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Longitudinal thinking and. Legacy Factors: Organizational Growth. Facilitator and Course Coordinator: Vinayshil Gautam PhD, FRAS(London) (Founder Director IIM K; Leader Consulting Team IIM S) A Al_Sager Chair Professor and First Head, Management Department, IIT D Chairman, DKIF.

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legacy factors organizational growth

Longitudinal thinking

and

Legacy Factors: Organizational Growth

Facilitator and Course Coordinator:

Vinayshil Gautam PhD, FRAS(London)

(Founder Director IIM K; Leader Consulting Team IIM S)

A Al_Sager Chair Professor and First Head,

Management Department, IIT D

Chairman, DKIF

organizational growth
Organizational Growth
  • The future of any organization depends on how well it is able to relate itself to its givens and use that knowledge to project growth.
    • Also, calls for longitudinal thinking
    • The longitudinal thinking can effect different components of the organization differently, because, the givens can vary in each component

(Burton et al., 2002; Eisenhardt et al., 1990b).

eg organizational structure
Eg:Organizational Structure
  • There is no ideal organizational structure
  • Structures can be placed along the continuum from mechanistic to organic
  • Entrepreneurial choices about organizational structures and processes are driven by founders’ prior experiences in specific companies
  • As the organization grows, it evolves into a more organic structure.

Past affiliations are an important and understudied component of founders.

Beckman (2006)

longitudinal thinking
Longitudinal Thinking
  • The present state is a result of the past state and the future state would be the result of the present state--- nothing begins ab initio.
  • Tool to analyse organizational structure
  • Account for the constraints and facilitations provided by the environment
longitudinal thinking cont
Longitudinal Thinking (cont.)
  • Can help to establish a useful pattern or trend between a dependent and an independent factor over time.
  • Can reveal the impact of other surrounding or circumstantial or peripheral factors
  • There are 2 underlying sub processes
    • Longitudinal study(mapping the givens)
    • Longitudinal analysis (structure, aggregate, classify)
slide7
Variables in Longitudinal Thinking- Used to factor variables into issues of technological choice and development
legacy variables
Legacy Variables
  • The trajectory of organizational growth can be plotted as
  • c is the legacy variable
  • Represents the appropriate definition of the situation
    • Longitudinal Thinking can reveal ‘c’ i.e. the factors that impact the dynamics of the relation between y and x

y = mx + c

legacy variables cont
Legacy Variables (cont.)
  • c emerged as a result of
    • Molding influences during the early stages of growth
    • Contextual factors
    • Personality variables
    • Process variables
  • Has to be factorized/scientifically decomposed and selectively built upon
    • Done by longitudinal thinking
legacy variables cont1
Legacy Variables (cont)
  • Any choice the organization makes invariably reflects
    • Its past experience
    • Its learning from its mistakes
    • Present state of affairs
    • Its vision for the future
organizational legacy
Organizational Legacy
  • When an individual leaves an organization to pursue an entrepreneurial venture, the new firm’s initial endowment will be the knowledge that is embedded in the parent organization.
  • Certain decisions central to the capabilities of a new firm, are part of that knowledge
    • The design of the organization
    • The degree of hierarchy and span of control
    • The institutional routines
    • Organizational culture

Agarwal et. al (2004)

slide13

A substantial percentage of the founders in the successful Inc.500 gathered ideas for their new company while working for their prior employer in the same industry1.

  • The survival rate of new firms is greater when the founders have prior work experience in incumbent firms2.

Bhide (2000)

Klepper and Sleeper (2005)

longitudinal analysis
Longitudinal Analysis
  • Detailed examination of data and evidence to reveal trends over time
    • Reveals patterns in target population’s achievements, behavior etc over time
  • Comparison with trend analysis
    • Switch from trend to longitudinal is simple; focus on the individual’s event
    • Gives a ‘before’ and ‘after’ picture
slide15

Comparison with cross-sectional analysis

    • People making up the population change according to who fits the criterion each year
    • Longitudinal analysis looks at the same people over time based on whether they fit the criterion at the selected time
longitudinal study
Longitudinal Study
  • Correlation research study that involves repeated observations of the same items over long periods of time.
  • Observational in nature
    • Repeated observations at an individual level
  • Enable to distinguish between short-term and long-term phenomena
cohort analysis
Cohort Analysis
  • Cohort
    • Group of people who share a common characteristics or experience within a defined period
    • Set of individuals entering a system at the same time
  • It seeks to explain an outcome through exploitation of differences between cohort
longitudinal thinking organizational effectiveness in learning process
Longitudinal Thinking & Organizational Effectiveness in Learning Process
  • Organizational learning is the sum total of the individual learning occurring in the workplace1
  • There is a marked shift to group learning
  • Cowan (1995) made use of the Native American Medicine Wheel to describe this model of organizational learning2
    • Circular, longitudinal & integrative

Argyris & Schon, 1996; Levitt & March, 1988; Normann, 1985; Weick & Westley, 1996)

Rhythms of Learning: Patterns That Bridge Individuals and Organizations : David Cowan, 1995

longitudinal thinking and organizational planning
Longitudinal Thinking and Organizational Planning
  • High-level planning activities
    • Establish the high-level goal
    • Scan the environment
    • Analyze the high-level goal
    • Develop strategies and tactics
    • Develop schedules and assign responsibilities

We need a plan before planning

longitudinal assessment for grading system in performance appraisal
Longitudinal Assessment for Grading System in Performance Appraisal
  • Based on the performance during the performance appraisal term
  • Each individual compared to their own beginning level
  • Assessment by means of
    • Process, effort, and participation as tools of learning.
    • Practice in generating and developing ideas.
    • Thinking skills, problems solving skills, and dexterity skills.
    • Grades on basis of ‘learning to think’.
slide26

CASE

A pharmaceutical company and the evolution of its organisation structure

organizational legacy and entrepreneurial firm performance
Organizational Legacy and Entrepreneurial Firm Performance
  • Study done on Swedish and Danish biotechnology start-ups
  • Founders’ immediate prior experience affects the performance of their new venture.
  • Differentiation between financial performance and product development
control variables
Control Variables
  • Human Capital variable
    • Work experience of the founders
    • Number of publications
    • Number of citations
  • Social Capital variable
    • Founding alliances: Early stage strategic alliances
    • Later alliances
performance measures
Performance Measures
  • Innovative performance
    • Early stage inventive performance: No. of patents granted to the firm
    • Number of active clinical trials in the firm’s portfolio (market potential)
  • Financial performance
    • PMV (Post Money Value)
      • Market capitalization, calculated as the average daily closing price in each year for a given firm, multiplied by the number of stocks committed
    • Non-listed firms
      • Calculated per each round of capital inflow as the total number of shares committed, multiplied by share values paid by new investors