Case analysis (GREAT-WRITERS ONLY)
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week1－8/BUSS5000_S2_Week 1_STUDENT_VERSION_20_07_16.pdf
The University of Sydney Page 1
BUSS5000 Critical thinking in Business
Introduction
Presented by
Dr Helen Parker
Unit Coordinator
The University of Sydney Page 2
Today’s Agenda
What is critical thinking and why are we all here?
Unit objectives and requirements
BUSS5000 teaching team
Unit assessments
Lecture schedule and content
Overview of BUSS5100 and PASS
The University of Sydney Page 3
What is critical thinking?
“Critical thinking is the intellectually disciplined process of actively
and skilfully conceptualizing, applying, analyzing, synthesizing, and/or evaluating information gathered from, or generated by,
observation, experience, reflection, reasoning, or communication, as
a guide to belief and action”.
(Scriven and Paul 2007)
The University of Sydney Page 4
Why are we doing this unit?
Employability skills!
– In addition to technical knowledge, employers want graduates that have:
– Global perspective & strong inter-cultural skills
– Critical mindset: prepared to question and test
– High quality communication skills (written and oral)
– Effective problem solving skills
– Ability to foster effective team work
The University of Sydney Page 5
Why are we doing this unit?
– The changing nature of society has led to changing societal and business attitudes
– More discerning and informed stakeholders
– Increasing expectations of businesses’ responsibility to society and the environment Climate change & global warming
Resource conflict (energy, land, minerals, food, water) – sustainability imperative
Corporate responsibility and sustainable competitive advantage
– Response to the Global Financial Crisis
– Loss of trust/corruption/greed/negative stereotypes
– Other units of study expect a critical mind set, e.g. ACCT5001, QBUS5001
The University of Sydney Page 6
What does a critical thinker actually do?
– Raises vital questions and problems, formulating them clearly and precisely
– Gathers and assesses relevant information, using abstract ideas to interpret it effectively
– Comes to well-reasoned conclusions and solutions, testing them against relevant criteria and standards
– Thinks open-mindedly within alternative systems of thought, recognising and assessing, as needs be, their assumptions, implications, and practical consequences
– Communicates effectively with others in figuring out solutions to complex problems
Source: www.criticalthinking.org
The University of Sydney Page 7
Approaches to critical thinking
The University of Sydney Page 8
8 elements of thought
The University of Sydney Page 9
Elements
of Thought
Purpose of the
Thinking Goal, objective
Point of View Frame of Reference
Perspective
Orientation
Questions at
Issue
Problem
Implications &
Consequences
Information Data, observations,
facts, experiences
Assumptions Presuppositions,
taking for granted
Concepts
Theories, laws,
models, definitions,
principles
Interpretation
& Inference
Conclusions,
solutions
Elements wheel
8
Elements
of
reasoning
The University of Sydney Page 10
We think
for a
purpose
Guided/within
a point of view
based on
assumptions
leading to
implications
and conse -
quences.
We use
data, facts,
and
experiences
We think to
make
inferences and
judgments
based on
concepts and
theories
We attempt
to answer a
question.
8
Elements
The University of Sydney Page 11
Evaluation
Compare &
Contrast
Application Action
Decision
Making
Standards
e.g., MarketingQ Elements
Nosich, G. M. 2009, Learning to think things through: a guide to critical thinking across the curriculum, 3rd ed., Pearson Education, New Jersey.
The core process of critical thinking in a discipline
The University of Sydney Page 13
Unit Objectives
– Demonstrate a working knowledge of key business
concepts and critical thinking
– Apply autonomous and constructive critical analysis skills
through the examination of business cases
– Develop critical reflection as a means of effective
business practices
– Evaluate critical action including ethical and sustainable
business practices
– Communicate effectively in writing and orally
The University of Sydney Page 14
The BUSS5000 teaching team - lecturers
14
Unit Coordinator
Dr Helen Parker
Dr Robert Gow
James
Anderson Dr Mavi Glinoga
Dr Zina O’Leary
A/Prof Margaret
Matanda
The University of Sydney Page 15
The BUSS5000 teaching team - lecturers
15
Lawrence Potter Dr Camilla Scanlan
Dr Steve
Hitchcock Prof. John Shields
The University of Sydney Page 16
BUSS5000 Senior Tutors – student focus
Dr Mavi GVivian Tang
The University of Sydney Page 17
Your tutors!
Dr Chris Siaw Lesley KnightClaudia Möller Anam Ullah
Julian Yim Tasbir Chowdhury Kriselda Samson Lawrence Potter
The University of Sydney Page 18
Your tutors!
Maryam Lashgari
Sanjeev DheerDr Lova Andriamora Philip Le
Telusila Faingata'a Wilson Ow
The University of Sydney Page 19
Unit structure and curriculum
The University of Sydney Page 20
Unit structure
Business Content
Learning key theories
Understanding cases
Business Skills
Writing and discussing
Applying theory to practice
Business Mindset
Critical thinker
Evidence-based decisions
The University of Sydney Page 21
Two assumptions
1. We learn to think critically by practising critical thinking
2. Further, this can be accelerated by critically thinking together
The University of Sydney Page 22
Macro (PESTEL/CSR)
Industry (Porters Five Forces/Disruptive
innovation)
Competitors and Markets (Stakeholder theory/SWOT)
Organisation (SWOT/teams & systems/Generic
Strategies)
Individual (Decision
making/personal values & ethics)
The University of Sydney Page 23
Week Topic
2 Introduction to business, stakeholder theory and value chain analysis
3 External/Internal analysis – PESTEL/Porter’s generic strategies
4 Industry level analysis and marketing concepts - SWOT
6 Decision making
7 Intercultural communication
8 Teams and systems
9 Growth and disruptive innovation
10 Personal values and ethics
11 Ethical capitalism: CSR and CSV
12 Employee engagement
The University of Sydney Page 24
Assessments
The University of Sydney Page 25
Online “CT for Business”
modules
0% 15 min/module Thursday 20 October
@ 10 am
Mid-semester exam 15% 100 minutes Saturday 3 September
@ 1.50 pm
Case Analysis & Evaluation 30% 2,000 words Monday 19 September
@ 10 am
Participation 15% 10 tutorials Week 12
Final exam 40% 130 minutes Exam period
The University of Sydney Page 26
Online modules
– Summary: The critical thinking skills that will be assessed in these online modules are skills that are used worldwide. You can answer these questions multiple times until the modules have been completed successfully.
– Task: The modules will improve your ability to solve problems, formulate inferences, calculate likelihoods and make decisions. These are foundation skills. These modules are accessible via Blackboard: Learning Resources.
– Length: Each of the ten modules will take approximately 15 minutes. We recommend you complete one or two each week.
– Weight: 0% but completion is mandatory. You must complete all modules successfully by the end of semester in order to pass this unit of study.
The University of Sydney Page 27
This assessment is listed as MANDATORY which means you must undertake the assessment and achieve a mark of 100% of the available marks in that assessment. Students who fail to achieve this minimum standard in this assessment, even when their aggregate mark for the entire unit of study is above 50%, will be given a Fail grade for this unit. As a result a student's academic transcript will show a fail grade and the actual mark achieved if the final mark of the unit is between 0-49 and a fail grade and a capped moderated mark of 49 for all other final marks.
Online modules
The University of Sydney Page 28
Mid-semester exam
– Summary: This exam will be based on content delivered and discussed during lectures and tutorials and from allocated readings and materials. The exam will involve analysis of 2 short case studies, both of which will be compulsory. Students are expected to respond in essay format.
– Length: 90 minutes plus 10 minutes reading time
– Weight: 15%
– Date: Saturday, 3 September @ 1.50 pm (put in your calendar)
The University of Sydney Page 29
Business case evaluation and analysis
– Summary: This evaluation will demonstrate an understanding of the semester’s tutorials, lectures, allocated readings, materials and additional research. Students will be required to respond to the questions outlined for a business case. It will be important to develop criteria with which to undertake the evaluation.
– Length: 2000 words (including references)
– Weight: 30%
– Due date: Monday 19 September @ 10 am
– Submission: On Blackboard via Turnitin
The University of Sydney Page 30
Participation
Summary: You are required to demonstrate your ability to think critically in situations involving other students. You will be assessed on:
(a) 'Critical thinking on a current business topic'. This in-class activity will commence in Week 4 and continue until Week 12. Students will work in teams of 3-4 and prepare a ten-minute presentation in relation to a business news item or a topic currently generating some 'heat' or media controversy. This presentation will focus on how this business topic is reported in the media. All team members are expected to contribute to the preparation of the presentation and should equally share the speaking time.
Weight: 5%
(b) In-class participation will be assessed in tutorials throughout the semester, from Week 2 to Week 12.
Weight: 10%
Total Weight for Assessment 4: 15%
Due: Ongoing (weekly in tutorials)
The University of Sydney Page 31
Final exam
Summary: This exam will be based on content delivered and discussed in lectures, tutorials and from assigned readings and materials. Students will have 120 minutes (plus 10 minutes reading time) to complete the closed- book exam. The exam will consist of three case studies, all of which will be compulsory. Students are expected to respond in an essay format.
– Length: 120 mins plus 10 mins reading time
– Weight: 40%
– Schedule: In final exam period
The University of Sydney Page 32
This assessment is listed as MANDATORY which means you must undertake the assessment and achieve a mark of 45% or above, of the available marks in that assessment. Students who fail to achieve this minimum standard in this assessment, even when their aggregate mark for the entire unit of study is above 50%, will be given a Fail grade for this unit. As a result a student's academic transcript will show a fail grade and the actual mark achieved if the final mark of the unit is between 0-49 and a fail grade and a capped moderated mark of 49 for all other final marks.
Final exam
The University of Sydney Page 33
BUSS5100 Communicating in Business
The University of Sydney Page 34
What is BUSS5100?
BUSS5100 Communicating in Business is a supplementary unit, the primary aim of which is to support students in their first semester of study to manage their business communication skills more effectively.
The University of Sydney Page 35
Successful communication
The University of Sydney Page 36
Unfortunately miscommunication happens quite frequently…
The University of Sydney Page 37
BUSS5100 is designed to solve this communication issue
– During BUSS5000 tutorials Week 1: Academic Writing Diagnostic
– Students enrolled in BUSS5100 based on their Academic Writing Diagnostic result will receive an email confirmation of enrolment in Week 2
– Timetabling assigns students to a BUSS5100 workshop (Workshops take place on Thursdays and Fridays)
– BUSS5100 workshops start in Week 3
– If you are interested in BUSS5100* you can request to be enrolled by emailing your NAME and STUDENT ID to [email protected] by Friday 29 July 2016.
*Subject to availability of spaces
The University of Sydney Page 38
All about PASS!
The University of Sydney Page 39
Peer Assisted Study Sessions
You learn from our VERY best students in PASS, top-achieving, experienced students help you- these students are most often our TOP BUSINESS SCHOOL students
The atmosphere in PASS is relaxed and friendly
You decide what goes on in PASS bring the questions you have about your coursework & the group will work together to solve the problems
In PASS, you talk about the material and solve problems interactively
PASS is confidential - what happens in PASS stays in PASS
REGISTRATIONS OPEN IN WEEK 1
http://sydney.edu.au/business/study/services/pass/i_want_to_register
Get in quick before places run out!
The University of Sydney Page 40
What we covered today….
What is critical thinking and why are we all here?
Unit objectives and requirements
BUSS5000 teaching team
Unit assessments
Lecture schedule and content
Overview of BUSS5100 and PASS
__MACOSX/week1－8/._BUSS5000_S2_Week 1_STUDENT_VERSION_20_07_16.pdf
week1－8/BUSS5000_S2_Week 2_Final_01_08_16 FINAL_BigSlides.pdf
The University of Sydney Page 1
BUSS5000
Critical Thinking in Business
Week 2
Presented by
James Anderson
BUSS5000 Teaching Team
The University of Sydney Page 2
Today’s Agenda
• Week 1 – a quick look back
• An introduction to business:
• Definitions
• Success?
• Stakeholders &
• Creating & adding value
• The central role of managers
• Critical thinking in business
• Week 3 – a quick look forward
The University of Sydney Page 3
What is critical thinking?
“Critical thinking is the intellectually disciplined process of actively
and skilfully conceptualizing, applying, analyzing, synthesizing, and/or evaluating information gathered from, or generated by,
observation, experience, reflection, reasoning, or communication, as
a guide to belief and action”.
(Scriven and Paul 2007)
The University of Sydney Page 4
What does a critical thinker actually do?
– Raises vital questions and problems, formulating them clearly and precisely
– Gathers and assesses relevant information, using abstract ideas to interpret it effectively
– Comes to well-reasoned conclusions and solutions, testing them against relevant criteria and standards
– Thinks open-mindedly within alternative systems of thought, recognising and assessing, as needs be, their assumptions, implications, and practical consequences
– Communicates effectively with others in figuring out solutions to complex problems
Source: www.criticalthinking.org
The University of Sydney Page 5
8 elements of thought
The University of Sydney Page 6
Evaluation
Compare &
Contrast
Application Action
Decision
Making
Standards
e.g., MarketingQ Elements
Nosich, G. M. 2009, Learning to think things through: a guide to critical thinking across the curriculum, 3rd ed., Pearson Education, New Jersey.
The core process of critical thinking in a discipline
The University of Sydney Page 7
What are the standards
• Clearness
• Accuracy
• Importance, Relevance
• Sufficiency
• Depth and Breadth
• Precision
The University of Sydney Page 8
Standards of Critical Thinking
Clearness • Thinking is clear when it’s easy understood and free from the likelihood of misunderstanding
Accuracy • Thinking and words are accurate when they describe the way things actually are
Importance, Relevance • Thinking is important when it’s directly relevant to addressing the problem at hand
Sufficiency • Thinking is sufficient when you’ve reasoned it out thoroughly enough for the purpose at hand
and taken into account all necessary factors
Depth and Breadth • Thinking is deep when you look below the surface of the question or issue to accomplish your
purpose • Thinking is broad when you recognize the need to look at other aspects, other perspectives
and other parallel problems
Precision • Thinking is precise when you have been as specific and detailed as needed to reason
through an issue
The University of Sydney Page 9
What is a business?
The University of Sydney Page 10
A definition of business
The University of Sydney Page 11
A definition of business
“Organisations mediate between the wider society and the individual, and joining an organisation as an employee exposes the individual to substantial direction and control. Despite the
self-activity of their members, organisations as corporate bodies do have economic and political powers above and beyond those
of the particular individuals that comprise them.”
(Thompson and McHugh 2009)
The University of Sydney Page 12
A definition of business
A deliberate arrangement of people to accomplish some specific purpose.
Business
Distinct purpose
People
Deliberate structure
The University of Sydney Page 13
Business, roles and responsibilities
We can quantify businesses in many, many ways: • Small vs Medium vs Large • For Profit vs Not for Profit vs Social Business • Government vs Commercial • Traditional vs Emerging • By Industry • By Market Position • etc
Fundamentally, they need to balance the needs & expectations of stakeholders
Scherer and Palazzo (2011) argue that business are increasingly taking a more political role, especially regards their corporate social responsibility (CSR)
Porter and Kramer (2011) also argue that we need to move beyond CSR to CSV (Creating Shared Value)
The University of Sydney Page 14
Business, roles and responsibilities
There are also many useful frameworks including the triple bottom line, which is the idea that business should have 3 areas of focus :
Economic: a focus on Profit
Social: a focus on People
Environment: a focus on the Planet
The University of Sydney Page 15
Business and success?
Why are some companies so successful over time?
like Apple, BHP Billiton, Alibaba
And many, many others not successful or sustainable?
like Enron, Home Depot (in China), Blackberry
The University of Sydney Page 16
Business and success?
Simon Sinek talks about why some organisations do things differently
The University of Sydney Page 17
A definition of Stakeholders
“The stakeholders in a firm are individuals and constituencies that contribute, either voluntarily or involuntarily to its wealth-creating capacity and activities, and who are therefore its potential
beneficiaries and or risk bearers.”
Source: Post, Preston and Sachs, 2002, Managing the Extended Enterprise: The New Stakeholder View.
The University of Sydney Page 18
Our weekly reading
Managing the Extended Enterprise: The New Stakeholder View.
“We develop a new stakeholder view of the firm that stresses the role of stakeholder relationships in the
creation of organizational wealth. This view is particularly useful for analysing and managing the
complex extended enterprises into which large corporations are evolving in the early years of the
21st century.”
The University of Sydney Page 19
Business and stakeholders
Internal Stakeholders External Stakeholders
Owners
Managers
Employees
Society
Customers
Creditors
Shareholders
Stakeholders
Suppliers
Government
Special Interest Groups
Unions The Organisation
The University of Sydney Page 20
Business and stakeholders
Internal Stakeholders External Stakeholders
Owners
Managers
Employees
Society
Customers
Creditors
Shareholders
Stakeholders
Suppliers
Government
Special Interest Groups
Unions The Organisation
Stakeholders can be:
Internal - operate within the business and core
to its day to day functioning, or
External - outside the firm but who care about
or are affected by its activities and performance
The University of Sydney Page 21
Business and stakeholders
Business need to balance the needs of stakeholders, and stakeholders can have competing interests.
Interests might not always be aligned, for example:
• Managers may want to pay the least salary that they can to keep their costs down, but
• Employees what to make the most that they can to ensure a comfortable lifestyle
• Suppliers usually want to sell their inputs for maximum $, but
• Customers often want to buy the finished product for the least possible price.
The University of Sydney Page 22
Fast Fashion - ZARA
• Founded in 1975
• Headquarter in La Coruna, Spain
• A Spanish clothing and accessories retailer for women, men and children
• The leader in rapid development of fast changing fashions
• Quick turnover of merchandise in the stores
• 1,923 stores in 88 countries
0
5
10
15
20
25
ZARA H&M Uniqlo Gap Aberc rombi e &
Fitch
Mang o
$ Billion 19.7 20.2 16.6 16.4 3.7 2.1
$ Billion
Sales in Fiscal Year 2014
The University of Sydney Page 23
Business and stakeholders
Who might be some of Zara’s stakeholders?
Internal: • Amanciao Ortega Gaona – owner
• Inditex – parent company
• Board of Directors
• The CEO and Senior Management team
• Frontline supervisors
• Employees – designers, production team, marketers, etc
External: • Customers – Spain, Global
• Supply Chain Partners – material manufacturers, distributors, IT partner
• Shopping Centre Operators
• The Spanish (and other) Governments
• Industry Interest Groups
The University of Sydney Page 24
Now lets talk about how businesses
create & add value
The University of Sydney Page 25
Business and value
Businesses create “value” for customers by doing things like:
Providing Quality Products & Services – what do they offer to the marketplace
Focussing on Exceptional Customer Service – often a key source of competitive advantage
Building efficient and effective systems of work – reflected in the resource-based view (RBV) of firm success
A good initial framework for value-add is the Input / Output Model:
TRANSFORMATIONINPUTS OUTPUTS
The University of Sydney Page 26
Business and value
The Input / Output Model:
TRANSFORMATIONINPUTS OUTPUTS
Like: • Capital
• Materials
• People
Like: • Products
• Services
Like: • Business Analytics
• Accounting
• Finance
• Logistics
• Marketing etc
This is where lots
of value-adding
takes place !
This is what we
teach in the
Business School!
This is where
managers do lots of
critical thinking
The University of Sydney Page 27
but …..
what is our model missing??
The University of Sydney Page 28
Business and value
Environmental, like:
• climate change
• emissions
• pollution
Legal, like:
• regulations
• laws
• health & safety
Economic, like:
• interest &
exchange rates
• competition
• prices
Socio-Cultural. like:
• demographics
• Diversity
• buying trends
Political, like:
• policy
• unrest & conflict
• elections
Technology, like:
• online
• mobile computing
• robotics
The University of Sydney Page 29
Business and value
The tool that we would like to land on in terms of value creation and adding
is the Value Chain. A Value Chain is:
The set of activities that firm operating in a specific industry performs in
order to deliver a valuable product or service to the market
Primary Activities
Support Activities
Firm Infrastructure
Human Resource Management
Technology Development
Procurement
Inbound Logistics
Operations Outbound Logistics
Marketing & Sales
Service
Porter’s Value Chain
Margin
The University of Sydney Page 30
Business and value
The primary activities relate directly to the physical creation,
sale, maintenance and support of a product or service
Primary Activities
Support Activities
Firm Infrastructure
Human Resource Management
Technology Development
Procurement
Inbound Logistics
Operations Outbound Logistics
Marketing & Sales
Service
Porter’s Value Chain
Margin
Primary Activities
Support Activities
Firm Infrastructure
Human Resource Management
Technology Development
Procurement
Inbound Logistics
Operations Outbound Logistics
Marketing & Sales
Service
Porter’s Value Chain
Adapted From Porter 1985
The University of Sydney Page 31
Business and value
Primary Activities
Support Activities
Firm Infrastructure
Human Resource Management
Technology Development
Procurement
Inbound Logistics
Operations Outbound Logistics
Marketing & Sales
Service
Porter’s Value Chain
Margin
The Primary Activities:
1. Inbound logistics – processes related to receiving, storing and
distributing inputs internally
2. Operations – transformation activities that change inputs into outputs
that are sold to customers
3. Outbound logistics – activities which deliver your product or service to
your customer, like collection, storage, and distribution
4. Marketing and sales – processes you use to persuade customer to
purchase from you instead of your competitors
5. Service – activities related to maintaining the value of your product or
service to your customers, once it has been purchased
Primary Activities
Support Activities
Firm Infrastructure
Human Resource Management
Technology Development
Procurement
Inbound Logistics
Operations Outbound Logistics
Marketing & Sales
Service
Porter’s Value Chain
Adapted From Porter 1985
The University of Sydney Page 32
Business and value
Support activities “support” the primary value creating
activities, and each support or secondary activity can play a
role (and sometime different role) in each primary activity.
Primary Activities
Support Activities
Firm Infrastructure
Human Resource Management
Technology Development
Procurement
Inbound Logistics
Operations Outbound Logistics
Marketing & Sales
Service
Porter’s Value Chain
Margin
Primary Activities
Support Activities
Firm Infrastructure
Human Resource Management
Technology Development
Procurement
Inbound Logistics
Operations Outbound Logistics
Marketing & Sales
Service
Porter’s Value Chain
Margin
Adapted From Porter 1985
The University of Sydney Page 33
Business and value
Primary Activities
Support Activities
Firm Infrastructure
Human Resource Management
Technology Development
Procurement
Inbound Logistics
Operations Outbound Logistics
Marketing & Sales
Service
Porter’s Value Chain
Margin
The Support Activities:
1. Procurement – what the organisation does to get the resources it
needs to operate
2. Human Resource Management – how well the company recruits,
hires, trains, motivates rewards and retains its workers
3. Technological Development – activities related to managing and
processing information as well as protecting the companies knowledge
base
4. Infrastructure – the company’s support systems, and the functions that
allow it to maintain its daily operations
Primary Activities
Support Activities
Firm Infrastructure
Human Resource Management
Technology Development
Procurement
Inbound Logistics
Operations Outbound Logistics
Marketing & Sales
Service
Porter’s Value Chain
Margin
Adapted From Porter 1985
The University of Sydney Page 34
McDonalds
• The worlds largest chain of fast food hamburger restaurants
• Started in California in 1940 by Richard and Maurice McDonald
• Developed the “speedee service system”
• Ray Kroc, a milkshake-maker salesman became an early
franchisee, then significantly expanded the firm from 1954
• 1980’s burger wars
• 2012 revenue of US$27billion with over 36,000 stores worldwide
The University of Sydney Page 35
McDonalds Value Chain
The primary activities might look something like?
Primary Activities
Support Activities
Firm Infrastructure
Human Resource Management
Technology Development
Procurement
Inbound Logistics
Operations Outbound Logistics
Marketing & Sales
Service
Porter’s Value Chain
Adapted From Porter 1985
Fresh fruit and vegetables
Beef & Chicken
Bread supplies
Drinks supplies
Wrapping supplies
etc
Food preparation
Cooking
Front counter order taking
Drive thru ordering
Online ordering
etc
Front counter order delivery
Drive thru delivery
Online order delivery
etc
The Golden Arches
Ronald McDonald
Advertising
Community Engagement
etc
Website
Customer service
Complaints management
etc
The University of Sydney Page 36
What do managers do?
The University of Sydney Page 37
What do managers do?
They …..
Plan the work
Represent their team
Manage the team
Make decisions Gather, filter &
disseminate
information
Communicate
The University of Sydney Page 38
What do managers do?
We have many models which can help us to organise our thinking about the managerial task
A key one is Fayol’s (1916) four functions of management:
Planning Organising Leading Controlling
The University of Sydney Page 39
What do managers do?
Planning Organising Leading Controlling
• Planning typically involves understanding your
environment, developing strategies, setting goals etc
• Organising typically involves designing the organisation,
and deciding on and managing the work of the team
• Leading typically involves understanding behaviour,
inspiring, motivating, influencing, communication etc, and
• Controlling typically involves defining standards, and
measures of performance and success
The University of Sydney Page 40
What do managers do?
However, Yukl (1998) also said that:
“Managerial work is inherently hectic, varied, fragmented, reactive, disorderly and political.
Brief oral conversations predominate, and many of these involve people outside the managers immediate work unit and chain of command.
Decision processes are highly political and most planning is informal and adaptive.”
The University of Sydney Page 41
What do managers do?
Steve Jobs talks about managing people
The University of Sydney Page 42
Critical Thinking
The University of Sydney Page 43
Business and critical thinking
What’s the link to Critical Thinking?
Critical Thinking helps us with many very important business & managerial activities, like:
Generating insights – environmental scanning & ideas generation
Doing deep analysis – what does the data tell us?
Beating the competition – our source of competitive advantage
Satisfying customer’s needs – what do customers want?
Innovating – the heart of business success?
Surviving – Strategy 101!
The University of Sydney Page 44
Business and critical thinking
Planning Organising Leading Controlling
Primary Activities
Support Activities
Firm Infrastructure
Human Resource Management
Technology Development
Procurement
Inbound Logistics
Operations Outbound Logistics
Marketing & Sales
Service
Porter’s Value Chain
Margin
Internal Stakeholders External Stakeholders
Owners
Managers
Employees
Society
Customers
Creditors
Shareholders
Stakeholders
Suppliers
Government
Special Interest Groups
Unions The Organisation
The University of Sydney Page 45
Review
1. An introduction to business, especially regards:
• Defining business
• Inputs and Outputs
• Stakeholders &
• Creating and Adding Value
2. The role of managers
3. Critical thinking in business
The University of Sydney Page 46
Next week?
Week 3:
Environmental Analysis
Mr Lawrence Potter
__MACOSX/week1－8/._BUSS5000_S2_Week 2_Final_01_08_16 FINAL_BigSlides.pdf
week1－8/BUSS5000_S2_Week 3_FINAL_05_08_16_Big Slides.pdf
The University of Sydney Page 1
BUSS5000
Critical Thinking in Business
Week 3
Environmental Analysis
Presented by
Lawrence Potter Director – Strategon Capital / Adjunct Lecturer
The University of Sydney Page 2
The University of Sydney Page 3
Today’s Agenda
Definition of Strategy
Strategic Management
Strategic Analysis: Models
PESTEL Analysis
• Application & Limitations
• Case Example: Pharmacy – Health Supplements
SWOT Analysis
• Application & Limitations
• Case Example: TATA Motors
The University of Sydney Page 4
My Work
Background
The University of Sydney Page 5
What is Strategy?
The University of Sydney Page 6
Definition of Strategy https: //www.youtube.com/watch?v=TD7WSLeQtVw
(Video 8.46 mins)
Steiner (2010, 1979): suggests that there is little agreement as to the term strategy in the business world. He suggests that:
– “strategic planning is inextricably interwoven into the entire fabric of management: it is not something separate and distinct from the process of management” (2010 p.3).
– Further he incorporates the following dimensions of strategy:
• Strategy is that which top management does that is of great importance to the organisation;
• Strategy refers to the basic directional decisions, that is, purpose and missions;
• Strategy is the important actions necessary to realise the purpose and mission;
• Should answer the question: What the organisation is doing?
• Should define What are the ends we seek and how should we achieve them?
Steiner, G. A. (1979). Strategic Planning. Free Press
Steiner, G. A. (2010). Strategic Planning. Simon and Schuster.
The University of Sydney Page 7
Success and Failure through Strategy
The University of Sydney Page 8
Nintendo Example http://www.theverge.com/2016/7/11/12147600/nintendos-stock-pokemon-go
The University of Sydney Page 9
The Strategic Management Process
Strategic Analysis
Strategic Choice
Strategy
Implementation
3 Key Steps
The University of Sydney Page 10
PESTEL Analysis
The University of Sydney Page 11
PESTEL Definition and Model
– A PESTEL analysis is a framework or tool used by marketers to analyse and monitor the macro-environmental factors that have an impact on an organisation. The results can be used to identify threats and opportunities in a SWOT analysis.
– The purpose of PESTEL analysis is to identify issues that fit two criteria:
1. The issues are outside the control of the organisation, and
2. The issues will potentially have a favourable or unfavourable impact on the organisation.
The University of Sydney Page 12
PESTEL Approach and Critical Thinking
The University of Sydney Page 13
PESTEL Model
The University of Sydney Page 14
PESTEL - Political
Political issues may include:
• Government stability and likely changes
• Bureaucracy
• Corruption level
• Tax policy (rates and incentives)
• Government involvement in trade unions and agreements
• Consumer protection and e-commerce
• Regulation/de-regulation
• Free Trade Agreements
• Import restrictions (quality and quantity)
• Tariffs
• Competition regulation
The University of Sydney Page 15
PESTEL - Economic
Economic issues may include:
• Growth rates (eg. Gross Domestic Product)
• Inflation rate (Consumer Price Index)
• Interest rates (official rate set by the Reserve Bank of Australia)
• Foreign exchange rates
• Unemployment trends
• Labour costs
• Credit availability
• Trade flows and patterns
• Level of consumers’ disposable income
• Stock market trends
The University of Sydney Page 16
PESTEL - Social
Social issues may include:
• Education level • Attitudes toward imported goods and services • Attitudes toward work, leisure, career and retirement • Attitudes toward product quality and customer service • Attitudes toward saving and investing • Buying habits • Religion and beliefs • Attitudes toward “green” or ecological products • Attitudes toward and support for renewable energy • Population growth rate • Immigration and emigration rates • Age distribution and life expectancy rates • Average disposable income level • Family size and structure • Minorities
The University of Sydney Page 17
PESTEL - Technological
Technological issues may include:
• Rate of technological change
• Spending on research & development
• Technology incentives
• Legislation regarding technology
• Technology level in your industry
• Communication infrastructure
• Access to newest technology
• Internet infrastructure and penetration
The University of Sydney Page 18
PESTEL – Environmental
Environmental issues may include:
• Weather
• Climate change
• Laws regulating environment pollution
• Air and water pollution
• Attitudes toward “green” or ecological products
• Endangered species
• Attitudes toward and support for renewable energy
The University of Sydney Page 19
PESTEL - Legal
Legal issues may include:
• Anti-trust laws
• Discrimination laws
• Copyright, patents / Intellectual property laws
• Consumer protection and e-commerce
• Employment laws
• Health and safety laws
• Environmental Laws
• Data protection laws
• Laws regulating environment pollution
The University of Sydney Page 20
PESTEL analysis of the Airline Industry
Political
• Security controls
• Restrictions on migration
Economic
• National growth rates
• Fuel prices
Environmental
• Noise pollution controls
• Energy consumption controls
• Land for growing airports
Social
• Rise in holiday travel
• Student international study
exchanges
Technological
• Fuel-efficient engines and airframes
• Security check technologies
• Teleconferencing for business
Legal
• Restrictions on mergers
• Preferential airport rights for some
carriers
The University of Sydney Page 21
SWOT Analysis
The University of Sydney Page 22
SWOT Analysis – Definition and Purpose
– A SWOT analysis provides a ‘general summary of the Strengths and Weaknesses explored in analysis of strategic capabilities and the Opportunities and Threats explored in an analysis of the environment’ (Johnson et al. 2015).
– The aim of a SWOT analysis is to help you develop a strong business strategy by making sure you’ve considered all of your business’s strengths and weaknesses, as well as the opportunities and threats it faces in the marketplace.
The University of Sydney Page 23
SWOT Analysis – Definition and Purpose
The University of Sydney Page 24
BUILDING a SWOT Analysis
SWOT:
– INTERNAL: Strengths and Weaknesses
– EXTERNAL: Opportunities and Threats
– POSITIVE FACTORS: Strengths & Opportunities
– NEGATIVE FACTORS: Weaknesses & Threats
– ACTIONS:
• Leverage and promote the positive factors
• Act and manage the negative factors
• BUILD a Competitive Advantage position
The University of Sydney Page 25
TATA Motors Overview: https://www.youtube.com/watch?v=ItoxY1ejN5w
The University of Sydney Page 26
Tata Motor’s SWOT Analysis
Strengths:
• Strong financial condition
• Profitability
• High amount of foreign investment
• Current market share and standing in market
• Number of patents and trademarks
• Successful new product launch in last 5 years
• Successful advertising campaigns
• Joint ventures, strategic alliances, takeovers and mergers
Weaknesses:
• Human Resource
• Lack of working capital
• No technical expertise of company
• No control over strategic direction
• Competitive capabilities
• Weak balance sheet
• Excess Debt
• Falling behind in R&D
Opportunities:
• Favorable government policies
• Expanding to new geographic areas
• Expanding product lines
• Increase market share from competitors
• Strategic Alliances
• Openings to extend brand name, image
• Vertical integration
Threats:
• Rising material costs
• Restive labor force
• Entrance of new competitors
• Slow market growth
• Inefficient Bureaucracy
• Natural disasters
• Vulnerability to business cycle
The University of Sydney Page 27
Review
• Business Strategy
• A PESTEL Analysis
• A SWOT Analysis
The University of Sydney Page 28
Next Week?
Week 4:
Internal Analysis & Competitor Analysis
Associate Professor Margaret Matanda
__MACOSX/week1－8/._BUSS5000_S2_Week 3_FINAL_05_08_16_Big Slides.pdf
week1－8/BUSS5000_S2_Week 5_FINAL.pdf
The University of Sydney Page 1
BUSS5000 Critical Thinking in Business
Week 5 Critical analysis & evaluation of a business case
Dr Robert Gow
The University of Sydney Page 2
Today’s Agenda
• Case Study Analysis
• UBER in Australia – The story so far
• Six Thinking Hats (Edward de Bono)
The University of Sydney Page 3
What is a business case study?
• A story (true or made up)
• Description of a business situation
• Illustrates business management theories and concepts
• Provides problems or issues to solve
• May require you to outline alternatives & determine a course of action to take
The University of Sydney Page 4
Case Study Analysis - Why use case studies?
• Provides real world business situations
• Develops critical thinking and self-reflection skills
• Develops skills to break down problems & evaluate them rationally
• Enhances verbal and written communication skills
• Enhances understanding of BUSS5000 models, frameworks & concepts
• Prepares business students for life-long learning
The University of Sydney Page 5
Case Study Analysis - The Evaluation Process
Recommendations Make recommendations linked to the problem The impact on the organisation’s competitive advantage
Identify relevant information Type of information required Models, frameworks & concepts to inform the analysis
The University of Sydney Page 6
Case Study Analysis - Factors to consider
Information provided • Use the information provided • Stay within the time period of the case (unless directed otherwise)
Assumptions & Limitations • Clearly state your assumptions • Outline the limitations of your analysis
References • Use supporting literature to support your argument (use the BSRG) • Do not plagiarise the work of others • Use paraphrasing skills • Use direct quotes sparingly
The University of Sydney Page 7
Case Study Analysis – Writing up the case analysis Introduction • Describe the purpose of the case study • Describe the context of the case • Identify any assumptions you are making Findings • Identify problems demonstrated in the case (supported by
facts in the case and relevant theory and course concepts) • Explain and justify your choice of analysis tools Discussion • Apply the analysis tools • Identify alternative solutions • Indicate how you decide what is acceptable/not acceptable
as a solution
The University of Sydney Page 8
Case Study Analysis – Writing up the case analysis Conclusion • Sum up the main points from the findings and discussion • Restate the purpose of the report and state how you
achieved it
Recommendations • Present an action plan detailing who should take action,
when and how
References (BSRG compliant)
The University of Sydney Page 9
Case Study Analysis – In summary
A case analysis actively engages you in: • identifying problems and questions, • diagnosing the identified problems or issues, • proposing workable solutions, • explaining and defending your assessments
Look for opportunities to apply BUSS5000 models, frameworks & concepts!
Due date: 19th September, 2016
The University of Sydney Page 10
UBER in Australia The story so far …
The University of Sydney Page 11
UBER - Background
• From a cold, snowy night in Paris in 2008, UBER was born out of desperation, by Travis Kalanick & Garrett Camp
• Launched in 2009 as a luxury car service in San Francisco
• Operates today in over 400 cities worldwide • $63 billion valuation (2015)
The University of Sydney Page 12
UBER - What does it do?
• A point-to-point ride sharing service
• Private individuals drive their own cars
• Riders book and pay for their ride through the Uber app
• Riders rate the driver
The University of Sydney Page 13
UBER – Some details
• Just about anyone can be a driver - even taxi drivers
• Passengers benefit from cheaper fares. Average fare comparisons show you might pay $14 with Uber to go from Hyde Park to Newtown vs $23 in a taxi.
• In NSW, a taxi licence cost $400,000, and the average driver makes about $10 an hour after costs.
The Daily Telegraph December 18, 2015
The University of Sydney Page 14
UBER – Part of the sharing economy
• Sharing economy (collaborative consumption) – the peer- to-peer-based activity of obtaining, giving, or sharing access to goods and services, coordinated through community-based online services (Hamari et. al 2015)
• Growth driven by: • A platform of smartphones and social media creating
increased and continuous access to information for consumer
• Financial crisis of 2008 networking and pooling of resources
• Cultural shifts (eg. car ownership)
The University of Sydney Page 15
UBER – The Sharing Economy
Collaborative Economy Honeycomb, viewed 18 August 2016, http://crowdcompanies.com/collaborative‐ economy‐honeycomb‐2‐watch‐it‐grow/
The University of Sydney Page 16
UBER – The Sharing Economy
PricewaterhosueCoopers, The sharing economy – sizing the revenue opportunity, viewed 18 August 2016, <http://www.pwc.co.uk/issues/megatrends/collisions/sharingeconomy/the-sharing- economy-sizing-the-revenue-opportunity.html>
The University of Sydney Page 17
UBER – The Sharing Economy
PricewaterhosueCoopers, The sharing economy – sizing the revenue opportunity, viewed 18 August 2016, <http://www.pwc.co.uk/issues/megatrends/collisions/ sharingeconomy/the-sharing-economy-sizing-the- revenue-opportunity.html>
Sharing Economy Projected Revenue Opportunity
The University of Sydney Page 18
UBER - Platform
Cloud base platform
Voice & Messaging applications
Online & Mobile Payments
Global Navigation
Background checks
The University of Sydney Page 19
UBER – Revolutionary aspects
• Introduced flexible, computer generated fares to the market – fluctuated throughout the day (surge pricing)
• Replaced organised and regulated transportation systems/provides with private, on-demand labour – ad-hoc taxi service providers
The University of Sydney Page 20
Is there more to UBER?
UBER Eats
Order food from a nearby restaurant and pay for the meal,
and the delivery, through the Uber account.
• Homeslice Pizza Melbourne
“We’ve tried other food delivery services, which are more of a slow trickle. You might get 3 or 4 orders a night per service. So with Uber Eats we were expecting the same thing, then right off the bat we get 50 to 60 orders”
The Weekend Australian July 9-10, 2016
• Is a restaurant front still necessary?
• Is there a future in commercial kitchens offering only third party delivery?
The University of Sydney Page 21
Uber – What else?
Uber Ice Cream
Order exclusive gourmet ice cream flavours designed by
Australia’s top chefs are getting involved.
UBER Commute
Drivers find people who want to grab a ride on their commute to
and from work.
The University of Sydney Page 22
UBER – Wait, there’s more!
UBER Pool
The carpool version of Uber. Share your ride if the app
detects someone else willing to book an Uber POOL along the
route you are going.
UBER Rush
An on-demand courier service.
The University of Sydney Page 23
UBER – Mapping Uber’s future
• Using mapping cars to capture street imagery
• $663m spent on mapping to reduce reliance on Google maps (rival technologies)
• Next steps? (AFP August 19, 2016) • Uber to launch driverless car service in Pittsburgh • established $300 million venture with Chinese-owned,
Sweden-based Volvo Cars to develop self-driving cars for sale by 2021
• Uber is buying Otto, a San Francisco startup developing self-driving commercial trucks
The University of Sydney Page 24
UBER – A competitive threat?
Sharing the Road: Business Travelers Increasingly Choose Uber, viewed 18 August 2016, www.certify.com/Infograph-SpendSmart-Full-Year-2015.aspx
UBER’s Market Growth In the USA
The University of Sydney Page 25
UBER – You can think of UBER as:
1. Absorbing taxi markets
2. Bringing taxis to markets that don’t have them
3. A personal logistics company
4. Delivering both people and things
5. A replacement for your car
6. A future fleet of self-driving cars
7. A giant supercomputer orchestrating the delivery of
millions of people and items over the world
(Teixeira and Brown 2016)
The University of Sydney Page 26
UBER – Unstoppable? What about China?
• Late comer to China (2014) losing $1 billion per year
• Used Google maps - switched to Baidu • Didi worked with taxi drivers, not individual owners • UBER used credit cards & Alipay, Didi used cash &
Wechat • Apple invests $1 billion in Didi (2016) • Didi buys UBER China ($1 billion August 2016)
The University of Sydney Page 27
UBER – The real reason behind UBER in China?
The University of Sydney Page 28
UBER – The real reason behind UBER in China?
‘China grants legal status to ride-hailing services’ (Xinhuanet 28 July 2016)
• Legal, but subject to more regulation and control
• Data collected by UBER would come under the purview of the government
• National and local regulatory approval required
• Ride-hailing companies urged to merge with taxi companies
The University of Sydney Page 29
UBER – A regulatory system struggling to keep up
ISSUES: Public Safety • Untrained citizens driving uninspected cars
Labour Regulation • Treatment of “driver partners”
Legal Grey Areas • Classifying UBER and its stakeholders • Taxi licensing laws
Loss of regulatory control! Loss of revenue for state government?
The University of Sydney Page 30
UBER – Government’s initial response to UBER
NSW cracks down on UBER ride-sharing
• NSW government has begun cracking down on the "ride-sharing" component of the smartphone app UBER by issuing $2500 fines and threatening legal action against motorists who offer the service. (Sydney Morning Herald 17 June 2014)
• NSW Roads and Maritime Services put controversial ride-sharing giant UBER on notice, issuing 40 suspension notices against offending drivers.
• "Taxi and hire car services in NSW must be provided by an operator accredited by Roads and Maritime, in a licensed and insured vehicle which is driven by an authorised driver” (RMS Director of Safety and Compliance Peter Wells) (ABC News 28 September 2015)
The University of Sydney Page 31
UBER – The report by CHOICE
• CHOICE, a consumer advocacy group, released the results of a report that looked at factors like price, reliability and safety (24 September 2015)
• Research was conducted over a total of 56 trips across Sydney - 28 in taxis and 28 with Uber
• UBER was found to be just as safe and reliable as your average taxi, and on average, was 40% cheaper
The University of Sydney Page 32
UBER – Government’s subsequent response to UBER
• UBER is now legal in all states of Australia (except the Northern Territory)
• A hire car licence is no longer needed in NSW to provide a hire car service
• NSW government is giving the taxi industry $250m in compensation after legalising UBER, funded by a $1 per trip temporary levy on all point-to-point transport providers
• 5,800 taxi plates owners in NSW will receive compensation receiving $20,000 per plate
• NSW drivers no longer pay an annual fee
The University of Sydney Page 33
UBER – But is everyone happy?
What strategies should the taxi industry in Australia pursue in the future to compete against UBER?
The University of Sydney Page 34
Six Thinking Hats Edward de Bono
The University of Sydney Page 35
Six Thinking Hats
• Six Thinking Hats is a systematic method of thinking which separates thinking into six distinct categories. Each category is identified with its own coloured metaphorical “thinking hat”. By mentally wearing and switching “hats”, users can focus or redirect thoughts, the conversation, or a meeting.
The University of Sydney Page 36
Six Thinking Hats
• Typical Western thinking is concerned with ‘what is’ - determined by analysis, judgement and argument - parties take an opposite view
• An alternative way of thinking is concerned with ‘what can be’ - involves constructive thinking, creative thinking and ‘designing a way forward’
• Parallel thinking means that at any given moment all parties are looking in the same direction
• Rather than juggling six balls at once, it is much easier to juggle just one
The University of Sydney Page 37
Six Thinking Hats
Blue Hat
• Blue is cool and the colour of the sky which is above everything else. The blue hat is concerned with control, the organisation of the thinking process and the use of other hats.
• Blue hat thinking is thinking about the thinking needed to explore the subject.
• Blue hat thinking defines the problems and shapes the questions.
• Blue hat thinking monitors the thinking and ensures the rules of the game are observed.
• Examples: • What is the structure? • What are the alternatives?
The University of Sydney Page 38
Six Thinking Hats
• White is neutral and objective and is concerned with objective facts and figures.
• It is used to record information currently available and to identify further information that might be needed.
• The person requesting information should use focussing questions to obtain information.
• Examples: • What are the facts in this matter?
The University of Sydney Page 39
Six Thinking Hats
Red Hat
• Red suggests anger, rage and emotions. The red hat gives the emotional view – this is how I feel about the matter.
• Red hat allows people to put forward feelings without justification or prejudice.
• The red hat covers 2 types of feelings. First, the ordinary emotions such as fear and dislike. Second, there are complex judgements that go into feelings of intuition, sense, taste and hunch.
• Examples: • I feel…… • My intuition tells me …….
The University of Sydney Page 40
Six Thinking Hats
Black Hat
• Black is sombre and serious. The black hat is cautious and careful. It points out the weaknesses in an idea – the need to consider risks, dangers and obstacles.
• The black hat can be used to assess the question “should we proceed with this?
• Examples: • Point out errors in thinking. • Questions the strength of evidence. • Is it the only conclusion?
The University of Sydney Page 41
Six Thinking Hats
• Yellow is sunny and positive, is optimistic and covers hope and positive thinking.
• Yellow hat is concerned with positive assessment ranging from the logical and practical at one end to dreams, visions and hopes at the other.
• Yellow hat generates concrete proposals and suggestions and is concerned with making things happen.
• Examples: • Looking into the future. • What’s the best possible scenario?
The University of Sydney Page 42
Six Thinking Hats
Green Hat
• Green is the energy and creative hat where we put forward new ideas, lay out options and alternatives.
• Seek to modify and improve suggested ideas. • Permitted to put forward possibilities – ‘we could do this, or this
or this.’ • Overcomes some of the difficulties proposed by the black hat. • Examples:
• New ideas, new concepts, new perceptions. • Alternatives and more alternatives. • Change.
The University of Sydney Page 43
Six Thinking Hats
Using the Six Hats
• Blue hat is used at beginning (eg definition of the problem) and end (what we have achieved, outcome).
• A sequence is outlined at the beginning and members must stay with the hat indicated.
• Only the facilitator can change the hat.
• The hats indicate the direction in which to think.
• One minute allowed per person present for each hat. Red hat should be a shorter time.
The University of Sydney Page 44
Six Thinking Hats - Summary
The University of Sydney Page 45
Next Week?
Week 6
Decision-making in business
Dr Zina O'Leary
__MACOSX/week1－8/._BUSS5000_S2_Week 5_FINAL.pdf
week1－8/Buss5000_S2_Week 6_fianl_31.8.2016.pdf
The University of Sydney Page 1
BUSS5000/CRITICAL THINKING
IN BUSINESS
Dr Zina O’Leary
Business Education
Week 6: Effective Decision-making
The University of Sydney Page 2
What is Decision Making?
The process by which a decision-maker selects the best alternative from among several possibilities
(Halpern 2014)
The University of Sydney Page 3
Logical and Systematic
The University of Sydney Page 4
Logical and Systematic
Identification of Problem(s)
Generation of Alternatives
(Brainstorming)
Evaluation of alternatives
(Pros and Cons)
Selection of Alternatives
(Choosing best option)
Follow through
(Implementation of Chosen Alternative)
The University of Sydney Page 5
RASH AND HAPHAZARD… Falling into Traps
The University of Sydney Page 6
Decision-making Traps (Hammond, Keeney and Raiffa 1998)
The Anchoring Trap
Status Quo Trap
Confirming Evidence Trap
Estimating and Forecasting Traps
Recallability Trap
Prudence Traps
Overconfidence
Sunk Costs
Framing
Source: The Hidden Traps in Decisionmaking (Hammond, Keeney and Raiffa 1998)
The University of Sydney Page 7
The University of Sydney Page 8
The Anchoring Trap
Definition
• Giving disproportional weight to the first information you receive.
• Initial impressions, estimates, or data anchor subsequent thoughts and judgments.
Example
• Projecting future product sales by looking only at recent past sales figures. In a fast-moving marketplace, poor forecasts can result.
The University of Sydney Page 9
General Mills
In the 1960s the General Mills
wanted to launch “Betty Crocker”
cakes in to the Japanese
markets.
Management worked on two
unquestioned assumptions –
anchored in their culturally biased
thinking.
1. who doesn’t love cake
2. cake mix is easy to make
ONLY TURE… IF YOU HAVE AN
OVEN
The University of Sydney Page 10
Status Quo Trap
Definition
• Favouring alternatives that keep the existing situation.
• People resist change and therefore decision-makers have a strong bias toward alternatives that prolong the status quo.
Example
• A company slips behind the competition because it does not accept new technology
The University of Sydney Page 11
Western Union
• In 1876 Alexander Graham Bell offered Western Union the patent for the first phone.
• Western Union claimed…
• “it lacked commercial possibilities” and resembled an “electrical toy”.
• Bell kept the patent (now AT&T).
The University of Sydney Page 12
Confirming Evidence Trap
Definition
• We have a tendency to seek information that agrees with the ideas we have.
• Evidence suggests when people are required to consider counterevidence, they make better decisions (Koriat, Lichtenstein & Fischhoff, 1980).
Example
You think you are making a sounds decision on how to remunerate a consultant. You discuss this with only like minded colleagues.
The University of Sydney Page 13
Star Wars
• In 1975 all evidence suggested that product merchandising was not particularly lucrative.
• George Lucas was entitled $500,000 for directing Star Wars. He kept his salary at $150,000 in exchange for two things:
• 1) that he retain all merchandising rights,
• 2) that he would retain the rights to any sequels.
• Executives consulted and thought the deal was a huge win for the studio.
The University of Sydney Page 14
Sunk Costs
Definition
• The sunk-cost fallacy is an irrational decision to invest more resources in a situation even when the original decision no longer seems plausible (escalation of commitment).
Example
An organisation keeps investing resources into a project when it is clear that it will not be profitable.
The University of Sydney Page 15
The Melbourne Star
• Opened two years behind schedule in December 2008 at $100 million (projected $40 million).
• Closed 40 days later due to structural defects.
• Reconstruction due to be completed by late 2010.
• Opened December 2013.
• Expectation of 1.5 million visitors per year – approx. 300,000.
• It could take up to 75 years for the Melbourne Star Observation Wheel to turn a profit.
The University of Sydney Page 16
Overconfidence Trap
Definition
• Overconfidence is a common decision-making pitfall that relates to a person’s ego.
• At the heart of egocentric decision-making is the tunnel- visioned perspective that one’s ideas are superior to those of others.
Example
A leader refuses to listen to alternative points of view regarding diversification into a new product line. Despite this, he/she is confident of his/her participatory leadership style and the validity/plausibility of their perspective.
The University of Sydney Page 17
Henry Ford’s Model-T
• Produced from 1908 to 1927.
• Market share rose from 9.4% in 1908 to 48% in 1914.
• However, Ford refused consider replacing his Model T and began to lose
market share.
• While on vacation, employees built an updated Model T. Ford kicked in
the windshield and stomped on the roof.
• By 1940 Ford’s market share had dropped to 20%.
The University of Sydney Page 18
What is Decision Making?
The process by which a decision-maker selects the best alternative from among several possibilities.
(Halpern 2014)
The University of Sydney Page 19
Multi Criteria Analysis
Multi Criteria Analysis is a decision-making tool:
• developed for complex multi-criteria problems,
• that compares and ranks alternative options or courses of action,
• and takes into account and evaluates respective consequences.
The University of Sydney Page 20
Conducting MCA
1. Establish the decision context/ options
– Options are generally chosen by the decision makers
– Can be based on expert advice , wider opinion, or computer simulation models
– Sufficient for realistic selection – limited to avoid unnecessary complexity
– There should be overall agreement of decision makers
Options
Performance Criteria
Shenzhen University
Sydney University
Boston University
The University of Sydney Page 21
Conducting MCA
2. Identify the value/performance criteria:
– Decision makers select the criteria – but they can be suggested by various sources.
– Criteria should:
• cover all key aspects of the decision making process,
• be exhaustive and exclusive,
• Be clearly defined.
Options
Performance Criteria
Education Qual
Location Cost Ability to work
Shenzhen University
Sydney University
Boston University
The University of Sydney Page 22
Conducting MCA - SCORING
Options are scored: each option is assigned a numerical score on a strength or preference scale for each option for each criterion.
Various methods exist for scoring scales: depends on how fine-grained the scoring needs to be
Scales often extend from 0 to 100
Options for scoring
Democratic decision-making: all members of the decision-making body, or each organizational branch/unit, independently allowed to score options
Panel of experts asked to make judgments; can use different panel to judge different criteria
Consensus model - decision-making body ‘thrash it out’
Different groups can score options on different criteria
Some subjective/ some objective
The University of Sydney Page 23
Conducting MCA
Options
Performance Criteria
Education Qual
Location Cost (low is a high
number)
Ability to work
Shenzhen University
65 50 90 100
Sydney University
75 70 50 0
Boston University
85 80 20 0
The University of Sydney Page 24
Conducting MCA
Numerical weights assigned to each criterion for each option
Weights usually determined separately and without knowledge of the scoring
Requires close attention - tied to overarching objectives
What is really important?
Whose preferences matter?
What can we live with?
The weights sum to 1 and are allocated to the criteria in the hierarchy
The University of Sydney Page 25
Conducting MCA
25
Options
Performance Criteria
Education Qual
Location Cost Ability to work
Index (rank)
Shenzhen University
.2x65=13 .3x20=6 .3x90=27 .2x100=20 66 (1)
Sydney University
.2x75=15 .3x60=18 .3x50=15 .2x0=0 48 (3)
Boston University
.2x85=17 .3x85=25.5 .3x20=6 .2x0=0 48.5 (2)
Assume weights are:
Index = 0.2(Ed quality) + 0.3(Location) + 0.3(Cost) + 0.2(work)
The University of Sydney Page 26
Sensitivity Analysis
26
Options
Performance Criteria
Education Qual
Location Cost Ability to work
Index (rank)
Shenzhen University
.3x65=19.5 .4x20=8 .2x90=18 .1x100=10 55.5 (3)
Sydney University
.3x75=22.5 .4x60=24 .2x50=10 .1x0=0 56.5 (2)
Boston University
.3x85=25.5 .4x85=34 .2x20=4 .1x0=0 63.5 (1)
Do other preference or weights affect the overall ordering of the options? What if weights were
Index = 0.3(Ed quality) + 0.4(Location) + 0.2(Cost) + 0.1(work)
The University of Sydney Page 27
MCA Strengths
• Identify a single, most-preferred option • Rank options • Distinguish acceptable from unacceptable options • Open and explicit • Incorporates a diverse range of information • Provides logic and accountability for a decision • Provides an important means of communication, within/ for the
decision making body • Can provide an audit trail • Flexible along many dimensions:
– choice of options – criteria – weighting – who is involved in weighting and scoring
The University of Sydney Page 28
MCA Weaknesses
28
• All the options tested must be judged on the basis of the whole set of criteria. If a criterion is not relevant for an option, either the criterion or the option has to be changed.
• Weighting is hard to derive
• Accused of lacking methodological rigor
The University of Sydney Page 29
References
Burke, L.A. and Miller, M.K. 1999, ‘Taking the Mystery out of Intuitive Decision-making’, The Academy of Management Executive, vol. 13, No. 4, pp. 91-99.
Halpern, D. 2014, Thought and Knowledge: An Introduction to Critical Thinking, Taylor & Francis, New York.
Hammond, J.S. Keeney, R.L and Raiffa, H. 1998, ‘The Hidden Traps in Decision-making’, Harvard Business Review, September – October Edition.
Hess, J.D. and Bacigalupo, A.C. 2011, ‘Enhancing Decisions and Decision-making Processes through the Application of Emotional Intelligence Skills’, Management Decision, Vol. 49, No. 5, pp. 710-721.
Koriat, A. Lichtenstein, S and Fischloff, B. 1980, ‘Reasons for Confidence’, Journal of Experimental Psychology: Human Learning and Memory, vol. 6, No. 2, pp. 107 – 118.
Munda, G. 2004. ‘Social multi-criteria evaluation: Methodological foundations and operational consequences’ European Journal of Operational Research, Volume 158, Issue 3, 1 November 2004, Pages 662–677.
Tversky, A. and Kahneman, D. 1974, ‘Judgment under uncertainty: heuristics and biases’, Science, New Series, vol. 185, no. 4157. Proctor, W. 2008. Multi-criteria analysis. In G. Argyrous (ed.) Evidence for Policy and Decision- Making, UNSW Press, Sydney, ch. 4.
UK Department for Communities and Local Government, 2009, Multi-Criteria Analysis: A Manual, http://www.communities.gov.uk/documents/corporate/pdf/1132618.pdf
__MACOSX/week1－8/._Buss5000_S2_Week 6_fianl_31.8.2016.pdf
week1－8/BUSS5000_S2_Week 7_01_09_16_Final for Students.pdf
The University of Sydney Page 1
BUSS5000
Critical Thinking in
Business
Week 7
Social Business: Towards
CSV (Creating Shared
Value)
James Anderson
The University of Sydney Page 2
Today’s Agenda
• Recap: Decision-Making
• An Introduction to Social Business
• Corporate Social Responsibility (CSR)
• Creating Shared Value (CSV)
• Critical Thinking in Application
• Next week: Teams and Systems
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Week 6: Decision-making
• A key managerial skill
• A clear and logical process
• Decision traps
• MCA
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What is Social Business?
Muhammad Yunis & Grameen Bank:
• Bangladeshi social entrepreneur, banker and economist
• Founded Grameen Bank in 1983 – providing microfinancing
• Awarded the Nobel Peace Prize in 2006
• Rated the No. 2 (by Foreign Policy Magazine 2008) in the list of the
“Top 100 Global Thinkers”
The University of Sydney Page 5
There are many social challenges
How do we address current social challenges in an effective way?
• The changing role of Governments
• e.g. mental health problems in regional NSW
• Sydney University provides Social Business opportunities
The University of Sydney Page 6
Alternative types of organisations
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Corporate Social Responsibility
(CSR)
The University of Sydney Page 8
Corporate Social Responsibility
Environment
“Zero carbon
footprint by 2050”
Community
Community grants
& financial literacy
Investment
‘Performance with
Purpose’
CSR is a holistic term for “actions of firms that contribute to social welfare,
beyond what is required for profit maximization” (McWilliams, 2015, p. 1)
The University of Sydney Page 9
Corporate Social Responsibility
• Carroll’s CSR Pyramid
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Corporate Social Responsibility
Rangan, Chase and Karim (2015). CSR activities typically fall
into three (3) “theatres”:
• Philanthropic focus
• Improving operational effectiveness
• Transforming the business model
The University of Sydney Page 11
Toms Shoes
The Story Part 1:
• Founded in 2006 by Blake Mycoskie
• Designs and sells shoes (and now eyewear and coffee)
• While doing volunteer work near Buenos Aires, he noticed many children were playing
without shoes
• Decided (and encouraged by Bill Gates) to develop a business where for each paid pair of
shoes sold in North America, he would provide a new pair free of charge to youth in
Argentina (and many other developing nations)
The University of Sydney Page 12
Creating Shared Value
(CSV)
The University of Sydney Page 13
Creating Shared Value (CSV)
• The reading:
The University of Sydney Page 14
Creating Shared Value (CSV)
Porter and Kramer (2011);
• The capitalist system is under siege – companies seen as profiting at
the expense of the broader community
• Having an outdated approach to “value creation”
• CSR efforts having limited effect
‘Creating Shared Value’ (CSV) involves “generating economic
value in a way that also produces value for society by addressing
its challenges.”
CSV can be corporations acting in new ways, or new “hybrid”
organisations .
The University of Sydney Page 15
Creating Shared Value (CSV)
• Reconceive products and markets • Providing products/services that add value to customers and customer’s customers.
• Providing products or service that provide extra value to disadvantaged markets
• Investing in wellness and social programs
• Redefine productivity in the value chain • Reducing carbon and energy footprint energy use at all levels of the value chain,
• Sustainable working practices at all levels of the value chain
• Enhancing operational efficacies in the value chain
• Enable local cluster development • Enhancing innovation and productivity within clusters composed of:
private business organisations
training institutions
trade associations
not-for-profit organisations and
public institution involved in providing of public assets i.e. water, energy, environment management
The University of Sydney Page 16
Porter on CSV
The University of Sydney Page 17
Creating Shared Value (CSV) at Nestle
http://usyd.be/csvnestle
The University of Sydney Page 18
The evolving role of the corporation?
• Still much debate on the role corporations should play, and there is no
single answer for this question that suits all cultures
• Pretending to be socially responsible will eventually be found out by
employees, customers and regulators!
• Example is ‘green washing’: pretending to help the environment.
Consider BP:
2000 Launched ‘Beyond Petroleum’ rebrand
2008 Still invested mostly in Petroleum
2010 Deepwater Horizon Oil Spill
The University of Sydney Page 19
The evolving role of the corporation?
2000 2008 2010
The University of Sydney Page 20
Critical Thinking about CSV
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The Triple Bottom Line
• One of the useful and related frameworks (flagged in Week 2) - the idea that business should have 3 areas of focus:
Economic: a focus on Profit
Social: a focus on People
Environment: a focus on the Planet
The University of Sydney Page 22
Toms Shoes
The Story Part 2
• After much criticism – designed to make consumers feel good, rather than solving the underlying causes of poverty
• “If you are really are serious about poverty alleviation, our critics said, you need to create jobs. At first I took this personally, but then I realised that they were right … using our model to create jobs is the next level.” (Mycoskie, 2013)
• The company has announced plans to have one third of its shoes produced in countries receiving aid.
The University of Sydney Page 23
Evaluation
Compare &
Contrast
Application Action
Decision
Making
Standards
e.g., MarketingQ Elements
Nosich, G. M. 2009, Learning to think things through: a guide to critical thinking across the curriculum, 3rd ed., Pearson Education, New Jersey.
The core process of critical thinking
The University of Sydney Page 24
Next Week?
Week 8
Business Context for Critical Thinking: Teams and Systems
Dr Helen Parker
__MACOSX/week1－8/._BUSS5000_S2_Week 7_01_09_16_Final for Students.pdf
week1－8/BUSS5000_Sem2_Week 4_finalMJM (003).pdf
The University of Sydney Page 1
BUSS5000 Critical thinking in business
Presented by Associate Professor Margaret Matanda Business School, Business Education
Week 4: Competitor & Internal Analysis
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Learning Objectives
Outline the various levels of analysis and evaluation
Examine frameworks used in competitor profiling and analysis
Understand internal analysis tools
• RBV Theory and SCA
• Porter's generic strategic
• Value Chain Analysis
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Industry Analysis
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Macro Analysis PESTLE
Industry Analysis Competitor Profiling & Analysis
SWOT Analysis – (opportunities and threats)
Internal Analysis Capability (& Value Chain) Analysis SWOT Analysis – (strengths and weaknesses)
The 3 levels of analysis
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Competitor Profiling and Analysis
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Defining the industry What business are we in?
What is the purpose of the competitor analysis?
• Delineating industry boundaries (geographically and market segment wise)
• Define boundaries on basis of substitutability or value offering
Mobile Telephone Service Industry Telephone Service Industry Telecommunication Service industry
Abell, D. F. (1980). Defining the business: The starting point of strategic planning (pp. 3-26). Englewood Cliffs, NJ: Prentice-Hall.
The University of Sydney Page 7
Who are they?
How do they compete?
When do they compete?
Where do they compete?
Identify competitors on basis of how their value offering can substitute your organisation’s value offering
Competitor Profiling
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Identifying competitors
Determining objectives
Assess relative resources & capabilities
Identifying Competitor strategies
Decided competitive posture (A, A or B)
Predict competitors’ reaction pattern & competitive
postures
Competitor Analysis
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Who are they?
Market leader
Nicher
Challenger
Follower
Business level competitive positions • The competitive strategy a company pursues is determined by
its competitive position in the industry and market place.
The University of Sydney Page 10
How do they compete?
Firms can compete on: – Price
• Qantas, Virgin, Jet star • Kellogg, Uncle Tobys, Sanatorium
– Differentiation: • Apple vs. Microsoft
– Promotion • Coke vs. Pepsi
– Distribution/Supply chain or logistics • Wal-Mart, Amazon, Zara
The University of Sydney Page 11
Market leader: Dominant firm in an industry in terms of market share or brand value Market leaders can pursue: – Defending strategy: Tries to hold & maintain its current position so
as not to be leap-frogged by competitors.
– Attacking strategy: When a market leader wants to expand market share will attack challengers & followers.
– Expand total market: Look for ways to increase overall market share for its products, may have advantages for the whole industry.
Strategies for the market leader
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Strategies for Challengers
– Challengers aim to extend market share and became the leader
– Challengers do not accept the status quo.
Decide who to challenge • Attacking strategy: When a market leader expands market share by
attacking challengers & followers. Deciding whether to eat the bigger or smaller fish depends on
capabilities and resources
• Defending strategy: Trying to hold and enhance current market intensifying price war against competitors
The University of Sydney Page 13
Approaches to Challenging
Challenger should
• have capabilities and resources to challenge or neutralise the
leader & check and
• understand market leader’s capabilities & strategies - risky
strategy.
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Challenging Approaches Reconfigure markets
– Innovation- product, process, service or business model innovation
Redefine the market – geographically & target market wise
Deploy assets – large capital outlays, technological and supply chain development
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Followers accept the status quo and avoid confrontation
Selective followers • In product & market terms to limit probability of retaliation
and being attacked by challengers and the leader • Careful product & market segmentation
Close follower • Imitates leader or challengers in implementation of
the strategy Distant follower
• Find areas of differentiation and imitation
Strategies for market followers
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Is Vodafone a follower or a challenger?
capital outlay $3 billion in the past year
Vodafone CEO launched attack on Telstra + 4GX in the back seat (Financial Review)
‘Vodafone was created as a challenger’ - Vodafone CEO Inaki Berroeta
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Avoid direct confrontation
Try and keep costs low
Try to develop distinctive sustainable competitive advantages
‘Me Too’ Player
• Cloners
• Imitators
• Adaptors
Strategies for market follower
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Focus on market segments have high margins not volumes and are too: • Small (specialist gourmet shops or gluten free food shops) • Troublesome (Amaysim- international roaming mobile data) • specialised
Ensure there is growth potential in defined markets
Develop capabilities to defend attacks • i.e. relational or innovation, customer linking capabilities
Ensure you have prerequisite capabilities and resources to serve the selected target market
Supernichers: • specialize in specific products and market • in essence these are monopolists in their niches
Strategies for Nichers
The University of Sydney Page 19
Competitive Position and Competitive Advantage
Market leader
Nicher
Challenger
Follower
Attack
Defend/protect current share
Expand total share
Get smart Segment market carefully - growth
potential Develop & protect unique capabilities
Attack
Defend/protect
Expand total share
Deploy assets
Reconfigure markets
Redefine markets
Avoid direct confrontation
Minimize cost
Imitate-watch & learn
The University of Sydney Page 20
Internal Capability Analysis
The University of Sydney Page 21
The Elements of Competitive Advantage (SPP Framework)
Sources of advantage • Superior skills
• Superior resources
Positional advantage • Superior customer value
• Lower relative costs
Performance outcomes • Profitability
• Market share • Loyalty
• satisfaction
Investment of profits to sustain CA
Day, G.S. and Wensley, R., 1988. Assessing advantage: a framework for diagnosing competitive superiority. The Journal of Marketing, pp.1-20.
This is a competitor-centered framework • Positional advantage depends on having better resources and a deploying your capabilities better than competitors
The University of Sydney Page 22
Capabilities and Sustainable Competitive Advantage
Sustainable Competitive Advantage (SCA): – The ability of an organization to deliver value to consumers, at a
profit, in one or more ways better than competitors and depends on distinctive resources.
Resources are the tangible and intangible assets firms use to conceive of and implement their strategies.
– a firm’s capacity to exploit a particular marketing opportunity.
Capabilities are
– complex bundles of skills and accumulated knowledge,
– exercised or deployed through organizational processes, and
– enable firms to coordinate activities and make use of their assets.
Capabilities can be financial, marketing, managerial, operational, innovation capabilities
The University of Sydney Page 23
Assessing organisational resources & capabilities (1)
– Resource Based View (RBV) Theory • Competitive advantage is based on internal assets or
resources and deploying of resources better than competitors – Capabilities are a subset of organisational resources that are
• tangible or intangible organisation specific cesses developed over time through complex interactions of the organisation’s resources
• embedded in the organisation and can be used to improve productivity
• not easily transferable • Unlike resources, capabilities are developed by through
exchange of information- need human capital
The University of Sydney Page 24
Assessing organisational resources & capabilities (2)
Capabilities can be strategic or functional capabilities • Strategic capabilities is the ability of an organisation to learn by
acquiring, adapting and assimilating information as well as strategy implementation
• Functional capabilities is the ability of organisation to implement strategic tactics (marketing, managerial, financial, supply chain and operational etc.)
There is a hierarchy of capabilities
Resources
Organisational capabilities (strategic & functional)
Dynamic capabilities
SCA
The University of Sydney Page 25
Role of Dynamic Capabilities
– The Dynamic Capabilities Approach (DCA emphasises the need to mobilise an organisation of capabilities to achieve superior performance is an extension of the RBV
– Dynamic capabilities are a firm’s ability to integrate, build, and reconfigure internal and external competences to address rapidly changing environments (Teece, Pisano & Shuen 1997)
– Dynamic capabilities can provide capacity to:
• sense and shape opportunities and threats, • seize opportunities, and • maintain competitiveness through enhancing, combining,
protecting, and reconfiguring organisational assets
The University of Sydney Page 26
VRIN Characteristics of Capabilities To create SCA a resource must be valuable, rare, inimitable and non-substitutable (VRIN) Valuable:
• enable an organisation to enhance efficiency or effectiveness • facilitate development and implementation of strategies • can help neutralise threats and exploit opportunities
Rare • unique to the organisation or controlled by a few in the industry • heterogeneous
Inimitable/imperfectly imitable • not easy/too costly for competitors to copy, acquire from factor markets
Non-substitutable • Non-transferable or easy to substitute
VRIN/O • organised to fully exploit the potential of a firm’s resources and
capabilities –a requirement for capabilities- redeploy, reconfigure
The University of Sydney Page 27
Value Chain Analysis
– Porter proposed the value chain as a tool to appraise an organisation's resources and capabilities
– Shows an organization as collection activities to design, produce, market, deliver and support its products or service
– Helps identify primary and support activities that add value to the final product and how these can be used to minimise costs or differentiate
– Primary activities add value at production stage- new sources of SCA can be in support activities (technological and business model innovation or information systems capabilities)
The University of Sydney Page 28
The Elements of Competitive Advantage (SPP Framework)
Sources of advantage • Superior skills
• Superior resources
Positional advantage • Superior customer value
• Lower relative costs
Performance outcomes • Profitability
• Market share • Loyalty
• satisfaction
Investment of profits to sustain CA
Day, G.S. and Wensley, R., 1988. Assessing advantage: a framework for diagnosing competitive superiority. The Journal of Marketing, pp.1-20.
This is a competitor-centered framework • Positional advantage depends on having better resources and deploying your capabilities better than competitors
The University of Sydney Page 29
Value Chain Analysis
Source: Michael E. Porter (1985), Competitive Advantage: Creating and Sustaining Superior Performance, New York: Simon & Schuster.
The University of Sydney Page 30
Porter's Generic Strategies
CA achieved through two generic strategies • Differentiation-better value offering than competitors • Cost leadership-lower cost than competitors
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Develop capabilities consistent with the organisation’s strategy A firm pursuing a differentiation strategy would focus on
• R&D, new product development, • branding • innovation
A firm focusing on a low-cost strategy would focus on • improving manufacturing, process efficiency, • capacity utilisation, cost minimization, outsourcing, etc.
SCA depends on possessing & deploying distinctive capabilities in:
market sensing, customer linking channel bonding
value exploration value creating value delivery
Capabilities and Strategy
The University of Sydney Page 32
Capabilities and Porter’s Generic strategies
Operational Excellence capabilities
Cost leadership strategy
R&D, innovativeness and relational management capabilities
Differentiation strategy
Customer intimacy & CRM capabilities
Focus strategy
The University of Sydney Page 33
Example of Relevancy of Dynamic Capabilities in non-western Economies
– Integrative capabilities is the ability of a firm to acquire, combine and deploy resources within and outside the organisation
– Prior research argues RBV and dynamic capabilities are not relevant in non- emerging and developing as well as Eastern economies
– Some studies have provided empirical evidence of the role of dynamic capabilities in China and emerging markets
Jiang, W., Mavondo, F. T., & Matanda, M. J. (2015). Integrative capability for successful partnering: a critical dynamic capability. Management Decision, 53(6), 1184-1202. http://www.emeraldinsight.com/doi/full/10.1108/MD-04-2014- 0178
The University of Sydney Page 34
Capability Analysis Stages
– Process is nor data driven but depends on insight, knowhow or skills of the managers involved
– Critical thinking and critical self-reflection skills are required at all stages of analysis
1 • Identify the key relevant resources and
capabilities
2 • Appraise the resources and capabilities
3 • Assess importance to the market or product
category
4 • Assess the organisation’s relative strength to
deploy the resource or capability
The University of Sydney Page 35
Outline the various levels of analysis and evaluation
Examine frameworks used in competitor profiling and analysis
Understand internal analysis tools
• RBV Theory and SCA
• Porter's generic strategic
• Value Chain Analysis
What we covered
The University of Sydney Page 36
__MACOSX/week1－8/._BUSS5000_Sem2_Week 4_finalMJM (003).pdf
week1－8/BUSS5000_Week 8 Lecture_slides_student_version.pdf
The University of Sydney Page 1
BUSS5000
Presented by Dr Helen Parker Unit Coordinator
Teams and systems– 4 decades of research in 50 minutes!
The University of Sydney Page 2
– 2 characteristics/3 myths about teams/12 characteristics of high-performing teams/4 teamwork styles in action
– Case study: Holacracy at Zappos
– Thinking about systems
The University of Sydney Page 3
What is a team?
3
– ‘…a small group whose members share a common purpose, hold
themselves individually and collectively responsible for goals, have
complementary skills and agreed-on processes for working
together…’ (McKee 2012, p. 341)
The University of Sydney Page 4
2 characteristics
– Non-psychological
– Size
– Physical Location
– Methodologies & processes, e.g., project management (Prince2)
– Psychological
– Tuckman model – forming, norming, storming and performing (adjourning)
– Team roles
The University of Sydney Page 5
– Cross-functional teams
– Employees from about the same hierarchical level,
but from different work areas, who come together
to accomplish a task
– Very common
– Task forces
– Not easy to manage!
(Robbins, Judge, Millet and Boyle 2014)
The University of Sydney Page 6
– Self-managed work teams
– Groups of 10 to 15 people who
take on the responsibilities of
their former supervisors
(Robbins, Judge, Millet and Boyle 2014)
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Holacracry – self-organising work teams
The University of Sydney Page 8
The University of Sydney Page 9
Holacracy in brief
– Authority and decision making are distributed among fluid ‘circles’ throughout the organisation
– Circle: a group of roles working toward the same purpose, i.e., a team that forms and disbands as the needs of the organisation change
– Teams are the structure
– Teams design and govern themselves
– Leadership is contextual
– Decisions closer to the work
(Bernstein, Bunch, Canner and Lee 2016, p. 47)
The University of Sydney Page 10
Zappos – 21st century culture
The University of Sydney Page 11
New holacratic culture at Zappos
– Severance packages to all employees for whom self-management was not a good fit
– 150 departments evolved into 500 circles
– “Lead link,” - assumes responsibility for connecting a circle to larger circles
– Av. of 7.4 roles/each role with 3.47 responsibilities/>25 responsibilities per employee
– “People Points” serves as a marketplace for the work that needs to be done, allowing work across multiple teams.
– System of “badges” - badges are awarded to mentees by mentors, e.g., “GlassFrog genius”
The University of Sydney Page 12
The University of Sydney Page 13
Holacracy in practice at Zappos
Fortune opinion
Zappos Holacracy
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Why teams don’t work!
– “…a team can generate magic. But don’t count on it”.
(J. Richard Hackman 2009)
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3 myths cont’d
– Harmonious teams are more productive
– Bigger teams are better
– Performance falls off in long-term teams
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Positive & negative moods are both useful in teams!
Positive mood for
creativity / brainstorming
Neutral to negative mood for
focussed attention to detail and
analysis
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Long-term projects need teams
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Psychological aspects of teamwork
– Tuckman model (1965)
– Team dysfunctions
– High performing teams
– Team roles/styles
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Tuckman model (1965; 1970’s)
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High performing teams:
1. Clear purpose
2. Informality
3. Participation
4. Listening
5. Civilised disagreement
6. Consensus decision
7. Open communication
and trust
8. Clear roles and work
assignments
9. Shared leadership
10. External relations
11.Style diversity
12.Self-assessment
12 Characteristics
2
0
Parker 2013
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Team roles and player styles
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Teamwork styles
Collaborator
Challenger
Communicator
Contributor
(Parker 2007)
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Team player styles
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Thinking about systems
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What is a system?
From Systems Thinking: A Primer:
– ‘A system is an interconnected set of elements that is coherently organized in a way that achieves something. … A system must consist of three kinds of things: elements, interconnections and a function or purpose.’ (Meadows 2008)
The University of Sydney Page 26(Snowden and Boone 2007)
The University of Sydney Page 27
Systems: from simple to complex
http://cognitive-edge.com/
The University of Sydney Page 28
Large scale
ICT project
Access to
ABS 5th floor
Access to
ABS 5th floor
on 4th July….
University of Sydney Business School
Teaching/learning
at USBS
The University of Sydney Page 29
Decision making in a complex adaptive system?
– “Probe, sense respond”
– Create environments and experiments that allow patterns to emerge
– Increase levels of interaction and communication
– Use methods that can help generate ideas: open up discussion through large group methods
– Set barriers
– Stimulate attractors
– Encourage dissent and diversity
– Manage starting conditions
– Monitor for emergence
The University of Sydney Page 30
– 2 characteristics/3 myths about teams/12 characteristics of high-performing teams/4 teamwork styles in action
– Case study: Holacracy at Zappos
– Thinking about systems
The University of Sydney Page 31
