Integrative Project
• Disc- 1 Open Systems Theory
The Discussions in this course are intended to give you some leeway in discussion. The topics are broad, and we are looking for you to take the discussion in directions that are useful and meaningful.
For this initial module of the capstone course, we will discuss open systems theory.
WEEK 1:
1. What is open systems theory?
2. How can open systems theory be used to understand an organization?
WEEK 2:
Your first task is to choose one of “Fortune Magazine’s Best 100 Companies To Work For” (2011) from the following website:
http://money.cnn.com/magazines/fortune/bestcompanies/2011/index.html
Be certain that you choose a company that is of great interest to you, as you’ll continue to study this company over the four modules. Be sure that you spend some time reviewing your chosen company’s website, familiarizing yourself with the company’s Annual Reports, 10-K filings, and other relevant information.
Discuss how open systems theory might apply to your chosen organization.
• Disc-2 OD Models
In the Background Information section of Module 2, you are provided eleven (11) different OD models.
Now that you’ve considered the background and the strengths and weaknesses of these models, which of them do you believe would be best suited to an OD analysis of your chosen Fortune “Best 100” organization? While you do not need to cover every characteristic of your chosen model, please be very thorough and specific in your discussion and reasoning.
• Disc-3 Nashler-Tushman Congruence Model
In the Background Information section of Module 3, the Nadler-Tushman Congruence Model cites four Input categories:
• Environment (factors external to the organization)
• Resources (factors internal to the organization)
• Organizational history (persistent traditions)
• Strategy (goals, objectives and strategic initiatives)
WEEK 1:
Please discuss the Environment, Resources and Organizational History and Strategy inputs in the context of your “Best 100” company. Be thorough, and be specific.
WEEK 2:
Since the Congruence Model recognizes “Outputs” as existing at the Individual, Group, and Organizational levels, please discuss the Outputs – at all three levels –of your chosen “Best 100” Company. Be thorough and be specific.
• Disc-4 OL vs. LO
In this module, we have studied the relationship between feedback loops and Organizational Learning (OL).
WEEK 1:
1. Please provide a definition of “organizational learning.”There are many, many, differing definitions of OL – and many opinions on precisely how organizations learn (or if they can even learn at all). Some notable theorists include Chris Argyris, Peter Senge, Bente Elkjaer, James G. March, Herbert A. Simon, Mark Easterbay-Smith, and Fiol & Lyles, among innumerable others.
2. Is there a difference between the notion of “Organizational Learning” (OL) and that of the “Learning Organization” (LO)? Are we anthropomorphizing (great word!) organizations when we say that they “learn”?
WEEK 2:
Please describe the extent to which you believe your chosen “100 Best” organization is also a “Learning Organization.” If so, how does your organization “learn”? What has your organization “learned,” and through what mechanism(s)?
Module 1 – Background
STRATEGIC REVIEW
OVERVIEW OF CASES
The Integrative Case Project (which you learn more about in the Case) focuses mainly on using Organizational Diagnosis (OD) models to analyze Whole Foods Market. For purposes of the Case studies, you will assume the role of a consultant for the Excellent Consulting Group. You will need to study Whole Foods Market and prepare reports for your boss, Art Epance, who is the Senior Project Manager at the Excellent Consulting Group. Essentially, the ABC Company has determined that it will require an outside review of Whole Foods Market to assist the company in determining how to proceed relative to integrating Whole Foods Market into ABC Company.
Each Case will be a separate analysis task in which you will prepare a report. The details of these assignments are explained in the Case assignments in each module.
The four cases in this course include the following:
• Case 1 – Strategic Review of Whole Foods Market.
• Case 2 – An analysis of Organizational Diagnostic models and identifying a model to use for diagnosing Whole Foods Market.
• Case 3 – Diagnosing the Inputs and fit with the strategy of Whole Foods Market, as well as the Outputs and Performance of Whole Foods Market.
• Case 4- Analyzing critical feedback loops and the opportunities for organizational learning at Whole Foods Market.
The SLP for this course involves participating in a simulation exercise. Unlike cases, which are static, simulations are interactive and you can see the results of your decisions. Additionally, you can repeat the simulation to improve the quality of your decisions.
GENERAL SLP SCENARIO:
The 4-module SLP sequence for BUS599 requires that you run a simulation over an 18-year period, and that you analyze the outcome of the decisions you make at each decision point.
In this course, we will be using the MIT Solar Power Pricing Simulation.
The Industry Evolution Management Flight Simulator portrays the growth and competition of firms as an industry evolves. Playing the role of chief executive for one of the firms in the industry, you make key decisions involving pricing, investment and marketing in order to succeed in the marketplace.
This version of the simulator has been customized to portray the solar power industry, specifically SunPower and other manufacturers of photovoltaic panels (PVs). While historically the cost of electricity from PV panels has limited them to niche applications, there is massive potential for growth in the market if solar power could become a viable alternative to traditional sources of electricity.
In the simulator, your job is to maximize SunPower’s cumulative profit over a period of eighteen years. To do this, you make pricing and investment decisions each simulated time period.
As a young company with a new innovation, you will start the game with a technology that you hope stays proprietary. In theory you can reap the benefits of technological advancements from the rest of the industry while spreading your advancements to them.
In addition, you (or your administrator) have the option of setting several other competitive and market scenarios, including the sources and rates of learning, the strength of knowledge spillovers, entry of new competitors, and external incentives that help to drive consumers towards using solar power.
You will receive periodic reports including your income statement and industry data. You need to select your strategies based on those reports, your understanding of the underlying industry structure, and your best judgment about how your competitor and customers may respond.
Though the model has been carefully calibrated and tested, it is not designed to predict the future or exactly match the history and special circumstances of SunPower. Rather, it is used to illustrate competitive dynamics important not only in the photovoltaic panel industry but in other contexts you may face. Instead of merely “beating the game,” focus on understanding the underlying industry structure so you can develop robust, successful strategies.
*** Source: Sterman, J. (2014). Eclipsing the competition: The Solar PV industry simulation. Forio. Retrieved on November 23, 2014 from http://forio.com/simulation/solar-test/index.htm#page=market_research
GET FAMILIAR WITH THE SIMULATION
Familiarize yourself with the simulation. This will require that you get an in-depth understanding of the terminology used in the simulation, as well as the pricing and cost structure of the product. As you begin this simulation (Year 1), your market share is only 2.40%. Your role with the company is to expand your company’s market share over the multi-year period of operations – while recognizing the highest possible cumulative profit. To do this, you must make favorable pricing decisions, and you must ensure that you are improving your product while simultaneously lowering unit costs. Product improvements are determined by the % of revenue allocated to process improvement (i.e., technological advancement = lower unit costs).
Be sure to review the SunPower case study, as it will provide you with background and context for the simulation: http://forio.com/simulation/solar-test/downloads/SunPower-Henderson.pdf
Then, visit the simulation here:
http://forio.com/simulation/solar-test/index.htm#page=market_research
At the landing page, click on “Play as an INDIVIDUAL.” Then, choose a Screen ID and click “Submit.”
Explore the interface and get familiar with it and the information it provides. The menu on the left-hand side shows these options:
NEED TO BRUSH UP ON CVP ANALYSIS?
You were introduced to this method in your previous courses, but this link will provide a refresher.
Rehman, A. (2014, March 24). Accounting for Management.com Cost-Volume-Profit Relationship (CVP Analysis). Retrieved from http://www.accountingformanagement.com/cost_volume_profit.htm
Should you need to brush up on financial analysis, the following presentation provides a very good overview of financial statement analysis:
http://vrpacioli.loyola.edu/ac102/chapter17/chapter17.ppt
Optional Reading and Resources
Remember that in preparing the assignments for this module (as those that follow), you must demonstrate that you know how to use the appropriate business tools for such an analysis. This will require you to integrate learning from courses throughout the MBA program.
Other Useful Resources
You may access some useful Internet and other resources relating to such matters as financial ratios and processes for measurement of organizational resources (both tangible and intangible) through the following links:
http://www.investopedia.com/university/ratios/#axzz2JNe7QCr3
http://www.sveiby.com/articles/IntangibleMethods.htm
Module 2 – Background
ORGANIZATIONAL DIAGNOSTIC MODELS
Organizational Development (OD) is a fundamental management subject and important for an MBA degree program. One aspect of Organizational Development is Organizational Diagnosis, which is not as comprehensive as the overall development or change process. Diagnosis is often the first step in the OD process. Over the years, there have been many OD models developed. Some are better than others and some are more useful in certain situations than others. Later models were developed with Open System Theory in mind, which tends to make the models more comprehensive. ABC Company and Whole Foods Market are interested in using an OD model to diagnose Whole Foods Market’s current situation. You will need to have an understanding of some of these models in order to make a recommendation.
Required Reading
Download and read this white paper by Falletta about OD models. Salvatore Falletta, President and CEO of Leadersphere, has written a white paper that reviews several commonly used models of organizational diagnosis. You will use several of these models in conducting your integrative Case project. The relevant part of this paper in terms of this class is the first 31 pages. The last part of the paper (pp. 32-43) deals with the theoretical foundations of the Burke & Litwin model, Falletta’s Organizational Intelligence Model; this is optional reading. We are not covering Falletta’s Organizational Intelligence Model.
Falletta, S. V. (2013) Organizational diagnostic models: an integrative review & synthesis. Organizational Intelligence Institute (www.oi-institute.com).
Falletta provides an overview of Open Systems Theory (OST) in his paper (pp. 8 & 9). Keep in mind that OST is not an OD model, but rather a basis for most of the later models. For a deeper understanding, go to the following optional reading and read about systems, systems thinking, and organizations as open systems. You will see that businesses are not unlike living organisms: they depend on the environment for sustenance; they comprise multiple, mutually dependent parts; and they affect the environment in the course of their daily activities. Open Systems Theory provides valuable insights into organizations.
Optional Reading
Systems Thinking and Learning Organizations (n.d.). National Defense University. Retrieved from http://www.au.af.mil/au/awc/awcgate/ndu/strat-ldr-dm/pt1ch4.html
There are no reading assignments for the SLP.
However, if you need a refresher on various theories (product life cycle, pricing, price elasticity, market saturation, product development, etc.) there are a multitude of articles on the Internet.
Optional Review Materials
Once again, this small sample of Useful Internet Sites may help you throughout the course, and can serve as a complement to previous course materials. You are encouraged to supplement this list if you need additional refreshers.
Module 3 – Background
CONGRUENCE MODEL OF ORGANIZATIONAL BEHAVIOR
The background reading for the Case in this module focuses on the Nadler-Tushman Congruence Model. You will be using this model to complete the case.
David Nadler is the founder and CEO of Mercer Delta Consulting Group. An internationally recognized expert in organizational change, Nadler has written seven books and numerous articles for practicing managers. Michael Tushman is a Full Professor at the Harvard Business School. He has written or edited eight books and is widely published in academic and practitioner journals.
Required Reading
Nadler, D. A. & Tushman, M. L. (1980). A Model for Diagnosing Organizational Behavior. Organizational Dynamics, 9 (2), 35-51. Retrieved on November 7, 2012 from EBSCO.
According to the authors, “Our congruence model of organizational behavior is based on how well components fit together – that is the congruence among components; the effectiveness of this model is based on the quality of these ‘fits’ or ‘congruence.’ (p.39).
From the reading, you will note that there are four input categories. They are as follows:
1. Environment (factors external to the organization);
2. Resources (factors internal to the organization);
3. Organizational history (Persistent Traditions); and
4. Strategy (goals, objectives and strategic initiatives).
If the link to the article does not work, it is probably because your computer does not allow “cookies” which would let you connect directly to the library. In such a case, you will need to connect manually to the appropriate database.
At the same time, you will continue with the Nadler-Tushman Congruence Model to assess an organization’s outputs. Nadler and Tushman identify outputs as existing at the individual, group, and organizational level. They also emphasize the importance of identifying the outputs that the organization desires vs. what is actually achieved.
Outputs are not complicated to understand. At the Organization level, they are the products and services that are provided to its customers. (It can also be the value provided to its owners, but we are not going to consider this here.) The primary way that a company measures its performance is financially: Sales, Profit, Return on Sales (ROS), Return on Assets; and also via market share.
The organization is made up of various groups. One way to look at groups is by functional area: marketing, operations, purchasing, etc. Another way, if the company is large, is by its various divisions or by its product groupings. Here it becomes a little more complicated to measure performance, but it is possible by defining the goals and objectives of each group.
The bottom level of the organization is the individual. Each person has a job description and is responsible for specific outputs for that job. The main method of performance measurement here is individual productivity: Outputs/Inputs (e.g., widgets/hour, or reports/day). This is more difficult to quantify and for a specific company is difficult to obtain, since this data is not generally reported. Sometimes you can infer some individual measures, for example, by dividing Profit by the number of total employees, to get a measure of overall profitability per person.
Optional Reading
The following is an interesting, updated, and highly recommended peer-reviewed journal article relating to organizational diagnosis. Following is the Abstract:
Abstract:
Using an operational framework, the diagnostic funnel is introduced, which prescribes the appropriate actions of a process consultant in conducting an organizational diagnosis. The diagnostic funnel comprises the four actions of (a) selecting a general diagnostic model, (b) collecting data that minimizes bias, (c) analyzing the data to reduce the likelihood of error, and (d) deriving a unique diagnostic paradigm, specific to the organization under study. It is argued that the actions described by the diagnostic funnel will result in a diagnosis that achieves a high level of scientific rigor. To provide a detailed description of the diagnostic funnel, a case example of an organizational diagnosis is presented.
Gregory, B. T., Armenakis, A. A., Moates, K., Albritton, M., & Harris, S. G. (2007). Achieving scientific rigor in organizational diagnosis: An application of the diagnostic funnel. Consulting Psychology Journal: Practice & Research, 59(2), 79-90. Retrieved from http://organized-change-consultancy.wikispaces.com/file/view/Diagnostic%20Funnel.pdf/113982643/Diagnostic%20Funnel.pdf
There are no reading assignments for the SLP
However, if you need a refresher on various theories (product life cycle, pricing, price elasticity, market saturation, product development, etc.) there are a multitude on the Internet.
Optional Review Materials
Once again, a small sample of Internet materials that may help you throughout the course can be accessed through the following links:
http://www.investopedia.com/university/ratios/#axzz2JNe7QCr3
http://www.sveiby.com/articles/IntangibleMethods.htm .
This can serve as a complement to previous course materials. You are encouraged to supplement this list if you need additional refreshers.
Module 4 – Background
FEEDBACK LOOP AND ORGANIZATIONAL LEARNING
While most models of organizational diagnosis that we have been exposed to in this class recognize the existence of feedback loops, none of them really offer a thorough discussion of the complexity of feedback or how it can be used to promote organizational improvement and development. To get a better view of this topic, we turn to the work on systems thinking and organizational learning. Much of this literature is based on the work of Peter Senge, whose seminal book The Fifth Discipline popularized the notion that organizations are capable of learning.
In all of the reading, pay particular attention to the two types of Feedback Loops: Reinforcing Feedback that causes growth, and Balancing Feedback that provides stabilizing effects.
Required Reading
This first reading is a good overview.
Bellinger, G. (2004). Introduction to systems thinking. Retrieved from http://www.systems-thinking.org/intst/int.htm.
This second reading is quite long and reviews much of the work in the area of learning organizations. Read it all if you like (see menu on left side of the page), but the most relevant part of the paper for this course is part VI, which covers systems thinking:
Larsen, K., McInerney, C., Nyquist, C., Santos, A., & Silsbee, D. (1996). Learning Organizations (Part VI: Systems Thinking) Retrieved from http://leeds-faculty.colorado.edu/larsenk/learnorg/index.html.
If you are still confused about feedback loops, here is another tutorial on this complex concept: Feedback Loops in System Dynamics.
Optional Reading
Bellinger, G. (2004) theWay of systems. Retrieved from http://www.systems-thinking.org/theWay/theWay.htm
Bellinger, G. (2004) Archetypes. Retrieved from http://www.systems-thinking.org/arch/arch.htm.
This is the home page for the extensive site from which much of the material for this module was taken: http://www.systems-thinking.org/index.htm.
There are no reading assignments for SLP 4.
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