to achievement of economic goals of a corporation but rather an opportunity for the basis of economic development of firms in terms of competitive advantage in global market. (Uddin et al, 2008)
Corporate governance involves the mechanism, roles and relationship between company and stakeholders for which the corporation is governed to achieve its goals. Hosmer (1994) claims that historically, business organizations have traditionally placed more emphasis on their strategy outcomes rather than adhering to business ethics. For adequate commitment from employees, an organization must exhibit good business ethics which will in turn build employee trust. Effective corporate governance is vital as it builds a good business ethics which is key in an organization corporate social responsibility.
GREENING AND ENVIRONMENTAL MANAGEMENT
Environmental management involves processes and practices that enable organizations to reduce its environmental impacts on the society and increase its efficiency. Hart (1997) defined greening as steps taken by an organization to reduce the impact of its operation on the physical environment. It enables organizations to manage environmental compliance via corporate plans.To maintain an environmental friendly society, organizations should be accountable for their actions on the environment. An example is BP oil leak in the south coast of USA in 2010. BP paid a huge amount of compensation to the United States government. Being held accountable for hazardous elements released into the environment ensures organization to better the quality of life in the local communities where operations are carried out.
For effective corporate social responsibility, stakeholders’ management is a vital role an organization must promote. The stakeholders of an organization form a key group for the survival of any organization whether primary or secondary as resources needed for survival are provide by these particular group. By investing in CSR, organizations also promote sustainability; improve the role of business in the communities and environmental goals.In summary, stakeholders’ management plays a major role in an organization effort to promote corporate social responsibility.
1Integration to existing legacy IT / Business systems,The integration of BPI into existing legacy IT requires a definition and evaluation of the existing system as well as processes involved in the organisation (Zellner, 2011). BPI supports the integration of existing business systemsThe integration of SAP into legacy system is a critical and comprehensive. SAP requires support and commitment to the overhaul of systems and processes of the organisation (SAP 2013). The integration of SAP is usually challenging because the implementation requires partial disposal of such legacy systems in favour of full utilization of SAP.2Revolutionary/Evolutionary implementation path,The implementation path of BPI is evolutionaryThe implementation path for SAP is revolutionary3Market share of international ERP market,BPI requires the need to focus on improving market share and enhancing customer satisfaction.The market share of SAP is estimated at 27% as at 2010. The market share is considerably high emphasizing the attractiveness of Sap in the market.4Provision of a ‘total’ turnkey solution,BPI benefits from business processes by ongoing commitment to deliver great performance which leads to maximum efficiency.BPI implementation can be more comprehensive and holistic because it can be used for technological support initiatives as well as non-technological initiatives (Zellner, 2011).The provision of turnkey solution into SAP has been integrated to address a variety of organisational processes, such as the human resource management, financial aspects an operational management (SAP, 2013).5Application that serves the total IT / Business needs of the Organisation.The application of six sigma, system thinking and lean are the other business needs that BPI serves an organisation. BPI can be used to address comprehensive and holistic changes due to its flexibility. It does not provide an in-depth support for technological enhancement.SAP serves business needs of an organisation by improve efficiency, improve decision making in an organisation. The various types of application that serves the needs of an organisation include: supply chain management, supplier relationship and project life cycle of a product.
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PROCESS MAPAssumptionsThe following assumptions where made.184.108.40.206