...of Complex Systems 8(1), 34-48, 2010 COMPLEXITY IN ORGANIZATIONS AND ENVIRONMENT - ADAPTIVE CHANGES AND ADAPTIVE DECISION-MAKING Robert Fabac* Faculty of Organization and Informatics, University of Zagreb Varaždin, Croatia Regular article Received: 14. May 2010. Accepted: 30. June 2010. ABSTRACT The features of complexity are ever more present in modern organizations and in environments in which they operate, trying to survive and be as competitive as possible.) In the processes of, the socalled emergence, the formal organizational structure, designed purposefully and with a plan, is going through a change due to complexity and the need for adaptation. As a result, there is a variety of new informal groups. At the same time, the intended structural changes and business process changes occur because of the perception that the leadership and senior organizational management have of the strategic situation. Managers in modern organizations often use business intelligence (BI) systems when making important business decisions. These systems offer support to the decision-making by gathering and processing relevant data and information about the company performance, but also about the data on conditions in close and remote environment. A modern company is characterized by the complex adaptive system, but the environment in which it operates together with other business subjects (agents) is also complex. Consequently, the requirements for appropriate or optimal decisions and...
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...FINANCIAL SYSTEMS FU TURE CHALLENGES IN GROWING COMPLEX E NVIRONMENT DISSERTATION Roszak Sabrina Msc BC & IS Management 1 MSC IS&BCFinancial SYSTEMS FUTURE Challenges in growing complex environment DISS Acknowledgements It is not an easy task going back to school after seven years of work experience. And it is much harder going back to school being a young mum. For this reason, my deepest gratitude goes to my family who has always supported me and helped me in this initiative. Especially, I would like to thank my parents who always believed in me, my husband who encourages me and over all, my son, whose love gave me all necessary energy and strength. I would also like take the opportunity to thank all the teachers from the MSc, especially Ms. Hirzmann who encourages me in my professional choices and future carrier and my professor Mr. Parmantier who helped me complete this dissertation. F inally, I would like to express my gratitude to Mrs. Jalabert, SBM MONACO Finance Director for her time spent answering my questionnaire. 2 MSC IS&BCFinancial SYSTEMS FUTURE Challenges in growing complex environment DISS Glossary BI: Business Intelligence BSC: Balanced Scorecard CFO: Chief Financial Officer CPI: Cost Performance Indicator CPM: Corporate Performance Management CR: Corporate Reporting CRM: Customer Relationship Management EPM: Enterprise Performance Management ERP: Enterprise Resource Planning FASB: Financial...
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...3. Complex context Complex context is unordered which means there is no apparent relationship between cause and effect. Thus, right answer cannot be discovered and it is determined by the emerging patterns. Pattern-based management style is suitable in this context. Most situations in organizations are complex because of the changes in its surroundings. In this context, leaders need to probe first, then sense before responding to the situation. In other words, managers should promote the finding of suitable patterns by conducting various experiments and creating an environment in which promoting new business opportunities. Challenges that leaders have to face: -The risk of falling back to command-and-control management styles, in which they can utilised the past guidelines with well-defined outcomes to create a fail-safe business plan. -Failures might occur during the experimental process which is important aspects of learning and understanding the pattern. They business might tried to avoid these failures by strictly controlling the experiment in which might restrain the chances for informative patterns to emerge. 4. Chaotic context In chaotic situation, the relationships between cause and effect are impossible to determine. There are no possible patterns due to the environment changes more frequently. In this domain, leader must first act to establish order and then transforming the situation from chaos to complex context where stability is sensed and pattern can...
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...management have all been developed at various times since World War 2 and continue to represent the corner stones of modern management thought (Vital source). Sociotechnical systems theory was developed in the 1950’s by the London based Tavistock Institute of Human Relations (Vital Source) .This is an approach to complex organizational work design that recognizes the interaction between people and technology in workplaces. The term also refers to the interaction between society's complex infrastructures and human behavior. In this sense, society itself, and most of its substructures, are complex sociotechnical systems (wiki). Quantitative management stems for the 1940’s and 1950’s and emphasizes the application of the quantitative analysis to management decisions and problems. This helps a manager make a decision by developing formal mathematical models of the problem which can be facilitated by the development of computers. This method is usually used in a supplement role in decision making (Vital source). Organizational behavior, also developed in the 1950’s, studies and identifies management activities that promote employee effectiveness by examining the complex and dynamic nature of individual, group, and organizational processes. Organizational behavior comes from a variety of disciplines including psychology and sociology, to explain the behavior of people on the job (vital source). Systems theory is the interdisciplinary study of systems in general, with the goal of...
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...participate in decision making process. b. Organic Structure is decentralized and has low complexity and formalization. It has an extensive information system, and employees rarely participate in decision making. It tends to be flexible and adaptive. c. Structure in function of the organization’s fundamental strategy. 1) Innovation Strategy focuses on developing important new product or services. An organic structure provides the flexibility for this strategy. 2) Cost-minimization Strategy imposes tight controls over expenses and reduces product prices. The mechanistic structure is appropriate. 3) Imitation strategies are not adopted by true innovators but rather by organizations that move into new markets after smaller competitors have demonstrated the potential for success. Limitation best suited to a structure that combines mechanistic and organic. d. Structure is also a function of 1) Size. Larger organizations tend to be mechanistic because greater formalization is needed. Strategies also change as sizes changes. Growing organizations often expand activities within their industry. 2) Technology. An organic structure may be best for coping with non-routine technology because formalization is low. 3) Environment. In general, the more stable the environment, the more mechanistic the organization. A mechanistic structure is appropriate when the environment has little capacity for growth. Dynamic environments require...
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...an ethical decision-making process it seems logical to think about how decisions in general are made by people. Decisions can be made on a programmed or nonprogrammed basis. Programmed decisions assume that the decision-maker already dealt with similar decisions before which now causes automatic reactions. Nonprogrammed decisions are more complex because they deal with new situations. Both kinds of decisions include a decision-making process that follows various steps until it reaches the final decision. No matter what kind of decision is made, somebody must play the important role of identifying a problem and, if applicable, recognizing similar situations already occurred before. Since those steps require a certain knowledge that only experts have, the responsibility will mostly likely lie with the leader of a team, project or the whole company. Even more important is the role of a leader in ethical decision making. The goal of a leader should be to meet the needs of stockholders, customers, employees, the environment, and other stakeholders. Ethics is an essential factor in business and of successful leadership and therefore ethics and leadership should go hand in hand. Successful leaders must be aware of several organizational and individual values. The foundation is, as so often, a good character. But since there is a connection between the employees’ own values and those of their workplace, a leader must be able to use these values in ethical decision making. “Six Pillars...
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...Introduction What is involved in making a good decision? A good decision is one that is based on logic, considers all available data and possible alternatives, and the quantitative approach. Decision theory is an analytic and systematic approach to the study of decision making The Six Steps in Decision Making 1. Clearly define the problem at hand 2. List the possible alternatives 3. Identify the possible outcomes or states of nature 4. List the payoff or profit of each combination of alternatives and outcomes 5. Select one of the mathematical decision theory models 6. Apply the model and make your decision 1 Thompson Lumber Company Step 1 – Define the problem Expand by manufacturing and marketing a new product, backyard storage sheds Step 2 – List alternatives Construct a large new plant A small plant No plant at all Step 3 – Identify possible outcomes The market could be favorable or unfavorable Possible outcomes are also called “States of Nature” Thompson Lumber Company Step 4 – List the payoffs Identify conditional values for the conditional large, small, and no plants for the two possible market conditions Payoffs or profits are called conditional values 2 Thompson Lumber Company Step 4 – List the payoffs conditional Identify conditional values for the large, small, and no plants for the two possible market conditions STATE OF NATURE FAVORABLE MARKET ($) UNFAVORABLE MARKET ($) ...
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...Organizations And External Environment Have you ever imagined yourself as a leader of a huge or small organization ? Which decisions would you make to guarantee a high efficiency of work ? I know that you feel that it may be easy to successful. It's just a decision-making and some employees who need someone to command them. Sitting behind large offices is a dream target for many employees, but to achieve this goal you need not only a hard work, but a high level of knowledge. Neglecting a simple thing could lead to the end. Over years many companies suffered from losses while others had already collapsed and did not exist anymore. There were many different reasons behind these problems. Some companies ended due to the competition with other firms. Others gave up because their products are no longer desirable. Most these firms figured out the main reasons of the problems too late. Many employers focus on internal environment more than the external environment or they would not pay attention to the outer boundaries. They may believe that the external environment is something you can’t control or deal with. For example, they look after good staff, great services, high quality of products ,appropriate structure…etc. All these issues manage and handle internal environment of the organization. Unfortunately, many firms somehow or another neglect external factors which could also affect negatively their business. Many companies went out of the market just because of the impact...
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...Question 2 (a) Describe and compare two decision-making model that are likely to be most commonly used by managers in a high pressure, rapidly changing environment. Explain why these two models are most relevant in such an environment? Answer: Classical Model and Administrative Model The Classical model based on rational and logical assumptions. It operates to accomplish established goals and defines problems. The manager strives for full informations and evaluates alternatives to maximize the benefit. This model of decision making is considered to be normative, which is the manager knows how the decision should be and not rely entirely on personal preferrence. Meanwhile, the Administrative Model has a vogue problems and goals. This model usualy under the uncertainty condition because managers have limited informations and alternatives. They make a decision based on intuitions and experiences but rarely use rational procedures concerning time consumptions. Most of the managers settle for satisficing choice for resolving problems. The Classical Model relevant for rapidly changing environment because this model focus on accomplising goals and resolving problems. It is derives from many informations and alternatives. The manager incorporates thoughtful analysis into decision making, not by personal perception. The Administrative Model uses intuition decision which is based on years of practice and hands-on experience that enable the manager to quickly identify solutions...
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...Summary of Content: This module examines the process of strategic management, focusing on the nature of strategy formulation and implementation. The analysis of strategy concepts and case study examples will be used to develop awareness of the factors that must be considered in strategic decision-making. Topics include: strategic vision and mission, environmental and industry analysis; generic strategies; core competence; growth and diversification; internationalization and the execution of strategy. At the end of the module we are able to subject the. * Concepts of strategic management to critical analysis; analyze the business and competitive environment; formulate competitive and development strategies drawing on relevant concepts, demonstrate an awareness of factors that must be considered in implementing strategy and leading strategic change. * A critical understanding and appreciation of the various behavioral manifestations of customer engagement * Identify and critically evaluate relevant theories underpinning such customer behaviors * Consolidate and integrate the knowledge and understanding gained from this module with other associated marketing modules * Sufficient knowledge to identify and manage these customer behaviors in their own or a related business * A comprehensive knowledge and understanding of the frameworks and concepts of strategic market management and planning. * To demonstrate expertise in conducting a strategic audit...
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...A strategic leader can utilize decision-making teams as a powerful asset in successfully coping with the environment. Such teams improve their decision making by using a process of consensus, a process useful when developing national security strategy, military strategy, or strategic planning in other public or private sectors. Knowing how to forge consensus for policy development and implementation is critical to successful management and leadership. STRATEGIC LEADERS AND TEAMS Consensus decision making offers the benefit of using more fully the experience, judgment, perceptions, and thinking of a team of people. To those who have not participated in consensus decision making, the process may seem frustrating. But, mastery of small group consensus decision making processes may be the key to achieving a successful resolution of whatever crisis appears in this complex environment. Because of the nature of modern issues in the global environment, strategic decision makers must rely on teams to solve problems and to make policy recommendations. A high performing team can be a positive force in assessing strategic situations and formulating national policy. LONG-TERM VISION - Effective strategic leaders employ a strategic team to help them in the visioning process. This team "sees" the strategic environment from various frames of reference, visualizing the effectiveness of proposed strategies over time. Teams help leaders to understand a complex situation and gain insight into...
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... 1 Introduction Businesses that succeed do so by creating and keeping customers. They do this by providing better value for the customer than the competition. Marketing management constantly have to assess which customers they are trying to reach and how they can design products and services that provide better value (“competitive advantage”). The main problem with this process is that the “environment” in which businesses operate is constantly changing. So a business must adapt to reflect changes in the environment and make decisions about how to change the marketing mix in order to succeed. This process of adapting and decision-making is known as marketing planning. Where does marketing planning fit in with the overall strategic planning of a business? Strategic planning is concerned about the overall direction of the business. It is concerned with marketing, of course. But it also involves decision-making about production and operations, finance, human resource management and other business issues. The objective of a strategic plan is to set the direction of a business and create its shape so that the products and services it provides meet the overall business...
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...humanity. In particular civil engineering is concerned with the design and construction of large scale infrastructure such as dams, bridges, roads and railway. Mostly all civil engineering projects have a significant impact on the public and the environment. It is therefore necessary for engineers to make morally responsible decisions that will result in the most positive outcome for the public and environment. Three concepts that must be analysed by engineers to ensuring a positive outcome are: safety, environmental impact and cultural consideration. A number of cases will be presented to illustrate the complex nature of engineering decision and to offer potential ways in which morally responsible engineers should act. Engineering requires a high level of knowledge and expertise. As well as having a high level of technical knowledge, engineers are required to make important moral decisions which may have significant future impacts. A morally responsible engineer is an engineer who goes out of their way to make sure they are doing their job to the best of their ability. This not only includes applying their skills to make an effective product, but making sure their end product has a positive impact both on the users and the environment. An example of an engineer who may be considered morally irresponsible is someone who only completes the minimum requirements for a project. Morally responsible engineers are encouraged to exceed this minimum level of expectation. This can be illustrated...
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...................................................... 2 PAGE 161 – 173: BUREAUCRACY AND AUTHORITY .............................................................................. 3 PAGE 201 – 220: ORGANIZATION STRUCTURE ...................................................................................... 4 PAGE 441 – 461: POWER AND POLITICS ................................................................................................ 4 LEESTOETS 2 ....................................................................................................................................... 6 PAGE 58 – 69: EFFECTIVENESS ............................................................................................................. 6 PAGE 81 – 106: ENVIRONMENT ............................................................................................................ 7 PAGE 119 – 149: TECHNOLOGY ............................................................................................................ 7 PAGE 201 – 233: STRUCTURE (ZIE LEESTOETS 1).................................................................................. 8 PAGE 249 – 258: STRUCTURE ............................................................................................................. 10 PAGE 346 – 355: CONTROL ................................................................................................................ 10 LEESTOETS 3 ...............................................................................
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...another. Specifically, the espoused values were generic and terminal in nature and unrelated to the tasks and goals at hand. To avoid the confusion in the minds of practitioners, and as reflected in the literature itself, a Strategy Quadrant (content), consisting of Stand, Standing, Shared values and Steps is proposed. The process of developing the 4Ss of strategy is delineated in terms of Mintzberg's "think/see/do first" processes (Strategy Triangle). The context ofcontext of strategy is defined in terms of stability and complexity (Strategy Duality). It is argued that, in complex and unstable contexts, the traditional mode of "think-first" deliberate strategies which set "thinking" apart from "doing" is becoming increasingly ineffective. The unpredictability of complex contexts, in which we operate, leave us with no choice but to be markedly adaptive rather than attempt to be overly prepared. Complex Adaptive Systems (CAS) are the order of the day, and the organization's Standing (desired future state) and Steps have to emerge in action, rather than be pre-determined, in the development of strategy. However, this emergence of strategy, ought to be predicated on a Stand (strategic perspective or position), and a set of Shared values, without which emergent strategies may well lead to chaos. The principal role of the leader in a CAS is not to increasingly...
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