Strategic Decision Success GRA 6820 Strategic Choice 1 GRA 6820 Strategic Decision Success (Harrison, Ch.11)

Strategic Decision Success

GRA 6820Strategic Choice

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GRA 6820

Strategic Decision Success(Harrison, Ch.11)



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Overview of chapter 11

• A profile of decision success

• Determinants of strategic decision success

• A model for strategic decision success

• A composite approach to the evaluation of strategic decision success

• Summary



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The function of models

Excellent Poor

ExcellentCelestial

mechanics

Quantum mechanic

s

PoorEvolutionary biology

EconomicsA

bili

ty

to

Pre

dic

tAbility to Explain

The ability to draw predictions from a mathematical model.

An abstract thinking aid that reveals or

illuminates some aspect of system behavior in a

simple way or which unlocks an insight.

Casti, J. (1990). Searching for Certainty. New York: William Morrow and Co.



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A simple set of equations…

Decision Success = f (Quality, Implementation)

where…

Quality = f (compatibility, timeliness, information, DM influence)

Implementation = f (conflict avoidance, risk-reward, understanding)

Success: A favorable termination of a venture

Ref: Mintzberg, Raisinghani and Theoret (1976)



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An event-oriented worldview

Problem

Goals

Decision Results

Situation

Sterman, J.D. (2000). Business Dynamics: Systems thinking for a problematic world. Boston: Irwin-McGraw-Hill.

Assumptions



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Defining characteristics of systems

1. A system’s parts must all be present for the system to carry out its purpose optimally.

2. A system’s parts must be arranged in a specific way for the system to carry ouit its purpose.

3. Systems have specific purposes within larger systems.

4. Systems maintain their stability through fluctuations and adjustments.

5. Systems have feedback.



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Linkages and interdependencies Organizations as systems

• Improved employee working conditions and training levels may improve service quality to the point that marketing can reposition service at a higher level.

• A commitment by marketing to fast product delivery creates pressures on scheduling and production.

• A late raw materials shipment has cascading effects on production and meeting customer orders, which increases complaints to customer service and sales.

• A change in production design often affects the equipment as well as costs of production, skill requirements and advertising and distribution approaches.

• Timing of a sales promotion influences capacity utilization and production costs, overtime scheduling as well as order quantity and delivery arrangements with suppliers.



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A feedback-oriented worldview

Sterman, J.D. (2000). Business Dynamics: Systems thinking for a problematic world. Boston: Irwin-McGraw-Hill.

Environment

Goals of other agents

Decisions

Side effects

Actions of others

Goals



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Disappointments in carrying out strategic change

87% expressed a sense of disappointment and helplessness over the strategy work.

59% felt that the problem lay in the execution of the plan.

However, the firms continued with the implementation work…– No other methods work better.– Management does not “dare” try anything new.



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Key issues in strategy implementation

• Understanding the consequences of implementation.

• Employee attitudes.

• Are there sufficient resources to carry out the strategy?

• Control routines and systems.

• Dedication on the part of the employees.



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A framework for managing strategic change

Types of strategic change

Diagnosing strategic change needs

Managing strategic change processes

Roles in the change process

Change tactics

Communicating change

Political processes

Structure and control

Styles of managing

change

Changing routines

Symbolic processes

Source: Johnson and Scholes, 1997



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Force-field analysis

• Client-focused organization and closeness to clients

• Flexible approach and structure

• Change is normal

• Informality and networking

• Working hard

• Fun place to work

• Job evaluation as “core”

• Individualism of consultants

• Complacency about change

• Lack of coordinated information

• Inadequate induction processes

• Overly complicated structure

• Too many meetings and memos

• Individual, not team, incentives and controls

Forces acting against change

Forces acting for change

Equilibrium



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Organizational resistance factors• Surprise• Human inertia• Misunderstandings, lack of knowledge• Emotional side effects

– Loss of established relationships and work routines.

• Little trust in management• Threats to security and status



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Organizational resistance to change

• Rules

• Limited focus

• Group resistance

• Loss of expertise

• Changed power relationships

• Job descriptions, evaluations, incentives

• Local changes

• Group norms

• Relocation of key employees

• Decentralization

Source Examples



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Personal resistance

• Habits

• Financial factors

• Lack of clarity

• Social factors

• Security/fear

• Changes in workload and type

• Changed reward systems

• Group isolation

• Group norms

• New responsibilities, groupings, reporting relationships

Source Examples



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Reducing resistance

• Participation

• Support

• Agreement

• Threats

• Training and communication

• Cooperation on changes

• Channel for emotional problems

• Common development of goals

• Relocation, layoff

• Open dialogue, information, training programs

Source Examples



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Phases of change

• Awakening• Awareness• Analysis• Re-evaluation• Commitment• Involvement• “Workshops”• Internalization• Evaluation

• “Something is wrong!”• Discussions, engagement, orientation.• Collecting information.• “What shall we do?”• Organization is “sold” on the ideas.• Presentation to the organization, find owners.• Participation in group work.• Group, management development programs.• “Have we reached our goals? What’s next?”



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“Unfreezing” and managing changeORGANIZATIONAL

SYMPTOMSPRESSURES FOR

CONFORMITYSTAGES

Informationbuilding

Informationbuilding

Organizationalflux

Organizationalflux

RefreezingRefreezing

ExperimentationExperimentation

Organizationalanticipation

Organizationalanticipation

Unfreezingmechanisms

Unfreezingmechanisms

Early signals made sense of within paradigm

Political pressures not to “rock the boat”

Information made sense of within paradigm

Resistance to new ideas

Rumors and signals Questions and challenges

“Felt need” for change

Competing views of causes of problems and remedies Information collection Political “testing” of support

New ideas tested out



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Factors in change management Develop a holistic perspective - avoid

local optimization and global sub-optimization.

Full and active support from top management.

Stimulate everyone for active participation. Create a culture for open communications. Reward the participants.



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Critical Systems Heuristics boundary questions

Step 1: The “Is” mode1. Who is the actual client of the system’s design?2. What is the actual purpose of the system’s design, as being measured not in terms of declared

intentions of the involved, but in terms of the actual consequences?3. What, judged by the design’s consequences, is its built-in measure of success?4. Who is the actual decision taker, that is, who can actually change the measure of success?5. What conditions of successful planning and implementation of the system are really controlled

by the decision taker?6. What conditions are not controlled by the decision taker, that is, what represents “environment”

to her?7. Who is actually involved as planner?8. Who is involved as “expert”, of what kind is his expertise, what role does he actually play?9. Where do the involved see the guarantee that their planning will be successful? Can these

assumed guarantors secure the design’s success, or are they false guarantors?10. Who among the involved witnesses represents the concerns of the affected? Who is or may be

affected without being involved?11. Are the affected given an opportunity to emancipate themselves from the experts and to take

their fate into their own hands, or do the experts determine what is right for them, what quality of life means for them, etc?

12. What worldview actually underlies the design of the system? Is it the worldview of (some of) the involved or of (some of) the affected?



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Critical Systems Heuristics boundary questions

Step 2: The “Ought” mode1. Who ought to be the client (beneficiary) of the system to be designed or improved?2. What ought to be the purpose of the system, that is, what goal states ought the system be able to

achieve so as to serve the client?3. What ought to be the system’s measure of success (or improvement)?4. Who ought to be the decision taker, that is, have the power to change the system’s measure of

improvement?5. What components (resources and constraints) of the system ought to be controlled by the

decision taker?6. What resources and conditions ought to be part of the system’s environment?7. Who ought to be involved as designer of the system?8. What kind of expertise ought to flow into the design of the system?9. Who ought to be the guarantor of the system?10. Who ought to belong to the witnesses representing the concerns of the citizens that will or might

be affected by the design of the system? That is to say, who among the affected ought to get involved?

11. To what degree and in what way ought the affected be given the chance of emancipation from the premises and promises of the involved?

12. Upon what worldviews of either the involved or the affected ought the system’s design be based?

Documents

Strategic Decision Success GRA 6820 Strategic Choice 1 GRA 6820 Strategic Decision Success (Harrison, Ch.11)