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Strategy & Systems Systems Thinking and Process Management August 31, 2000

Strategy & Systems Systems Thinking and Process Management August 31, 2000. Yesterday’s Objectives. To review the factors that were responsible for the development and success of large, industrial organizations.

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Strategy & Systems Systems Thinking and Process Management August 31, 2000

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  1. Strategy & SystemsSystems Thinking and Process ManagementAugust 31, 2000

  2. Yesterday’s Objectives • To review the factors that were responsible for the development and success of large, industrial organizations. • To identify the forces that are transforming the business world today and in the future. • To discuss the impact of these changes on the organizations and business careers of the future and their implications for your business education.

  3. Today’s objectives • To develop a systems/ process view of business organizations • To explore the challenges, including ethical challenges, of managing an organization that involves a wide variety of stakeholders • To develop process modeling skills

  4. Systems Theory • Systems theory explores the structure, relationships, and interdependencies within and between systems • Examples • Biological organisms • Factories • Families • Organizations

  5. The Organization as a System • An organization is a system that consists of subunits that are interactive, interrelated, and interdependent. The organizational system is also part of the external environment, and it is interactive, interrelated, and interdependent with other systems (stakeholders) in its environment. • Critical to understand interactions and interdependencies • Understanding the parts of a dissected frog fully doesn’t mean that you could put the frog back together

  6. AN OPEN SYSTEMS VIEW OF THE ORGANIZATION External Environment Transformation processes Inputs Outputs This model depicts the organization as a mechanism for transforming inputs such as raw materials into outputs such as goods and services. Hatch, 1997

  7. McDonald’s as a System • Inputs • Potatoes, real estate, beef, beanie babies, employees • Throughputs • Set up franchises, design menus, design promotions, advertise, cook, clean up restaurants • Outputs • Food, family experience, profits, employment

  8. What is a principle/ agent relationship? Who are the principles and who are the agents at McDonald’s (Friedman)What is a stakeholder?Who are the stakeholders of McDonald’s? (Freeman)

  9. McDonald’s stakeholders • Stockholders, employees, customers, suppliers, government, Burger King, Wal-Mart, franchise owners, corporate headquarters employees • Levels of commitment, influence, expectations to input, throughput, output

  10. What are the most important challenges that a top manager faces in managing the firm as a system?

  11. What skills and knowledge does a top manager need to deal with these challenges? • Understanding of principles’ (and other key stakeholders) desires and expectations • including risk/ reward; time frame; tolerance for ambiguity; need for control • Understanding of key stakeholders contribution to the organization • Understanding of interrelationships between the parts and the whole • Creating uniqueness (distinctive competence/ competitive advantage) • Manage tradeoffs • Manage fit • Self-understanding (what you can do and still sleep at night; risk/ reward…)

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