Chapter 2Environment, Diversity, and Competitive AdvantageSpring 2006Dr. Burton

Chapter 2Environment, Diversity and Competitive

Advantage

Planning Ahead What is the environment of organization? What are the challenges of managing

diversity? What is a customer-driven organization? How is information technology changing

the workplace? Why is organizational learning

important?

External Environments of Organizations

What is Competitive Advantage? Utilization of a core competency that

clearly sets an organization apart from its competitors and gives it an advantage over them in the marketplace

External Environments of Organizations

What is Competitive Advantage? Companies may achieve it in many ways

including products pricing customer service cost efficiency quality

External Environments of Organizations

The General Environment - all of the background conditions of the organization including: Economic Social-cultural Legal-political Technological Natural environment

External Environments of Organizations

The Specific Environment - actual organizations, groups, persons with whom an organization must interact in order to survive and prosper stakeholders

customers suppliers competitors regulators

How is diversity managed in a multicultural organization

Characteristics of multicultural organizations: Pluralism Structural integration Information network integration Absence of prejudice and discrimination Minimum intergroup conflict

How is diversity managed in a multicultural organization? Organizational subcultures

Cultures based on shared work responsibilities and/or personal characteristics

Common subcultures include: Occupational Functional Ethnic Racial Generational Gender

How is diversity managed in a multicultural organization?

Diversity can be a source of competitive advantage.

Diversity leadership approaches: Affirmative action Valuing diversity Managing diversity

How is diversity managed in a multicultural organization?

Personal challenge of managing diversity: Accepting the goal of diversity maturity

Organizational challenge of managing diversity: Changing organizational culture Changing organizational mission

practices

Customer-Driven Organizations

Customers and Operations Management Operations

activities and decisions through which organizations transform resource inputs into product outputs product output can be goods or

services

Customer-Driven Organizations

Customer and Quality Operations International Standards

Organizations (ISO), Geneva Switzerland ISO 9000 certification

provides customers with assurance that a set of solid quality standards and processes are in place

increasingly necessary to compete internationally

Customer-Driven Organizations

Total Quality Management Malcolm Baldridge National Quality Award

established in the U.S. benchmark of excellence in quality

achievements criteria include

quality values are incorporated into day-to-day management

workers are trained in quality techniques products are as good as or better than its

competitor

Customer-Driven Organizations

Quality and Continuous Improvement Continuous

Improvement Always looking

for new ways to improve upon current performance

Information Technology Utilization

Information Needs of Organizations Information

data made useful for decision making intelligence public

Information Technology Utilization

Information Systems and Networks technology to collect, organize, and

distribute data in such a way that they become meaningful as information

Information Technology Utilization

Information Systems and Networks Management Information Systems

(MIS) specifically designed to use IT to

meet the information needs of managers in daily decision-making

Information Technology Utilization

Chief Information Officer (CIO) oversees all aspects of computer,

information and telecommunications systems

central role in strategic decision-making

Information Technology Utilization

Intranets networks of computers that use special

software to allow persons working in various locations of the same organization to share databases and communicate electronically

Enterprisewide networks move information quickly and accurately

from one point to another within an organization

Information Technology Utilization

Extranets networks that use the public Internet to

allow communication between the organization and elements in its external environment

electronic data interchange (EDI) allows companies to communicate electronically with one another

Information Technology Utilization

What is a Learning Organization? a company that is able to

continuously change and improve based on the lessons of experience

able to change due to the people, values and systems

Information Technology Utilization

Organizational Learning mental models personal mastery systems thinking shared vision team learning

Information Technology Utilization

Knowledge Management processes through which

organizations develop, organize and share knowledge to achieve competitive advantage Chief Knowledge Officer (CKO)

energizes learning processes manages organizations intellectual

assets

The five learning disciplines

Mental Models Building Shared Vision Team Learning Personal Mastery Systems Thinking

The Fifth Discipline

“It is vital that the five disciplines develop as an ensemble”

The 5th discipline is systems thinking.Systems thinking integrates the

disciplines.Metanoia--A shift of the mind:

seeing interrelationships rather than linear cause-effect chains, and

seeing processes of change rather than snapshots.

Systems Diagram“Seeing circles of influence”

WaterFlow

CurrentWaterLevel

PerceivedGap

FaucetPosition

DesiredWaterLevel

Reading a Reinforcing Circle Diagram

Sales

SatisfiedCustomers

PositiveWord of Mouth

Give me a lever long enough… and single-handed I can move the world.

Archimedes

The Five Learning Disciplines

•Systems Thinking

•Personal Mastery

•Mental Models

•Building Shared Vision

•Team Learning

Three Levels of the five learning disciplines

Practices

Principles

Essences

The state of being of those with high levels of mastery

in the discipline.

Guiding ideas and insights.

What you do.

Three-stage Continuum

Stage One: New cognitive, linguistic capacities.

Stage two: New Action Rules

Stage Three: New values and Assumptions

The Five Learning DisciplinesThree Levels

Practices: What you do Principles: Guiding ideas and

insights Essences: The state of being of

those with high levels of mastery in the discipline.

Mental Models

Essences

Principles

Practices

*Love of truth

*Openness

*Espoused Theoryvs. Theory-in-use

*Ladder of Inference*Balance Inquiry and Advocacy

*Distinguishing “Data” fromabstractions based on data

*Testing assumptions*”Left-Hand

Building Shared Vision

Essences

Principles

Practices

*Common-ality of Purpose

*Partnership

*Shared Vision as a “Hologram”

*Commitment vs.Compliance

*Visioning Process--Sharing Personal Visions--Listening to Others--Allowing Freedom of Choice

*Acknowledging Current Reality

Team Learning

Essences

Principles

Practices

*CollectiveIntelligence*Alignment

*Dia Logos*Integrate dialogue

and discussion*Defensive routines

*Suspending assumptions*Acting as colleagues*Surfacing own defensive nests*Practicing

Personal Mastery

Essences

Principles

Practices

*Being*Generativeness*Connectedness

*Vision*Creative Tension

vs. Emotional Tension*Subconscious

*Clarifying Personal Vision*“Holding” Creative Tension

--focusing in the result--seeing current reality

*Making Choices

Systems Thinking

Essences

Principles

Practices

*Holism*Interconnectedness

*Structure influencesBehavior

*Policy resistance*Leverage

*System Archetypes

*Simulation

Systems Thinking Skills

Recognizing jumps from observations to generalizations

Articulating mental models of past and present realities (mind-mapping)

Balancing inquiry and advocacy Seeing differences in what is said and

what is done Recognizing the unintended

consequences of certain actions (causal loops)

Source: Porter O’Grady & Wilson