Экономические науки / 6.Маркетинг и менеджмент.

Shvindina Hanna, Ph.D.

Sumy State University, Ukraine

Strategic Changes Modeling: Search for New Paradigm

Under modern market conditions, on one hand, the dynamic environment requires the adaptation to the random unpredictable changes, but on the other hand – tough competition requires proactive actions which will overcome environmental determinism.

The globalization trends, technological breakthroughs done by global players recently and mentioned goals conflict push scholars to the search of the new methods and management techniques in the field of organizational development and strategic decision-making.

The generalization of the findings of previous studies allows distinguishing several key discussions in the field of organizational development.

First dimension is presented by the debates about the drivers and essence of organizational development, and we should mention research by W.G. Astey and A.H. Van de Ven [1] in which six debates were identified in the field of organization theory:

1. The debates System versus Individual Action, where the systemic argument considers organization as a whole and individual is considered as a component of the system, while strategists believe that individual actions are significant and the organization is a set of aggregated individual acts.

2. Adaptation versus Selection Debates. Historically the dominating view has been formed as internal adaptation theory, according to which organizations respond to change by modifying their internal components, or elaborating new ones to maintain the equilibrium with the environment. Population ecologists argue that environmental in-and-out selection mechanism is the driver of change: sufficient organizational forms are selected in, and ineffective organizational forms are selected out. The discussions takes place in a sphere of size-related adaptation (e.g., research by Penings [ibid]), “market failures” framework (offered by O. Williamson) and many others.

3. Environmental Constraints versus Strategic Choice. Environmental view suggests that all firms in industry act typically, at the same time strategists are interested in the search for the unique set of competences and competitive advantages. If environment is the population of the organizations, then strategic choice of one of them has minimum impact on others, however the example of market pioneers proves the contrary.

4. “Natural” versus “Social” Environment discussion. The population ecology enforces that environment is beyond the organization’s control, in contrast human ecology theory argue that organization can interact symbiotically to create protective social environment and to establish interorganizational network. This network works as a rule-establisher thus interorganizational relationships become more powerful system than economic forces.

5. Individual versus Collective Actions Organizational Behaviour. Individuals pursue their own self interests but to win they need to act cooperatively with others. Maximization of self-interests may go into a conflict with the institutional demands of the organizational system, but if individual acts reasonably, he or she will maneuvre within the games theory framework. We may mention that the confrontation between eastern and western patterns in organizational behaviour still exist (or Collectivism versus Individualism in the theory by G. Hofstede [2]).

6. Organization versus Institution Debates. The main question is, are the organizations designed as a set of operable tools, based on the neutral logic and aimed to achieve effeiciency; or the organizations are the set of institutionalized manifestations of social needs, pressures, expectations, designed to satisfy stakeholders’ interests.

Second dimension of the discussions embraces the trends in a field of organizational performance assessment.

1. Efficiency versus Productivity. The ratio of output to inputs is crucial performance indicator, but at the same time has no link to the fit between markets opportunities and organizational competences. Efficiency in this case means strategic efficiency of producing goods and services in order to satisfy customers needs.

2. Profit versus Value. There is a lot of research about the performance indicators that domain in a field of organization theory. Chronologically the organizational objectives evolved in parallel to the environment evolution: profit → growth → shares value → competitive advantage → value for customer → balance of stakeholder’s interests.

3. Graphic Methods versus Calculations. There are two different fields of applied research in organization management. One of them is aimed to create comprehensive holistic framework that will allow to construct the repeatable algorithm, e.g. 7S Model [4], 6-Box Model of Weisbord [5], Star Model offered by A. Kates and J. R. Galbraith [3]. The other one is less concentrated on the shape of results and more on the economic calculations. These studies are based on qualitative and quantitative data, and aimed to reveal specific issues in the research sphere.

Modeling organizational development requires new paradigm to design the organizations. New paradigm should adopt the debates in both dimensions and accumulate the best practices that will be in accordance to environment specifics.

References:

1. Astley, W. G. Central perspectives and debates in organization theory / W. Graham Astley, Andrew H. Van de Ven // Administrative science quarterly. - 1983. – June. – P. 245-273

2. Hofstede G. Cultural dimensions in management and planning / Geert Hofstede // Asia Pacific Journal of Management. – 1984. - January, Volume 1, Issue 2. – P. 81–99.

3. Kates, A. Designing your organization: using the star model to solve 5 critical design challenges/Amy Kates, Jay R. Galbraith. — 1st ed. Jossey-Bass Willey Imprint. – 256 pages.

4. Waterman, R. H. Structure is not organization / R.H. Waterman, T.J. Peters, J. R. Phillips // Business horizons. – 1980. – N 23(3). – P. 14-26.

5. Weisbord, M.R. Organizational diagnosis: Six places to look for trouble with or without a theory / M.R. Weisbord // Group & Organization Studies. – 1976. - N 1(4). – P. 430-447.