1. Lecture 11 – ECON.S-1620 Prof. Charles Moran Copyright 2015 1 Evolutionary Approaches to Organizations Lecture 11

2. Lecture 11 – ECON.S-1620 Prof. Charles Moran Copyright 2015 2 Evolution and Organizations Organizations develop and interact with their environment Internal – External Cyber (unseen) and extended environment of organization members Creating organization memory –Culture –Core Values –Strategy and Structure –Firm specific dynamic capabilities

3. Lecture 11 – ECON.S-1620 Prof. Charles Moran Copyright 2015 3 Evolution and Organizations (cont’d) Build identity – regular and predictable firm behavior patterns competencies and routines Branding? These are modified over time – following patterns of success and recovering from failure

4. Lecture 11 – ECON.S-1620 Prof. Charles Moran Copyright 2015 4 Evolution and Organizations (cont’d) Success builds routines and reinforces competencies Does this lead to increasing inertia [Do what has created success]? Why? BUT – Environmental conditions change and pace of change is accelerating! Is organization inertia fatal to adaptation? Can we manage inertia and adaptability to sustain success as environments rapidly change?

5. Lecture 11 – ECON.S-1620 Prof. Charles Moran Copyright 2015 5 Group 1 - Management’s New Paradigms – Drucker (1999) Scope of Management Not defined by political boundaries – but political bound. Constraints on practice Management is not bounded by the organization – it must manage internally and externally Management of information technology is not about getting more information –Rather getting external information “Results take place outside the organization. Inside, there are only costs.”

6. Lecture 11 – ECON.S-1620 Prof. Charles Moran Copyright 2015 6 Management’s New Paradigms – Drucker (1999) (cont’d) New paradigm: “Management must define the results it expects to attain and then must organize the resources of the institution to attain these results.” Consider:Jack Welch – GE Bill Gates – Microsoft Andy Grove – Intel Zuckerberg and beyond Results are outside the organization

7. Lecture 11 – ECON.S-1620 Prof. Charles Moran Copyright 2015 7 Management’s New Paradigms – Drucker (1999) (cont’d) “Management is the specific tool, the specific function, the specific instrument, to make institutions capable of producing results.” Thoughts from Coase/fluid organization: “Growth and survival both now depend on getting the organization in touch with the outside world.”

8. Lecture 11 – ECON.S-1620 Prof. Charles Moran Copyright 2015 8 Management’s New Paradigms – Drucker (1999) (cont’d) HOW? Learning organizational and/or individual Turnover Less structured organizations Independence of members? Putting individuals in roles where they lack some experience and some information and encourage improvisation Second City as management school?

9. Lecture 11 – ECON.S-1620 Prof. Charles Moran Copyright 2015 9 Management’s New Paradigms – Drucker (1999) (cont’d) False Principles: One right way to organize Management is only a business discipline There is a singe/best way to manage people Each industry has a specific/unique technology and market Management job is to “run the business” – internal v. external focus Managements scope applies only to organization assets and people (Don’t try to manage what you don’t control)

10. Lecture 11 – ECON.S-1620 Prof. Charles Moran Copyright 2015 10 Management’s New Paradigms – Drucker (1999) (cont’d) Are there any benchmarks in this new world? What is an organization? Defined by results? What is management?

11. Lecture 11 – ECON.S-1620 Prof. Charles Moran Copyright 2015 11 No Boundaries Group 2 - Ghemawat – “Managing Differences – The Central Challenge of Global Strategy” –What is the challenge –Can the challenge be managed –Role of values as the ‘management’ tool Accept v. Valuing Diversity