STRATEGIC THINKING

Prof.Dr.Dr.Dr.H.C. Constantin BratianuFaculty of Business Administration

Academy of Economic Studies

Bucharest, Romania

My business is thinking

T.A. Edison

KNOWLEDGE PARADOX

• We are living in a world which is infinite in time, space and complexity

• We need to understand this world for survival, and for a better life

• However, our mind is finite from biological and psychological point of views

• How can we know and understand an infinite world with a finite mind ?

THINKING MODEL

• We are using thinking models which are cognitive approximations of complex real phenomena

• Thinking models are developed throughout our education in family, school, church and society

• The more powerful these thinking models are, the better cognitive approximations we can get

• The more powerful these thinking models are, the better decisions we can make

STRUCTURE

• Basic structure

knowledge

rules

values

KNOWLEDGE

• Data, Information, Knowledge- information = processed data- knowledge = processed information

• Tacit knowledge- experience- talent- intuition

• Explicit knowledge- concepts- ideas- theories

KNOWLEDGE

Knowledge Strudcture

Explicit Knowledge

Tacit Knowledge

Rational Mind

Non-Rational Mind

Knowledge Transfer Process

Direct Experience

Cogito, ergo sum !

R. Descartes

To release the spirit one must accentuate the work with meditations of the heart and the soul.

(M. Musaschi – The Book of five rings)

Kamakura

RULES

• Behavior rules – in childhood

• Religious rules

• Grammar rules

• Mathematical rules

• Logical rules

VALUES

• Values = Deeply held ideas of members about what is right or wrong, fair or unfair – anything that has personal worth or meaning

• We are living in a given culture, which is defined by a set of fundamental values

• We learn these values through education in family, school, church and society

• Values constitute the reference system of our decisions

STATIC THINKING

• The simplest model of thinking

• TIME is not included in this model

• Things and events are almost the same. They do not change, or change is not significant

• Think of Pyramids. Same image anytime

• When things do not change we get a feeling of security

• Static thinking opposes any change. It is like a resistance

DYNAMIC THINKING

• Time is a fundamental variable

• Things and events change in time. Processes develop in time

• For reversible processes time direction is not important

• For irreversible processes time has directionpast >>> present >>> future

• Entropy is a measure of irreversibility

• Entropic thinking is the most powerful thinking model from time point of view

LINEAR THINKING

representation

Input (X)

Process constant (K)

Output (Y)

Y = kX

LINEAR THINKING

• Outputs are proportional with inputs

• Processes are described by linear equations

• Linear thinking is the most frequently used approximation in our daily life

• Measuring systems are based on linear thinking

• Budgetary salaries are based on linear thinking

• Democracy is based on linear thinking

NONLINEAR THINKING

• Life processes, natural processes, social processes are not linear

• Outputs are related to inputs by nonlinear equations, of different forms

• Scientific discoveries, Engineering innovations, Business negotiations

• Intellectual work, artistic performance and knowledge processing are strongly nonlinear processes

• Friendship, love, happiness, excellence, performance, quality etc. are strongly nonlinear

LINEAR APPROXIMATION

• Graphical representation

DETERMINISTIC THINKING

• Based on idea that things and events must be very well defined and determined

• They are given, fixed, settled. They are certain

• Mathematics, Physics have deterministic laws

• Legislation, regulations in organizations

• Time tables for trains, aeroplanes, students classes

• Certainty is a feeling we are looking for all the time

RANDOM THINKING

• Life events, nature events, social events have all random/probabilistic occurencies

• They have different probabilities of being produced

• Outcomes are not strictly determined by known inputs

• There are always risks associated with uncertainties

• Understanding trends and challenges for different developments, and shaping the future is based on this kind of random thinking

INTELLIGENT THINKING

• A complex model of thinking able to optimize and to offer the best solutions to any problem

• A model based on capacity of combining a lot of known data and knowledge, in a very short time

• All the data and knowledge needed are known. There are no new elements

• Intelligent thinking is strongly nonlinear and dynamic

• Intelligent thinking is able to process tacit knowledge

CREATIVE THINKING

• A complex model of thinking able to generate always a new piece of knowledge

• Knowledge creation, conversion, transmission and use are based on this model of thinking

• Creative thinking is highly nonlinear and random

• Scientific discoveries and Engineering innovations are based on creative thinking

• In real life there is a strong connexion between intelligent thinking and creative thinking

STRATEGIC THINKING

• Strategic thinking is the most advanced and the most powerful model for Science, Engineering and Business

• Strategic thinking is based mostly on the following:

- dynamic thinking

- nonlinear thinking

- random thinking

- intelligent thinking

- creative thinking

• Strategic thinking is the most adequate way of thinking for the future

STRATEGIC THINKING

• Graphical representation

L NL

Complexity

D

R

S

D

Generation

Time

Simple thinking model

Strategic thinking model