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Strategic Decision Success GRA 6820 Strategic Choice 1 GRA 6820 Strategic Decision Success (Harrison, Ch.11)

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Presentation on theme: "Strategic Decision Success GRA 6820 Strategic Choice 1 GRA 6820 Strategic Decision Success (Harrison, Ch.11)"— Presentation transcript:

1 Strategic Decision Success GRA 6820 Strategic Choice 1 GRA 6820 Strategic Decision Success (Harrison, Ch.11)

2 Strategic Decision Success GRA 6820 Strategic Choice 2 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

3 Strategic Decision Success GRA 6820 Strategic Choice 3 The function of models ExcellentPoor Excellent Celestial mechanics Quantum mechanics Poor Evolutionary biology Economics Ability to Predict Ability 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.

4 Strategic Decision Success GRA 6820 Strategic Choice 4 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)

5 Strategic Decision Success GRA 6820 Strategic Choice 5 An event-oriented worldview Problem Goals DecisionResults Situation Sterman, J.D. (2000). Business Dynamics: Systems thinking for a problematic world. Boston: Irwin-McGraw-Hill. Assumptions

6 Strategic Decision Success GRA 6820 Strategic Choice 6 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.

7 Strategic Decision Success GRA 6820 Strategic Choice 7 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.

8 Strategic Decision Success GRA 6820 Strategic Choice 8 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

9 Strategic Decision Success GRA 6820 Strategic Choice 9 Disappointments in carrying out strategic change è 87% expressed a sense of disappointment and helplessness over the strategy work. è 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.

10 Strategic Decision Success GRA 6820 Strategic Choice 10 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.

11 Strategic Decision Success GRA 6820 Strategic Choice 11 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

12 Strategic Decision Success GRA 6820 Strategic Choice 12 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

13 Strategic Decision Success GRA 6820 Strategic Choice 13 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

14 Strategic Decision Success GRA 6820 Strategic Choice 14 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 SourceExamples

15 Strategic Decision Success GRA 6820 Strategic Choice 15 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 SourceExamples

16 Strategic Decision Success GRA 6820 Strategic Choice 16 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 SourceExamples

17 Strategic Decision Success GRA 6820 Strategic Choice 17 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?”

18 Strategic Decision Success GRA 6820 Strategic Choice 18 “Unfreezing” and managing change ORGANIZATIONAL SYMPTOMS PRESSURES FOR CONFORMITY STAGES Information building Information building Organizational flux Organizational flux Refreezing Experimentation Organizational anticipation Organizational anticipation Unfreezing mechanisms Unfreezing mechanisms l Early signals made sense of within paradigm l Political pressures not to “rock the boat” l Information made sense of within paradigm l Resistance to new ideas l Rumors and signals l Questions and challenges l “Felt need” for change l Competing views of causes of problems and remedies l Information collection l Political “testing” of support l New ideas tested out

19 Strategic Decision Success GRA 6820 Strategic Choice 19 Factors in change management è Develop a holistic perspective - avoid local optimization and global sub-optimization. è Full and active support from top management. è Stimulate everyone for active participation. è Create a culture for open communications. è Reward the participants.

20 Strategic Decision Success GRA 6820 Strategic Choice 20 Critical Systems Heuristics boundary questions Step 1: The “Is” mode 1.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?

21 Strategic Decision Success GRA 6820 Strategic Choice 21 Critical Systems Heuristics boundary questions Step 2: The “Ought” mode 1.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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