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Managerial Theory of Strategic Behavior of Environment Serving Organizations

Managerial Theory of Strategic Behavior of Environment Serving Organizations. Introduction to Strategic Behavior. Prepared by: Corinne Jenni April 18 th , 2008. State of Knowledge. state of knowledge. Behavior of Complex Organizations in Turbulent Environments. Practical Knowledge

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Managerial Theory of Strategic Behavior of Environment Serving Organizations

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  1. Managerial Theory of Strategic Behavior of Environment Serving Organizations Introduction to Strategic Behavior Prepared by: Corinne Jenni April 18th, 2008

  2. State of Knowledge state of knowledge Behavior of Complex Organizations in Turbulent Environments Practical Knowledge how organizations should behave Theoretical Knowledge why and how organizations do behave gaps in knowledge Theory and Practical Technology are only vaguely related

  3. Goal of the Book THEORY PRACTICE Applied Theory generic concepts translatable into practical problem-solving Mintzberg attacking Ansoff: “Now, let’s fill the gaps between theory and practice.”

  4. Basic Hypothesis of the Book

  5. Environment-Serving Organization • ESOs work: entrepreneurial and strategic work, operations, marketing, political work • ESOs income: • commercial transactions (goods/services sold to customers) • subsidy transactions (external agent grants resources w/o tangible return) • ESOs success: • selling products/services needed by customers • using resources efficiently to supply needs • strategic budget determines success of strategy • ESOs management: Change of Power • manager as leader/motivator • employees with knowledge power (i.e. technology)

  6. Definition - Axiom Merriam-Webster Dictionary: • a maxim widely accepted on its intrinsic merit 2. a statement accepted as true as the basis for argument or inference 3. an established rule or principle or a self-evident truth (http://www.merriam-webster.com)

  7. Basic Axiom “… the art of life is first to be alive, secondly, to be alive in a satisfactory way, and thirdly, to acquire an increase in satisfaction.” Alfred North Whitehead Maslow’s hierarchy of needs 6. Growth (personal growth) 5. Self-Actualization (morality, creativity, etc) 4. Esteem (respect, confidence) 3. Love (family, friends) 2. Safety (employment, health) 1. Physiology (air, water, food)

  8. Whitehead’s Axiom • Individual is motivated by an aspiration for security (survival) and achievement making trade-offs between the two aspirations depending on entailed risk • Individuals create, join and use organizations to achieve security and/or achievement • Individuals’ aspirations is determined by his achievement drive and power at his disposal

  9. Machiavelli’s Axiom • Individuals/Groups seek to attain their aspirations by influencing others to behave in accordance with their preferences. • Their influence depends on the degree of control which they possess over allowing and/or denying others the fulfillment of their aspirations.

  10. J.V. Thompson’s Axiom • Organizations have behavior tendencies which are independent and frequently contrary to the preferences of powerful participants. • Organizations have recognizable collective aspirations which are not necessarily those of powerful participants. • Organizations resist efforts to change their prior behavior. • The behavior of organizations in an environment may range between the extremes of reluctant, passive adaptation to the environment, and aggressive, creative modification of the environment.

  11. Emery-Trist Axiom • The environment determines the modes and conditions of behavior necessary for survival and/or achievement of organizational aspiration.

  12. Chandler’s Axiom The success/survival of an organization depends on a two way alignment: • between its behavior in the environment and the conditions for success/survival defined by the environment. • between its behavior and its internal configuration.

  13. Hypothesis 1.1: Survival Drive When an ESO is confronted with the prospects of extinction, it focuses all of its energy on a search for a survival strategy. psychological roots systemic roots sociological roots Survival Drive reflects the individual’s drive for personal security, the tribal interdependence and allegiance of social groups, and the inertial tendency of complexbureaucratic systems to continue functioning in a previously established mode.

  14. Hypothesis 4.1: Convergence of Firms and Non-Profits In the future, the firm’s commercial focus will become progressively diluted, and not-for-profits will become more commercial. no longer clearly distinctive behavior • For-Profit Not-For-Profit • less profit-seeking behavior - more efficient • more focus on ethics - entrepreneurial • environmental conscious - more aggressive

  15. Hypothesis 4.2: Growth of Environmental Turbulence During the twentieth century the key events in the environment of ESOs have become progressively more novel; costlier to deal with; faster; more complex; and more difficult to anticipate. • Industrial Revolution (business firm) • Mass-Production Era (Model T) • Mass-Marketing Era (market mentality) • Post-Industrial Era (Drucker - ‘Age of Discontinuity’) • Porter’s 5 forces - widely recognized in business firms • Barney – sustainable competitive advantage (“a green edge”)

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