1. Chapter 2 Environment, Diversity, and Competitive Advantage Spring 2006 Dr. Burton

2. Chapter 2 Environment, 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?

3. 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

4. External Environments of Organizations  What is Competitive Advantage? Companies may achieve it in many ways including  products  pricing  customer service  cost efficiency  quality

5. External Environments of Organizations  The General Environment - all of the background conditions of the organization including: Economic Social-cultural Legal-political Technological Natural environment

6. 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

7. 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

8. 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

9. 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

10. 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

11. 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

12. 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

13. 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

14. Customer-Driven Organizations  Quality and Continuous Improvement Continuous Improvement  Always looking for new ways to improve upon current performance

15. Information Technology Utilization  Information Needs of Organizations Information  data made useful for decision making intelligence public

16. Information Technology Utilization  Information Systems and Networks technology to collect, organize, and distribute data in such a way that they become meaningful as information

17. 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

18. Information Technology Utilization  Chief Information Officer (CIO) oversees all aspects of computer, information and telecommunications systems central role in strategic decision- making

19. 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

20. 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

21. 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

22. Information Technology Utilization  Organizational Learning mental models personal mastery systems thinking shared vision team learning

23. 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

24. The five learning disciplines  Mental Models  Building Shared Vision  Team Learning  Personal Mastery  Systems Thinking

25. 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.

26. Systems Diagram “Seeing circles of influence” Water Flow Current Water Level Perceived Gap Faucet Position Desired Water Level

27. Reading a Reinforcing Circle Diagram Sales Satisfied Customers Positive Word of Mouth

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

29. The Five Learning Disciplines Systems Thinking Personal Mastery Mental Models Building Shared Vision Team Learning

30. 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.

31. Three-stage Continuum  Stage One: New cognitive, linguistic capacities.  Stage two: New Action Rules  Stage Three: New values and Assumptions

32. The Five Learning Disciplines Three 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.

33. Mental Models Essences Principles Practices *Love of truth *Openness *Espoused Theory vs. Theory-in-use *Ladder of Inference *Balance Inquiry and Advocacy *Distinguishing “Data” from abstractions based on data *Testing assumptions *”Left-Hand

34. 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

35. Team Learning Essences Principles Practices *Collective Intelligence *Alignment *Dia Logos *Integrate dialogue and discussion *Defensive routines *Suspending assumptions *Acting as colleagues *Surfacing own defensive nests *Practicing

36. 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

37. Systems Thinking Essences Principles Practices *Holism *Interconnectedness *Structure influences Behavior *Policy resistance *Leverage *System Archetypes *Simulation

38. 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