Strategic Decision Success
GRA 6820Strategic Choice
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GRA 6820
Strategic Decision Success(Harrison, Ch.11)
Strategic Decision Success
GRA 6820Strategic Choice
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Overview of chapter 11
• A profile of decision success
• Determinants of strategic decision success
• A model for strategic decision success
• A composite approach to the evaluation of strategic decision success
• Summary
Strategic Decision Success
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The function of models
Excellent Poor
ExcellentCelestial
mechanics
Quantum mechanic
s
PoorEvolutionary biology
EconomicsA
bili
ty
to
Pre
dic
tAbility to Explain
The ability to draw predictions from a mathematical model.
An abstract thinking aid that reveals or
illuminates some aspect of system behavior in a
simple way or which unlocks an insight.
Casti, J. (1990). Searching for Certainty. New York: William Morrow and Co.
Strategic Decision Success
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A simple set of equations…
Decision Success = f (Quality, Implementation)
where…
Quality = f (compatibility, timeliness, information, DM influence)
Implementation = f (conflict avoidance, risk-reward, understanding)
Success: A favorable termination of a venture
Ref: Mintzberg, Raisinghani and Theoret (1976)
Strategic Decision Success
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An event-oriented worldview
Problem
Goals
Decision Results
Situation
Sterman, J.D. (2000). Business Dynamics: Systems thinking for a problematic world. Boston: Irwin-McGraw-Hill.
Assumptions
Strategic Decision Success
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Defining characteristics of systems
1. A system’s parts must all be present for the system to carry out its purpose optimally.
2. A system’s parts must be arranged in a specific way for the system to carry ouit its purpose.
3. Systems have specific purposes within larger systems.
4. Systems maintain their stability through fluctuations and adjustments.
5. Systems have feedback.
Strategic Decision Success
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Linkages and interdependencies Organizations as systems
• Improved employee working conditions and training levels may improve service quality to the point that marketing can reposition service at a higher level.
• A commitment by marketing to fast product delivery creates pressures on scheduling and production.
• A late raw materials shipment has cascading effects on production and meeting customer orders, which increases complaints to customer service and sales.
• A change in production design often affects the equipment as well as costs of production, skill requirements and advertising and distribution approaches.
• Timing of a sales promotion influences capacity utilization and production costs, overtime scheduling as well as order quantity and delivery arrangements with suppliers.
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A feedback-oriented worldview
Sterman, J.D. (2000). Business Dynamics: Systems thinking for a problematic world. Boston: Irwin-McGraw-Hill.
Environment
Goals of other agents
Decisions
Side effects
Actions of others
Goals
Strategic Decision Success
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Disappointments in carrying out strategic change
87% expressed a sense of disappointment and helplessness over the strategy work.
59% felt that the problem lay in the execution of the plan.
However, the firms continued with the implementation work…– No other methods work better.– Management does not “dare” try anything new.
Strategic Decision Success
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Key issues in strategy implementation
• Understanding the consequences of implementation.
• Employee attitudes.
• Are there sufficient resources to carry out the strategy?
• Control routines and systems.
• Dedication on the part of the employees.
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A framework for managing strategic change
Types of strategic change
Diagnosing strategic change needs
Managing strategic change processes
Roles in the change process
Change tactics
Communicating change
Political processes
Structure and control
Styles of managing
change
Changing routines
Symbolic processes
Source: Johnson and Scholes, 1997
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Force-field analysis
• Client-focused organization and closeness to clients
• Flexible approach and structure
• Change is normal
• Informality and networking
• Working hard
• Fun place to work
• Job evaluation as “core”
• Individualism of consultants
• Complacency about change
• Lack of coordinated information
• Inadequate induction processes
• Overly complicated structure
• Too many meetings and memos
• Individual, not team, incentives and controls
Forces acting against change
Forces acting for change
Equilibrium
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Organizational resistance factors• Surprise• Human inertia• Misunderstandings, lack of knowledge• Emotional side effects
– Loss of established relationships and work routines.
• Little trust in management• Threats to security and status
Strategic Decision Success
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Organizational resistance to change
• Rules
• Limited focus
• Group resistance
• Loss of expertise
• Changed power relationships
• Job descriptions, evaluations, incentives
• Local changes
• Group norms
• Relocation of key employees
• Decentralization
Source Examples
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Personal resistance
• Habits
• Financial factors
• Lack of clarity
• Social factors
• Security/fear
• Changes in workload and type
• Changed reward systems
• Group isolation
• Group norms
• New responsibilities, groupings, reporting relationships
Source Examples
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Reducing resistance
• Participation
• Support
• Agreement
• Threats
• Training and communication
• Cooperation on changes
• Channel for emotional problems
• Common development of goals
• Relocation, layoff
• Open dialogue, information, training programs
Source Examples
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Phases of change
• Awakening• Awareness• Analysis• Re-evaluation• Commitment• Involvement• “Workshops”• Internalization• Evaluation
• “Something is wrong!”• Discussions, engagement, orientation.• Collecting information.• “What shall we do?”• Organization is “sold” on the ideas.• Presentation to the organization, find owners.• Participation in group work.• Group, management development programs.• “Have we reached our goals? What’s next?”
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“Unfreezing” and managing changeORGANIZATIONAL
SYMPTOMSPRESSURES FOR
CONFORMITYSTAGES
Informationbuilding
Informationbuilding
Organizationalflux
Organizationalflux
RefreezingRefreezing
ExperimentationExperimentation
Organizationalanticipation
Organizationalanticipation
Unfreezingmechanisms
Unfreezingmechanisms
Early signals made sense of within paradigm
Political pressures not to “rock the boat”
Information made sense of within paradigm
Resistance to new ideas
Rumors and signals Questions and challenges
“Felt need” for change
Competing views of causes of problems and remedies Information collection Political “testing” of support
New ideas tested out
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Factors in change management Develop a holistic perspective - avoid
local optimization and global sub-optimization.
Full and active support from top management.
Stimulate everyone for active participation. Create a culture for open communications. Reward the participants.
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Critical Systems Heuristics boundary questions
Step 1: The “Is” mode1. Who is the actual client of the system’s design?2. What is the actual purpose of the system’s design, as being measured not in terms of declared
intentions of the involved, but in terms of the actual consequences?3. What, judged by the design’s consequences, is its built-in measure of success?4. Who is the actual decision taker, that is, who can actually change the measure of success?5. What conditions of successful planning and implementation of the system are really controlled
by the decision taker?6. What conditions are not controlled by the decision taker, that is, what represents “environment”
to her?7. Who is actually involved as planner?8. Who is involved as “expert”, of what kind is his expertise, what role does he actually play?9. Where do the involved see the guarantee that their planning will be successful? Can these
assumed guarantors secure the design’s success, or are they false guarantors?10. Who among the involved witnesses represents the concerns of the affected? Who is or may be
affected without being involved?11. Are the affected given an opportunity to emancipate themselves from the experts and to take
their fate into their own hands, or do the experts determine what is right for them, what quality of life means for them, etc?
12. What worldview actually underlies the design of the system? Is it the worldview of (some of) the involved or of (some of) the affected?
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Critical Systems Heuristics boundary questions
Step 2: The “Ought” mode1. Who ought to be the client (beneficiary) of the system to be designed or improved?2. What ought to be the purpose of the system, that is, what goal states ought the system be able to
achieve so as to serve the client?3. What ought to be the system’s measure of success (or improvement)?4. Who ought to be the decision taker, that is, have the power to change the system’s measure of
improvement?5. What components (resources and constraints) of the system ought to be controlled by the
decision taker?6. What resources and conditions ought to be part of the system’s environment?7. Who ought to be involved as designer of the system?8. What kind of expertise ought to flow into the design of the system?9. Who ought to be the guarantor of the system?10. Who ought to belong to the witnesses representing the concerns of the citizens that will or might
be affected by the design of the system? That is to say, who among the affected ought to get involved?
11. To what degree and in what way ought the affected be given the chance of emancipation from the premises and promises of the involved?
12. Upon what worldviews of either the involved or the affected ought the system’s design be based?
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