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Improving Business Performance Through Effective Managerial Training Initiatives

Luisa dall’Acqua Scientific Lyceum TCO, Italy & Live Editions Inc., USA

Dickson Lukose GCS Agile Pty. Ltd, Australia

A volume in the Advances in Logistics, Operations, and Management Science (ALOMS) Book Series

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Published in the United States of America by IGI Global Business Science Reference (an imprint of IGI Global) 701 E. Chocolate Avenue Hershey PA, USA 17033 Tel: 717-533-8845 Fax: 717-533-8661 E-mail: [email protected] Web site: http://www.igi-global.com

Copyright © 2018 by IGI Global. All rights reserved. No part of this publication may be reproduced, stored or distributed in any form or by any means, electronic or mechanical, including photocopying, without written permission from the publisher. Product or company names used in this set are for identification purposes only. Inclusion of the names of the products or companies does not indicate a claim of ownership by IGI Global of the trademark or registered trademark.

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All work contributed to this book is new, previously-unpublished material. The views expressed in this book are those of the authors, but not necessarily of the publisher.

For electronic access to this publication, please contact: [email protected].

Names: Dall’Acqua, Luisa, 1962- editor. | Lukose, Dickson, editor. Title: Improving business performance through effective managerial training initiatives / Luisa dall’Acqua and Dickson Lukose, editors. Description: Hershey : Business Science Reference, [2018] Identifiers: LCCN 2017024125| ISBN 9781522539063 (hardcover) | ISBN 9781522539070 (ebook) Subjects: LCSH: Organizational effectiveness. | Industrial management. | Strategic planning. | Information technology--Management. Classification: LCC HD58.9 .I4677 2018 | DDC 658.4/07124--dc23 LC record available at https:// lccn.loc.gov/2017024125

This book is published in the IGI Global book series Advances in Logistics, Operations, and Management Science (ALOMS) (ISSN: 2327-350X; eISSN: 2327-3518)

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Advances in Logistics, Operations, and

Management Science (ALOMS) Book Series

Editor-in-Chief: John Wang, Montclair State University, USA

Mission

ISSN:2327-350X EISSN:2327-3518

Operations research and management science continue to influence business processes, administration, and management information systems, particularly in covering the application methods for decision-making processes. New case studies and applications on management science, operations management, social sciences, and other behavioral sciences have been incorporated into business and organizations real-world objectives.

The Advances in Logistics, Operations, and Management Science (ALOMS) Book Series provides a collection of reference publications on the current trends, applications, theories, and practices in the management science field. Providing relevant and current research, this series and its individual publications would be useful for academics, researchers, scholars, and practitioners interested in improving decision making models and business functions.

• Information management • Political science • Computing and information technologies • Finance • Production management • Decision analysis and decision support • Risk Management • Services management • Organizational behavior • Marketing engineering

Coverage

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The Advances in Logistics, Operations, and Management Science (ALOMS) Book Series (ISSN 2327-350X) is published by IGI Global, 701 E. Chocolate Avenue, Hershey, PA 17033-1240, USA, www.igi-global.com. This series is composed of titles available for purchase individually; each title is edited to be contextually exclusive from any other title within the series. For pricing and ordering information please visit http://www.igi-global.com/book-series/advances- logistics-operations-management-science/37170. Postmaster: Send all address changes to above address. ©© 2018 IGI Global. All rights, including translation in other languages reserved by the publisher. No part of this series may be re- produced or used in any form or by any means – graphics, electronic, or mechanical, including photocopying, recording, taping, or information and retrieval systems – without written permission from the publisher, except for non commercial, educational use, including classroom teaching purposes. The views expressed in this series are those of the authors, but not necessarily of IGI Global.

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Motivationally Intelligent Leadership Emerging Research and Opportunities Michael A. Brown Sr. (Florida International University, USA) Business Science Reference • ©2018 • 139pp • H/C (ISBN: 9781522537465) • US $155.00

Enterprise Resiliency in the Continuum of Change Emerging Research and Opportunities Raj Kumar Bhattarai (Tribhuvan University, Nepal) Business Science Reference • ©2018 • 186pp • H/C (ISBN: 9781522526278) • US $150.00

Examining Cultural Influences on Leadership Styles and Learning From Chinese... Valerie Zhu (Xi’an University of Science and Technology, China) Business Science Reference • ©2017 • 207pp • H/C (ISBN: 9781522522775) • US $125.00

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List of Reviewers Amitabh Anand, SKEMA Business School, France Mohan Bavirisetty, CISCO, USA Irene Maria Gironacci, Reply SPA, Italy Alok Goel, CSIR, India Maria Luisa Nardi, Independent Researcher, Italy Gabriella Giulia Pulcini, University of Camerino, Italy John Thomas Riley, The Big Moon Dig, USA Thea Van der Westhuizen, University of KwaZulu Natal, South Africa Rama P. Varanasi, Matryzel Consulting Sdn Bhd, Malaysia Anna Verrini, Independent Researcher, Italy

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Table of Contents

Preface.................................................................................................................. xv

Acknowledgment.............................................................................................. xxiv

Section 1 Methods, Practices, and Strategies to Improve the Enterprise

Performance

Chapter 1 Enterprise.Agility.in.Today’s.Era.of.Complexity...................................................1

Rama P. Varanasi, Matryzel Consulting Inc., Malaysia

Chapter 2 Risk.Taxonomy.and.Strategic.Rationality.in.Enterprise.Decision-Making. Process:.A.Metacognitive.Analysis......................................................................17

Luisa dall’Acqua, Scientific Lyceum TCO, Italy & Live Editions, Inc, USA

Chapter 3 Learning-Performance.Relationship:.A.New.Holistic,.Dynamic,.and.Strategic. Organizational.Approach......................................................................................46

Ana Martins, University of KwaZulu-Natal, South Africa Isabel Martins, University of KwaZulu-Natal, South Africa Orlando Petiz Pereira, University of Minho, Portugal

Chapter 4 Knowledge.as.Quantum.Leap:.A.Resource.of.Innovative.Factors.to.Manage. Unpredictability....................................................................................................69

Irene Maria Gironacci, Reply SPA, Italy

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Chapter 5 The.Benchmarking.Practices.as.a.Strategic.Option.to.Improve.the. Performance.of.Economic.Companies..................................................................86

Redouan Ainous, University of Algiers 3, Algeria

Section 2 Management Case Study

Chapter 6 Orientism.Management.Strategy.for.Entrepreneurial.Mindset.in.the.School. Governance.........................................................................................................115

Luisa dall’Acqua, Scientific Lyceum TCO, Italy & Live Editions Inc, USA

Chapter 7 Key.Success.Factors.for.Developing.and.Implementing.a.Workplace.Skills. Plan.....................................................................................................................147

Thea van der Westhuizen, University of KwaZulu Natal, South Africa Proctus Lucky Shange, Limpopo Department of Education, South Africa

Chapter 8 Using.Big.Data.as.a.Backbone.for.Thailand.4.0:.A.Proposed.Framework.........177

Jirapun Daengdej, Assumption University of Thailand, Thailand Kitikorn Dowpiset, Assumption University of Thailand, Thailand

Chapter 9 Strategists.From.the.Past,.as.Encrypted.Cognitive.Maps,.Whose.Access.Code. Is.the.Will.of.Learning.Solutions........................................................................196

Anna Verrini, Independent Researcher, Italy

Chapter 10 Managerial.Mindsets.in.the.Academic.World:.The.Crisis.of.Educational. Organizations......................................................................................................210

Gabriella Giulia Pulcini, University of Camerino, Italy Valeria Polzonetti, University of Camerino, Italy

Chapter 11 Impact.of.E-Commerce.on.Agricultural.Business.Success................................223

Carla Sofia Vicente Negrão, University of Coimbra, Portugal

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Chapter 12 Extended.Managerial.Implications:.People.and.Space.in.the.Twenty-First. Century................................................................................................................254

John Thomas Riley, The Big Moon Dig, USA

Compilation of References............................................................................... 283

About the Contributors.................................................................................... 309

Index................................................................................................................... 314

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Detailed Table of Contents

Preface.................................................................................................................. xv

Acknowledgment.............................................................................................. xxiv

Section 1 Methods, Practices, and Strategies to Improve the Enterprise

Performance

Chapter 1 Enterprise.Agility.in.Today’s.Era.of.Complexity...................................................1

Rama P. Varanasi, Matryzel Consulting Inc., Malaysia

This.chapter.delves.into.some.of.the.facets.surrounding.complexity.and.determining. solutions.for.a.globalized.future,.both.in.the.context.of.the.fourth.industrial.revolution. and.changing.socio-economic.dynamics.where.humanity.has.been.witness.to.more. shifts.in.a.decade.than.in.the.previous.four.centuries..It.has.therefore.come.to.be. an.era.where.the.only.certainty.seems.to.be.constant.uncertainty..The.two.principal. entities.standing.at.the.forefront.of.such.uncertainty.are.governments.and.corporations.. The.author.addresses.key.facets.influencing.complexity.and.agility.in.corporations.

Chapter 2 Risk.Taxonomy.and.Strategic.Rationality.in.Enterprise.Decision-Making. Process:.A.Metacognitive.Analysis......................................................................17

Luisa dall’Acqua, Scientific Lyceum TCO, Italy & Live Editions, Inc, USA

Over.the.last.decade,.risk.management.has.become.increasingly.important.both.in. financial. and. non-financial. businesses.. This. is. due. to. the. increase. in. uncertainty. caused.by.a.number.of.internal.and.external.factors..Genesis.of.business.risk.can.be. related.to.the.divergence.between.external.factors.and.components.of.organizational. and.operational.structures.of.companies..In.this.chapter,.a.baseline.risk.taxonomy. was.proposed,.and.the.cognitive,.regulatory,.and.social.components.of.risk.inherent.

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in.a.decision-making.process.were.analyzed..A.synthesis.model.was.then.elaborated,. which. exposes. the. relationships. between. decision-maker,. decision-making,. and. environment.for.risk.management,.including.through.decision-making.information. technology.

Chapter 3 Learning-Performance.Relationship:.A.New.Holistic,.Dynamic,.and.Strategic. Organizational.Approach......................................................................................46

Ana Martins, University of KwaZulu-Natal, South Africa Isabel Martins, University of KwaZulu-Natal, South Africa Orlando Petiz Pereira, University of Minho, Portugal

Organizational.learning,.knowledge.creation,.retention,.and.diffusion.are.strategies.that. open.many.a.window.of.opportunities.for.organizations.to.differentiate.themselves.in. the.global.economy..However,.performance.based.on.knowledge.has.not.yet.become. exposed..Intangible.assets.must.be.continuously.analyzed.to.reach.organizational. performance.and.sustainability..New.management.and.economic.literature.reveals. that.communities.of.practice.focus.on.humanized.leadership.and.self-efficacy.that. promote. added. value. to. the. organization.. Furthermore,. the. humanisation. of. the. organization. perspective. becomes. the. nucleus. and. the. framework. for. all. levels. of. productivity. and. competitiveness.. This. chapter. posits. different. organizational. learning.pathways.according.to.a.holistic.perspective.with.humanisation.as.a.unique. element..The.chapter.is.centered.on.an.analysis.of.the.human.capital.construct.as.the. point.of.departure..Furthermore,.the.chapter.reflects.on.humanized.and.humanising. emotional,.spiritual,.and.relational.capital.in.order.to.reach.the.level.of.organizational. knowledge.

Chapter 4 Knowledge.as.Quantum.Leap:.A.Resource.of.Innovative.Factors.to.Manage. Unpredictability....................................................................................................69

Irene Maria Gironacci, Reply SPA, Italy

A. key. role. of. every. government. is. to. control. the. scientific. and. social. progress. managing.the.knowledge.and.learning.process.with.efficiency.and.efficacy.towards.a. factual.wellness.of.people..The.purpose.of.this.chapter.is.to.describe.a.basic.strategy. paradigm.of.management.in.global.capitalism.of.knowledge,.with.web.economy,. globalization,.dematerialization.of.value..In.this.global.worldmaking,.an.Indonesia- Italy.research.team.proposes.a.new.knowledge.science.paradigm.to.change.the.way. we.are.behaving.in.educational.didactic,.scientific.mindset,.business.management. in.the.twenty-first.century:.nature.knowledge.theory.(NKT)..As.new.basic.science,. it.is.the.outcome.of.advanced.study.beyond.knowledge.management.

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Chapter 5 The.Benchmarking.Practices.as.a.Strategic.Option.to.Improve.the. Performance.of.Economic.Companies..................................................................86

Redouan Ainous, University of Algiers 3, Algeria

This. chapter. analyses. the. development. of. benchmarking. research. from. 1989. to. 2017.. Drawing. upon. diary. and. database. seeks,. all. articles. were. recovered. and. afterward.dissected.in.the.light.of.the.substance.investigation.strategy..The.chapter. demonstrates.that.benchmarking.has.caught.expanding.research.consideration,.as. proven.by.the.developing.number.of.articles.distributed..Conduct.change.hypotheses. primary. benchmarking. ponders. were. not. announced,. prompting. troubles. in. recognising.fundamental.factors.in.viable.medications..Benchmarking.research.has. been.overwhelmed.by.subjective.techniques,.albeit.both.quantitative.and.blended. strategies.are.picking.up.outstanding.quality.

Section 2 Management Case Study

Luisa dall’Acqua, Scientific Lyceum TCO, Italy & Live Editions Inc, USA

In. a. digital. era,. characterized. by. shared. decision-making,. and. where. web-based. management.is.increasingly.widespread,.the.term.school.“leader”.may.also.refer. to.the.highest-ranking.administrator,.who.manages.a.complex.organization,.leads. teachers,.as.well.as.those.who.participate.in.school.leadership.activities,.using.and. managing.digital.supports..The.school.leader.is.always.the.first.and.foremost.person.in. ensuring.the.efficiency.in.running.the.school.and.the.effectiveness.of.the.educational. politics.application..Nowadays,.this.role.includes.new.duties.and.needs.an.equipment. for.new.skills..Education.world.and.policy.makers.alike.seek.a.frame.for.effective. leadership.that.can.produce.sustainable.school.improvement.and.continuous.teacher. commitment..The.research.finality.of.this.chapter.is.how.to.manage.the.educational. change,.to.train.principals/headmasters.to.be.decision.leaders,.able.to.recognize.and. manage.the.change,.choose.right.collaborators/coadjutors.with.the.perspective.of. a.factual.team.building.

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Thea van der Westhuizen, University of KwaZulu Natal, South Africa Proctus Lucky Shange, Limpopo Department of Education, South Africa

The.aim.of.this.chapter.is.to.determine.the.key.success.factors.for.implementing.a. workplace.skills.plan.(WSP)..To.obtain.perspectives.of.department.managers.on. the.key.success.factors.for.implementation.of.a.WSP.in.the.Limpopo.Department. of.Education,.a.quantitative.research.approach.was.used..A.probability.sample.of. 75.managers.was.selected..The.sample.was.composed.comprise.51%.women.and. 49%.men..Of.the.sample,.74%.of.the.participating.managers.were.members.of.the. skills.development.committee..The.study.revealed.various.key.success.factors.for. WSP.implementation.that.were.determined.by.managers,.which.included.aspects.of. information.gathering.to.inform.a.WSP,.aspects.of.skills.auditing,.aspects.of.compiling. and.submitting.a.WSP,.aspects.of.implementing,.monitoring,.and.evaluating.a.WSP,. and.aspects.of.reporting.on.an.implemented.WSP..The.chapter.provides.insights. for.organisations.in.implementing.a.WSP.according.to.the.determined.key.success. factors,.identifies.obstacles.that.may.hinder.the.implementation,.and.recommends. strategies.that.can.be.implemented.

Chapter 8 Using.Big.Data.as.a.Backbone.for.Thailand.4.0:.A.Proposed.Framework.........177

Jirapun Daengdej, Assumption University of Thailand, Thailand Kitikorn Dowpiset, Assumption University of Thailand, Thailand

Every.country.is.currently.preparing.themselves.for.the.fourth.industrial.revolution,.the. environment.where.innovation.is.the.key.concept.for.survival..Most.of.the.countries. have. developed. framework. for. their. e-government. development.. Unfortunately,. most.of.these.frameworks.do.not.contain.adequate.details.on.what.are.the.activities. required.if.big.data.will.be.used.as.a.backbone.of.all.services..This.research.focuses. on.proposing.a.conceptual.framework.for.development.of.e-government.in.Thailand.. The.proposed.framework.explicitly.contains.all.important.activities.to.be.completed. if.big.data.will.serve.as.the.core.component.of.all.services.for.their.citizens.

Chapter 9 Strategists.From.the.Past,.as.Encrypted.Cognitive.Maps,.Whose.Access.Code. Is.the.Will.of.Learning.Solutions........................................................................196

Anna Verrini, Independent Researcher, Italy

This.chapter.explores.some.different.ways.to.acquire.not.only.professional.competence. but.also.knowledge.and.learned.solutions..The.author.doesn’t.give.a.“magic.solution”. to.solve.all.problems,.but.instead.suggests.some.ideas.to.keep.in.mind.and.work. around.to.overcome.great.difficulties.

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Chapter 10 Managerial.Mindsets.in.the.Academic.World:.The.Crisis.of.Educational. Organizations......................................................................................................210

Gabriella Giulia Pulcini, University of Camerino, Italy Valeria Polzonetti, University of Camerino, Italy

Academic.didactics.has.started.implementing.pedagogic.strategies.that.overcome. the.traditional.frontal.lecture.to.reach.a.new.aim:.supporting.the.learning.process.. According. to. the. leading. connectivism. principles,. which. are. revolutionizing. education,.learning.processes.are.a.complex.and.dynamic.concept..On.one.side,.new. technologies.are.promoted.to.support.the.learners’.“cold”.cognition..On.the.other,. strategies.boasting.a.“hot”.cognition.are.acquiring.more.and.more.importance..The. student-teacher.relationship.is.facing.change:.teachers.are.required.to.consolidate. their.profession.and.tutor.the.learning.process,.regardless.of.the.field.of.study..These. new.strategies,.although.carried.out.reluctantly,.have.been.successfully.implemented. in.some.action.research.projects.highlighting.the.learners’.engagement.on.one.side. and.the.professors’.hesitation.on.the.other..This.chapter.explores.this.phenomenon.

Chapter 11 Impact.of.E-Commerce.on.Agricultural.Business.Success................................223

Carla Sofia Vicente Negrão, University of Coimbra, Portugal

In.an.increasingly.digital.and.competitive.environment,.it.is.important.to.understand.the. agricultural.business’.success.in.a.digital.economy..E-commerce.appears.as.a.potential. strategic.tool..The.purpose.of.this.chapter.is.to.analyze.the.impact.of.e-commerce. on.agricultural.business.success.in.Portugal..Through.a.quantitative.approach,.data. were.collected.by.survey.and.a.sample.of.372.agricultural.enterprises.is.obtained.. The.empirical.results.suggest.a.negative.and.significant.impact.of.e-commerce.on. productivity..However,.there.is.a.simultaneous.relationship.between.the.e-commerce. adoption.and.performance,.both.individually.and.globally..This.study.contributes. to.the.addition.of.theory.on.e-commerce.adoption,.the.impact.of.e-commerce.on. performance,.and.other.determinants.of.the.agricultural.business’.success.

John Thomas Riley, The Big Moon Dig, USA

In.these.challenging.times,.people.need.a.positive.vision.of.the.future.that.human. space.exploration.best.provides..The.way.Apollo.to.the.Moon.was.run.in.the.1960s,. with.a.huge.government.program,.simply.cannot.happen.today..Fortunately,.all.the. elements.needed.to.build.a.twenty-first.century.grassroots.human.space.program.are. now.available..This.chapter.provides.one.possible.approach.developed.by.the.Big.

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Moon.Dig,.called.MOVE,.and.discusses.its.critical.elements.such.as.management. of.a.large.out-of-box.project,.finding.a.lunar.settlement.site,.critical.habitat.design,. and.applying.the.lessons.learned.to.other.problems.on.Earth.

Compilation of References............................................................................... 283

About the Contributors.................................................................................... 309

Index................................................................................................................... 314

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Preface

Current Knowledge Society requires multiple stakeholders in the process of designing, conducting and use of knowledge in a hybrid multi-user context. It means to activate cooperation and co-creation of decision making, dynamic changing processes, digital inclusion, smart and open approach to big data flux phenomena, promotion of openness, accessibility and usability of knowledge.

The main topics, focused on the context of the Knowledge Society, are: proposed classified sets of managerial mind to interpret and deal with managing self, organizations, context, relationships, change; factors, assessment, effective techniques and technology for training and tutoring managers; innovative set of analytic tools to diagnose, manage and perform effectively in an international business, including Big data analytic and predictable impact and critical outcomes of decision risk management.

The networking of knowledge and the speeding up of information processing open up new possibilities for work on databases, irrespective of their size, their use, and their ultimate purpose. Very powerful knowledge management systems are being set up, at the level of scientific or governmental bodies as well as of large- and small-scale businesses.

The notion of innovation system is connected to the role of leaders and decision- makers in the management of the scientific and technological environment. Innovative frameworks of analysis, by approaching science and technology systemically (i.e. in relation to the economy, politics, and society), stress adaptation and local success. Any research and innovation policy must take account of a complex set of problems.

Even the global economy changed and moved towards the knowledge-based economy. This transition includes the best practices taken from the service-intensive, manufacture-intensive and labor-intensive types of economies and added knowledge- based factors to create an interconnected and globalized economy where sources of knowledge like human expertise and trade secrets are crucial players in economic growth and are considered as important as other economic resources.

The literature on the knowledge economy focuses heavily on knowledge production, however, and attends less to knowledge dissemination and impact. A key insight of

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Preface

the productivity debate is that significant gains in productivity are achieved only when new technologies are linked to complementary organizational practices.

In this context, successful managers can contribute meaningfully to guide processes, optimize organizations and, even more, improve dialogue between smart cities, government,s and industries, only if they are equipped with specific knowledge, skills, and abilities. That is obtained through a comprehensive set of (adequate to scope) management education training and experiences. The International Federation of Red Cross (HQ in Geneva), for example, has an own management development meaning. It needs a fast-action culture because it must act quickly in responding to disasters everywhere - earthquakes and wars, floods and famines. But it also needs to engage in the slower, more delicate task of building a capacity for action that is careful, thoughtful and tailored to local conditions and needs.

The proposed book aims to provide a theoretical foundation and empirical support for developing an effective managerial mindset in people and professionals, presenting emerging key management strategies, contextualized processes, organizational analysis, and innovative management tools, techniques and technologies.

What are the elements of the new managerial mindset, as we can see it now? How having an entrepreneurial mindset and international experience can influence

the rapidity of internationalization? How the global mindset of founders of born global firms influences their choices in the competitive landscape?

Serge Tchuruk, the former CEO of Alcatel, used to say in conferences that “business should be an adventure. It had the power to possibly change the very complexion of the organization. The days when an organization’s DNA had unambiguous national origins are gone forever”.

Managerial decision-making involves problem-solving skills; certainty, risk and uncertainty management; programmed and unprogrammed decision-making; intuitive and rational approach making decisions; group decision making management (with benefits as well drawbacks).

The focus is to develop knowledge, skills, and awareness, which will enable managers to transform companies by providing team-based leadership through the creation and communication of vision and values, to achieve world-class standards of performance. The ability to manage a company and self-control in stressful situations is mainly a matter of method. A static mentality influences our entire interpretative process, placing it in a judging and repetitive position, with no escape. In contrast, a dynamic mentality brings in harmony with constructive actions, in continuous learning.

The key factor to know how to make the right decisions, in work, in business, as in life, is called Managerial Intelligence. Business management is strongly supported by the available stock of managerial intelligence, i.e. cognitive, emotional and social ability making it possible to see, design and build the upcoming world. A complex

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Preface

problem does not have a unified solution, it cannot be addressed by breaking it into its elementary parts, because it is not their summation, but their link and interaction.

Managerial intelligence comes from the combination of three factors (Cristoferri, 2016):

• Critical thinking and the ability to turn it into action • Ability to grasp the complexity of interpersonal relationships, working with

and through people (social intelligence) • Continuous assessment of themselves to adapt thinking and action to the

context in which it is being operated (introspective intelligence)

Line managers, staff managers, functional managers as well general managers need to improve “managerial intelligence” in a global updating mindset.

A growing number of academics and practitioners view global mindset, or the cognitive capabilities of key decision makers, as a critical success factor that affects a variety of organizational outcomes (Gupta & Govindarajan, 2002; Englis, Kedia, & Davis, 2000; Jeannet, 2000; Levy, 2005). This emerging consensus reflects a recognition that the present-day competitive landscape requires a shift in focus from structural and administrative mechanisms to mindset-based capabilities.

Worldwide, training establishments prepare senior managers effectively to master these challenges. Between others, McGill University proposes a significant framework, built around five managerial mindsets, that can mean a geography of the mindset universe (Gosling & Mintzberg, 2013):

• Managing Self: The reflective mindset. • Managing Organizations: The analytic mindset. • Managing Context: The worldly mindset. • Managing Relationships: The collaborative mindset. • Managing Change: The action mindset.

These five sets of the managerial mind are five ways in which managers interpret and deal with the world around them. Each has a dominant subject, or target, of its own. For reflection, the subject is the self; there can be no insight without self- knowledge. Collaboration takes the subject beyond the self, into the manager’s network of relationships. The analysis goes a step beyond that, to the organization; organizations depend on the systematic decomposition of activities, and that’s what analysis is all about. Beyond the organization lies what we consider the subject of the worldly mindset, namely context—the worlds around the organization. Finally, the action mindset pulls everything together through the process of change—in self, relationships, organization, and context.

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This framework replaces the functional framework used in most MBA and AMP programs (marketing, finance, accounting, etc.) and is more oriented to managing business activities themselves. It means an example of crucial managerial mindset factors.

The problem for many managers today, as well as the business schools that train them, is not a lack of analysis but too much of it—at least, too much conventional analysis. What lack is overall a worldly mindset. Being worldly does not require global coverage, just as global coverage does not a worldly mindset make. Indeed, global coverage does not even ensure a global perspective, given that the managers of so many “global” companies are rooted in the culture of the headquarters’ country. Of course, shifting from a global to a worldly perspective is not easy. No wonder managers must be worldly. They have to mediate those wide zones where organization meets context.

This comprehensive and timely publication aims to be an essential reference source, building on the available studies on, and experiences with, developing ‘instruments of change’ and managerial mindset to train students, practitioners and professional “in-service”. The book aims to explore perspectives and approaches to the Knowledge Management and Leadership in the Knowledge Society as well as Knowledge Economy that are highly agile and responsive to market dynamics. The book also aims to combine theoretical underpinnings with practical relevance, in order to provide insights into training activities and how they can be developed in order to optimize managerial knowledge and skills.

Main research and project fields of this work range from knowledge representation and reasoning, Knowledge Management and Engineering, Machine Learning, Business Strategies, Big Data Analytics, and Social Network Analytics. The target audience of this work are policy makers, academicians, researchers, advanced-level students, technology developers, and government officials will find this text useful in furthering their research exposure to pertinent topics and assisting in furthering their own research efforts in this field.

ORGANIZATION OF THE BOOK

The majority of studies conceptualize global managerial mindset in related mainly to two salient dimensions of the global environment, most notably in relation to the strategic complexity associated with globalization and cultural and national diversity. So, this book is organized into two sections: the first one is focused on methods, practices, and strategies to improve the enterprise performance; the second one is dedicated to managerial case studies, such as applications in a specific sector of job or geographical contexts of analysis. The whole work consists of twelve chapters. A brief description of each of the chapters follows:

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Chapter 1

This chapter investigates some of the facets surrounding complexity and determining solutions for a globalized future. The key factors of global 4th Industrial Revolution are explored, especially how humanity has been witness to more shifts in a decade than in the previous four centuries about the changing socio-economic dynamics. A specific section is dedicated to the measuring of enterprise agility, with the intent to measure a variety of inter-nodal influences on decision-making processes within organizations. The author provides excellent info-graphics and table, and explore how sustainability, demanded to organizations, move from previously adopted linear approaches toward multifaceted and multi-pronged approaches, driven by uncertainty and increasing complexity.

Chapter 2

This analysis has the general purpose to identify an integrated and holistic approach to the risk management. The chapter offers a comprehensive list of risk criteria and types of risks, and an analysis of the cognitive, regulatory and social components of risk inherent in a decision-making process. Furthermore, the study proposes a synthesis model which exposes three different points of view of decision-making risk, that should be considered in the overall risk analysis and management.

Chapter 3

This study is centered on an analysis of the human capital construct as the point of departure. It explores different organizational learning pathways according to a holistic perspective with humanization as a unique element. Furthermore, it reflects on humanized and humanizing emotional, spiritual and relational capital in order to reach the level of organizational knowledge. The theoretical framework chosen for this research is the Resource-based and Knowledge-based Views of the Firm along with the Learning Organization principles to demonstrate the paradigm shift from the scientific management approach to the new age paradigm.

Chapter 4

The purpose of this chapter is to provide a definition of “Knowledge Management “, via an analysis of the literature on main approaches of it, and the close relationship between scientific thought, knowledge and life cycle of the industry. Between others, this analysis describes an innovative scientific contribution, The Natural Knowledge Theory (NKT), which intends to interpret the unpredictable interactions

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and relationships between agents in biological, social and cultural environments, and to explore the connections between science, production, and consciousness of the process in industrialism.

Chapter 5

The right value of the chapter is the in-depth literary overview of the topic. This chapter analyses the development of Benchmarking research from 1989 to 2017. Drawing upon diary and database seeks; all articles were recovered and afterward dissected in the light of the substance investigation strategy. The author wanted to highlight the use of this method contributes to improving performance, identifying strengths, strengthening them and weaknesses, and treating them so that they are distinguished from other competitors.

Chapter 6

The research finality of this chapter is how to manage the educational change, to train principals/headmasters to be decision-leaders, able to recognize and manage the change, choose right collaborators/coadjutors with the perspective of a factual team building. The proposed research intends to provide a solution to train School Leaders of all sectors in “state of the art” techniques and paradigms of modern pedagogy and knowledge management. The Author proposes an application in this context of a new interpretative paradigm, Orientism, focused on understanding and managing fluid nature of knowledge, but at the same time to seize and manage the unpredictability and risks of the dynamics of knowledge management in relationships complex environment, in a society.

Chapter 7

The aim of this study was to determine the key success factors for implementing a workplace skills plan (WSP). To obtain perspectives of department managers on the key success factors for implementation of a WSP in the Limpopo Department of Education, a quantitative research approach was used. Starting from this specific regional context, the work focuses on the identification of the key factors needed to develop a WSP that may include training for computer skills, report writing, financial management and the like.

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Chapter 8

This research focuses on proposing a conceptual framework for the development of e-Government in Thailand. The proposed framework explicitly contains all important activities to be completed if big data will serve as the core component of all services for their citizens. The paper begins with giving a background of the topic which includes industrial revolution, e-Government frameworks, and big data. Then it discusses issues of the existing works, which lead to this research. This followed by discussion on the proposed framework and rationale behind this work.

Chapter 9

In this chapter, the author has a case study approach to analyze the key winner managerial strategies. Strength points of the chapter is the overview of some strategic actions of excellent manager of the past, such as Adriano Olivetti, Mario Tchou, Merloni family, Buitoni family, Luisa Spagnoli, Hewlett and Packard.

Chapter 10

This chapter describes a training project, led by both University of Camerino (Italy) and University of La Matanza (Argentina). The aim of the project is to train teachers to a managerial mindset, thus allowing them to go beyond their field of study and carry out self-reflection and nurture the rapport they share with learners. The work explores the academic system, specifically in Italy, and its strengths and weaknesses in the efficiency and the effectiveness of didactics, and the role of manager-teachers.

Chapter 11

This study is focused on the increasingly digital and competitive environment that agricultural enterprises cross due to the technological advances of the twenty-first century. It contributes to the addition of theory on e-commerce adoption, the impact of e-commerce on performance and other determinants of the agricultural business success. Moreover, the work aims to analyze the specific impact of e-commerce adoption on ABS in Portugal. For this purpose, it is taken into account taking the potential endogeneity of e-commerce on ABS determination models.

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Chapter 12

In the end, but not least, this chapter provides one possible approach to the management, developed by the Big Moon Dig, called MOVE, and discusses its critical elements such as management of a large out-of-box project, finding a lunar settlement site, critical habitat design, and applying the lessons learned to other problems on Earth. The work is very provocative, as much as interesting, because explains a not-known extraordinary scientific point of view.

Luisa dall’Acqua Scientific Lyceum TCO, Italy & Live Edition Inc, USA

Dickson Lukose GCS Agile Pty. Ltd., Australia

REFERENCES

Aard, G. (2015). New Technology-Based Firms in the New Millennium. Emerald Group Publishing Limited.

Anselmi D., Marinò, P., & Zuccardi, M. (2014). Il declino del sistema dei controlli manageriali nelle pubbliche. Franco Angeli.

CristoferriG. (2016). Retrieved from http://www.repubblica.it/economia/ affari-e-finanza/2016/02/01/news/elan_le_figure_pi_richieste_e_meno_ reperibili-132532463/

Danskin Englis, P., & Wakkee, I. (2015). Managerial Mindset and the Born Global Firm. In New Technology-Based Firms in the New Millennium (pp. 9–27). EGPL. doi:10.1108/S1876-022820150000011009

Englis, P., Kedia, B., & Davis, P. (2000). Internationalization of born global and gradual globalizing firms: The impact of the manager. Journal of Global Competitiveness., 7, 278–286.

Gosling, J., & Mintzberg, H. (2003). The Five Minds of a Manager. Harvard Business Review, 81(11), 54–63. PMID:14619151

GoslingJ.MintzbergH. (2013). Retrieved from https://www.youtube.com/ watch?v=obLQSF1ojkM

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http://www.repubblica.it/economia/affari-e-finanza/2016/02/01/news/elan_le_figure_pi_richieste_e_meno_reperibili-132532463/

http://dx.doi.org/10.1108/S1876-022820150000011009

http://www.ncbi.nlm.nih.gov/pubmed/14619151

https://www.youtube.com/watch?v=obLQSF1ojkM

Preface

Gupta, A., & Govindarajan, V. (2002). Cultivating a global mindset. The Academy of Management Executive, 16(1), 116-126.

Jeannet, P. (2000). Managing with a Global Mindset. Academic Press.

Levy, D. L. (2005, May). Offshoring in the New Global Political Economy. Journal of Management Studies, 42(3), 685–693. doi:10.1111/j.1467-6486.2005.00514.x

UNESCO. (2005). Towards Knowledge Society. UNESCO Publishing.

Walter, W. (2004). The knowledge economy. Annu. Rev. Socioliol., 30, 199–220.

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http://dx.doi.org/10.1111/j.1467-6486.2005.00514.x

Acknowledgment

We would like to acknowledge the help of all the people involved in this project and more specifically, the authors and reviewers who took part in the review process. Without their support, this book would not have become a reality.

First, we would like to thank each one of the authors for their contributions. Our sincere gratitude goes to the chapter’s authors who contributed their time and expertise to this book.

We as editors wish to acknowledge the valuable contributions of all the reviewers and valuable colleagues, Dr. Mohan Bavirisetty (Chief Scientist and Technology Leader at Cisco - Kentucky), Dr. Amitabh Anand (Researcher at SKEMA Business School, France), and Mrs. Maria Luisa Nardi (Historian of Political and Economic Institutions, Italy). Most of the authors also served as referees; we highly appreciate their double task. A special thanks is for Eng. John Tom Riley regarding his in-depth and fine-tuning analysis of reviewed chapters.

We wish to acknowledge the very valuable help and encouragement we received from our Colleagues, and friends, especially Mr. Eric Kmiec (CEO at R&D Live Editions, California), who came forward to extend their support. We wish to place on record our deep appreciation and thanks to Ms. Jordan Tepper, Book Development Editor, Ms. Kayla Wolf and Mariah Gilbert, Managing Editors, Ms. Jordan Tepper and Mr. Joshua Herring, Book Development Editors, IGI Global for their support, cooperation and attention to details to bring out the publication of this book in time. All of them contribute to the improvement of quality, coherence and content presentation of this work.

Lastly, we wish to thank our families for their understanding and support in providing us all the necessary facilities and affectionate environment to enable us to complete our work and above all we are immensely thankful to the Almighty.

Luisa dall’Acqua Scientific Lyceum TCO, Italy & Live Editions Inc, USA

Dickson Lukose GCS Agile Pty. Ltd., Australia

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Section 1

Methods, Practices, and Strategies to Improve the Enterprise Performance

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Chapter 1

DOI: 10.4018/978-1-5225-3906-3.ch001

ABSTRACT

This chapter delves into some of the facets surrounding complexity and determining solutions for a globalized future, both in the context of the fourth industrial revolution and changing socio-economic dynamics where humanity has been witness to more shifts in a decade than in the previous four centuries. It has therefore come to be an era where the only certainty seems to be constant uncertainty. The two principal entities standing at the forefront of such uncertainty are governments and corporations. The author addresses key facets influencing complexity and agility in corporations.

INTRODUCTION

This chapter aims to provide a birds-eye view to various factors influencing organizations/ enterprises around the world. While the marketplace is awash with sufficient content around management, globalization, growth and economic value, distilling the impact of external influencers on enterprise agility is yet to be seen as a mainstream endeavor. The author wishes to describe the influencers, look at the impacts – positive and adverse – and introduce the idea around an Agility Index. Further, the intent of this Chapter is not to pick a few burning issues and try resolving them. Instead, the aim is to take an overarching view to changes in the marketplace and civil society, consider specific factors, and determine their impact on organizations. The chapter shall refrain from addressing facets that may have their sources in Government, or Civil Society except for passing references where appropriate. The objective of this Chapter is to outline complexity in its various forms, and endeavor at convincing readers to embrace it, and consequently build agile enterprises.

Enterprise Agility in Today’s Era of Complexity

Rama P. Varanasi Matryzel Consulting Inc., Malaysia

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Enterprise Agility in Today’s Era of Complexity

BACKGROUND

For two decades now, the world has seen numerous shifts – transformational in nature and fundamentally game-changing in their impacts. Most such shifts have been possible thanks to significant progresses made in the fields of Science, Engineering, Medicine, and Technology. Sub-disciplines like Material Sciences, Nanotechnology, Biosciences, organ farms, laboratory-grown meat, gene sequencing, gesture-based computing, machine learning and others contend for mind-space with human trends around increased isolation, instant gratification, reduced attention spans, pastism, rising rage, contextual deficit, and related aspects. Enterprises built around traditional command-and-control structures have for long endeavored at creating value, for themselves - most visibly in the form of shareholder value - and for customers - mostly in the form of competitiveness and comparative distinctiveness. Early years of this century resulted in aggressive adoption of capitalist endeavors manifested in corporations, ably supported by forward-looking policy making governments.

Times have now changed dramatically. Organizational structures have moved from owned-and-operated models to collaborative partnering. Such dramatic shifts have resulted in added uncertainty, as traditional boundaries have been breached, management theories – for long held as holy grail – discarded, dependencies – hitherto manifested in the form of production and consumption (read traditional economics) – have changed form distinctly. Models defined traditionally within the context of the “Employer-Employee-Customer” triad are no longer seen as useful or sustainable. Replacement models have delivered upon unfulfilled promises, while adding new layers to existing models. It is highly appropriate to quote observations made by Jared Weiner1 recently who says, quote “economies do not replace each other with each disruptive transition. They layer on top of each other. Hence the old remains in the system though they may be lesser in their impacts” unquote. Panning the globe one can clearly stand witness to a variety of transitions, from democracies to theocracies, capitalist to managed, family-run to crony models, all vying to make sense of emerging trends that do not seem to have any historical precedent. Contending with such uncertain futures is not only difficult, but scary at times. The former is influenced by shifting boundary conditions, while the latter is compounded by conflicting views on the future one wants to be a part of.

It therefore becomes pertinent to understand the root causes for such shifts in behavior, and marketplace expectations if one has to put a handle on understanding and deciphering complexity. Going back to the beginning of the industrial age, Nickolai Kondratiev2 articulated six major shifts the world has been witness to, as in Figure 1.

It is pertinent to note that while economists like to describe various shifts in the world as a function of six distinct trends, broader consensus emerging in the

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Enterprise Agility in Today’s Era of Complexity

past two years has resulted in usage of the term Industrial Revolution, to describe these very shifts. The author believes that the terms used to describe these shifts are unimportant. What is relevant is to appreciate some key outcomes emanating from each shift. Distinctively, a few of these outcomes are:

1. Innovation: Every cycle has been driven by innovation, from steam engines and electricity to artificial intelligence and the internet. Consequently, following a brief period of adjustment, enterprises have latched on to such innovations in a concerted manner, thereby creating substantial economic value.

2. Economic Crises: The end of each significant trend has usually been characterized by run-away inflation and uncontrolled price fluctuations, alongside declining/ stagnating wages. Consequently, the pressures on corporations transferred risk to governments, creating the perfect conditions for economic crises.

3. Revitalization: Each distinct crisis brought to the table new opportunities for innovation. Learning from previous mistakes, the world has typically bounced back to its feet, while creating new solutions, new opportunities and more economic value than in the previous cycle.

4. Shrinking Cycle Times: Interestingly, from the first to the sixth wave, the cycle time for each wave has reduced from an average of seventy years per cycle to approximately twenty years now. It is envisaged now that in the next decade, cycle times for each transition will reduce to almost zero. This has

Figure 1. Kondratiev waves

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Enterprise Agility in Today’s Era of Complexity

substantial implications, primary among them being that the world will be in a state of “continual flux”.

Nevertheless, some distinct positives have also emanated with each cycle. New jobs replaced old ones, skills morphed with increasing sophistication, enterprises ventured into building and developing more complex products and services, customers began to shift from basic expectations to more sophisticated consumption patterns, markets opened up – creating heterogeneous entry points for enterprises to leverage and serve. All these trends have collectively resulted in an increased global GDP and fortunes across board (however unevenly such incomes were distributed). The world went from being extremely local to a globalized and highly integrated marketplace. Global supply chains have increasingly become sophisticated, mature and flexible enough to withstand the vagaries of demand-supply imbalances around the world. Policy makers on the other hand went from being discrete enablers to active participants in the global economy. Their roles shall not form part of this Chapter. However, suffice to say that participation of governments in collaboration with enterprises has created opportunities for cooperation, mutual growth and general well-being of the planet.

Of course, no endeavors of this scale can be without their issues. Most often, one surmises that issues can be dealt with from within. Enterprises face issues every day, and have structured approaches toward resolving them. It is considered an integral part of doing business. Most issues have been articulated well by academics, research entities and analysts the world over – sufficient fodder for endless conversations on how to address them and build solutions – some temporary, others more sustained.

Interestingly however, familiarity breeds contempt. Replication and evangelism of solutions has come to define most endeavors today. One who bucks the (globally) accepted trend is considered either ignorant or a maverick. Aligning enterprises to a prescribed mode is considered not only necessary, but crucial for marketplace acceptance. Two hundred and fifty years of corporate initiatives have premised themselves on being the well-endowed lot, above the collective (read millions of customers across multiple markets). A bid to inculcate a sense of commonality has led enterprises on a path of replication. Various phases – read industrial revolutions – have prescribed the “how” without really asking “why”. Today, all of it has been upended by nimble entities who start with the premise of “why not”. Consequently, enterprises that have been built by such thinking have come to dethrone traditional ones all over the world, to the point that at times the “too big to fail” mindset seems passé. This Chapter aims to discuss some of the more prominent trends influencing enterprises, and their ability to thrive with uncertainty.

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Enterprise Agility in Today’s Era of Complexity

FACTORS DEFINING ENTERPRISE COMPLEXITY

1. Degrees of Separation: Traditional command-and-control organizations have always thrived on a structure with clearly defined realms of authority, and accountability. Decision-making went one way – down from the top. The same model governed ideation, risk management, customer emphasis, product development and marketplace strategies. Over the years, the enterprise world went from value to scale, with the latter defining influence. Complexity manifested from outside the organizations was rationalized through a “one- size-fits-all” approach toward standardization. The author calls this trend the “tyranny of empire”. For long the world has dealt with empires that employed individuals whose only contribution was to follow scripted instructions and not swerve away from the rules. Cognition and ability to build on shared experiences from across the organization was consecrated to management theory. Interestingly however, the advent of the web democratized knowledge, to the point that today one is ignorant of one’s own volition (and not on account of lack of access to such information). New enterprises that began to spring the world over in the past two decades have – among other things – upended the very notion of command-and-control. Their emphasis on predicting, collaborating and shaping the marketplace gave way to the traditional “build and sell” models of yore. The very notion of consistency was discarded, paving the way for continuous fluidity and agile responsiveness. In traditional enterprises, turnaround cycles - in response to marketplace changes – were usually a three to five year endeavor. Customers too did wait for such turnarounds to happen. Not anymore. The customer of today is looking for instant gratification, and choices in real time. Enterprises continue to contend with lack of information – validated – that could help shape their own strategies. Traditional entities almost always focused on two distinct layers: (a) internal structured footprint and (b) customer needs in the context of competition. Today’s enterprises contend with two distinct facets: (a) multiple degrees of separation among employees, customers, collaborators, partners and supply chains; and (b) developments from other industries that may adversely or positively influence their own business models/ products / services/ solutions. Gone are the days when competition was articulated as an “intra-industry” function. Today, business models are becoming obsolete because an innovation in one industry wipes out another3. Competitiveness today has come to be redefined as a function of how far along the consumer adoption curve an entity is, rather than in quantitative terms like market-share or mind-share alone. On the other hand, consumer loyalty has become obsolete.

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Enterprise Agility in Today’s Era of Complexity

2. Internal Complexity: Complexity is a term used to define a collection a scientific principles concerned with finding patterns among multitude phenomena, behavior, and in today’s digital world, millions of terabytes of data. While complexity has been dealt with by enterprise leaders for long, what seems to have manifestly changed is the variegated nature of inputs, increased velocity with which one expects to resolve such inputs, and the choices one is faced with. Social networks have collectively created hundreds of millions of individual connections among individuals, where nodal relationships and multi-nodal interactions are no longer linear. With each passing day, the non-linearity is increasing in all directions, while continually catering to the individual aspirations of participants. Inputs from such sources therefore have not only become increasingly complex and distinct of each other, new realizations are dawning on organizations and leaders in terms of preparedness to deal with such input factors. Internal enterprise ecosystems have for long been enhanced with changing consumer and marketplace patterns. For e.g. in 2003, Citibank N.A was undertaking a review of their complex operations, wondering where such complexities existed so that they could rationalize on the footprint. What was surprising was that around the world Citibank offered approximately 150,000 versions of their demand deposit account. To handle such distinct and differentiated products, the bank had to work with over twenty eight different computer systems. This is just one example among many other products that Citibank offered across its various banking operations around the world. Such environments within enterprises are quite commonplace. Leaders have learned to manage such ecosystems through adoption of a few proven strategies – standardization, mass customization, and in the recent decade, virtualization (collectively termed SMV). The consequence of such strategies are quite evident today. The world is witness to a rising breed of new age firms that have taken on the task of enabling enterprises in their goals around adoption of SMV. The rise of outsourcing and global sourcing, thanks to a large underutilized global communications network has allowed enterprises to streamline their internal organizations, and try to create a sense of control over the magnitude of networked workflows and controls governing their business models. Disruption came early through outsourcing, with enterprises clearly defining what was core to them, and what wasn’t. Hence most (complex and veritably multi-nodal) operational back-offices were labeled non-core, making such functions and sub-functions the right targets for sourcing out. The benefits of such initiatives are clear for many to see. Organizations who adopted outsourcing strategically saw their entities being subjected to the SMV model faster, and

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Enterprise Agility in Today’s Era of Complexity

at lower cost structures. Concurrently, internal teams were able to focus more on growth and serving customer footprints. The sourcing industry can be thought of as one harbinger for new ideas, technologies and solutions that much of the developing world wasn’t privy to toward the end of the millennium. Of course, the nature and type of explosive growth this industry has created is old news. The good side of this story was in its ability to create millions of jobs for young people in much of the developing nations struggling with economic growth in the face of older industries and lack of sustainability. The adverse side to this story has been the rising income gaps between the enabled and the un-enabled folks that couldn’t benefit from the wave of technological adoption (factors influencing such lack of adoption notwithstanding).

3. External Complexity: In the face of increasing population and a growing middle class, a resource revolution has been waiting to happen to satisfy the needs of over 2.5 billion new middle-class people worldwide. Productivity improvements have shown significant growth across various sectors, while creating millions of new jobs. This has created the necessary impetus for resource efficiencies. A significant change was required to sustain GDP growth worldwide, as shown Figure 24.

Figure 2. Global demand in the context of a rising global middle class

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Enterprise Agility in Today’s Era of Complexity

Technologically, smart machines have become increasingly able to perform advanced pattern-recognition tasks (that hitherto required human intelligence). The evidence of “capital deepening” is undeniable, where robots, computers and software (as capital) are increasingly substituting human labor. The contributing factors for such capital deepening have been increasingly cheap processing power, sophisticated software, cheap and ubiquitous sensors, and a much better understanding of human intelligence (in the form of cognitive sciences). Meanwhile, consumer behavior has changed dramatically. Influencers are many. Principal among them are two distinct types of trends that have a direct influence; (a) Internal Trends: Sense of Entitlement, Pastism, Rising rage, Instant gratification, redefinition of intimacy, Nostalgia, Loneliness, Anxiety, Individualism, Obesity et al; and (b) External Trends: Changing value systems, Digital narcissism, Urbanization, Localism, Desire for control, Declining fertility, Contextual deficit et al. Enterprises have been caught up in cycles of internal restructuring, modernization and rationalization that most have been unprepared for the onslaught of complexity from outside their control areas, with customers and marketplace behavior defining such shifts most poignantly. The entire notion of production-consumption spectrum driven by demand-supply dynamics has begun to give way to a fundamentally new model, where needs and wants have lost their intrinsic definitions completely, while traditional modeling of market demand have become obsolete. The late Dr. C.K. Prahalad had, in his book titled “The new age of innovation”5 clearly emphasized that enterprises can no longer operate using traditional methods to remain competitive. The emphasis on co-creation has to take center-stage, where collaboratively solutions are built, consumed, and enhanced. Consumers are seeking involvement through the production-consumption spectrum and are no longer willing to be told what to do. Prahalad’s formulae are intrinsic to the nature of markets and consumers today. From the yesteryears’ model of mass customization, today consumers are asking for an N=1 model (i.e. each consumer is treated as a distinct person, with preferences, choices, circumstances, and behavior), and enterprises are no longer location-constrained as resources are global in nature and can be leveraged: R = G. Predictions made by him in 2008 have unfolded exactly within the next few years. Today technologies permit us to deploy a N=1 model alongside a R=G leverage. The added complexity here is that individuals who play various roles in a given day – employees, customers – need to be factored in. The author believes that a third factor needs to be incorporated, that of E=1. Mass customization of customers has given way to an N=1 model. Similarly,

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Enterprise Agility in Today’s Era of Complexity

if we are to build cognitive enterprises that are not straitjacketed but willing to utilize the entire organization’s capabilities, employees too have to be treated as singular, with each employee viewed as a function of innovative ability and responsive collaborator. Enterprises cannot afford to have a significantly “singular” view to consumers, and a “commoditized” view to employees. The consequent discord will not permit organizations to build value. Contrarily, such diametrically opposite models will only increase complexity within organizations, while reducing flexibility to change or shifts.

4. Anti-Fragility: Command-and-control organizations have almost always premised their operating environments as a function of structured governance, supported by clear and distinct roles for each individual employed. Internal ecosystems have been premised on extracting efficiencies within highly controlled environments, so as to remain competitive. These are necessary yet insufficient measures. Complexity-induced change needs to percolate into organizations across all its decision points, particularly around governance, and strategic planning. The desire to remain competitive can make organizations tunneled in their vision of their near-term future, leading to decisions that create fragility instead of resilience. To exploit complexity, autonomy and outcome- centric hierarchies/ roles become crucial levers. Straitjacketed approaches built around traditional management theories do not hold true any longer. A caveat here is that it is not possible to design systems that are capable of addressing all types of changes while incorporating anti-fragility/ resilience into corporate environments, given that the influencers to such types of changes come from a range of sources, not all within one’s influence circle. The author surmises that the first step to creating resilient and agile environments within organizations is to accept that theory around management is not sacrosanct anymore. Traditionally accepted principles around cost containment, consumer pricing, and marketplace spend, customer outreach/ marketing et al have been upended by new models. Disruption has come not just from deployment of new technologies, but from making fundamental changes to operating models. Agility therefore has now come to be defined in the context of collaborative co-creation rather than pure competitiveness.

5. Age of Zero Marginal Value: Today some significant shifts have come into play in the marketplace. Primary among these are reduced distinction between buyer and supplier markets, where integrated approaches to production and consumption began to give rise to a new breed of companies. Technological innovations like atomically precise manufacturing have begun to compress global supply chains (thereby upending traditional businesses). Further, automation at the transactional level (especially jobs requiring high levels of pattern recognition) have begun to replace humans. Input factors began to get

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equalized to the extent that organizations that had thrived on differentiating (amongst themselves) by the nature of their inputs began to lose out. The age of “Zero Marginal Value” has begun, where capital such as software and robots can be replicated cheaply, thereby creating an environment that builds upon its successes, with marginal value reducing dramatically even when used in greater quantities. A state of “Global Commons” is likely to be established as the marginal costs of many industries are driven to near zero (nearly profitless). The intensity of these changes have impacted all industries worldwide. Traditional models that thrived on input-factor sophistication are being seen as increasingly irrelevant in the face of transcendental shifts in business models, marketplace complexities and consumer expectations. The uncertainty faced by organizations is unprecedented. Expectations have invariably shifted. Enterprises expect their partners to move from being fringe provisioning entities to collaborative and co-creation partners. Figure 36 shows a snapshot of all that is changing within corporations worldwide (. Fundamental shifts are noticeable across all layers within organizations. The biggest shifts are observed in the Operational and Tactical layers. The former is seeing a shift from transactional to intelligent workflows, where technologies and other innovations across data science, artificial intelligence and other

Figure 3. Shifting enterprise footprints

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trends mentioned earlier are influencing traditional resource-heavy delivery. Intelligence is being created continuously instead of keeping the lights up. The fallouts are the irrelevance of job-centric and transactional models. Meanwhile in the tactical layer traditional service delivery the premised efficiency-based endeavors within functions is being replaced by an integrated multi-functional and cross-organizational view. The endeavor isn’t as much about enhancing efficiencies of operational inputs through structure and rigor. Rather the emphasis is co-creation and predictive approaches that aim to build agility and resilience within the larger organization.

6. Triple Bottom Lines: Traditional enterprises operate along lines of serving paying customers, who are able to afford in the first place. Such models exclude more than half the world’s citizens. Of course, the argument is that such individuals do not have incomes sufficient enough to consume in the first place – an argument that has both merit and an opportunity. The private sector has seized on the opportunity by pushing products/ services because the lure of a sizeable untapped consumer base is just good to ignore. Of course, human greed has manifested itself in an ugly manner that instead of ensuring that a larger population base is brought into the mainstream economy, organizations continued to pursue their capitalistic goals. The only difference was that the consumer base was new, poor, vulnerable and ignorant of market realities. The “race to the bottom” became a distinct reality, especially in countries like Bangladesh, Indonesia, India, South Africa, Kenya etc. Some noteworthy elements are as follows, manifested particularly with microfinance: a. Various Pitfalls Ignored: High interest rates; lack of sustainability; no

business training; lack of awareness of social factors are some key pitfalls that continue to plague the microfinance sector.

b. Microfinance Doesn’t Cure Poverty: Aneel Karnani from Stanford University’s Social Innovation Review suggests the only way to cure poverty is to create jobs, not give microcredit. However this element was never understood, and continues to be (largely) ignored.

c. Microfinance Is Not for All Poor: Microloans are more beneficial to borrowers living above the poverty line than to borrowers living below the poverty line. This is because clients with more income are willing to take the risks, such as investing in new technologies that will most likely increase income flows. Poor borrowers, on the other hand, tend to take out conservative loans that protect their subsistence, and rarely invest in new technology, fixed capital, or the hiring of labor. Microloans sometimes even reduce cash flow to the poorest of the poor, observes Vijay Mahajan, the chief executive of Basix, an Indian rural finance

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Enterprise Agility in Today’s Era of Complexity

institution. He concludes that microcredit “seems to do more harm than good to the poorest.”

d. Grameen Bank’s Failures: was always receiving state funding & donor support quietly since its inception. Should success of microfinance be based on the “Growth” of the MFI itself, or the utilization of the financial resources? Most important requirement for the poor seemed to be savings, not entrepreneurism.

e. Democratization of Capital: The private sector continued to pursue its capitalistic goals, which wasn’t always possible owing to conflicting interests & misplaced priorities with the poor citizens segment. Under the watchful eye of the World Bank based Consultative Group to Assist the Poor (CGAP), the microfinance industry has increasingly turned to the rules and norms of global finance to formulate standards of scale and sustainability. Concerned with portfolio quality rather than poverty, with return on equity rather than social equity, microfinance now bears the promise of commercial expansion. Their motto seems to have failed in adhering to the key need of the day: treating the society as a shareholder.

Corporates have long struggled to ensure that overall returns remain positive and consistent, though marginal returns from investing in initiatives aimed at inclusivity may be extremely high. This paradox is a consequence of rigid operating environments that do not permit any deviations/ shifts. Interestingly, diminishing returns (also called diminishing marginal returns) is the decrease in the marginal (per-unit) output of a production process as the amount of a single factor of production is increased, while the amounts of all other factors of production stay constant. The law of diminishing returns (also law of diminishing marginal returns or law of increasing relative cost) states that in all productive processes, adding more of one factor of production, while holding all others constant, will at some point yield lower per-unit returns.

The law of diminishing returns does not imply that adding more of a factor will decrease the total production, a condition known as negative returns, though in fact this is common. For example, the use of fertilizer improves crop production on farms and in gardens; but at some point, adding more and more fertilizer improves the yield less per unit of fertilizer, and excessive quantities can even reduce the yield. A common sort of example is adding more workers to a job, such as assembling a car on a factory floor. At some point, adding more workers causes problems such as getting in each other’s way, or workers frequently find themselves waiting for access to a part. In all of these processes, producing one more unit of output per unit of time will eventually cost increasingly more, due to inputs being used less and less effectively7.

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The most crucial element in this discussion is the impact of variable costs on marginal and consequently overall returns. Unfortunately, the nature of infrastructure, predictability with cost and usage elements in rural/ underprivileged areas (especially in poor/ developing nations around the world) can be notoriously unpredictable, preventive and predictive allocation of alternatives (for e.g. generators to ensure continuous power supply to service centers) can add significantly to the costs. Unfortunately, this can be a sizeable variable cost factor that has a direct impact on total cost of operations. However, if we were to switch a different premise, there arise a host of opportunities.

The private sector can create tangible returns to businesses, if and only if social enterprises embed both social and economic goals clearly into their mandates, create much-needed employment opportunities (and do all that’s necessary in terms of skills and training to ensure inclusion), dedicate management effort to sustain such models, and finally, try to spin off such entities into entrepreneurial ventures. This emphasis on the “triple bottom-line” of People, Planet and Profit would help embrace the goal of uplifting all the poor which needs millions of entrepreneurs, preferably from the very communities that they hail from and can create impacts. A few companies are not sufficient to make the ripple impact felt. It is time for large enterprises to work cohesively in making the initial investments. Agile enterprises that embrace the complexity such environments (read potential markets) present can surely benefit not just from growth but from sustained competitiveness.

MEASURING ENTERPRISE AGILITY

Measuring Agility requires more than determining organizational readiness to internal or marketplace factors. It needs an emphasis on specific elements that govern and influence organizational responses, as well as readiness. Further, while measuring it is crucial to determine not just responsiveness, but also readiness. Combining elements from both sides of the readiness spectrum then elevates an organization’s awareness to levels sufficient to remain agile. The Enterprise Agility Index developed is presented here in a concise manner8. Essentially this index comprises three layers. The primary layer comprises three principal dimensions influencing agility, namely Resilience, Proactivity, and Adaptability. The next layer represents Measure Variables for each dimension. The last layer comprises Elements defining each Measure Variable. This Index therefore comprises three dimensions, nine Measure Variables and sixteen Elements, as reflected in Figure 4.

The intent of the authors is to measure a variety of inter-nodal influences on decision-making processes within organizations. Each organization represents a distinct picture of its dependencies within and across industrial ecosystems.

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This measure focuses not only on industrial aspects, but also socio-cultural and econo-commercial aspects so as to arrive at an encompassing picture of Agility. Determination of scores at the Element level assist an organization in focusing on enhancing the particular element’s effectiveness, while also making decisions around inter-elemental dependencies.

Establishing a base and then taking appropriate decisions should greatly assist organizations in knowing what their actual readiness/ agility elements, so as to determine effective strategies. Given the nature of marketplaces today, and complexities within, it is pertinent that enterprises determine their Agility holistically and not limit themselves to the more obvious market-oriented factors alone, or in response to temporal industry rhetoric.

CONCLUSION

Enterprises today face an unprecedented set of challenges, compounded by ever- changing influencers. Dynamic markets and circumstances are the only constant. Traditional models are increasingly being subject to severe survival questions, while new entities are replacing old ones at an unprecedented pace. Sustainability therefore is demanding organizations move from previously adopted linear approaches toward a multi-faceted and multi-pronged approaches, driven by uncertainty and increasing complexity. The time for incorporating slow and laborious changes is passé. Customers and markets are the least forgiving toward enterprises that create boundaries and silos. Agility therefore has come to be a multi-dimensional animal necessitating constant yet fast-paced changes to be adopted.

Figure 4. Enterprise agility Index

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Enterprises at the forefront of their industries will only remain ahead of the curve if and only if they choose to display multi-faceted agility and adaptability. The author believes that upending of organizations, industry sectors and players within is a new constant. Agility then becomes a crucial precursor to every idea. There may come a point in time when large corporations may yet be replaced by nimble entities that believe in open trade and collaborative solutioning, and in doing so, perhaps democratize the corporate world sufficiently enough for collective growth and inclusivity.

ENDNOTES

1 Jared Weiner is one of the Founders of The Future Hunters, who focus on discovering, understanding and presenting future trends before they become part of mainstream vernacular. http://thefuturehunters.com/

2 Nickolai Kondratiev was a Russian economist who articulated what is known as Kondratiev waves in his book titled “The Major Economic Cycles” in 1925. These waves also called super cycles, great surges, long waves, K-waves or the long economic cycles, that are supposedly cycle-like phenomena in the modern world economy; Joseph Schumpeter, another noted economist had suggested naming them Kondratieffs which essentially include descriptions of the long-cycles, or Kondratiev waves with understood effects. In the above infographic, these waves are compared to the rolling 10-year yield on the S&P 500 Index.

3 Sony Walkman was killed by the iPod. Digitization killed Kodak’s film business. There are many such examples around the world.

4 Productivity improvement is measured in GDP/Btu (British Thermal Units); Materials in GDP/ Metric Ton; Water in GDP/ Cubic Meter; Food in Yield/ Hectare; Greenhouse Gases in GDP/ Ton of CO2 equivalent. Source of data: Book titled “Resource Revolution – Meeting the World’s Energy, Food and Water Needs” by McGlobal Institute, 2011.

5 The New Age of Innovation is a book authored by (late) Dr. C.K. Prahalad and M.S. Krishnan, 2008 describes how co-creation of value is not only necessary, but inevitable if enterprises are to deal with complex ecosystems going forward.

6 Transformation of Enterprises; Part of research conducted by Matryzel Consulting Inc, 2016 into nature of enterprise shifts and expectations in a more connected and digitally-enabled future.

7 Greater details on utility value, marginal returns et al can be found in the book Poor Economics, by Abhijit Banerjee, and Esther Duflo, 2011; Dept. of Economics, MIT; Library of Congress Cataloging –in-Publication Data, USA)

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http://thefuturehunters.com/

Enterprise Agility in Today’s Era of Complexity

8 Enterprise Agility Index has been developed by two leaders, namely (a) Mike Fabrizi, Principal Architect, the MITRE Corporation, USA and (b) Bobby Varanasi, CEO, Matryzel Consulting Inc. Presently this index is being deployed in organizations across the US and Asia-Pacific. All IP rights to this Index are owned by the two aforementioned authors of this Index.

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Chapter 2

DOI: 10.4018/978-1-5225-3906-3.ch002

ABSTRACT

Over the last decade, risk management has become increasingly important both in financial and non-financial businesses. This is due to the increase in uncertainty caused by a number of internal and external factors. Genesis of business risk can be related to the divergence between external factors and components of organizational and operational structures of companies. In this chapter, a baseline risk taxonomy was proposed, and the cognitive, regulatory, and social components of risk inherent in a decision-making process were analyzed. A synthesis model was then elaborated, which exposes the relationships between decision-maker, decision-making, and environment for risk management, including through decision-making information technology.

INTRODUCTION

Current technological progress has multiplied the difficulty of reading the world in which managers, entrepreneurs, and researchers work, making the ‘problems management’ more and more complex, even the most day-to-day issues, and imposing on the mind of the decision-maker to learn and manage the ‘complex’.

The natural and social world is complex: it includes many significant differences that coexist in the same space and time and much unpredictability of effects

Risk Taxonomy and Strategic Rationality in Enterprise

Decision-Making Process: A Metacognitive Analysis

Luisa dall’Acqua Scientific Lyceum TCO, Italy & Live Editions, Inc, USA

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Risk Taxonomy and Strategic Rationality in Enterprise Decision-Making Process

(randomness). Executing choices in such a complex context involves running an increasing risk of decision bankruptcy, and the need to manage that.

In the last decade, risk management has become more and more important both in financial and non-financial entities, due to increased uncertainty associated with a number of internal and external factors: from its own systemic structural conception, to the uncertainty of the surrounding events, the environment and the market to which it relates, and last but not least, creative dynamics.

A company is constantly interacting with the market and the environment in which it is integrated and operates: it is measured in a highly changing economic context: while the environment is constantly evolving, the business structures have a tendency to rigidity and resistance to change, to be able to efficiently and effectively carry out the production activity. The market establishes the rationality and learning path of the economic system.

In this current market environment, characterized by a widespread uncertainty and constant volatility, companies are called upon to review their own strategy and Risk Management (RM) policies, considering the evolution of the risk concept itself. Indeed, it is necessary to build an integrated approach that involves all the fundamental aspects of a company’s life. Risk-weighted strategies must evolve towards an integrated approach to all business processes, and consider risk not only as a threat but also as a source of opportunities and competitive advantage.

A strategy can be defined as a meta-decision, that is, a decision on how to decide. It is not a programmable rulebook, plan, or set of instructions, but rather a holistic view, that directs and brings consistency to decisions made by an organization or a single agent. By changing the context of operational decisions, strategic meta-decision defines the inherent burthen of complexity, improving logical-rational learning in problematical frameworks and setting-up evolutionary structures.To do this, we need to build an artificial system in which strategic levers are put into action and regenerated over time: the fundamental innovation on which each model is based, the complexity of regulation required, the quality of knowledge that comes from used to make regulation, the kind of rationality that is set to guide the complexity regulated by knowledge. Strategic rationality has two alternatives types of rationality: instrumental and evolutionary.

They are in fact dealing with the problem of generating economic value at three different levels of complexity:

• Instrumental Rationality: The calculation of “means and ends” on the basis of simplification and ex-ante rendering, as much as possible certain, non-modifiable.The basic operational model remains unchanged. It means handling a complexity at minimum levels (determinism)

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Risk Taxonomy and Strategic Rationality in Enterprise Decision-Making Process

• Evolutionary Rationality: The generation of more or less random variants, an experimental selection of them based on the obtained performances, ex- post retention of those that are satisfactory with respect to the performance requirements to be obtained. The routines remain firm until they work. It means handling a high complexity, but it can proceed with many small micro- variations that accumulate over time (evolutionism)

• Strategic Rationality: The interpretation and modification of the decision- making problem (meta-decision) by acting in the context of operational decisions (subjects, ends, means, criteria of choice) in an intuitive, creative and holistic manner. It consists of an action that cannot be calculated a priori and cannot be referred to the former post. It means handling a maximum complexity when it comes to changing the rules of the game and sharing them with other actors (Spohn W., 2001)

Defining and pursuing a given strategy is extremely important:

1. Identifying all the risks that may affect its realization 2. Identifying possible scenarios according to interpretative approaches 3. Defining contingent interrelations and lines of action in order to maximize

positive outcomes in favorable scenarios (opportunities) and minimize negative outcomes in unfavorable scenarios (threats)

This research proposes a risk scenario, according to this analysis. In the first section, a taxonomy of risks was described, especially in its application in business context. Furthermore, four distinct approaches to risk are defined for management purposes. The outcome is a synthesis model which exposes the profiled relationship between decision-maker, decision, and social environment.

BACKGROUND

The first known use of the term “risk” dates back to the transition period between the late Middle Age and the Modern Age and is particularly evident in Spain and Italy (Luhmann, 1991). It was associated with the probability of winning in gambling and game choices for achieving the wished result. Already in the medieval school tradition, there were expressions such as “periculum sortis” or “ratio incertudinis”, that referred to a reflection on the uncertainty of the outcomes of an action. In particular, they concerned the description of a creditor’s insolvency in the legitimate recovery of an interest.

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Risk Taxonomy and Strategic Rationality in Enterprise Decision-Making Process

Since the seventeenth century, probability analysis, in uncertain phenomena, has become the basis of scientific knowledge, transforming the nature of evidence, knowledge, authority, and logic: any process or activity has its chances of success or failure. Risk calculation is thus a theoretical basis for making decisions and so deeply rooted in science and production.

The theory of probability has given rise to a new way of thinking. But the research evolves and focuses, from the nineteenth century on the relationship between the objective (or mathematical) probability of a given result and the subjective preferences of the player himself: scientific reflection focuses on the consideration that individuals do not always choose consistently and unambiguously, having the possibility, for example, of opting differently between the low probability of a big gain and the high probability of small losses.

Studies in this area lead to an increasingly fertile arguing complexity. In the economic field, in particular, they look to the search for the possible reasoning of the economic actor, capable of achieving more effective and efficient operating results (the logic of choice).

Thus, at the beginning of the 20th century, a real risk analysis was born, defined as the method of knowing whether and how a decision maker can reduce the uncertainty of the outcome of a strategic decision. It refers to the calculability of the productive or monetary investments and the negative or positive outcomes of the economic cycle, and the calculation of the guarantee and insurance procedures with respect to those outcomes. In the academic sphere, the first studies of business risks date back to the beginning of the twentieth century with the contributions of Knight, the German school of Leitner, and the Italian school of Corsani. In this first phase, the risk was associated with the occurrence of damage or loss. Only since the twentieth century is the adherence to a more upside risk concept, as well as possible value creation opportunities.

Subsequently, the attention of scientists extended to more research areas, which posed issues such as whether or not the reliability of technological systems, the operational failure of the decision maker and the human operator, or the cognitive representation of risky activities related to judgments, preferences, and emotions of a subjective nature.

Essentially, risk analytic emerged as a theoretical answer to the various issues created by uncertainty.

The recognition of a particular problem, the selection of the information and the prospect of the choices, made for its resolution, is through the application of precise decision-making rules, and who analyzes it, is called a decision-manager.

The importance of risk in entrepreneurship has been strongly emphasized and has taken on crucial value since the ‘90s. Many regulatory interventions have entailed the obligation for businesses to adopt risk and control procedures, leading

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Risk Taxonomy and Strategic Rationality in Enterprise Decision-Making Process

to the attention of all companies of the need to devote adequate resources to the management of uncertainty. However, many contributions from authors who, long before the 1990s, focused their studies on the notion of risk. In the United States, as early as 1992, the Committee of Sponsoring Organizations (COSO) issued the first guidelines on internal risk control, which, in 2004, came to the international standard for Enterprise Risk Management (ERM). In Europe, the first reference document is FERMA of the Federation of European Risk Management Association (2003). Finally, in 2009, another framework of New Zealand origin was proposed, a direct competitor of the COSO model, proposed by ISO 31000 (AIRMIC, 2010).

RISK SCENARIO

Asset’s General Criteria

Due to the diversity of studies and sectors in which the risk analysis has been applied, the present work proposes a summary of the most common criteria for a risk taxonomy (Loucks, Costa, 1991; Holland, 1992; Becker et al,1992):

• Source or Cause: The first type of risk refers to the source of the event possibly giving rise to a damage. Researchers distinguish in: ◦ Technological Risks: They are related to the danger for man and the

environment, possibly resulting from a series of productive activities, linked to infrastructure and technology networks, increasingly sophisticated and complex in equipment and installations

◦ Natural Risks: Due to irregular actions of physical and natural forces, such as earthquakes, floods, etc.) Research conducted by a team of scientists, led by Kunreuther at Boston International Institute for Applied Systems Analysis (IIASA) are well-known. They were about the risk of natural gas, considering, in particular, the jurisdictional limits in the decision-making processes used to make decisions, and to how individuals perceive the dangers of natural dangers

◦ Risks arising from the Human Factor. • Nature of the Event: More articulated is the criterion regarding the nature

of the potentially unfavorable event. Some authors generally distinguish between: ◦ Static Risks: Linked to losses caused by unnatural action of nature and

human mistakes and misunderstandings

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Risk Taxonomy and Strategic Rationality in Enterprise Decision-Making Process

◦ Dynamic Risks: Associated with changes in human needs and technological and organizational improvements. Others between (Green-Trieschmann, 1981, pp. 4-6):

◦ Objective Risks: Variations related to real loss versus probable ◦ Subjective Risks (Hazards): Relating to the mental state of an

individual who has doubts or disturbances about the outcome of an event • Effects: Another type of risk refers to the possible effects of the event possibly

giving rise to a damage. Researchers distinguish in: ◦ Economic Risks (in Society): Likely to cause monetary losses. For

example in the financial sector: ▪ Studies on the so-called theory of capital gains in the valuation of

investments ▪ Studies on the perception of risk by investors ▪ Studies on the political dimension of risk in international affairs

◦ Environmental Risks (Hazards): Ie susceptible to leakage with immediate reflection on the population, such as ▪ Public risks ▪ Health Risks: Tumors, infectious diseases, etc. ▪ Social Risks: Protecting the population from social risks is the

main objective of welfare policies. Social risks vary according to the social class, gender, age, but also depending on contexts

• Control: The distinction based on the possibility of facing and controlling the risks is more generic. This is the case, for example, of: ◦ Avoidable Risks: The subject can predict and establish a control

strategy ◦ Inevitable Risks: The subject cannot avoid damage to external or

internal factors • Size: It refers to the possibility of distinguishing risks from the size in the

scope of action, such as ◦ Large-Scale Risk, affecting the entire society ◦ Small Scale Risk, which concerns the personal activities of each

individual, voluntary and controllable or not, and which have generally less catastrophic consequences than the first one

• Stakeholders: An additional criterion is based on those who suffer the consequences of the unfavorable event. They are divided in: ◦ Impersonal Risks in origin and effect, such as those associated with

disarmament of the economic system, political-social changes, extraordinary natural disturbances

◦ Personal Risks in origin and effects, such as the risk of death, unemployment, property, legal liability, etc.

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Risk Taxonomy and Strategic Rationality in Enterprise Decision-Making Process

◦ Related to individual characteristics, such as age, nationality gender, race, education

◦ Related to financial characteristics, such as wealth or income ◦ Related to job, such as employment, managerial activity, industrial

activity or seniority

Taxonomy of Business Risks

Afterwards the previous classification it is possible to define a business risk (macro-) taxonomy (Prandi, 2012; Crouhby, 2006; Segal, 2011; Ross, 1974):

• Source: ◦ Endogenous Risks: They are a direct consequence of the interior

dynamics of the company. Their origin is from management choices, the organization of production, logistics, personnel, and so on. The company, therefore, is able to partially influence the course and scope of them

◦ Exogenous Risks: They arise from external phenomena on which the company has no chance of modifying nature, direction and dynamics, such as economic cycle, dynamics of interest rates and exchange rates, natural disasters. These risks have a financial impact on the company but are not influenced and manageable by it. The company can only establish prevention and transfer mechanisms to third parties in order to protect themselves from the possible manifestation of these dangers

• Impact: ◦ Pure Risks: They always mean unfavorable events. Those risks are

associated with the possibility of sustaining a heavy burden, but not the possibility for income. They arise from sudden events that cannot be anticipated ex-ante through forecasting activities. They can only be managed through ex-post risk transfer activities. For example risks of civil liability, risks of material damage to property or other property, natural disasters, death, invalidity and employee illness. Examples: risks that may cause a negative business impact as a result of the damage or loss of availability of company assets or events that affect people in the company. It also covers the risks of liability for damage caused by the enterprise to persons, animals or things of third parties.

◦ Speculative Risks: They meet on a daily basis in most financial decisions, and can produce both positive and negative outcomes for the enterprise. They are related to uncertain future events that can generate both negative economic outcomes and positive economic outcomes. The

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macro-categories for speculative risks are business risks and derivative risks. Business risks related to the company’s typical business: financial, operational and strategic risks. For speculative risks, the monitoring phase is crucial, while prevention is not sufficient as a management mode.

• Dynamics or Economic Features: ◦ Systemic Risks (or Not-Diversifiable): Referred to the dynamics of

the global economy, often summarized in “market risk”. They refer to the trend of the economic cycle, to the interest rate and exchange rate fluctuations, investors’ risk appetite, and in general to any risky event that cannot be eliminated by diversification.

◦ Specific Risks (or Diversifiable): Derived from the characteristics of the company itself and the specifics of the industry in which it operates. These risks can be mitigated through the diversification process. This process involves taking many random variables that are not fully correlated each other in order to reduce overall variability through risk compensation. Most corporate risks have a systematic and diversified component. The systematic part depends on the general trend of the economy and the financial markets, while the diversifiable share is specific to the company. Some risks have no systematic component; for example, natural events such as the earthquake risk are totally diversifiable unless they are such as to affect the world economy. So the earthquake risk is completely diversifiable unless it covers geographically relevant geographic areas

• Business Activities: This distinction derives from the model of Porter’s value chain of 1987. Porter outlines a model in which business activity can be subdivided into primary activities and support activities. They are: ◦ Entrepreneurial Risks: Derived from primary activities. It is a type of

risk that cannot be eliminated, not transferable to third parties and cannot be covered by insurance policies. Indeed it is possible to implement a policy of prevention that can adopt management policies consistent with the type of business taken for reference

◦ Associated Risks: Derived from secondary activities. They deal with side-effects of the company’s reality. They are subject to specific policies aimed at minimizing their impact on the company.

• Stakeholders: ◦ Related to consumer behavior ◦ Following, risky product characteristics

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Difference Between Risk and Uncertainty

There is a huge amount of literature on the topic, but the American economist F.H. Knight (1921) has been one of the main promoters of the distinction between risk and uncertainty. He distinguished between two types of uncertainty. The first type is when we know the potential outcomes in advance, and we may even know the odds of these outcomes in advance. Knight calls this type of uncertainty risk. The risk becomes apparent when events that are considered repeatable and therefore susceptible to statistical estimates occur. Knight’s vision falls into the so-called objectivistic current, which attributes to risk the features of objectivity and measurability.

A significant contribution is the Black swan event theory, coined by N. N. Taleb (2010) refers to an important and inherently unpredictable event that, once occurred, is rationalized with the benefit of hindsight. Appropriate preparation for these events is frequently hindered by the pretense of knowledge of all the risks; in other words, Knightian uncertainty is presumed to not exist in day-to-day affairs, often with disastrous consequences.

The most recent contribution of the Italian matrix is that of Beretta (2004), which defines the risk as “the distribution of possible deviations from the expected results due to uncertain events, internal or external to the corporate system. The impact of risk factors may have both positive and negative connotations, making the risk as a generator both of possible losses and of opportunities for risk factors. creation of value “.

Risk as a Threat

The risk is understood as the set of possible threats. The only negative view of the risk derives from the fact that only a few decades ago, in the economy, only pure risks were taken into account, which is characterized by the existence of two only scenarios. In the first scenario, highly probable, there are no economic effects on the company, in the second scenario, in low probability, an event that results in a very high level of damage occurs. This notion of risk is perfectly adequate and simpler to manage the pure risks and in general of those risks characterized by a better scenario where no adverse event occurs. The application of the risk concept as a threat poses a lot of danger in the presence of risks which also present opportunities, as well as threats. If all possible, positive and negative scenarios are taken into account and the risk is measured by considering both positive and negative events, correct results may be obtained, otherwise, taking into account only negative aspects, it is likely to come to misguided conclusions. Another major consequence of this view is to neglect or underestimate the effects of extreme events, with low probability scenarios but with tremendous damage.

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Risk Taxonomy and Strategic Rationality in Enterprise Decision-Making Process

Basilea II’s Risk Taxonomy

A risk taxonomy that deserves a separate treatment is that officially proposed under the EU New Basel Capital Accord Regulations of 2004 (Basel 2). Such legislation, set up by a committee composed of the bodies responsible for supervising the financial activity, aims to prescribe a prudent management of credit institutions, placing particular emphasis on the correct management of the risks involved, in order to achieve long-term profitability and stability objectives. Although this agreement focuses on the regulation of the financial and credit intermediation sector, within it a distinction can be made between appreciable business risks and transversally applicable to any economic sector. The classification proposed by Basel 2 divides the risks into simply four types: operational, market, credit and strategic risk. (Sinibaldi, 2007; Dessì, 2012; Chapman, 2006; Crouhy, 2006):

• Operational Risk: “The risk of direct or indirect losses stemming from inadequacy or dysfunction of procedures, human resources and internal systems, or from exogenous events” Basel Committee on Bank Supervision, Operational Risk, supporting document to the New Basel Capital Accord, 2004. The definition is deliberately vague in order to be able to be applied to any business activity and does not distinguish clearly the boundaries of operational risk. A wide range of risks can therefore be attributed to this case. Operational risk definitions of the same kind have been proposed by the Bank of Italy and the Federal Reserve Bank. Operational risks tend to be pure risks since their occurrence can only be a source of losses and tendentially endogenous. A list of operational risks, which does not want to be exhaustive, but only exemplifying, is proposed below: ◦ Human Resources: Losses due to negligence or incompetence,

unauthorized activities, fraud, misappropriation of property or breach of laws, regulations and corporate directives by individuals within the company

◦ Procedures: Losses deriving from shortcomings in operating procedures and process management, ie in the internal control system

◦ External Evidence: Damage caused by exogenous events of a political, regulatory, social, environmental nature, as well as illicit activities committed by entities outside the corporate structure

◦ Technologies: Losses due to inefficiencies and malfunctions in IT systems and production facilities.

• Market Risk: This type of risk can be attributed to all losses arising from the negative outcome of transactions involving the trading of financial assets. Exposure to this risk results from the change in the value of assets held in

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the investment portfolio. This risk directly affects all companies listed on the financial markets, as their share capital is exposed to changes in the market. Market risk concerns not only stock prices but also other financial values such as currency exchange rates and interest rates. This consideration, therefore, extends the relevance of market risk to all companies that are characterized by foreign currency operations and debt servicing.

• Credit Risk: This type of risk can be attributed to all losses resulting from the non-fulfillment of financial charges by a debtor. It would not be right to consider the credit risk to be relevant just only in the context of lending activities. Businesses operating in different sectors are also exposed to the possible default of their customers. This is even more important in a context in which the payment extension takes on considerable size. Credit risk does not occur solely in the event of insolvency by the debtor since an integral part of the credit risk must also be considered to be the deterioration of the borrower’s economic and financial condition only if it affects the ability to meet the commitments agreed

• Strategic Risk: This last type of risk can be attributed to the degree of success of the highest-level business strategies. It is essentialto define the market segments to operate and the resources to be employed in each of these. Decisions to enter new market segments or to abandon existing ones involve diversification or specialization strategies whose success is uncertain and therefore subject to risks. Strategic decisions also include choices regarding the launch of new products that are particularly relevant to the enterprise, which require the investment of huge resources to be realized. The key factor in addressing and managing strategic risk is to identify the successful practice of achieving, maintaining and increasing the company’s competitive advantages over time. It is related to: the general trend of the economy, demand trends in the market segments affected by the strategy, the behavior of competitors, possible technological innovations, the trend of corporate image and reputation, possible changes in the regulatory and/or political context.

RISK ANALYTICAL APPROACHES FOR THE RISK MANAGEMENT

Our research, therefore, proposes a classification of different approaches to risk analysis and management: logical-probabilistic, cognitive, systemic-social, socio- cultural, insurance, financial, managerial.

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Logic-Probabilistic Approach

A logical-probabilistic notion connects the concept of risk to situations where the result of the action is not certain, but where the probability of alternative random results is known. These can be estimated through the use of probabilistic tools and can be selected according to preference relationships by the decider. It is inherent in a so- called “engineering” approach, which proposes the formulation of a decision-making criterion, useful in identifying and measuring uncertainty related to risky actions. The studies that laid the foundation for this approach were, among others, decision analysis, cost-benefit analysis, safety analysis, Markov process modeling, reliability analysis, “futures” modeling, etc. This approach takes the risk within statistical conceptualization and designates it through the expected frequency of undesirable effects from events, objects and actions, that is, human, technological and natural sources. This inevitably leads to an objective risk assessment in determining the extent of the damage on the one hand, as in the Theory of Statistical Decision, based on the assumption that the real risk is generated by the product of the probability of an event for the entity of harmful consequences. In this case, when time is introduced, that is, when the probability of the event considered is related to a delimitation of time by identifying a given period, then a risk definition will be generated as the product of the frequency of an event for ‘the extent of the harmful consequences through a careful study of the use of information sources. On the other hand, as in the case of the theory of rational decision, the probability is also attributed to a subjective assessment of the probabilities in the construction of reality.

Specifically, the Cost-Benefit Analysis, together with the Decision Analysis, represents an analytical risk formalization by means of the strategy-oriented formula, according to which the selection is carried out through the formal adoption of a plurality of evaluation criteria, internal and external to each single system of interaction. It is applied in socio-economic terms. In the case of risky decisions, it often takes the name of Risk-benefit analysis. It uses, as a selective strategic criterion, an assessment of monetary advantages and disadvantages for members of the community in relation to individual decision-making options. The logical scheme of cost-benefit analysis is rooted in the concept of the utility of the classical political economy and in the revision that this concept has been carried out by marginalist economic theories and sociology of the first half of our century. In summary, according to the Cost- benefit analysis (which deals mainly with market choices) and Decision Analysis (which mainly deals with risk from the point of view of decision-makers), the most important assumption of decision improvement is programming, or decision on decision-making premises.

Between others, the mathematician Bayes has considerably contributed to a statistical approach to the risk-based decision, claiming that the damage caused by a

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decision, which is supposed to always be an action, will depend on the type of action taken. And there is a ‘more reasonable’ definable rule of thumb that is to minimize global risk. This minimal risk is referred to as Bayesian risk (Hazewinkel, 2001). One of the key features of Bayesian risk is that it requires a “rational” inductive type that does not claim to describe the psychological processes underlying the assessment of uncertain events.

Managers, in terms of objectives, are more understandable for management, it also turns out to be the most flexible, in fact, it suits both pure risks and speculative risks. Risks are future and uncertain events that can affect the achievement of the strategic, operational and financial objectives of an institution.

In this approach, as in the statistical one, both threats and opportunities are contemplated. In the statistics, there are significant deviations from the expected value, while in the managerial one, there are deviations from the goals.

Cognitive Approach

The cognitive risk approach aims to counteract and define the limits of the previous notion, as it attributes the value of more information factor to the probabilistic distribution of the event, which, together with others, contributes to determining the individual’s attitude. The risk equates to the subjective and personal perception of each individual of an objective uncertain situation: the attempt to formulate an objective method of reducing and making uncertainty over the future acceptable, in fact, conflicts with the practical impossibility of bringing in a single pattern analytic the plurality of the individual and social processes underlying it.

Logical-probabilistic matrix analyzes (mostly economical) are considered highly prescriptive and formalized, in the certainty of having a methodology that allows a rational and reliable treatment of any risky decision.

• Risk Perception: Decision-making approaches that have developed within cognitive psychology, such as risk-perception, focus on decision-making from the central hypothesis that individuals use a series of mental strategies (which allow the individual to orient itself against the complex objective of evaluating probabilities or estimating values of every decision in a state of uncertainty) and heuristic princes to try to give order to a perceived world as uncertain (Ortwin, 1998; Slovic, 2000).

• Time Factor: Researchers like Taylor and Dunnette (1974) focused attention on a particular aspect of subjective perception of decision-making risk: the time available to a decision maker. For example, they have shown that executives with high availability to take risks tend to make quick decisions

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based on little information. Janis and Mann (1977) argue that there are two types of behavior: if there is not enough time to look for and evaluate a better alternative, the individual often gets panic and chooses without adequately reflecting an action arbitrary outcome based on the provisional information. If, on the other hand, there is enough time, the decider can seek information with open minds, helping him to evaluate old and new alternatives

• Prospect Theory: According to this theory, choosing between multiple perspectives of action is not determined solely by the final probabilities of a subsequent event occurring or not. Risk appetite or risk aversion depends (Kahneman et al, 1982): ◦ By representing biased perception about the likelihood of an event ◦ By the availability of references, with which to evaluate the frequency

of an event ◦ By the progressive valuation adjustment process, compared to a first

estimate ◦ By evaluating the frequency or the relative plausibility of an event based

on subjective and limited information to your direct experience. • Acceptable Risk: C. Starr, in a 1965 paper (Sjoberg et al, 2004), had

established risk acceptance standards obtained through statistical processing of a large amount of data from a historical risk analysis. The rules identified were three: ◦ Individuals are likely to accept risks a thousand times higher for

voluntary activities than for non-voluntary activities ◦ The statistical risk of death from natural causes seems to be a

psychological measure to judge the acceptability of other risks ◦ The acceptable level of risk for some activity is largely proportional to

the third power of associative benefits • Risk Proclivity: Some researchers have identified risk proclivity as a variable

component of the personality of each individual, based on which a distinction can be drawn between risk-seekers and risk-averse individuals. The risk in this perspective is a real product of the utility associated with the available action alternatives.

• Risk Reduction: According to some authors of the cognitive-subjectivist approach, decision-making risk reduction factors may be: communication structures, choice of members in the group, choice of strategy, leadership. ◦ Communication Structures: Leavitt studies (Gabassi et al., 1993,

2002) are recommended for their research on communication structures. He argues that:

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▪ If a decision needs to be taken quickly, in the case of a large group where the exchange of information would be problematic, the groups have a highly centralized structure and give greater productivity to their very simple tasks.

▪ If the task is complex, the group needs a decentralized structure to give better results, and within these, the personal satisfaction of individuals is greater.

◦ Choice of Members in the Group: Bales studies (Gabassi et al., 1993, 2002) are recommended for their research on individual style and classification system for each member of a group. The most suitable personal style also depends on the task and purpose of the group. He argues that: ▪ The style can be predominant for those who show more active,

gives suggestions to those who ask and, on the contrary, tends to assume a subordinate form

▪ The style can be negative, of those who appear hostile or detached. On the opposite, there are those who are friendly to the positive pole of the staircase

▪ The style can be suggestive of who is sensitive to the purposes of the group and participates in it, as opposed to those who are indifferent

◦ The Choice of the Strategy: This is the third possible risk reduction factor according to a cognitive approach: 1) the habits that are taken on a long and continuous basis 2) the evaluation must cover the most positive and negative elements 3) decision-maker must reflect on the consequences of the decision taken 4) in case of difficulty it is advisable to consult an external consultant

◦ The Leadership: The studies are many. Lewin, Lippit e White Bales studies (Douglas, 2000) are recommended for their research on effects of authoritarian leadership over the effects of democracy. Task groups were formed with ten-year-olds. In one group there was an authoritarian leader, another democratic one. The groups worked for 6 weeks and were seen as in the groups with a democratic leader, where the kids decided independently of their own activities and were helped in the realization, the boys themselves had fun and productivity was greater. In the other one, the boys showed themselves apathetic, little interested in the activities.

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Risk Taxonomy and Strategic Rationality in Enterprise Decision-Making Process

Systemic-Social Approach

A third type proposes a systemic-social concept of risk management proper to a functionalist-structuralist approach, according to which it is not an expression of the decision-making process of an individual and its behavior, but translates the dynamics of the entire social structure into an over-individual plan. Contingencies, adaptive responses to them, social order and social communication are closely related concepts.

This theoretical approach renounces the primacy of the individual, both as a rational investigator (see the logical-probabilistic notion) and as a point of reference for the scheme of action (see the cognitive-subjectivistic notion). The perception of the risk of each choice is linked to an overwhelming overhead on the social level, without certain and shared fundamentals to anchor the decision. The risk is thus a character of decisions, but it is closely linked to the development of society (science, technology, medicine, politics), and generally to the transformations of the structure in which social communication is made possible. It is, therefore, a way of building such structures through the necessary contingency treatment, where the process of imputing decisions that bind the future, perceived as open and insecure, is dealt with.

In summary, a set of definitions, instructions, and behavior programs are elaborated in the subject/environment interaction, stored in the individual psychic system and deposited in the ‘material’ media. There are four issues of trouble:

• A cognitive one (concerning the provision of information that is valid around the environment, natural and social, in order to be able to move in it by weighting the risks)

• An emotional one (which concerns the assignment of a positive or negative value to many objects which in itself do not possess it)

• An evaluative one (concerning the anticipation of the consequences of a particular action on both the subject and the members of the groups to which it belongs)

• A symbol one (concerning the meanings to be attributed to the crucial events of existence)

N. Luhmann is recommended as a major exponent of the systemic approach (Luhmann, 2000). He argues that every social phenomenon must be framed in a global sense, with the aim of reducing social complexity. Such horizons must necessarily be made immune to the risk of errors: expectations that have led to the imputation of meaning, in case of disappointment, or should be kept firm (normative attitude) or, alternatively, adapted to the situation, learning from the disappointment itself (cognitive attitude). The continual expansion of the multiplicity of contingencies

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tends to overburden the mechanisms of absorption of uncertainty that have stabilized in social systems. The risk, therefore, for Luhmann, is the boundary between the security and stability of the present and the potential instability of the future. It is thus identifiable with the medium to represent and constrain the very future of society. The guiding ideas that inspire Luhmann’s theoretical course are:

• ‘System Differentiation’: The shift from the conceptual bipolar difference between the whole and each single partto the difference between the system and external environment, applied to social events. The decisive question is: how can a complex system survive in a complex environment? The system differentiation consists in the duplication of the differentiation environment/ system within the system itself learning as evolutionary logic;

• Autopoiesis: Luhmann draws from a series of research conducted by two molecular biologists, Maturana and Varela, to which it is the concept of autopoiesis. The theory of self-referential systems argues that a system differentiation can only be achieved through self-referencing. This means that the system is no longer limited to the ability to construct and modify its own structures autonomously, but also autonomously in the constitution of its own elements. Key term is a production of “meaning” through communication structures.

Socio-Cultural Approach

The socio-cultural approach stems from cognitive studies that include, among the variables of decision-making, also the decision-making opportunities offered by the environment, defining as a ‘set of opportunities’ the set of actions compatible with physical, economic constraints, legal, psychological, social or moral. In summary, the risk can be identified by the combination of the knowledge of possible alternatives (with respect to the future) and the sharing of objectives (or consensus). From the intersection between these two dimensions, the schema defining the constituent conditions of the risk thus arises.

When knowledge is certain and full consent, ie when all alternatives are known and goals are shared, then a program can be established to determine the best solution. The problem is solely technical and the solution can be represented by a calculation.

If the knowledge is relatively solid but there is no consensus, the problem is the disagreement on the possible valuation criteria, which can produce broad debate or strengthen the coercive decision power.

This approach is proper to anthropological, sociological and psychological- social approaches such as (Kahan et al, 2006; van der Linden, 2015; Giddens,

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1999): Diffusion of Responsibility Hypothesis, The Familiarization Hyphotesis., The Extremity Hypothesis, The Social Decision Scheme Hypothesis, e Cultural theory.

It refers to the knowledge selection process that interprets and binds the individual and collective actions, that, in every society, are produced as a result of ‘one’s own vision of the world’. The The risk is thus referred to the cultural codification processes that determine its recognition and acceptability.

Between others, M. Douglas’s cultural theory (Douglas, 1997) in particular, judges analytical studies with abstract, decontextualized and desocialized view of risk, and considers perception and risk-building as a social process where editing decisions in decision-making procedures slip by individual decision-makers to the social institutions to which they belong. According to this approach, the medium that provides a representative strategy of reality - or model of reality - to the subject/ agent is the contextual culture. The subject, in turn, defines social and legal norms with the aim of guiding the behavior of stakeholders, resolving conflicts, and dealing with deviance.

In the presence of unsafe data, the risk problem can be defined as a problem of personal insufficient information. The obvious solution, in this case, is to extend and share the search, generating consensus. “In a situation where the cognitive elements are uncertain and the consensus reached is subjected to constant controversy, we are exactly at what seems to characterize the ‘contemporary problem-solving dilemma’ “ (Douglas and Wildawsky, 1982).

Thus, the concept of ‘collective decision’ is introduced, understood both as a decision taken by a single agent but by collective involvement, both as a collegial decision. In summary, the collective decision can be characterized by several factors: the involvement of more or fewer social actors, the formation of a common (ideological) identity, the development of a social project, the possible reference to a situation of frustration/discomfort. In contrast to the statistical theory of the decision, which considers only the decisions of individual individuals (although the Theory of Games projects them in a context of more decision-makers), some scholars have tried to found a theory of public choice, according to which not always all players can enjoy the same prerogative of decision. According to Olson and Wu (2007), for example, by increasing the size of a group, to base the decision on small individual orientations means not pursuing the collective good, but in the end, it will affect every single free rider of a harm. Thus, the problem of subjective preferences should be translated into a problem of collective preferences, or ‘preference aggregation’. These problems represent an evolution of the Theory of Decision in a Theory of Collective Decision. In a democratic political context, the advantages and disadvantages should be equated, and collective decisions must in some way be the result of the participation of all decision-makers, arguing that the

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Risk Taxonomy and Strategic Rationality in Enterprise Decision-Making Process

need to aggregate preferences is in conflict with the democratic need for the non- dictatorship of collective decisions.

There are also researche, such as those of the sociologist Beck (1992) proposing a concept of a contemporary “risk society”, within which two fundamental processes emerge:

• Individualization: It concerns the sense of insecurity and anxiety that the fragmentation of traditional socialization agencies produces in the individual

• Anthropological Shock: It concerns the perception of the self-destruction that humanity is facing.

The conflict associated with the distribution of well-being leaves room for conflict over the production and distribution of the risk associated with the technological and economic development of traditional companies.

A COMPLEX MODEL OF DECISION RISK

This work concludes with producing a synthesis model to interpret and manage the risk, constitutive of a decision-making process. According to the Theory of Complexity, the starting point is to consider the decision-making risk-manager as an adaptive agent of a complex system. The decisional risk is the condition that a decision maker has to deal with stress related to possible problem situations that can be verified during decision-making, which undermine the effectiveness and efficiency of the decision, with a view to the prefix goals and the realization of the effects wanted and anticipated. It is the result of the correlation of several variables and different problem situations and will vary according to the objective of the action and choice that the decision maker accomplishes.

The subject-agent is entrusted with a continuous commitment to safeguarding and updating its decision-making competence. A dynamic mental structure, capable of resisting the internal and external stresses of decision-making, is much needed as it subjects the subject to designing and administering skills, cooperations and conflicts.

According to the theorists of complexity, the empirical rule to follow in action is: make every decision as low as possible (“endogenous” decision to the decision maker), but be ready and available to give control at a higher level in case of conflict (‘exogenous’ decision to the decision maker).

In the case of ‘endogenous’ risk management in a collective entity, only the existence of meta-rules (not predetermined, equally observed by the agents, and of which they are creators) can ensure effective treatment of this risk. These rules

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Risk Taxonomy and Strategic Rationality in Enterprise Decision-Making Process

determine a defined state of autocatalysis: they are promoted and managed by real “catalyst agents”, which have the function of intervening to determine the union or separation of other variables and agents of the system.

Complexity is the logical sum of varieties, variability, and indeterminacy. It is in the land between order and chaos is filtered, interpreted and regulated by knowledge, which defines and maintains the variety, variability, and indeterminacy allowed (Renn, 2008).

This filtering and complexity selection is the primary task of strategic choices that simplify the context of the decision.

The complexity is first filtered and then driven by subjective knowledge. Complexity exists in the outer environment, in the form of “free” complexity. Part of this is filtered out of human knowledge, which makes the varieties, variability, and “objective” uncertainty meaningful, transforming them into utility, uncertainty and subjective risk (interpreted complexity).

The interpretation of complexity from a subjective point of view creates a distinction between ends (intentions, achievements, situations that have value for the subject in question) and means (objects, people, and contexts that can be used as tools to reach the ends, but which have no value in themselves) (oriented complexity).

Risk Relations and Variables in Decision-Making

In summary, there may be three different points of view of decision-making risk, that should be considered in the overall risk analysis and management. They are interconnected and produce decision-making stress and are made up of variables under risk (See Table 1).

Table 1. Decision-making risk coordinates

Agent Decisional Stress Variables of the Decision-Making Process in Risk Conditions Relationship Between Dimensions of Context

Decision- maker

inadequate judgment Liability Subjective-Socialdecision-making conflict

(damage)

Decision information uncertainty

Interpretation Subjective-Objectivesituational uncertainty (communicative uncertainty)

Context constraints

Strategic opportunity Objective-Social cross-compliance opinion

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Standpoint of the Decision-Maker

The Decision-Maker Makes a Decision

The complexity of the decision-making process depends on the incidence of the decision-maker’s preferences and skills (subjective variable of the decision- making process). The problematic situation, or ‘decision-making stress’, which can determine the instability of the conditions of the decision (or ‘critical’) and affect the effectiveness and efficiency of the way in which such a decision is taken, is the lack of judgment by the Decision-maker (subjective decision-making stress). We summarize five possible causes of lack of judgment (Slovic et al, 1981):

• Focusing attention on irrelevant aspects of the problem because they are guided by erroneous expectations

• Being not able to think probabilistically so judgments about the value of certain data become inappropriate

• Detecting too many data, which results an overload of the ‘cognitive ability’ of interpreting data This is basically a semantic problem of attributing meaning to certain rules, principles, roles, or meaning and meaning to information

• The time factor (Lowenstein, Elster, 1992) which may affect some individuals to such an extent that they seek and evaluate a better alternative to action, to panic and to choose without adequately reflecting an arbitrary final action based on the provisional information. If on the other hand, there is enough time, the decision maker can seek information with an open mind, helping him to evaluate old and new alternatives

• Value factors and motivation attributed to action, related to the need to enjoy the company of their peers, to strengthen the sense of security and to gain the understanding of others, which can lead to subjective anxiety associated with the fulfillment of such need social (Dowd, 1998; Segal, 2011).

The Decision-Maker Interacts With the Social Environment

It happens when making a decision, involving decision-making responsibility in determining possible variations or effects (damage) in the environment outside the decision-maker itself. The problematic situation in which the d-maker may incur is the decision-making conflict in making a decision (environmental decision-making stress). Decision-making power can be exercised explicitly or implicitly, legitimate or illegitimate, fair or iniquitous. If such a condition implies that “Ego”‘s action is directed at the affirmation of its will on “Alter”, despite the contrary will of the latter, the decision-making process taking place develops in a context of conflict.

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Conflict is defined as a more or less conscious opposition between two or more individuals or groups, who pursue so many different purposes that they become incompatible, thus pushing one to assume a position of power each other, up to modify socially significant aspects of the relationship. Cause of conflict, Gallino, 1993,can be: the scarcity of resources, common utility existing in the same situation; the exploitation of resources of others; the absence of alternative action opportunities that avoid confrontation with the action of others; a low mobility rate that prevents the objective possibility of escaping from belong to a community ; the delay with which the institutions adapt to the transformations of social stratification; various forms of social differentiation; bad political management of consensus.

The Decision-Maker Runs a Decision-Making Risk

The d-maker’s responsibility remains the keystone of the decision-making risk.

Standpoint of the Decision

The Decision Affects the Decider

the decision-making mechanism imposes on the Decider a ‘logic’ of choice, ie rules or decision-making functions to apply to the formal analysis of the sources of information, the degree of evidence and the probability of the related error (objective variable of decision process). Even in this case, there is the possibility that a problematic situation arises, informational uncertainty (objective stress), which corresponds to the following conditions (Alchourron & Bulygin, 1971): incompleteness of information; the presence of minor evidences; the presence of a large number of hypotheses to be considered in view of a possible action, and considered more or less equally plausible; the existence of a divergence of evidence (or arguments) that indicate different hypotheses and the existence of a mixed evidence: evidence in favor of and against a given hypothesis, where not necessarily the counter are in favor of a well-defined rival hypothesis.

These conditions are thoroughly investigated by studies of a “classic” logic- probabilistic approach.

First, the existence of inaccurate evidence or vague hypotheses. The inaccuracy can be of a probabilistic type or a ‘fuzzy’ type (Kaehler, 2010). This condition stems from studies of “fuzzy logic”, which aims to provide a representation of the world through an inimitable theory in which there are no definite boundaries for the sets, but gradual boundaries, according to which it is not will speak more about ‘membership of an element to a set, but’ degree of belonging ‘.

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• An object that is located on the shaded edges cannot be said definitively belonged, or not, to the whole. It then depends on its location more or less in the center. The product of these shaded sets forms a fuzzy patch, an area that represents the set of all possible associations.

• The second condition is the existence of predetermined decision rules with an ambiguous expression. A term or statement is considered ambiguous if they can assume a plurality of distinct meanings, and the context does not allow to clarify which of these meanings they have been used. The ambiguity involves an overabundance of rules of meaning.

• Finally, a third condition corresponds to the existence of predetermined decision-making rules with generic expression. The generality, or lack of specification, of a linguistic expression, is when the expression itself refers indifferently to a plurality of different situations. Any statement that does not distinguish between different cases may be termed generic

The Decision Modifies the Social Environment

The communication of the decision can be a variable of decision-making, according to the principles of the Palo Alto School (California), for which communication is the very nature of the relationship that unites agents. Hence, the objective variable of the decision-making mechanism, but even more the objective decision-making stress, through the communication of the decision, can cause environmental stress. The uncertainty of the decision, therefore, becomes a situational uncertainty.

The Decision Determines a Decision-Making Risk

The interpretation of the decision remains the keystone of the decision-making risk.

Standpoint of the Context (Social Environment)

The Environment Affects the Decision

The social environment affects the decision as it limits the decision-making process to formal and substantive constraints. These constraints can be defined as ‘institutional’. Some scholars define opportunities as one of the factors of conflict: it is in the case where there is no alternative opportunity to achieve the same purpose, or similar purpose, without having to clash with the action and purpose of the other. The growth of external pressures from regulatory and regulatory regulations, both Community and national, by rating companies and institutional investors, is another important stimulus factor along with the emergence of the “portfolio point of view”,

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ie the second-tier risk assessment an integrated and no more functional logic, and the growing need to quantify it to evaluate its impact on the business’s business, not only in economic and financial terms, highlighting any correlation with other risks with the aim of facilitating decision-making process.

Five key variables can be described in economic risk:

• Institutional Variables: The risks involved by this factor are mainly related to the failure to meet the expectations of the stakeholders. This can be translated into a lack of stability in the ownership structure, and the relationships the company has with other stakeholders. In this context, they attach particular importance to the set of predetermined systems in order to ensure that the company obtains results consistent according to the expectations

• Economic Variables: The set of variables related to the characteristic, capital and financial management determines the economic circumstances that affect the business activity. These factors can lead to the emergence of risky phenomena, arising from business events, or to the competitive context.

• Assets Variables: These are the variables relating to the sources of funding and the use of these resources. The major risks associated with this factor are the criticality of finding media and decisions regarding their investment, as well as the possible choice of non-optimal financial structures.

• Organizational Variables: This category includes all the variables that define the organizational structure of the enterprise, its procedures, its staff. The risks associated with these factors are mainly due to the poor efficiency of such an arrangement and the fact that the latter is prejudicial to the achievement of the objectives set.

• Productive Variables: They refer to the technical-productive structure, understood as the choice of output processes and the size of the output. The uncertainty related to this factor is mainly related to the cost structure and the ability of the product to meet customer needs. These variables allow you to begin to define possible business risk declines, according to the classifications of various kinds highlighted in the literature and can be found in most business realities

The Environment Acts on the Decision Maker

The Social Environment constraints and influences the Decision maker. In fact, the preferences of the subject and his own identity makes sense thanks to the acknowledgments, the re-definitions, the disconfirmations of his “environment” (social variable of decision-making). One can speak of an ‘actual’ rationality in decision-making, which is not just related to individual skills and interest but is

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a search for coherence and normality in the sense of identity research and social reassurance. In our social life, we are constantly subjected to ‘pressures’ coming from the environment (people or groups) that push us to conform to their patterns of behavior and decision-making. This favors cross-compliance opinion (environmental decision-making stress). The same media of mass communication can act as instruments for strengthening opinions, orientations and pre-existing attitudes. In this sense, public opinion, ie the ability to grasp generally accepted views and guidelines by a large number of people, can represent an active force capable of developing political, economic or cultural pressure, including through the use of means of communication.

The Environment Establishes a Decision-Making Risk

The opportunities offered by the social environment remain the strategic keystone of the decision-making risk.

CONCLUSION

The present work proposed a global profile of the risk, mainly focusing on three analysis: a taxonomy of risks, from generic use of the term to business risk, with the purpose to identify the scenario of application; an identification of 4 approaches to risk for management purpose (logic-probabilistic, cognitive, social-systemic and socio-cultural), and, finally, a synthesis model which exposes decisional stress, profiling the relationship between decision-maker, decision and social environment in risk condition.

This analysis has the general purpose to identify an integrated and holistic approach to the risk management.

Every decision maker is substantially a risk manager, but in a corporate context, a catalyst professional person can be better focused on the risk management: the Chief Risk Officer. The CRO has the task of interfacing with the whole organization, interacting with different activities, processes, functions and decision makers, in order to coordinate and ensure the effectiveness of the process while maintaining the right balance between costs and opportunities. The CRO doesn’t handle business risks, but governs the process of risk analysis and management of the various managers, real risk-owners, fosters dialogue, supports colleagues at a methodological level, integrates information coming from multiple functions in an integrated way, so as to consolidate an overall view of the company’s risk profile.

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Risk Taxonomy and Strategic Rationality in Enterprise Decision-Making Process

Basel III profiled the role of the Risk Officer and the Chief Risk Officer (CRO). This function is responsible for overseeing risk-taking activities across the enterprise. Key activities of the risk management function should include, in summary:

• Identifying a material individual, aggregate, and emerging risks • Assessing these risks and measuring the enterprise’s exposure to them • Supporting the board in its implementation, review, and approval of the

enterprise-wide risk governance framework • Ongoing monitoring of the risk-taking activities and risk exposures to

ensure they are in line with the board-approved risk appetite, risk limits and corresponding capital or liquidity needs

• Influencing and, when necessary, challenging material risk decisions

In the enterprise life-cycle, internal stress tests should cover a range of scenarios based on reasonable assumptions regarding dependencies and correlations. Test results should be incorporated into the reviews of the risk appetite, the capital adequacy assessment process, the capital and liquidity planning processes, and budgets.

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KEY TERMS AND DEFINITIONS

Complexity Theory: The application of the study of biological complexity systems in the field of social or business strategic management and organizational studies.

Decision Making: The process of making choices. Risk Analysis: A proven way of identifying and evaluating factors that could

negatively affect the success of an action or project. It allows you to examine the risks that you face and helps you decide whether or not to move forward with a decision.

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http://www.svt.ntnu.no/psy/Torbjorn.Rundmo/psychometric_paradigm.pdf

http://dx.doi.org/10.1037/h0037343

http://dx.doi.org/10.4018/978-1-59140-788-1

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Risk Manager: Who assesses the risks according to their severity and frequency and, therefore, identifies the best policy to optimize their management, in line with the company’s financial resources and capabilities.

Strategy: A meta-decision, that is, a decision on how to decide. It is not a programmable rulebook, plan, or set of instructions, but rather a holistic view that directs and brings consistency to decisions made by an organization or a single agent.

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Chapter 3

DOI: 10.4018/978-1-5225-3906-3.ch003

ABSTRACT

Organizational learning, knowledge creation, retention, and diffusion are strategies that open many a window of opportunities for organizations to differentiate themselves in the global economy. However, performance based on knowledge has not yet become exposed. Intangible assets must be continuously analyzed to reach organizational performance and sustainability. New management and economic literature reveals that communities of practice focus on humanized leadership and self-efficacy that promote added value to the organization. Furthermore, the humanisation of the organization perspective becomes the nucleus and the framework for all levels of productivity and competitiveness. This chapter posits different organizational learning pathways according to a holistic perspective with humanisation as a unique element. The chapter is centered on an analysis of the human capital construct as the point of departure. Furthermore, the chapter reflects on humanized and humanising emotional, spiritual, and relational capital in order to reach the level of organizational knowledge.

Learning-Performance Relationship:

A New Holistic, Dynamic, and Strategic Organizational Approach

Ana Martins University of KwaZulu-Natal, South Africa

Isabel Martins University of KwaZulu-Natal, South Africa

Orlando Petiz Pereira University of Minho, Portugal

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INTRODUCTION

In the current globalized world, change is rife and in order to be sustainable, organizations need to view learning as dynamic, strategic and holistic in nature. This thinking calls for shifts in mind-sets and management approaches. Several constructs will be explored in this research in order to reflect on the importance of training, learning and development in contemporary organizations. These constructs include humanization of the organization through the intangible and strategic nature of capitals, namely, human capital, social capital, emotional and spiritual capitals. This chapter will explore the concepts of communities of practice (CoPs) and their link with skills transfer in organizations. The theoretical framework chosen for this research is the Resource-based and Knowledge-based Views of the Firm along with the Learning Organization principles to demonstrate the paradigm shift from the scientific management approach to the new age paradigm. In order to improve efficiency and knowledge diffusion, organizations need to invest in projects that energize humanization in the organization and in its people through competency management, a source of competitive advantage. Another source of competitive advantage is social responsibility because it enhances the humanization ties of the organization. This humanizing perspective arises with the human relations school which endeavors to free the employee from the role of ‘production slave’. Nevertheless, the individual has remained a subordinate in the organization because the group has the power and not the individuals of the group, nor their feelings. Therefore, what has now become a concern is the group and not the individuals nor their feelings of a particular group.

Indeed, humanization does have direct influence on individual performance and can be considered a differentiating element of organizational competitive advantage which warrants organizational strategies to be redefined. This humanization perspective focuses on people according to the social standing which is contrary to the Taylorist viewpoint which focuses on the physical dimension. This social perspective, despite its importance, is insufficient because it does not encompass the four human dimensions, namely, body, mind, emotions and spirit. There is a group of questions situated in the realm of humanizing the organization that warrant reflection. These questions are, namely, (i) how to demand more synergies?; (ii) how can higher organizational performance levels be obtained?; (iii) how to improve individual income efficiencies and enable each individual to perform their very best, in a context of scarcity both of time and investment, to know who the people are, where they are and where they wish to be? This is the context in which this chapter is contextualized to highlight the importance of new strategic values for organizations. These values are unique and essentially intangible in nature; they add structure to and promote organizational sustainability and competitiveness. In the current competitive environment, these

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Learning-Performance Relationship

values are elements of a pool of heritage capitals per excellence. These facilitate improvement of organizational efficiency indicators.

This chapter is directed at creating a reference composed of strategic values which distinguish organizations. Based on this aim, this chapter starts by presenting critical reflections on extant literature about organizational performance and its dynamic link with human capital to demonstrate the importance of this capital in promoting organizational sustainability; the inimitable nature of human capital is emphasized to distinguish it as a strategic capital with multiple profitability powers. Based on this importance, human capital is related to and arises from intellectual capital. The debate ensues with reflections on the constructs of training, learning and knowledge sharing, regarded as paths towards efficient and effective resource distribution and performance. Knowledge creation and diffusion is a fundamental start in the organizational constellation. In this context, organizational learning is explored as a collective process of intelligence. Subsequently, the structural foundations of humanization in organizations are set out and related to CoPs. In addition, extant literature is reflected on to demonstrate a concomitance between new leadership directions and CoPs. Conclusions, reflections and recommendations for future research will be set forth.

ORGANIZATIONAL PERFORMANCE AND THE DYNAMIC ROLE OF HUMAN CAPITAL

According to Hitt, Bierman, Shimizu and Kochhar (2001), the main reason why performance levels vary in organizations is because these firms have different human capital. Amit and Schoemaker (1993), Barney (1991) and Martín-de-Castro, Delgado- Verde, López-Saéz and Navas-López (2011) posit that intangible resources are the source for an organization’s competitive advantage and positive returns (Peteraf, 1993) in view of the fact that these resources are unique and inimitable.

It is maintained that organizational sustainability depends on high levels of performance, viewpoint which is also corroborated by the OECD. In this competitive asymmetric usage of information, values seem to be the core competencies in the construction of the knowledge economy. This arises from the dissemination of innovation as well as from the organizational entrepreneurial capacity, which should be greater than the collection of intellectuality, sensitivity and humanism, in the organization. In this way, the knowledge economy is closely linked to utilization, production and diffusion of knowledge, which also requires sensitive human and connectedness towards those objectives. Proponents of High Performance Work Practices (HPWPs) assert that success arises from the enabling, motivating nature

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of workplace culture on employees (Godard, 2009), encouraging them to share their own knowledge and skills which increases performance more fully than traditional practices.

Rubinstein and Kochan (2001) further corroborate that the HPW paradigm also improves the employment relationship, creating a culture of partnership between stakeholders. In this environment, trust is nurtured both inside and outside the organization and is achieved by the equitable treatment of those who not only work for the organization but also for those who leave as well as the actual community in which the organization operates (Tamkin, 2004). Performance depends directly on productivity and organizational competitiveness. In turn, these depend on human capital and on motivation policies.

The different levels of performances are related to the direct effect resulting from the different resources and capabilities, in accordance to the resource-based view (RBV) of the firm, as various studies demonstrate (Miller & Shamsie, 1996; Pennings, & van Witteloostuijn, 1998). In this regard, Pfeffer (1994) corroborates that human capital, as an essential resource, can directly affect the firm’s performance (Finkelstein & Hambrick, 1996; Huselid. 1995; Pennings et al., 1998). However, there is some uncertainty regarding the level of empirical support for the RBV. Reed, Lubatkin and Srinivasan (2006) maintain the following areas of concern, namely: RBV is not prescriptive; it lacks a clear definition of competitive advantage; it has a tautology problem; its relevant domain seems to be ambiguous; and it extremely general. In order to construct a bridge between human capital and performance it is important to outline the roots inherent in the notion of this capital in contemporary organizations. In this regard, Edvinsson (1997, p. 368) defines intellectual capital as “...the possession of knowledge, applied experience, organizational technology, customer relationships and professional skills...” by organizations to effectively interact and succeed in the highly competitive market.

According to Marr, Gupta, Pike and Roos (2003) intellectual capital entails three domains, namely, human capital (know-how, skills and capabilities), structural or organizational capital (networks, culture and systems) and relational or social capital (customer, relationships with stakeholders). Human capital is associated with the individual, unique tacit knowledge that employees have. This capital comprises four factors (Hudson, 1993), namely, the individual’s genetic inheritance, education, experience and attitudes about life. Human capital is the source for innovation and for strategic renewal to occur in organizations. Intelligence that employees have is also considered as the core of human capital and is consequently the most difficult to codify. In economic terms, the global tacit nature of intellectual capital can be difficult to quantify. Structural or organizational capital includes networks, culture and systems. Organizational systems maintains optimum levels of intellectual performance as well as organizational performance (Bontis, 1998). A supportive

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culture is part of the environment which is based on a sharing culture and has a strong structural capital. For that reason, intellectual capital can be measured because there is a component of structural capital that can be codified in that it can be measured as a function of efficiency. Structural capital consist of the organization’s rules, procedures and culture. The individual does not acquire this capital because it is an integral part of the organization (Martins, A., Pereira & Martins, I., 2014).

Knowledge management and intellectual capital are fundamental in creating organizational value. Intellectual capital is considered a basic resource and should be linked up with knowledge management practices in order to create value. Intellectual capital studies have focused on ‘capital’ from a quantifiable, economist perspective (Pulic, 2000). On the other hand, several knowledge management studies, including Nonaka (1994), Adams and Lamont (2003) as well as Lee and Choi (2003) among other authors, perceive organizational value creation primarily as a process. Intellectual capital is considered in a particular point in time from a static asset perspective while knowledge management practices are deliberated from a dynamic process perspective (Kianto, 2007). This viewpoint is contrary to that of Barney (1991) who corroborates that resources, competencies, skills and capabilities are mixed while Teece (1997) postulates the dynamic of these to be separated.

Intellectual capital is viewed as a key resource for value creation as well as an excellent organizational performance driver due to its capabilities of achieving and sustaining competitive advantage (Meng-Yuh, Jer-Yan, Tzy-Yih & Thomas, 2010; Martinez-Torres, 2006). This capital is comprised of three elements which include, namely: “human capital; structural capital and relational capital” (Yun & Hyo, 2006, p. 253). Kannan and Aulbur (2004, p. 389) describe human capital as an – “accumulated value of investments in employee training, competence and future” and thus indicates the valued contributions of employees’ intellectual abilities and competencies towards organizational routines.

These intellectual abilities and competencies are described as tacit knowledge due to being embedded within employees and developed over time through skills development, experiences and behaviours (Ployhart & Moliterno, 2011). Furthermore, human capital cannot function effectively without structural capital due to being interdependent on each other. Structual capital consists of systems, processes and procedures, techniques, as well as tangible and intangible assets that are created and manipulated by the organization (Kannan & Aulbur, 2004). These systems, techniques, processes and procedures, are created from the overall corporate aims and objectives of the knowledge organization. They also include the strategies, methods and structured routines which employees should follow whilst applying their intellectual abilities, skills, and talents to tasks (Subramaniam, 2005). The tangible assets (almost visible structures in the case of customized software applications used

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in computers) and intangible assets (visions, organizational norms and values) are also dependent on by employees to ensure that their talents utilized and routines practiced are done in line with the organization’s corporate objectives (Cezair, 2008).

Herremans, Isaac, Kline and Nazari (2011) posit that if organizations possess effective and reliable structural capital, they can reduce organizational uncertainty as well as develop its intellectual capabilities in preparation for the assured future objectives. This can be done through ability that structural capital has in enhancing the knowledge creation routines that human capital has. Through effective structural capital, the organization can be continuously pro-active towards adapting to market changes by transforming vital information gathered into valuable knowledge, which can satisfy and sustain its innovative capabilities. Zangoueinezhad and Moshabaki (2009, p. 262) also maintain that strong and appropriate use of the structural capital can assemble, create and utilize “competitive intelligence”; which in turn can be used to create unique competitive advantage. By acquiring detailed knowledge about weaknesses and short-comings of competitors, the organization can gain significant market share through such opportunities acknowledged and acted on (Zangoueinezhad & Moshabaki, 2009); thus securing the business sustainability in such a turbulent business environment of today’s knowledge economy. Furthermore, Boud and Garrick (1999) corroborate with Garavan, Morley, Gunnigle and McGuire (2002) who view that employees are the intellectual capital of any organization and investing in learning and developing, this ‘capital’ will benefit them in their quest for competitive advantage. O’Donohue, Sheehan, Hecker and Holland (2007) make reference to human capital and the potential it has to help an organization be successful and sustain their competitive advantage over their competitors.

According to Manville and Ober (2003) as well as Ulrich (1998), individuals with their knowledge and their skills are considered the most important assets for organizations and not its buildings or materials. The challenge lies with managers who need to ensure their intellectual capital are motivated and challenged. Stewart (2003) describes human capital as being the employees of an organization, i.e. their most important assets. Managers should be assessing their employees to ensure that they are recruiting the best talent and also learning and developing their existing talent (O’Donohue et al., 2007). Organizations should be looking at learning, talent and development as a “strategic tool” which will impact on the performance of their staff (Browell, 2000). In order to hold onto human capital, organizations need to bond with their staff, empower them and equip them with new knowledge and skills to keep them developing and motivated (Stewart, 2003).

Prahalad and Hamel (1990) gave rise to the concept of human capital. They corroborate that an organization has unique characteristics and human capital enables organizations to sustain competitive advantage. The term human capital is linked to one of the internal dimensions of intellectual capital and is made up

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of competencies, values, attitudes and education (Garavan, Morley, Gunnigle & McGuire, 2001). Human capital encompasses both the individual and organizational levels thus viewing human resources as capital emphasizing key characteristics of flexibility and adaptability (Garavan et al., 2001) as well as the development of individual competencies (Athey & Orth 1999). David and Lopez (2001) highlight the contribution that tangible and intangible characteristics of human capital make to economic growth.

Rowley (1999) posits that the core competency enabling organizations to survive, resides in their ability to adapt, learn and change. The main objective of knowledge management seems to be to “increase the effectiveness of human capital through knowledge sharing and knowledge synergies and to improve organizational flexibility towards change and innovation” (Rahe, 2009, p.103). For Yang (2003, p. 242), knowledge and learning are attributed a new conceptual framework in that “(h)olistic theory defines knowledge as a social construct with three distinctive and interrelated facets, namely — explicit, implicit, and emancipatory knowledge”. Emancipatory knowledge is based on motivational levels, feelings and emotions towards the external circumstances surrounding the individual. Implicit knowledge is based on the individual’s experiences, actions and behavior. Explicit knowledge is codified knowledge which arises from the individual’s interpretation of the event. These three facets are holistic in that they are both contradictory and complementary to each other.

An increasingly turbulent external environment characterized by the economic downturn impacting upon global markets and resulting in increasing financial pressure on all sectors has resulted in the notion of human capital gaining importance. From this perspective, human capital, which seeks to maximize gains from existing resources, is highly relevant (Pedrini, 2007). In ascribing to this RBV of the firm, the notion of human capital facilitates the creation of competitive advantage in determining resources that are unique and context-bound and thus difficult to imitate (Offstein & Gnyawli, 2006). Benevene and Conti (2010, p.124) suggest “human resources are crucial in creating human capital because organizations do not create knowledge otherwise”. The focus on human capital translates what have been considered traditions from the human relations school into factors affecting an organization’s bottom line (Cordes, 2005) and as is typical of such research, human capital is often explored from the RBV (Royal & O’Donnell, 2008). Pickett (2005) suggests a Human Capital Capability Framework of which workforce optimization is a central component that leads to the improvement of overall organizational performance. This framework is considered a systemic model, according to Pickett (2005), as it is directly associated with the management of human capital with organizational performance metrics conceptually echoing the inductive nature of

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this empirical research into human resource planning. This framework comprises a self-assessment tool with five major human capital indicators, namely: managerial effectiveness and leadership practices; employee engagement and talent retention; knowledge accessibility and optimization; including workforce optimization as well as learning effectiveness and learning capacity.

According to an international study that McBassi & Company conducted in 2004, the results reveal a positive relationship between best human capital practices and the financial returns to shareholders as compared to those organizations with weak human capital practices. Unlike Wallis (2004), Pickett (2005) focuses only on human capital and neglects the finer detail associated with the concept as conceptualized by Bueno, Salmador, Rodriguez and De Castro (2006). Critical analysis indicates that social capital could also be considered to have an impact across all of Pickett’s (2005) components proposed from learning capability, as epitomized in social learning theory to knowledge sharing which is implicitly associated with networking and the idea of both social and intellectual capitals (Rhodes, Lok, Hung & Fang, 2008). Thus, by dividing the components of human capital capability, the systemic approach fails to recognize the fluidity of the concept and its interrelated dynamic nature. The work of Edvinsson and Malone (1997, p.146) seem to express this succinctly in the comment that “corporate value does not arise directly from any of its intellectual capital factors, but only from the interaction between all of them”.

Reed et al. (2006) posit a pragmatic, albeit partial resolution to these concerns and highlight a mid-range theory: the Intellectual Capital-based view (ICBV) of the firm. As a mid-range theory, ICBV endeavors to provide a higher potential for empirical testing than the RBV, representing specific aspects more narrowly linked to a firm’s competitive advantage. In this way, ICBV can be viewed as complementary to a more widely understood knowledge-based view (Grant, 1996), trying to assess knowledge assets responsible for superior performance. From the knowledge-based view of the firm, according to Hsu and Sabherwal (2011), as well as Kogut and Zander (1993), it has been highlighted that organizations are social entities that store internal and external knowledge which lies at the core of the survival and success of organizations. This theoretical–pragmatic approach is narrowly focused or is a specialization of the RBV. This approach arose from practitioners in the 1990s (Brooking, 1996; CIC, 2003; Edvinsson & Malone, 1997), and ICBV distinguishes different blocks of intellectual capital. Therefore, from a strategic point of view, intellectual capital is becoming a crucial factor for a firm’s long-term profit and performance in the knowledge-based economy (Hsu & Fang, 2009; Kong, 2010).

The human capital construct has developed enormously over the last two decades which has also highlighted the importance of intangible values. Indeed, intellectual capital has thus become a strategic construct both in organizations as well as society and includes, human, social and structural capitals. Intellectual capital embraces

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intangible assets which include knowledge, skills, abilities and competencies. These intangible assets enable individuals to effectively deal with tangible assets which demonstrates the complementary nature between hard and soft skills. This interaction between the different capitals harnesses organizational talent which is fundamental when dealing with competition, for achieving organizational productivity, performance and longevity. Moreover, the following critical success factors associated with intellectual capital include, namely, knowledge sharing, knowledge creation, tact and explicit knowledge organizational culture, competitive advantage, competitive intelligence, creativity, talents competencies and performance, to name but a few. In this way, this new organizational mindset and culture sets organizations on the path towards these critical success factors. Organizations should be in tune with a culture of learning, trust, commitment, values and cooperation. This mindset enables knowledge to be created, taught, learned, diffused and shared. This holistic perspective entails an intelligent organization approach which is in tune with the current economy based and immersed in knowledge.

TRAINING, LEARNING, AND KNOWLEDGE SHARING

Continuous learning and motivating individuals to learn has become a norm in the last two decades. Human capital and its development has given rise to other spirals, namely, emotions and spiritual. Training, learning and development are regarded as the foundations for performance as well as the support for knowledge spillovers, especially tacit knowledge. Therefore, Bandura (1997) as well as Cabrera and Cabrera (2005) corroborate that constant learning through training should prevail in the organization. Anderson, Krajewski, Goffin and Jackson (2008) substantiate that those leadership self-efficacy beliefs exclusively related to effective leadership could reinforce learning and development programs even though these may be reliant on the specific needs of the leader or function. Additionally, Anderson et al. (2008) created a taxonomy to express a belief structure which is cognitive, multidimensional where managers comprehend their individual skills in order to accomplish their leadership responsibilities (Martins, A., Martins, I. & Pereira, 2017).

In the knowledge-based economy, it is perceived that individuals are interconnected and organizational performance depends on the typology of that relationship. Therefore, individuals search for tools that support knowledge sharing and its augmentation. Thus individuals are receptive to learning new knowledge in an environment where there is a culture based on trust and supported by knowledge management, according to Nielsen (2006). Mclenery (2007) advocates that learning is a timely process albeit Hofstede (1981) indicate that organizations are sustainable if they follow a long term orientation to learning new knowledge. These organizations are

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innovative and creative. Furthermore, Rowley (1999) corroborates that organizations need knowledge management because knowledge needs to be managed in the actual culture of the organization. According to a hard style of management, Alvesson and Karreman (2001) as well as Haesli and Boxall (2005) advocate that management pay attention on controlling and monitoring workers’ behavior. In order for individuals to share their knowledge, Schultze and Stabell (2004) emphasize that knowledge management needs to have a neo-functionalist discourse in their culture. In this way, organizations can achieve efficiency, effectiveness and gain sustainable completive advantage, in the knowledge economy.

Hislop (2010) as well as Pan and Scarbrough (1999) emphasize that management is carried out in response to the performance gaps that are evident by the technical and economic environmental change. Furthermore, knowledge management ensures that there is interpersonal trust relationships within the organization to allow employees to be motivated to share their knowledge, Young and Tseng (2008). Furthermore, Grant (1991) suggests that both social and technical subsystems are the key to gaining competitive advantage in the firm. Blackner (1995) and Muller (1996) agree stating that for effective sharing of tacit knowledge it is largely reliant on employee retention and embedding employee know how in the organization’s culture. Martensson (2000) corroborate that knowledge management needs to also develop, organize and utilize employee competencies. However, according to Massingham (2008), if this is not carried out affectively, people will leave the organization and there will be reduced organizational output and productivity and irretrievable damage can be done to organizational memory (Haesli and Boxall, 2005). Dawson (2000) believes that tacit knowledge is what allows for innovation and sustainability within the organization. However, Nonaka, von Krogh and Voelpel (2006) believe that it is both tacit and explicit knowledge that needs to be present if the organization is going to create knowledge for competitive advantage. New knowledge must be created for an organization to survive (Srithika & Bhattacharyya, 2009); this can only be done if there is continuous learning throughout the organization (Love, Gunasekaran & Li, 1998). Due to the post-industrial era and the knowledge based economy, it is important that organizations take a leadership style and soft management approach to their management styles.

“The primary purpose of learning and development as an organizational process is to aid collective progress through the collaborative and expert stimulation and facilitation of learning and knowledge that support business goals, develop individual potential and respect and build on diversity” (Harrison, 2009, p. 8). Training occurs in an organizational context and is collective in nature. Carter & Scarbrough (2001) postulate that, since the 1990s, knowledge and learning acquired a strategic position in organizations. Therefore, organizations should endorse learning and cultivate the notion of the ‘learner’ (Martins et al., 2017). The main challenge lies in (re)

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building a paradigm that values human capital and organizational learning. These are considered the fundamental components for organizational sustainability. This reflection brings forth an awareness of the close relationship between training, learning, knowledge sharing, competencies and performance. There is a need to incorporate new perspectives and constructs, namely, humanization, CoPs, in order to ease knowledge flux in the information highway. These will lead to virtuous circles as opposed to vicious circles which often decrease individual and organizational performance.

HUMANISATION, PERFORMANCE, BA AND COPS: A HARMONIOUS INTERACTION

It is important to nurture emotional intelligence in leadership behaviors so that those instil humanistic and spiritual feelings in the organization in order to create a humanistic workplace and also to achieve higher performance levels (Martins, 2016). Transformational leadership promotes high levels of performance (Leidner, Preston & Chen, 2010). Organizational performance is a core element for knowledge management efficiency and enables organizations to nurture human capital value. Leadership is a people management skill which also emphasizes the symbiosis between soft skills, negotiation and technical skills. Soft skills enable, support and augment effective leadership behavior as well as management. The knowledge-based society requires that all organizational tangibles, including intellectual assets, be measured. In view of the fact that knowledge and learning are considered critical resources in contemporary organizations, trust and social capital are a fundamental components to ensure organizations are sustainable in the current knowledge- based economy (Martins, 2016). Intellectual capital enriches human capital and its associated capitals, namely spiritual and emotional capitals; furthermore, social capital, also known as relational capital, actions knowledge leading the organization on the path of continuous improvement. Trust is a considered as a core component of social capital. Knowledge sharing takes place when individuals work together because trust is an essential characteristic of these relationships. Furthermore, trust enhances the quality of dialogue and discussions in order to strengthen knowledge sharing (Ichijo, Krogh & Nonaka, 2000).

Various intelligences are related to organizational performance. Moreover, it is important to invest in social capital in order to strengthen social relationships in the organization, CoPs as well as ba, through the sharing of tacit knowledge that is acquired through participating in the CoPs. There are also some differences between CoPs and ba. CoP is the place where individuals learn embedded explicit knowledge that is prevalent in the organization. Ba is the live or virtual place where knowledge

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is created, as Gray and Dentson (2005) as well as Nonaka, Toyama, and Konno (2000, p. 14) postulate. Furthermore, a ba requires energy to become active; when participants change, the ba changes, as the figure below depicts.

According to Nonaka et al. (2000), there are four types of ba, namely, (i) originating ba, (ii) dialoguing ba, (iii) systemising ba and (iv) exercising ba. Originating ba is the place where commitment, trust and love arise through sharing experiences and interactions with individuals on a face-to-face basis. Dialoguing ba is the collective sharing of skills and tacit knowledge as a result of dialogue. Reflection occurs via thought. Systemising ba facilitates explicit knowledge to be shared in written form between participants via collective and also virtual environments. Exercising ba enables the individual to embody explicit knowledge and convert reflection into action.

According to Nonaka et al. (2000, p. 7), “knowledge is dynamic, since it is created in social interactions amongst individuals and organisations. Knowledge is context-specific, as it depends on a particular time and space”. Knowledge is the core of social capital, furthermore, knowledge is “humanistic, as it is essentially related to human action. Knowledge has the active and subjective nature represented by such terms as ‘commitment’ and ‘belief’ that is deeply rooted in individuals’ value systems”, Nonaka et al. (2000, p. 7).

Social capital prevails in the existing relationships that organizations have with their external stakeholders, such as customers, suppliers, competitors and citizens. This capital is mostly measured on a long term basis. It nurtures a strategic relationship with clients and their satisfaction, loyalty and longevity (Martins et al., 2014).

DISTRIBUTED LEADERSHIP AND THE SYMBIOTIC CONNECTION WITH COPS

According to Vera and Crossan (2004), diverse leadership behaviors encourage organizational learning. Distributed leadership involves a system-wide perspective

Figure 1. Four types of Ba

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that goes beyond organizational levels, roles and boundaries. This type of leadership is a characteristic of the collective rather than merely the individual (Martins et al., 2017).

Distributed leadership fulfils a significant role in knowledge creation (Nonaka, et al., 2000). This leadership promotes the creation and sharing of knowledge assets, invigorates ba. The onus is on the leaders to perceive the need and the context, to build the space for ba, identify who will be part of the ba. Once this is established, it is the “knowledge producers [who will] have to supply the necessary conditions, such such as autonomy, creative chaos, redundancy, requisite variety, and love, care, trust and commitment”, Nonaka et al. (2000, p. 25).

It is important that organizational consciousness is verified in everyday life in order to enable the group to achieve common goals which are co-created with inspirational leadership sharing common goals and objectives as well as creating synergies in the group and the organization. In the last few decades, the disconnection between leader, follower and the elements of the organization have experiences a gigantic development, Petriglieri and Petriglieri (2015). This situation has worsened with international financial crises, such as that of 2008. This crisis reduced everyone’s trust levels to their lowest.

It is a fact that a leader inspires, motivates, encourages and goes along with the group of individuals. The leader also endeavors to capture the value that arises from group synergy, because the sum total of all the members’ return is substantially lower that the yield of the group. By the same token, in organizations, leaders are considered to be facilitators. Consequently, the constant feedback that leaders provide their subordinates is seen as a requirement in the search for excellence (Campos, 2013). Therefore, an individual’s path to glory and self-realization includes values such as happiness, passion and beauty (Podolny, 2011). Furthermore, these values are the banners that qualify humans and which should prevail in the relationship between leader and subordinate associating this relationship with existing synchronies. Happiness, passion and beauty are some of the characteristics of modern day leaders, Podolny (2011). In the workplace, many individuals have learned to repress values of beauty, passion and happiness because they perceived these values to be undesirable in organizations.

The new holistic organizational construct of human capital encompasses spiritual and emotional capitals. Only once the theory of spirituality is concomitant with ethical cognition will it be easier for individuals to perceive, assimilate and experience ethical situations. In this way, values of benevolence, generosity, humanism, integrity, justice, mutuality, justice, mutuality, receptivity, respect, responsibility and trust,

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which are at the core of individual spirituality, are internalized and part of daily lives of individuals and organizations. These values bear direct effects on exceptional organizational performance.

CONCLUSION

The current reflection highlights that a virtuous circle is developing in the economy. The web of close relationships between these constructs and contexts has direct influence on the performance of individuals and organizations. Individuals are becoming aware that lateral learning is essential. Therefore, those individuals who have a range of hard and soft skills and competencies perform to higher levels compared with those individuals that only specialise in a specific field.

This study tends to reveal the following: human capital is considered as a diamond, a fundamental asset with distinct attributes which enrich organizations and society. This capital is a component of intellectual capital and it is necessary to enlarge its scope in the current knowledge society. Intellectual capital encompasses the human dimension, the daily organizational routines and social relationships, all which enrich the organization and its spillovers benefit the individuals and society at large. CoPs are regarded as knowledge sharing collaborative group. These communities nurture collective informal knowledge. They are of added advantage to the knowledge economy because sharing and cooperation are zealously practised and promote new ideas and creativity. The reflection of extant literature revealed that the ba also contributes to improving performance which depends on the level of trust, compassion, emotional and spiritual wellbeing both in the group and the organization. Passion, enthusiasm, commitment and dedication that individuals reveal, are values associated with performance and quality of life. Humanization is another performance-related construct. Viewed from this perspective, relationships are considered healthier; authenticity is lived with sincerity and transparency. This path may well lead to organizational longevity. Feelings that individuals have should be dignified and these increase when levels of humanisation in the organization are high. This impacts directly on the level of sustainable organizational gains. For this reason, it is stimulating to invest in this area. Those organizations that do not invest will inhibit their own progress because they allow their knowledge to become obsolete and therefore useless and unattractive. This reflection reveals that competencies should be viewed from a holistic, integral and complementary perspective because of the current knowledge-based economy. Therefore, it is necessary to redefine new organizational approaches wherein intangibles are considered the guiding stars. Moreover, these should be nurtured to sustain their applicability on performance levels.

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KEY TERMS AND DEFINITIONS

Communities of Practice: The place where individuals learn embedded explicit knowledge that is prevalent in the organization; tacit knowledge that entails individual experiences are also shared.

Humanization: An environment wherein individuals work together that is imbued with trust, which is a vital characteristic of these relationships. Dialogue and soft skills are nurtured.

Knowledge Creation: Individuals are imbued with assets that include knowledge, skills, abilities, and competencies. Leaders should create spaces, physical and virtual, to enable individuals to energize, create, and share new ideas from their experiences (tacit) and formal (explicit) knowledge.

Leadership Self-Efficacy: Beliefs related to the notion that leaders are able and competent to reinforce learning and development, to nurture an environment that is open and receptive to knowledge sharing.

Learning: Regarded as an indispensable and strategic resource in contemporary organizations that ensure their longevity. Continuous investment in upgrading the skillsets of individuals ensures higher performance levels and greater competitive advantage.

Organizational Learning: A new organizational paradigm that considers human capital and its knowledge assets as its strategic capability. This continuous learning mindset enables the organization to pursue its path of sustainability.

Performance: Depends directly on productivity and organizational sustainability. The organization has a unique human capital imbued with distinctive intangible assets that ensure higher levels of competence, adeptness, productivity, and efficiency.

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Chapter 4

DOI: 10.4018/978-1-5225-3906-3.ch004

ABSTRACT

A key role of every government is to control the scientific and social progress managing the knowledge and learning process with efficiency and efficacy towards a factual wellness of people. The purpose of this chapter is to describe a basic strategy paradigm of management in global capitalism of knowledge, with web economy, globalization, dematerialization of value. In this global worldmaking, an Indonesia- Italy research team proposes a new knowledge science paradigm to change the way we are behaving in educational didactic, scientific mindset, business management in the twenty-first century: nature knowledge theory (NKT). As new basic science, it is the outcome of advanced study beyond knowledge management.

INTRODUCTION

Global world-making, based on web economy, globalization, dematerialization of value, focuses on sharing generative ideas through networking and effective communities of practice. Value points are flexibility, speed adaptation, response to supply and demand through enterprise systems (supply chains and strategic alliances) and product diversification. But the current complexity of reality, in which phenomena, people, and contexts are characterized by a high variety, variability, and indeterminacy, must be reduced or governed to transform problems into solutions.

From an economic point of view, reproducibility generates advantage because knowledge can be re-used and the outcome of a work can be standardized, producing

Knowledge as Quantum Leap: A Resource of Innovative Factors

to Manage Unpredictability

Irene Maria Gironacci Reply SPA, Italy

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very large economies of scale. To date, management increases the area of re-use of knowledge to verify its validity and efficiency and tomultiply its value. It requires strong investments in ad hoc solutions and practical knowledge.

Between others, this analysis will describe the innovative scientific contribution of Md Santo, founder of an Indonesia-Italy research team, dedicated since 2010 to the advanced study of beyond Knowledge Management (BKM). The theory comprehends several sectors of research, such as Technical system, Engineering system, Socio- system derived from Communication technology, Information technology, Work Flow algorithm. Its referred paradigm is the complexity theory, which interprets the unpredictable interactions and relationships between agents in biological, social and cultural environments, rights to which they belong (Holland, 1992). Complexity theory has the purpose to generate an “order in the chaos” of complex and dynamic information, sources of information, and emerging intertwined interactions between agents (Schütz, 1995).

THE HISTORICAL MILESTONES

The first modernity has proposed an interpretation of knowledge reproduced in a “mechanical way”, in an abstraction process, by separating knowledge from its reference to specific objects, people and contexts of the real world in any context of application (from science to technology, calculus, business, market, law and so on), and by creating impersonal automatism, with engineering methods and techniques. Varieties, variability, and uncertainty were not considered objective.

This vision was according to the spirit of Enlightenment period. The intellectuals believed that they could build a world illuminated by reason, attributing validity to scientific “truths” against the “beliefs” derived from authority, religion, and tradition. The statement was: it is true what can be demonstrated and reproduced objectively, independent of subjective evaluations, in all places and times.

The only way was the experimental method, focused on the cause-effect relationship. The invariability of the law has meaning if causes and effects are considered as abstract phenomena, with no reference to specific contexts and people. “Abstraction” becomes the premise for reproducible and therefore invariant/ demonstrable phenomena.

The economy of the first modernity was based on this abstract concept of the certain knowledge engine, that worked fine for a while because of the industrial

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Knowledge as Quantum Leap

world was just getting started, and it let society grow in productivity, production, and incomes.

But this mechanic conception of the knowledge process cannot work with an increasing complexity of economic needs, processes, and outcomes.

This problem cannot be solved by postponing politics and state control of industry, when they themselves are also organized in the form of automatisms, according to the same principle of abstract and replicative rules.

The industrial revolution marked a break with the past, an economic take-off as a transition from economic expansion to development.

The scientific thought accompanies this process, such as quantum physics and relativity theory, as a turning point compared to classical physics, and demonstrating the impossibility of classical stable laws to represent experimental reality.

In 1897, the great French chemist Marcelin Berthelot writes: “The scientist never ceases to increase the patrimony and collective capital of peoples”, referring to the implicit gnoseological and ethical impulse implied in science, and the practical applications of scientific knowledge and its industrial grip.

At first, the management of reproducible knowledge was therefore proposed through the compilation of tasks and the creation of machining lines and chains of specialized machines: from the Taylor’s “scientific work organization” to Ford’s “assembly line”, Sloan’s “system management, Simon’s” bounded rationality”.

In the “second modernity” (reflexive modernity, Beck et al, 1994), the connection created in industrialism between science, technology, and production sees a propagation of knowledge not entrusted to automatisms, that proceed in a linear way but are also organized in a circular process.

Engineering structures, not more politics or states assume the responsibility of the outcomes and activate reflexive processes of changing the fundamental mechanisms.

Research evolves up to more and more optimized systems theory, focused on stability, satisfaction, identity, feedback, routines of actions within the economic system.

The spread of knowledge becomes slower (and more expensive), but also capable of learning from the contexts in which it’s applied, thus acquiring a regeneration capacity of its own premises and extending re-usability area, in time and space.

Reproducibility of the knowledge becomes creative, according to the acceleration of the dynamics of competition, forced by the globalization phenomena in turn sustained by the explosion of communication networks. Ultimately, everything lies in the availability and accessibility of huge amounts of real-time information.

The main consequence is that value-creating mechanisms for firms tend to change with increasing speed, resulting in significant reductions in product and service life cycles, even in industrial sectors traditionally unused to reason in terms of market dynamics

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As systems become more complex and the data sets become very large to reproduce, modern science relies to a very large degree on computer simulations, computational models, and computational analysis of very large datasets.

KNOWLEDGE MANAGEMENT APPROACHES

This analysis has highlighted how, in the scientific literature, the term “knowledge management” (KM) is identified and defined differently. Although, researchers agree to emphasize the centrality of an increasingly updated knowledge and basic criteria to manage knowledge effectively as the main sources of a stable and lasting competitive advantage for businesses.

The new critical factor of managerial practice is the sharing, replicability of knowledge, and integrated management.

KM discipline is more than 20 years old. Knowledge managers have a large body of knowledge and robust, proven methodologies from which to draw. Leading organizations have refined and perfected approaches like communities, transfer of best practices, and lessons learned, laying a clear path for firms that are less far along. It is a meta-process, an integrated approach to identify, capture, retrieve, share and evaluate all the information assets in a company. This information asset includes databases, documents, procedures, but also the skills and expertise.

Furthermore, KM has a multidisciplinary nature and the extent to which it evolves based on developments inside and outside organizations. External forces continue to transform organizations’ strategic objectives and what senior leaders consider important. This, in turn, affects how knowledge managers formulate strategies and value propositions for their programs. Moreover, new science and technologies as well schools of thinking are constantly influencing the portfolio of available KM approaches and how those approaches are implemented and evaluated.

In recent years, thanks to the contributions of management theorists (such as Davenport, Drucker, Wiing, etc.), consultants and managers as well as an ever- increasing number of successful cases, KM has become the reference management model for ‘ enterprise since the year 2000.

Between others, in the Italian school of thought, some authors argue that “the main objective of Knowledge Management is to maximize the returns of corporate knowledge and keep up-to-date them” (Massa et al., 1999). Other authors characterize Knowledge Management from the point of view of its purpose: “Knowledge Management is a review of intellectual assets that detects unique sources, critical functions, and potential impediments that hinder knowledge flows to the point of use. Knowledge Management protects intellectual goods from decay; seeking opportunities to improve decisions, services, and products by adding intelligence,

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increasing value and providing flexibility and support for creativity in its ongoing evolution “(Bandini and Calzavara, 2000).

In other contributions, knowledge management is considered as a set of processes (or activities) that enable you to identify, capture, organize, and disseminate knowledge to improve the company’s competitive capacity.

Other authors Sorge (2000) argues that Knowledge Management is the corporate discipline that studies corporate knowledge and which is concerned with identifying the methodologies and tools for managing it through an approach based on cultural, organizational and technological innovation. This approach is aimed at developing skills and competencies that can enhance business competitiveness, streamline processes, shorten time to market, and streamline the structures more effectively to the business. “

Finally, Daft (2010) defines Knowledge Management as “a new way of thinking about organizing and sharing the intellectual and creative resources of an organization. It refers to the systematic effort to find, organize and make available the intellectual capital of a company and to foster a culture of continuous learning and knowledge sharing so that organizational activities can build upon the knowledge already gained. ” This author considers Knowledge Management as a new way of thinking about the organization and highlights the important role that the organization must play by underlining how intentional efforts are needed to achieve the goal of organizing and making available the intellectual capital of a company. According to this author, knowledge management is a critical task especially for organizations trying to become learning organizations.

In contemporary research, determinism and indeterminacy in the real world, coexist, in a scale-size (Rullani, 2010):

• Unpredictable Environment: Because chaotic or casual, or just unknown (due to our provisional ignorance);

• Deterministic Mechanisms: That need abstract artificial environments to work in order to reproduce the standard;

• Biological Systems and Artificial Intelligence: That can live in unpredictable environments, adapting to a certain extent through the permitted varieties and control feedback;

• Cognitive (Human and Social) Systems: That are themselves generating unforeseen and unpredictable variations, giving an open, explorative meaning to the environmental complexity;

Knowledge spreading and sharing must be organized so that the knowledge reproduced and transferred (to other people and other contexts) does not become effective. There are two different problems:

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• A Logical Problem in Terms of Validity: Knowledge has to go from one context to another without losing any validity, or lose as little as possible;

• A Practical Problem (Logistics): Knowledge must be reproduced and transferred (in time and space) at low costs and in a short time;

The reproduction of knowledge, therefore, will result in an integrated vision of:

• Mechanical Propagation: (Physical systems, science, machines, automatisms and deterministic algorithms); linearity and deterministic;

• Systemic Propagation: (Biological evolution, artificial intelligence, organizational self-regulation with feedback); Circular and indeterminable, in the sense that it guarantees the minimum performance but admits an (undetermined) variety of possible paths to realize it;

• Cognitive Propagation: Open to large variety, variability, and indeterminacy. Cognitive constructions depend on the creativity of thought (imagination, potentiality, representations).

COGNITIVE PROPAGATION

This study is focused on this specific approach because it distinguishes proven strategies that solve the problem both in terms of validity and logic. Four types of cognitive propagation can be distinguished:

• Cognitive Propagation for Sharing: More people make a shared learning experience in the same context. For example: leaners share the same learning experience in the classroom, a trainer or an expert “teaches” how to do to less experienced people (apprentices, for example), the same person crosses in his professional life different departments and different crafts summing up the skills acquired in each task; Innovation is planned together or shared experimentation (for example, between specialists, or in the producer- consumer, supplier-customer relationship). This method allows you to deal with complex problems without over-simplifying them. Knowledge has to go from one context to the other without losing its validity, or losing it as little as possible, but is slow in propagation and hardly comes to great numbers of re-use of knowledge.

• Cognitive Propagation by Coding: experience is de-contextualized, isolating the critical factors and defining the abstract context in which they must work (code). It prescribes the (abstract) context and the (abstract) behavior to lead, taught and propagated, extending abstract knowledge to other people

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and other contexts. So that experience can be repeated successfully and then re-contextualized in its application. Even code propagation requires a sharing process, but it costs less than a general sharing of all the knowledge to propagate. Re-contextualization must take into account differences in the context of science, technology, and education, which are typical examples of propagation by coding, but also computer science, fashion and art use access codes to propagate knowledge. These codes are often the result of a slow, low-coded sharing requirement that issues are drastically simplified and cost a lot when coding and when the code is taught.

• Cognitive Propagation by Incorporation: knowledge is incorporated into material objects, in people, or in material contexts. By reproducing (or transferring) the object, person, or context, even the built-in knowledge is reproduced (or transmitted). For example: keeping a document in the drawer the knowledge contained therein remains and spreads over time; transferring to space the maintenance technician transfers the competence he is carrying; reproducing the atmosphere of a luxury restaurant reproduces the knowledge associated with the brand and lifestyle.

• Mediated Cognitive Propagation: An interdependence and interconnectivity between the previous approach are offered by Connectivism, a theoretical approach, and strategy that intends to solve over-abundance of information, rapid changes, high density/diversity of information sources and perspectives, and the critical need to find a way to filter/evaluate them. It offers a formal and informal knowledge/learning process, that acknowledges the importance of “mediating e-objects”. Technology plays a central role in the distribution of identity and cognition. New knowledge is the result of interactions between agents, from their different points of view: they continually and actively re- orient their cognitive structures in a situated, collaborative and consistent knowledge acquiring process. In this perspective, knowledge, and learning are focused on analysis and comparison of different opinions, through the ability to identify connections (Siemens, 2006, 2008).

In this distributed environment, content can be categorized into four main features:

• Aggregation: Access to a wide variety of resources to read, watch, or play; • Remixing and Re-Purposing: After consuming some content, participants

are encouraged to disassemble and re-assemble content according to their needs and perspectives;

• Production: Participants are encouraged to create knowledge artifacts of their own;

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• Feedforward: Participants are encouraged to share their work with others in the course and with the world at large.

A strength point in a network of nodes of people, contents, and relationship, is that the performance of the group increases by the input of a new unit. Some key points of the knowledge process to be applied, are:

• To focus on the “problem” and connections rather than on “content”; • To encourage the agent to use own previous experiences, re-examine them

and bring them into a relationship with new information and knowledge; • To create a context of collaborative learning; • To realize that the knowledge sharing and learning project are developed by

the agents; • themselves and in collaboration; • To realize an analysis of need and interests of the participants; • To be grounded in experiential activities rather than on the transmission and

“absorption” of knowledge.

The connective knowledge management is characterized by a growing awareness of the sector of contents and the development of qualitatively better conceptions of the constructs. The findings indicate that facilitators should primarily be aware of the range of different understandings held by the agents and should actively encourage the acquisition of richer conceptions through sharing of experiences and know-how. Training should not be limited to the expert presentation of topics, but rather should provide agents with the possibility to compare their own point of view with different ways to recognize the topic to be debated, highlighting the complexity of the constructs and the different levels of understanding that agents should achieve, and at the same time highlighting the opportunities for common grounding and shared knowledge.

NATURE KNOWLEDGE THEORY

Nature Knowledge theory is an interpretative paradigm of the complexity in the knowledge society, proposed by Md Santo (dall’Acqua, Md Santo 2012). It comprehends several sectors of research, such as Technical system, Engineering system, Socio system derived from Communication technology, Information Technology, Work Flow Algorithm. It moves from a Cognitive approach to the knowledge.

The analyzed crucial aspects of a company are:

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Strength

The possibility to improve:

• Dynamic, synergetic, and collaborative construction of significant knowledge • Adequate networking facilities for group interaction within the virtual

knowledge space • Distributed dynamic knowledge creation, and adapting interactive knowledge

discovery • Mapping and measuring of relationship, communication flows between

people, groups, organizations, technology, information/knowledge processing

Opportunity

The possibility to improve:

• Continuous creation of new concepts, approaches, methods, techniques, products, services and ideas to solve lack of performance

• Routinely embedding knowledge creation, capture, and re-use in business processes

Threat

The possibility to have:

• No transmission of knowledge between retired and newcomers in enterprise cycle of knowledge

• Influence of the value assigned to choices and decisions by the contextual interaction among KM, culture, and values

Weakness

The possibility to have:

• Continuous refining of policies, rules, and procedures, to be performed • The use of techniques and technology just to trigger changes in ecology of

work

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The questions are: how to manage threat and weakness with an approach that is both logical and practical, in terms of creativity, engagement in solving problems, overcoming difficulties, knowledge growth and accumulation of experience?

This framework proposes a holistic vision of the KM dynamics, with a “not strictly technical” approach, emphasizing “final mutual spiritual enrichment” between the agents, through a contextual interaction of KM dimension. It framework interprets “Innovation” and “Entrepreneurship” as prominent business variables, that could be considered as one single entity. “Innovation” is a matter of learning, increased development of knowledge. “Entrepreneurship” is always associated with an economic entity to “Innovation” as the main characteristic, “as well as a human organ has internal memory, learns and develops, linked with the whole body” (Md Santo, 2012). The organization is interpreted like a living mechanism, having interior own consciousness, wherein each agent works with own specific profile, as well as each tool works with its specific functions, having to be orchestrated in a “Nature Knowledge continuum”. It is an evolution of a System theory vision because it comprehends the Knowledge Base of a Global Complex Universal System, like a multi-agents environment.

It describes the multi-agents environment as an entity comprised of dynamical continuous interaction among Inductive, Deductive and Socioductive thinking (Know-Where learning or Middle Up – Down thinking) (see Figure 1).

NKT, by definition, is a theory developed and based on adoption to postulate of “The Universe or the Nature Knowledge is the source and center of Consciousness”

Figure 1. Source: dall’Acqua, 2016.

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rather than “Mind Brain or Human Being is the source and center of Consciousness”. By consideration that Knowledge has already “actionable” traits contrary different with Data and Information, it is reasonable if we say Consciousness is the attribute of Knowledge.

Its focus is to orient people to manage decisions specifically in unpredictability conditions in multi-agents environment context. It proposes a new solution to the demand for “innovative and creative leadership” to make choices, to open to the change of perspective, to manage relationships and complex environments, based on a new model of behavior and meaning processing by the agents, and the management of the simultaneity of how people process information.

In Md Santo’s view, Innovation as well creativity is generated by KM Process Framework with KM Standards Culture and Value. The first one is driven by maximum (highest) effective complexity; the second one is driven by less effective complexity.

What the framework intends is a powerful approach to sharing and discovering a whole array of options, leading to more informed decision-making and a more intimate, expansive and dynamic understanding of the culture and context in which the agents work.

The model is an evolution of its first version, called Human System Biology- based KM approach, which assigns three dimensions of the Biological System to KM: Body, Mind, and Soul. The outcome is three KM dimensions: Technology (KM Tools) analog with human senses, Processes (KM Process Framework) analog with human mind-brain and People (KM Standard Culture and Value) analog with human consciousness DNA respectively (see Figure 2).

Figure 2. Source: dall’Acqua, 2016.

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Nature Knowledge Continuum is the relationship between Nature KM - Personal KM (Human Knowledge) - Organizational KM (or just KM).

Specifically, development mechanisms are based on two mainly dynamics: Knowledge Interface (KI) and Spatio-Tempo dynamics. Totally there are 9 (nine) KIs, 1st KI through 9th KI.

The 4th KI, 5th KI as well as 6th KI are indirect, not explicitly exposed in Knowledge sharing, the key factor through consciousness transfer towards (new) Knowledge development in a cognitive phenomenon. The interactions among KIs ecosystem occurred perpetually and dynamic within horizontal as well as vertical modes and facilitated by KM model framework.

The new concept of Knowledge Management (Personal KM, Organizational KM, and Nature KM) represents Consciousness element to complementing Matter and Energy as fabric or basic ingredients of Universe within scientific context with regard to our strong and solid postulate: “We are Knowledge Management (KM) regulated by Nature, and vice-versa by nature we are KM model” (Md Santo).

Data – Information – Knowledge – Wisdom (DIKW continuum) representing human mind-brain evolution which prominently blown up within current Science evolution since the 17th century or Newtonian era.

CONCLUSION

To date, management increases the area of re-use of reproducible knowledge to verify its validity and efficiency and to multiply its value. It requires strong investments in ad hoc solutions and practical knowledge. Focusing on the relationship among scientific thought, knowledge, and economy, this work describes a new interpretative framework of the complexity in the Society of the Knowledge.

In the panorama of theories, the first milestone was the F.W. Taylor’s “scientific work organization”, in the early 2oth century. He introduced the term “scientific

Table 1. Knowledge Interface components

Via Knowledge Management Is Referred to Corresponding to HSB_KM

1st KI knowledge with Lower Consciousness (KLC) Corporate Sense BODY

2nd KI knowledge with Medium Consciousness (KMC) Corporate Brain MIND

3rd KI knowledge with Higher Consciousness (KHC) Corporate Consciousness SOUL

7th KI Machine / Techno Learning

8th KI Individual Learning

9th KI Organizational Learning

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management”, to get the best possible efficiency from workers and machines, through analysis of the movements needed to carry out a work and the timing of each action or function. Taylorism analyzes and measures actions made by the worker, by timing them and breaking down the work required to do a fragment operation, which corresponds to partial times. This analysis gives the one best way: there is only one way to carry out an operation and the worker has to take care of it scrupulously.

But the increasing complexity of reality, phenomena, people, and contexts are characterized by a high variety, variability, and indeterminacy. It must be reduced or managed to transform problems into solutions. It is a mash of production and reproduction of knowledge, in inter-wined interactions between agents.

In the latest approaches, determinism and indeterminacy coexist in the real world, in a scale-size, and the interactions are analyzed according to more and more optimized systems theory, focused on stability, satisfaction, identity, feedback, routines of actions within the economic system.

Between others, this study described an approach to KM, called Nature Knowledge Theory, a specific theory based on adoption to the paradigm of “The Universe or the Nature Knowledge is the source and center of Consciousness” rather than “Mind Brain or Human Being is the source and center of Consciousness”. Nature Knowledge Theory (NKT) considering the Universe as an alive and psycho-somatic being. “We believed the development of NKT model framework and its derivatives will facilitate the processes on how we will be able to unify general relativity and

Table 2. Nature Knowledge Theory’s grid

Personal Knowledge Management

associated with Human System Biology (Body – Mind – Soul) as the basic model of

Human System Biology-based KM (HSB_KM) framework

BODY Human Senses

functions

MIND Human Mind (Brain)

functions

SOUL (Spiritual) Human Conscience

Human as Social Being functions

DIKW Continuum

Organizational Knowledge Management

TECHNOLOGY (Machine/techno

Learning) KM Tools

PROCESS (Individual/Human

learning) KM process framework

PEOPLE Organizational Learning

KM Standards and Culture

Human Knowledge Continuum

Nature Knowledge Management

(covering Nature Knowledge continuum Knowledge Theory (NKT) as new Basic Science and New Integrated Formal

Science (NIFS) as new Formal Science

Good (not Bad) Nature achievement

True (not False) Nature achievement

Right (not Wrong) Nature achievement

Nature Knowledge Continuum (Human Knowledge Continuum is part of NKT)

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quantum mechanics as well innovative and creative leadership toward Theory of Everything (TOE)” (Md Santo et al., 2014).

By eclectic definition, human Knowledge is the output of human knowing tools, evolved as an emergent property, having consciousness inside human being as a complex system, alive and behaving as a subject with free will.It intends to main a new solution to the demand for “innovative and creative leadership” to make choices, to open to the change of perspective, to manage relationships and complex environments, based on a new model of behavior and meaning processing by the agents, and the management of the simultaneity of how people process information.

The approach was empirically verified, between 2008 – 2016 years of advanced study on beyond KM with the discovery of new formal science (called as New Integrated Formal Science or NIFS) by an Indonesia-Italy research team, in collaboration with the School of Business & Management - Bandung Institute of Technology (SBM-ITB) (Md Santo et al., 2014).

Researchers strongly convinced either NKT or NIFS have the potential to change the landscape of science dramatically in the 21st century with new paradigm covering the paradigm of philosophy in general and philosophy of science as well as how we fix “the big mistakes in science” in the domain of social and natural sciences. Furthermore, it is analyzed in the more recent development in the identification of connections between science, production, and consciousness of the process in industrialism (Md Santo, 2013).

ACKNOWLEDGMENT

A respectful thought is dedicated to the main researcher and author of NKT, Dr. Raden Moesdarsanto (Indonesian nickname Md Santo). Md Santo sadly passed a few months ago without completing this chapter as co-author. He was a reliable researcher with a long a valuable career. Founder of Social Networking Site (SNS) on Comprehending Knowledge Management 2.0 through contextual learning on the issues of (mobile) Technologies, Market, People And Innovation” (over 700 members in 38 countries), he had a long and valuable career as Chairman of Medical Research Board and Dean of Medical School, Chairman of Knowledge Management & Non- Linear Study Group, Chairman of the University Educational Development Board, Chairman of Clinical Specialist Training and Education Program at Medical School (Sriwijaya University, Indonesia), Medical Doctor & Ophthalmic Surgeon Consultant (Airlangga University, Indonesia), Educational Technology and Educational Measurement - the Educational Testing Service (ETS), (Princeton, NJ, USA under WHO), Consultant ADB – US based SECID (Asian Development Bank – South East Consortium for International Development) team for University Academic

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Development Plan), Chairman of Dept Ophthalmology, South Sumatera General Hospital (Indonesia), Chairman of the Indonesian Medical Association, Province Capital South Sumatera (Indonesia), Knowledge Manager at PT Mobee Indonesia Inc .(Jakarta), Knowledge & Learning Facilitator at PT QB Youth Inc (Jakarta).

REFERENCES

Bandini, S., & Calzavara, D. (2000). Knowledge management e valorizzazione dell’esperienza. Un caso di core knowledge. Sistemi e impresa, (5), 73-78.

Beck, U. (1994). Reflexive Modernization. Stanford University Press.

Chiappelli, P., Prolo, P., Rosenblum, M., Edgerton, M., & Cajulis, O. S. (2006). Evidence-Based Research in Complementary and Alternative Medicine II: The Process of Evidence-Based Research. Evidence-Based Complementary and Alternative Medicine, 3(1), 3–12. doi:10.1093/ecam/nek017 PMID:16550218

Daft, R. (2010). Management. South-Western, Cengage Learning. Retrieved from http://abiturient.bgu.ru/mag/files/inter/Richard_Daft_Management_Text_Book.pdf

dall’Acqua, L., & Santo, M. (2012). New interpretative paradigms to understand and manage the unpredictability of the dynamics of learning in a complex multi-users knowledge environment. Proceedings of Artificial Intelligence Workshop 2012 on Collaboration and Intelligence in Blended Learning, 92-9.

dall’Acqua, L. (2014). Needs and strategies of KM in a multi-user environment: PENTHA Model view and analysis. In Jekpot KM19, Milano, Italy.

dall’Acqua, L. (2016). Orientism Management (OM): A New Framework to Manage Decisions and Hyper Dynamic Knowledge Process in a Multi-User Network. In Product Innovation through Knowledge Management and Social Media Strategies. IGI Global.

Holland, J. K. (1992). Adaptation in Natural and Artificial Systems. An Introductory Analysis with Applications to Biology, Control and Artificial Intelligence. Cambridge: Mitt Press.

Merlino, M., Massa, S., & Puliafito, P. P. (1999). Impresa e società della conoscenza: ruolo del knowledge management. Sviluppo e Organizzazione, mag-giu.

Rullani, E. (2010). Modernità sostenibile. Idee, filiere e servizi per uscire dalla crisi. Marsilio.

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http://dx.doi.org/10.1093/ecam/nek017

http://www.ncbi.nlm.nih.gov/pubmed/16550218

http://abiturient.bgu.ru/mag/files/inter/Richard_Daft_Management_Text_Book.pdf

Knowledge as Quantum Leap

Santo, M. (2012). Decomposing Knowledge System as High End of Universe Evolution: The benefit for Theoretical Physics and Future Science. In Applied Physics National Seminar III, Surabaya, Indonesia.

Santo, M. (2013). Bagaimana Knowledge Management bersama Fisika membangun “Nature Knowledge Theory”. In 3rd Annual Forum Center for Science and Technology Development Studies, Jakarta, Indonesia.

Santo, M., dall’Acqua, L., & Kristinawati. (2014). New Integrated Formal Science (NIFS) and Personal Knowledge Management (PKM) for K-12 Education. In NKI – SONO Consortium for Educators and Scientists (NSCES). Bandung Institute of Technology.

Schütz, A. (1995). Don Quixote and the problem of reality (P. Jedlowski, Trans.). Armando Editore.

Siemens, G. (2006). Knowing knowledge. Retrieved from: http://www.elearnspace. org/KnowingKnowledge_LowRes.pdf

Siemens, G. (2008). New structures and spaces of learning. The systemic impact of connective knowledge, connectivism and networked learning. Retrieved from: http://elearnspace.org/Articles/systemic_impact.htm

Sorge, C. (2000). Introduzione al knowledge management. Sperling & Kupfer.

KEY TERMS AND DEFINITIONS

Human System Biology-Based Knowledge Management (HSB_KM) Model Framework: A knowledge management (KM) comprehensive entity comprising of technology (KM Tools) identical with human senses or processes (KM Process [of Learning] Framework) identical with human mind-brain, and people (KM Standard Culture and Value) identical with human conscience DNA.

Knowledge Interface (KI): A terminology of human and/or nature knowledge variable derived from human-system biology knowledge management (HSBKM) model framework acting as the function of knowing tools producing nature or human consciousness founded either in human knowledge (Individual KM), organizational knowledge (Nurture/KM), or nature knowledge, respectively. There are nine KIs, first KI through ninth KI. Both of the KIs are involved in contributing knowledge- sharing process through consciousness transfer towards (new) knowledge evolvement in psychological phenomenon.

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http://www.elearnspace.org/KnowingKnowledge_LowRes.pdf

http://elearnspace.org/Articles/systemic_impact.htm

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Knowledge Management: There is no single and definitive definition of knowledge management (KM). In a broad sense, the concept can refer to the management and sharing of knowledge and has been pursued since antiquity with the development of libraries and communication tools.

Nature Knowledge Theory (NKT): A theory developed and based on adoption to a paradigm of “the universe or the nature knowledge is the source and center of consciousness” rather than “mind brain or human being is the source and center of consciousness”. Surely, NKT is within the nature knowledge continuum instead of DIKW continuum as dominated our current scientific mindset since the seventeenth century (Newtonian era). Nature knowledge theory (NKT) considers the universe as a psycho-somatic entity.

New Integrated Formal Science (NIFS): Newly discovered formal science that is epistemologically as well as paradoxically derived from human system biology- based knowledge management (HSB_KM) model framework and exists as an entity comprised of dynamic continuous interaction among inductive thinking, deductive thinking, and socioductive thinking.

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Chapter 5

DOI: 10.4018/978-1-5225-3906-3.ch005

ABSTRACT

This chapter analyses the development of benchmarking research from 1989 to 2017. Drawing upon diary and database seeks, all articles were recovered and afterward dissected in the light of the substance investigation strategy. The chapter demonstrates that benchmarking has caught expanding research consideration, as proven by the developing number of articles distributed. Conduct change hypotheses primary benchmarking ponders were not announced, prompting troubles in recognising fundamental factors in viable medications. Benchmarking research has been overwhelmed by subjective techniques, albeit both quantitative and blended strategies are picking up outstanding quality.

INTRODUCTION

The “benchmarking” methodology was envisioned in the mid-80s by American industrialists to counter the Japanese superiority by taking motivation from the techniques for their rivals. Xerox was one of the initiators, becoming a market pioneer in a competitive market amid the 1970s (Stapenhust, 2009).

The Benchmarking Practices as a Strategic Option to

Improve the Performance of Economic Companies

Redouan Ainous University of Algiers 3, Algeria

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This chapter, other than giving a review of literature on benchmarking, covers the accompanying destinations:

1. Organizing the productions in an efficient way to empower simple and fast pursuit.

2. Classification of literature. 3. Examination of the result of productions 4. Recognizing holes and giving indications for future research.

So, this chapter initially gives a relationship among the prior reviews on benchmarking and features the result for each situation. Next, another strategy for grouping the literature is proposed. The development and categorization of distributions are exhibited in a graphical shape for simple understanding. The papers have been nearly inspected and scope for further work has been identified.

BACKGROUND

The Chapter looks at the background to the main definitions, incorporate views of others, types of benchmarking, steps and process.

Literature Review

• Camp (1989): The creator characterizes benchmarking as the approach of setting up operating targets and productivity programs based on industry best practices lead to superior performance. The four essential philosophical steps of benchmarking incorporate knowing your operation; knowing the business leaders or competitors; consolidating the best practices and picking up superiority. Benchmarking has likewise been separated into two parts: practices and measurements. Its process can examine the creator points out that each. A case demonstrates the process. Both authentic and managerial perspectives are explored.

• Pickering and Chambers (1991): Companies and their subsystems can best judge competitive performance by reference to outside perspectives. The pith of benchmarking is to develop this outside perspective and to scan for performance levels and practices that will provide a competitive edge. The following baseline, built up by a study of organizational performance and practice, is compared to a benchmark made by gathering data on models. This assessment is then used as a boost for activity, which is proposed to improve the organization’s relative position.

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The Benchmarking Practices as a Strategic Option

• Zairi (1992): Benchmarking is the craft of building up superior performance by distinguishing gaps in performance and copying the best practices which help close them. It is a private development from the implementation of total quality management. It provides business organizations with the chance of investigating competitiveness by measuring positive performance. This research discusses different aspects, for example, its significance, the various sorts of this methodology, its implementation approaches and detailed criteria encouraging its successful implementation. Since one of the challenges of working on benchmarking is the acquisition of data, the research discusses the benefits of customer feedback in surveying ebb and flow performance. For instance, to feature the significance of customer feedback, some data on customer-supplier connections about Advanced Manufacturing Technology (AMT) have been used. The data allude, from one viewpoint to suppliers’ particular assessment of the levels of support, backup, and training they provide for their customers, and customers’ assessment of the levels of support, backup and training got from their suppliers .

• Abalateo and Lee (1993): The findings of the research study are presented and broke down through an examination of each investigative inquiry. It is important to take note of that point by point portrayals of perceptions and interviews are provided in the reference sections, while summarization of these findings are delineated using cross-classification tables presented throughout this research.

Based on the literature and data from Air Mobility Command, six air cargo bearers and one Air Force ethereal port are identified as benchmark cases. Joined Parcel Service, Federal Express, Emery Air Freight, Airborne Freight, DHL Airways, and Burlington Air Express is chosen as the six air cargo industry leaders.

• Noha (1993): Working with more than sixty driving U.S. companies since 1987, LaSalle Partners, a worldwide real estate services, and speculation firm, has directed a progression of nine studies in an assortment of ventures. The studies have inspected the properties practices of participants and identified best practices promoting the superior performance of corporate real estate portfolios. This research outlines the results and findings of those studies, distinguishes general and particular advantages of the best practices process, and portrays key elements for completing successful benchmarking initiatives.

• Flynn et al. (1995): As leaders become more associated with actualizing Total Quality Management, questions are raised about which management practices ought to be underscored. In this exploratory examination of the relationship of

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particular quality management practices to quality performance, a framework was built. It motivations on both core quality management practices and on the structure that makes a situation supportive of their use. Likewise, it incorporates two measures of quality performance and their part in setting up and supporting a preferred competitive standpoint.

Path analysis was used to test the proposed model, with different relapse analysis determining the path coefficients, which were decomposed into their various impacts. Feeble linkages were dispensed with the trimmed model showed that perceived quality market outcomes were essentially related to statistical controller opinion and the product configuration process. While the inward measure of a percent that passed the last examination without requiring improving was emphatically related to process stream management and to statistical control feedback, to a lesser degree. The two measures of quality performance were related to the favorable competitive position. Essential Foundation components included best management support and workforce management. Supplier connections and work states of mind were likewise related to some of the core quality practices and quality performance measures.

The results were translated in light of Hill’s idea of order champs and order qualifiers and Garvin’s eight dimensions of quality. They show that different core quality management practices prompt achievement in various aspects of quality and that those points work differently as order champs and order qualifiers.

• Elmuti and Kathawala (1997): Benchmarking has become a well-known received procedure and is used to increase favorable competitive position. After some time, the methodologys used to benchmark have been improved and altered. Many companies are becoming intrigued by this methodology for the continuous improvement it permits. Benchmarking is developing in an offer to organizations because of the cost funds achieved in executing operations. It likewise supports the organizations’ planning, vital planning, and capital planning.

Also: The methodology is an organized process comprising of a few steps. While actualizing the steps of the process, a company must know about moral and lawful issues. These problems fill in as rules for both partners to guarantee universal achievement of goals. As it keeps on developing in fame, the process is advancing in as good as ever bearings.

Furthermore: the general objective is to help companies in accomplishing a great competitive ability.This is not an objective that any company strives for all companies endeavor to be beneficial, competitive, or more all successful. Benchmarking can aid any company into progress similarly as long as it is connected effectively.

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• Finch and Lube (1995): Benchmarking makes it simple to distinguish the gap between where the organization might want to be and where it is. This gap offers a measure of the improvement an organization ought to make. In the short run, maintaining a strategic distance from this gap and refusing to change will diminish the open doors for survival at last. It is a remarkable device because it includes everybody, including the management and the laborers.

• Matters and Evans (1997): The sort of benchmark a company ought to attempt is subject to the company’s characteristics and conditions. It is up to the best management whether they want to benchmark focusing on differing inside capacities, competitors, industry performance, or ‘best-in-class’ objectives.

• McNair and Leibfried (1992): The management picks will be to a significant degree helpful to the company if it is connected accurately. It is the seed of organizational and social changes that must happen. If survival and competitive superiority are to be achieved.

There is almost certainly that benchmarking is setting down deep roots. Any company should benchmark on the off chance that it wants to: accomplish excellent competitive capacities, prosper in a worldwide economy, or more all on the off chance that it wants to survive (McNair and Leibfried, 1992). These patterns are impossible for companies any longer; they ought to be finished by all who need to stay competitive. If a company picks not to communicate, set goals, and work toward an excellent competitive ability, they will systematically confront annihilation or radical upheaval.

• Bhutta and Huq (1999): The substance of benchmarking is the process of recognizing the most elevated gauges of excellence for products, services, or processes, and after that making the improvements necessary to achieve those principles ± commonly called ‘best practices’. Different companies have embraced and customized the methodologyology to suit their requirements. A five-step model is suggested in this study as a model to be used when undertaking its study. Two contextual investigations are specified, and a comparison presented.

• Johnson and Chambers (2000): The researchers distinguish food service directors’ use of performance measures and to determine their present practices of, and demeanors and convictions about, best practices. Outline a survey was directed using a researcher-developed questionnaire that had been approved in a pilot-test. The survey was sent to 600 randomly chose food service directors; 247 (41%) reactions were broken down.

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◦ Subjects/Setting: Subjects were food service directors in the United States from four classifications of food service operations, such as in school/college, restorative, health car.

◦ Statistical Analyses: Results were broken down using distinct measurements and χ2 tests to explore the relationship between factors of intrigue.

◦ Results: The most common performance processes used by food service directors were food costs percentage, cost per unit or areas of service, and dinners per work hour. Inside benchmarking had been used by 71% of the respondents, outside by 60%, and utilitarian/non- exclusive by 25%. Seventy-seven percent of the interviewees thought this methodology had some of the considerable significance of their employments. Classifications of food service operations were related to the sort of partner and were related to certain performance measures. Sixty-one percent of respondents announced requiring knowledge and attitudes.

• Barkham et al., (2001): To complement the evidence-based practice worldview, the authors contended for a core outcome measure to provide practice-based evidence for the mental treatments. The utility requires instruments that are satisfactory deductively and additionally to service users and an organized proposal of the measure at a national level. The growth of the Clinical Outcomes in Routine Evaluation — Outcome Measure (CORE-OM) is condensed. Data are presented crosswise over 39 optional care services (n = 2710) and inside a seriously assessed single service (n = 1455). Results recommend that the CORE-OM is a legitimate and reliable measure for various settings and is worthy to users and clinicians and additionally strategy producers. Baseline data levels of a patient presenting issue seriousness, including hazard, are accounted for notwithstanding outcome benchmarks that use the idea of reliable and clinically critical change.

• Billings et al., (2001): This study depicts the framework and process to determine best practices in the internet learning communities for Web-based nurturing courses. The benchmarks for best practices were resolute based on evidence-based research in advance education. These quality pointers were then used to develop and pilot test a benchmarking survey crosswise over three state schools of nursing. The results of the pilot test, and in addition the applications and implications for best practices, is talked about.

• Jarrar and Zairi (2001): Like the pace of change increase speed in the 21st century because mechanical open doors, the progression of world markets, demands for development, quality and speed, organizations need to straighten out and realign their operations to counter every one of these difficulties. The

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pace of change has progressively constrained organizations to be outward looking, showcase situated and knowledge driven. A useful apparatus that can enable businesses to manufacture stable capacities, charm an internal stream of thoughts and set up good competitive gaps is benchmarking. This study presents the findings of a worldwide survey, embraced by the European Centre for Total Quality Management (UK), which was gone for evaluating the patterns and future headings of the methodology and the exchange of best practices. 227 organizations participated in the study. Participant institutions originated from 32 different nations, all engaged with benchmarking. The participants had a wide cross-area of organizational areas, running from non- benefit and government offices to ecological management services and car parts makers. The survey shed light on current patterns in the methodology (its spread and the advantages achieved) and featured some issues that will influence its future, predominantly the impacts of data innovation and globalization. Most study participants saw these components as an open door instead of danger. The study provides our analysis of these results and provides recommended best practices for accomplishing competitive preferred standpoint through this methodology in the future.

• Yasin (2002): The literature related to benchmarking practices and theory was reviewed from 1986 to 2000. The prior phases of its developments focused on a process as well as action introduction. Recently, in any case, its extension seems to have incorporated techniques and systems. In spite of late progressions, the field of benchmarking still experiences the absence of theoretical developments, which are severely expected to control its multifaceted applications

• Dattakumar and Jagadeesh (2003): Benchmarking is perceived as a basic apparatus for continuous improvement of quality. An extensive number of publications by different authors mirror the enthusiasm for this procedure. Reviews of literature on the methodology have been done in the past by a couple of authors. In any case, considering the commitments in the current times, a more comprehensive review is endeavored here. In this study, the authors have reviewed benchmarking literature in a way that would help researchers, academicians and professionals to investigate the development, development and materializes of this strategy. The authors have inspected different studies and have proposed a different plan of classification. What’s more, certain gaps that would provide insights for further research have been identified

• Cooper et al. (2004): This first of three articles reports the results of the latest American Productivity and Quality Centre study on performance and best practices in new product development. Performance results achieved on

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various NPD measurements are accounted for first, trailed by a set of Best Performing companies, what these businesses have in common and — most important — what differentiates them from the rest. This first article focuses on the ‘general population side’ of NPD — on how to extend teams are organized and on other winning characteristics of groups. The atmosphere and culture for the advancement inside the business end up being one of the most grounded drivers of NPD performance, and the specifics of what the Best Performers have done to achieve this positive atmosphere are plotting. At last, the part of senior management in setting the phase for the business’s NPD exertion is analyzed.

• Donthu and al., (2005): Benchmarking does not have much consideration in marketing literature because of the absence of suitable devices to aid the benchmarking process. This research tries to fill this gap in research and suggests a thorough quantitative methodology to marketing productivity. Data envelopment analysis (DEA) is proposed to aid regular exercises and to guide managers. DEA is useful in recognizing the best performing units to be benchmarked against and in addition to providing noteworthy measures for improvement of a company’s marketing performance. A representation is provided to show the qualities and shortcomings of DEA as a benchmarking apparatus. Implications for managers and headings for future research are examined.

• Baba et al. (2006): The motivation behind this research is to present a calculated framework for benchmarking implementation in little medium- sized endeavors (SMEs) contemplating their characteristics.

This research starts with the review of the meaning of SME and a comparison of the characteristics of SMEs and expensive organizations. It presents the requirement for a framework and its association with the methodology and TQM. This is trailed by reviewing its implementation structures proposed by researchers and discusses these frameworks based on their qualities and shortcomings from SMEs perspective. The frames were sorted into two expensive types based on the different author’s background and the approach on how they see the implementation process.

Furthermore, the research suggested a calculated framework for implementation committed to the automotive assembling SMEs. This framework guides them through from begin to the finish of the benchmarking process. The structure was approved at six pilot’s contextual investigation companies, which gave useful comments and recommendations in regards to the usefulness and relevance inside the SMEs setting.

The applied framework is still in the development stage and research is embraced to incorporate the pilot study company recommendations and comments into the last form of the structure.

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This guidance and framework provide a useful guide for companies to adopt and adjust before setting out on their benchmarking venture. This research satisfies an identified knowledge gap and offers practical help to SMEs beginning its implementation exertion.

• Francis and Holloway (2007): The point of this research is to review the important themes in the literature on benchmarking and to evaluate the commitment to knowledge provided so far. Four themes from the literature are featured: studies of the idea of best practice; criticisms and assessing the viability of the framework; and the thought of best practice. The authors contend that, while the literature includes a couple of fundamental analyses of the practice and effects of it, unmistakable, and even prescriptive, records of the ‘realities’ of dominate it. The more drawn out term (subjective and quantitative) impacts and perspectives of differing partners on the methodology are to a great extent disregarded. This particular concentration has implications for the commitment of benchmarking research to practice, for instance, regarding the part of inward organizational abilities in dissecting the performance of processes and working communications and change. The author’s supporter areas of future research to develop a theoretical understanding and thoroughly assess its effect on the set of performance management.

• Allstate (2008): The motivation behind this research is to inspect the momentum perceptions of company workers in regards to the use and understanding of the terms ‘benchmark’ as in performance measurement and ‘benchmarking’ as in measurement took after by identification of best practices for improvement.

A short review of the literature from different businesses is condensed on this issue and afterwards related to the research question. The individual research study is used to look at the perceptions of 42 participants who were fundamentally full- time representatives at companies in the New York metropolitan range seeking after a part-time graduate business degree.

The speculation is supported by the literature and the research findings that there is to be sure a misunderstanding of the commonly used terms identifying with performance measurement benchmarks and genuine benchmarking. Where identification of process leaders is just the first step in a complete process that at that point distinguishes best practices to be received.

Limitations of the study are identified, for example, the size and characteristics of the study populace, and recommendations are made for future research attempts to confirm the findings.

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This research uncovers that a more exact terminological use of proper practices ought to be promoted and used by management leaders, teachers and authors.

This is a significant experimental research study that examines the critical issue of misunderstandings and errors of insignificant performance benchmarks for comparative analysis and real practices that recognize best practices for adjusting using continuous improvement.

• Augusto Cauchick Miguel and Carnevalli (2008): This research proceeds with the analysis of the data gathered in a survey of quality capacity sending (QFD) carried out in Brazil. What’s more, extends the study via doing interviews at some of the companies who participated in the survey to recognize best practices on QFD applications.

To examine the data gathered in a survey of QFD and interviews, eight exemplary criteria based on the QFD literature was considered. The study at that point presents and discusses best practices in QFD application.

The results of breaking down the interviews demonstrated that there were exemplary aspects in the use of the technique and the key points in the QFD implementation. Which ought to be considered were related to support from upper management, completing training, creating the group, recurrence and length of gatherings, and creating a calculated model, among other aspects.

Stress that the significance of some of these exemplary aspects differs with the sort of company and the product established with QFD, and could be less essential for other goods and businesses.

The results demonstrated that there were key points in the QFD implementation that ought to be considered relying upon the kind of company and the product.

The key points in the QFD implementation identified in this study might be useful to QFD users and scholastic.

• Moriarty and Smallman (2009): The motivation behind this study is to review the epistemology of benchmarking, and methodologically distinguish the components of the theory.

A limited approach is connected to roots, primal and useful definitions of the theory.

It remains theoretically undetermined, with publications focusing on practicality and praxis instead of epistemology. Analysis of the literature leads to another meaning of it, focusing around the teleological processes that prompt state-change of organizations.

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The Benchmarking Practices as a Strategic Option

An academic establishment for benchmarking ought to be predictable with current organizational standards. Going ahead the study intends to develop a theory of best practices based on an illustrative model got from the local review.

The study starts the development of a more thorough theoretical base for future practice, which will fortify organizations’ business cases for undertaking such processes.

• Stapenhurst (2009): The author has been intended for the general reader intrigued by benchmarking to peruse from the beginning through to the end. It starts in Part 1 with a clarification of what methodology it means and the advantages it brings. Part 2 depicts in detail, well ordered, how to run a successful study, from recognizing projects through developing measurements, gathering, approving and dissecting data, working with and gaining from participants. Part 3 discusses both how to manage individual benchmarking projects and how to promote and maintain benchmarking exercises inside an organization. He is composed in light of the benchmarking professional. Once the reader has discovered his way around. These incorporate managing secrecy issues, arranging Best Practice gatherings and overcoming imperviousness to benchmarking. Some readers may have particular needs or purposes behind getting this research.

• Asrofah et al. (2010): The motivation behind this study is to look at best practices that add to the viability of benchmarking in Indonesian assembling enterprises.

250 questionnaires are circulated to representatives of the Badan Pengelola Industry Strategies (BPIS) enrolled companies, particularly to the quality managers or production managers that are engaged with this process in companies.

Altogether, 155 responded to the questionnaire; that gives a reaction rate of 51.67 percent. Analysis of the data has demonstrated that some benchmarking practices, e.g. the assembling process, and organizational and natural components do fundamentally influence the viability of it.

Further study should be attempted to recognize other best practices. A further constraint of the survey is that the study things are based on the literature review. An administration body, for example, a benchmarking department (BPIS) can, accordingly, concentrate on these elements for the further development of the approach. BPIS Indonesia can organize even more training and courses for littler assembling companies. From an organizational perspective, consideration ought to be given to improving compatibility, worker imaginativeness, and government mediation with the goal that the best practices of benchmarking can be used proactively as a vital device.

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The Benchmarking Practices as a Strategic Option

From the findings of this study, for this process to be successful, an organization needs these general requirements. Top management commitment and support a strong understanding of the assembling operations and needs for improvement: eagerness to impart data to partners; and devotion to progressing benchmarking endeavors.

• Hong and al. (2012): The motivation behind this study is to review a noteworthy segment of the literature on benchmarking practices to achieve better perspectives for rising research streams. The study examines the dedicated literature and presents a framework that suggests developing examples of firms’ best practices.

Benchmarking remains an essential vital apparatus of business in turbulent times. Five research dimensions are examined regarding the accompanying: strategy-based methodology; operational viability and specialized proficiency based on it. For reasonable competitive favorable position, this methodology goes past the operational level and moves into an extensive variety of the value chain, key, functional, and extend levels.

The study adds to the literature on the topic by recognizing key areas. It mirrors a personal introduction. However, future research may achieve a more systematic and quantitative analysis of the literature review. This review study is unique in this and compresses the results to pick up a proper understanding and provide perspectives for future research.

• Talib and al., (2013): The motivation behind this investigation is to explore the connection between total quality management (TQM) and quality performance in Indian service companies. The exact data was gathered using a self-directed instrument that was circulated to 600 Indian service companies. Of the 600 instrument messaged, 172 available instruments were returned, yielding a reaction rate of 28.6 per penny. A stratified sampling procedure was used to get the base example size of 600 from the four picked service ventures (i.e. Healthcare, Banking, Information and Communication Technology (ICT), and Hospitality). The data were broken down using factors, Pearson’s correlation, and different relapse analyses.

The findings uncovered that TQM practices were observed to be partially correlated with the quality performance of the Indian service companies. It was additionally discovered that quality culture was perceived as the dominant TQM practice in quality performance. The other practices, for example, quality systems, training and instruction, cooperation and demonstrated a positive association with quality performance.

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The Benchmarking Practices as a Strategic Option

The research was restricted by incorporating just four ventures in the selection of service companies in India, making this a potentially single choice and it may not be sufficient, to sum up, the results for the whole Indian service companies.

The study has added to the TQM literature with a superior understanding of the 17 TQM practices and their relationship with a company’s quality performance. Which will provide essential knowledge to top-management of service companies, to refine their current TQM practices and in this way improve quality performance.

• von Eiff (2015): Hospitals worldwide are confronting similar open doors and dangers: the socioeconomic of a maturing populace; steady increases in ceaseless ailments and severe ailments and a relentlessly expanding demand for medical services with more escalated treatment for multi-dismal patients. Also, patients are becoming more demanding. They expect amazing drugs inside respect drove and natural mending condition.

The severe financial weights that these developments involve oblige care providers to increasingly cost-control and to apply process re-building, and continuous performance improvement measures, to achieve future financial maintainability. In the meantime, controllers are calling for improved patient outcomes. Benchmarking and best practice management is successfully demonstrated performance improvement instruments for empowering hospitals to achieve a more elevated amount of clinical yield quality, upgraded patient fulfilment, and care conveyance abilities, while at the same time containing and diminishing costs.

This study means to illuminate what the methodology is and what it is not. Furthermore, it is expressed that is a capable managerial apparatus for improving fundamental leadership processes that can add to the previously mentioned improvement measures in health care conveyance. The benchmarking approach portrayed in this research is arranged toward the rationality of an information yield model and is clarified based on practical global cases from different businesses in different nations.

Benchmarking is not a venture with a characterized begin and end. It is a continuous process of measuring and hunting down best-in-class performance:

1. Measure yourself with yourself after some time against key performance pointers

2. Measure yourself against others 3. Identify best practices 4. Equal or surpass this best practice in your establishment 5. Focus on basic and successful approaches to actualize arrangements

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The Benchmarking Practices as a Strategic Option

Comparing just figures, for example, the usual length of stay, costs of procedures, contamination rates, or out-of-stock rates, can lead effortlessly to wrong conclusions and central leadership with regularly tragic results. Only looking at figures and proportions is not the reason for distinguishing potential excellence. It is important to look past the numbers to see how processes function and add to best-in-class results. Best practices from even very different ventures can empower hospitals to jump results in the patient introduction, clinical excellence, and cost-adequacy.

In spite of common benchmarking approaches, it is brought up that a comparison without ‘looking behind the figures’ (being acquainted with the process structure, process dynamic and drivers, process establishments/standards and process-related motivator components); will be to a significant degree constrained alluding to dependability and quality of findings.

To exhibit transferability of benchmarking results between different businesses, practical cases from health care, automotive, and lodging service have been chosen.

Also, it is portrayed that universal comparisons between hospitals providing medical services in different health care systems do have an extraordinary potential for accomplishing jump results in medical quality, an organization of service arrangement, successful work structures, obtaining and coordination processes, or management, and so on.

• Agarwal and al. (2016): The reason for this research is to explore the quality of management practices of hospitals in the Australian healthcare system, particularly those in the state-managed health systems of Queensland and New South Wales (NSW). Further, the authors evaluate the management practices of Queensland and NSW public hospitals mutually and benchmark against in the health systems of seven other nations, in particular, the USA, the UK, Sweden, France, Germany, Italy and Canada.

In this study, the authors adjust the one of a kind and globally sent Bloom et al. (2009) survey instrument. Which uses a ‘double visually impaired, double scored’ methodology and a meeting-based scoring lattice to measure and universally benchmark the management practices in Queensland and NSW public hospitals based on 21 management dimensions crosswise over four vast areas of management – operations, performance observing, targets and individual management.

The findings uncover the areas of quality and potential areas of improvement in the Queensland and NSW Health hospital management practices when compared with community hospitals in seven nations, in particular, the USA, the UK, Sweden, France, Germany, Italy and Canada. Together, Queensland and NSW Health hospitals perform best in operations management took after by performance observing. While

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target management presents scope for improvement, individual management is the circle where these Australian hospitals lack the most.

This research is important to both hospital chairpersons, and health care approach producers are expecting to lift management quality at the hospital level and at the institutional level, as a vehicle to reliably convey reasonable, brilliant health services.

This study provides the first globally comparable vigorous measure of management capacities in Australian public hospitals, where hospitals are run autonomously by the state-run healthcare systems. Moreover, this research study adds to the exact evidence base on the quality of management practices in the Australian public healthcare organisms of Queensland and NSW.

• Balagué and al., (2017): Knowledge Management (KM) in libraries alludes to the systematic management and control of knowledge as an important asset while delivering astounding library and data services. On the off chance that one wishes to make the ideal use and dispersal of organizational and other work-life related knowledge, at that point, one needs to get proper knowledge management devices and to receive a systematic procedure for KM throughout the organization. This can apply an empowering impact on the lifelong learning of the libraries’ staff that is basic in the present quickly changing valid data condition. This individual research led in three scholarly books – IZUS/Universität Sbibliothek Stuttgart, Universitat Autònoma de Barcelona Library (UAB) Barcelona and University of Eastern Finland Library (UEF), creates a comparison of the KM processes being actualized in each of the foundations to guarantee the continuous learning of the libraries’ staff.

We have used the most important references in this field and most of the quotes on Google Scholar and published in the most important scientific journals indexed in the most important databases such as Springer, Elsevier and Emerald, shown in the Table 1.

Definitions

To complete the review, following the main synthetic definitions are cited:

What Is Benchmarking?

• It is the scan for the most productive techniques for an offered movement, to guarantee superiority.’(Camp, 1992)

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Table 1. Suggest the relevant references with importance

Title Author(s) Year Published in Pages Citations

Benchmarking: the search for industry best practices that lead to superior performance,

Camp, R.C., 1989 ASQC/Quality Resources.

1-299 3302

Benchmarking a self-improvement strategy Pryor, L.S., 1989 J. Bus. Strategy 28-32 103

Learning from the best leads to superior performance

Camp, R.C., 1992 J. Bus. Strategy13 3-6 127

Benchmarking: How to learn from best-in-class practices

Mittelstaedt, R.E., 1992 Glob. Bus. Organ. Excell.

301-315 81

The art of benchmarking: using customer feedback to establish a performance gap.

Zairi, M., 1992 Total Qual. Manag. 177-188 79

Évaluer et améliorer ses performances: le benchmarking

Balm, G.J., Turbe- Suetens, N.,

1994 Afnor 1-9 34

Performance measurement system design: a literature review and research agenda

Neely, A., and al., 1995 IJ of operations & production management,

80-116 2860

The impact of quality management practices on performance and competitive advantage

Flynn, B.B., and al.,

1995 Decis. Sci. 659-691 1289

PDMA research on new product development practices: Updating trends and benchmarking best practices

Griffin, A., 1997 J. Prod. Innov. Manag. 429-458 1832

Benchmarking and operational performance: some empirical results.

Voss, C.A., and al., 1997 Int. J. Oper. Prod. Manag

1046- 1058

250

Benchmarking–best practices: an integrated approach.

Bhutta, K.S., Huq, F.,

1999 Benchmarking Int. J. 254-268 266

Benchmarking in the UK: an empirical study of practitioners and academics

Longbottom, D., 2000 Benchmarking Int. J 98-117 109

Service profiling and outcomes benchmarking using the CORE-OM: Toward practice-based evidence in the psychological therapies

Barkham, M., and al.,

2001 J. Consult. Clin. Psychol.

184-196 488

Benchmarking best practices in web-based nursing courses.

Billings, D.M., and al.,

2001 Adv. Nurs. Sci 41-52 303

Future trends in benchmarking for competitive advantage: A global survey.

Jarrar, Y.F., Zairi, M.,

2001 Total Qual. Manag. 906-912 84

The theory and practice of benchmarking: then and now.

Yasin, M.M., 2002 Benchmarking Int. J. 217-243 296

A review of the literature on benchmarking Dattakumar, R., Jagadeesh, R.,

2003 Benchmarking Int. J. 176-209 264

Benchmarking best NPD practices—I Cooper, R.G., and al.,

2004 Res.-Technol. Manag. 31-43 459

Benchmarking marketing productivity using data envelopment analysis.

Donthu, N., and al.,

2005 J. Bus. Res. 1474- 1482

188

A benchmarking implementation framework for automotive manufacturing SMEs

Baba, Deros, M., and al.,

2006 Benchmarking Int. J. 396-430 181

What have we learned? Themes from the literature on best-practice benchmarking.

Francis, G., Holloway, J.,

2007 Int. J. Manag. Rev. 171-189 100

Measurement benchmarks or ‘real’ benchmarking? An examination of current perspectives

Alstete, J.W., 2008 Benchmarking Int. J. 178-186 38

continued on following page

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• It is a continuous process of comparing a process, product or service with a comparative movement esteemed to be the best, to set yearning however realistic goals and improvement activities to become and remain the best of the best in one reasonable time’. (Balm and Turbe-Suetens, 1994)

• It is a persistent orderly procedure of assessing organizations perceived as industry pioneers, to decide business and work forms that speak to best practices and build up balanced performance objectives”. In operational terms this is much of the time consolidated to “the scan for industry best practices that prompt prevalent performance.” By “best practices” is implied the strategies utilized as a part of work forms that best meet client necessities. Benchmarking is then not just about what we need to accomplish; the benchmarks or the estimations of best performance, yet in addition how they are accomplished, the procedures that are utilized. This definition particularly features that benchmarking can apply to the items, administrations, and practices of an organization. For the most part, benchmarking can be connected to any zone where we need to analyze performance as well as gain from others. The definition likewise determines that we need to benchmark against either our hardest competitors, with the goal that we know where our qualities and shortcomings are in connection to them, or industry pioneers so we know about the most noteworthy performance levels right now being accomplished (Cross, R., and al. 1995).

Title Author(s) Year Published in Pages Citations

The benchmarking book Stapenhurst, T., 2009 Routledge 1-433 168

En route to a theory of benchmarking Moriarty, J.P., 2009 Benchmarking Int. J. 484-503 97

Best practices for the effectiveness of benchmarking in the Indonesian manufacturing companies.

Asrofah, T., and al.,

2010 Benchmarking Int. J. 115-143 27

A theory of benchmarking. Moriarty, J.P., 2011 Benchmarking Int. J. 588-611 69

Evolving benchmarking practices: a review of research perspectives

Hong, P., and al 2012 Benchmarking Int. J 444-462 51

An empirical investigation of the relationship between total quality management practices and quality performance in Indian service companies.

Talib, F., and al 2013 . Int. J. Qual. Reliable. Manag.

280-318 96

International benchmarking and best practice management: in search of health care and hospital excellence, in: International Best Practices in Health Care Management.

Von Eiff, W., 2015 Emerald Group Publishing Limited

233-252 08

Benchmarking management practices in Australian public healthcare

Agarwal, R., and al.,

2016 J. Health Organ. Manag.

31-56 7

Benchmarking the Knowledge Management Practices in Selected European Higher Education Libraries

Balagué, N., and al.,

2017 Qual. Quant. methodologys Libr

331-341 2

Table 1. Continued

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• It is s the correlation of practices, while for others, and maybe most usually, it incorporates both the examination of performance and practices. (Stapenhurst, 2009)

• It is a continuous process of assessing products, services and strategies against those of the most genuine competitors or partners or organizations perceived as leaders or leaders.’ (Longbottom, 2000)

• It is a cooperative demeanor that permits an inner or outer comparative analysis of ideas, strategies, apparatuses, processes, products, services. It is based on the accumulation and analysis of quantitative and subjective data and on understanding the way of life of the partner organization. It must be an indispensable part of a process of consistent assessments and improvements, the motivation behind which is to become or remain the best. ‘(Fabien L, 2004)

What Are the Different Types of Benchmarking?

In his first compositions, Robert C. Camp recognised four Types of benchmarking (GAUTRON and al, 2003):

1. Internal Benchmarking: It is used at whatever point a company can distinguish Processes in a few locales, areas, nations or mainland’s. It is then feasible for them to compare employed in these different spots of action without going to see what happens somewhere else. This arrangement Advantages and limitations. The favourable position is described by more prominent straightforwardness compare the results, since they apply to a similar Sector, to connect contacts and to make visits. Adjustment is likewise encouraged since it manages a similar occupation. Then again, this benchmarking does not exceptionally imaginative practices, since they place in a setting of corporate culture with a mission, projects and common targets. This is the situation, for instance, of Xerox, Texas Instruments, Schindler, France Telecom, EDF Nuclear Power Production Centre. a. Advantages: Data to share is effortlessly open. They stay in-house. The

sharing of a similar culture encourages the transposition of the identified arrangements. Placing them into practice considers quick performance picks up. This benchmarking can be set up rapidly.

b. Disadvantages: The data is partial; it concerns just the interior condition of the company or the group. The data can likewise be divided, truncated and arranged, each needing to ensure the interests of its service or its own. There is likewise a danger of smugness or even scholarly relationship.

Table 1. Continued

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2. Competitive Benchmarking: In spite of what is for the most part trusted, this benchmarking is broadly practiced in some Sectors of the business. It doesn’t, of course, the key processes regarding the market. By and by, it is all the time used for all that productivity, managerial costs and work relations. With subcontractors, which are regularly common. Similarly, for inside benchmarking, the adjustment is encouraged by the Similarity of practices. Notwithstanding, it is very hard to practice genuine benchmarking competitive, which dependably discovers its points of confinement in the secrecy. What is sometimes called benchmarking Competition is not by any means the case if the competitors do not operate on the same occupied range, or if for one same segment, they are not routed to similar users end. Cases of real competitive benchmarking: Toyota and BMW, Sun Microsystems with Hewlett Packard and IBM. Examples of false competitive benchmarking: RATP with other urban transporters in great cities, computer Management with medical computing. a. Advantages: The partners are anything but difficult to recognize.

They are for the most part exceptionally energetic. It rapidly features all the performance gaps between the organization’s ideas, techniques, instruments, processes, products, services and competitors.

b. Disadvantages: Data sharing is restricted. They are sometimes difficult to gather. There are a couple of real disclosures. There is the danger of losing delicate data and uncovering fundamental processes. Finally, the other economic specialists, on the off chance that they are educated, may envision that there is the likelihood of attention.

3. Functional Benchmarking: In a similar division, companies, competitors or No, compare their support processes (organisation, Management, coordination, and so forth). Moreover, adjust Ideas to improve their competitiveness. The points of interest are of a same order from those by honing inside benchmarking: simplicity of relationship and Comparison, moderately straightforward adjustment. The points of confinement are those of the extension, which does not strategic processes, and the absence of innovative because of a culture connected to the business division. There are numerous cases in the fields of Chemistry/drug store, vitality, automotive, IT and telecommunications. a. Advantages: The partners are moderately simple to distinguish. The

data is effortlessly available. The arrangements identified are effortlessly versatile. It is a benchmarking with useful developments.

b. Disadvantages: It is regularly constrained to cost comparisons. The hazard is to concentrate quantitative analysis on subjective analysis and disregard the human factor.

4. Generic Benchmarking: This is without a doubt the benchmarking that all its value to the apparatus. The one commits to Practices with those of

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the organisation of a segment total different. It is in this way conceivable to discover in the partner Practices which are all the better because they are the principle because of its performance. The focal points are various: partnership without imperative of Confidentiality, a wellspring of imaginative thoughts, perennial because based on a corresponding and permanent need data. The few outstanding troubles are connected to great problem in adjusting practices that come from a Sector. Cases, numerous in this benchmarking, demonstrate an incredible capacity to open up Companies that practise it: Schneider Electric, Xerox, Faurecia, Auchan, Embraer (Brazil and France), Crédit Lyonnais, Crédit du Nord, Renault, Bull, Siemens, Toshiba, and so forth. It Means that the instrument must be considered in every one of its Aspects if one wants to get the best advantage from them. a. Advantages: Non-exclusive benchmarking is, by all accounts, the most

productive and imaginative technique, yet additionally the best. It makes find and believability new levels of performance. The disclosure of new situations promotes receptiveness and makes numerous from the earlier vanish. It triggers performance bounced and breakthrough developments.

b. Disadvantages: Potential partners are hard to distinguish. They are regularly requested and should locate a real enthusiasm for building up another partnership. There are sometimes challenges in understanding the partner organisation and in adjusting and exchanging certain processes.

What Are the Steps to Implement Benchmarking?

The philosophies of R. CAMP and Gerald J. Ointment are perceived. We draw on these two approaches and late research to propose a 6 stage, and 20 steps approach vital for the accomplishment of this process (GAUTRON and al, 2003).

The demonstrative step is not benchmarking, but rather a key essential for any progression. It makes it conceivable to recommend areas for improvement with prompt implementation. It features the qualities and shortcomings of the organisation that will characterise the motivation behind benchmarking and distinguish the benchmarks themselves (Gautron et al, 2003).

MAIN FOCUS OF THE CHAPTER

One of the most important business performance methodologys in contemporary management thought that has proved a great success at the level of international companies is the Benchmarking approach. The use of this methodology contributes

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to improving performance, identifying strengths, strengthening them and weaknesses, and treating them so that they are distinguished from other competitors. In order to better understand the approach, we discussed some of the basic concepts, its objectives, its importance, and its most important types. We also presented the most important stages of the Benchmarking process and the conditions for its success.

This chapter answered a series of questions about this methodology: What is Benchmarking? What are the different types of it? What are the steps to implement it? What are the key factors for success?

Benchmarking contributes to improving the business performance of the institution by comparing the performance of the institution with other institutions and benefiting from its experience. This is what we focus on in this book in studying methodologies of improving business performance through Effective Managerial Training Initiatives.

This chapter can help students to develop a host of skills and knowledge that are increasingly important in the professional world.

Table 2. The steps of benchmarking

Phase 1 Diagnosis Step 01: Analyse the activities and their results Step 02: Analyse measurement systems and measurements Step 03: Evaluate the company’s current performance

Phase 2 Planning

Step 04: Establish and train the Benchmarking team Step 05: Define the object of the benchmarking and the benchmarks Step 06: Identify the best organisations and select potential partners Step 07: Establish the relationship and draft the Memorandum of Understanding Step 08: Determine a methodology for data collection and information retrieval

Phase 3 Information Processing

Step 09: Collect and organise data Step 10: Analyse indicators and compare performance gaps Step 11: Understand the gap and set future performance levels

Phase 4 Appropriation Step 12: Communicate the results of the Benchmarking Step 13: Establish functional and operational objectives Step 14: Develop action plans and allocate resources

Phase 5 Action Step 15: Implement the defined actions Step 16: Evaluating Performance Step 17: Encourage initiatives

Phase 6 Monitoring Adjustment

Step 18: Analyse feedback Step 19: Adjust if necessary Stage 20: Sustain the practice of the process

Source: (Gautron and al, 2003).

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SOLUTIONS AND RECOMMENDATIONS

The Author recommends the use of Benchmarking methodology because:

• This must be a primary process from the perspective of customer fulfillment. • Know your particular process entirely before any activity (This self-analysis

step is foremost). • Work and communicate viably. • Characterize the targets to be achieved and the points on which you must be

careful when making your business visits. • Implementation of a careful and viable planning. • Limit costs by approaching the method systematically. • Identify key measurement markers for the process chosen. • Prepare visits with the goal that they are not only a session of informal talk.

The meticulousness, completeness of the questionnaire, the interviews, the assortment of conversationalists and their inclusion in the processes examined determine the adequacy of exchanges.

• Communicate this data to the company you will visit. • Implement changes or improvements: Rather than immediate results. • Ensure progressing communication throughout the term of the venture.

Provide ongoing communication throughout the project.

FUTURE RESEARCH DIRECTIONS

A member of one benchmarking club chose not to take an interest in future investigations since they never utilized the outcomes. A supervisor in an alternate organization quit benchmarking in light of the fact that senior management had pointed the finger at him for the organization’s generally poor appearing in a past report. Such an organization will never profit by the method as long as senior management utilizes it as an apparatus to assess and censure.

Generally members will decide to benchmark the arranged future keeping an eye on levels since these will speak to typical operations and, against the present information, the approach could be viewed as unimportant.

At future benchmarking kick off gatherings where the measurements are probably going to advance as the members work to elucidate the definitions in the light of having utilized them.

We start by taking a gander at the focal part that the Help Desk plays not just in guaranteeing that provided information are right and on time yet additionally how it goes about as a key store for data to drive improvements for future studies.

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CRITICAL VIEW AND CONCLUSION

Nonetheless, many articles have showed up. As indicated by the literature review directed by the writers, while a few articles have showed up in the scholarly literature, beginning in 1992, the mind larger part of articles are found in specialist sort diaries. The aftereffects of this literature review and investigation recommend that the extension of benchmarking data, advancements, and cases ponders happened principally in professional productions.

This outcome isn’t astonishing, since benchmarking started in the business segment as an administrative system that could be utilized to distinguish execution holes and enhance operational execution. It has advanced from that point forward with nearly nothing if any information or dispersion of learning from the scholarly group. This thought of expansion in the specialist field is encouraged by Voss et al. (1994).

The literature review featured the development of the approaches that the benchmarking in the field of the management. This development has added to the assortment of definitions, the standard component of which is the continuous measurement of one’s performance, compared with that of the best to find out about the new working strategies and practices of other organizations. We propose to hold Ellis’ definition, which mirrors the benchmarking process; it has the benefit of setting particular accentuation on the use of pointers and the elements of learning and sharing the technique. Likewise, Pitarelli et al. featured the key components of a benchmarking approach, in other words, the enthusiasm of acing the steps of the process that we need to improve and gathering reliable data (checking) to support fundamental leadership. Its model apparently demonstrates that the comparison of markers is just a single step in the process, positively a major stride, however inadequate to talk about the approach.

In the Management it is a subject that has never been routed, to our knowledge, in a systematic and institutionalized way. This is the reason our diary is based on different sources frequently combining actualities and suppositions; a perusing matrix of the experiments could not be developed in a frame as organized like a classic review of articles based on comparable techniques. Another constraint of our review is that the literature looked for was not thorough; it comprised of recognizing the most illustrative articles from our perspective, the perusing of which was carried out by a solitary reader. At last, we examined the socioeconomic setting that supported the use of the methodology in the management part, yet did not manage the thought processes that prompted utilization and financing of the implementation of it in the Experiments chose in this chapter.

These issues should be set out to make the approach a favored strategy in the quality change endeavors. The asset prerequisite for full-scale benchmarking exercise should be deliberately settled especially for little and medium endeavors.

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These associations which are ordinarily tight on spending plan can’t bear to wander contributing sizeable assets.

Along these lines, any dedication towards the methodology must be justified in wording of guaranteed returns. Most likely, it is a magnificent device for quality change, guaranteeing accomplishment as demonstrated by the rich literature referred to in this paper. Applying the administer of ceaseless change, benchmarking apparatus can be additionally honed. It is trusted that this paper has tossed light on certain dim zones of the management approach along these lines requesting further investigation on the theme, to make it more helpful and an adaptable apparatus in the quality tool kit (Neely, A., and al 1995).

ACKNOWLEDGMENT

I especially acknowledgment the family My mother and My Father for the time spent explaining to Achieve this level.

I especially wanted to thank my family for allowing me to do long studies away from home and to have supported me during the full times.

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KEY TERMS AND DEFINITIONS

Benchmark: The reference for measuring or surveying quality. Benchmarking: The process of distinguishing what is best in a particular segment

to achieve best practice outcomes in that division.

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http://dx.doi.org/10.1108/01443579510083622

http://dx.doi.org/10.1108/eb039332

http://dx.doi.org/10.1108/02656711311299845

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Best of Class: The term usually used to allude to a higher product, despite the fact that it can also be used to allude to larger process. It is all the more commonly employed in product development companies.

Best Practices: A superior practice, giving excellent results in a particular field. Brainstorming: A formal technique of creative problem solving under the

guidance of a facilitator. Measurement of the Benchmark: The quantitative measures related with the

production process. They are used to evaluate the limit of the process itself and its results.

Strategic Option: The choices that worry the future improvement of the organization. These incorporate going into new exercises, deciding the geological extension, choosing the methodology of advancement, cost strength differentiation specialization diversification integration, and outsourcing internationalization.

Xerox: A USA company based in Connecticut primarily recognized as the inventor of the xerographic copier and the leading printer manufacturer. Its laboratory, the PARC, invented windowed interfaces.

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Section 2

Management Case Study

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DOI: 10.4018/978-1-5225-3906-3.ch006

ABSTRACT

In a digital era, characterized by shared decision-making, and where web-based management is increasingly widespread, the term school “leader” may also refer to the highest-ranking administrator, who manages a complex organization, leads teachers, as well as those who participate in school leadership activities, using and managing digital supports. The school leader is always the first and foremost person in ensuring the efficiency in running the school and the effectiveness of the educational politics application. Nowadays, this role includes new duties and needs an equipment for new skills. Education world and policy makers alike seek a frame for effective leadership that can produce sustainable school improvement and continuous teacher commitment. The research finality of this chapter is how to manage the educational change, to train principals/headmasters to be decision leaders, able to recognize and manage the change, choose right collaborators/ coadjutors with the perspective of a factual team building.

INTRODUCTION

The starting point of this research is the statement that the current technological advancement has multiplied the difficulty of managing an innovative school system, in changing to guarantee training of youth, common people, managers, entrepreneurs

Orientism Management Strategy for Entrepreneurial

Mindset in the School Governance

Luisa dall’Acqua Scientific Lyceum TCO, Italy & Live Editions Inc, USA

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and researchers to become real decision manager in a complex multi-referenced digital world. Especially it focuses on the internal “diversity” in a school, the variety of backgrounds, interests, knowledge, skills and personality in a school team, with possible three different processes: top-down process by politicians, catalyst process by School Leaders and their team, and botton-up process by teachers and students, connected in a community of practice. This analysis intends to put key questions and related criticities of School Leadership, proposing a conceptual interpretation, possible strategies and tools to manage.

The work refers to the recent Italian Educational Reform, titled “The good school”, and the National Digital School Planis. According to Orientism Management (OM) framework, the analysis put in evidence the new enterprenieural mindset of the principal, that makes a necessary paradigm change, based on computational thinking and project culture, and strategies of middle management.

The here proposed research is intended to ease this described situation by providing a solution to train School Leaders of all sectors in “state of the art” techniques and paradigms of modern pedagogy and knowledge management.

BACKGROUND

Around the beginning of the twentieth century, as schools grew from one-room schoolhouses into schools with multiple grades and classrooms, the need arose for principals/headmasters 1 to manage these more complex organizations, responsible for a range of sectors, such as:

• To manage financial operations • To supervise building maintenance • To schedule students, their incoming and outbound orientation • To manage numerous personnel (administrative, teaching and maintenance

staff) • To deal with public relations • To keep watch school policy regarding discipline • To coordinate the instructional program

The management role included some curriculum and instruction supervision. Until the early 1980s, school management was the primary role played by

principals. But, increasingly, the role of principal changed from school manager to school instructional leader, and finally to the school reform leader. This is because, in a society characterized by hyperactive dynamic shared knowledge, continuously subject to reviews and discussions, cross media based, with multiple confused

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reference points and overload of information, the school reform leader becomes a catalytic agent:

• To interpret innovative education policy • To define new contextualized educational needs • To improve didactics, based on flexible learning and computational thinking 2 • To select specialized educational human resources, techniques and technology

of support, which are creative and at the state of the art of the development.

A Case Study: The Principal’s Profile in the Italian Education Policy

Historically, Legislative Decree 165/2001 described the Italian school administrator profile, and in art. 25 the specific executive role3. It established a delicate balance between the size of single member of the executive (with responsibilities, its “independent powers of management”, its managerial discretion, etc.) and “distributed” management, i.e. the reference to the professional community, the collective bodies, links with the territory, with the commitment to develop the professional resources, to perform functions of planning coordination. The principal meant as community builder, therefore, as well as a public official with the burden of the achievement of objectives.

The new educational scenario changed in a complex and multiple way. It concerns: a) environments (physical, digital and educational scenarios), b) student’s needs, for overloaded, multi-referenced and accelerated information, c) relationship between agents (student, teacher, tutor, parents, institutions), d) interaction and navigation with technologies. Therefore, the recent Italian Law 107/2016 specifies new roles for the principal: besides defining management and administrative choices, profile and activities of the whole school (comma 4), the principal, “respecting the competences of collegial bodies and confirming the unitary and national levels of use of the right to study”, has to guarantee (comma 78):

• Effective - efficient management of human resources • Financial, technological and material resources • Uniformity to the public scientific system • Responsibly, results of the service (learning and professionalism in both

teachers and students)

Therefore, according to the 2016 Italian Reform, new and more commitments are required to principals. In synthesis, they are:

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• E-Government Activities: ◦ To activate innovative projects about dematerialization, interoperability,

technology infrastructures) ◦ To reorganize (process reengineering) the school function diagram ◦ To improve performance and efficiency with attention to quality and

usefulness of the results ◦ To define and implement the Regional Digital Agenda, contributing to

the design and development of a Smart City • Open Government Activity, Practicing:

◦ Access to open information and data ◦ Participation (listening and consultation), collaboration and

accountability ◦ Using technology as a qualifying factor for citizens’ relationships and

effectiveness of internal innovation processes • Innovative Design and Solutions:

◦ Not limited to digitizing existing document flows and processes, but ◦ To take into account the opportunities for innovation that the potentialities

of different application solutions can offer for knowledge management and data management (eg big data, open data)

• Procurement of Innovative Digital Services: ◦ To activate projects and initiatives, that enrich the quality of services, ◦ To rely on the support of technicians ◦ To have critical capacity and interaction to identify the most effective

solutions • Safeguard of Digital Citizenship:

◦ To ensure the respect of the principles of digital citizenship in an inclusive and disseminated way

◦ To activate initiatives that make the rights of digital citizenship practicable (digital identity, privacy, and security, access to information)

FROM MANAGER TO LEADER

Traditionally, a principal should:

• Encourage the teaching/learning process by recognizing existing resources in the school and giving value to their work

• Be the true interpreter of pedagogical, sociological and educational aspects regarding the cultural sector and the promotion of human resources

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• Be the one who cares about relations with the territory by taking a leading role in coordinating the organization, in terms of the management scope, mastering the context, creating and developing the context of collaboration and a new offer

However, the leading process, able to change the school manager in School Leader, adds new focus in the role, such as (see figure 2):

Figure 1. XXI century school change

Figure 2. From school manager to school leader

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• Being an experimenter of innovative solution challenging the status quo and inspiring ideas to the teachers

• Improving and encouraging people rather than focusing just only on the school system

• Working suitable for problems

There is a wide and ever growing variety of theories to explain the concept and practice of leadership.

Most theories view leadership as grounded in one or more of the following three perspectives: a) leadership as a process or relationship, b) leadership as a combination of personality characteristics, c) leadership as certain behaviors or, as they are more commonly referred to, leadership skills.

Just quotes: “Leadership is persuading people to set aside, for a period, their individual goals, with the goal of achieving a common goal, important for the group’s responsibility and well-being.” (Hogan R., Curphy, Hogan J., 1994). “Leadership helps to make the taken decisions in action. There is leadership when some people, with motivation and determined goals, mobilize resources to activate, engage and meet the motivations of others” (A. Leigh, 1994). “Leadership is the quality that makes some people capable of driving others in the realization of certain activities. Leaders must achieve stability within the group, resolve conflicts, stimulate change and further improve the growth and development of the group “(Di Nubila, 2002).

The question is: what is the most appropriate leadership profile for the specific school context?

School Leadership as Open Relationship Skill

According to PENTHA approach [dall’Acqua, 2014], the main leadership needs, to be effective and productive, in addition to activating performance of collaboration and cooperation, are:

• Knowledge Level (K-L): ◦ By interactions, to generate a significant flux of communications

and coordination of actions (reinforcement knowledge process) by processing meaning

◦ To implement cooperation through knowledge management protocols, such as sharing, level of specialization of the agents (collection or creation of content) and sharing of the work (distributed allocation)

◦ To manage factual information and access content, as well as procedural knowledge and best practices, towards “reduction of complexity”

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◦ To find related stuff, integrating distributed knowledge ◦ To realize and manage knowledge awareness and data meaning

management in a network of relationships ◦ To realize and manage consciousness transfer in a knowledge interface

phenomenon ◦ Not last, to realize and manage “spirals” and re-birth, or re-purposing,

of different knowledge (patterns), emerging in different forms • User Level (U-L):

◦ To realize a degree of connectedness, as a function of the density of connected agents, speed, and flow of shared information, plasticity and frequency of created connections

◦ To realize periodically interaction between all the agents, to understand problems, mitigate risks and remove the roadblocks

◦ To manage a complex network with numerous typologies of nodes and connections of knowledge, skills, communication, representations, relationships, technologies and multi-paradigm

◦ To manage own emotional and social intelligence (see below, KMF) ◦ To improve problem-solving, networking and bridging skills: expertise,

design and organizational competence, ability to operate systematically in terms of processes and products

◦ To optimize the entire range of (structural-, logistic-, material-, economic-functional-, human- and professional-) resources and make them synergically working with system targets

• Environment Level (E-L): ◦ To facilitate information management by archiving all communications

and interactions within an e-environment to access and share for future activities

◦ To enable an effective capture of the tacit knowledge (e.g., experience, intuition, creativity) that is missed with traditional knowledge management systems, that focus on document archiving (i.e., explicit knowledge)

◦ To promote communication and logistical coordination among (geographically distributed) workforce members through the use of communities of practice (CoPs) and collaboration tools

◦ To scan and report pathways of individual/social actions ◦ To facilitate an intelligent and creative learning/business atmosphere

that will allow employees the freedom to capture the knowledge that is up to date and accurate

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Project Mindset

A prerequisite in the cultural background of the School Leader is to own or practice a design culture, to give concrete and coherent implementation to innovative logic.

This analysis refers to the Orientism Management concept [dall’Acqua, Md Santo, 2014] to describe School Leader’s risk management. The framework dedicates attention to different “plans” in the decisional process:

• Prescriptive Plan: How School Leaders should reason • descriptive Plan: How they reason • Social Plan: What type of reasoning motivates the decisional action in terms

of efficacy and efficiency • Communicative Plan: What type of reasoning is recognizable • Management Plan: What conditions guarantee “order” in a process, against

networking, understanding, and learning “chaos” • Tutoring Plan: How School Leaders can be supported in their choosing

process • Historic Plan: How a diachronic vision (history) of the issues and own

previous experiences can lead decisions • Comparative Plan: How a synchronic vision (comparing transversal

situations and conditions) can lead decisions • Creative Plan: How to innovate • Simulation Plan: How to simulate cases study

Key points of Orientism concept are:

• The creation of new models of behavior • The simultaneity of how we process information • Larger pieces of human experience are to be put together to achieve success • The complex interconnection between reference points

New variables, factors, and criteria are needed to direct and motivate the mind in the decisional process, in self-reference, to be considered in a lifelong guidance to have success in choices, assumptions of responsibilities and achievement of objectives, over the uncertainty.

OM is composed by intertwined 10 Knowledge Management (KM) typologies, each based on areas of development and improvement of own personal leadership: KM with consciousness (3 levels), meaning, feeling, will, understanding, personalization, availability, synergy.

The outcome is the design of a training strategy for School Leaders.

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Figure 3. Decisional process planning

Figure 4. KMs of OM strategy

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1ST KNOWLEDGE MANAGEMENT WITH CONSCIOUSNESS

(Low Level): KMC/L

As Orientism’s component, it focuses on the learning “TO KNOW WHAT” by the School Leader. It means to activate a prescriptive plan, that concerns a knowledge base of an updated regulatory guide, according to own school profile, educational needs, and a possible offer.

SWOT Analysis

• Strength Points: ◦ Solid identity and high professional identification ◦ Compulsory education

• Weakness Points: ◦ Increasingly complex schools ◦ Deep change in the management paradigm

• Opportunities: ◦ School Leader as crucial agent of the innovative educational process ◦ Getting better remuneration

• Threads: ◦ Excessive (or contradictory) legislation ◦ Low financial resources to invest (needs of funding)

Training to Improve KMC/Low

In PENTHA model approach, training for School Leaders is to apply FORMING mode: a method concerning a) a topic introduction to making pre-service School Leaders aware of the school reality, introducing to the role through normative, with a robust case of studies to apply it, and b) an increasingly updating of law for Principal in service. The training purpose is to empower attitudes, according to vision, professionality, and dedication to the role.

Table 1. KMC/low according to OM model, with related focused tutoring modes

Knowledge Management Learning To Empower According to

Focused Tutoring Modes

with (Low) Consciousness KMC/l

to know what Energy, Action Future

Passion, Vision, Profession

Forming

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2ND KNOWLEDGE MANAGEMENT WITH CONSCIOUSNESS

(Medium Level): KMC/M

As Orientism’s component, it focuses on the learning “TO KNOW HOW” by the School Leader. It means to activate a management plan, concerning how to provide efficacy and efficiency by a distributed management.

SWOT Analysis

• Strength Points: Needs of leadership paradigm change • Weakness Points:

◦ Multiplicity of responsibilities ◦ Mistakes of leadership ◦ Employees coordination in relation to the process of change

• Opportunities: ◦ School middle management ◦ School digital promoter

• Threads: Low or not adequate human resources

Figure 5. SWOT analysis of KMC/low

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Distributed Leadership: School Middle Management

Speaking about top management includes the need of circulation of information top down and bottom up, and connection by all members, focus on quality of contributions, and valorization of critical, creative and strategic thinking.

According to 2016 Italian Reform, to accomplish leadership tasks, principals can choose and be supported by a maximum of 10% of employees (Law 107/16, comma 83), that can be invested in collaborative functions in the school’s organizational and didactic structure, at different levels, responsibilities and competencies: collaborators, instrumental function, projects’ referents, coordinators of department, work team.

The “coadjutors” are not simply “collaborators” of the principal: they support the executive management of the school in various ways and are the real “middle management”.

To apply this organization principals have to manage a strategic use of delegation (supposing sufficient incomes for their additional workload, besides teaching).

This means several main possible critical factors of management, such as absence of candidates, not competent candidates, not competent but available candidates, competent but insecure or embarrassed candidates from the context, leadership mistakes.

To analyze the problem, this study refers to a few historical leadership theories, evaluated among the most suitable theories: Situational Leadership of Hersey and Blanchard [1982] and Formative / Supporting Leadership of Black and Moudon [1994].

Figure 6. SWOT analysis of KMC/medium

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Case 1: Unqualified Person

It is a common situation in a school, and often principal has not the choice to delegate duties.

If coadjutors are unqualified persons for the required role, so they need precise instructions on the job to be performed, and specific knowledge of legislation and procedures.

The principal takes on the directive role of “telling leader”, who makes decisions for the coadjutors, plans and organizes their work.

Criticism in criticism: keeping active the relational level, not to risk overcoming too much the coadjutor’s initiative.

Case 2: Available Person, but Not yet Competent

It’s the case of a person, willing to professional development, to take responsibility, but not yet able to do the assigned work.

The principal takes on the role of “coaching leader”, who has the responsibility of the decisions, but explains and motivates them, with the aim of actively involving the collaborator

It makes the relational level high.

Case 3: Competent but Insecure Person

It’s the case of a competent coadjutor, but uncertain for fear of liability, non-inclusion in the context, or no sense of belonging

The principal takes on the role of “empowering leader”, who is participative, decides together with the collaborator the decisions be taken to facilitate the work of the coadjutor.

The relational level is high, in support, reassurance, empowerment, trust.

Case 4: Competent, Responsible, Reliable, Self-Confident Person

It’s the case of an autonomous coadjutor, able to set goals, following the principal’s guidelines.

The principal takes on the role of “delegating leader”, who defines the general reference work-guidelines, communicates the willingness to be of help and support, supervises and controls the results (not the process).

It keeps the level of interaction within limits.

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School Leadership’s Possible Mistakes

To be a coach leader means to direct managerial action not to the achievement of the assigned work result, but to the development of the skills and attitudes of the team members. It means not just speaking about goals, but also and above all how to achieve these goals. It means replacing support, team management, and personalized development, with push and pull logic.

Managing the previously described main situations, the principal can fall in the following common behavioral mistakes:

• Connected With the Level of Maturity of the Staff: ◦ To assume a style too much directive, risking to become authoritarian ◦ To assume a style too much supporting, risking to become paternalistic ◦ To assume a style too much persuasive, risking to become handling ◦ To assume a style too much participative, risking paralysis in the

relationship ◦ To assume a style too much delegating, risking to assume an attitude of

“passing the buck” • Connected With the Public Image or Perception of the Principal:

◦ Perceiving a self-centric leader, rather than coadjutor’s centric relationship and their organizational growth; or a failed leader (laxism).

◦ On the other hand, not perceiving level evolution signals in coadjutors or signs of inadequacy of an assigned role

• Connected With the Judgment of People: ◦ Employees, always classified into two categories: motivated and

reliable or lazy, irresponsible, incapable; competent (left in peace) or incompetent (always checked)

◦ Employees, always classified equal, at medium level, causing not sufficiently understanding or minor management of crucial situations (between motivational support and professional reinforcement)

• Connected With the Principal Attitude: ◦ With tension “to run the game”, for needs to feel “indispensable”, and,

usually with a very specialized vision of the school and no graduation in the assignment of tasks

◦ Feeling the need to get rid of the coaching role, with the consequent risks of overloading the available collaborative employee, or too early delegating on, and leaving alone the coadjutor, without guidance, resulting in loss of control

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◦ With high expectations of results, leaving crucial situations in the hands of people who are not adequately competent but available, and the possible consequent disappointment or damages without forecasting

A Key Support: The School Digital Promoter

According to the 2016 Italian Reform, a key school coadjutor is who is titled Digital Promoter (literally, “Animatore Digitale”). This one is a crux between a scrum master and an instructional designer: is a project manager, as well a technological resources manager and a focal point for digital teaching activities.

• As a project manager, the School Digital Promoter: ◦ Develops a vision of the structural change of the school through

technology, in collaboration with the School Leader and in accordance with the three-year plan of the training offer;

◦ Coordinates the implementation of activities with the help of skills and abilities of fellow teachers, teachers in the network of schools, and external experts

◦ Stimulates collaboration within the school community ◦ Monitors technology, digital activities, efficacy and efficiency

• As a focal point, the School Digital Promoter: ◦ Is the medium between the school and the territorial professional

community ◦ Identifies and feeds good practices and opportunities ◦ Stimulates openness and collaboration with other schools and with the

subjects of the territory

This role is flanked by three teachers (titled “Team of Innovation”), those who support ten teachers (with the role of “Digital Experimentators”).

Training to Improve KMC/Medium

In PENTHA model approach, training for pre-service Principals is to apply MODELING, PERFORMING and SCAFFOLDING modes. Modeling is a method for which the Tutor demonstrates how to perform a task It means to give a robust case of studies to the School Leader. Performing is a method to push School Leader on motivation and attitude in a performance. Scaffolding is a method with focus on favoring the adaptation of the knowledge/learning path taken, a reflection on the actions developed by the School Leader, stimulated by the Tutor

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The training purpose is to empower skills, effective awareness of the role and work outcome, according to professionality, vocation, and mission of the role.

3RD KNOWLEDGE MANAGEMENT WITH CONSCIOUSNESS

(High Level): KMC/H

As Orientism’s component, it focuses on the learning “TO KNOW WHERE” by the School Leader. It means to activate a descriptive plan, concerning contextualized design and action

SWOT Analysis

• Strength Points: ◦ To can control the management process as “action pin” ◦ Knowledge of the territory and its resources also for guidance activities

• Weakness Points: Work on multiple sides • Opportunities:

◦ Private funding ◦ Top down a bottom-up support

• Threads: To identify critical contextualized relationships

The main critical contextualized issues, on which focusing the management, are to identify the criticalities and potentials associated with the relationship between School Leader and Collegiate Bodies, Unions, Government, Family, Region and Local Authorities, Professional Organizations, Technical, companies and other stakeholders.

Training to Improve KMC/High

In PENTHA model approach, training for School Leaders is to apply NARRATING mode. It is a method concerning two different aspects: a) introduction of the topic

Table 2. KMC/medium according to OM model, with related focused tutoring modes

Knowledge Management Learning To Empower According to

Focused Tutoring Modes

with (Medium) Consciousness KMC/m

to know how Role, Skills, Work Vocation, Profession, Mission

Scaffolding, Modeling, Performing

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to attract the attention of School Leader, appreciating of different leadership styles and different forms of intelligence; b) to encourage School Leaders to verbalize their experiences, not only for dutiful reports but also in a personal e-portfolio. The training purpose is to empower skills, effective actions and work outcome, loving the profession and according to professionality, mission, and passion of the role.

4TH KNOWLEDGE MANAGEMENT WITH MEANING: KMM

As Orientism’s component, it focuses on the learning “TO KNOW WHY”, that the School Leader needs to manage. It means to activate a social plan, concerning a reasonable motivation for decisional actions in terms of efficacy and efficiency.

SWOT Analysis

• Strength Points: Solid regulatory system • Weakness Points: Lack trust and conviction in the Reform

Figure 7. SWOT analysis of KMC/high

Table 3. KMC/high according to OM model, with related focused tutoring modes

Knowledge Management Learning To Empower According to

Focused Tutoring Modes

with (High) Consciousness KMC/h

to know where Work, Action, Love

Profession, Mission, Passion

Narrating

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• Opportunities: Professional Upgrade Courses • Threads:

◦ Hostile teachers’ collegiate body ◦ Hostile school board

Training to Improve KMM

In PENTHA model approach, training for pre-service School Leaders, as well in-service, is to apply COACHING and NORMING modes. Coaching is a method in which the Trainer actively supports the School Leader motivating, analyzing performance, providing feedback, reflection on assignment, stimulating discussion about the method adopted. Norming is a method to optimize high-performing, effective behaviors

The training purpose is to empower work, purposes and future development of the school, according to professionality, vision, and mission of the role.

Figure 8. SWOT analysis of KMM

Table 4. KMM according to OM model, with related focused tutoring modes

Knowledge Management Learning To Empower According to

Focused Tutoring Modes

with Meaning KMM

to know why Work, Purpose, Future

Profession, Vision, Mission

Coaching, Norming

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5TH KNOWLEDGE MANAGEMENT WITH FEELING (KMF)

As Orientism’s component, it focuses on the learning “TO KNOW MOVING (TOWARDS)”, by School Leader to activate a change of perspective or action. It means to activate a general personalized tutoring plan, concerning how to support School Leaders in their personal choosing process.

SWOT Analysis

• Strength Points: Emotional intelligence • Weakness Points:

◦ Difficulty to manage stress ◦ Weak attitude with subordinates

• Opportunities: Balanced human resource support • Threads: Strong hostility between teachers or with other School Leaders

In operational meaning, emotional intelligence is a set of soft skill for a School Leader. It consists in:

• Personal Emotional intelligence is the ability to manage oneself, own inner environment, autonomy, self-critique, assumption of responsibility (internal ecology)

• Social-Emotional intelligence is the ability to manage relationships, the external social environment (external ecology)

Figure 9. SWOT analysis of KMF

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Successful school leaders are team-builders. They understand the importance of relationships, empower their staff and pupils and show great empathy. “Get the relationships right – open, trusting, humorous – and much else follows naturally,” says Kingsbridge Community College principal, Roger Pope. “They feel motivated. They want to follow you” 4.

Internal Ecology

Governing Personal Emotional intelligence can support School Leader to understand the circumstances and causes that trigger them. Main behavioral features are:

• Self-Mastery or Self-Control: ◦ Knowledge how to handle anxiety and emotions in a reasonable and

profitable manner even under stress, learning to temper reactions ◦ Attitude of tolerance and understanding of opinions other than theirs

(interest in understanding them) • From Egocentrism to Social Self:

◦ Availability to listen and understand the other (active listening), to identify oneself with the other (empathy, tuning), to appreciate the contribution of others, enhancing them

◦ Knowledge how to think as a community, as well as individuality • Inner Strength:

◦ Self-esteem, but not arrogance ◦ Capacity and availability for self-learning ◦ Assertiveness (affirmation of self and ideas in constructive terms) ◦ Enthusiasm (the pleasure of working and solving problems) ◦ Self-motivation, overcoming difficulties

• Voltage to the Result: ◦ Mental orientation towards the production of concrete results and

solutions, together with others ◦ Professional discipline

External Ecology

Governing Social Emotional intelligence can support School Leader to relate positively to others and to interact constructively with them. Main behavioral features are:

• Understanding the Other: Interpersonal communication skills in public speaking (verbal and para-verbal)

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• Authority and Leadership: ◦ Ability to influence others’ behavior by making them useful to the

organization and to task ◦ Knowledge how to manage with authority and flexibility rather than by

virtue of the authority conferred ◦ Actively act as Coach of your team of coadjutor, co-workers, and

subordinates ◦ Knowledge how to motivate your collaborators, to delegate when

appropriate, possible and without prejudice to security; to decide to risk (under calculated risk conditions)

• Pushing to Continuous Improvement: ◦ Attitude to solving problems rather than looking for faults ◦ Monitoring the progress of projects, studies, interventions and capitalize

on acquired know-how ◦ Attitude to support innovative ideas and improvement ◦ Knowledge how to promote lifelong learning, self-learning ◦ Skills immediate positive and, if necessary, negative feedback on the

performance • Driven by the Institution’s Result and Image:

◦ Knowledge how to dress up the institutional roles (manager, member of a group, public representative of an institution, institutional leader, spontaneous, subordinate, participating in a working group etc.)

◦ Knowledge how to get the same from your co-workers and coadjutors ◦ Ability to promote the image of the institution both inside and outside ◦ Availability to offer the best of your skills and commitment

Training to Improve KMF

In PENTHA model approach, training for School Leaders is to apply COACHING (see KMM training), NARRATING (see KMC/h training), FADING and REFLECTING modes. Fading is a method for adjusting and adapting the learning path according to the achievements of the Learner until the proof of his positive capability in full autonomy. Reflecting is a method which pushes to compare own difficulties with an Expert/Tutor and encourages them to perform pull actions. Reflection is the vehicle for critical analysis, problem-solving, synthesizing of opposing ideas, evaluation, identifying patterns and creating meanings. The training purpose is to empower spirit of service and love in the role, according to own vocation, passion for the mission.

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6TH KNOWLEDGE MANAGEMENT WITH WILL (KMW)

As Orientism’s component, it focuses on the learning “TO KNOW EXPERIENCING”, a process that the School Leader needs to activate and control. It means both historical, comparative and simulation plans, about analyzing, using own, and other’s previous experiences, comparing transversal situations and conditions, to make decisions, using also virtual simulation tools.

SWOT Analysis

• Strength Points: Scientific analysis of the decision process • Weakness Points:

◦ Mistakes of leadership ◦ Not adequate or not updated competences

• Opportunities: ◦ Tools for reflecting activities or repository or decision simulation ◦ Sharing of ideas between peer

• Threads: Low or not adequate human resources

Training to Improve KMW

In PENTHA model approach, training for School Leaders is to apply FADING (see KMF training) and PERFORMING (see KMC/m training) modes. The training purpose is to empower factual actions, the spirit of service, and soft skills, according to own passion, vocation and professionality.

Table 5. KMF according to OM model, with related focused tutoring modes

Knowledge Management Learning To Empower According to

Focused Tutoring Modes

with Feeling KMF to know moving Role, Love, Spirit Vocation, Mission, Passion

Coaching, Reflecting, Fading, Narrating

Table 6. KMW according to OM model, with related focused tutoring modes

Knowledge Management Learning To Empower According to

Focused Tutoring Modes

with Will KMW to know experiencing

Action, Skills, Spirit

Passion, Profession, Vocation

Fading, Performing

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7TH KNOWLEDGE MANAGEMENT WITH UNDERSTANDING (KMU)

As Orientism’s component, it focuses on the learning “TO KNOW ENABLING”, that the School Leader needs to improve. It means to activate tutoring, as well management and social plans.

SWOT Analysis

• Strength Points: ◦ Sharing project and organizational design guidelines by verifying their

financial compatibility ◦ Acquisition of information on the organizing work and security system

(structural, hardware/software, web) • Weakness Points:

◦ Timing difficult to reconcile with deadlines of planned commitments ◦ Progressive reduction of support activity ◦ Difficulty in immediate intervention ◦ Lack of timely responses ◦ Little knowledge and attention to school issues by teachers

• Opportunities: ◦ Comparison between peers (Principals) of existing issues and regulatory

clarifications ◦ Use of regional expertise to solve internal issues ◦ Creation of internal/external networks

Figure 10. SWOT analysis of KMW

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◦ Possibility of establishing partnerships, protocols of understanding, partnerships with private and business associations

◦ Quality controls as feedback to be analyzed • Threads:

◦ Little dialogue with families ◦ lack of convergence in educational goals between partners ◦ Too much commitment to School Leader involves high risk of errors

In assessing the activity of the school principals, according to the Italian Educational Reform, the analysis takes into account the socio-economic context in which they work and the results of the processes activated to achieve the goals defined by the school within the purpose of the offered training.

Specifically, the evaluation is carried out through indicators identified taking into account the executive’s contribution to the pursuit of the results for the improvement of the school service provided for in the self-assessment report and the general criteria laid down.

Example of categories of indicators: direction and organization of the school institution; internal and external relations; innovation and development; valuing human resources and managing financial and instrumental resources available.

Training to Improve KMU

In PENTHA model approach, training for School Leaders is to apply COACHING (see KMM training), NARRATING (see KMC/h training), FADING (see KMF

Figure 11. SWOT analysis of KMU

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training), NARRATING (see KMC/h training), REFLECTING (see KMF training), SCAFFOLDING (see KMC/m training), and, in addition, EXPLORING modes. Specifically, Exploring is a method, which forces the Principal to solve problems with new or alternative solutions. The construction of knowledge occurs through the observation and the transformation of experience. The training purpose is to empower awareness of the possible developments and soft skills, according to the vision of the future, own vocation and professionality.

8TH KNOWLEDGE MANAGEMENT WITH PERSONALIZATION (KMP)

As Orientism’s component, it focuses on the learning “TO KNOW CHANGING” by the School Leader. It means to activate a creating plan to improve new dynamics, relations, and balance.

SWOT Analysis

• Strength Points: Personal coordination with regard to the process of change • Weakness Points:

◦ Fear of change ◦ Tendency to individualism

• Opportunities: Research new relationships with the work environment • Threads:

◦ Issues related to pre-adolescence and adolescence ◦ Resistance to change by teachers and/or families

Training to Improve KMP

In PENTHA model approach, training for School Leaders is to apply both SCAFFOLDING (see KMC/m training) and STORMING modes. Storming is a method

Table 7. KMU according to OM model, with related focused tutoring modes

Knowledge Management Learning To Empower According to

Focused Tutoring Modes

with Understanding KMU

to know enabling Awareness, Skills, Future

Vision, Vocation, Profession

Coaching, Narrating, Exploring, Reflecting, Scaffolding, Fading

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concerning effective communication, conflict resolution. The training purpose is to empower awareness of the role of any involved agent, related to the goal, according to the vision of the future, own vocation, and own mission.

9TH KNOWLEDGE MANAGEMENT WITH AVAILABILITY (KMA)

As Orientism’s component, it focuses on the learning “TO KNOW OPENING” towards people, environment, future and perspectives, interpretations by the School Leader. It’s part of both creative and social plans, already described.

SWOT Analysis

• Strength Points: Vertical curriculum, where educational continuity between school orders can lay the foundation for successful training, builds the educational alliance of a territory

Figure 12. SWOT analysis of KMP

Table 8. KMP according to OM model, with related focused tutoring modes

Knowledge Management Learning To Empower According to

Focused Tutoring Modes

with Personalization KMP

to know changing Role, Awareness, Purpose

Vocation, Mission, Vision

Storming, Scaffolding

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• Weakness Points: Not in-depth knowledge of other areas of school, both from an organizational point of view and from the point of view of acquiring knowledge and professional skills

• Opportunities: ◦ Experimenting with cross-design projects on different stakeholders by

exploiting the different experiences and professionalism in the different sectors

◦ Active involvement of students ◦ Opening and dialogue with families

• Threads: In the interest of continuity of methods and strategies in a vertical curriculum the school may lose the specificity of its field

Training to Improve KMA

In PENTHA model approach, training for School Leaders is to apply FADING (see KMF training) and STORMING (see KMP training) modes. The training purpose is to empower awareness of the role of any involved agent, with energy and spirit of service, according to the vision of the future, own vocation and passion.

Figure 13. SWOT analysis of KMA

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10TH KNOWLEDGE MANAGEMENT WITH SYNERGY (KMS)

As Orientism’s component, it focuses on the learning “TO KNOW DEVOTING” towards work, goals, relationships by the School Leader. It’s on the base of all plans, specifically, it’s part of a social plan.

SWOT Analysis

• Strength Points: Resistance to a very complex job for passion and strong vision of own administration

• Weakness Points: No tuning with College of Teachers • Opportunities: Financial and operational tools by Government to be able to

accomplish innovation • Threads: Too fast changes in legislation, sometimes contradictory

Table 9. KMA according to OM model, with related focused tutoring modes

Knowledge Management Learning To Empower According to

Focused Tutoring Modes

with Availability KMA

to know opening Awareness, Energy, Spirit

Vision, Vocation, Passion

Storming, Fading

Figure 14. SWOT analysis of KMS

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Training to Improve KMS

In PENTHA model approach, training for School Leaders is to apply FADING mode (see KMF), especially adjusting and adapting the decision path according to the achievements of the School Leader, until the proof of a synergetic rhythm of work and positive feedbacks.

FUTURE RESEARCH DIRECTIONS

The following step is a new concept of e-environment, called “Pathways”, characterized by new functionalities and an innovative UI, belonging to SONO Knowledge Technology, Global contributing Knowledge Cells (KC) Technology.

The project describes an advanced, intelligent educational learning, simulation, and exercise environment, assisted by an artificial intelligence (AI) skeleton framework, driven and developed based on latest state-of-the-art pedagogical, didactical and Knowledge Management concepts and paradigms. It focuses on the described innovative approach and concept to allow prospective and in-service School Leaders to test their intended managerial approach in a simulated, near reality “school world” representing known educational/administrative environments. It can be applied by Government to train and evaluate managerial activities of School Leaders.

CONCLUSION

The present contribution intends to be a theoretical as well practical guideline for School Leaders, as decisionmakers, to manage tasks towards goal, and to understand what elements are useful to own personal and professional development to optimize performance.

The proposed approach interprets the fluid nature of the decision-making process, looking at knowledge and knowledge activities as dynamic, adaptive and self-regulative, based not only on well-known explicit curricular goals but also on

Table 10. KMS according to OM model, with related focused tutoring modes

Knowledge Management Learning To Empower According to

Focused Tutoring Modes

with Synergy KMS

to know devoting Purpose, Energy, Love

Passion, Vision, Mission

Fading

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unpredictable interactions and relationships between players. The knowledge process is emerging in human and biological, social and cultural environments. This process is oriented orient on the internal “diversity”, the variety of backgrounds, interests, knowledge, skills and the whole personality of the trainees, individually or within in a work team.

REFERENCES

Bandler, R., Robert, A., & Fitzpatrick, O. (2013). An Introduction To Nlp. Harper Collins Publishers.

Black & Moudon. (1994). The Managerial Grid. Gulf Publishing.

Cheong, R.K.F., & Tsui, E. (2010). The Roles and Values of Personal Knowledge Management: An exploratory study. VINE, the Journal of Information and Knowledge Management System, 40(2), 204-27.

Cheong, R.K.F., & Tsui, E. (2011). From Skills and Competencies to Outcome-based Collaborative Work: Tracking a Decade’s Development of Personal Knowledge Management (PKM) Models. Knowledge and Process Management. The Journal of Corporate Transformation, 18(3), 175-193.

dall’Acqua, L., & Santo, M. (2012). New interpretative paradigms to understand and manage the unpredictability of the dynamics of learning in a complex multi-user knowledge environment. Proceedings of Artificial Intelligence Workshop 2012 on Collaboration and Intelligence in Blended Learning, 92-9.

dall’Acqua, L., & Santo, M. (2014). Orientism, the basic pedagogical approach of PENTHA ID Model vs. 2, to manage decisions in unpredictability conditions. Proceedings of World Congress on Engineering and Computer Science WCECS2014, 1, 316-21.

dall’Acqua, L. (2014). Needs and strategies of KM in a multi-user environment: PENTHA Model view and analysis. In Jekpot KM19, Milano, Italy.

Downes, S. (2010). The role of the Educator in PLE World. Retrieved from http:// www.slideshare.net/Downes/the-role-of-the-educator-in-a-ple-world

Everard, K. B. (2004). Effective School Management. Paul Chapman Publishing.

Gardner, H., & Hatch, T. (1989). Multiple intelligences go to school: Educational implications of the theory of multiple intelligences. Educational Researcher, 18(8), 4–9.

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http://www.slideshare.net/Downes/the-role-of-the-educator-in-a-ple-world

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Hannigan, T. (1998). Managing Tomorrow’s High-Performance Leaders. London: Quorum Books.

Hersey and Blanchard. (1982). Management of Organizational Behavior: Leading Human Resource. Prentice-Hall.

Law 107/2015 (Italy). (n.d.). Retrieved from http://www.gazzettaufficiale.it/eli/ id/2015/07/15/15G00122/sg

MacBeath, J. (2002). Effective School Leadership: Responding to Change. Paul Chapman Publishing.

Nardi, B. (1999). Context and consciousness: Activity theory and human-computer interaction. Cambridge, MA: MIT Press.

Reigeluth, M. (1999). Instructional-Design Theories and Models: A New Paradigm of Instructional Theory. Hillsdale, NJ: Lawrence Erlbaum Assoc.

KEY TERMS AND DEFINITIONS

Computational Thinking (CT): A problem-solving process that includes a number of characteristics and dispositions. CT is essential to the development of computer applications, but it can also be used to support problem solving across all disciplines, including the humanities, math, and science.

Digital Promoter: A teacher with strong organizational skills that will have the task of following the school’s digitization process.

Emotional Intelligence: Personal emotional intelligence is the ability to manage oneself, own inner environment, autonomy, self-critique, assumption of responsibility (internal ecology); Social emotional intelligence is the ability to manage relationships, the external social environment (external ecology).

Middle Management: In a school, a team of teachers responsible for implementing the school leader policy.

National Plan of Digital School (Italian PNSD): The guideline document of the Italian Ministry of Education, University and Research for the launch of an overall innovation strategy for the Italian school and for a new positioning of its educational system in the digital era. It’s a fundamental pillar of The Good School (Law 107/2015).

Orientism: A new multi-dimensional KM approach to improve the people’s ability to manage decisions and own change of perspectives, according to natural, social, artificial environments, in personalized multi-user dynamic, assigned value to multiple reference points and multi-interpreting paradigms.

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PENTHA Model: An instructional/knowledge design model focused on designing the KM environment, defining the (didactical) rules for an intelligent tutoring system, facilitating person’s change and enhancement.

Reform of “Good School” (Italy): Government gives the financial and operational tools to school leaders and teachers to be able to accomplish it.

School Leadership: The process of enlisting and guiding the talents and energies of educational community toward achieving common educational aims.

“The Good School”: Law 107/2015, an operational vision that reflects the Italian government’s position in relation to the most important challenges of innovation in the public system: the core of this vision is the innovation of the school system and the opportunities for digital education.

ENDNOTES

1 In this work we will use the title of “principal” to mean both meaning. 2 See key terms and definitions. 3 Since that season (Law 59/1997) enforcement measures sprang, among which

certainly still effective autonomy Regulation (DPR 275/1999) and the assignment of managerial qualifications (D.Lsg 59/1998).

4 See http://www.kingsbridgecollege.org.uk/.

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Chapter 7

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DOI: 10.4018/978-1-5225-3906-3.ch007

ABSTRACT

The aim of this chapter is to determine the key success factors for implementing a workplace skills plan (WSP). To obtain perspectives of department managers on the key success factors for implementation of a WSP in the Limpopo Department of Education, a quantitative research approach was used. A probability sample of 75 managers was selected. The sample was composed comprise 51% women and 49% men. Of the sample, 74% of the participating managers were members of the skills development committee. The study revealed various key success factors for WSP implementation that were determined by managers, which included aspects of information gathering to inform a WSP, aspects of skills auditing, aspects of compiling and submitting a WSP, aspects of implementing, monitoring, and evaluating a WSP, and aspects of reporting on an implemented WSP. The chapter provides insights for organisations in implementing a WSP according to the determined key success factors, identifies obstacles that may hinder the implementation, and recommends strategies that can be implemented.

Key Success Factors for Developing and Implementing

a Workplace Skills Plan Thea van der Westhuizen

University of KwaZulu Natal, South Africa

Proctus Lucky Shange Limpopo Department of Education, South Africa

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INTRODUCTION

Implementation of a Workplace Skills Plan (WSP) in South Africa raises a number of issues for skills development facilitators (Hattingh, 2004; Meyer, 2002; Hattingh, 2003; Paterson, 2008; van der Waldt, 2004; Regenesys, 2010; Hattingh & van der Walt, 2004). This chapter considers key factors that govern the success of WSP implementation in South African organisations, including gathering of information for a WSP, skills auditing, compiling and submitting a WSP, and implementing, monitoring, evaluating, and reporting on the WSP.

Each of these factors is important for skills development facilitators and human resource management and development departments of an organisation seeking to establish an accurate and well-informed WSP for the development of its employees. Unless line management and employees alike understand the significance of planning for skills development they are likely to give less than full support to a WSP, causing it to fall short of its objectives. Skills development and training processes need to be seen as a strategic priority of the organisation, with full support and buy-in from senior management. Challenges in this regard, and lack of knowledge regarding the implementation of a WSP, prompted the researcher to undertake a study on skills planning processes in the provincial department of education (hereafter referred to as “the DoE”) in South Africa that was the setting for the study reported here.

One step commonly taken by an organisation is to institute a quality management system for its skills planning and for development of its employees (van der Waldt, 2004). Van der Waldt (2004) states that a WSP must be in keeping with the performance management system and other human resource management practices, systems and procedures of the organisation, and that this requires sound information management to collect relevant information for skills planning (e.g. academic qualifications of employees, profile of work experience, etc.). Organisations are encouraged to use WSPs from previous years as baseline for building up this information system. Job descriptions that are plainly defined and linked to the priorities of the organisation enable it to identify skills needs that can accommodate change, organisational development and skills needs for the future.

Attention to the identified key factors makes it possible to develop a specifically focussed WSP that goes beyond just basic workplace skills needs and may include training for computer skills, report writing, financial management and the like. In the case of the DoE, rather than being seen simply as an instrument for strengthening compliance, its WSP thus needs to identify and address critical and scarce skills linked to key technical and functional areas within the DoE.

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BACKGROUND

Each year the DoE spends millions of rands on skills development training programmes for its employees, based on an annually compiled WSP. As described by Hattingh (2004), a WSP is a skills planning document indicating all the skills development programmes that an organisation needs to implement within a particular financial year. Its purpose is therefore to give strategic direction to skills enhancement so that employees play an optimally effective and efficient role in the work of the organisation.

Various concerns that have been raised by stakeholders in relation to key WSP factors in the development and implementation of a WSP in the DoE organisation have meant that the employer has not seen return on investment from the WSP, while human resource officials have been accused of lack of competence.

According to Crook et al. (2011), human resources (HR) practitioners initially focussed on areas such as recruitment and selection processes, personnel management and administration, and the terms and conditions which give an employer control over the workforce, with less attention given to the training and development of employees. When an insufficiently skilled workforce hindered production of goods and services and maximisation of profit the result would often be that employers chose to cut labour as their cost-recovery strategy, while employees chose to resign rather than wait for retrenchment (Crook et al., 2011).

The problem of skills shortages led to the establishment of human resource development (HRD) units to address lack of skills among employees and develop their capacity to contribute more productively within the organisation (Crook et al., 2011). This component in an organisation is referred to variously as skills development, training and development, or human capital development (Crook et al., 2011). In the DoE, the human resource development component is called Human Resource Utilisation and Capacity Development (HRU&CD).

According to Meyer (2002), these differences in terminology do not alter the primary responsibility of this component, which is to provide services of training and education of the organisation’s human capital and enhance its performance. Van der Waldt (2004) states that the role of human resource development is to increase the effectiveness and efficiency of employees in carrying out their work responsibilities, which leads in turn to organisational improvement and the attainment of both personal and organisational goals.

The task of an HRD division is to enhance employees with values, knowledge and skills through provision of appropriate education and training (Munzhedzi, 2011). This enables them to make a relevant and valuable contribution to the work of the

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organisation. Munzhedzi (2011) states in addition that the objective of training and development is to grow its human capital: namely the knowledge, experience, skills, creativity, and social and personality attributes that constitute an employee’s ability to execute tasks and yield economic value.

The HRU&CD unit in the DoE is tasked with similar responsibilities. It is a common tendency in both the public sector and the private sector for organisations not only to neglect the development of their human resources but also to re-allocate training budgets every financial year (Munzhedzi 2011) so that minimal skills development takes place. Lack of skills, as Munzhedzi (2011) points out, results in poor performance of work responsibilities, lack of inspiration, resignations by employees, job losses and retrenchment. From the perspective of employers, the delivery of services is poor and competent employees leave their jobs. According to Ziderman (1997, p. 352), lack of attention to human capital development is one of the factors that retards a country’s economic growth. Institutions that lack skilled and competent employees often spend more money on external service providers and private consultancies to do their work.

Government departments and private sector organisations in South Africa, and consequently also the DoE, are mandated to provide skills development opportunities to their employees in terms of the Skills Development Act No. 97 of 1998, the Skills Development Act No. 31 of 2003 as amended), and the Skills Development Levies Act, 1999 (Act 9 of 1999). Government departments are expected to implement skills development programmes as a tool to empower their employees with skills, values and knowledge that enable them to respond effectively to the demands of service delivery (South Africa,, 2011).

All employers need to understand that skills development is crucial for upgrading employee performance (Regenesys 2010, p. 101). Whereas investment in human capital skills development has been a key feature globally of fast-growing organisations, national investment in human resources in South Africa is five times less than comparable investment in countries such as Korea, Taiwan and Malaysia (Regenesys, 2010, p. 101).

The Skills Development Act No. 31 of 2003 as amended instructs all organisations in both the public and private sector to develop the capacities of their employees through skills development (South Africa, 2011). The research reported here focussed on key success factors for WSP implementation using the DoE as a case study. Skills development legislation requires all registered organisations (such as the DoE) to prepare and submit their WSPs to their respective Skills Education Training Authority (SETA) by 30 June each year (Hattingh, 2004).

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Rationale for the Research

According to Hattingh (2003), inadequate understanding of the key WSP factors and poor planning for skills development programmes has meant that most skills development facilitators are unable to correctly complete a WSP form as required by their respective SETA, with complaints that the form demands a lot of information, is complicated, or lacks relevance.

Similar problems face the DoE in regard to its WSP. Even though each financial year closes with the budget for skills development fully exhausted, and with training certificates having been issued to employees who are found competent, lack of skills continues to affect public sector organisations. With this in mind, the decision was made to conduct a study to investigate the key success factors for WSP implementation in the DoE. The study has significance for all relevant stakeholders and focusses on aspects of the following key factors:

• Information gathering to inform a WSP • Skills auditing • Compiling and submitting a WSP to the relevant SETA • Monitoring, implementing and evaluating actions of a WSP • Reporting on a WSP

The envisaged beneficiaries of the study are outlined in the next set of subsections.

The DoE

Permission to conduct this research was given by the relevant gatekeepers subject to certain conditions, one of which was that the outcomes of the research must be shared with the DoE. The DoE thus had an initial opportunity to compare its WSP implementation against the recommendations of this research.

The study identified five key success factors for WSP implementation, together with details of implementation in regard to each aspect. This gave the DoE extensive information about the way that development of skills in an organisation should be planned. The findings of a study such as this will potentially put senior management in a position to influence WSP implementation, enabling their organisation and the relevant stakeholders to understand how the training budget is spent (Hattingh & van der Walt, 2004). This study also sought to provide insight on the internal monitoring of human resources development by the department, and help to achieve its targeted outcomes, namely to provide quality services of education and training across the province (Paterson, 2008).

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This research was therefore conducted in line with the DoE’s vision “To be a catalyst for human development, providing innovative and inspiring quality life- long education”. In addition, the research sought to benefit the DoE in that proper planning and implementation of the WSP would qualify the organisation for the mandatory grant from the ETDP SETA, amounting to 50% of the skills levy paid in the given year.

The Human Resource Development Division

A further aim of the study was to provide the HRU&CD unit of the DoE with relevant knowledge, skills and experience for implementation of a WSP appropriately linked with provincial skills development priorities and national skills development strategies.

The research sought to provide the unit with a tool for developing a quality WSP, in time for the annual deadline, that would lead to high-impact learning in combination with other skills development programmes for performance improvement of staff and of the organisation.

The Employees of the DoE

Employees who participate in skills programmes emanating from an appropriately developed, compiled, implemented, monitored and evaluated WSP can be regarded as direct beneficiaries of a WSP (Meyer, 2002) in that the programmes develop the knowledge and skills in regard to their everyday jobs. Hattingh (2003) stresses that proper implementation of a WSP will mean that employees of the organisation benefit from knowledge and skills that will enable them to carry out their work functions more effectively and efficiently. DoE Employees will benefit from a WSP integrated with other performance improvement processes (such as talent management, succession planning and retention of scarce skills) for developing human capital in line with departmental goals and objectives.

According to Meyer (2002), a WSP relating to the training needs of employees is a powerful tool for motivating employees to contribute at their level best in their organisation. Human resources benefits from a WSP that Hattingh (2003) cites are, firstly, that it enables accurate indication of learning needs in analysis of training needs, and secondly, that it enables employees to provide feedback on relevance to their own work role of completed learning programmes that can be used in evaluating the quality and the relevance of such programmes.

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HRD Officials and Skills Development Facilitators

This study also sought to benefit skills development facilitators (SDFs) and HRD practitioners by providing knowledge and experience of WSP planning and implementation that will help them to direct skills planning more precisely to the skills the organisation needs in pursuit of current and future strategic objectives. In close consultation with managers and skills development facilitators the HRD officials in the DoE will align the WSP with the strategic priorities of the organisation, and in consultation with the HR manager and other senior officials will organise and oversee the nomination, selection and capacity building of the SDF and the Training Committee to see that they have the necessary competence to perform these functions.

According to Aguinis (2014), HR practitioners are the vehicle by which recommendations such as those preceding from this research can be implemented a given organisation. In this way skills development facilitators and HRD practitioners act as agents of change in WSP implementation, and also gain additional experience and competences in planning and implementing skills development for employees. The study will furthermore provide HR practitioners with new opportunities to develop their knowledge and competences regarding the key points in WSP implementation, and to re-examine their instruments and techniques for WSP implementation, thereby making them more effective and motivated. In this regard, Regenesys (2010) argues that “education and training develop the skills and competences of employees and enable them to work more effectively and efficiently” because they feel empowered and important in the organisation; they also benefit from skills and knowledge that equip them to compete in the job-market.

RESEARCH AIM AND OBJECTIVES

The primary aim of the study was to determine the key success factors for WSP implementation in the DoE in accordance with the following research objectives:

1. To investigate the extent in which aspects of information gathering inform the WSP are applied, and the perceived importance of this process

2. To determine the extent to which skills auditing are applied, and the perceived importance of this process

3. To determine the extent to which aspects of compiling and submitting a WSP are applied, and the perceived importance of this process

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4. To investigate the extent to which a WSP is implemented, monitored and evaluated, and the perceived importance of this process

5. To investigate the extent of reporting on the implementation of a WSP to SETA, and the perceived importance ofn this process

Information Gathering for the WSP

Information gathering is the process of collecting all the information required for the WSP to be developed and implemented (Meyer, 2002). This process lays the foundation for all subsequent critical steps. Information gathering can also be described as a proactive first step during which the organisation, through the skills development facilitator (skills development facilitator), collects information to design a plan on how the skills of the workforce will be developed. According to Hattingh (2004), it is important to incorporate information gathering in other improvement processes (such as talent management, succession planning and retention of scarce skills) for developing the human capital needed for organisational goals and objectives.

According to Hattingh (2004), information for the WSP must directly reflect the scope and nature of the organisation concerned. She argues that one of the good things about a WSP is that it directly informs its own development and implementation. She states further that a variety of info may be processed, considered and shared in the process of “workplace skills planning”.

Although the skills development facilitator is a member of staff designated to carryout functions of gathering information for a WSP, he or she will need assistance from other role players (Hattingh, 2003) in taking account of the full range of issues affecting HR development, skills planning and employee performance improvement. Meyer (2002) argues that for optimum focus on the skills needs of the organisation, the skills planning aspect requires agreement from management, and in particular from line function managers and employee representatives.

It is important for employees and managers to take ownership of skills development processes (Hattingh, 2003). This action may contribute effectively towards maximum participation and improved support for the tasks of the SDF and result in the emergence of an appropriate WSP. Hattingh (2004) states that it is important to establish who should be involved in the first step: gathering information. Important role players whose contribution helps to ensure that relevant information is gathered (Hattingh and van der Walt, 2004) are a) top and senior management, b) HR managers, c) line managers together with supervisors, d) training committee and e) the employees.

The information collected in the information gathering can be categorised into external and internal information (Thompson and Strickland, 2003), where external information refers to any information gathered from outside the immediate institution itself and internal information is information collected from within the institution.

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The external information to be considered in the information gathering may include the following factors and draw on the following resources, as outlined below, relating to the comprehensive skills planning and development that is involved in the development and implementation of a WSP.

Skills Auditing

Skills auditing can be defined as the process by which skills gaps in an organisation are identified (Hattingh, 2003). A clearly designed job description for each individual employee is important for the skills audit in order to show the responsibilities and performance standards that constitute the human capital (Hattingh, 2003). According to Meyer (2002), the skills audit serves as a direct translation of what contributions the employee should make in the operational plans of the organisation. Sometimes the skills audit is conducted in response to key structural challenges facing the organisation in its operations.

Skills auditing determines the gap between the required skills and the currently available skills in the organisation (Meyer, 2002). Implementing the WSP addresses the gap. According to Hattingh (2004), the skills audit “requires a clear profile of existing skills” of all employees, and a fundamental element in the skills audit is clear “formulation of competency profiles or job descriptions for the different job categories”. These job profiles must specify the tasks and their performance standards, together with what incumbents should know, understand and be capable to do to competently perform their responsibilities in those jobs.

Hattingh (2004) makes it clear that an effective skills audit requires a clearly organised baseline of skills needs against which to compare the skills that already exist in the organisation. The skills auditing process comprises three different phases: a) human resource planning, b) job and competence profiling, and c) finding the skills gap.

Compiling and Submitting a WSP

Meyer (2002) states that once the first two aspects of the WSP have been established it is advisable next to consult widely on the identified skills development priorities. It is also advisable to compile a WSP draft coupled with the skills interventions to address the needs and set up associated budgets for implementing these interventions. Table 1, adapted from Hattingh (2004), shows what the compiled and submitted WSP should be and what it should not be in the case of the given provincial DoE.

The last phase in preparing the WSP is to have it endorsed by the relevant authorities of the organisation prior making its submission to SETA. In the DoE, the WSP is approved by the skills development facilitator, the head of department,

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the head of branch, and the provincial skills development committee: including HRD practitioners, union representatives, the labour relations manager and the HR practitioners.

WSP Implementation, Monitoring, and Evaluation

Regenesys (2010) point out that monitoring and evaluation should be conducted during or after the implementation phase.

Implementing a WSP

Depending on the size of the organisation and more specifically the scope of skills needs identified, Grobler et al. (2006) argue that “implementing the WSP could be a small and manageable task”. It is recommended that an annual training schedule be developed which will help to plan and direct the implementation of skills development. It is important to communicate the plan to all affected personnel; this will help to secure support and participation of management and staff. Affected staff members may include the following:

• The employees chosen as attendees in the skills development programmes, where it is important that those undergoing skills training participate keenly for the sake of their own personal development and for good return on investment on the side of the organisation.

Table 1. What a WSP should and should not be

What the WSP “Should” Be What the WSP “Should Not” Be

The WSP should respond to the question, “What skills does the organisation require in order to be able to achieve its plans in one, two or five years’ time?”

The WSP should not just answer the question “What training must the organisation record in its WSP for this year?”

The result of the “analysis of skills needs and the identification of performance-directed initiatives”.

Mechanical completion of the form and basic listing of training and statistics.

A tool to provide strategic approach in planning the development of the workers of the organisation.

Something done to meet a submission date as stipulated by SETA.

A document containing precise details regarding training priorities for the organisation. An instrument used internally to grow the capacity of the workforce, to enhance individual performance, improve service and contribute towards the achievement of the goals and objectives of the organisation.

Just juggling the figures from the initial WSP to submit a new updated version to the SETA.

Hattingh, 2004.

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• The section manager who supervises the chosen employee for training will be required to approve his/her partaking, particularly in the event where the attendee stays on training for an extended period of time.

• Support staff who will be present as mentors or for peer-learning to support the employees in their skills development journey.

Monitoring a WSP

Monitoring is a continuing function intended to provide skills development facilitators and relevant stakeholders with “regular feedback and early indications of progress, or lack thereof, in the achievement of intended results” from a WSP (UNDP, 2002). It is can be defined as a process of tracking the actual performance or situation against what was intended in terms of set standards (UNDP, 2002). In monitoring, data from the implementation, strategies and results of the WSP is collected and used to recommend corrective measures. Examples of the purposes served by monitoring of WSP implementation include the following:

• Verifying the phase of execution of a WSP by acknowledging achievements, identifying gaps and applying the necessary corrective actions to such gaps (Kusek and Rist, 2004)

• Collecting and analysing data in order to determine if the implementation of a WSP is achieving its desired results (Kusek & Rist, 2004)

• Improving the efficiency and effectiveness of the implementation of a WSP (Kusek & Rist, 2004)

According to Regenesys (2010), the purposes listed above indicate how effectiveness and efficiency are key in the monitoring process.

Evaluating a WSP

According to Regenesys (2010), evaluation involves comparison between the actual WSP that is being implemented or has been implemented and the WSP that was set to be implemented. Evaluation can thus be described as a process that examines what was set to be done, what has been attained, and how it has been done. Regenesys (2010) further states that evaluation can be done either in the course of implementing a WSP or after the implementation has been completed. The intention is to see if there are any lessons to be learned for the future implementations.

According to the UNDP (2002), evaluation can be described as “a time-bound exercise that systematically and objectively [assesses] the relevance, performance and success” of ongoing and completed WSP implementation. It is undertaken selectively

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to answer specific questions intended to guide skills development facilitators and relevant stakeholders in the implementation of a WSP. It also serves to provide information on the validity of underlying theories and paradigms initially used to develop and implement a WSP. Evaluation also helps to identify things that worked, things that did not work, and why those things could not work. Kusek and Rist (2004) state that evaluation seeks to achieve one or more of the following purposes:

• To determine relevance, efficiency, effectiveness, impact and sustainability of the implementation of a WSP

• To provide SDF and relevant stakeholders with evidence of why targets and outcomes of implementing a WSP are or are not being achieved

• To provide credible and useful information and enable incorporating into the decision-making process of lessons learned

• To methodically and objectively measure development in the implementation of a WSP

Hattingh and van der Walt (2004) note that for successful evaluation the employer needs to “provide the skills development facilitator with the resources, facilities and training to perform the [skills development] functions” set out for the organisation and its employees.

RESEARCH APPROACH

Problems for investigation in this quantitative study were identified using a positivist research paradigm. The study site was a provincial department of education which has one provincial office and five district offices located in five municipal districts of the province. The five district offices independently deliver services of education to a number of circuit offices, and these offices of the circuit also cater for the needs of education to all schools of the province. The sample population were 75 permanently employed employees stationed in the five district offices. They included both education specialists and office-based employees.

The research instrument was a structured questionnaire divided into six sections. One section related to biographical and demographical information and the other five related to the five research objectives. A four-point Likert scale was used to determine a) extent to which the participants apply a WSP, and b) the importance of various aspects of a WSP. Cronbach’s Alpha was used to determine reliability, and question items indicated good reliability above .7. A pilot study to simulate the instrument to be used was conducted among circuit managers in a seminar session

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that was held. The purpose was to verify the instrument for obvious errors. Peer debriefing was used to verify for consistency. The course of the pilot was thoroughly evaluated for weaknesses and then amended to improve it. Most respondents (82%) had participated in some form of skills development programme offered by the DoE and 18% had participated in more than 11 different types of skills development programmes. Some of the respondents (11%) served on a committee steering the WSP development. RESULTS AND DISCUSSION

Response Rate and Biographical Information

The sample of 75 employees permanently employed by the DoE comprised 51% women and 49% men. The entire sample completed the self-administrated questionnaire.

The ethnic composition of the sample was 97% African and 3% Coloured. Most of the employees (73%) had been working for the DoE for more than 6 years and most (94%) hsd some form of undergraduate qualification.

Analysis and Interpretation

Participants were asked to rate question items according to extent of application and perceived importance.

Research Objective 1: To Investigate the Extent in Which Information Gathering Informs the WSP Are Applied, and the Perceived Importance of This Process

Extent of Application

Although a large number of respondents scored 4, the average score of the whole sample on the first question was 2.9 (close to 3). In general, responses indicated that to “some extent” gathering information for a WSP was perceived as necessary in the organisation. However, the high standard deviation (1.046) indicates that the opinions on this question were significantly different across the sample.

On the second question, the average score of the whole sample was 2.82 (close to 3). In general, responses indicated that to “some extent” gathering information for a WSP considered external environment factors. However, the significant standard deviation (.968) indicates that the opinions on the question were different across the sample.

On the third question, the average score of the whole sample was 2.81 (close to 3). In general, responses indicated that to “some extent” gathering information for a WSP considered internal environment factors. However, the significant standard

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deviation (.833) indicates that the opinions on this question were different across the sample.

On the fourth question, the average score of the whole sample was 2.83 (close to 3). In general, respondents believed that to “some extent” gathering information for a WSP considered employee information. However, the significant standard deviation (.890) indicates that the opinions on this question were different across the sample. In terms of importance, this item is the third most important (at 70.75%) on the list.

On the fifth question, the average score of the whole sample was 2.77 (close to 3). In general, respondents believed that to “some extent” gathering information for a WSP considers the relationships between training units and other units of the organisation. However, the significant standard deviation (.910) indicates that the opinions on this question were different across the sample. In terms of importance, this item is the third most important (at 69.25%) on the list.

Perceived Importance

Information gathering is a vital aspect in the implementation of WSP because it provides relevant information required for a WSP. The managers believed that information gathering for a WSP must consider employee information as most the important process (70.75%) and that it is a necessary process in any organisation (73%). They also regarded it as very important to gather information about the external environment (71%) and the internal environment (70%) alike. Some managers felt that consideration of training units and other units was less important (68%).

Research Objective 2: To Determine the Extent to Which Skills Auditing Is Applied, and the Perceived Importance of This Process

Extent of Application

On the first question in this section, the average score of the whole sample was 2.61 (close to 3). In general, respondents believed that to “some extent” skills auditing was properly conducted in the organisation. However, the significant standard deviation (.853) indicates that the opinions on this question were different across the sample.

On the second question in this section, the average score of the whole sample was 2.56 (close to 3). In general, respondents believed that to “some extent” skills auditing took into consideration human resource planning. However, the standard deviation (.890) indicates that this opinion was not shared by everybody in the sample.

On the third question in this section, the “average score of the whole sample was 2.60” (close to 3). In general, respondents believed that to “some extent” skills auditing created integration between the job and competence profiling. However,

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the significant standard deviation (.858) indicates that the opinions on this question were very different across the sample.

On the fourth question in this section, the average score of the whole sample was 2.64 (close to 3). In general, respondents believed that to “some extent” skills auditing took into account finding the skills gap. However, the standard deviation (.907) indicates that the opinions on this question were different across the sample.

On the fifth question in this section, the average score of the whole sample was 2.41 (close to 2). In general, respondents believed that to a “small extent” skills auditing took into account the link between an employee qualifications and their current job in the organisation. However, the significant standard deviation (.876) indicates that the opinions on this question were different across the sample.

On the sixth question in this section, the average score of the whole sample was 2.24 (close to 2). In general, respondents believed that to a “small extent” the competencies of the members of skills development committee was taken into account by skills auditing. However, the significant standard deviation (.939) indicates that the opinions on this question were very different across the sample.

Perceived Importance

Skills auditing plays an essential role in the implementation of a WSP in an organisation. It determines the gap between the skills that an organisation has and the skills that it should to have. The managers regarded finding the skills gap and the effectiveness of this process as very important (66%). Job competency profiling and human resource planning were also regarded as important (65%). Considering the competencies of the skills development committee in auditing of the WSP was considered less important (65%).

Research Objective 3: To Determine the Extent to Which Compiling and Submitting a WSP Is Applied, and the Perceived Importance of This Process

Extent of Application

On the first question in this section, the average score of the whole sample was 2.83 (close to 3). In general, respondents believed that to “some extent” their organisation was committed in compiling a WSP. However, the high standard deviation (1.014) indicates that the opinions on this question were very different across the sample.

On the second question in this section, the “average score of the whole sample was 2.45” (close to 2). In general, respondents agree that to a “small extent” employees were always consulted on needs identified in the compiled WSP Skills. However,

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the significant standard deviation (.867) indicates that the opinions on this question were very different across the sample.

On the third question in this section, the average score of the whole sample was 2.30 (close to 2). In general, respondents agree that to a “small extent” members of skills development committee were well-trained on processes of compiling a WSP”. However, the significant standard deviation (.998) indicates that the opinions on this question were very different across the sample.

On the fourth question in this section, the average score of the whole sample was 2.48 (close to 2). In general, respondents agreed that to a “small extent” activities of compiling a WSP received adequate support from management. The standard deviation (.901) indicates that the opinions on this question were different across the sample.

On the fifth question in this section, the average score of the whole sample was 2.84 (close to 3). In general, respondents agreed that to “some extent” the DoE always submitted its WSP on time. However, the high standard deviation (1.016) indicates that the opinions on this question were significantly different across the sample.

Perceived Importance

After gathering information for a WSP is completed and the skills auditing process to identify skills gap in the organisation is finalised a WSP is compiled. This is the point where the WSP is endorsed by the skills development facilitator or other person appointed as the head of skills unit in an organisation. After a WSP has been endorsed by the chairperson of the skills development committee, it will then be endorsed by the head of the organisation before it can be submitted to the relevant SETA. The sample population (managers) regarded it as very important to submit the WSP to the SETA on time and indicated that it was important for the organisation to be committed to this process (71%). The managers regarded it as somewhat less important (58%) to have sufficient training on compiling a WSP. A possible explanation for this low ranking might be that managers feel they did not need more training on top of their workload.

Research Question 4: To Investigate the Extent to Which a WSP Is Implemented, Monitored and Evaluated, and the Perceived Importance of This Process

Extent of Application

On the first question in this section, the average score of the whole sample was 2.58 (close to 3). In general, respondents thought that to “some extent” actions of a WSP were well implemented in the organisation. However, the standard deviation (.907)

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indicates that the opinions on this question were significantly different across the sample.

On the second question in this section, the “average score of the whole sample was 2.93” (close to 3). In general, respondents thought that to “some extent” WSP implementation in the organisation included accredited formal trainings. However, the high standard deviation (.910) indicates that the opinions on this question were significantly different across the sample” .

On the third question in this section, the average score of the whole sample was 2.75 (close to 3). In general, respondents thought that to “some extent” the organisation’s WSP took into account implementation of workplace-based training. However, the high standard deviation (.884) indicates that the opinions on this question were significantly different across the sample.

On the fourth question in this section, the average score of the whole sample was 2.72 (close to 3). In general, respondents thought that to “some extent” a WSP was properly monitored in their organisation. Standard deviation (.934) indicates that the opinions on this question were different across the sample.

On the fifth question in this section, the average score of the whole sample was 2.82 (close to 3). In general, respondents thought that to “some extent” a WSP is properly monitored in the organisation. However, the standard deviation (.821) indicates that the opinions on this question were different across the sample.

On the sixth question, the average score of the whole sample was 2.61 (close to 3). In general, respondents thought that to “some extent” results of monitoring and evaluation were used to improve future implementations of training programmes. However, the high standard deviation (.802) indicates that the opinions on this question were significantly different across the sample.

On the seventh question in this section, the average score of the whole sample was 2.62 (close to 3). In general, respondents thought that to “some extent” management encouraged monitoring and evaluation of a WSP. However, the high standard deviation (.873) indicates that the opinions on this question were different across the sample.

Perceived Importance

Implementing, monitoring and evaluating a WSP are crucial. This can be regarded as an execution phase because it is where the skills planning document in the form of the WSP is put into action. The monitoring and evaluation of this process is done to ensure that these aspects yield the desired results. Managers regarded it as very important to include formal training (73%), effectively monitor (71%) and include workplace-based training (69%). However they felt it was less important (58%) to improve implementation of the WSP in every financial year

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A possible reason for this low ranking may be that managers acknowledge that the organisation does not implement a WSP according to the identified critical aspects. Another reason may be that managers understand that for annual improvement in the quality of WSP implementation the organisation must have well-trained skills development committee members who can be given more responsibilities in the WSP implementation.

Research Question 5: To Investigate the Extent of Reporting on the Implementation of a WSP to SETA, and the Perceived Importance of This Process

Extent of Application

On the first question in this section, the average score of the whole sample was 2.86 (close to 3). In general, respondents thought to “some extent” their organisation reported annually to the relevant SETA on the implemented WSP. However, the high standard deviation (.989) indicates that the opinions on this question were significantly different across the sample.

With reference to the second question of this section, the average score of the whole sample was 3.01 (close to 3). In general, respondents thought that to “some extent” the DoE met WSP submission deadlines. However, the high standard deviation (.938) indicates that the opinions on this question were significantly different across the sample.

On the third question in this section, the average score of the whole sample was 3.04 (close to 3). In general, respondents thought that to “some extent” the DoE had a good relationship with SETA. However, the high standard deviation (.860) indicates that the opinions on this question were significantly different across the sample.

On the fourth question in this section, the average score of the whole sample was 2.68 (close to 3). In general, respondents thought that to “some extent” the skills development committee played a critical role in compiling an Annual Training Plan. However, the standard deviation (.914) indicates that the opinions on this question were different across the sample.

On the fifth question, the average score of the whole sample was 2.33 (close to 2). In general, respondents thought that to a “small extent” members of skills development committee were trained in compilation of an Annual Training Plan. However, the high standard deviation (1.055) indicates that the opinions on this question were significantly different across the sample.

On the sixth question in this section, the average score of the whole sample was 2.75 (close to 3). In general, respondents agree that to “some extent” all units that

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train employees in the organisation submitted their reports on training that they had conducted. The standard deviation (.823) indicates that the opinions on this question were significantly different across the sample.

On the seventh question, the average score of the whole sample was 2.78 (close to 3). In general, respondents thought that to “some extent” a WSP report of the organisation included other training conducted by other units. However, the standard deviation (.850) indicates that the opinions on this question were different across the sample.

On the eighth question in this section, the average score of the whole sample was 3.12 (close to 3). In general, respondents thought that to “some extent” all reports of a WSP were approved by the skills development committee in the organisation. However, the high standard deviation (.946) indicates that the opinions on this question were significantly different across the sample.

Perceived Importance

The skills development facilitator is required to report to the organisation on the implemented WSP of the previous financial year. This form of reporting can be done in any format identified as suitable for the organisation. However, another critical report on the implemented WSP is made to the SETA. Organisations are required to report to their relevant SETA, using the reporting format stipulated by the SETA, by 30 June every year. Managers regarded it as very important that reports on a WSP should be approved by the skills development committee first before sending it to the SETA (78%) and that the DoE should have a good relationship with the SETA (76%). The managers perceived it important to a lesser degree for the skills committee to play a critical role in compiling the Annual Training Plan (67%) and for them to receive training in doing so (58%).

Success Factors That Managers Regard as Important for Implementing a WSP

The rankings by the participant managers on the key success factors for WSP implementation indicate that variety of aspects are important or very important. The respondents regarded 12 items as very important (70%+). Items that were ranked between 1 and 4 are rated 71%+ important and aspects that were ranked between 6 and 10 are rated 58%+ important. The items that the respondents regarded as important success factors for implementing a WSP are set out in Table 2.

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Table 2. Success factors that managers regard as important for implementing a WSP

Rank Item No. Item Means Percentage Importance

1 F2g All reports of a WSP must be approved by the skills development committee in the organisation.

3.12 78%

2 F2b The DoE must have a good relationship with SETA. 3.04 76%

3 F2a The DoE must meet deadlines for submitting a WSP report to SETA.

3.01 75.25%

4 E2a Implementation of a WSP must include accredited formal trainings.

2.93 73.25%

5 B1 Information gathering for a WSP is necessary in an organisation. 2.90 72.50%

6 F1 organisation report must be relevant to SETA on the implemented WSP every year.

2.86 71.50%

7 D2d A WSP must be submitted on time to SETA. 2.84 71%

8 B2c Information gathering for a WSP must consider employee information.

2.83 70.75%

9 D1 Organisations must be committed in compiling a WSP. 2.83 70.75%

10 B2a Information gathering for a WSP must consider external environment factors.

2.82 70.50%

11 E2d Implementation of a WSP must be properly monitored in an organisation.

2.82 70.50

12 B2B Information gathering for a WSP must consider internal environment factors.

2.81 70.25%

13 F2 A report of a WSP of the organisation must include other trainings conducted by other units.

2.78 69.50%

14 B2d Information gathering for a WSP must consider training units and other units.

2.77 69.25%

15 E2b A WSP must include the workplace-based trainings. 2.75 68.75%

16 F2e All units who train employees in the organisation must submit their reports on training that they have conducted.

2.75 68.75%

17 E2c Training methods must be designed to suit each particular training implemented.

2.72 68%

18 F2c The skills committee must play a critical role when compiling an ATR.

2.68 67%

19 C2c Skills auditing must consider finding the skills gap. 2.64 66%

20 E2f Management must encourage monitoring and evaluation of a WSP. 2.62 65.50%

21 C1 Skills auditing must be properly conducted within the organisation.

2.61 65.25%

22 E2e Results of monitoring and evaluation must be used to improve future implementations of training programmes.

2.61 65.25%

23 C2b Must consider job and competence profiling. 2.60 65%

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Conclusions in Relation to Information Gathering to Inform a WSP

Information gathering is a vital aspect because it furnishes the related information needed in the execution of a WSP. It lays a “critical foundation for the rest of the key success factors to follow in the implementation of a WSP”. The information collected gives an organisation an adequate evidence of the “nature of the organisation, its stakeholders and employees, and the skills required to achieve the set goals and objectives”. Below are the focal conclusions with respect to research objective 1:

• Information gathering for a WSP is necessary in an organisation because it considers employees information.

• The information gathering takes into consideration both the external and internal environmental factors.

• It is assumed that information gathering for a WSP also considers training units and other units in an organisation.

• Organisations that conduct proper processes of information gathering obtain a better understanding of the skills planning document they need to compile in planning for the development of their employees.

Conclusions in Relation to Skills Auditing

Skills auditing determines the skills gap between the skills that an organisation has and the skills that an organisation needs to have. The organisation’s WSP is therefore compiled largely on the bases of the first two key aspects: information gathering and skills auditing. The following are the main conclusions with respect to research objective 2:

• The aim of skills auditing is to find the skills gaps in an organisation. It indicates the skills that an organisation has and the skills that an organisation needs to have.

• A properly planned and conducted skills auditing process considers job and competence profiling.

• It considers human resource planning in the organisation. • It considers the link between an employee qualification and his or her current

job. • It also considers competencies of the members of skills development

committee.

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Conclusions in Relation to Compiling and Submitting a WSP

After collecting all the relevant information relating to the previous two aspects, a skills development facilitator (or an organisation) needs to consult widely on the identified skills development priorities. It is also advisable to compile a draft WSP together with the interventions for addressing the needs and associated budgets for implementing these interventions. The final step in preparing the WSP is to get it signed by the relevant authorities in the organisation before submitting it to the relevant SETA. The following are the main conclusions with respect to research objective 3:

• It is assumed that organisations are able to determine what the WSP should be, and what it should not be.

• A WSP is signed by the relevant authorities of the organisation before submitting it to the applicable SETA.

• Management of the organisation and employees are consulted on training needs identified.

• Organisations compile a WSP for review. • A WSP is submitted to the relevant SETA. • It is assumed that the organisation is committed in compiling a WSP. • It is assumed that a WSP is always submitted on time to SETA. • The management of the organisation seem not to be doing enough to support

activities of compiling a WSP. • It was found that managers and supervisors take decisions for employees

regarding skills development programmes that employees “can attend”. • Members of skills development committee” have not been sufficiently trained

on compiling a WSP.

Conclusions in Relation to Implementing, Monitoring, and Evaluating a WSP

Implementation, monitoring and evaluation constitute execution of the WSP in the organisation. It is at this stage that the outcomes of a WSP in relation to its planned objectives, and the monitoring of it implementation become evident. The following are the main conclusions with respect to research objective 4.

• Employees do not participate voluntarily in attending skills development programmes, but are chosen by their immediate supervisors.

• The organisation implements a WSP through formal trainings. • It is assumed that on-the-job trainings are also organised for employees.

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• The organisation tries to monitor the implementation of a WSP. • It is assumed that the organisation also tries to make use of the results of

monitoring and evaluation in order to improve future implementations of training programmes.

• It is assumed that the organisation is not doing enough follow-ups on how the training was received by the attendees.

Conclusions in Relation to Reporting on an Implemented WSP

The skills development facilitator (or other official appointed for this purpose) must submit a report on a WSP to the relevant SETA by a given date each year.

• It is assumed that the organisation follows annual training report criteria for acceptance.

• It is assumed that the Department has a good relationship with the SETA. • It is concluded that the report on the organisation’s WSP includes other

training conducted by other units.

The skills development committee plays a critical role in compiling an annual training report ATR.

RECOMMENDATIONS

Recommendations on Implementing a WSP

An organisation must appoint a registered skills development facilitator (skills development facilitator) who will act as the link between the organisation and the SETA regarding issues of skills development. The skills development facilitator must have broad knowledge of skills facilitation, plus background experience in skills development. It is recommended that an organisation supplies training for the skills development facilitator in instances where he or she lacks the necessary training. The ETDP SETA provides training for individual employees to become accredited skills development facilitators in a course consisting of six unit standards used to identify competence as an accredited skills development facilitator.

In implementing a WSP the skills development facilitator and the organisation must identify and involve the internal and external stakeholders, specify their roles and responsibilities, support skills development strategies such as the HRD-SA and NSDS III, and make sure that there is a clear understanding of the various systems, structures and processes that relate to skills needs. The different environment systems

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in which the WSP functions need to be determined, and good relationships between employees and their supervisors need to be developed and maintained.

It is recommended that organisations establish skills development committees whose members have had approptriate training on WSP implementation. Skills development committee membership must include representation covering trade unions, HR equity, employee wellness, labour relations, etc., and capable of inspiring and recruiting workforce to take advantage of skills development opportunities provided to them by the organisation.

Organisations are advised to have sound strategic human resource management that make it possible to incorporate workplace skills planning in the strategic direction of the organisation. The primary purpose of the WSP is to organise the planning and implementation of skills interventions so that employees are sufficiently skilled, knowledgeable and capable to achieve the organisation’s main goals. Implementing a WSP also suggests that an organisation must prepare a workplace for learning, register a skills development facilitator, set up a skills development committee, make a case for workplace skills planning, understand the meaning and need for a WSP, consider the sector skills plan, understand the role of environmental skills plan, align its WSP with the current National Development Strategy, and ensure adequate resources for workplace skills planning.

Information gathering indicates the nature and scope of skills programmes and projects that must be comprised within a WSP. Employee information is crucial and needs to be collected carefully and discreetly since it may include sensitive information such as age, salary level, race, etc. Developing the skills of employees means that the organisation is investing in its human resources. Information such as age of an employee enables the organisation to determine the projected number of years that an investment may last and also indicates the period during which an employee will be able to give return to the employer on the skills and knowledge that have been developed. The information gathered must also include information about the internal and external environment in which a WSP functions.

It is recommended that organisations implementing a WSP should conduct a skills audit. This will give the skills development facilitator an opportunity to determine the skills that the organisation either has or should have. The skills auditing must cover three fundamental areas: human resource planning, job and competence profiling, and finding the skills gap.

It is recommended that compiling a WSP should be preceded by gathering of all the required information and completion of the skills audit. A compiled WSP must observe the following requirements:

• It must include all sections and units of the organisation. • It must be supported by all relevant stakeholders involved.

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• It must be signed by the skills development facilitator, the skills development committee members, and the head of the organisation.

• It must be submitted to the relevant SETA.

Further recommendations are as follows: the WSP must be submitted on time to the SETA, skills development facilitators must represent their organisations and show commitment in compiling a WSP, compilation of the WSP must receive adequate support from management, employees must be consulted on skills needs that have been identified, and members of the skills development committee must be adequately trained in compiling a WSP.

A WSP needs appropriate implementation to deliver the desired results, and this goes beyond merely following an established plan. Employees must also participate willingly in attending skills development programmes, supervisors must give adequate support to employees selected to attend these programmes, formal training events must take place, the skills development facilitator must organise off-the-job training, and an environment must be created that allows employees to use the skills and knowledge they acquire from training programmes.

Sound monitoring tools are needed to ensure that the WSP implementation happens as planned. Monitoring is also needed in the information gathering, in the skills audit, and in compilation of the WSP and submission to the relevant SETA. This will help the skills development facilitator and the organisation to achieve the desired outcomes of the WSP. Management encouragement in monitoring and evaluation of the WSP will also improve the implementation.

An annual training report (ATR) of an organisation must be compiled and endorsed by all members of the skills development committee, relevant stakeholders, the skills development facilitator and the head of the organisation. The ATR must be submitted to the relevant SETA by due date each year and must be in SETA format so as to furnish all the needed information. All units which equip personnel within the organisation must submit their reports on training that they have conducted. The members of skills development committee must also be trained in compiling an ATR.

The following information needs to be included in the annual WSP and ATR submissions:

• Particulars of the company that is submitting the WSP • Particulars of an organisation submitting the ATR • Prioritisation of skills development interventions by the organisation • Employed workers in structured programmes leading towards NQF 1 (ABET) • The organisation’s banking details, physical address and personal details of

the SDF

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• Definition of the occupational groups • Reporting on education and training interventions provided to beneficiaries

An ATR will show whether the organisation managed to implement its skills programmes and projects as set out in the WSP that was submitted in the previous year. What the SETA is interested to see in the ATR is whether the skills grant it provided to the organisation was used accordingly, and whether the organisation was able to develop the skills of its employees as indicated in the WSP. It is therefore recommended that organisations implement their skills development interventions in relation to their WSP. In this way the ATR will also be in line with the WSP.

Recommendations for Further Research

New facts regarding WSP implementation need to be documented. Relevant research literature on key success factors for WSP implementation is very limited, and much of what is available is outdated. Additional training institutions or academies should be established across the country to equip skills development facilitators and skills development committee members for WSP implementation. Although many skills development facilitators and their organisations are registered with their relevant SETAs, many also remain unregistered.

Research is also needed on how to determine the impact of a WSP in the organisation and on the academic qualifications and skills-related experiences of the members of the skills development committee. Many employees also fail to take advantage of training opportunities that an organisation may support and research is needed to determine how they can be motivated to take skills development interventions seriously.

REFERENCES

Aguinis, H. (2014). Performance management. London: Pearson.

Crook, T. R., Todd, S. Y., Combs, J. G., Woehr, D. J., & Ketchen, D. J. (2011). Does human capital matter? A meta-analysis of the relationship between human capital and firm performance. The Journal of Applied Psychology, 96(3), 443–456. doi:10.1037/a0022147 PMID:21244126

Grobler, P., & Warnich, S. (2006). Human resources management in South Africa. Cape Town: Boston Publishers.

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http://dx.doi.org/10.1037/a0022147

http://www.ncbi.nlm.nih.gov/pubmed/21244126

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Hattingh, S. (2003). Learnership: A tool for improving workplace performance. Randburg, South Africa: Knowres Pub.

Hattingh, S. (2004). High impact skills development: A practical implementation guide on three inter-related processes. Randburg, South Africa: Knowres Pub.

Hattingh, S., & Van der Walt, A. (2004). Reinventing human resource development to enhance learning. Randburg, South Africa: Knowres Pub.

Kusek, J. Z., & Rist, R. C. (2004). Ten steps to a results-based monitoring and evaluation system. Washington, DC: World Bank. doi:10.1596/0-8213-5823-5

Meyer, M. (2002). Managing human resource development: An outcomes-based approach. Durban: LexisNexis Butterworths.

Munzhedzi, P. H. (2011). Performance management system and improved productivity: a case of the Department of Local Government and Housing in the Limpopo province. Master of Administration. Pretoria: University of South Africa.

Patton, M. Q. (1990). Qualitative Evaluation and Research Methods. Newbury Park, CA: Sage Publications.

Regenesys School of Public Management. (2010). Monitoring and Evaluation Manual. Sandton: PDM, Regenesys Management.

South Africa. (2011). Public Service Act (Proclamation 39 of 2011). Pretoria: Government Printer.

Thompson, A. A., & Strickland, A. J. (2010). Strategic management: concepts and cases. New York: McGraw-Hill/Irwin, University of Michigan.

UNDP. (2002). Handbook on Planning Monitoring and Evaluation for Results. New York: United Nations Development Programme, World Bank Publishers.

Ziderman, A. (1997). National Programme in Technical and Vocational Education: Economic Education Relationship. Journal of Vocational Education and Training, 49(3), 351–366.

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APPENDIX: QUESTIONNAIRE ON FACTORS FOR IMPLEMENTING A WORKPLACE SKILLS PLAN

Table 3. Demographical information

A1 Gender Male Female

A2 Race African Coloured

Indian White

A3 Are you permanently employed? Yes No

A4 How many years have you been employed by the Department of Education?

0-5 years From 6 years above

A5 What is your highest educational qualification? From matric to honours degree

From masters to PHD

A6 Are you a member of the skills development committee?

Yes No

A7 How many skills development courses have you attended

Between 0 to 10 From 11 above

Please mark with a √ or x.

Table 4. Information gathering to inform a WSP

Not at All

Small Extent

Some Extent

Great Extent

B1 In your view, to what extent is gathering information for a WSP perceived as necessary in your organization?

1 2 3 4

B2 To what extend do you think the aspects of information gathering consider the following in the department?

B2a External environment factors 1 2 3 4

B2b Internal environment factors 1 2 3 4

B2c Employee information 1 2 3 4

B2d Relationships between training units and other units of the organisation

1 2 3 4

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Table 5. Skills auditing

Not at All

Small Extent

Some Extent

Great Extent

C1 In your view, to what extent do you think skills auditing is properly conducted within your organization?

1 2 3 4

C2 To what extend do you think the aspects of Skills Auditing consider the following in your organization:

C2a Human Resource Planning 1 2 3 4

C2b Job and competence profiling 1 2 3 4

C2c Finding the skills gap 1 2 3 4

C2d The link between an employee qualification and his or her current job

1 2 3 4

C2e Competencies of the members of skills development committee

1 2 3 4

Table 6. Compiling and submitting a WSP

Not at All

Small Extent

Some Extent

Great Extent

D1 In your view, do you think your organization is committed in compiling a WSP?

1 2 3 4

D2 To what extend do you agree with the statements below

D2a Employees are always consulted on needs identified in the compiled WSP

1 2 3 4

D2b Members of Skills Development Committee are well-trained on processes of compiling a WSP

1 2 3 4

D2c Activities of compiling a WSP receive adequate support from the organization’ management

1 2 3 4

D2d The Department of Education always submit its WSP on time to SETA

1 2 3 4

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Table 7. Implementing, monitoring, and evaluating a WSP

Not at All

Small Extent

Some Extent

Great Extent

E1 In your view, to what extend do you think actions of a WSP are well implemented in your organization?

1 2 3 4

E2 To what extend do you agree with the statements below

E2a Implementation of a WSP in your organization includes accredited formal trainings

1 2 3 4

E2b A WSP of your organization includes the implementation of work-place based trainings

1 2 3 4

E2c Training methods are designed to suit each particular training implemented

1 2 3 4

E2d A WSP is properly monitored within your organization 1 2 3 4

E2e Results of monitoring and evaluation are used to improve future implementations of training programmes

1 2 3 4

E2f Management encourage monitoring and evaluation of a WSP 1 2 3 4

E2g The quality of implementing a WSP improves every financial year in your organization

1 2 3 4

Table 8. Reporting on the implementation of a WSP

Not at All

Small Extent

Some Extent

Great Extent

F1 In your view, to what extent does your organization report to the relevant SETA on the implemented WSP every year?

1 2 3 4

F2 To what extend do you agree with the statements below

F2a The Department of Education meets deadlines for submitting a WSP report to SETA

1 2 3 4

F2b The Department of Education has a good relationship with SETA

1 2 3 4

F2c The skills development committee play a critical role when compiling an Annual Training Report

1 2 3 4

F2d Members of skills development committee are trained to compile an Annual Training Report

1 2 3 4

F2e All units who train employees in your organization submit their reports on trainings that they have conducted

1 2 3 4

F2f A report of a WSP of your organization include other trainings conducted by other units

1 2 3 4

F2g All reports of a WSP are approved by the skills development committee in your organization

1 2 3 4

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Chapter 8

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DOI: 10.4018/978-1-5225-3906-3.ch008

ABSTRACT

Every country is currently preparing themselves for the fourth industrial revolution, the environment where innovation is the key concept for survival. Most of the countries have developed framework for their e-government development. Unfortunately, most of these frameworks do not contain adequate details on what are the activities required if big data will be used as a backbone of all services. This research focuses on proposing a conceptual framework for development of e-government in Thailand. The proposed framework explicitly contains all important activities to be completed if big data will serve as the core component of all services for their citizens.

INTRODUCTION

The Fourth Industrial Revolution1 is coming. With various intelligent technologies combined together, things will change very rapidly. Doing things the same way will no longer survive in the 21st century. As a result, most of the countries in the world already have their clear visions to direct how they would like their country to stay competitive in this environment.

Using Big Data as a Backbone for Thailand 4.0: A Proposed Framework

Jirapun Daengdej Assumption University of Thailand, Thailand

Kitikorn Dowpiset Assumption University of Thailand, Thailand

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Thailand responses to the revolution by creating an initiative called Thailand 4.0. The aim of this initiative is to transform the country towards “Value-Based Economy”. The value-based economy is referred to shifting interest of the country from generating income for the country by relying on aap large amount of goods, especially agricultural products, to focusing on innovation and services.

Different degree of innovations has been promoted in many countries around the world. For example, China and India have “Made in China 2025”2 and “Make in India”3 as visions to encourage better and more technological industries in their countries. America has “A Nation of Makers”4 which focuses on getting Americans to turn ideas into reality. Similarly, the United Kingdom use idea of a “Design in Innovation Strategy”5 in encouraging their businesses to pay more attention to innovations. Last but not least, one of the world hi-tech countries, Korea, using a concept of “Creative Economy”6 to direct development in the country. Thailand, according to Thailand 4.0., is becoming a value-based and innovation-driven economy by moving from producing commodities to promoting creativity and innovations.

Despite the set strategies of all countries on how they would like to pursue with the revolution, there are 2 important elements that they have to concern, a clear strategic plan and supporting technologies that will allow them to achieve their goals.

With regard to the plan, most of the countries today have developed a plan with a framework for developing e-Government in their countries. In order to efficiency support the value-based or innovation-driven economy, having just technologies is not sufficient, attentions have to be given to management and utilization of data used in or provided by the e-Government systems (Hugo, 2017). A concept called “Big Data” has been widely been applied in handling and utilizing data in order to achieve strategic goals of organizations in both public and private sectors (Thomas & Frank, 2016). Unfortunately, to our knowledge, most of the e-Government frameworks do not consider some important management aspects that can greatly affect performance of the big data systems. This chapter discusses a novel framework that integrate important issues for big data development into an e-Government framework. In order to propose a practical framework, this research focuses on a case study of Thailand and its vision as Thailand 4.0, but the proposed framework can be adapted to other contexts if required.

The chapter begins with giving a background of the topic which includes industrial revolution, e-Government frameworks, and big data. The chapter then discusses issues of the existing works, which lead to this research. This followed by a discussion on the proposed framework and its components. The chapter is then ended with challenges that can be further explored and conclusion.

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BACKGROUND

Industrial Revolution

The Fourth Industrial Revolution aims to leverage differences between the physical, digital, and biological sphere. It integrates cyber-physical systems and the Internet of Things, big data and cloud computing, robotics, artificial-intelligence based systems and additive manufacturing. – European Commission, 2017

The industrial revolution is the process of change from an agrarian economy to an economy driven by machine, automation, and until recently cyber-physical system. Figure 1 shows four industrial revolutions and their key elements.

The upcoming revolution, which is the 4th revolution, has a unique character that makes it quite different from the previous one. In fact, it has been known that changes to be introduced by the 4th revolution is increased at an exponential rate when compared with changes introduced by the previous revolution.

According to European Commission, 2017, the 4th revolution aims at having an economy which is driven mainly by using technologies and concepts such as Artificial Intelligence (AI), cloud computing, Internet of Things (IoT), Big Data, and robotics. This means that most of the activities that drive the economy will be

Figure 1. Industrial revolutions and their key elements By Christoph Roser at AllAboutLean.com.

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driven by intelligent machines, hardware that can think and act autonomously with minimum input from a human. Citizens of every country will have much higher demand than today due to the fact that things surrounded them can response to their needs very quickly. This means that there will be a much higher number of requirements/transactions and these requirements can be changed very rapidly for businesses and government agents (European Commission, 2017).

From a government perspective, this means that services to be provided to their citizens have to be redesigned in such a way that it can cope with both very large number of transactions and changes that can occur in very high rate. Consequently, this leads to a very high expectation for the systems that provide services by the government, which often referred to as “e-Government”. Most of the countries expect that their e-Government must play the key role in achieving such goals of the 4th revolution.

E-Government Frameworks

Like any other systems that have been developed, e-Government systems consists of software, hardware, communications, and data used in the system. As a result, issues that can occur with development of software, hardware, communications, and data can also occur during development the e-Government system. In software project management, it has been long known that most of the software projects will fail to meet what has been set out in their plan (Chaos Report, 2014). Statistics on how software project failed in the last ten years has not much changed. Approximately, only around 20% of the software projects meet all requirements, and within allocated budget and time.

The failure rate can be easily magnified when it comes to e-Government systems. This is because e-Government is not only about providing e-Services, but often have to be an integration of services from various parties, and most importantly meet requirements of its users. To achieve such demand, it is obvious that development of e-Government requires a large amount of efforts in reforming public services, which includes structural and operational changes of all parties involved (Chong, 2007). As a result, a solid framework is required when implementing most e-Government in order to minimize such failures.

In addition, with regard to the e-Government framework, ITU or International Telecommunication Union, is a specialized agency of the United Nations (UN) that is responsible for issues that concern with information and communication technologies, proposes an e-Government framework that can be used for ranking e-Government around the world. Four basic dimensions of the e-government environment (ITU, 2009):

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1. Infrastructure, 2. Policy, 3. Governance and 4. Outreach.

In addition, ITU recommends e-Government Readiness Assessment Framework which focuses on 4 dimensions

1. Recommendations on the Dimension of Infrastructure: 1.1 Mobile infrastructure for e-government (m-Government) 1.2 Broadband infrastructure for e-government

2. Recommendations on the Policy Dimension: 2.1 Laws on e-government security 2.2 Institutional models of e-government

3. Recommendations on the Governance Dimension: 3.1 Process re-engineering 3.2 Back-office implementation

4. Recommendations on the Outreach Dimension: 4.1 E-government services to citizens (G2C) 4.2 E-government services to business (G2B) 4.3 Interagency e-government services (G2G)

The proposed four dimensions of the framework are recommended for all countries when developing their e-Government framework.

Comparison of E-Government Frameworks

Despite the fact that ITU has recommended a framework which shows what should be considered in every e-Government framework, various researches propose frameworks that can solve different problems or focus on different issues of e-Government.

Hakikur, 2010, proposes a framework which focuses on 4 elements of the e-Government, which are:

1. Democracy: Promoting – Integrity, Accountability, and Transparency 2. Equity: Enhancing – Responsiveness, Accountability, Transparency,

Effectiveness, and Quality of life 3. Access: Providing – Information pertaining to the governance system 4. Availability: Increasing – Efficiency, Effectiveness, Quality of system, and

Understandability among participants

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A very detailed framework which resultant from studies of a number of frameworks, then all elements are analyzed and combined is proposed by Abdelbaset & Eddy, 2009.

In addition, with regard to the comparison between what currently existed in the interested countries, according to the Asian Development Bank, there are stages or maturity of e-Government. In other words, not all e-Government are equal (Clay, 2001). These stages are:

Stage 1: Setting up an email system and internal network; Stage 2: Enabling inter-organizational and public access to information; Stage 3: Allowing 2-way communication; Stage 4: Allowing exchange of value; Stage 5: Digital Democracy; and Stage 6: A portal taking citizens where they need to go.

In the light of real-world practices, different countries have their own way to develop the most suitable framework for their context. In other words, regardless of what has been proposed by ITU, countries see what should be focused on their framework differently. Table 1 depicts focuses of different countries in their frameworks. Note that the reason for choosing these 5 countries is because, except Thailand, the 4 countries in this example are ranked number 1 to 4 in UN e-Government Survey 20167.

Issue of Existing Frameworks

Regardless of the countries considered in this research, most of the e-Government frameworks currently existed do not provide guideline or information on how “data”, which is the core of every e-Government, should be created, managed, and used. This non-trivial issue should be minimized. The reason that e-Government framework should have more details on how country should deal with the issue of data is because most of the projects related to using data will fail. In fact, Gartner predicts that around 60% of the big data projects will fail in 2017 (Laurence, 2015). Similar observations also discussed in Bernard, 2015 and Sarah, 2015.

Thailand’s Digital Government

Value creation, development of IT professionals and software developers and updated laws are necessary components for the development of Thailand 4.0. (Bangkok Post, May 11, 2017, http://www.bangkokpost.com/tech/local-news/1247330/thailand-4- 0-keys-outlined).

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http://www.bangkokpost.com/tech/local-news/1247330/thailand-4-0-keys-outlined

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It has been widely known that innovation always comes with risks. Unfortunately, businesses need to keep changing and keep coming up with creative ideas and try them. In order to create a supportive environment for such atmosphere, a government must operate and services in a totally new way. In such environment, highly efficient services are required. Red-tape in government processes have to be minimized. To achieve such environment, efficient e-Government system is the key. Thailand digital government has been developed as one of the engines for the country to achieve its goal set in Thailand 4.0.

Table 1. Example of focuses in e-government frameworks of 5 countries8

Country Focuses Current Maturity Level

Australia (Department of Finance, Australia, 2006)

1. Meeting users’ needs 2. Establishing connected service delivery 3. Achieving value for money 4. Enhancing public sector capability.

Korea (Ministry of Public Administration and Security, 2009)

1. Improvement of efficiency and transparency of administrative work 2. Provision of people and company-focused administrative services 3. Strengthening of communications with the people about government policies 4. Increased efficiency of information resource management

Singapore (Arun & Narayanan, 2002)

1. Reinventing government through a continuous rethinking of all aspects of governance to explore the nature and quality of government interactions with its citizens, businesses, and employees. 2. Delivering integrated electronic services centered on customers’ needs. 3. Being proactive and responsive by adopting a ‘sense and respond’ approach. 4. Using ICT to build new capabilities and capacities for achieving quantum leaps in service delivery. 5. Innovating with ICT by embracing enterprise and experimentation.

Thailand (EGA, 2016)

1. Government Integration 2. Driven Transformation 3. Smart Operations 4. Citizen-centric Services

United Kingdom (European Commission, 2015)

1. Make digital inclusion part of wider government policy, programmes, and digital services 2. Establish a quality cross-government digital capability programme 3. Give all civil servants the digital capabilities to use and improve government services 4. Agree on a common definition of digital skills and capabilities 5. Boost Go ON UK’s partnership programme across the country 6. Improve and extend partnership working 7. Create a shared language for digital inclusion 8. Bring digital capability support into one place 9. Deliver a digital inclusion programme to support SMEs and VCSEs 10. Use data to measure performance and improve what we do

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For Thailand, according to (EGA, 2016), Digital Government Development vision is:

In 3 years time, the Thai Government will be elevated to a Digital Government with government integration, smart operations, citizen-centric services and driven transformation.

Four main elements of the Digital Government of Thailand are:

1. Government Integration: Integration between different agencies including information and operations integration in order to a. Provide a single complete view of a citizen b. Use shared services c. Provide integrated government services at a single point

2. Driven Transformation: Transforming an organization in aspects such as human resources, work processes, technology and regulations

3. Smart Operations: Utilizing technology and digital equipment in supporting personnel’s work tasks a. Connection between equipment b. System which supports the management of Big Data c. Analytic Tools

4. Citizen-Centric Services: Elevating the services sector so that there is experience design and provides service based on an individual’s needs.

According to the four main elements of the Digital Government of Thailand discussed above, none of these elements can be achieved without “data”. In other words, “having reliable data that is always available upon request” and “ability to perform efficient and effective data analytics” are two of the most important issues for achieving all of the four elements.

What Is Big Data?

Regardless of details of e-Government applied in any context, as mentioned earlier, “data” play a critical role in every e-Government system. All systems require accurate, timely, no-conflict, trustable, and useful data in their systems. With today technologies that have the ability to create a large amount of data every second, the old concept of data storage, which only pays attention to being able to rapidly access to a database, is no longer adequate. In 2001, Doug Laney, an analyst at Gartner, proposed a definition of big data as the three Vs:

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• Volume: Refer to very large amount of data that have been stored and managed by today business.

• Velocity: Focus on the fact that, in today environment, especially with a social network, data can be generated all the time, and these data can flow into businesses from a large number of sources.

• Variety: Talk about the fact that data that created not just very large and continuously flow into businesses, but they can be in any format, both structured and unstructured.

Today, the concept of big data has been successfully applied in many industries. Example of these industries includes banking, telecommunications, retail, insurance, logistics, and medical. The importance of this new kind of storage makes it listed in almost every technology surveys as one of the technologies required by every business.

Technical vs. Management Aspect of Big Data Frameworks

With popularity of big data in today businesses, large number of researches have been focusing on comparing and proposing framework for big data. However, despite the number of frameworks proposed so far, all frameworks can be categorized into 2 related groups: technical and management-oriented frameworks.

Technical frameworks mainly focus on HOW to best use big data tools or systems in different kinds of works. Example of studies that focus on technical aspect of Big Data frameworks include Wissem, et al., 2016 and Justin, 2016 which show performance of different frameworks of big data systems. In addition, other possible technical-based studies are (Benedikt and Alberto, 2013) and (Yue, et al., 2014) which focus on the performance of big data with regard to graph processing. Figure 2 shows an example of technical framework by a company called GIGAOM, which based on Apache Hadoop software9.

On the other hand, management-oriented frameworks focus on WHAT has to be done from an organizational perspective in ensuring that maximum benefits from big data technologies are realized in businesses. Figure 3 shows an example of management-oriented big data framework by a consultant company called CBIG. In addition, Figure 4 depicts a framework by IBM that can be used to assess the maturity of big data in an organization.

In this chapter, the management-oriented framework is considered since nature of the issues focused on the fact that inadequate information is not usually given in e-Government frameworks currently existed.

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Figure 2. A big data framework by GIGAOM Source: https://gigaom.com/.

Figure 3. Big data framework by CBIG Consultants Source: http://www.cbigconsulting.com/approach/big-data-analytics-framework/.

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https://gigaom.com/

http://www.cbigconsulting.com/approach/big-data-analytics-framework/

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ISSUES OF EXISTING FRAMEWORK

The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency. – Bill Gates

Unfortunately, similar to most of the e-Government frameworks available in other countries, Thailand’s e-Government framework also does not contain adequate information on WHAT issue on “data” should be managed and dealt with in the country, especially issues of redesigning government operations and structure to allow efficient flow of transactions and data in their services.

In addition, as mention earlier, the chance of system development projects failure is very high. In fact, an article from Harvard Business Review argues that regardless of millions of dollars invested in IT projects, only around 25% of the functionalities available in the system are actually benefit to the organizations (Bent and Alexander, 2011). This is why business processes, and sometimes even organizational structures, have to be redesigned to allow technologies to deliver better and more efficient services to customers or citizens in case of development of e-Government system.

Issues of redesigning organizational structure and dealing with organizational behavior have been long investigated in management field. The issues are not at all trivial. All of these non-technical issues have to be solved and managed in order to allow truly efficient services in e-Government to occur. Unfortunately, most of these non-technical issues are not explicitly show in most of the e-Government frameworks available today.

THE PROPOSED FRAMEWORK

In order to minimize chance of failure as discussed above, rather than trying to copy how others have done, those who are in-charge of system development should pay attention to understanding their own context, which includes elements such as cultures, human resources, political issues, and technological know-how, then decide what should be done in their context (Glenn, 2015). This section describes a framework proposed in this research based on the limitations as discussed above and what currently missing in the e-Government framework of Thailand.

The aim of proposed framework is to attain the 6th stage of e-Government’s maturity model, where citizens of a country can efficiently access to their required services and information from a single source from their e-Government system.

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Rational

Prior to discussing the proposed framework, the following rationale drives the design of this framework.

1. The goal of this framework is to be at the highest level of e-Government by centralizing all access and management of the data.

2. Similar what has been suggested to the Australian government, the framework should allow analyzing of data from transactions of service usages, categorized and learn in order to offer appropriate services with least amount of human involvement (Catherine, 2016).

3. The fact that e-Government services require a huge amount of efforts in order to produce easy-to-use steps from highly complex protocol currently existed in governmental processes have to be seriously considered (James, 2003).

Figure 4. A framework for assessing maturity of big data systems by IBM Source: http://www.ibmbigdatahub.com/blog/big-data-governance-framework-assess-maturity.

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4. One-Stop-Service platform is the target of this framework. In fact, the use of this kind of platform is one of the main factors that give the UK and Australia top positions in the ranking of United Nations e-government survey (David, 2016).

According to the all four points described above, a centralized big data and the analytic system can be used as a backbone of the framework in order to allow all four points to be achieved. In addition, to achieve all four points described above, the government itself have to change the way they operate and services.

The Framework

The following framework is proposed in order to overcome all limitations of the previous works. The framework has been designed especially for the existing issues found in e-Government framework of Thailand. In order to allow efficient services for every party in the country as described in the four elements of the Digital Government of Thailand, with regard to the upcoming industrial revolution, the aim of this framework is to have the big data and data analytics as the backbone of all services in the country. Figure 5 depicts the proposed framework for e-Government,

Figure 5. The proposed e-government framework with big data as the backbone of all services

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which focuses on having big data and data analytics as the backbone of all services of the government.

There are 2 related parts in this framework, which are:

Part 1: Overall focus of e-Government Part 2: Overall focus of Big Data & Data Analytics

Part 1: Overall Focus of E-Government

For a given e-Government framework of a country, the first part contains all aspects generally focused on the framework. In case of the framework of Thailand, as discussed above in the section of “Thailand’s Digital Government”, this particular part of the framework contains 4 main interests of the country, which are: Government Integration, Data-Driven Transformation, Smart Operations, and Citizen-centric Services.

Part 2: Overall Focus of Big Data and Data Analytics

This second part of the framework can be seen as the supporting framework for the first part. In this case, this second part has been specially designed for having big data and data analytics as the backbone of the overall e-Government system. In order to allow efficient services for all citizens by using big data as the backbone of the country, the second part consists of 5 related activities that have to be created and maintained by the government. These activities are:

1. Data Governance: Data governance serves as the main activity of this second part of the framework. In general, the data governance involves:

2. Setting up and managing policies that involve both technical and non-technical issues related to the use and management of data in all services. This includes policies on: a. Data accessing/sharing and authorization, especially on the issue of

centrally controlled and managed b. Human resources c. Technologies such as cloud or management of data access d. Organizational structure e. Laws and regulations f. Performance of the overall data services

3. Monitoring performance of all remaining 4 elements in order to:

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a. Particularly for the centralized system, where a failure of the main system means failure of all services, ensure that all performance issues are efficiently managed if any

b. Improve the overall performance of the data services 4. Business Process Management: Without efficient processes, any system,

regardless of how much it cost to develop, can turn out to be a bottleneck for their organizations. Activities related to business process management includes ensuring that all:

5. New business processes contains a minimum number of steps and require minimum (or no) documents

6. Existing processes always executed at their best possible performance 7. Problems that can lead to dropping of performance are minimized, if not

entirely eliminated 8. Processes are properly managed 9. Data Management: All data in agreed format are always available. Regardless

of a number of data sources, data management activity involves with ensuring that:

10. Only authorized parties can access the data 11. Data is always available upon requests 12. Data is in the agreed formats 13. Data Quality: In addition to being able to have data with correct format always

available for its users, ensuring that data is of quality is also a critical issue for the organizations. This activity involves with ensuring that:

14. The accuracy of the data is managed and maintain 15. The integrity of the data is always maintain 16. Data Analytics: In many cases, regardless of the data quality, users may not

want to have the raw data. For management, in particular, trends and patterns are more important than just having the raw data. This is why data analytics has been receiving a large amount of attention in today highly competitive environment. The data analytic activity may involve being able to: a. Perform various analytics according to requirements of all stakeholders b. Provide useful patterns or trends for the users c. If possible, explanations on WHY a certain suggestion(s) is proposed

Note that, not all possible issues related to big data and data analytics are included in the second part of this framework. In this research, for example, issues such as security of the data, and managing of input and output devices are not included because Thailand already has national-level plans for both issues.

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Challenges in Turning Conceptual Framework to Implementation Blueprint

Recall the fact that the aim of this chapter is to propose a conceptual framework for e-Government which utilize a concept of big data as backbone of the e-Government system. A large amount of detailed information on activities within the framework is left for further studies. Examples of these details include strategies, procedures, activities, and technologies to be used. For example, for activity, according to e-Government of Singapore (Ministry of Finance, 2013), a data-sharing activity can be further broken down to:

1. Made easily accessible 2. Made available for co-creation 3. Released in a timely manner 4. Shared in machine-readable format 5. As raw as possible

Each of the five requirements for “data-sharing” activity discussed above can be further investigated starting from, for example, What is the exact scenario of “easily accessible”? What are the processes involved in making the easily accessible possible? Is there any rules and regulations need to be changed? What are the required technologies?

CONCLUSION

Every country and organization are preparing themselves for the forth industrial revolution. In this revolution, businesses are competing by using innovations instead of mass manufacturing. In order to create a supportive environment for all innovations to be developed from both public and private sectors within a country, efficient e-Government system has to be developed. Unfortunately, according to the fact that e-Government system has to cover a vast amount of requirements from both users within the government itself and citizens or businesses within the country, this makes it is highly difficult to develop the system that meets all requirements. Having a framework as a guideline for the development is one of the solutions to minimize the chance of failure. Unlike most of the e-Government frameworks available to-date, the proposed framework in this chapter allows a country to explicitly see all activities

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required to develop its e-Government system with big data and data analytics as the backbone of all services of the government. However, since the goal of this research is only to draw up a conceptual framework to show what should be included in the e-Government framework, details of all activities are left for further investigation.

REFERENCES

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Department of Finance, Australia. (2006). 2006 e-Government Strategy, Responsive Government: A New Service Agenda. Author.

Donaldson. (2016, August 4). e-Participation rising, but UK now beats Australia at e-government. The Mandarin.

EGA. (2016). Thailand’s 3 Year Digital Government Master Plan (2016-2018). Electronic Government Agency. EGA.

Ellingwood. (2016). Hadoop, Storm, Samza, Spark, and Flink: Big Data Frameworks Compared. Retrieved from https://www.digitalocean.com/community/tutorials/ hadoop-storm-samza-spark-and-flink-big-data-frameworks-compared

Elser, B., & Montresor, A. (2013). An Evaluation Study of Big Data Frameworks for Graph Processing. Proceedings of 2013 IEEE International Conference on Big Data Bent.

European Commission. (2015). eGovernment in United Kingdom. Author.

European Commission. (2017). The Fourth Industrial Revolution. Author.

Flyvbjerg & Budzier. (2011, September). Why Your IT Project May Be Riskier Than You Think. Harvard Business Review.

Garner, C. (2016). Can Australia lead the world in e-government? Second is good. But we’re still far from our potential. Canberra Times.

Goasduff, L. (2015). Gartner Says Business Intelligence and Analytics Leaders Must Focus on Mindsets and Culture to Kick Start Advanced Analytics. Retrieved on May 12, 2017. From http://www.gartner.com/newsroom/id/3130017

Inoubli, Aridhi, Mezni, & Jung. (2016). Big Data Frameworks: A Comparative Study. CoRR.

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International Telecommunication Union. (2009). e-Government Readiness Assessment Framework. ITU.

Mahizhnan & Andiappan. (2002). e-Government: The Singapore. Tamil Internet.

Marr, B. (2015). Where Big Data Projects Fail. Forbes. Retrieved on May 12, 2017. From https://www.forbes.com/sites/bernardmarr/2015/03/17/where-big-data- projects-fail/#26834de8239f

Ministry of Finance. (2013). e-Government in Singapore. Presentation to the United Nations, 4 Sep 2013

Ministry of Public Administration and Security. (2009). e-Government of Korea: Best Practices. National Information Society Agency.

Moreno, H. (2017). The Importance Of Data Quality -- Good, Bad Or Ugly. Retrieved on September 29, 2017. https://www.forbes.com/sites/forbesinsights/2017/06/05/ the-importance-of-data-quality-good-bad-or-ugly/#1ebfbaf510c4

Oestreich, T. W., & Buytendijk, F. (2016). Why You Need to Rethink Your Data and Analytics Roles Now. Gartner, Inc.

Rabaiah, A., & Vandijck, E. (2009). A Strategic Framework of e-Government: Generic and Best Practice. Journal of E-Government, 7(3), 2009.

Sin. (2007). Foundation of Effective E-Government-The Singapore Experience. Belfer Center for Science and International Affairs, Harvard Kennedy School.

Wescott. (2001). e-Government in the Asia-Pacific Region. Report of Asian Development Bank.

White, S. K. (2015). Study reveals that most companies are failing at big data. CIO from IDG. Retrieved on May 12, 2017. From http://www.cio.com/article/3003538/ big-data/study-reveals-that-most-companies-are-failing-at-big-data.html

Yong, J. (2003). e-Government in Asia: Enabling Public Service Innovation in the 21st Century. Times Edition.

Zhao, Y., Yoshigoe, K., Xie, M., Zhou, S., Seker, R., & Bian, J. (2014). Evaluation and Analysis of Distributed Graph-Parallel Processing Frameworks. Journal of Cyber Security, 3(3), 289–316. doi:10.13052/jcsm2245-1439.333

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https://www.forbes.com/sites/forbesinsights/2017/06/05/the-importance-of-data-quality-good-bad-or-ugly/#1ebfbaf510c4

http://www.cio.com/article/3003538/big-data/study-reveals-that-most-companies-are-failing-at-big-data.html

http://dx.doi.org/10.13052/jcsm2245-1439.333

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ENDNOTES

1 https://www.forbes.com/sites/bernardmarr/2016/04/05/why-everyone-must- get-ready-for-4th-industrial-revolution/#505748683f90

2 http://www.cbbc.org/mic2025/ 3 http://www.makeinindia.com/web/mii/home 4 https://nationofmakers.us/ 5 https://www.gov.uk/government/publications/design-in-innovation-strategy-

2015-to-2020 6 http://policy.creativekorea.or.kr/eng/ 7 https://publicadministration.un.org/egovkb/en-us/reports/un-e-government-

survey-2016 8 Note that value of the “Current Maturity Level” equals to 6 is derived from

the fact that these countries have score of their “Online Service Component”, according to United Nations e-Government Survey 2016, more than 90%.

9 http://hadoop.apache.org/

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https://www.forbes.com/sites/bernardmarr/2016/04/05/why-everyone-must-get-ready-for-4th-industrial-revolution/#505748683f90

http://www.cbbc.org/mic2025/

http://www.makeinindia.com/web/mii/home

https://nationofmakers.us/

https://www.gov.uk/government/publications/design-in-innovation-strategy-2015-to-2020

http://policy.creativekorea.or.kr/eng/

https://publicadministration.un.org/egovkb/en-us/reports/un-e-government-survey-2016

http://hadoop.apache.org/

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Chapter 9

DOI: 10.4018/978-1-5225-3906-3.ch009

ABSTRACT

This chapter explores some different ways to acquire not only professional competence but also knowledge and learned solutions. The author doesn’t give a “magic solution” to solve all problems, but instead suggests some ideas to keep in mind and work around to overcome great difficulties.

INTRODUCTION

This chapter has the perspective to try to understand some different ways to acquire not only professional competence but specifically knowledge and “learn solutions”. In a period when it is so difficult to overcome the economic/financial/social crisis started many years ago, it would be absolutely mandatory to understand the reasons why this situation has been created and to find some different way to succeed and finally come out. No way this situation has been created only for economical/ financial reasons.

One of the major problem that seems to create difficulties trying to come out from this crisis is the lack of management: we need to find managers. Let’s remember and

Strategists From the Past, as Encrypted Cognitive Maps, Whose Access Code Is the Will of Learning Solutions

Anna Verrini Independent Researcher, Italy

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Strategists From the Past, as Encrypted Cognitive Maps

keep in mind something so simple that can appear stupid: a body without the head is nothing. The same for a company: without the head it’s impossible to manage the company, get results and then get it revive or just survive.

Too many persons believe now that the “innovation”, and usually we mean “technical innovation”, can solve any problem. But we forget that “innovation for innovation” is just a good practice that can help improving the production flows, bettering the quality of products and services, but if there is nobody capable to invent, to create new business and then to plan, to design, to control, innovation can be reduced to a theoretical exercise, nothing much more than this.

Intuition and innovation: two words that can seem to be again quite close, but without intuition, innovation could be nothing. Technicians usually love innovation and push to use innovation for itself. It would be better to analyse the life around, analyse how to solve problems and use innovation to design new solution. Imagination and creativity, the best menu to have companies prospering. We need persons capable to invent and to create: it is no longer enough to keep the situation under control. Now is mandatory to start again to prosper not just to survive. When we look back to the past we can see many persons using imagination and creativity to invent new products, new services to solve problems when there was really less technical support to solve the problems. They used creativity also to create technical solutions: but this way they solved problems.

INTUITION FIRST, THEN INNOVATION

I don’t have the intention with this chapter to find the “magic solution” to solve the problems, but just suggest some ideas to keep in mind and work around to overcome the great difficulties we find any time and everywhere at the moment.

Actually, the idea is: let discover, analyse and use excellences we can find in the past and also excellences we can find around us also today, and let try to learn from the experience of these persons and apply what we learn. The first thing to do will be to try to understand if there is something in common, and what, between the excellences we will analyse.

Please, don’t start again every time from scratch but let try to start again from three!! (“Ricomincio da tre” is the title of an old Italian film – 1981. M. Troisi as protagonist and rector).

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The Crisis We Are Living

With these few lines, I would not claim to understand the reasons of the crisis we are living with at the moment and from a long number of years. It would be great: to understand better the reasons could help to solve the problems!

I would just make some considerations. All the history long of the man has been an alternation of periods of prosperity and periods of crisis for many different reasons due largely to the man. War (then men) and nature have been the dominant reasons. Always we came out stronger than before. Let just see the last worldwide war: more or less every European country has been destroyed from the war. But the reaction of the people was great and we were able to build again our cities, our schools, our economy, our infrastructure, our life. The main reason that give the possibilities to come out of critical situation is to find leaders. So, let’s go around and find person, say “talents”, with a potential to become leaders through an appropriate training and executive coaching.

In this situation, what is very important is to analyse the excellence of the persons and their peculiarities, and the capability they had “to create” something. Following, few examples of persons who had the capability to invent and create new business or believe and invest in something completely new when they decided to do.

SOME EXCELLENCES IN THE PAST

Adriano Olivetti and His Company

Adriano Olivetti was probably the most eclectic entrepreneur / manager in the past century, projected into the future in a way that still now, after about 60 years from his death, his ideas seem to be too much projected in the future. The Company was founded by his father Camillo Olivetti in 1908 to build typewriters. Initially Adriano was educated at home by his mother and later he worked together with the other workers in the Company. After graduation in chemical engineering at the Polytechnic University in Turin, he spent time in the USA to learn the roots of American industrial power. For the same reason, he later went to England. Immediately after his father, Camillo Olivetti, left the management of the company, Adriano takes the control making a revolution in the company starting with the plan to design and build again the industrial structures. Everything was designed to realize a better working environment for the workers in the company and a better social environment in the territory where they were living.

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The industrial building should be perfectly integrated in the nature and the internal structure should be flexible enough to be changed and adapted following new requirements (see Figure 1). Now we speak of smart work: Adriano Olivetti realized it about 70 years ago. But to get the workers’ participation was something he had in common with the father Camillo. Adriano invested a lot for the education and training of the persons working in the Company, and not only. His major objective was the well-being of the persons and their families also in a cultural perspective (Calogero, 2011; Filippazzi, 2006).

He created a sale network of shop in Italy, and not only, where Olivetti style was, of course, absolutely evident not just for the logo but specially for the way customer was dealt with. He expanded the business opening markets outside Italy. One of the last investment he made was an American Company, Underwood, he decided to buy to enter the USA market in a more extensive way. The Company was in a bad situation: when Adriano Olivetti died, on 1960, he was close to go there to reorganize the Company. He didn’t have the time to demonstrate the validity of this way to enter and enlarge a new market: to buy a company with a large and structured sales organization in the territory.

The concepts not only of efficiency, but of beauty and elegance was applied also in designing the products of the Company: any times architects were involved in designing a new product. It was 1959 when the Illinois Institute of Technology selected “Lettera 22” (see Figure 2), one of the more famous portable typewriter produced and sold by Olivetti, as the best designed product of the last 100 years. This typewriter is on exhibition at MoMA in New York starting from 1950 (Parolini, 2008).

Figure 1. Olivetti’s building in Ivrea (Italy)

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As a proof of the portability of this typewriter there is a photography of the most famous Italian journalist in the past century, Indro Montanelli, sitting on a stack of old books and newspapers with a “Lettera 22” on his knees, writing a story. When he died, a sculpture inspired to this picture was erected to him in the centre of Milano (see Figure 3).

Adriano Olivetti was engaged in a lot of different things from politics to culture, from philosophy up to the management of the company, always looking forward and designing the future. Second half of 1950’s, prodded from a letter of Enrico Fermi he decided to invest in the electronics research and 4 years later the first commercial computer designed and produced at Olivetti was installed at Marzotto, a major global player in the textile industry, located in the north east of Italy. Unfortunately, he made something that was too much in advance in that period, specifically in a country as Italy was, where the mechanical and engineering industry was the more important. When he died, it was 1960, the electronics research and production were stopped. But it is not the case to go on speaking about Adriano Olivetti because it would take too long and also because he is very well known not only in Italy: it’s enough to get in touch with “Fondazione Olivetti” and “Archivio Olivetti” to have all the information, from the life of the Olivetti’s to the company accounts. Probably he is the most famous Italian entrepreneur after the second world wide war. He left an extremely important inheritance in terms of human capital with a number of

Figure 2. Lettera 22 typewriter Open image.

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managers who spent the experience acquired with Olivetti in companies that had the opportunity to benefit from those skills. Few persons remained in the Company as researcher and got excellent results: one of this result was the P101 “personal” computer put in the market middle 60’s, more or less 15 years before the time when we started to know and use PC in the 80’s.

The same CISCO had the backbone created, de facto, by two persons from Olivetti, Mario Mazzola e Luca Cafiero who founded four companies they sold to CISCO: Crescendo, Andiamo, Nuova and Insieme. They probably left a unique “made in Italy imprinting” in a giant of the Bay Area. And, if we look at CISCO,

Figure 3. Montanelli’s sculpture Milano Porta Venezia Public Gardens.

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we can notice a management conduct that is very close to the conduct at Olivetti, the Olivetti of Adriano (Bonfanti, 2004).

What we can also say is that Adriano Olivetti was capable to put together the professional profiles necessary to manage “in toto” the company, the persons working in the company and the territory. For every problem the right person to solve it: from journalists to architects, from sociologists to philosophers.

CSR (Company Social Responsibility) realised 70 years ago is probably the major characteristic standing Olivetti and giving the company the possibility to achieve the results they got.

Mario Tchou (by Olivetti Company)

Very often leaders didn’t have an excellent scholastic career, or rather, they had problems in the school or had a very short scholastic career. It is not so easy to evaluate a person: the capability to evaluate person is a gift that is not so frequent to find. Let just remember what happened in Olivetti with electronics research.

In the second half of 1950’s, starting from a suggestion coming directly from Enrico Fermi through Roberto Olivetti, Adriano Olivetti invested a lot of money in the research in electronics (see Figure 4). That time few persons had the capability to see in the future and decide to invest in the electronics research. Adriano Olivetti was capable to do. Mario Tchou, the son of a Chinese Ambassador in Italy, born in Rome but living in the United States where he completed his studies and was working at the Columbia University in New York, had the courage to accept the proposal of Olivetti and came back to Italy. He put together an excellent group of physicists, mathematicians, engineers who wined the challenge and designed and

Figure 4. First desktop computer, P101 Fondazione Adriano Olivetti.

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produced one of the first transistor commercial computer in the world, the Elea 9000. As I mentioned, the first one has been installed in 1959 at Marzotto, a major global Player in the textile industry founded in 1836 by Luigi Marzotto.

The “alliance” between Mario Tchou and the visionary Adriano Olivetti, who was named “produttore di idee oltre che di cose” (producer of ideas, not only things), brought in great results but was interrupted by the early death of Adriano when he was only fifty-nine years old in 1960 followed by the tragic accident on the motorway between Milano and Ivrea that caused the death of Mario Tchou only one year later, when he was 38 years old. In few years the Italian financial establishment and the leaders of the traditional metal and engineering industry stopped everything: they didn’t believe in the “electronic”. Only a small group of researchers remained at Olivetti but had the capacity to go ahead and announce, few years later (it was 1964) the first desktop computer in the world, Programme 101, or P101 (see figure 5), also known as Perottina from the name of Pier Giorgio Perotto, the responsible of the research team at Pregnana, a small city close to Milano where the team of Mario Tchou moved (Rao, 2008).

But let see the way Mario Tchou put together the basic team that started to work at Barbaricina, an area close to Pisa that was the first site where researchers started their activity (see Figure 5: the team who started to work in Barbaricina).

Figure 5. The research team in Barbaricina (Italy) in second half 1955’s Open.

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One of the person who was selected directly from Mario Tchou, recounts that he was very moved all the interview long being in front of that genius and was going around speaking about his experience at university with a lot of details. Tchou seemed not to listen anything but suddenly he asked what could be the weight of a ball he had in his hands. The candidate started replying with a number absolutely casual but immediately after regain control and asked for specifications, diameter, material and so on. The reaction of Tchou was to start to smile saying he was looking for the capability to react in face of an unexpected event! Of course, this candidate was immediately hired.

Another story that is part of the “myth Mario Tchou” has been reported many times by persons who worked with him. When it was clear to be necessary to start hiring persons to work with the new computer as programmers, he authorized but only provided that selection was done among persons who didn’t demonstrate to be so good as scholar. And we must remember that, at that time, it was not so clear what kind of competence should have a programmer so it was difficult to define competences and characteristics he must have. The person who made the selection is usual to say that “he went around in Italy making interview to young who was part of “the dregs” of the Italian school population”. Quite a strange way to select persons, but they got excellent results.

What can we say? This person was excellent not only as scientist but he had an unbelievable capability to create a team of excellent persons, not only technician.

And this characteristic is another essential condition to conduct a company.

Aristide and Vittorio Merloni

Still Today, many times the word “Olivettiano” is used when speaking of managers with the same characteristics and style of management as Adriano Olivetti.

Just to give an example, let’s spend few words about Vittorio Merloni. His father Aristide founded on July 1930 a small company to produce scales. Diversification was a guiding principle for Aristide Merloni and his inspirational principle was always the corporate social responsibility: “There is no value in the economic success of any industrial initiative unless it is accompanied by a commitment to social progress”.

Vittorio, who is mentioned sometimes as “entrepreneur Olivettiano” continued on the same principles as the father. It was 1975 when he founded Merloni Elettrodomestici, later renamed Indesit. But the best way to describe the inheritance left by Vittorio Merloni is the installation speech at Confindustria when he was elected president in 1980. Particularly a sentence is very important still now:

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“The true limiting factor in the Italian economy for the next years will be mainly the shortage of managerial factor and the inadequate professional conditions of the workforce” (free translation of one sentence from the speech of Vittorio Merloni).

Again: CSR, creativity, intuition, care of the territory, capability to accept risks (Balloni & Pettenati, 2016).

Pasta Buitoni: A Brand Famous Everywhere in the World

“Pasta” is probably the most famous Italian food together with “pizza” and Buitoni is the family who started to produce pasta in 1827 in a small work-room in Sansepolcro, in the centre of Italy in an area between Toscana, Umbria and Marche. Buitoni is probably the oldest “food industry” in Italy. The production started for the decision of an ingenious woman, the wife of the founder of the Company, Giovanni Battista Buitoni, who decided to produce a new kind of pasta using hard wheat, expressly imported from Puglia, south of Italy. Innovation is the underlying theme from the beginning: in 1884 they started to produce a new kind of pasta, “pastina glutinata” that is the first dietetic speciality produced in Italy for a controlled feeding without losing the traditional taste.

They were famous as “revolutionary company” for their social commitment not only in the company but also in the territory for the wellbeing of their workers and all the persons leaving in the territory.

In 1908 Francesco Buitoni was one of the partner who participated to found, together with Annibale Spagnoli and his wife Luisa, a new food industry, Perugina.

Again: CSR, creativity, intuition, care of the territory.

Luisa Spagnoli and Perugina

Then we can spend some words about another excellence we should analyse and learn a lot of lessons and is again the case of a woman: Luisa Spagnoli. She was born end of 19th century in Perugia, in a needy family. Together with the husband, she took over a small glocery in Perugia that was included in the Perugina factory in 1909. Perugina was founded in 1907 by Francesco Buitoni, Leone Ascoli, Francesco Andreani e Annibale Spagnoli (the husband of Luisa). And this was the beginning of a typical Italian story of excellence based on an Italian woman capable to use her intelligence, intuition and innovation going on to make what, specifically on that time, was typical of a woman: to study and realize recipe of cakes chocolate based! But she was also capable to keep alive the company over the first worldwide war when only the women were available to work.

One of the more popular products, “invented” in 1922 and still now on the market, is the “Bacio Perugina” (see Figure 6) she created to recycle rejects items

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of the daily production. Another trade mark is “Cioccolato Luisa”, the unmistakable “Fondente Perugina” she created in the same period.

But the fortune of the Company is essentially due to the collaboration between Luisa Spagnoli and Giovanni Buitoni, one of the son of Francesco. He was involved by his father in Perugina because of the crisis of the company. The tactics applied by Giovanni Buitoni solved the problems and the Company was again profitable in a very short period. His management capabilities together with the intuition of Luisa Spagnoli in creating new products were the foundation of the fortune of the Company.

Luisa Spagnoli has been an inventive and a resourceful entrepreneur, but not only. She always took care of the needs of the persons around her making a lot for the wellbeing of the persons working with her and of family in the territory. She created a nursery and a company store in the manufacturing plant to help women working at Perugina.

She started a new very important project at the end of the first worldwide war: the farming of angora rabbits. Angora, obtained through a special procedure that let avoid to shear the rabbits, was used to produce shawls and boleros sold through a number of shops opened everywhere in the world. These new products of the “Italian style” were adopted by the more famous stars.

Let me say, again CSR, creativity, intuition, care of the territory and the persons living in.

Figure 6. Bacio Perugina

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Hewlett-Packard

This is the story of a company started in a garage in California in the years of the “Depression” by these two friends, Bill Hewlett and David Packard. They started designing, producing and supporting tools specialized on the requests of costumers who had to solve specific problems. Starting from this activity in a garage they created one of the most important and universally acclaimed and admired technology companies in the world. But this was not just an excellent company on a technical point of view. They created solutions to solve problems. Not only, the wellbeing of the personnel working with them was always at the centre when managing the company and were able to create an environment “that fostered intense individual creativity”.

But I would stop here to speak about Hewlett-Packard because it is better to read the book written by David Packard, “The HP way” (Packard, D., 1995).

At the end, I would just explain my first feeling: it was typical of all these persons, apparently so different, to keep the “man at the centre” taking care of his needs, any case, both he was working with them or was a customer or people living in the territory. Other characteristics they had in common were the creativity, the intuition together with the capability to accept risk, to evaluate persons and to create and conduct team.

These could be some reasons why it would be useful to analyse their story and learn from them.

FUTURE RESEARCH DIRECTIONS

What is clearly emerging, in my opinion, just considering these few examples, is that it is extremely important also to look in the past behind us and today in the reality “the case of excellence”, because it is always possible to learn a lot through the study of these cases. Many time the problems we find and have to solve are the usual problems we always had and continue to have, apart from the environment that is always changing. What I suggest is “to collect as much as possible” cases of excellence, to study what they were able to create and to realize and how, and learn as much as possible. Starting from this point we will able to create training protocol for an emerging class of manager-entrepreneur.

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CONCLUSION

At the end, I would make some reflections: it was typical of all these persons, apparently so different, to keep the “man at the centre” taking care of his needs, any case, both he was working with them or was a customer or people living in the territory. For all of them the inspiration principle was the “Company Social Responsibility”: “There is no value in the economic success of any industrial initiative unless it is accompanied by a commitment to social progress”. And which way they got results? Because they had intuition, creativity, capability to accept the risk, to evaluate persons, to create and conduct team. Everyone was a manager-entrepreneur. It could be these some of the reasons why it would be useful to analyse their story and learn from them. Unfortunately, it seems that nothing is changed after 1980 when Vittorio Merloni was elected president of Confindustria (Confindustria is the Italian Association of Industries): still today there is a terrible lack of managers.

ACKNOWLEDGMENT

The author wishes to acknowledge the very valuable help, information and encouragement I received from Donata Tchou, daughter of Mario Tchou, in writing this chapter. Also, she would like to thank the all librarians of the Archivio Olivetti (Roma) and Fondazione Olivetti (Ivrea) for their collaborations in finding documents and materials, that supported this research and helped to get results of better quality.

REFERENCES

Associazione Italiana per l’informatica e il calcolo automatic. (n.d.). Informatics History. Retrieved August, 2017 from http://www.aicanet.it/storia-informatica

Balloni, V., & Pettenati, P. (2016). Vittorio Merloni Un imprenditore olivettiano. Bologna, Italy: Il Mulino Publisher.

Bonfanti, C. (2004). Mezzo secolo di futuro: l’informatica italiana compie cinquant’anni. Mondo Digitale, 3(4), 48-68.

Buitoni. (n.d.). Pasta History. Retrieved August, 2017 from https://www.buitoni.it/ casa-buitoni/la-storia-buitoni/

Calogero, G. (2011). Ricordi e aneddoti dei Laboratori di Ricerche Elettroniche Olivetti. Archivio Olivetti.

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http://www.aicanet.it/storia-informatica

https://www.buitoni.it/casa-buitoni/la-storia-buitoni/

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Dictionary.com. (n.d.a). Creativity. Retrieved August, 2017 from http://www. dictionary.com/browse/creativity

Dictionary.com. (n.d.b). Enterpreneur. Retrieved August, 2017 from http://www. dictionary.com/browse/entrepreneur

Filippazzi, F. (2006). ELEA: storia di una sfida industriale. In La nascita dell’informatica in Italia. POLIPRESS.

Packard, D. (1995). The HP Way – How Bill Hewlett and I Built Our Company (D. Kirby & K. Lewis, Eds.). New York, NY: Harper Collins Publishers.

Parolini, G. (2008). Olivetti Elea 9003: Between Scientific Research and Computer Business. In J. Impagliazzo (Ed.), History of Computing and Education 3 (HCE3). IFIP — The International Federation for Information Processing (Vol. 269). Boston, MA: Springer. doi:10.1007/978-0-387-09657-5_3

Perugina. (n.d.). Chocolate History. Retrieved August, 2017 from https://www. perugina.com/it/mondo-perugina/storia

Rao, G. (2008). Mario Tchou e l’Olivetti Elea 9003. Limes, 4(8), 10.

Sapelli, G., & Cadeddu, D. (2007). Adriano Olivetti, lo spirito nell’impresa. Trento, Italy: Il Margine.

KEY TERMS AND DEFINITIONS

Buitoni: A historical brand of Italian pasta products; a food business specializing in several types of pasta, famous worldwide.

Innovation: Fresh thinking that creates value; new products, business process, and organic changes that create wealth or social welfare.

Merloni: The name of several Italian companies, active mainly in the thermo- hydraulic sector, that are named after the founder, Aristide Merloni.

Olivetti: A Telecom Italia group company operating in the field of information technology. In the past, it has been one of the most important companies in the field of writing machines, computing, and electronics.

Perugina: A historical brand of Italian confectionery products; a food business specializing in chocolate production. The “Perugina Kiss,” a chocolate with love tickets inside.

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http://www.dictionary.com/browse/creativity

http://www.dictionary.com/browse/entrepreneur

http://dx.doi.org/10.1007/978-0-387-09657-5_3

https://www.perugina.com/it/mondo-perugina/storia

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Chapter 10

DOI: 10.4018/978-1-5225-3906-3.ch010

ABSTRACT

Academic didactics has started implementing pedagogic strategies that overcome the traditional frontal lecture to reach a new aim: supporting the learning process. According to the leading connectivism principles, which are revolutionizing education, learning processes are a complex and dynamic concept. On one side, new technologies are promoted to support the learners’ “cold” cognition. On the other, strategies boasting a “hot” cognition are acquiring more and more importance. The student-teacher relationship is facing change: teachers are required to consolidate their profession and tutor the learning process, regardless of the field of study. These new strategies, although carried out reluctantly, have been successfully implemented in some action research projects highlighting the learners’ engagement on one side and the professors’ hesitation on the other. This chapter explores this phenomenon.

INTRODUCTION

In the twenty-first century, the social problems of some people as epidemics, climate changes, nuclear accidents and terrorism, have turned in a problem of all people. When problems involve whole communities, a crisis is produced and affects all

Managerial Mindsets in the Academic World:

The Crisis of Educational Organizations

Gabriella Giulia Pulcini University of Camerino, Italy

Valeria Polzonetti University of Camerino, Italy

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Managerial Mindsets in the Academic World

systems and therefore education too. But educational system can find the solution because can be an important factor of social renewal.

The necessary change of educational system is well illustrated in “Insegnare a vivere. Manifesto per cambiare il mondo” or “Teaching how to live. A manifesto to change education” the last book of Morin E., in which he explains his thesis that “the crisis of the future”, the historical uncertainty, can be addressed by teachers who have the mission to prepare the future generation to know how to deal with unexpected things. (Morin, 2014, p. 31).

The academic world is feeling the need for a change in the didactic paradigms that have been defining Italian University so far. In view of the many interdisciplinary challenges future graduates will face, the idea of training students mastering multiple well-organized synapses is making its way. These will include specific discipline knowledge as well as soft skills, which mean a dynamic combination of cognitive and meta-cognitive, interpersonal, intellectual and practices abilities, that include communication, creativity, analytical thinking, multitasking and time management. Soft skills are somehow the manifestation of what has metabolized through learning and that at the same time aimed at developing social knowledge building processes (Tryphon & Vonèche, 1996) and a mindful brain (Siegel, 2013). This model refers to a pedagogical connectivism vision, that actually overcomes the constructivist vision, where who learns is in the center of the educative process and builds the knowledge thanks to the interactions with the others. But that happens if the student is aware of the knowledge nature and has a critic spirit that allows him to select the useful information to grow and improve. Modern teachers should be highly competent and enlightened, not only as far as theory and practice are concerned but also in managing each aspect of the learning.

Even though science teachers do not have to be competent in psychology and neuroscience, they must possess good command of the strategies effectively supporting didactics. These include metacognitive strategies which allow:

• A deeper understanding of the learners, thus designing materials and content aimed at fulfilling their specific needs

• Learners to address their self-assessment and self-regulated learning skills, which will increase their understanding of their own learning style and, accordingly, choose a way to face their action points.

This opens to some questions: Who trains these didactics-competent teachers? Who gives feedback on the implemented teaching methods? What kind of feedback is to be given?

Most Universities rely on students’ judgment, which is exclusively based on personal experience, to assess the quality of teaching methods.

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Objective didactics assessment is not easy. If teachers are judged based solely on their availability, the feedback will only take into consideration meeting hours and overlook basic aspects such as communicative style, voice pitch, meeting environment, strategies for learners with special needs and email replies. Sometimes teachers themselves overlook sensitivity and the fundamental parameters aforementioned, either unwittingly or because it is not considered relevant to their academic career development.

Despite being consistent with all academic contexts, what stated above may be particularly relevant to Science teaching. Science teachers are often unaware of some learning-related concepts such as metacognition, teaching and learning styles and about the factors that could affect learning as communication and emotions.

Many learners receive little or no exposure to factors crucial to a successful educational experience hereby intended as continuous competence development. Being aware of the self- regulation principles that enable the learning process as well as motivation are the key to learners’ development.

In order to achieve this change, there needs a managerial mindset, so teachers are able to teach what is knowledge in his complexity and changeability.

Science teachers gaps in cognitive strategies are identified and analyzed in an article written by Physics Professor Persico E. (1956)

“Tell me about electromagnetic waves”. The candidate, who failed to explain why electricity wires are covered with insulation, now looks noticeably relieved and industriously starts writing on the board the differential forms of Maxwell’s equations. Such an easy question!

(….) This disease is so complex it is impossible to express it in one word, but basically it mirrors a contrived and overall wrong learners’ approach to Physics.

The definition if this disease, which is now known as “Persico Syndrome”, wraps up by stating:

“Are teachers to blame? Or are teacher teachers to blame? It may be because of this or for any other reason. We would like to read from you. Tell us, please… what’s wrong?”.

STATE OF THE ART

As of today, Science teachers fail in providing learners with strategic tools to support their autonomous learning processes and enable them to adopt development strategies based on self-awareness.

Metacognitive processes are at the basis of skills such as reflecting on action, filling knowledge gaps to face real problems, being dynamic in a “liquid” modernity

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(Bauman, 2002), assessing and analyzing one’s skills. Metacognitive process awareness and its application cannot be underrated.

Both gaps in teacher training and their lack of interest affect students, not only those from under-privileged backgrounds (e.g. family, religious or political issues) but also learners who need moral values and guidance. At the end of their first year of university, many of these learners will contribute to increase dropout rates.

Yet, things can change. “Orphans make the best recruits” says one of the characters in “Skyfall” directed

by Sam Mendes. Research shows how under-privileged subjects may be capable of overcoming

incredible challenges as soon as they encounter a mentor. A training that relies on effective methods to develop learners’ motivation, boast their confidence and enable autonomy will lead to unforeseen results. It is all about designing veritable management courses aiming at encouraging professors’ interest towards new teaching methods and that legally validate their effectiveness. Defining competencies and giving feedback is of the utmost importance, but there is more. There are a lot of qualitative aspects in scientific didactics that may be quickly dismissed because they are thought to apply to humanities only. That is not the case. The right person can make learners fully appreciated these aspects: teachers may show new perspectives, take in broader issues, lead and guide the overall personal growth, not just the academic one.

Awaiting the necessary reforms aimed to the expansion of teacher professionalism, in this chapter are illustrated the results of a research project carried out during the Doctoral Degree Program in “Development of New Approaches to Teaching and Learning Natural and Environmental Sciences” at University of Camerino (Pulcini, Angeletti & Polzonetti, 2016). After the analyses with some investigations upon teaching methods and strategies research, the course “Know Yourself. Discover your learning style” was designed and tested (Pulcini, Amendola, Angeletti & Polzonetti, 2016). This course elaborates on fundamental aspects of the learning process which may be overlooked in science teaching.

Many students saw this course as an opportunity for guidance, self-analysis and improvement even though not specifically aimed at their academic field of study. This training course had the learners at its core and gave them a chance to voice or question their values and learning objectives.

University of Camerino and University of La Matanza, Argentina came together to share the UNICAM “Know Yourself” course and to reach out to academic professors. The aim of the project is to train teachers to a managerial mindset, thus allowing them to go beyond their field of study and carry out self-reflection and nurture the rapport they share with learners. Teachers monitor their own practice by consciously implementing the most effective and supportive teaching methods

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and strategies. At the same time, teachers will be able to provide each learner with a personalized approach not just those with special needs. The manager-teacher will optimize academic activities; provide students with a multifaceted role model who is able to design a special background against which every single student can shine.

UNIVERSITY TEACHING… EVERYONE NEEDS TO KNOW HOW TO TEACH

The PhD is the third level of university education that allows to start to develop a research work and improve the curriculum vitae even through scientific publications. The doctoral programs are related to all the academic areas but the doctoral courses on didactics and orientation are not really common in Italy. This is maybe because these activities are considered ancillary and functional to academic-scientific activity and not fundamental to the teaching activities itself.

In addition, the guidance activities are considered mandatory in the academia. On the other hands, these activities are time-consuming, but not relevant for the academic career.

Given the premise, the Ph.D. in “Development of New Approaches to Teaching and Learning Natural and Environmental Sciences” loses, in this context, some of its value, as in the academic sphere, professor who dedicates himself to these activities is not valued as the one who deals with “scientific research”.

In general, the quality of scientific production is mainly based on the number of citations that each publication receives, supplemented by the importance of the magazine. Efficiency is instead estimated on the basis of two indices: a financial index (defined as the ratio between the resources transferred to a research structure and the number of role professors and researchers working within the structure) and an index of operational (defined as the relationship between the scientific production of a structure and the number of role professors and researchers involved in the structure). Effectiveness is judged on the basis of socio-economic impact indicators and the ability to get grants and funding.

It seems clear that these criteria are discriminatory on the base of the research carried out by researchers from the same field. In fact, this activity is recognized and could be useful only if conducted by subjects belonging to the humanistic disciplinary area.

In the academic system, the professor must be both an expert of the research in which he is engaged and the manager of the teaching activities, in which he must demonstrate full awareness of his pedagogical and methodological choices, also.

Lack of preparation in the field of didactics has serious repercussions on the quality of student learning and it’s time to find a solution about it.

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It’s possible to plan an update on this specific skills for all the subjects involved in teaching activities. Furthermore, is important to define new procedures that allows progression in college career by evaluating all the activities developed.

On this regard, it’s important to underline that in some European countries, there are different approaches about the definition of the academic careers.

Researchers and lecturers who practice guidance- and/or tutoring- activities at the same time will also benefit from the recognition and appreciation of these activities for their career. To date, this type of commitment does not enjoy equal dignity, slowing down the necessary process of change that should be sustained to improve the academic system.

In addition, it’s important to consider that Italy has the second lowest percentage of university graduates in the European Union.

Which solutions can be proposed? Paths of methodologies and teaching strategies, for example, could be included in the training of students intending to pursue the career of teacher and/or academic professors. Over the past 20 years, pathways on teaching methodologies, such as those offered for teaching science subjects in secondary schools have been carried out by university teachers with almost exclusively humanistic training. A choice often dictated by the lack of experts in the scientific area, which in fact demonstrates the gap between fundamental teaching skills and the difficulties to fill them in the current organizational structure.

The PhD program in Development of New Approaches to Teaching and Learning Natural and Environmental Sciences at University of Camerino is an example of how to train competent personnel in the field of methodological and pedagogical research within the academy and to know how to implement it for the benefit of the students. An opportunity is offered to experiment with strategies and didactic activities that go beyond the normal paths offered by any other form of doctoral course. But in Italy a similar course is a rarity.

LATENT NEEDS

Quite often, real needs are hidden, undisclosed. Learners can feel something is wrong with the lesson, cannot study and fail exams. At the same time they refuse help from experts who might help them overcoming those problems.

This is because it is not the teacher who is providing help and getting learners to focus on their own action points: someone else is. There is nothing learners would like more than asking for teachers’ help, since they are quite familiar with each other. Most of the times teachers fail to provide guidance. Learners are directed to remedial courses that replicate the dynamics of traditional lectures. Frustration is unavoidable. How can we solve this impasse?

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In 1956, Persico observed structural deficiencies, asking himself who was guilty and looking for motivation in the past, “are teacher teachers to blame?”

In the cited article, also Persico noticed how students aren’t able to transfer the acquired knowledge in a particular situation and are not able to create mind maps of this new knowledge. This prevents them from effectively using aids such as drawings and pictures to get their point across or to explain a theoretical topic with some examples in real life. This ability of transfer and of match the verbal dimension of communication and images is a fundamental parameter to assess learners’ performance. This skill is proof of an ongoing learning process as well as synaptic connections.

Didactics should be thoroughly renewed, as well as science syllabus. The contents of science syllabus must give indications about their complexity, looking forward the relationship with the multiple sciences including the human ones. In particular, the planning of the taught discipline has to provide, in addiction of the goals to be achieved, the tools that are made available to self-absorb what is learned, so it has to be able to support the self-learning, as well as is useful to indicate the organization of the feedback moments aimed at supporting the self-evaluation.

Surely the university needs to be reformed with regard to the didactic turnaround and the role of the professor, which should be considered as tutor and didactic orientator. Orientation as a drive to support self-orientation and lifelong guidance needs to be more targeted and personalized. This role of the professor as an orientator is institutionalized, formed with proper preparation and incarnation by all those who devote themselves to teaching.

If we want to improve the whole field of training, guidance should be pursued as a fundamental practice to support the acquisition of students’ life and soft skills from their younger ages. Orientation, exercised by all teachers, thus becomes the guiding principle of student choices and growth. Guidance is to educate and train the individual by trying to provide him with all the tools most suited to his growth and full accomplishment, and surely orientation is a fundamental action in the management of the world of education, which must be exercised at every level from childhood to university.

LEARNING STYLES LEADING THE WAY TO A METACOGNITIVE PATH

“Wherever knowledge is taught, there is nowhere to know what knowledge is”, as Morin (2014, p. 13) highlights and it’s also reaffirmed by Jerome Bruner when he explains that modern pedagogy thinks the student has to be aware of his thought processes and that the teacher must help him to “become more metacognitive - to

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be aware not only about the subject he is studying, but also of the way in which he proceeds in learning and thinking” (Bruner, 1996).

On one hand teaching science is connected to the study of the theories and to the quantitative demonstration of their accuracy, from the other the abundance of disciplines, dispersed and partial, “are in turn error sources” (Morin, 2014, p.12) and it would be incurious to just teach science, considering that “the problem of the final analysis is more general than this and it would be in the interest of prospects to compare the issues of science teaching with those of a more humanistic field” (Bruner, 1959).

Knowledge is born from a big analyse of a scene and of being able to face the cases where this scene changes, and to connect the various spaces of knowledge and to find solutions to real problematic

The UNICAM “Know Yourself” course wants to highlight the importance of the metacognition and of the processes that motivate the acquisition of transversal skills and in general starting from the knowledge and the analysis of different learning styles. In this way some issues related to cold and hot cognition are deepened. The first part focuses on defining what learning process, guidance and competence and, in particular, on the competence of “self-motivated lifelong learning” are.

Myths about cognitive processes are disproved and brain mechanisms are shown. What and how do we learn? What pushes us? Further reading and visuals introduce candidates to the point of view of neuroscientists, communication experts and people in entertainment. Candidates’ attention is drawn to their individual learning style, how to self-assess their action points and strengthen their cross-sector skills (Pulcini, Amendola, Grelloni, & Polzonetti, 2016).

Secondly, candidates are introduced to different theories about learning processes and a self-reflection questionnaire.

According to Keefe J. W. (1988), learning styles are “characteristic cognitive, affective, and physiological behaviors that serve as relatively stable indicators of how learners perceive, interact with, and respond to the learning environment”. Learning styles are defined as being “relatively stable”: they are not fixed, as they are the result of different aspects. Learners’ status quo remains unaltered unless their learning environment experience changes. Undergoing new experiences leads learners to increase and/or develop new learning approaches. (Pulcini, Porcarelli, Angeletti & Polzonetti, in preparation)

Once their learning styles are profiled, learners receive guidance in writing a report about their own style. The report will spark their metacognition. Metacognition involves thinking about one’s own thinking process (understanding one’s own capabilities to build their knowledge) and active control over the process of thinking used in learning situations (monitoring and self-regulated strategies).

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Cornoldi C. (1995) states that metacognition is to be fully aware of the cognitive processes happening in learning situations. This definition allows further control over learning styles and learning strategies. “Onion model”, the Curry L. (1987) model of learning behavior suggests cognitive styles change with greater difficulty, because are referred to the preferred way an individual processes information, while learning styles and strategies may be influenced by a motivating environment which leads to successful improvement activities.

The “Know Yourself” experience suggests that curiosity sparks motivation yet it is not sufficient to keep motivation alive as it needs continuous boosting. Raising awareness about their knowledge is essential to foster teachers’ motivation to learn. Learners should feel the need to be competent and find motivation to be so: this can be achieved only by renewing didactics.

Secondly, real understanding of knowledge develops thanks to active and constructive processes. That is why the teacher-centered approach paradigm needs moving to a learner-centered one in which learners are autonomous and responsible. Targeting individual needs, designing learning styles oriented content, giving procedures to facilitate learning will allow attention to shift from teaching to learning. Learning facilitation should not only be limited to students with special needs but should be a consistently implemented as a teaching management strategy.

This type of course provided in blended-learning modality, that combines in- person classroom learning with computer-assisted learning, is arrived at its third edition. Initially these courses provided 25 hours of activity to be performed in attendance, online and offline and with the assignment of 1 cfu to the students that ended it doing well all the requested activities. Later, the students requested to deepen treat of some of the proposed themes, the course has provided 50 hours with the assignment of 2 cfu. The course has been followed by 255 students from lots of the UNICAM study courses and throught the received feedbacks it improves within every new edition

STOP GIVING RESPONSIBILITY TO SOMEOME ELSE

Services such as psychological help centers and counseling on campus are itself a great achievement. Yet, it is not enough to retain dropout rates. On one side, pedagogists, sociologists and psychologists can successfully analyze the effectiveness or the ineffectiveness of higher education. On the other, students rarely rely upon these services. They aim at building rapport with their teachers and demand their attention.

The work, data and conclusions of many research groups elaborating on higher education dropout reasons suggest that relatively few students take part to statistical surveys. Students avoid assessment and self-assessment because they feel like they

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are undermining their own self confidence and are being judged. Why do students repress their dropout reasons? Maybe because it was hard to make this informed decision. No one wants to go through the pain again or reflect and suffer for their personal defeat.

When, who and how can higher education students be supported? The enrolment process and the first year are the most crucial moments. A

consistent orientation program is of the utmost importance: students are curious, excited about their future and more likely to turn to experts for guidance. These include psychologists, who can profile competences, and educators, who can suggest effective strategies to raise self-awareness and facilitate an informed education choice.

During their first University year freshmen are welcomed with dedicated events and receive information about the services they can benefit from. Access to these services is only granted after school to analyze what is wrong with lectures or what lectures lack. This paradoxical situation may be faced either in the classroom together with the teacher, or through distance education. Teachers should consistently build rapport with learners, provide them with the most effective education tools, foster a positive discussion and give regular feedback. Only after putting these actions into practice, teachers may suggest receiving further support from psychologists or tutors.

Being your own manager in the academic world is not impossible but this calls for a full understanding of which competencies are consolidated and which require self-regulation actions. Nevertheless, students need guidance to achieve autonomy.

LEADING THE WAY TO MANAGERIAL TEACHING

So far, the need of transforming and assessing didactics in higher education institutions has been frequently highlighted, especially as far as science teaching is concerned. This need is closely linked to University quality analysis. Quality criteria mentioned in “Standards and guidelines for quality assurance in the European Higher Education Area”, 2015 effectively support social cohesion as well as social, economic and cultural development. These criteria meet the needs of competent, skilled and dynamic graduates.

The aim of this document is to suggest a constructivist-style learner-centered teaching method, which allows flexibility and appraises life skills. Learning is a network-creation (Siemens, 2005). Networking and studying abroad should be fostered, as well as online education and new teaching approaches. There is a need for a highly personalized approach that meets the requirements stated in the Lisbon Strategy, produces an actual “flipped learning” and adapts its education and training methods to learners’ needs.

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The Conference of Italian University Rectors has been calling for an updated quality assessment system which employs shared criteria to evaluate quantitative performance both in research and didactics. Lately, the National Agency for the Evaluation of the University and Research Systems (ANVUR) has listed both qualitative and quantitative criteria investigating into the enrolment process, attendance, graduation, job search, internationalization and qualitative and quantitative criteria investigating didactics. Each program should select some of these criteria, according to its specific characteristics.

Most criteria listed by ANVUR address teachers only indirectly. Ranges of significant criteria should be defined in order to be able to give an informed feedback that takes into consideration the fact that labeling didactics is not easy, especially when they should be applied, flexible and creative. These considerations should not hinder the development of didactics policies whose aims should include procedures formalization and documentary research of implemented teaching activities.

CONCLUSION

Science teaching research took a leap forward with the launch of the “Know Yourself” course. Its content is planned and structured according to University of Camerino quality assurance demands: turn intentions into actions to improve learning support services, students’ career (orientation program included), critical thinking skills, transfer of metacognitive skills. The “Know Yourself” course feature blended-learning modules adopting the learning styles teaching approach. Orientation programs are envisioned not just as learning support but become “the core of competence”. Students learn to learn when they are fully aware of their learning skills and take action to develop thanks to metacognition and self-regulation.

The course “Know Yourself” implements the suggestions of the National Plan for scientific university degrees (PLS), drafted in 2004 in Italy, whose aims is to spread science culture. For this reason, the methodological bases and the strategies used in the format “Know yourself” have been tested by 47 teachers from secondary schools of the area of Ascoli Piceno. The course for teachers showed the importance for the students of the knowledge of cognitive processes and of metacognitive methodologies, so teachers have been stimulated to prepare didactic modules with useful tools to support students on how to be the boss of their own learning process.

The academic world is experiencing an increasingly higher sensitivity towards these matters. Nevertheless, this should not remain an isolated case but be part of a bigger picture which features structured policies aimed at revolutionizing higher education didactics.

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The quality system of higher education must find a way to continuously monitoring the efficiency and the effectiveness of didactics. But first, teacher training and selection must be reviewed: manager-teachers are responsible for science teaching. According to the action research principles teacher must spend energy to the benefit of learners.

Faculties of sciences worldwide are addressing these action points and try to implement solution involving teachers rather than learners. University of La Matanza has been researching on teacher training strategies and tools (Larrosa, Martinez, Agüero, & Giuliano 2016). The “Know Yourself” course is set to be launched at University of La Matanza with the objective of balancing the learning teaching process according to the learners’ actual needs. Also, professors will get the chance of growing accustomed to online learning. and witness the implementation of innovative teaching strategies.

Dropout rates could decrease and student achievements could improve only by revolutionizing the concepts of higher education teaching and the quantitative and qualitative positive results of the research that carry forward the concepts and methodologies outlined in this chapter and that are the subject of the PhD thesis “Metodología y herramientas pedagogicas modernas para mejorar el aprendizaje y la orientación en las asignaturas STEM” (Pulcini, 2017 in preparation) is a clear answer.

Some countries are already leading the way to the managerial mind sets in the academic world. It is time for change and put these theories into practice in the Italian academic world as well. Let’s go!

REFERENCES

Bauman, Z. (2002). Modernità liquida. Roma, Bari: Laterza.

Bruner, J. (1963). El proceso de la educación. UTEHA.

Bruner, J. (1996). La Cultura dell’educazione. Nuovi orizzonti per la scuola. Feltrinelli.

Cornoldi, C. (1995). Metacognizione e apprendimento. il Mulino.

Curry, L. (1987). Integrating concepts of cognitive of learning style: A review with attention to psychometric standards. Ottawa, Canada: Canadian College of Health Services Executives.

Keefe, J. W. (1979). Student learning styles. Reston, VA: National Association of Secondary School Principals.

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Larrosa, M., Martinez, A. M., Agüero, M., & Giuliano, M. (2016). Evolución del abandono de materias de los primeros años de ingeniería frente a cambios en la enseñanza. Bahia Blanca: Jornada. V Jornadas Nacionales y I Latinoamericanas de Ingreso y Permanencia en Carreras Científico - Tecnológicas Argentina.

Morin, E. (2014). Insegnare a vivere. Manifesto per cambiare l’educazione. Raffaello Cortina.

Persico, E. (1956). Che cos’è che non va? Il Giornale di Fisica, 1.

Pulcini, G. G. (n.d.). Metodología y herramientas pedagogicas modernas para mejorar el aprendizaje y la orientación en las asignaturas STEM. PhD thesis.

Pulcini, G. G., Amendola, D., Angeletti, M., & Polzonetti, V. (2016). Know Yourself. Discover your Learning Style. An innovative activity in undergraduate education. ICERI2016 Proceedings.

Pulcini, G. G., Amendola, D., Grelloni, M., & Polzonetti, V. (in press). E-Learning Styles, “Conosci te stesso”. EMEMITALIA2016-Design the Future! McGraw-Hill.

Pulcini, G. G., Amendola, D., & Polzonetti, V. (2017). “Know Yourself” a strategic prerequisite to encourage academic studies. Conference Proceedings. International Conference, New Perspectives in Science Education. libreriauniversitaria.it edizioni.

Pulcini, G. G., Angeletti, M., & Polzonetti, V. (2016). Caso de Estudio en una Universidad Italiana: Análisis de los Estilos de Aprendizaje como Herramienta de la Pedagogía Moderna. Livro De Atas. VII Congresso Mundial de Estilos de Aprendizagem.

Pulcini, G. G., Porcarelli, A., Angeletti, M., & Polzonetti, V. (n.d.). Stili cognitivi e strategie di apprendimento degli studenti universitari. Una sperimentazione basata sulla prima traduzione italiana del Cuestionario adaptado de Estilos de Aprendizaje (CAMEA40).

Siegel, D. J. (2013). La mente relazionale. Neurobiologia dell’esperienza interpersonale (C. Raffaello, Ed.). Academic Press.

Siemens, G. (2005). Connectivism: A learning theory for the digital age. International Journal of Instructional Technology and Distance Learning, 2(1), 3–10.

Tryphon, A., & Vonèche, J. (1996). Piaget-Vygotsky: The Social Genesis of Thought. Taylor & Francis Ltd.

Zara, V., & Stefani, E. (2017). Istituzione, attivazione e accreditamento dei corsi di studio. Novità introdotte da AVA 2.0 e dal DM 987/2016. Manuale sulla didattica. Fondazione CRUI.

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DOI: 10.4018/978-1-5225-3906-3.ch011

ABSTRACT

In an increasingly digital and competitive environment, it is important to understand the agricultural business’ success in a digital economy. E-commerce appears as a potential strategic tool. The purpose of this chapter is to analyze the impact of e-commerce on agricultural business success in Portugal. Through a quantitative approach, data were collected by survey and a sample of 372 agricultural enterprises is obtained. The empirical results suggest a negative and significant impact of e-commerce on productivity. However, there is a simultaneous relationship between the e-commerce adoption and performance, both individually and globally. This study contributes to the addition of theory on e-commerce adoption, the impact of e-commerce on performance, and other determinants of the agricultural business’ success.

INTRODUCTION

In an increasingly digital and competitive environment that agricultural enterprises cross due to the technological advances into the 21st century, it is important and becomes interesting to understand their success in a digital economy. From these technological advances arose a new form of trade - e-commerce as a potential strategic tool for agricultural enterprises to become more successful in a digital economy, as more and more information and markets are available to the consumer. Although

Impact of E-Commerce on Agricultural Business Success

Carla Sofia Vicente Negrão University of Coimbra, Portugal

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many enterprises adopt e-commerce without knowing their impact (positive, negative or potential) (Leonard and Cronan, 2002).

To clarify the possible importance of e-commerce adoption and thereby increase the agricultural business success (ABS), in a digital economy, it is proposed this study. The study therefore addresses the following research question: what is the impact of e-commerce adoption on ABS? The following general hypothesis is formulated for this investigation: e-commerce adoption has a positive impact on ABS.

This chapter aims to analyze the impact of e-commerce adoption on ABS in Portugal. For this purpose, the researcher has taken into account the potential endogeneity of e-commerce on ABS determination models. Previous studies have suggested models (e.g., Bertschek et al., 2004, 2006; Falk & Hagsten, 2015; Kubota & Milani, 2011; Liu et al., 2013). However, although e-commerce adoption may be a factor impacting the ABS, other factors may contribute to its success. In order to reach this objective, the author proposes an empirical study. In addition, this aim is achieved by performing the following specific objectives, in the context of agricultural enterprises:

• To verify possible relationships between e-commerce adoption and ABS, in multiple dimensions, in Portugal, in year 2014;

• To identify key factors that contribute to ABS in Portugal, in the period of 2014.

The present study may be relevant in a country - such as Portugal - for several reasons. Firstly, at the time of data collection, Portugal was experiencing serious economic crisis and e-commerce adoption by agricultural business could be a strategy for enterprises to grow, increasing productivity and improving performance, and, consequently, the extent of the potential economic growth. Secondly, another reason is due to the fact that Portugal is one of the European countries with the lowest intensity of e-commerce adoption by enterprises and weak business growth. This makes it interesting to analyze the impact of e-commerce in the Portuguese context. Thirdly, e-commerce in agriculture is an under-researched and scarce theme in Portugal. Finally, it may be important to discover and analyze strategies with impact on ABS, so that managers have more information available that can be useful to plan future strategies, in order to be more successful. In addition, agricultural sector is the focus of the author’s interest.

This chapter can contribute to research on success, because it tests an ABS model, in various dimensions, based on a holistic approach. It can contribute to research on e-commerce, within the agricultural business in Portugal, because empirically it analyzes the impact of this technology adoption on ABS. The researcher believes that this chapter adding knowledge for development of agricultural sector for politicians,

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economists, managers, consultants and academic researchers, about key determinants of ABS, in particular, the e-commerce impact.

The next section contains the theoretical background and hypotheses of research. The section 3 describes the research methodology and the section 4 presents the results. The final section presents the conclusions, discusses some limitations of the research and suggests directions for future research.

THEORETICAL BACKGROUND AND HYPOTHESES

Agricultural enterprises, like the rest of the economy, have the challenge for changing their business model and practices (Henderson et al., 2000).

Success: An Overview

Success is a theme of interest in the scientific community that has allowed the development of studies over the years, and up to now, thus becoming a relevant and current theme. The research into business success covers different terms that have been used to refer to this phenomenon in different disciplines. “Success” is a broad term and therefore conceptualized in different forms. Success relates to the achievement of goals and objectives for any sector of human life (Chittithaworn et al., 2011; Islam et al., 2011). In addition, in business, success is “a matter of opinion and may be related to the degree to which objectives are met or exceeded, some of which may be critical for success” (Simpson et al., 2012, p. 272). However, in the field of agricultural business, success is understood as the achievement of goals and objectives of agricultural business.

In literature on success, several ways have been used to measure this phenomenon, in multiple dimensions in different disciplines. This phenomenon is measured as: survival (Headd, 2003; Schutjens & Wever, 2000), success vs. failure (Lussier & Pfeifer, 2001) and successful status at closure (Headd, 2003). Or size (Schutjens & Wever, 2000; Unger et al., 2011), growth (Lee et al., 2010; Schutjens & Wever, 2000; Unger et al., 2011; Zhou & De Wit, 2009) and profitability/ productivity (Unger et al., 2011). And still perceived organizational performance/ success (Ahmad et al., 2011; Alom et al., 2016; Chan et al., 2006; Chittithaworn et al., 2011; Hult & Ketchen, 2001; Islam et al., 2011; Lee et al., 2010; Sabherwal & Chan, 2001).

However, for the purposes of this study, the researcher decides to conceptualize success in three dimensions: growth, productivity and performance of agricultural business. Turnover growth that represents the enterprise growth. Turnover per employee that represents productivity/ profitability. In addition, the organizational performance perceived by agricultural managers. The meta-analytic review of Unger

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et al. (2011) uses the dimensions - growth, profitability and size, but in the present study, the size is considered an independent variable. Instead, the researcher includes the perceived performance of agricultural enterprises. These measures are chosen for two reasons. The first, because turnover and number of employees are indicators widely used in the literature. The second, because they are objective measures and easier to obtain compared to other financial measures. In addition, Zhou and De Wit (2009) suggest that future studies use sales growth as a dependent variable for growth and Combs et al. (2005) point to sales growth as the most used indicator in terms of growth. Furthermore, the researcher has selected other subjective measures of manager’s perception and a more direct response, because they are easier to obtain than objectives measures and also represent organizational success.

Different researchers studying these phenomena from different perspectives and different factors influence business success. Schutjens and Wever (2000) point to large firm size right from the beginning, good preparation, have a business partner, and a few years in salaried employment increase startup firm growth. Zhou and De Wit (2009) show individual and organizational determinants of growth but environmental determinants don´t influence growth.

Ahmad et al. (2011) validate un construct for business success which include satisfaction with financial performance, satisfaction with non-financial performance, performance relative to competitors and business growth. Alom et al. (2016) point to entrepreneurial and enterprise characteristics and economic factors impact on overall performance. In perspective of Sabherwal and Chan (2001) and Chan et al. (2006), the strategic alignment improves perceived organizational performance. Chittithaworn et al. (2011) point that SMEs characteristics, customer and market, the way of doing business, resources and finance, and external environment influence business success. Based on resource-based view, Hult and Ketchen (2001) point to market orientation, entrepreneurship, innovativeness, and organizational learning have a positive effect on performance. Islam et al. (2011) show that entrepreneur characteristics affect business success, but firm characteristics are not significant. Lee et al. (2010) show gender differences on perceived business success and profit growth models.

RESEARCH MODEL AND HYPOTHESES

Based on the above discussion, the researcher proposes the research model presented in Figure 1. The ABS model can be considered holistic, across knowledge of multiple disciplines, integrating several theories addressed in the literature and different theoretical models, namely in the context of entrepreneurship, strategic management,

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marketing and economics. ABS is measured in three dimensions: growth, productivity and agricultural enterprise performance. However, it is difficult to estimate a model with only one explanatory variable and all other factors are included in the error term. In this sense, the present investigation contains other explanatory factors/ attributes and control variables on ABS model. These model aims to investigate the impact of e-commerce adoption on success of agricultural business, controlling the effect of other factors, such as internationalization, strategic alignment, and manager characteristics. On researcher’s perspective, these strategies are key determinants for ABS. Because these variables are considered fundamental criteria for expansion of agricultural success business. These explanatory variables have already been used by other authors, but separately, in other areas and circumstances and it is thought that their aggregation provides a complete approach that explains ABS.

Over time, in addition to e-commerce, the internet does develop other technologies for enterprises and changing the traditional business to e-business. E-business also includes internal electronic exchanges, in addition to including e-commerce. Chaffey (2007, p. 13) defines e-business as “all electronically mediated information exchanges, both within an organization and with external stakeholders supporting the range of business processes”. The choice of appropriate capabilities e-business for agricultural enterprises may be fundamental to success. E-business use can occur in different ways, namely by: e-sales, e-know-how, e-collaboration, e-service, e-commerce, supply chain management (SCM), customer relationship management (CRM), electric data interchange (EDI) and e-community, according to Wikipedia (2016). However, many agricultural companies continue to work without their presence in technological environments.

Figure 1. Research model: Agricultural business success model Source: Own elaboration.

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Impact of E-Commerce Adoption on Agricultural Business Success

The technological advances walk to the ubiquity of commerce. The rapid growth of e-commerce leads agricultural enterprises to change their business. However, most agricultural enterprises still don´t have e-commerce. Therefore, it is necessary to know what their impact on ABS.

A quick look at the literature reveals that there are many definitions of e-commerce. To Chaffey (2007), e-commerce is much more than a mere commercial exchange, it can be considered as “all electronically mediated information exchanges between an organization and its external stakeholders”. Laudon and Traver (2014, p. 10) define e-commerce as the “use of the Internet, the Web, and apps to transact business. More formally, digitally enabled commercial transactions between and among organizations and individuals”. These authors explain that digitally performed transactions correspond to transactions carried out through digital technologies (internet, web, mobile applications) and commercial transactions mean that they include the exchange of value for products/services between organizations and individuals.

E-Commerce B2B can allow this sources of competitive advantage: lower intermediation costs, lower purchasing costs, enhanced information gathering and processing and improved market share or development of new markets (Barnes-Vieyra & Claycomb, 2001), than B2C, enterprises more visible to consumers (Bodini & Zanoli, 2011).

In addition, over the past years, the relationship between e-commerce adoption and business success is investigated. The previous literature considers the positive impact of e-commerce on enterprises. Raymond et al. (2005) demonstrate that e-commerce and e-collaboration positively influence sales growth. Vilaseca-Requena et al. (2007) show impact of e-commerce adoption for online sales. Liu et al. (2013) show evidence that e-commerce has a positive influence on productivity. Abebe (2014) confirms the positive impact of e-commerce on performance.

However, previous studies suggest that there may be an endogeneity problem (e.g., Bertschek et al., 2004, 2006; Falk & Hagsten, 2015; Kubota & Milani, 2011; Liu et al., 2013) and several instrumental variables are used for e-commerce adoption. Bertschek et al. (2004) use the following variables: export quota, enterprise age, number of software applications and subsidiaries abroad. Subsequently, Bertschek et al. (2006) include the variables: export quota, enterprise age, number of software applications of an enterprise and the existence of production facilities or subsidiaries abroad. Several years later, the study of Kubota and Milani (2011) use the variables: % of professionals in information technology (IT), enterprise age and the existence of site. Thereafter, Liu et al. (2013) use the network effect (or network externalities)

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to address the problem of endogeneity of e-commerce. More recently, Falk and Hagsten (2015) test endogeneity of e-commerce (% e-sales) on productivity growth and use employees number with broadband internet access as instrument. In this chapter, the researcher decides to choose the enterprise’s age and perceived strategic value as instrumental variables for e-commerce adoption of agricultural business in Portugal, as discussed in the next section.

Impact of Internationalization on Agricultural Business Success

The internationalization strategy can positively influence to increase ABS. Coad (2009, p. 126) states “expansion into new geographic markets can be an attractive opportunity for firm growth.” (…), “to boost sales” (…) and offers “advantages such as scale and scope economies, more market power, diversification of revenues, and the ability of spreading fixed costs such as R&D over a larger sales base”. Therrien et al. (2011) examine the impact of exports on performance (commercial success) in services sector, measured by introduction of a new product and percentage of sales of this product, and through econometric models showed that to obtain more sales enterprises need to enter on the market early or introduce new products with high level of novelty. The authors suggest that exporters are more likely to have innovative products and to market them. This can happen because if an organization introduces a new product and has access to several markets it can spread its new product more efficiently.

From the same line of reasoning, agricultural enterprises that export their products are expected to have higher turnover growth and sales performance and therefore a better ABS. The impact of internationalization can be measured by intensity of exports from agricultural enterprises.

Coad et al. (2016) test the impact of exports on business growth, with growth measured through sales, productivity and employee growth, having a positive impact on all quantiles for sales growth, only for 25%, 50% and 90% quantiles, and in all quantiles except 90% and 95% for employees´ growth.

Impact of Strategic Alignment on Agricultural Business Success

According to Porter (1979, p. 143), the strategy can be understood as “building defenses against the competitive forces or as finding positions in the industry where forces are weakest.” A key strategy is for enterprises to become competitive and survive in an ever-changing environment. The appropriate strategy allows a positioning of organization against the competition. The concept of alignment

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is a “complex, multi-dimensional construct” (Johnson & Lederer, 2010, p. 138). Strategic alignment is a process of continuous adaptation and change (Henderson & Venkatraman, 1993). In this sense, many organizations have difficulty achieve alignment (Johnson & Lederer, 2010). Due to the above, it is convenient to know that managers perceive a high level of alignment in their agricultural enterprises.

In this investigation, alignment is treated as the fit between business strategies including e-commerce/IT/IS and sales/commercial/marketing and agribusiness. In this sense, through the literature, the researcher selects antecedent factors of alignment, as shown in Table 1. Alignment is a process of continuous adjustment that agricultural enterprises use to obtain the interconnection between the strategies and objectives of e-commerce/IT/IS or sales/commercial/marketing with the strategies and objectives of the business.

Impact of Manager on Agricultural Business Success

The ABS is conditioned to the manager through their strategic decisions, so it is necessary to identify their characteristics, which appear to be relevant in success literature. Because it is intended to study the impact of these characteristics associated with the manager on ABS.

The literature presents arguments for the impact of manager’s individual factors on success. Davis and Harveston (2000) find the impact of age and education on sales

Table 1. Variables for strategic alignment

Dimensions Factors Authors and Date Scope

Agribusiness (factors beyond the control of the organization)

Environmental uncertainty • Sabherwal and Kirs (1994) • Chan et al. (2006)

Environmental

Environment scanning EB/ traditional business

Bergeron et al. (2004)

Strategy of e-commerce/IT/IS and sales/marketing

Organizational (business strategy, e-commerce / IT / IS and sales / marketing)

Strategic use the e-business/business traditional

Bergeron et al. (2004)

Strategy e-business/ traditional business

Shared domain knowledge • Reich and Benbasat (2000) • Chan et al. (2006)

Coordination of information between e-commerce / IT / IS / sales / marketing and organizational

Prior e-business/ traditional business success

Chan et al. (2006) Strategy e-business/ traditional business

Planning sophistication Chan et al. (2006) Plan of e-commerce / IT / IS / sales/ marketing with plan of e-business/ traditional business

Source: Own elaboration.

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growth, arguing that the aging of entrepreneur decreases sales growth, and a high level of education has a positive impact on internationalization and sales growth. The results of Lussier and Pfeifer (2001) indicate that managers of enterprises successfully have significantly higher levels of education than those with failed enterprises. In a similar way, it happened with their results for owner’s age. In contrast to Davis and Harveston (2000), younger owners/managers who start a business are more likely to be unsuccessful than older. This may be due to the lack of experience of owner/ manager. Baum et al. (2001) show the relevance of traits, motivation and competencies of the CEO/entrepreneur for growth. The present study has no interest in the perceptions, but in the characteristics age and education, and in a wider scope, i.e. for CEO /entrepreneur / IT/e-commerce/e-business manager or sales/marketing.

An individual approach with emphasis on manager characteristics helps to explain the ABS, through age and education. In principle, it is expected that having a manager with higher education would have a positive impact on ABS in various dimensions, because higher levels of education correspond to people with more general and technological knowledge.

Research Hypotheses

Starting from the research question and with the support of literature review, the researcher has the expectation that if an agricultural enterprise adopts e-commerce can improve its success, in terms of growth, improve their productivity and performance. In order to examine this relationship, the researcher plans to test the following formulated hypotheses.

E-commerce affects the growth of agricultural business. Growing agricultural enterprises are, therefore, successful companies, whereas, in contrast, when they are stagnant, are considered unsuccessful enterprises. Previous studies (O’Regan et al., 2006; Raymond et al., 2005) indicate that e-commerce provides growth. Abebe (2014) confirms the positive impact of e-commerce on annual sales growth rate. Hence:

H1a: E-commerce adoption has a positive impact on growth.

E-commerce influences positively the productivity of agricultural business. Labour productivity of agricultural business is understood as the result of the resources that are applied. Therefore, increasing productivity is about maximizing what is achieved sell/provide maintaining the same resources. One of the reasons for companies adopt e-commerce is to generate short-term productivity gains (Karakaya & Shea, 2008). Several studies (Bertschek et al., 2004, 2006; Kubota & Milani, 2011; Liu et al., 2013) indicate that e-commerce has a positive influence on productivity. Hence:

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H1b: E-commerce adoption has a positive impact on productivity.

Success relates to the agricultural business sales performance. In the B2C perspective, the enterprise becomes more visible to customers with e-commerce (Bodini & Zanoli, 2011). According to Wu et al. (2003), sales performance refers to market share, sales volume increase, price change, increase of new customers and increase of existing customers. Hence:

H1c: E-commerce adoption has a positive impact on sales performance.

E-commerce adoption can improve efficiency. Success can be measured by efficiency.

Customer response is faster through electronic communication Wu et al. (2003). Efficiency corresponds to the possibility of cost reduction in the transaction (Eikebrokk & Olsen, 2007, 2009). Efficiency is related to the improvement of efficiency in production and marketing, that is, the reduction of production and transaction costs, the general activities of management, coordination, marketing and acquisition of new customers Wu et al. (2003). “E-commerce provides companies with greater efficiency and reliability of business processes through the automation of transactions” (Shim et al., 2000, p. 40). B2B e-commerce is expected to reduce transaction costs, more transparent markets and the most efficient business (Bertschek & Fryges, 2002). In the case of exports and, above all, in digital products, it is expected that the reduction of transaction costs is still greater (Bertschek et al., 2004). Hence:

H1d: E-commerce adoption has a positive impact on efficiency.

This measure of ABS concerns the orientation of agricultural enterprise to the domestic or international market, as well as market segmentation (Chamberlin et al., 2009), and also to improve customer service via e-commerce (Karakaya & Shea, 2008) and to the company’s prestige in terms of products and markets (Karakaya & Shea, 2008). Hence:

H1e: E-commerce adoption has a positive impact on products and markets.

According to Hausen et al. (2006), e-commerce improves coordination between buyers and sellers. Based on the study by Wu et al. (2003), this concept concerns the communication of agricultural enterprise with the partners and suppliers. Hence:

H1f: E-commerce adoption has a positive impact on relationship development.

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Customer satisfaction refers to the extent to which the company meets customer expectations.

“Customer satisfaction has always been assumed as a necessary condition for the success of organizations” (Molla and Licker, 2001: 135). A satisfied customer returns to buy again.

According to Wu et al. (2003), quantifying customer satisfaction as results of the organization covers: satisfaction with the type of commerce used, encourage others customers and increased customer loyalty. Hence:

H1g: E-commerce adoption has a positive impact on customer satisfaction.

One of the two reasons for companies adopt e-commerce company’s long-term competitiveness (Karakaya & Shea, 2008). Competitive advantage refers to the position of agricultural enterprise vis-à-vis its competitors. This concept encompasses better financial performance, respond quickly to market changes, higher marketing performance, achieve organizational objectives more effectively and rapidity in innovation (Swilley et al., 2012). The following hypothesis is based on the study of Swilley et al. (2012) for M-commerce. Hence:

H1h: E-commerce adoption has a positive impact on competitive advantages.

E-commerce adoption affects the value creation. For an agricultural company to have success must know how to contribute to add value to the client, and, therefore, defining organizational goals that meet customer needs. Overall, Amit and Zott (2001, p. 503) define value as the “total value created”… “regardless of whether it is the firm, the customer, or any other participant in the transaction who appropriates that value”.

In this investigation, it is about creating value for the customer and is measured through the perception of farm manager. The creation of superior value for the client, according to Martelo et al. (2013) corresponds to the increase in the level of customer loyalty compared to competitors and compared to last year, and the increase in customer satisfaction compared to the previous year. Hence:

H1i: E-commerce adoption has a positive impact on customer value creation.

E-commerce affects agricultural business performance. In addition, performance refers to more than one concept. Consequently, the following hypothesis is proposed for agricultural business performance, in global terms. Hence:

H1j: E-commerce adoption has a positive impact on agricultural business performance.

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RESEARCH METHODOLOGY

Based on positivist research paradigm, the research approach can be classified into a quantitative and deductive approach. In addition, this research consists of a cross- sectional study with primary data.

Sampling and Instrument

Data collect using a questionnaire. A pre-test is carried out to validate the proposed model and, therefore, to improve the clarity and comprehension of the questions. Items come from prior literature reviews, but are modified to the specific context of e-commerce and e-business in agriculture, using seven-point Likert scale, where the minimum is 1 “totally disagree” and the maximum 7 that represents “totally agree”, and an option category to “don’t know/ don´t answer”. This option is treated as missing data.

The questionnaire was sent to two respondents in the same enterprise: a) manager/owner of the agricultural enterprises and b) responsible for commerce (e-commerce/IT/IS manager if there is e-commerce, or sales/ commercial/ marketing manager). Part of the questionnaire is intended to characterize the strategic value and performance through two groups of questions: a) for e-commerce adopters and b) for non-adopters. Other part, questions about use and type of e-business, and for 2 groups of respondents: a) use e-business and b) do not use e-business (only traditional business), to characterize strategic alignment.

A sample is selected from agricultural enterprises in Portugal. The period of data collection takes from September 14, 2015 and run until January 24, 2016.The researcher receives responses from 418 enterprises but only one respondent per enterprise. 46 responses were rejected because they are duplicate, errors or missing dates in variables, except those that are measured on a Likert scales. The overall response rate is 11.76%, but is 10.46% when counting only usable surveys. Then, this sample consists of 372 observations. Subsamples for commerce contains 58 (15.59%) enterprises that adopt e-commerce and 314 (84.41%) that don´t adopt. Another subsamples that use e-business (n = 66; 17.74%) and use traditionally business (n = 306; 82.26%).

Measures of the Variables

Table 2 provides the description of all variables included in the model, but several variables are derived from previous studies.

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Table 2. Variables of agricultural business success model: ABS

Variable Description/Measurement Authors and Date

Dependent Variable

logVN1314: Turnover Growth (log)

logVN2014-logVN2013 Nunes et al. (2011), Coad and Rao (2008) e Coad et al. (2016)

logPROD14: Productivity (logarithm)

log(VN2014/EMP2014) Bertschek et al. (2004, 2006)

FSP: Sales performance Factorial score FSP Adapted from Wu et al. (2003)

FEF: Efficiency Factorial score FEF Adapted from Wu et al. (2003)

FPM: Products and markets Factorial score FPM Adapted from Karakaya and Shea (2008) and Chamberlin et al. (2009)

FRD: Relationship Development

Factorial score FRD Adapted from Wu et al. (2003)

FCS: Customer satisfaction Factorial score FCS Adapted from Wu et al. (2003)

FCA: Competitive advantages

Factorial score FCA Adapted from Swilley et al. (2012)

FCV: Creating value for customer

Factorial score FCV Adapted from Martelo et al. (2013)

AEP: Agricultural enterprise performance

Average (FSP, FEF, FPM, FRD, FCA, FCS, FCV)

Independent Variables

ACE 1 - if enterprise adopt e-commerce 0 – otherwise

EXPOP: Exports % exports

SA: strategic alignment

Average factorial scores (SAEU: Environmental uncertainty; SAES: Environment scanning of E-business; SASU: Strategic use of E-business/ traditional business; SASD: Shared domain knowledge; SAS: Prior success; SAPS: Planning sophistication)

Adapted from Bergeron et al. (2004) and Chan et al. (2006)

AGElog: manager age Logarithm of number of years

EDU: Education

EDU1: 1 - Up to 9 years; 0 – No

EDU2: 1 – Up to 12th year; 0 – No

EDU3: 1 - higher education; 0 – No

Control Variables

SAE: Sectors of activity economic

SAE1: 1 - Primary sector; 0 – No

SAE2: 1 - Secondary sector; 0 – No

SAE3: 1 - Tertiary sector; 0 – No

SIZE: Size Average number of employees in 2014 Coad et al. (2016) and Abebe (2014)

GROUP: Belonging to a group

1 – Yes; 0 – No

Other Variable

EB: E-business 1 – Yes; 0 – No

Instrumental Variables

SV: Strategic Value Average factorial scores (SVOS: Organizational support; SVMP: Managerial productivity; SVDA: Strategic decision aids)

Adapted from Grandon and Pearson (2004)

AGEAS: Age of enterprise related to sector where enterprises operate

Years up to 2014 relative to the industry average (Age of enterprise/ average age of sector)

Bertschek et al. (2006)

Source: Own elaboration.

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Control Variables

The group was suggested as an explanatory variable by other authors, Bertschek and Fryges (2002) and Therrien et al. (2011). Generally, enterprise belongs to a group have greater financial resources and may have less risk aversion (Bertschek & Fryges, 2002). Regarding the industry effect, Zhou and De Wit (2009) suggest that firms with labor intensive may have a greater propensity for growth. Davis and Harveston (2000) show evidence significant positive effect of company size on sales growth.

Discussion of the Instruments

As one of the explanatory variables is endogenous, the researcher discusses economic arguments supporting the validity of two variables that it is used as instruments for e-commerce adoption, which are enterprise age and perceived strategic value. The expectation is that these are correlated to e-commerce adoption but not with the error of ABS model. The plausible simultaneity of e-commerce and ABS has the consequence that e-commerce is an endogenous explanatory variable on ABS determination model.

The first instrument is enterprise age1, that is used as an instrument in several studies and through different forms. The researcher follows Bertschek et al. (2006). Enterprise age is measured in relation to average enterprises age in the same industry. For these authors, an enterprise more recent than the industry average has a relative age less than one, whereas, the enterprise’s age in relation to an older enterprise exceeds the value of 1. Relative age is logarithmic due to asymmetry and the researcher add square logarithm of relative age, since the age effect on the probability of adopting e-commerce may be non-linear.

The second instrument is perceived strategic value. The researcher also considers the manager’s perception of strategic value that is understood as the level at which the manager perceives the value that e-commerce can provide him. Usually, enterprises choose to invest in e-commerce due to the perceived strategic value that can be achieved (Sutanonpaiboon and Pearson, 2006). In the researched literature, although no papers have been found in Portugal or specifically in the agricultural context, several studies have focused on the relevance between the strategic value of e-commerce and e-commerce adoption in different countries and in developed and underdeveloped economies. Strategic value is measured in different ways for enterprises: organizational resources (Martelo et al., 2013), strategic value of IS (Subramanian & Nosek, 2001), strategic value of e-commerce (Grandon & Pearson, 2003, 2004; Saffu et al., 2007, 2008; Saffu et al., 2012; Seyal & Rahim, 2010).

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RESULTS

In order to prevent potential problems with Common Method Bias (CMB) variation, the survey takes into account several recommendations proposed by Podsakoff et al. (2003), such as: items are written clearly and concisely, ensuring respondent anonymity to encourage participation, unknown to the respondent of conceptual model and Harman’s single-factor test is performed. The researcher conducts a statistical test for common method variance with the Harman one-factor method, through a principal component analysis of all measures. Results show 14 factors with eigenvalues greater than 1, which explain 69.20% of the variance. The first factor explains 26.01% of the variance, and therefore less than 50%. This suggests that CMB isn´t a problem in this investigation and doesn´t explain alone the observed relationships among the study constructs.

Preliminary Analyses

First, the researcher checks for missing data in turnover. Are removed all data with 0, the values without coherence in turnover in 2013 and 2014, and enterprises that are established in 2014. After, all observations with missing values are removed, except for the variables measured by Likert scales. The procedure of mean substitution of items in scales is used to reduce the problem of missing data. When the missing values are less than or equal to 20%, Downey and King (1998) suggest two methods for replacing missing data: item mean and person mean. The average substitution of valid answers is one of the most used methods for missing data and maintains the sample size (Hair et al., 2010).

Subsequently, running SPSS 20 because the variables composed of several items on a Likert scale are subjected to descriptive, consistency (reliability) and factorial analysis, as shown in Table 3, Table 4 and Table 5. Besides the descriptive analyze, in order to guarantee the adequacy of the scales to the proposed variables, the researcher test reliability and validity of the constructs, through Cronbach’s alpha2 and Kaiser-Meyer-Olkin (KMO)3. With the consistency analyze, most of the constructs provide a certain degree of trust on scales. Factorial analyze of principal components was run to test the unidimensionality of the measurement scales and to obtain the factorial scores. The scores are exact when the extraction is performed by principal components method, while by other methods the score is only approximate (Maroco, 2007). These factor scores are estimated values of the factors to be used in the subsequent analyses.

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Strategic Value Construct

As seen in Table 3, the perceived strategic value (SV) consists of the following components: SVOS, SVMP and SVDA, and all items are kept.

Alignment Construct

Table 4 shows analyze for strategic alignment (SA). The researcher chooses to remove item SAEU1, SAEU3, SAES1, SAES3 and SAPS.

Performance Construct

Analysis of performance is presented in Table 5 and FPM variable is removed. The dependent variables are the factorial score of each factor and one of them (AEP) is the average of all factorial scores.

In summary, the following criteria are used: all averages are higher than 4, which represents agreement; Cronbach’s alpha > 0.74 except for SAEU (0.64) and corrected item-total correlation > = 0.4. Furthermore, principal components analyze method; extraction of factors with their own value superior to 1; factor weight> = 0.5 (if lower the variable isn´t considered relevant, then it is dropped) and orthogonal rotation method varimax. KMO> 0.6 for all factor analyses except FRD; commonalities is more than 0.5 except in FCV1; all Bartlett’s sphericity tests are significant (up to 0.05) and variance explained above 60% except SAEU (but explained variance is very close to 60).

Table 3. Descriptive, consistency and factorial analyze of strategic value perceived

Construct Items Minimum Maximum Average Cronbach’s Alpha KMO Variance Explained

SVOS

SVOS1 SVOS2 SVOS3 SVOS4

1 1 1 1

7 7 7 7

4.44 4.67 4.74 4.78

0.831 0.781 66.58

SVMP

SVMP1 SVMP2 SVMP3 SVMP4

1 1 1 1

7 7 7 7

4.63 4.64 4.70 4.51

0.941 0.846 85.18

SVAD

SVDA1 SVDA2 SVDA3 SVDA4

1 1 1 1

7 7 7 7

4.62 4.69 4.60 4.66

0.942 0.837 85.45

Source: Own elaboration.

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Estimation Method

Through the review of the literature on e-commerce adoption, the researcher believes that e-commerce has an impact on ABS and is endogenous. Then, it is used instrumental variables method to explain this impact. Following Wooldridge (2002, pp. 623-625), in the first stage, the researcher estimates a probit regression of the probability of e-commerce adoption. As independent variables, the researcher takes all independent variables of the success model and the instrumental variables. In the second stage, the researcher predicts the fitted variable for each observation in the sample. In the third stage, the ABS model was estimated using instrumental variables method, where the researcher includes the fitted value resulting from the previous stage as an instrumental variable for e-commerce adoption. This method is appropriate when endogenous variable is binary.

Table 4. Descriptive, consistency, and factorial analyze of alignment

Construct Items Minimum Maximum Average Cronbach’s Alpha KMO Variance Explained

SAEU

SAEU1 SAEU2 SAEU3 SAEU4 SAEU5

1 1 1 1 1

7 7 7 7 7

4.25 4.95 5.36 4.94 4.66

0.653 0.653 58.12

SAES

SAES1 SAES2 SAES3 SAES4 SAES5

1 1 1 1 1

7 7 7 7 7

4.27 4.82 4.06 4.84 4.55

0.764 0.637 68.22

SASU

SASU1 SASU2 SASU3 SASU4 SASU5

1 1 1 1 1

7 7 7 7 7

4.22 4.25 4.49 4.68 4.72

0.855 0.796 63.80

SASD

SASD1 SASD2 SASD3 SASD4

1 1 1 2

7 7 7 7

4.85 4.97 5.17 5.00

0.899 0.828 76.74

SAS

SAS1 SAS2 SAS3 SAS4 SAS5

1 1 1 1 1

7 7 7 7 7

4.85 4.70 4.75 4.63 4.57

0.895 0.879 71.09

SAPS

SAPS1 SAPS2 SAPS3 SAPS4 SAPS5 SAPS6

1 1 1 1 1 1

7 7 7 7 7 7

4.73 4.49 4.69 4.61 4.66 4.76

0.946 0.904 82.23

Source: Own elaboration.

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Regression Results

The results of the regression analyses, using STATA, are shown in Table 6.

Model 1: Growth

The results indicate inconsistent with expectations and statistically insignificant. Isn´t possible to reject the null hypothesis. Different from previous findings of Abebe (2014).

ABS is statistically different depending on managers’ education. “secondary education” (-0.179) and “higher education” (-0.139) are negative and statistically significant for growth rate model (logVN1314), at 5% and 10% level, respectively. It means that enterprises with managers who have secondary and university education have lower growth rate than enterprises with managers who only complete basic

Table 5. Descriptive, consistency, and factorial analyze of performance

Construct Items Minimum Maximum Average Cronbach’s Alpha KMO Variance Explained

FSP

FSP1 FSP2 FSP3 FSP4

1 1 1 1

7 7 7 7

4.71 4.82 4.77 5.08

0.777 0.714 60.18

FEF

FEF1 FEF2 FEF3 FEF4 FEF5

1 1 1 1 1

7 7 7 7 7

4.02 4.21 4.39 4.20 4.33

0.894 0.856 70.48

FPM

FPM1 FPM2 FPM3 FPM4

1 1 1 1

7 7 7 7

3.62 4.04 4.40 5.57

0.162 0.526 33.84

FRD FRD1 FRD2

1 1

7 7

4.99 5.01

0.858 0.500 87.57

FCS FCS1 FCS2 FCS3

1 1 1

7 7 7

4.84 4.63 4.82

0.809 0.715 72.69

FCA

FCA1 FCA2 FCA3 FCA4 FCA5

1 1 1 1 1

7 7 7 7 7

4.40 4.65 3.93 4.48 4.48

0.836 0.808 60.80

FCV FCV1 FCV2 FCV3

2 3 3

7 7 7

5.03 5.08 5.05

0.797 0.618 72.04

Source: Own elaboration.

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education. Moreover, the average growth of enterprises included in SAE2 is lower than SAE3, on average 0.301 units. Belonging to a group have 0.134% decrease in growth, at 5% level of significance.

Model 2: Productivity

The findings point to a negative and statistically significant impact of e-commerce adoption on productivity, i.e., e-commerce adoption provides a 31.8% decrease in productivity, at 10% level of significance. Then, contrary to expectations hypothesis H1b is rejected. This result clashes with findings prior studies (Bertschek et al., 2004, 2006). While, a 1% increase in manager age provides a 0.503% decrease in productivity, at 10% level of significance. Belongs to “primary sector” has 73.1% less productivity compared to enterprise that belongs to “tertiary sector”, at 1% level of significance. The enterprise included in tertiary sector allows a 1363% increases in productivity, at 1% level of significance. Belong to a business group suggests that agricultural enterprise has 69.3% more productivity, at 1% level of significance.

Model 3 to 10: Performance

E-commerce adoption has significant positive impact on sales performance (β = 1.685; p <0.05), efficiency (β = 2.699, p <0.01), customer satisfaction (β = 4.138, p <0.01), competitive advantages (β = 1.442, p <0.05) and value creation (β = 1.176, p <0.10), both individually and globally (β = 1.934, p <0.01), and therefore on agricultural business performance. Then, hypotheses 1c to 1j are accepted, except 1f.

In addition, strategic alignment positively influences on sales performance (β =0.392; p <0.01), efficiency (β = 0.221, p <0.01), relationship development (β =0.849, p <0.01), customer satisfaction (β =0.287, p <0.05), competitive advantages (β = 0.430, p <0.01), creating value (β =0.454, p <0.01), both individually and globally (β = 0.439, p <0.01), the ABS. Previous study of Chan et al. (2006) confirmed that alignment affects business success.

Moreover, it has also obtain that internationalization (β = 0.00671; p <0.01) and strategic alignment (β = 0.392; p <0.01) have a positive impact on sales performance. Enterprises that have managers with university education have less efficiency (β = -0.424; p <0.05) and less competitive advantages (β = -0.357; p <0.05), than enterprises with managers have basic education. However, enterprises that have managers with university education have a greater relationship development than enterprises with managers who have a basic education (β = 0.309; p <0.05). Enterprise belongs to “secondary activity sector” SAE2 has more creating value (β =0.571; p <0.05) compared to a company that is in “tertiary activity sector” SAE3.

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Increasing in size of companies has a positive effect on competitive advantages (β = 0.246; p <0.01). Finally, belonging to a group suggests that agricultural enterprises has less relationship development (β = -0.206; p <0.10).

DISCUSSION

Econometric analyses allows, on the one hand, confirming the exogeneity of e-commerce adoption when success is measured through growth and productivity. On the other hand, endogeneity of e-commerce adoption when measuring success as perceived agricultural business performance.

However, impact of e-commerce adoption on success of agricultural enterprises isn´t significant when success is measured through growth, and, contrary to expectations, is negative when measured through productivity. In general, these results may be due to the small number of observations of enterprises adopting e-commerce or small size of enterprises. Another possible reason for these results may be non-separation between B2B and B2C.

Contrary to Bertschek et al. (2004, 2006) that point to a relationship of simultaneity between the adoption of B2B e-commerce and productivity. The present study points to exogeneity of e-commerce adoption and significance of this negative relationship. These results may be due to non-separation of B2B and B2C. In addition, prior papers use service/retail enterprises, a different context of the Portuguese agricultural sector. Perhaps this is why it has had a negative impact from e-commerce adoption on productivity. Results of Kubota and Milani (2011) show that enterprises that do not adopt e-commerce have higher productivity than a randomly chosen one.

From subsequent analyses, result a positive and significant impact of e-commerce adoption on ABS, when this is measured through agricultural business performance, as shown in Table 6. All hypotheses are corroborated except impact of e-commerce adoption on relationship management (β = 0.466; n.s.), although positive, is not significant.

In addition, the results suggest some degree of simultaneity between e-commerce adoption and performance, then enterprises that adopt e-commerce have superior performance, and enterprises with high performance are more likely to adopt e-commerce. E-Commerce adoption has a significant positive influence on performance, efficiency, customer satisfaction, competitive advantages and value creation, both individually and globally, and vice-versa.

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FUTURE RESEARCH DIRECTIONS

It might be interesting: analyze the manager’s perceptions before and after e-commerce adoption through a longitudinal study and use longitudinal data to analyze the dynamic effects of e-commerce adoption on ABS. It is also suggested to carry out this study with other indicators of success, conducting this study in several countries in order to compare these results with other countries or replicate in other sectors could lead to different results.

CONCLUSION

It is concluded that the decision to adopt e-commerce by agricultural enterprises is determined by perceived strategic value, but not by age enterprise in relation to activity sector.

This research provides also empirical evidence of the negative contribution of e-commerce adoption to success measured through productivity, in the context of agricultural enterprises in Portugal. There is also evidence of simultaneity relationship between e-commerce adoption and performance, both individually and globally, i.e., companies adopting e-commerce achieve higher performance and vice versa.

The study contributes to clarify the relationship between e-commerce adoption and success. A holistic view of success is obtained, with other explanatory variables that facilitate and influence ABS that can be used to predict future opportunities. Additionally, in methodological terms, endogeneity of e-commerce adoption is tested differently from previous studies. It also contributes with a new instrumental variable for e-commerce adoption - strategic value perceived.

This research presents several limitations that must be considered when interpreting the results. Sample size is a limitation of this research work, the value of responses (372) is a little lower than the recommended minimum (384) according to The Research Advisors (2006). Potential bias of non-responses is another possible limitation of this study. To estimate the magnitude of the bias, a non-response analyses could be performed to compare the responses that were obtained early and late, as suggested by Armstrong and Overton (1977). However, the researcher cannot distinguish between responses received earlier and later. In this way, the researcher cannot perform this comparison and know the potential bias due to non-responses. The variable of IT workers could be used as an instrumental variable of endogenous e-commerce adoption as Kubota and Milani (2011) study, but this question was only asked of e-commerce adopters. This limitation can be considered as a suggestion for future research. Finally, in this sample are included only agricultural enterprises

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because it is the focus of the author’s interest, however, this limits the scope of the sample, because there are other enterprises with interest on success.

Lastly, recommendations for possible solutions are suggested, at different levels: Al level governmental, it is proposed governmental support to agricultural enterprises and individuals for continuous formation, in particular the importance of e-commerce and other business technologies and managerial training initiatives. Creation and support of networks of agricultural business for enterprises to expose their products/ services and to boost the agricultural market and enable internationalization of products/services. Hence, provide economic growth of this activity and economic growth of the country in general. In the organizational context, it is suggested focus on technology, for example, managerial training initiatives, for enterprises adapts in an environment increasingly digital. It is paramount that the leadership and the workers do not resist the change to these new technological environments. In an ever-changing environment, leadership will adopt methods to manage workers’ resistance. As the results suggest focusing on strategic alignment for performance, plan the strategic alignment. As well the focus on internationalization. In the technological context, as this paper presents determinant factors for e-commerce adoption and impact in the ABS, the technology manufacturers have information on factors important for e-commerce adoption and the managers’ needs, for the development of appropriate programs for this activity sector.

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ENDNOTES

1 There is no consensus among authors about which enterprises are most likely to adopt technologies, whether the recent or the old. According to Christensen and Rosenbloom (1995) cited by Bertschek and Fryges (2002) and Bertschek et al. (2006), newer enterprises are more flexible and more likely to adopt technologies. Also, Kubota and Milani (2011) argue that more recent enterprises are more flexible to adopt innovations. However, Bertschek et al. (2006) argue that more recent firms may have more risk aversion on technology adoption because of lack of experience and financial resources.

2 Cronbach’s alpha coefficient is the most used, it varies between 0 and 1 and the internal consistency is considered very good if alpha> 9; good between 0.8 and 0.9; reasonable between 0.7 and 0.8; weak between 0.6 and 0.7 and unacceptable if <0.6 (Pestana & Gageiro, 2014).

3 KMO varies between 0 and 1, between 1-0.9 points to a very good factorial analyze; 0.8-0.9 good; 0.7-0.8 mean; 0.6-0.7 reasonable; 0.5-0.6 bad and if less than 0.5 unacceptable (Pestana & Gageiro, 2014). For Bryman and Cramer (2011), the ideal value is greater than or equal to 0.8. Hair et al. (2014) consider acceptable 0.7; however this limit may be lowered to 0,6 if the research is exploratory.

4 Value recommended by Tenenhaus et al. (2005).

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Chapter 12

DOI: 10.4018/978-1-5225-3906-3.ch012

ABSTRACT

In these challenging times, people need a positive vision of the future that human space exploration best provides. The way Apollo to the Moon was run in the 1960s, with a huge government program, simply cannot happen today. Fortunately, all the elements needed to build a twenty-first century grassroots human space program are now available. This chapter provides one possible approach developed by the Big Moon Dig, called MOVE, and discusses its critical elements such as management of a large out-of-box project, finding a lunar settlement site, critical habitat design, and applying the lessons learned to other problems on Earth.

INTRODUCTION

Sometimes the old ways of getting big things done are simply no longer available. Here it is not the case that a manager thinks that it is time for a new approach but rather that it is simply no longer possible to do things the old way. Fortunately the 21st century offers the modern manager a great many new possible paths.

This chapter makes the case that this is exactly what has happened in human space exploration today, yet society still critically needs the positive forward-facing

Extended Managerial Implications:

People and Space in the Twenty-First Century

John Thomas Riley The Big Moon Dig, USA

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Extended Managerial Implications

vision provided best by human space exploration. The old approach of a massive government program, quite literally a Moon-Shot, is simply now lost to history so new approaches must be found and tested. In this situation a manager must find new paths, but must build these paths on a foundation of elements of the old that provide the continuity of a solid history of success.

Fortunately, all the elements needed to build a 21st-century grassroots human space program are now available. This chapter presents one possible approach, the Big Moon Dig (BMD) (Riley, 2017b) and discusses its critical elements:

• Managing ideas for a large out-of-box project • Using mass media to build a movement featuring a process called MOVE

(Mass, Online, Vetted, Exploration) (Riley, 2017a) • Reducing big data to find a lunar settlement site • Responding to new insights into key design elements of space habitats,

critically radiation protection • Applying the lessons learned to other problems on Earth (Brown, 2009)

(Friedman, 2016) (Gregory, 2013) (“JPL InfoGraphics”, 2017) (Pinker, 2012)

The Big Moon Dig is currently a fledgling effort now in search of a breakthrough.

Figure 1. Emblem of the Big Moon Dig

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Order of Topics

This chapter covers the management approach, the technical design, and the current state of the Big Moon Dig project.

• Basic Project Management • 21st-century management • The Big Moon Dig approach • Lunar location • Digging in for protection • Conclusion

BASIC PROJECT MANAGEMENT

A new-built-on-old management approach is needed to reinvigorate human space exploration in the 21st century.

Background

In the mid-20th century, the United States had a huge government program that successfully put human beings on the Moon. In the 21st century, that particular path to space is simply not open to us.

It does not matter that Apollo to the Moon was on most people’s top-five list of the greatest human accomplishments of the 20th century; the historical elements that drove Apollo to the Moon simply no longer exist.

Apollo to the Moon is not going to happen again. Likewise, there will be no Apollo to Mars.

But this does not mean that nothing can be done. An enormous number of people can now be organized and mobilized using the internet and social media, generating effective action on many of the great problems of the 21st century. This chapter is about how to do just that, using the example of human space exploration.

The Need

Society’s lack of progress in space, as evidenced by being stuck in low Earth Orbit (LEO), does not mean that the need for human space exploration has gone away.

A major motion picture, The Martian, and a major TV miniseries, Mars, were recently released. Both were set on Mars, both had high production values, both were very realistic, and both drew huge audiences.

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Also, both depicted the Apollo-style approach to funding and organization. Granted, they did open up the process a bit.

Still, no go! It is not inadequate technology that is holding humans back from space; rather,

it is our dependence on antiquated methods of organization. In the face of the many great challenges of the 21st century (e.g., climate change, sea level rise), the old levels of government resources will simply not be available.

Some progress has been made in the commercialization of space. For example, the most up-to-date rockets now come from private companies, not the government. However, this path is limited because the primary customer for these products is still the government.

There are a few successful commercial space products, like communication satellites and upcoming space tourism, but these have limited markets and do not involve the human exploration of space beyond an LEO.

Above all, the problems on Earth in the 21st century are even greater than those of the 20th. Space enthusiasts cannot ethically strip funding on problems just to blast off into space. Yet in these troubled times, people need the outward vision provided best by human space exploration to keep their view of the future forward-facing and positive, even if only modest expenditures are possible.

The biggest lesson BMD finds from the recent popular depictions of humans in space is simply that human beings do not yet know enough to go to Mars. To get there, a great section of the human race first needs a massive learning experience in real space. The most practical classroom is the Moon.

The Outer Space Treaty of 1967

All off-Earth settlements are subject to the Outer Space Treaty of 1967 and its implementing agreements (“The Outer Space Treaty of 1967”, 2006). The original treaty includes the following statements:

RECOGNIZING the common interest of all mankind in the progress of the exploration and the use of outer space for peaceful purposes,

BELIEVING that the exploration and use of outer space should be carried out for the benefit of all peoples irrespective of the degree of their economic or scientific development,

This flowery language has been clarified in implementation agreements that put specific requirements on space settlement. In the United States, many space enthusiasts believe these requirements to represent excessive political correctness,

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so the derived requirements are therefore a contentious issue. However, the National Aeronautics and Space Administration (NASA) has provided leadership in compliance with this treaty. As the Big Moon Dig proposes an international effort, it must provide leadership too.

Elements critical to this leadership position:

• Settlement Not Colony: The word “colony” carries such terrible baggage from Earth history that it must never be used. BMD will always use the words “settlement” and “settlers.”

• Metric: The Moon and Mars are both metric; they are subject to the International System of Units (SI). The US has already lost one Mars mission to bungled unit conversion, and designers must not endanger future missions in this way.

• Charter Becomes Constitution: Too many stories about space settlements feature revolutionary wars resulting from bad early agreements. This is particularly important if an off-Earth product such as Helium-3 can be developed for sale in an on-Earth market. Before any settlement construction begins, a charter must be worked out and signed by all stakeholders. These charters will later have to be forged into a specific constitution for each off- Earth settlement.

These management concessions are small but critical to the healthy development of an international space effort.

Buy-In

BMD games and stories are the keys to inviting masses of people to buy into the BMD project (Sivers, 2010). Buy-in is a key human mental capability that is responsible for the completion of all major human projects from the Great Pyramids to the Gothic cathedrals to Apollo to the Moon. It gets people into action and it keeps them in action.

Buy-in produces reliable long-term action; fear produces erratic short-term action. Buy-in has a long history of use in management training, but it is only now beginning to gain footing on a firm scientific basis with physical brain studies.

To generate buy-in, people must be invited to imagine themselves personally succeeding in the project. The vision may be brief, but it must be very clear; it is basically a daydream. Words have turned out to be the best way to invite people to daydream and, through these dreams, to buy in.

Formal buy-in has several necessary steps:

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• Providing Information on the Project: This information can be presented in any form from personal stories to the latest mind-blowing graphics.

• Issuing the Invitation to Dream: The fancy graphics must stop. The actual invitation must be in language so that the person has the mental resources available to daydream.

• Envisioning: The person has a short but clear daydream about him- or herself succeeding with the project.

• Speaking Out: The person usually feels compelled to make a statement of interest in the project.

• Getting Into Action: The person gets into action and stays in action for a very long time. A 10-minute daydream can keep a person in action for a decade.

Buy-in is fundamentally about vision. If buy-in is managed well, the number of people in effective action on the project will grow. The effect may not be large for any single event, but the result compounds and can thus grow exponentially.

Big Moon Dig Organization

The Big Moon Dig is currently loosely organized as a not-for-profit and is dependent on the support of volunteers over the Web. In its initial phase, it is probing for topics that have the potential to go viral and generate mass buy-in. These efforts to date include: (1) lunar settlement design; (2) writing short stories; (3) making YouTube videos; and (4) entering challenges.

If BMD can generate a possibility of exponential growth for any of its efforts, it can then more formally organize and apply for more substantial foundation funding.

21ST CENTURY MANAGEMENT

The 21st century is a different time from 1969, with different needs and different technologies. For example, modern cell phones now have better computers than the Apollo lunar module. As such, a different management approach is needed.

MOVE

BMD proposes MOVE: Massive Online Vetted Expedition.

• Massive: The effort will involve millions of people from all over the world.

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• Online: The effort will be organized over the Web and will have many elements so all participants can find at least a small place for themselves.

• Vetted: The effort will be in stages, with the most successful people in each stage moving on to the next.

• Expedition: The big picture for BMD is to establish a human settlement on the Moon and to learn enough from that effort to then move on to Mars. The participants will build their knowledge as they learn how people can practically move beyond Earth.

This approach is in its infancy, and achieving its mission will take a large amount of work from many people.

Tell the Story

Where is the best place to start? Writers told the story of Apollo to the Moon best only after the fact, for example,

through movies like Apollo 13. This time, an early kickoff of stories is critical to restart the process by inviting people to buy in once more to human space exploration (Heinlein, 1966) (Ghosh, 2016).

BMD has started this writing process. The people there are developing stories and short videos that can provide people with visions of their futures in these demanding times. All of BMD’s works are designed to generate buy-in for action.

A listing of the current stories and short videos is available on the Big Moon Dig website (Riley, 2017c).

Value to Participants

All the training and time expended in BMD will be of value to the participants only if the human resources departments of high-tech firms see this experience as a valuable achievement. The vetting process therefore must be difficult enough to be of value both to BMD and to the participant. Alumni of BMD must have experience that means something both to themselves emotionally and to their careers.

Crazy First Followers

When a project designer starts work on an out-of-box idea, the idea must look a little crazy; otherwise it will not look far enough into the future to allow time for the idea to develop. Being a little far-out buys time.

At some point, however, the idea must generate buy-in for at least one first follower. The first follower is a critical step, and the leader must treat the first follower as an

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equal stakeholder of the project. Then more and more people can buy in without feeling too crazy.

First followers are competent people who happen not to be inclined to self- generated buy-ins of their own ideas but who are still seeking the thrill of the new. These people are critical to any idea taking off.

BMD has attracted interest and contributions from a number of people, but it has not yet successfully built up a cadre of crazy first followers. Its future is still therefore very much in doubt.

Climate Change

Climate change is now solidly based in science and is a known danger to humanity that will require substantial public resources to combat. Space exploration can only move forward in coordination with other such critical public efforts.

The United States already has more projects proposed to address climate change than there are funds to prosecute them. For example, a major effort is currently under way to raise the level of key roads around Miami, Florida. This effort is designed to allow the inner city to continue to function for about 50 years even if much of the surrounding low-income and rural areas are lost to tidal flooding. While such minimal efforts are just a start, they still cost hundreds of millions of dollars, and these costs can only be expected to grow.

Soon the big projects will have to start. There are plans for a surge barrier across the mouth of New York Harbor. A number of major naval bases, like the one at Norfolk, Virginia, will require extensive rebuilding to stay operational.

All these projects are more likely to attract government funding than a new human space exploration initiative. It is simply not reasonable to propose a new Apollo-style mission in the face of more pressing problems. Space simply cannot compete with Earth when a great number of people are in real danger.

Population Peak

The best available computer models of the human population of the Earth show a peak of about 10 billion people around 2050; see Figure 2 (Meadows, Randers, Jorgen, & Meadows, 2004). This is only an approximation, but the alternative—that the population will continue to grow exponentially forever—is not physically possible.

The population will then stabilize at some value that the ecosystems of the Earth can sustain. Critically, the numerical value of this sustainable level cannot be predicted at this time.

In the literature, this peak is called the demographic transition from Stage 3 (exponential growth) to Stage 4 (stability) (Kurzgesagt, 2016) (“Demographic

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Transition”, 2017). This transition is now well documented as currently underway in many countries, both industrial and developing. The worldwide estimated peak of 10 billion people in 2050 appears to be on target.

This population peak will be a major event in the history of human society, at least comparable with the Industrial Revolution, and it is only about 33 years out. Unfortunately, available technical information, or even serious literature on what society will be like after this peak, is almost non-existent. Most of the few available stories simply describe dystopias.

The population computer models show a period of chaos after the peak. Formal chaos theory is therefore a reasonable management tool in this situation. Chaos theory (Gleick, 1967) supports the idea that even small changes to a model’s driving parameters before the peak can have a significant effect at a later time (known as the butterfly effect), even if the exact result cannot now be predicted.

BMD is taking action on two efforts to help manage this prospect. First, many of its short stories include plot elements about people dealing with the societal changes caused by the population peak. Second, the forward-looking, positive vision provided by human space exploration is being developed as a specific management tool for the difficult transition to a sustainable Earth.

A 21st-century manager must not let this population peak blindside his or her organization.

Figure 2. World population 1800 to 2200 By BMD.

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Super Advanced Technologies

Several super advanced technologies, comparable in social and economic impact to the internet, will certainly come to fruition in the next 33 years. These technologies will change the entire picture. From a planning perspective, the possible technological breakthroughs have both great promise and great failure potential, but can only be seen through a glass darkly.

A promising example is EEStor (“EEStor, Energy Everywhere”, 2017). Several years ago, this startup patented an energy storage technology at least 10 times better than the current best technology, the lithium ion battery. Its energy storage unit is a super capacitor built from readily available titanium dioxide and barium. If a startup can mass produce these units, they will instantly make the electric car the must-have Earth vehicle and make solar/wind the energy source for all of society. Alas, to date, the best this startup has been able to produce are a few lab samples the size of a fingernail.

For BMD, the Space Elevator is an example of a false promise technology. If this science fiction technology could actually be built, then the cost of putting mass into Earth’s orbit would drop by an order of magnitude. Unfortunately, the viability of this concept can be disproven with a simple Excel sheet; however, this buy-in persists among many potential BMD customers.

So BMD has no choice but to follow technology developments closely. If EEStor, or an equivalent, actually goes into manufacture, then BMD will have to drop everything and redesign all its power systems and robots. All these designs will then become 10 times better overnight.

On the other hand, BMD must continue to advocate to its potential customers that the latest generation of rockets is good enough for its purposes and that the wait for a cheap pie-in-the-sky path to space is a disaster in itself.

The greater the future possibility, the greater the management headache.

THE BIG MOON DIG APPROACH

Before BMD becomes too committed to any specific action, staff members need to work out exactly what they are trying to do. The current first-stage effort raises a lot of questions that need answers before the later stages of design and construction can begin. These questions cover the areas of (1) a detailed mission statement; (2) management; (3) financing; (4) story development; (5) game development; (6) science planning; (7) educational outreach; (8) software development; and (9) hardware development.

Clearly, a lot of work still has to be done just to call the BMD mission started.

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The Game

Currently, human beings spend millions of person-hours each year playing video games. Can this expenditure of time be applied to productive efforts?

Under MOVE, the series of games, courses, and challenges that BMD calls “the Game” will be the door most people open into their effort.

The Game will be the key to teaching people everything they need to know to do the many jobs required. For example, the Game will provide the knowledge needed to design a lunar rover. The Game will also teach skills like tele-operation of remote robots on the Moon.

Under MOVE, the V stands for “vetting,” and the Game will be the chief vetting tool. It takes at least 1,000 hours of practice just to find out if a person is any good at something, whether it is athletics, playing a musical instrument, or, in this case, tele-operating a lunar rover. The Game will be how people put in this time.

In all human efforts, once the drill hours are in, a few people will turn out to be astonishingly good at a given skill. These are the people BMD needs to identify to promote to the next levels.

Corporations as People

Corporations are critical to all modern economies. Because the United States predates the Industrial Revolution by a few decades, the rights of corporations are not part of the US Constitution, but rather have been added over the years by courts and state governments.

Corporations now have many, but not all, of the rights of a biological person. In addition to selling stock, they can hire and fire people, own property, sue and be sued, and sell products and services. Recently, even the right to hold religious beliefs that may be recognized in court has been added.

Technical people have been working for decades on exactly what capabilities an artificial intelligence (AI) or robot must have to be considered a person. A precise test (the Turing test) was developed, but no AI has passed this test to date.

In BMD stories, a few key characters (a lunar excavator, Digger03, and a research vessel, the Yvette A. Wight) are both AIs and, because they are independently incorporated, are also corporate persons. Neither would pass the Turing test, but that is not a problem as they never claim to be anything but what they are: machines.

Corporations are legal entities, but they are economic beings at their hearts. Robots are technical entities, but they too, deep down, are economic beings. In the economic sense, these two are then quite compatible even if their other capabilities point in different directions.

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For now, incorporation for robots to make them persons is more a legal trick than a technological one, but it does raise the management question of at what point do AIs stop being equipment and start being key team members.

LUNAR LOCATION

The Big Moon Dig’s efforts to find a good location for a lunar settlement (Schurnk et al., 2008) provide an excellent understanding of its achievements so far.

Ancient History

This story starts a very long time ago, perhaps three billion years. The Moon had already formed; it had quickly phase-locked with one face to the Earth and it had cooled enough to form a solid crust.

Then an enormous asteroid hit the Moon, striking in the southern hemisphere almost exactly opposite the Earth. This blast created a truly magnificent basin with many concentric rings, which is now called the South Pole-Aitken Basin.

Today, not much is left of the South Pole-Aitken Basin’s rings as most of the major cratering of the Moon’s surface has occurred in the time since. In fact, this basin was not even discovered until the 1960s. There are, however, just a few ring mountains left, like Mount Malapert, one of the most southerly lunar features visible from Earth.

The most striking surviving artifact of this basin is its enormous dish-shaped hole. In some places, this hole is more than 13 kilometers deep and 2,500 kilometers wide. The size and depth of this basin holds important value for human space exploration today. It is a key lunar resource in itself.

The Scott A Massif

A massif is a block of crust larger than a mountain but smaller than a continent. BMD is interested in one such feature on the Moon, which arose in the South Pole- Aitken Basin formation.

Mountain features on the Moon are rarely named, but craters are. Mountain features then take their names from nearby craters. In this case, the nearest named crater is a secondary one called Crater Scott A (Bussey & Spudis, 2004, pp. 188- 189) (Rukl, 2004).

The Scott A Massif (see Figure 3) is about 120 kilometers from the lunar South Pole, on the Earth side. It is basically a hilly plateau running 35 kilometers east-west. The area useful to humans could easily fit a very large Earth city like Los Angeles.

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On the Moon, the Scott A Massif runs from 20 to 45 degrees longitude and -84.7 to -86.1 latitude. This is a little east of the Earth-Moon line and so far to the south of the Moon’s equator that only a sliver is ever visible from Earth.

LRO

The Lunar Reconnaissance Orbiter (LRO) was launched in June 2009 carrying an altitude and slope instrument called the Laser Ranging (LR) system. About 14 months later, the first year’s slightly worked altitude and slope data were made available to the general public.

BMD spent most of the next year reducing the LRO data on personal computers using common software like Excel and SketchUp. In the end, BMD used more than nine million altitude and slope data points. The best result is a three-dimensional (3D) terrain map of the Scott A Massif that can be animated for games, machined with a Computer Numerical Control (CNC) device, or 3D-printed.

Points with slopes measured below 15 degrees are taken as available for construction and easy travel; see Figure 4. Points with slopes above 25 degrees are considered unsafe for any purpose, as a rover could easily lose traction in the ubiquitous fine dust and slide to its destruction.

Peak of Eternal Light

The location and depth of the South Pole-Aitken Basin is perhaps the greatest piece of good luck human space exploration has ever had. Everywhere else on the Moon, a settler has to deal with 14 Earth days of brutal sunlight and then 14 days of bitter cold night.

Figure 3. The Scott A Massif altitude and slopes Taken from LRO data by BMD.

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In just a handful of places, like the south edge of the Scott A Massif, the Sun still shines across the deep basin at midnight and illuminates these Peaks of Eternal Light.

Of course, irregularities both locally and across the basin occasionally block the sunlight, but a well-planned solar power station would produce usable power more than 95% of the time, 24/7/365.

Scott A Massif locations always have a permanent view to the dark sky away from the Sun to support cooling (again, a feature much more limited at lunar equatorial sites).

Because of this near-polar location, designers can mount a solar voltaic panel on a billboard panel with a single axis central pivot and spin it around once a month to track the Sun. This reduces power station design to simplicity.

Permanently Shadowed Craters

Near the two lunar poles are craters that have not seen sunlight in billions of years. Furthermore, these features directly face the deep black of space and are therefore some of the coldest places in the solar system.

Volatile materials, such as water from comets and Helium-3 from the Sun, have been accumulating in these craters over the eons. In BMD stories, these places are simply called “the cold and the dark.”

These volatile resources are some of the most critical materials for the success of a lunar settlement. With them, settlers can make everything from breathable air to rocket fuel. Settlers simply cannot stay on the Moon for the long term unless they learn to mine these materials from their admittedly difficult locations.

Several permanently shadowed craters are located near the base of the Scott A Massif. The LRO data show at least three passable trails leading from the Scott A Massif down to the permanently shadowed craters to the south (see Figure 4). The only way to prove this claim is to build a rover, send it to the Moon, and roll it out.

Science does not know exactly what will be found in these craters because no samples have been retrieved for testing. BMD expects to find the Moon’s ever-present

Figure 4. The Scott A Massif points with slope below 15 degrees By BMD.

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finely ground lunar rock, the regolith, with trace amounts of volatile materials adhering to the particles.

Cooking this material to 600°C will ensure that all the volatiles come off, but this work would certainly mean hauling bulk material to sunnier areas where solar power is available, like up the Scott A Massif. This digging and hauling will be a challenging task.

Looking Around

What would a settler see if they stood on the Scott A Massif and looked around? In some ways, it would be very like the Apollo sites, as shown in Figure 5 (Light,

1999). All surfaces have a cover of finely ground, gray powdered rock accented with many scattered rocks and small craters. The surface is nearly colorless and about the shade of an old asphalt parking lot.

Figure 5. Apollo 11 astronaut By NASA (NASA, 1969).

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None of the visible surfaces is precisely flat or level, but there are no sharp cliffs either. The southern boundary simply rolls off, becoming steeper and steeper by degrees until a rover’s wheels can no longer get any traction.

The sunlight is harsh; the shadows are long and black. The Sun is always low in the sky as it circles around monthly. It never gets more than a few hands above the northern horizon, even at noon, and it skirts the southern horizon near midnight.

Anything left in the sunlight gets very hot, 200°C or more, and anything in the shadows gets very cold. All equipment on the surface takes a real beating, but even just one meter underground the temperature is stable at around 20°C because regolith is such a poor conductor of heat.

The Earth hangs permanently in the northern sky, low to the horizon, tracing out a lazy figure 8 each month. This allows a permanent line-of-sight communication link.

To the south lies a great darkness, and somewhere in that darkness are the permanently shadowed craters and the Moon’s South Pole.

What Is Wrong With Scott A

Despite its advantages, the Scott A location does have a few problems:

• Fuel Required: It simply takes more Delta V, and therefore more rocket fuel, to get to near-polar locations on the Moon. With any rocket purchased, fewer kilograms can actually be delivered to these locations.

• Free Return: The orbit transfer needed for lunar polar locations is not on a free-return trajectory. Remember in Apollo 13 that the crew got home because their trip out was nearly the same as their trip back. This valuable mission feature holds only for equatorial locations.

• A Long Trail Down: It is a long way down to the permanently shadowed craters from the Scott A Massif. The drop is 6 to 8 kilometers with a travel distance of 40 to 60 kilometers.

Remember that at the Apollo sites, which were all near the equator, the Moon days are 14 Earth days long and boiling hot by noon, the nights are the same length and without solar power at all (but with cryogenic cold), and there are no volatile resources nearby. In fact, the Apollo astronauts arrived in the early morning and would have cooked to death if their departure had been delayed by as little as three days.

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DIGGING IN FOR PROTECTION

Much of BMD’s effort must go into the design requirements for human habitation off-Earth.

Habitat Design

What do settlers need from their living spaces to create a successful lunar or Mars settlement?

First, the settlers need a good location, like BMD’s Scott A Massif, where power can be had simply and there are plenty of resources nearby.

The settlers then need buildings that will keep a person alive even in the harsh local conditions. The buildings must be airtight and provide protection from radiation, thermal extremes, and small meteors; see Figure 6. All in all, this is not a small design task.

Beyond that, the construction must rely on local materials as much as possible. Materials shipped from Earth cost a huge fortune, and this cost is a showstopper.

Like most lunar planning groups, BMD eventually calls for inflatable habitats shipped from Earth in a collapsed configuration. The goal is to get as much living

Figure 6. Deep habitat, exterior features near the South Pole By BMD.

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space as possible for as little mass shipped as possible, thus providing the lowest delivered cost.

However, if settlers have thin-walled blow-up houses, what must they do to make them safe to live in on the Moon?

Radiation

In space, radiation is a killer (Limoli, 2017). This one problem dominates human living unit design for all spaceships and off-Earth settlements; it is a showstopper.

The LRO instrument, Cosmic Ray Telescope for the Effects of Radiation (CRaTER), and a similar Mars mission instrument, Mars Radiation Environment Experiment (MARIE), were specifically designed to measure the danger of space radiation to human flesh. The results were not what the space enthusiasts had wanted to hear. The radiation danger for humans in space is much worse than had been foreseen and included in plans to date, about twice as bad.

This radiation problem is compounded when it’s ignored. Most of the spaceships depicted in movies are simply death traps that either do not provide adequate shielding or call for an active shield that has no basis in science.

An astronaut might get away with living with this danger for a few days, like during Apollo to the Moon, but a space designer cannot ignore this problem for either a trip to Mars or any long-term space settlement.

There are two types of deadly space radiation:

• Coronal Mass Ejections (CMEs) from the Sun • Galactic Cosmic Rays (GCRs) from deep space

Coronal mass ejections are generated by great storms on the Sun. Like Earth storms, they last from a few hours to a few days. These storms’ radiation is intense and dangerous to humans. At any given location on the Moon or Mars, or on a trip through our solar system, an astronaut can expect from zero to five CMEs per year.

Fortunately, this type of radiation does not penetrate very far. One meter of regolith will stop CMEs, but all outside human operations must stop and wait out the storm.

Galactic cosmic rays are generated by distant, enormous explosions like supernovas. The particles they include are fewer in number than with CMEs, but they penetrate very well indeed. And they are particularly hard on the human brain as they go shooting through a settler 24/7/365.

The first meter of shielding simply converts GCRs from a few high-energy particles into a much larger number of moderate-energy particles. This change actually causes the radiation danger to increase.

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The questions, then, are how much shielding is needed to make a human being safe and what can settlers make this shielding from?

Regolith Shield

For a long-term settlement on either the Moon or Mars, the habitat designer must provide effective radiation protection; no other option is remotely safe. This shielding must also provide protection from temperature extremes and micro-meteorites.

The best, and by far the cheapest, shielding material available is the local regolith; see Figure 7. Regolith is the ground up rock that covers airless bodies like the Moon. Some materials manufactured on Earth would provide slightly better shielding, but hauling bulk materials from the Earth would be ruinously expensive.

The question then is: How thick a coat of regolith is needed to match the radiation protection available on the surface of the Earth?

Radiation protection on Earth is provided by the atmosphere, the body of the planet, and Earth’s magnetic field.

If a settler is on the Moon or Mars, then half the exposure to radiation is blocked by the planet. Being on planets is inherently safer than traveling between them.

Neither the Moon nor Mars has any magnetic field to speak of, or much atmosphere density to count toward the shielding either.

The habitat designer then needs to match the total level of protection found on Earth with a thick layer of the local regolith. BMD started this calculation with the regolith density measurements from Apollo to the Moon and the atmospheric pressure on Earth; see Table 1. The answer BMD got was that a layer of typical

Figure 7. Deep habitat basic room By BMD.

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lunar regolith four to five meters thick (at least 16 feet) will provide a conservative amount of shielding.

Hopefully, with actual measurements at the site, the designers will find that less depth is acceptable. However, BMD feels it is unrealistic to set this number below four meters in its planning. Solutions such as sandbags or 3D-printed blocks covering a surface habitat are unlikely to meet this requirement.

Allowing 3.2 meters (10.5 feet) for the height of the inflatable habitat, BMD will need to dig a trench about 8 meters (27 feet) deep. Substantial trenches are needed if the lunar settlers are to be safe for the long term. From this requirement then comes the project name: the Big Moon Dig.

Roof Support

Will the internal habitat pressure support such a thick regolith shield on the roof? BMD calculated the answer to be a definite yes. In fact, even internal pressure as low as pure oxygen suit pressure of only 32.4

kilopascals would hold the roof weight given the Moon’s low one-sixth g; see Table 1. Normal air pressure of around 100 kilopascals handles the problem very well and would even easily support a robot or other equipment on the roof shield.

Digging In

So the major settlement challenge becomes how to dig a big trench on the Moon for inflatable habitats. Clearly this could be a showstopper for the BMD concept.

BMD knows that it is very difficult to dig in the Moon’s one-sixth gravity and that the ever-present grit can destroy equipment quickly.

What BMD does not know is how the size of rocks varies with depth and if this dig is even possible given the problems of shipping in massive equipment. It will

Table 1. Air pressure to radiation shielding equivalence and roof support

Location Pressure Regolith Shield Support

kPa (psi) meter (ft) meters (ft)

Sea Level 101.3 14.7 6.01 19.71 36.2 120

Denver 84.0 12.2 4.99 16.36 30.0 98

Mexico City 81.4 11.8 4.83 15.85 29.0 95

Apollo Suits 32.4 4.7 11.6 38

Regolith Density 1719.6 kg/m^3

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take a test trench being successfully dug using only low-mass equipment to fully answer this critical question. Power and lighting for digging are also real problems.

BMD proposes to use MOVE to get thousands of volunteers to work on basic digger design and then operation. Paying qualified people to do these tasks would surpass any foreseeable budget.

BMD appreciates that these tasks may take years, but the effort will get people directly involved in human space exploration as never before. A finished big trench will be a capital space asset that will attract major resources for the effort to build and emplace the inflatables.

Several BMD short stories are about this big dig and the interaction of the people and robots involved.

Lava Tubes

Lava tubes form when a stream of fluid lava runs downhill for a long enough time to form a rivulet with a thick crust cooled over its top. Sometimes the source of the lava is then cut off while the internal liquid continues to run, leaving an empty tube.

There are many lava tubes on Earth and a few are suspected on both the Moon and Mars. If a lava tube can be found in a good off-Earth location, it might offer a marvelous solution to the shielding problem.

Several examples of lava tubes appear to exist on the Moon, judging from photography from orbit. The problem is that it is not known whether they drained out to form actual long cavities or if their few skylight entrances are safe.

The grit on both the Moon and Mars contains magnetic particles of iron, which make ground-penetrating radar measurements from orbit extremely difficult. Consequently, no mission has yet come up with a way to practically map lava tubes.

BMD feels that they cannot now base their settlement planning on lava tubes. Sometimes out-of-box management is about gently killing preexisting buy-ins that are blind alleys.

The Art of the Cairn

For perhaps a million years, human beings have marked trails with stacks of rocks called cairns. Settlers certainly need to mark their trails and they certainly need to use local materials to do this. The tricky bit is making an art of it, particularly if the actual work is done by robots that are remotely controlled.

Lunar cairns could contain bits of human-made materials, like metallic multi- layered insulation (MLI), boasting that people were there. They could also contain flat rocks with the names of an exploration crew engraved on them robotically. On the Moon, a substantial cairn could last a million years.

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The Farm

If lunar settlers want to stay for any length of time, they will have to grow their own food. Farms are thus critical settlement elements created in long sections of the basic inflatable buildings. The plants would be grown hydroponically under LED lights.

The planting base will be a double-sieved regolith with both the fine dust and large rocks removed. It will have to be washed thoroughly as it will have never been in contact with water before and may contain many salts.

This approach has already been tested on Earth, sometimes with striking results. For example, tomato plants can live under these conditions for many years, grow a snarly trunk 10 centimeters in diameter, and produce tons of fruit, thereby earning the plant the space name “tomato tree.”

The Gym

In low gravity (one-sixth g for the Moon, three-eighths g for Mars, and zero in between), the human body atrophies. Every day each settler must exercise for about two hours, but hours spent outside will be very limited and the inside living spaces very restrictive. BMD must therefore design a truly stupendous exercise machine.

BMD proposes a four-robot-armed, five-screened People Pod; see Figure 8. Two arms are for the settler’s hands and can match any movement the body can make while providing any level of resistance. The other two arms do the same but for the feet.

The five screens will provide a visual environment to break a settler out of his or her claustrophobic existence and into open virtual space. This will include a

Figure 8. Deep habitat gym with people pod By BMD.

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lot of Earth scenes, but it will also show the space beyond the shield in real time, which will allow efficient control of the surface robots. The pod will have a great sound system too.

The People Pod will be programmed to play a vast array of sports and video games. This will require a major development effort that is critical to moving on to Mars.

Helium-3

Helium-3 is a heavy isotope of helium that is valuable but rare on Earth. Fortunately, it is abundant, if dispersed, on the Moon (Schmitt, 2006) (“Helium-3”, 2017). This sets up a major management conundrum.

Helium-3 is generated in the Sun and carried by solar wind; it has accumulated over the eons stuck to the surface of particles on the Moon. Despite helium being the leakiest stuff in the universe, small amounts still adhere to the rough particles of lunar regolith. Potentially exploitable levels were found at the Apollo sites. The exact level of accumulation in the permanently shadowed craters has not been determined but is critical.

There is a commercial market for helium-3 on Earth; for example, it is currently extremely valuable in medical radiology. In the future, modern technology may advance enough for it to be used to generate power through fusion. If society were able to achieve this, then the accessible helium-3 of the Moon could cleanly power the civilizations of Earth for hundreds of years. This makes helium-3 the most likely material to be mined on the Moon and returned to Earth at a profit.

There are two major problems in achieving this goal: (1) developing commercial fusion and (2) bulk processing of materials on the Moon.

• Fusion: Society may be able to harness any of six different fusion reactions for power. These are categorized into three generations by how difficult the reactions are to ignite. The easiest to ignite (first-generation) involve hydrogen isotopes that are either found in Earth’s oceans or can bemanufactured in conventional reactors. These reactions, however, yield much of their power in the form of high-energy neutrons, which, over time, render their reactor vessels brittle and highly radioactive.

The helium-3 reaction is a third-generation fusion reaction and much more difficult to ignite, but it would then yield far more energy and provides that energy in the form of high-energy charged particles. These particles are much easier to convert to electrical power and do not render the reactor vessel radioactive nearly so quickly.

This bright picture for space commercialization is dimmed by the prospects for another third-generation reaction using boron-11. Boron-11 is readily found on

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Earth (e.g., the washing powder Borax). Who is to say that if society can achieve one third-generation fusion technology, then it could not as easily do another?

• Lunar Mining: Helium-3, along with other valuable volatiles, can be efficiently released from lunar regolith by simple heating. The problem is that only a small amount of volatiles is harvestable from each ton of regolith processed, so a large volume of the raw material must be scooped up, enclosed, and heated.

Handling bulk material on the Moon is made very difficult by the cost of shipping massive equipment from Earth and the incessant wear caused by the gritty regolith.

These considerations set up a difficult management dilemma of whether or not to base plans for lunar settlement on mining helium-3. There is a real possibility that this effort could be civilization’s salvation, but there is also the possibility that either the helium-3 power technology will never be developed or that it would become obsolete soon after being developed.

BMD has chosen to avoid pushing helium-3 as a make-or-break concept, but it will continue to watch developments closely. Critically, either of these two third- generation reactions, helium-3 or boron-11, shows promise for powering a starship.

True Grit

A big killer in space is the grit. Both the Moon, Mars, and asteroids are covered with very finely ground rock

particles that have never been rounded by movement in water. These rough-edged particles tear up seals and grind away at any exposed moving parts. The Apollo spacesuits were wrecked by the lunar grit in just three days.

So the design of grit-stopping seals is the settler’s next great problem after radiation.

Hardware on the Moon

Early hardware will need to include miniaturized equipment to analyze the commercial potential of a site. This will include the ability to handle small volumes of regolith dust, magnetically separate the ferromagnetic component, and bake out the volatiles in an enclosure. The yield of helium-3 and water is critical. The magnetic component needs to be evaluated for its use as the medium for 3D printing.

Early on, BMD will need a lunar explorer of the Sojourner class (about shoebox- sized). It must be small and low in mass, yet able to travel tens of kilometers over the lunar surface (big wheels). It must be able to handle a grade of at least 20% even

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on a surface of fine dust. It must be tele-operated from Earth but have enough local smarts to keep itself out of trouble.

BMD plans also require a lunar digger. It turns out that digging in the Moon’s one-sixth gravity and on its surface of fine dust is extremely difficult.

BMD hardware designs need to start with Earth versions that can be 3D-printed and controlled with the microcomputers that millions of makers can program today. The building and testing of these prototypes will be key challenges in the Game.

When BMD actually sends something to the Moon, BMD must know exactly what it’s doing. By the time human society sends people to Mars, likewise.

IN CONCLUSION

A 21st-century manager can take a number of lessons from the fledgling Big Moon Dig effort.

Back on Earth

Can the BMD management approach be applied to problems right here on Earth? BMD thinks the answer is yes. Basically, it is all about providing vision. In

addition to our space settlement stories, BMD has started a series of short stories, called “Iron Seas,” on sequestering carbon dioxide in the oceans. These stories contain plot elements about how a popular movement can address a great problem of the 21st century and then go on to look at how people might address some of the accompanying social changes.

Terrorist recruiting is a rather viscous form of buy-in. The BMD experience may both provide positive alternatives and bring our society to a better understanding of how buy-in works. In the 21st century, buy-in is both good and bad.

Short Videos

The information in this chapter is covered in a series of short videos (Riley, 2017b), which are a now in preferred social media:

• Part 1, MOVE: The MOVE concept is discussed. • Part 2, Location: BMD shows how determined amateurs can now reduce

NASA lunar data to find great locations for a settlement. The data are out there.

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• Part 3, Habitation: Key design considerations for lunar habitats, like radiation protection, are discussed.

• Remembering the Future: This video offers a discussion of future prediction in the form of a movie review.

Takeaway

The BMD approach to revitalizing human space exploration can be understood in four main points:

• No More Apollos: Apollo to the Moon was at a time in history that is now gone and that will not return in the 21st century. It is one thing to change management approaches because a new one looks better; it is quite another to commit to a big change because the old way simply is no more.

• People Need the Vision: The human race faces many problems in the 21st century (e.g., climate change, sea level rise) and the forward-looking, positive vision provided by human space exploration is a necessary tool that people have used in the past and that is critical to have available today.

• New Approaches: More powerful social tools and technologies are available in the 21st century than ever before. These may be organized to revitalize human space exploration into MOVE: Massive Online Vetted Exploration.

• Bits and Pieces: If only a few of the ideas from the Big Moon Dig prove of value amidst the chaos of the 21st century, then the total effort will be worthwhile. One big idea can keep many small ideas moving forward (Kelly, 2016).

That said, the Big Moon Dig is only in its early stages, and it will take a great amount of both luck and work to bring it to fruition.

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KEY TERMS AND DEFINITIONS

Big Moon Dig (BMD): A movement to reinvigorate human space exploration through use of twenty-first century technology and social media.

Buy-In: Buy-in is a key human mental capability that is responsible for the successful completion of all major human projects, from the Great Pyramids to the Gothic cathedrals to Apollo to the Moon; it gets people to take action and keeps them in action.

Cairn: A pile of rocks that is artfully constructed to mark a trail. Coronal Mass Ejections (CMEs): Radiation released by great storms on the sun.

CMEs are dangerous to the health of astronauts but do not deeply penetrate shielding. Galactic Cosmic Rays (GCRs): Radiation from deep space. These energetic

particles form a steady background radiation that is dangerous to the health of astronauts in the long term and deeply penetrates shielding.

Low Earth Orbit (LEO): True orbits around Earth but below the Van Allen belts. Lunar Reconnaissance Orbiter (LRO): An American unmanned mission to

lunar orbit launched in June 2009. It provided the altitude, slope, and radiation data used in this chapter.

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Extended Managerial Implications

Lunar Settlement: A living habitation for human beings on the Moon. It may be for commercial and scientific purposes, but not for military use. It has a charter under the Outer Space Treaty of 1967.

Regolith: The finely ground rock that covers the Moon and many celestial bodies. It contains no organic matter and little in the way of volatiles; therefore, it does not qualify as a soil.

Scott A Massif: An elevated land area near the south pole of the Moon that runs from 20 to 45 degrees longitude and -84.7 to -86.1 latitudes. It is a remnant of one of the rings of the very old South Pole-Aitken Basin.

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