Week 2 The business context 1. Porter’s Five Forces
Where does the power lie?
How do I maximise my power and leverage?
How do I identify and minimise my weaknesses?
The threat of new entrants, bargaining power of suppliers, bargaining power of buyers, threat of substitute products or services and rivalry among existing competitors 2. Porter’s Generic Strategies
How do I gain a competitive advantage in business?
What strategies will help me achieve my goals?

3.1 The Cost Leadership Strategy 3.2.1 Increase profits by reducing costs 3.2.2 Industry-average prices 3.2.3 Increasing market share 3.2.4 Low costs mean greater profit
You will need: 3.2.5 Strong control over Cost of Labour 3.2.6 Preferential access to raw materials, components etc. 3.2.7 Take advantage of economies of scale 3.2.8 Easy access to supply chains and affordable logistics 3.2 The Differentiation Strategy 3.3.9 Create a product that is perceived as unique 3.3.10 Brand Loyalty 3.3.11 Can provide better insulation from competition
You will need:
2.2.4 Strong R&D
2.2.5 Creativity
2.2.6 Unique Marketing Strategy
2.2.7 Innovate to stay ahead of the competition
2.3 Focus Strategy
2.3.1 Focus on niche markets
2.3.2 Unique understanding of the market
2.3.3 Either cost leadership or differentiation
You will need:
2.3.4 Unique/specific insight into the market
2.3.5 Knowledge of suppliers and specialists
2.3.6 Willing to take the risk that the niche may disappear 3. Value Chain Analysis
Value Chain Analysis helps you identify the ways in which you create value for your customers, and then helps you think through how you can maximize this value: whether through superb products, great services, or jobs well done.
How to Use the Tool
Value Chain Analysis is a three-step process:
1.Activity Analysis: First, you identify the activities you undertake to deliver your product or service;
2.Value Analysis: Second, for each activity, you think through what you would do to add the greatest value for your customer; and
3.Evaluation and Planning: Thirdly, you evaluate whether it is worth making changes, and then plan for action.

Example:
Lakshmi is a software development manager for a software house. She and her team handle short software enhancements for many clients. As part of a team development day, she and her team use Value Chain Analysis to think about how they can deliver excellent service to their clients.

During the Activity Analysis part of the session, they identify the following activities that create value for clients:
•Order taking
•Enhancement specification
•Scheduling
•Software development
•Programmer testing
•Secondary testing
•Delivery
•Support

Lakshmi also identifies the following non-client-facing activities as being important:
•Recruitment: Choosing people who will work well with the team.
•Training: Helping new team members become effective as quickly as possible, and helping team members learn about new software, techniques and technologies as they are developed.

Lakshmi marks these out in a vertical value chain on her whiteboard (you can see the first three client-facing activities shown in the "Step 1: Activity Analysis" box in Figure 1 below):

Next, she and her team focus on the Order Taking process, and identify the factors that will give the greatest value to customers as part of this process. They identify the following Value Factors:
•Giving a quick answer to incoming phone calls.
•Having a good knowledge of the customer's business, situation and system, so that they do not waste the customer's time with unnecessary explanation.
•Asking all the right questions, and getting a full and accurate understanding of the customer's needs.
•Explaining the development process to the customer and managing his or her expectations as to the likely timetable for delivery.

You can see these in the "Value Factors" column of figure 1.
They then look at what they need to do to deliver the maximum value to the customer. These things are shown in the Figure 1's "Changes Needed" column.
They then do the same for all other processes.
Once all brainstorming is complete, Lakshmi and her team may be able to identify quick wins, reject low yield or high cost options, and agree their priorities for implementation. http://www.mindtools.com/pages/article/newTMC_10.htm 4. PESTLE Analysis
Week 3 Critical thinking-individually 1. What does it mean to think critically?
What would it mean if we did not have the ability to think critically?
You will accept everything told to you by those who all have a vested (vt. 授予；使穿衣) interest (vested interest: 既得利益) in influencing us.
They have a vested interest in getting us to believe what they say. 2. Whose interest is being served?
Ideological State Apparatus (意识形态国家机器)
A person's beliefs, desires, choices, intentions, and judgements are directed or given to them by the institutions of our society. 3. A lack of inner reflection limits your ability to engage in outer reflection, which can lead to
Short-term thinking... including reactive decision making and quick fix solutions
Poor ability to predict outcomes
Maintenance of the status quo
Stagnation and inability to innovate
Susceptibility (敏感性) to power games
Unethical behaviour
Poor levels of social and environmental responsibility
Lack of alignment with strategic goals 4. The antidote: critical thinking
The ability to:
4.1. Recognise assumptions
4.2. Evaluate arguments
Clarity, Accuracy, Precision, Relevance, Depth, Breadth, Logic
4.3. Draw conclusions
Week 4 Group decision-making & traps
1. The non-critical approach----risks Short-term thinking (IBGYBG-I will be good you will be good) Reactive decision making /Quick-fix solutions (e.g. airlines industry is under tremendous pressure) Poor ability to predict outcomes (e.g. Kodak was not able to predict outcomes) Stagnation an inability to innovate (e.g. reject technology and innovation) Maintenance of the status quo (e.g. Bell’s telephone, western union turning down the telephone-assumed it was just another ‘electrical toy’) Unethical behaviour (e.g. birth defects was caused by the mother taking thalidomide [θə'lɪdəmaɪd]镇静剂 during pregnancy) Poor levels of social and environmental responsibility (e.g. Deepwater Horizon explosion- the largest accidental marine oil spill in the world, and the largest environmental disaster in U.S. history)
2. Decision Making Traps Rushing to conclusions Toxic assumptions (they are the assumptions that commonly go unchallenged (未受到过质疑的)people accept it without asking questions about whether it is right or wrong.), and are typically based on a view of the world that relies on existing market, model or competitive dynamics(动态竞争). As soon as those dynamics change, potentially in unforeseen ways, the business is underprepared and struggles to adapt-----internet) Analysis paralysis(分析瘫痪)(a decision can be treated as over-complicated, with too many detailed options, so that a choice is never made, rather than try something and change if a major problem arises-----internet 一种常见的项目状态，这时过多的系统建模极大地减缓了实现系统方案的进度。) (e.g. The Big Bang Theory) The quick vote (doesn’t allow discuss, doesn’t allow people to be heard, doesn’t allow consensus to be built) Sunk cost trap (e.g. Melbourne Star) (throw good money after bad) Vocal minorities (someone with a big mouth (夸夸其谈的人) is very convincing, and they have more influence because they are vocal even they are not the majority) Lack of response (when you motivate people, nobody cares, nobody is interested, and nobody really does much) The Abilene Paradox (阿比林悖论) (a group of people collectively decide on a course of action that is counter to the preferences of many (or all) of the individuals in the group---internet) (在许多组织内尽管每个人心中都不愿意，但却又常常做出一些违背个人意愿的集体决定) 补充: It involves a common breakdown of group communication in which each member mistakenly believes that their own preferences are counter to the group's and, therefore, does not raise objections. A common phrase relating to the Abilene Paradox is a desire not to "rock the boat( 捣乱；破坏良好的现状；使遇到危险). This differs from groupthink in that the theory is characterized by an inability to manage agreement. 区别于groupthink Group think (you actually change your believes and change your behaviour because the people around you are thinking and doing something differently)
3. Steps in Critical Decision Making
Step 1: identify the problem
Step 2: generate and evaluate alternate solutions
Step 3: choose an option and perform due diligence
Step 4: implement the solution
Step 5: evaluate (whether or not we met the objective)
4. Tools to avoid traps
4.1 Paired analysis (Paired Comparison Analysis helps you to work out the relative importance of a number of different options---internet) 配对分析http://www.mindtools.com/pages/article/newTED_02.htm
How to Use the Tool
To use the technique, download our free worksheet, and then follow these six steps:
4.1.1. Make a list of all of the options that you want to compare. Assign each option a letter (A, B, C, D, and so on) and note this down.
4.1.2. Mark your options as both the row and column headings on the worksheet. This is so that you can compare options with one-another.
4.1.3. Within each of the blank cells, compare the option in the row with the option in the column. Decide which of the two options is most important.
4.1.4. Write down the letter of the most important option in the cell. Then, score the difference in importance between the options, running from zero (no difference/same importance) to, say, three (major difference/one much more important than the other.)
4.1.5. Finally, consolidate the results by adding up the values for each of the options. You may want to convert these values into a percentage of the total score.
4.1.6. Use your common sense, and manually adjust the results if necessary.
4.2 Multi-criteria analysis (sub-discipline of operations research that explicitly considers multiple criteria in decision-making environments---internet) 多标准分析
4.3 Decision trees (think logically)
Choosing by Projecting "Expected Outcomes" 5.3.1 Drawing a Decision Tree
At the end of each line, consider the results. If the result of taking that decision is uncertain, draw a small circle. If the result is another decision that you need to make, draw another square. Squares represent decisions, and circles represent uncertain outcomes. Write the decision or factor above the square or circle. If you have completed the solution at the end of the line, just leave it blank. (Square: certain; Circle: Uncertain) 5.3.2 Evaluating Your Decision Tree
Now you are ready to evaluate the decision tree. This is where you can work out which option has the greatest worth to you. Start by assigning a cash value or score to each possible outcome. Estimate how much you think it would be worth to you if that outcome came about. 5.3.3 Calculating Tree Values
Calculating the Value of Uncertain Outcome Nodes 5.3.4 Calculating the Value of Decision Nodes
4.4 Cost benefit analysis (think about all the costs and benefits)
You can use Cost-Benefit Analysis when you are:
•Deciding whether to hire new team members.
•Evaluating a new project or change initiative.
•Determining the feasibility of a capital purchase.
4.4.1 Brainstorm Costs and Benefits
4.4.2 Assign a Monetary Value to the Costs
4.4.3 Assign a Monetary Value to the Benefits
4.4.4 Compare Costs and Benefits
4.5 Nominal group technique (It can be used in groups of many sizes, who want to make their decision quickly, as by a vote, but want everyone’s opinions taken into account---internet) 名义群体（决策）技术: The nominal group technique (NGT) is a group process involving problem identification, solution generation, and decision making.[1] It can be used in groups of many sizes, who want to make their decision quickly, as by a vote, but want everyone's opinions taken into account (as opposed to traditional voting, where only the largest group is considered).[2] The method of tallying is the difference. First, every member of the group gives their view of the solution, with a short explanation. Then, duplicate solutions are eliminated from the list of all solutions, and the members proceed to rank the solutions, 1st, 2nd, 3rd, 4th, and so on. Some facilitators will encourage the sharing and discussion of reasons for the choices made by each group member, thereby identifying common ground, and a plurality of ideas and approaches. This diversity often allows the creation of a hybrid idea (combining parts of two or more ideas), often found to be even better than those ideas being initially considered.
具体方法是，在问题提出之后，采取以下几个步骤：
1）成员集合成一个群体，但在进行任何讨论之前，每个成员独立地写下他对问题的看法；
2）经过一段沉默后，每个成员将自己的想法提交给群体。然后一个接一个地向大家说明自己的想法，直到每个人的想法都表达完并记录下来为止（通常记在一张活动挂图或黑板上）。所有的想法都记录下来之前不进行讨论；
3）群体现在开始讨论，以便把每个想法搞清楚，并做出评价；
4）每一个群体成员独立地把各种想法排出次序，最后的决策是综合排序最高的想法。
名义群体法的优点
名义群体法的主要优点在于，使群体成员正式开会但不限制每个人的独立思考，但是又不像互动群体那样限制个体的思维，而传统的会议方式往往做不到这一点。
4.6 Multi-voting (Multi-voting is a process which respects the opinions of all participants and allows everyone to be fully involved in the decision---internet) 多方投票
When group consensus is needed, multi-voting is a simple process that helps you whittle down (削减，削弱) a large list of options to a manageable number. It works by using several rounds of voting, in which the list of alternatives becomes shorter and shorter. If you start with 10 alternatives, the top five may move to the second round of voting, and so on.
4.7 Consensus (a decision process for making full use of available resources and for resolving conflicts creatively)
4.8 Common ground: Grounding in communication (or common ground) is a concept proposed by Herbert H. Clark and Susan E. Brennan. It comprises the collection of "mutual knowledge, mutual beliefs, and mutual assumptions" that is essential for communication between two people. [1] Successful grounding in communication requires parties "to coordinate both the content and process". The concept is also common in philosophy of language.
4.9 Stepladder technique (everyone has a chance to speak)
What is the Stepladder Technique?
The Stepladder Technique is a simple tool that manages how members enter the decision-making group. Developed by Steven Rogelberg, Janet Barnes-Farrell and Charles Lowe in 1992, it encourages all members to contribute on an individual level BEFORE being influenced by anyone else. This results in a wider variety of ideas, it prevents people from "hiding" within the group, and it helps people avoid being "stepped on" or overpowered by stronger, louder group members.
All of this helps the group make better decisions.
How to Use the Tool
The Stepladder Technique has five basic steps. Here's how it works:
Step 1: Before getting together as a group, present the task or problem to all members. Give everyone sufficient time to think about what needs to be done and to form their own opinions on how to best accomplish the task or solve the problem.
Step 2: Form a core group of two members. Have them discuss the problem.
Step 3: Add a third group member to the core group. The third member presents ideas to the first two members BEFORE hearing the ideas that have already been discussed. After all three members have laid out their solutions and ideas, they discuss their options together.
Step 4: Repeat the same process by adding a fourth member, and so on, to the group. Allow time for discussion after each additional member has presented his or her ideas.
Step 5: Reach a final decision only after all members have been brought in and presented their ideas.
4.10 Futures analysis (plan various futures)
Week5 Case study: Starbucks
1. healthy vs. toxic assumptions
Healthy: a range of perspectives Toxic: Groupthink/ only one view Evidence-based no evidence or validation Open to challenge stay in the comfort zone Critical analysis mindlessness
2. Starbucks Australia
Pursue a differentiation strategy with high-price, high-value products, services and environment
Possible toxic assumptions: growth is good Aussie coffee drinkers are just like American coffee drinkers
Possible decision-making traps: sunk cost trap Over-confidence and expectation trap
Lessons learnt: 1) crossing international borders is risky, so in-depth research is absolutely vital 2) think global and act local 3) keep sight of your competitive advantage 4) consider the viability of the business model in new markets
3. Six Thinking Hats
A way to make group decision-making more powerful and more efficient, using it to avoid traps. It means six perspectives on information that you can use through group decision-making. All the group members put the same hat at the same time.
White (information gathering): The white hat is about data and information. It is used to record information that is currently available and to identify further information that may be needed. The available locations; rent, buy or self-construct; costs reports; availability; macro economy and prediction; plant design
Red (gut reaction本能反应, intuition): The red hat is associated with feelings, intuition, and emotion. The red hat allows people to put forward feelings without justification or prejudice. What emotions are surrounding this decision? Low costs of renting a plant
Yellow (positive consequences): The yellow hat is for a positive view of things. It looks for benefits in a situation. This hat encourages a positive view even in people who are always critical. Listing all the advantages of the decision with supporting reasons Saving costs; no need to design; can produce shoes as soon as possible; if fail, suffer little loss
Black (negative consequences): The black hat relates to caution. It is used for critical judgement. Sometimes it is easy to overuse the black hat. Consider all the disadvantage of an idea. Limitations; property price
Green (creative alternatives): The green hat is for creative thinking and generating new ideas. This is your creative thinking cap. Design for the future; there will be huge demand in the future.
Blue (process control): The blue hat is about process control. It is used for thinking about thinking. The blue hat asks for summaries, conclusions and decisions. Thinking about thinking! What do we want to achieve? Used by the meeting's Chair to move among the different thinking styles. He or she may have needed to keep other members of the team from switching styles, or from criticizing other peoples' points.
'Six Thinking Hats' is an important and powerful technique. It is used to look at decisions from a number of important perspectives. This forces you to move outside your habitual thinking style, and helps you to get a more rounded view of a situation.
Many successful people think from a very rational, positive viewpoint. This is part of the reason that they are successful. Often, though, they may fail to look at a problem from an emotional, intuitive, creative or negative viewpoint. This can mean that they underestimate resistance to plans, fail to make creative leaps and do not make essential contingency plans.
You can use Six Thinking Hats in meetings or on your own. In meetings it has the benefit of blocking the confrontations that happen when people with different thinking styles discuss the same problem.
Example

The directors of a property company are looking at whether they should construct a new office building. The economy is doing well, and the amount of vacant office space is reducing sharply. As part of their decision they decide to use the 6 Thinking Hats technique during a planning meeting.

Looking at the problem with the White Hat, they analyse the data they have. They examine the trend in vacant office space, which shows a sharp reduction. They anticipate that by the time the office block would be completed, that there will be a severe shortage of office space. Current government projections show steady economic growth for at least the construction period.

With Red Hat thinking, some of the directors think the proposed building looks quite ugly. While it would be highly cost-effective, they worry that people would not like to work in it.

When they think with the Black Hat, they worry that government projections may be wrong. The economy may be about to enter a 'cyclical downturn', in which case the office building may be empty for a long time. If the building is not attractive, then companies will choose to work in another better-looking building at the same rent.

With the Yellow Hat, however, if the economy holds up and their projections are correct, the company stands to make a great deal of money. If they are lucky, maybe they could sell the building before the next downturn, or rent to tenants on long-term leases that will last through any recession.

With Green Hat thinking they consider whether they should change the design to make the building more pleasant. Perhaps they could build prestige offices that people would want to rent in any economic climate. Alternatively, maybe they should invest the money in the short term to buy up property at a low cost when a recession comes.

The Blue Hat has been used by the meeting's Chair to move among the different thinking styles. He or she may have needed to keep other members of the team from switching styles, or from criticizing other peoples' points.

It is well worth reading Edward de Bono's book 6 Thinking Hats for more information on this technique.
4. The ‘premortem’ (useful/ powerful tool, give valuable feedback to the original decision making team)
A premortem is a managerial strategy in which a manager imagines that a project or organization has failed, and then works backward to determine what potentially could lead to the failure of the project or organization. The technique breaks possible group thinking by facilitating a positive discussion on threats increasing the likelihood the main threats are identified. Management can then analyse the magnitude and likelihood of each threat, and take preventative actions to protect the project or organization from suffering an untimely “death”. (Internet) Little demand for TOMS shoes; unexpected penalties for issues including environment; opposition of locals and governments due to leading local businesses into bankruptcy; no increase in employment rate
A typical premortem begins after the team has been briefed on the plan. The leader starts the exercise by informing everyone that the project has failed spectacularly. Over the next few minutes those in the room independently write down every reason they can think of for the failure—especially the kinds of things they ordinarily wouldn’t mention as potential problems, for fear of being impolitic ([ɪm'pɒlɪtɪk] adj. 失策的；不明智的). For example, in a session held at one Fortune 50–size company, an executive suggested that a billion-dollar environmental sustainability project had “failed” because interest waned when the CEO retired. Another pinned the failure on a dilution of the business case after a government agency revised its policies.
Next the leader asks each team member, starting with the project manager, to read one reason from his or her list; everyone states a different reason until all have been recorded. After the session is over, the project manager reviews the list, looking for ways to strengthen the plan.
Week 6 Employee engagement
1. Definition:
1st type: Employee engagement is the emotional commitment the employee has to the organization and its goals.
2nd type: The extent to which employees commit to something or someone in their organization, how hard they work and how long they stay as a result of that commitment.
2. Three forms of engagement Engaged (work with passion) Not engaged (just fulfil the tasks) Actively disengaged (unhappy)
3. Why employee engagement matters? YouTube
When employees are engaged they perform better and your business grows
When people are engaged with their work, they are more likely to work hard, get better at their jobs and stay with you for years and years, not just stop by for a few months then take their talents elsewhere.
Try to get a balance: organisations where managers talk to their people, listen to their people, reward their people for a job done well, give opportunities to learn and keep their people focused on their goals tend to succeed and grow faster.
Engagement drives performance for individuals, teams and organisations.
4. Enhance employee engagement
Non-financial incentives are critical to engage employees (e.g. Praise and commendation from direct manager & attention from leaders) 1). 8 key drivers of Employee Engagement
Trust and integrity. Do managers ‘walk the talk’?
Nature of the job. Is it mentally stimulating? (No boring jobs)
Does the employee understand how their work contributes to the company’s performance?
Co-workers/team members significantly influence one’s level of engagement
Pride about the company
Relationship with one’s manager (crucial factor)
Career Growth opportunities
Employee development 2). Three strategies to enhance employee engagement (RPT)
Recognition (employees want to get feedback & managers communicate with employees)
Personal growth (employees want opportunities in their company)
Trust (company trust employee & employee trust company) 3). Examples of effective and meaningful employee engagement:
Hilti (corporate culture workshop)
Google (enhancing employment engagement through innovative workspace)
8. Three principles for effective engagement (IID) Inclusion (the company can do participation process with everybody or do with random sample) 8.1 ICJ Deliberation (熟思more than discussion, more than exchange of argument, we need to deliberate, we need to invite experts, and we need to weigh our argument) Influence (important) (when people participate in those process, people want to have certain influence) 8.1. The ‘ladder of participation’ or how good participation looks like –in theory ICJ Information (manage can inform the employees) Consultation (possible to consult employees) Joint decision-making (final recommendation of your employees)

Week 7 Business as a system 1. The process of critical thinking (Strachan 2007) 2.1 Making assumptions and perspectives explicit 2.2 Understanding interests and power relationships 2.3 Exploring alternative ways of thinking and acting 2.4 Making ethical choice 2. Why understanding system is important? 3.5 We can’t understand parts of a business without understanding the whole system of the business. 3.6 Thinking in systems promotes learning in organisations. 3. Definitions of a system (Meadows 2008)
A system is an interconnected set of elements that is coherently organised in a way that achieves something…
A system must consist of three kinds of things: elements, interconnections and a function or purpose. 4. How systems work 5.7 Elements
Easiest part to understand low life quality, low employment rate, donate money; map that against setting up a new plant that deal with raw materials, plant property and equipment, employees, shoes
Focusing only on elements inhibits understanding of system 5.8 Interconnections
Give the system its system-ness: Investigate the causes and solutions of low life quality and low employment rate; donate or set up a business
Operate through a flow of information 5.9 Purpose Purpose=Behaviour ⧧ Stated goals: The way it acts is the purpose, not what it says. For instance, a company may say its goal is to eradicate poverty; however, its act tells us that the purpose is to maximise shareholders’ values.
Self- perpetuation purpose: Most organisations want their continual existence.
Sub-purpose (If it contradicts with the overall purpose, it may change the overall purpose.) 5.10 Stocks
Memory of the history of changing flows within the system, it’s what in the system at a given time (历史变化的流动内存)
In the specific case, stocks are the water in the reservoir which is replenished by rain. Understanding stocks is important coz it allows you to understand how information flows into the system and where blocks of information may exist.
In the mining example, there is no information flow. Understanding the stocks is important coz it allows us to know how long we can exist in terms of the mining example. 5.11 Levers (n. 杠杆；控制杆)
System elements that, when triggered, have a multiplying effect on the system.
In the financial system of USA, if AIG performs well, others perform well. So AIC acts as the role of a lever. 5.12 Boundaries (一定有, 但是没有固定的规则)
In order to study a system, one must place boundaries on it.
Systems thinking requires an awareness of what boundaries we place on systems, and an ability to change those boundaries as we change perspectives, although there is no rule to set boundaries.

5. How systems learn (use a system thinking approach to promote learning in organisations组织如何自我学习 进步) There are two ways systems learn from themselves. 6.13 Balancing feedback loops (Standard balance loop) 标准平衡循环 6.14.1 A balancing loop attempts to move some current state (the way things are)to a desired state (goal or objective) through some action (whatever is done to reach the gaol).
Standard balance loop 6.14.2 Greater the gap, greater the tendency for action.
The desired state interacts with the current state to produce a gap. The desired state is considered to be fixed during this consideration. The gap created by the difference between the desired state and the current state is really the motivation for action, and the larger the gap the greater the tendency to produce action. The action taken then adds to the current state. The current state subtracts from the gap, thus reducing it. When the action succeeds in moving the current state to a point where it is equal to the desired state the gap is reduced to zero and there is no more motivation for action.
A desired state: becoming a mature and successful social business that sell numerous shoes and boosts the life quality and wellbeing of local people
Current state: nothing but an intention to set up a social business
The gap between the two states is the motivation for action.
5.1.3 Effective strategy
Ensure there is an explicit well understood and agreed upon definition of the desired state. If you don't know where you're trying to get to then any action will take you somewhere.
Ensure there is an as objective as possible definition of the current state. It is the relation between the desired state and the current state that forms the basis for planning and subsequent action. If the planning is flawed there is a good chance the resultant action will be inappropriate to move the current state to the desired state.

Because action is driven by the size of the gap there is a natural tendency for the extent of action to decline as the current state approaches the desired sate. This tendency accounts for the fact that as projects approach completion it seems to be more and more difficult to make progress toward completion. To overcome this tendency the motivation for action must come from somewhere else other than the gap. In terms of project completion the focus might be to begin to think about completing this project so the organization can get on to the next one. The answer to the predicament lies outside the structure.
5.1.4 Triggered by a lever
Turn the facet 6.14 Balancing Loop with Delay 6.15.3 This structure is a variation of the standard balancing loop. The variation being that there are one or more delays in the structure which are responsible for producing a very different behaviour pattern than with the standard balancing loop.

6.15.4 Implications of Delay
Delays within this structure could exists between the time the action is taken and the time current state changes, or between the time current state actually changes and the time it is realized in order to affect the extent of the action being taken. A delay at either location will have essentially the same affect. The affect being that the action will continue to add to the current state at a level above what it should. This is essentially an overreaction which will tend to drive the current state beyond the desired state and the gap will go negative. The structure's reaction to this is to run in reverse, if this is possible for the particular instance described by the structure. The delay may be such as to cause overreaction in the opposite direction to move the current state below the current state. With a sufficient delay the structure will result in larger and larger oscillations ([力] 振动；振幅) over time. 6.15.5 Effective Strategy
Advice for dealing with this structure is quite simple. Patience is a virtue. If you know you're dealing with a balancing structure and things are not going as expected then study the structure to see if there could be one or more delays that your impatience is simply having difficulty dealing with. This structure proves that there are times when taking additional action is worse than not taking additional action. More is not always better. 6.15.6 Action/Reaction delay
Action: turn the facet; reaction delay: feel temperature changes
Apply: A manager takes an action without understanding there is an action/reaction delay, so he thinks his action doesn’t have any consequences or results. Or he doesn’t realise there is an reaction triggered, positive on one hand, negative on the other hand if you don’t understand how the system works 6.15 Reinforcing feedback loops
A reinforcing loop is one in which an action produces a result which influences more of the same action thus resulting in growth or decline.
5.3.1 Can be positive or negative
Interest rate for deposit money-positive
Reducing the price of product-negative
5.3.2 Balancing feedback loops and reinforcing feedback loops can happen at the same time in the same system. A balancing feedback loop can trigger a reinforcing loop. 6. How systems support critical thinking
6.1 Name and identify relevant elements and interconnections
Interconnections often mean interest and power relationships between people and groups of people.
6.2 Work through logic using models
Make things clear
6.3 Explore alternatives
6.4 Communicate simply
Make assumptions and perspectives explicit 7. Types of solutions (Systematic solutions) 8.16 Symptomatic(有症状的) solutions (quick-fix solutions)
Address symptoms, not the underlying problem
Focused on often because of time limitations
Example: Toms Shoes, only provide shoes, not jobs for developing countries 8.17 Fundamental solutions (More important, more lasting)
Examines root causes of problems
More time consuming, but lasting 8. Apply system thinking to the case of Aboriginal juvenile detention
8.1 Identify where the offenders are coming from and the cost of imprisonment of those offenders, then map that against the underspend in education, health and social services in those communities. [6.1 Name and identify the elements of the system]
8.2 Engage with community around the causes and solutions to local crime, and determine where imprisonment funds could be spent in those communities to provide social services and community based alternatives to non-violent offences. [6.2 Identify interconnections][6.3 Explore alternatives]
8.3 Put the case study to Government showing projected savings based on reductions in imprisonment spending, and those savings can then be allocated to investment spending, and those savings can then be allocated to investment in services identified by the community. [6.2 Work through logic; 6.3 Communicate simply]
8.4 Measure and evaluate, with targets such as reduction in imprisonment, amount of imprisonment money saved, and community well-being indicators. [Feedback from system] 9. Becoming a system thinker
9.1 Expand mental boundaries
9.2 Recognise constraints of systems
9.3 Move beyond symptomatic solutions
9.4 Confront values
9.5 Recognise that business can make a difference
Week8 Culture in the business environment
1. Hofstede’s three levels of mental programming (心理编码) Human nature (bottom) basis of our pyramid Universal: we all have it Inherited: we automatically have it from birth Underpin
Culture
Specific to group or category Learned
Personality (opposite to human nature) Specific to each individual Inherited & learned (Part comes from our DNA Part comes from our experiences & the people around us)
2. Definition of culture:
Culture is the set of distinctive (adj. 有特色的,与众不同的)spiritual, material, intellectual and emotional features of society or a social group that encompasses, not only art and literature, but lifestyles, ways of living together, value systems, traditions and beliefs. 一个社会或者社会群体的精神的，物质的，智力的，情感的特点，包括艺术与文学，生活方式，价值体系，传统和信仰。
Hofstede said that culture is the societies’ personality
Learned: absorb the culture that we grow upon (E.g. children raise in the culture rather than they born to)
Symbolic: different cultures will assign different meanings to arbitrary symbols (任意组合的符号) (E.g. colour blue Iran: positive meaning connected to spirituality Western world: depression feeling blue/ have a blue Monday)
Overlap: differences regions have different cultures
Assist in sense-making: humans are constantly in the process making sense of our world One way is that we group things together
Mechanisms of control: your culture can both predict and prescribe How you will act and react in a given situation
Invisible: Cultural Iceberg 90% below surface invisible: difficult to see: values/ priorities/ assumptions 10% visible: easy to see: customs/ mores(['mɔːreɪz; -riːz] n. 习惯，习俗；风俗；道德观念The essential or characteristic customs and conventions of a society or community: ‘an offence against social mores’)/ courtesies
Culture shock (5 periods) Honeymoon period (love everything about new culture) Initial shock (e.g. certain habit) Superficial adaption (assume yourself settled in) True culture shock (your new culture clashes in a fundamental way with your values) True adaptation (really settled in)
3. Hofstede’s Work Values Studies: Dependence, inequality, unknown, emotional, natural and time perspective
Dependence on others:
1). Individualism vs. Collectivism: refers to the ties amongst people in a community Higher: More respect for privacy Enjoyment of challenges
Hard work is rewarded (e.g. USA)
Defined as a preference for a loosely-knit social framework in which individuals are expected to take care of only themselves and their immediate families Lower: Respect for age, wisdom and tradition Harmony is more important than honesty (keep peace at all cost)
Mastering a skill has intrinsic reward (内在奖励；内在报酬) (master skills for the sake of learning something new) (E.g. Guatemala [ˌɡwɑtə'mɑlə] and Panama)
Defined as a preference for a tightly-knit framework in society in which individuals can expect their relatives or members of a particular in-group to look after them in exchange for unquestioning loyalty.
Handling inequality:
2). Power distance: refers to the amount of inequity that exists and is accepted Higher: centralised companies Strong hierarchy Large gaps in compensation (e.g. Malaysia) Lower: supervisors and employees are treated as equals Teamwork (e.g. Australia)
Dealing with the unknown:
3). Uncertainty avoidance: refers to the degree of anxiety or stress a society feels in uncertain situations. Higher: collective truth and a “right” way to do things More rules and policies Differences are avoided and people are often more nervous (e.g. Belgium) Lower: more informal business attitude Risk is embraced and change is accepted (e.g. Denmark)
Emotional gender roles:
4) Masculinity vs. Femininity: Refers to the degree a society upholds (vt. 支撑；鼓励；赞成；举起) traditional male and female roles Higher: Traditional “male” and “female” jobs A higher level of assertiveness (n. 魄力,自信) and competition (e.g. Japan) Lower: Equality across professions A more caring, nurturing environment (a blurring n. 模糊 of typical gender roles) (E.g. Sweden)
Time perspective:
5) (T) Long term vs. Short term orientation: refers to the extent to which cultures respect tradition and how quickly or slowly change happens in a certain culture. 对于传统的尊重的程度以及变化发生的快慢 Long Term Orientation (high) stands for the fostering of virtues oriented towards future rewards, in particular perseverance and thrift (n. 节俭；节约). ---making sacrifices for a long-term goal (China, Japan and South Korea) 以未来为导向，储蓄，节俭，为长期利益做出牺牲 Short Term Orientation (low) stands for the fostering of virtues related to the past and present, in particular, respect for tradition, preservation of ‘face’ and fulfilling social obligations. ---Efforts should produce quick results. It is important to maintain personal stability and happiness in the present (USA, Russia and France) 对于过去和现在的行为，尊重传统，保住颜面，完成社会责任，强调快速的结果，维持个人现在的稳定和快乐。
Dealing with natural drives:
6) (T) Indulgence vs. Restraint: Indulgence stands for a society that allows relatively free gratification of basic and natural human drives related to enjoying life and having fun. (Indulgent cultures will tend to focus more on individual happiness and well-being, leisure time is more important and there is greater freedom and personal control) (USA) Restraint stands for a society that suppresses gratification of needs and regulates it by means of strict social norms. (Positive emotions are less freely expressed and happiness, freedom and leisure are not given the same importance) (China)
4. What does this mean for business? Updated communication skills Knowledge of different cultures Culture appropriate marketing Overcoming stereotypes Bi-culturals (there are people who are influenced by more than one culture) Leadership training
5. Stereotypes
Stereotypes are generalisations about the behaviours and characteristics of a group of people.
Stereotypes are a way of categorising the world around us
Stereotypes are learned
Stereotypes can be positive or negative (even a positive stereotype can have a negative outcome)
Stereotypes are often linked to prejudice
Stereotypes are often unjustified (most people will hold the stereotype about a certain culture even if they have never met one person from that culture)
Stereotypes create expectations about the way individuals will behave

Week 9 Business ethics 1. Concept of business ethics
Business ethics (also corporate ethics) is a form of applied ethics or professional ethics that examines ethical principles and moral or ethical problems that arise in a business environment. It applies to all aspects of business conduct and is relevant to the conduct of individuals and entire organizations.
It is the applied ethics discipline that addresses the moral feature of commercial activity. 2. Flag of convenience
A cruise ship trip, why is so cheap? You cannot do that in an ethical way.
Flag of convenience is the business practice of registering a merchant ship in a sovereign state different from that of the ship's owners, and flying that state's civil ensign (旗(帜)；尤指(挂在船上的)国旗；军旗；舰旗，商船旗) on the ship.
Register in a country where there are low regulation, slack labour laws and slack environmental laws. 3. Labour ethics 4.1 Pay different wages for the same job according to different nationalities (employment agency, endemic due to convenience flag) 4.2 Under minimum wages, violate fairness and ethics 4.3 Who’s responsible for the planet (different sections)? 4. Environment
Noise and pollutions
How to compensate for the price to be environmental-friendly 5. Community
Who actually benefits from the business?
Threats to culture and heritage
Risk of STD (Sexually Transmitted Disease性传播疾病)
PHP: peaceful, happiness and property 6. Consumer ethics
How much more will you pay?
Morals/organics
7. Deontology [,diːɒn'tɒlədʒɪ] /deontological ethics
Focus on duty and intention
Whatever the consequence, based on moral rules
We are rational, autonomous beings.
Doing the right thing for the right reason.
It is the motive that matters.
The end does not justify the means.
Doing one’s moral duty
The most familiar forms of deontology, and also the forms presenting the greatest contrast to consequentialism, hold that some choices cannot be justified by their effects—that no matter how morally good their consequences, some choices are morally forbidden. On such familiar deontological accounts of morality, agents cannot make certain wrongful choices even if by doing so the number of those exact kinds of wrongful choices will be minimized (because other agents will be prevented from engaging in similar wrongful choices).
If an act is not in accord with the Right, it may not be undertaken, no matter the Good that it might produce (including even a Good consisting of acts in accordance with the Right).

8. Utilitarianism
Focus on consequences and maximise happiness
Greatest good for the greatest number
In business context: cost/benefit
Weighted up cost vs. possible damages
Ethically guilty
Consequentialists hold that choices—acts and/or intentions—are to be morally assessed solely by the states of affairs they bring about. Consequentialists thus must specify initially the states of affairs that are intrinsically valuable—often called, collectively, “the Good.” They then are in a position to assert that whatever choices increase the Good, that is, bring about more of it, are the choices that it is morally right to make and to execute. (The Good in that sense is said to be prior to “the Right.”)
Utilitarians, for example, identify the Good with pleasure, happiness, desire satisfaction, or “welfare” in some other sense.

Week 10 Social business 1. Define social business
Social business, as the term had once been commonly used, was first defined by Nobel Peace Prize laureate Professor Muhammad Yunus and is described in his books ‘Creating a world without poverty’—Social Business and the future of capitalism and Building Social Business—the new kind of capitalism that serves humanity's most pressing needs.

In these books, Yunus defined a Social Business a business:
Created and designed to address a social problem
A non-loss, non-dividend company, i.e.
1.1 It is financially self-sustainable and
1.2 Profits realized by the business are reinvested in the business itself (or used to start other social businesses), with the aim of increasing social impact, for example expanding the company’s reach, improving the products or services or in other ways subsidizing the social mission. 2. Understand the overarching context in which social businesses operate Private Sector | Social Business | Charity | 100% focus on profit;
No CSV;
No CSR; | Run in the middle | Social enterprise;
No ability to earn profit;
Charitable service;
Legal capacity as non-for-profit organisation | | | | | | | | | | | | |

3. Shared value: (Porter and Kramer ‘Creating shared value’)
3.1 Defined as policies and operating practices that enhance the competitiveness of a company while simultaneously advancing the economic and social conditions
3.2 Shared value creation focuses on identifying and expanding the connections between societal and economic progress 4. Mind mapping: what works well + what needs to change
4.1 Using a mind map, identify what works well and what needs to change
4.2 Make improvements that will make the business idea a more viable (adj. 可行的) social business 5.3 Consider: 5.4.1 Social impact
How many people does the business serve and how much impact is it having?
Environmental impact, supplies access and viability, employee skills, worker safety, employee health, water use, energy use 5.4.2 Economic impact
How profitable is the business? Where does the profit sit? 5.4.3 Sustainability of the business model
Can the business operate as it currently does in the long term? 5. Social enterprise may take the form of social business. A social business is NOT necessarily not-for-profit. Profits, efficiency, demand…these are not dirty words! While profit is not a dirty word, the same cannot be said for ambiguity. Reporting, responsibility and stakeholders must be clearly structured and followed. So who are stakeholders? Investors, community, collaborators and customers.
Every firm should look at decisions and opportunities through the lens of shared value. This will lead to new approaches that generate greater innovation and growth for companies-and also greater benefits for society. 6. A contrast between CSR and CSV: CSV should supersede CSR in guiding the investments of companies in their communities. Corporate social responsibility (CSR) | Creating shared value (CSV) | According to Porter and Karmer(2011),
1. Reactive: Discretionary or in response to external pressure
2. Peripheral to the business (adj. 外围的；次要的): Separate from profit maximisation; Agenda is determined by external reporting and personal preferences
3. A cost centre: Citizenship, philanthropy, sustainability 4. Value: Doing good 5. Impact limited by corporate footprint and CSR budgetExample: Fair trade purchasing | 1. Proactive: Integral to competing 2. Core to the businessIntegral to profit maximisation; Agenda is company specific and internally generated 3. Delivers economic and social value: Joint company and community value creation 4. Value: Economic and societal benefits relative to cost 5. Realigns the entire company budgetExample: Transforming procurement to increase quality and yield | | | | | | | | | Key attributes | Key attributes | › Positive externalities:
External to core business | › Positive externalities | › Intrinsic to business model:
Social impact and economic model are not related. | › Intrinsic to business model | › Financial sustainability | › Financial sustainability | | + Adding | | Genuine intersection between social and economic factors*: A new concept which means how a private sector could bring social impact and environmental impact into a core business model, how to align them and how to cooperate with productionTypes of collaboration that social business can engage with different stakeholders that may differ from traditional charity or sector | | =Dual mandate investments | | › Cannot create profits without social impact:
Social and economic impacts are positively linked; genuinely commit both | | › Cannot create social impact without creating profits:
Social and economic impacts are positively linked; genuinely commit both | | › Risk management?Types of funding models, particularly financial sustainability. It enables social businesses to access commercial finance and elite talents, genuinely bring investment capability, fortunately or unfortunately, create financial returns and competitive wages. Impact investment looks for commercial returns but also social impact. Lack of expertise, existing skills and resources | | Sources of CSV↓ | | Re-conceiving products and markets | | Re-defining productivity in the value chain | | Enabling local cluster developmentEthical implications: your own consideration about whether this type of social business is actually the right way or approach including social impact to the value chain. |

7. Case analysis: Creating shared value in the supply chain
A Nestlé case study
These principles are at the basis of Nestlé’s culture and aim to protect the trust of its consumers and other stakeholders. The principles and their associated policies are concerned with activities related to:
7.1 Consumers
7.2 Human rights and labour practices
7.3 Employees
7.4 Suppliers and customers
7.5 The environment
Nestlé works within the secondary sector of industry, creating and supplying products to customers.
Nestlé works with cocoa farmers in order to help them run profitable farms and eliminate child labour, whilst developing a sustainable supply of cocoa for Nestlé products.
These are core to its business activities and vital for its value chain:
Water: because the ongoing quality and availability of it is critical to life, to the production of food and to Nestlé’s operations.
Rural development: because the overall well-being of farmers, rural communities, workers and small businesses and suppliers is intrinsic to the long-term success of Nestlé’s business.
Nutrition: because food and nutrition are the basis of health and of Nestlé’s business as the leading Nutrition, Health and Wellness company.
The Cocoa Plan has become a key way in which Nestlé is tackling issues facing cocoa farmers as well as their families and communities. Nestlé sources most of its cocoa production from Côte d’Ivoire. Both the quality and quantity of cocoa supplies are in decline. The average cocoa farmer is over 55 years old and so the industry needs to consider where the next generation of cocoa farmers will come from. Many younger people in the region are leaving the countryside to work in cities. As a result there is a shortage of labour and skills. Ultimately, the aim is to raise the standard of living of cocoa farmers to ensure a new generation of cocoa farmers will take over and benefit.
Full content: http://businesscasestudies.co.uk/nestle/creating-shared-value-in-the-supply-chain/creating-shared-value-along-the-supply-chain.html#axzz3GfVYVMFr 8. Why should you care?
Fastest growing sector in developed countries
Make money through transformation not transaction
Lack of existing skills and resources
Get rich and change the world!

Week 11 Disruptive technology: business impact 1. Disruptive technology
The term "disruptive technology" has been widely used as a synonym of "disruptive innovation", but the latter is now preferred, because market disruption has been found to be a function usually not of technology itself but rather of its changing application. Sustaining innovations are typically innovations in technology, whereas disruptive innovations change entire markets. For example, the automobile was a revolutionary technological innovation, but it was not a disruptive innovation, because early automobiles were expensive luxury items that did not disrupt the market for horse-drawn vehicles. The market for transportation essentially remained intact until the debut of the lower priced Ford Model T in 1908. The mass-produced automobile was a disruptive innovation, because it changed the transportation market. The automobile, by itself, was not. 2. Disruptive innovation- Clayton Christensen theory of disruptive innovation
A process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors. 破坏性创新
It allows a whole new population of consumers to access a product or service that was historically only accessible to consumers with a lot of money or skill ’
Incumbents in large and well entrenched markets seldom survive fundamental technology change.
Example: Starbuck was a disruptive innovator for the US ‘sit-down’ diner business; Chobani yoghurt in the US market 3. How can incumbents fight back?
Usually they do ‘too little, too late’–blinded for too long by their big revenues, profits and customers who have a vested interest in the status quo
Can’t cut costs or risk their customer base further, so…
Focus less on their largest established markets and related value propositions (价值主张；价值定位；价值命题)
Initially, ramp up (增加，提高) their own products/features/benefits but later….
Try to disrupt their own businesses e.g. Greek yoghurt from General Mills
Hive off (脱离编制；分出) their disruptive efforts into an innovation ‘pod’ or ‘innovation lab’
Take a stake in the disruptor
And of course –disruptors in turn become incumbents and face their own disruptors (HBO versus Netflix) 4. 12 key disruptive technologies
1. Mobile internet
2. Automation of knowledge work –‘second machine age’
3. The ‘Internet of Things’
4. Cloud technology
5. Advanced robotics
6. Autonomous vehicles
7. Next-generation genomics
8. Energy Storage
9. 3D printing
10. Advanced materials
11. Advanced oil/gas exploration and recovery
12. Renewable energy 5. Challenges for business in digital age
New pressure on prices and margins
Competitors emerging from unexpected places
Huge competitive advantages for a lucky few
Plug and play business models (即插即用商业模式) are more prevalent
Growing talent mismatches
Converging global supply and demand
Relentless evolution of business models 6. What can we do?
Look for things that you can do well -things that involve creativity and interpersonal interaction.
Keep learning and be ready to be flexible and adjust. Learning needs to be life-long now.
Really follow your passion. There are a lot of niches and things that people can do, where you can reach a big audience and do well. 7. Governments need to plan and intervene now!
Write open-ended legislation that kicks in when the inequality rises above a threshold (Shiller2014)
-Inequality indexation of the tax system
-Develop comprehensive system of ‘livelihood’ insurance
-Encourage greater innovation http://en.wikipedia.org/wiki/Disruptive_innovation Exemplar:
TOMS Shoes is a successful multi-national shoe manufacturer that has an interest in social business. In order to make a contribution to developing countries they are setting up a factory and training facilities in Argentina where they will employ and train local people to manufacture and market low cost shoes.

Thinking about the Week 8 lecture on Hofstede’s cultural dimensions would you prefer that your business scores higher or lower on power distance? Why is this your preference? How would this benefit your business and how would you create this culture in your company?

What is power distance?
Would you prefer that your business scores higher or lower on power distance?
Why is this your preference? How would this benefit your business?
How would you create this culture in your company?

Power distance refers to the level of inequality in a culture or business. In companies with a lower power distance teamwork is more important whereas in companies with higher power distance there is a more distinct hierarchy between employers and employees.

I would prefer to run a business with a lower power distance score.
Because employees would feel that they are important to the business and therefore they would work harder. I think this is particularly important with my business as it is a social business and it is based on fairness and equality. This would benefit my business because employees perform at their best when this is a relaxed and casual atmosphere.

I would create this culture in my business by having a monthly team building activity where managers and employees can socialise together. As the CEO of my company I would make sure that I know all my employees by name and I will eat lunch with the other employees when I can so that they will feel they can talk directly to me about important issues. I will have a policy where mangers’ salaries can only be 20% higher than other employees, particularly important because we are based in a 3rd world country.