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This 5 page Class Notes was uploaded by Hali Nepsha on Wednesday October 12, 2016. The Class Notes belongs to BUSM 353 at Purdue University North Central taught by Richard Panton in Fall 2016. Since its upload, it has received 2 views. For similar materials see Organization and Environment in Business at Purdue University North Central.
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Date Created: 10/12/16
Wed Oct. 5 Huber ch 2 The current era of envrio. Turbulence is just the tip of the iceberg with new stability Stability occurs when the Environment changes little over some significant period of time For most businesses: stability no longer exists. It’s gone. History. Current Environment: dynamic, rapid, changing marked by technologic progress and growing complexity Why are we facing a “New Enviro”? Chiefly bc of techno. a. scientific technology b. information, transportation and manufacturing technologies But also c. complexity / interconnectedness d. dynamism e. competitiveness between firms Managers will, of course, try to manage each (and all), and will direct their organizations in the response and reaction to these changes. But they will have to yield to the ‘New Environment’ to survive. To predict future enviro. Requires more than extendn’ current trend (maybe misleading) Or extrapolating past knowledge (maybe misleading) To use trending with any success, we must: 1. pick only trends whose CAUSES can be determined 2. pick only trends with a substantial history 3. pick only trends that are defined well enough to allow educated deduction about the future 4. pick only trends related to the CAUSES of that which is being predicted (bottom line just one instrument used ) Knowledge creates new knowledge One someone discovers one thing leads to discovering others o Somebody else finds an exception to the rule o Somebody else finds another use for the new invention o Somebody else finds another way to do it even better Growth in communications capability makes all new knowledge more available. (can be distributive faster and further) But will communication tech cont. to expand? -the future will contain information in greater volumes -still room to grow (we are not at the highest(top end)) When we have access to top end we then can conclude: – The future will contain information in greater volumes. • Our USE of more information turns it into more knowledge • Noting that history is full of predictions that everything that could be known had already been discovered, • Could this prediction of ever-increasing knowledge rates be wrong? Perhaps. But…. – Massive effort will go into solving the problem – Huge volumes of new knowledge will be discovered, analyzing and assessing the disease • And it will be published and widely shared • And what is learned can reasonably be expected to be extended to new and related fields – So it’s possible that even a significant decline in world population might not result in a slow-down in new knowledge generation • Although it may alter the direction of pursuit • And the rate of acceleration may slow, temporarily Technology User what contin. To devel. Most new techno. • New knowledge leads directly to new technology. • And to new applications for existing technology • Historically, new technology came from the users, not from pure science. • Industrial consortia, University research, and government laboratories for improving science or industry did not exist • 20th century changed that. (be less comp. spec and be more broad ind. And so research) (Pure research would benefit everyone !) -In theory Univer. Research is to teach us the latest and greatest. (now in science and indu. This is sponsored) We start with goals in mind and try to reverse engineer how to get there?!. • Scientists now develop not only theoretical knowledge, but also practical uses for that knowledge. – Some is driven by financial need – theory doesn’t pay the bills. – Some driven by need to survive – publish or perish in academia • Improve or become irrelevant in your business – Some is driven by the understanding that if we can apply what we believe we know, then we move closer to knowing more. • We prove the theories – We discover exceptions • We polish the rough edges of the knowledge • We begin to see into the next level • Technological advances will multiply, much like their underlying knowledge – And also with compounding speed and reach (If we could just apply what we know we could be that much closer to what we know!.) (Through Learning and adapting) Remember As long as knowleg. Grows so will the applications! Goes with PPT Lecture Slides- Huber Ch 2 Huber ch 2 contin. Oct. wed 12 • Scientists now develop not only theoretical knowledge, but also practical uses for that knowledge. o Some is driven by financial need o Some is driven by need to survive (improve or become irrelevant) Mental blocks (the only clear vision we have is of the past.) We can only see what has occurred not what will occur. Rely on experience and observation is limited Complexity of Future Environments Attributes of complexity o Variety o Density o Interdependence of the key entities in the enviro. (trade interdep. For depende.) For profit-driven businesses, environmental entities are things like customers, suppliers, competitors, markets, regulators, etc. Pfeffer’s “social actors (So ask yourself if future enviros. Will be more complex….how will the attributes change?) Variety Tech. as already growing faster and accelerating o With tech advances come new produc., new applic., new competit., new markets. Density The # of entities (customers, suppliers, competitors, regulators, etc..) growing or declining? – Lots of mergers, lots of failures – maybe declining numbers? – Nope. 10 – 20X start-ups and entrepreneurs – so expanding numbers • And that’s just US business – And small business files 10x the patents of large business, so there is a technology impact Interdependence Pfeffer raised some issues As more and more diverse demands placed on firm, experience says we’ll sharpen our focus onto essential core activities o Non-essential activities outsourced (Outsourcing increases interdependence and complexity) o Complexity will increase What’s the Future?... As more org.s automate/downsize, more potential entrepreneurs cut loose As variety grows, too will # org.s chasing profit from variety As communication/ transportation technologies grow, more customers, suppliers markets and competitors o Even if the overall number does not grow, more will have access More relationships to manage = more complexity, variety & density As variety/ density grow orgs will need more/better sensors o So we can sense/see/anticipate new threats and opportunities What does all this mean? • To survive in the new environment, firms will have to adapt: – Handle increasing complexity by growing more complex • Adding staff and functions to handle the new issues • Increasing interdependence – Reduce complexity by changing the environment • Not a viable option for most orgs. – Although perhaps usable in specific circumstances – Reduce complexity by narrowing org focus • Niche pursuit (all marketing is niche marketing) • Narrower focus increases outsourcing of non-essentials – Which adds complexity Environmental Dynamism & Competitiveness Velocity - Turbulence - Instability • More activities, combined with increasing technology – Yields more ‘events’ (an entity doing something that impacts our org.) Therefore, velocity – the speed with which events that effect the org occur – increases – the future will not produce 30 hour days! Event arrival is not predictable or consistent (Therefore, turbulence – technological discontinuities – increases) • We can expect to go from substantial stable periods, interrupted by change, to having constant change interrupted by occasional stable moments Problem? Most people, most of time, envision future much like future (includes CEOs) • Specific, understandable and incremental changes are not a problem o This is why we P-O-L-C: to manage the manageable change • General change with many new elements are a problem • Most every review of what was predicted vs. what occurred shows the prediction underestimated the change o It’s hard to overcome inertia Some orgs will claim to see little evidence of all this. They already operate in micro- o niches o markets o Environments Many of the ‘big’ changes may pass them by – for now. The same issues making the macro-environment change will, at the least, shorten the lifetime of the stable micro-environment End Huber Ch. 2
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