Terms in this set (110)
What are three phenomena that organizations and managers grapple with today?
1) Innovation & Organizational Change
2) Global Strategy
An invention becomes an innovation when it brings a) novelty and b) commercial value (recording sound vs. reproudcing sound)
How to go about describing an innovation
What are types of innovation?
Process, product, business model
What are characteristics of innovation?
Competence-enhancing vs competence destroying, incremental vs. radical
REFER BACK TO 4.
What we sell (products or services)
New production or delivery method
Business Model Innovation
New ways to profitably create value for customers
refine an existing technological trajectory (improve price / performance at a rate consistent with the existing technical trajectory)
disrupt the existing technology trajectory (advance the price/performance frontier by much more thatn the existing rate of progress)
What are many firms good at?
What are fewer firms good at?
What can radical innovations introduce?
Moments in time when innovations appear that undermine the dominant design in an industry (the "industry standard")
Can technological discontinuities be good or bad?
Can be either.
Can be competence-enhancing or competence-destroying
Innovation builds on and reinforces existing capabilities
Innovation overturns existing capabilities (can affect industry structure)
What has the greatest effect on competitve advantage?
Innovations that enhance the organizations's competences but destroy the competitors' competetnces tend
WhT are innovation challenges for the organization?
Knowledge and organizational inertia
What encompasses knowledge?
-Knowledge sharing across and within the organization
What types of organizational inertia exist?
Structural and cultural
refinement, choice, efficiency, implementation, execution
Search, variation, risk taking, experimentation, play, flexibility, discovery, innovation
Exploitation/exploration Implications for organizations
1) Essential for organizations
2) Need to maintain appropriate balance for both
Knowledge sharing: WHere can knowledge be sourced?
Across, within and outside the organization through new employees, alliances, or acquisitions
How can knowledge be shared?
Within the organization across employees, teams, department
Knowledge from other organizations; knowledge different from our existing knowledge base
Refers to the difficulty of sharing knowledge across an organizaiton
-causal ambiguity, unproven knowledge, motivation of source, credibility of source, recipient motivation, recipient absorptive capacity, recipient retentive capacity, barren organisational context, and arduous relationship between source and recipient.
-Sticky Knowledge reveals that the transfer of practices is a complex phenomenon, and demonstrates the range of barriers to transferring best practices within the firm
How does sticky knowledge increase?
A resistance to change rooted in the size, complexity, and interdependence in the organization's structures, systems, and formal processes
A resistance to change rooted in shared expectations about how things are to be done
Bigger, older organizations versus smaller younger orgaiations
major advantage of entrepreneurial firms
What are solutions to innovation challenges?
Cultural revolution, learning from failure, ambidexterity
How to change organizational culture?
Goals / People / Symbols / Systems /Structure
Articulate a new vision embodied by new role model s
Key positions shoudl be held by people who endorse the new culture
New myths & artifacts to replace old ones
Monitor and reward behavior consistent with new values
Formal structure of the organization should reflect informal culture shift
-Separate their new, exploratory units from their traditional, exploitative ones
-Maintain tight links across uits at the senior executive level
What is the outcome if ambidextrous organziations are employed successfully>
-Balance exploration and exploitation
-Juggle short term perspective (navigating current environment)
with long-term perspective (spearhead innovations that change the environment)
-Ability to anticipate and be proactive vs. complacent
Process of expanding and competing in multiple countries
What are 3 key questions in glboal strategy?
1) SHould I expand internationally?
2) Where should I expand (i.e. which countries)?
3) How should I expand ("modeof foreign entry")?
Rationale for Foreign Expansion
Conduct Better-off test
QUestion for better-off test?
Does combining and coordinating activities across multiple geographies enable more value to be created and claimed with country-by-country operations?
What are the componenets of better-off test?
-Consider not just volume of business
-Create more favorable industry structure
-Widen the wedge between WtP and cost
How to widen the wedge between WtP and cost?
At what level do economies of scale matter?
Do costs increase/decrease across countries?
Global/local brand impact?
Cross-country differences in preferences?
Opportunities for cross-border learning and innovation
How do we manage risk?
-Hedge against country risk and economic downturns
-Think of emerging markets as strategic options
-Consider implications of different modes of entry
Where should I expand?
The Liability of Foreignness
Why do foreign firms face higher costs of doing business than local competitors (home advantage)?
-Unfamiliar local market conditions
-Unfamiliar legal, culutral, language environment
-Fewer local networks
-Communicating and operating at a distance
Cultural Distance Includes
Administrative Distance includes
Shared monetary and political ties
Knowledge and information
How should I expand?
Articulate and consider a broad range of alternatives (build, borrow, buy)
-Greater risk of opportunism: seek out control (high/medium/low)
-Greater need for local knowledge/adaptation: seek out local partners (cooperative strategy)
Scale of Less to More Control
Long-term contracts to buy rough diamonds
Ownership of Mines
How to combine knowledge systemically thru flows and control?
-leverage internal & external networks
-Connect formal & informal
What do centralized organziational strucutres do?
Rely on small number of top managers to make decisions and provide direction for the company
What do decentralized org. strucutreus do?
Give a larger number of managers at lower levels of the hierarchy more responsibility in making decisions and providing direction
Pros of centralized
-Good for stable environments and operations across similar countries
Pros of decentralized
Good for more turbulent and diverse environments
Separates parts of the organization (fucntions, divisions)
Binds parts of the organization together
separates parts of the organization (functions, divisions)
How do you create the right levels of differentiation and integration?
Depend on complexity of environment (more complex, the more you need differentiation)
Countries that experience rapid economic growth but are characterized by voids in market-based institutions (these countries do not have fully developed market instutitions such as stofk markets, labor markets, intellectural property protections, legal systems
Rules of the game
Characteristics of companies from emerging markets who aspire to have global presence
-Tend to have a longer-term perspective
-May be more flexible and unconventional
-Better adapter to complex, uncertain, instable environments
-Home field advantage
Corporate Social Responsibility
the deliberate actions a company takes to protect, enhance, and promote the welfare and well-being of society
Related terms to CSR
Sustainability, social impact
India 2013 Companies ACt (CSR Law)
APplies to companies with either:
-Net worth of over 5 billion rupees (approximately 75 million USD)
-A turnover of over 10 billion rupees (approx 75 million USD)
-net profits exceeding 50 million rupees
-domestic and foreign firms with subsidaries in India
What does the 2013 Companies Act require?
Mandates that those companies:
-Form CSR board
-Submit annual returns documenting their planned and actual CSR programs
-Contribute at least 2% of net profits to their CSR activities or explain why this threshold was not met
What is the main objective of the 2013 Companies Act?
Harness private sector resources & capabilities by involving companies in CSR project design and implementation
Who are your stakeholders?
People / groups with a stake in your project, and who can influence its success now
1st degree stakeholder
Whose livelihoods are DIRECTLY affected?
2nd degree stakeholder
Whose livelihoods are INDIRECTLY affected?
3rd degree stakeholder
Who influences or has an interest in the issue?
Hos should managers spend on CSR?
According to Jensen, "spend an additional dollar on any constituency provided the long-term value added to the firm from such expenditure is a dollar or more"
Perceptions of the acceptability of a company and its local operations at a moment in time (really being part of the community you operate in)
What is the value fo keeping social license?
Lower probability of:
-kidnapping/killing/threats to personnel
-destruction of property
-Factory closures due to riots
-legal actions against the organization
-Delays in obtaining permits
-Terminations of contracts with the organization
-VOluntary turnover of personnel
-Drops in analyst ratings/stock price
-Drop in sales
Value Creation thru Stakeholder Engagement: Strenghtening social license thru
-Faster delivery of permits/authorizations
-Greater worker productivity
-Better contractual conditions
-Higher worker retention rates
-Increase customers' willingness to pay
How do you define shared value?
Creating economic value in a way that also creates value for society by addressing its needs and challenges
What are some examples of crafting shared value?
-Social Entrepreneurship / Innovation
-Overcoming institutional voids
3 things to think about with CSR Program
-Modes of Implementation
What are some portfolio characteristics regarding CSR variety?
-Number of projects
-Number of thematic areas
-Number of geographic areas
Functions of the Executive (1938) to ensure organization's survival:
-Maintaining willingness to cooperate among members
-Establishing systems of communication among members
-Managing people and making sure they do their jobs
-Ensuring the integrity of organizational purpose
Leadership in Administration, leadership goes beyond ensuring efficiency:
-Involves critical decisions that affect the firm's character and not just its routine
-Involves setting a mission and creating a social organism to fulfill it
-Responsible leadership is essential: do not drift away from goals/principles
What is organizational leadership?
The act of influencing employees from various teams, units, and other groups to achieve a common purpose
What are two key challenges of leadership involve what?
1) Establishing a common purpose 2) Orchestrating the efforts of a multitude of groups toward the purpose
Type of Control Mechanisms
Because organizational culture is difficult to observe and influence, we must look at artefacts and behaviors offer clues
-Codes of conduct
-Slogans, rituals, and symbols
Greater sense of purpose and meaning enhance task interest & pride in performance
Conditions for goal setting
They must be attainable (develop a plan for performing a task)
Conditions for setting goals
-Goals must be attainable
-People must be committed to goals
-People need to receive feedback on progress towards goals
-Works better for less complex tasks
Mistakes in Designing Rewards
Hope for teamwork
Reward individual effort
Hope for long-term growth, stakeholder engagement, socio-environmental responsibility
Reward quarterly earnings
Hope for acquiring exploratory knowledge
Reward goals, making the numbers
Hope for commitment to total quality
Reward shipping on schedule, even with defects
Hope for learning from failure
Reward reporting good news; agreeing with the boss
Attention & Praise
Employee of the month
Pitching an idea/project
Being excluded from big decisions, prestigious teams & projects
Extrinsic Reward Systems
-Tangible, typically more formal
-External to the work itself
-Controlled by others
Intrinsic Reward Systems
-Intangible, typically more informal (psychological rewards)
-Depend on the person doing the work and task characterisitics
What do extrinsic rewards doZ?
Significantly undermine intrinsic motivation (and creativity, learning, etc.