[Study] THE IRON CAGE REVISITED: INSTITUTIONAL ISOMORPHISM AND COLLECTIVE RATIONALITY IN ORGANIZATIONAL FIELDS

Once organizational field becomes well-established, there is an inexorable push towards homogenization not only for current organizations but also for new entrants.

Organizational field is the set of organizations that aggregate, constitute a recognized area of institutional life: key suppliers, resource and product consumers, regulatory agencies, and other organizations that produce similar services or products. Therefore, the field can comprehends the importance of both

1. Connectedness: existence of transactions tying organizations to one another: professional associations, labor union, BOD, ...
2. Structural equivalence:  have ties of the same kind to the same set of other org.

The process of institutional definition, or "structuration", consists of four parts:

1. an increase in the extent of interaction among organizations in the field;
2. the emergence of sharply defined interorganizational structures of domination and patterns of coalition;
3. increase in the information load with which organizaitons in  a field must contend;
4. develop mutual awareness among participants in a set of organizations that they are involved in a common enterprise.

Competition creates the power forces that lead organizations to become more similar to one another.

The diversity of organizational forms is isomorphic to environmental diversity.

There are 2 types of isomorphism: competitive and institutional. 3 mechanism through which institutional isomorphic change occurs:

1. coercive isomorphism:  political influence and the problem of legitimacy
• resulted from formal/informal pressures by other organizations upon which they are dependent and by cultural expectations in the society and by government mandate 
2. mimetic isomorphism: standard responses to uncertainty
• uncertainty is also a powerful force that encourages imitation and modelling is a response to uncertainty. 
• Models may be diffused unintentionally, indirectly through employee transfer or turnover or explicitly by organizations such as consulting firms or industry trade associations. 
• Innovation can also be accounted for modelling. 
3. normative isomorphism: professionalization.
• professionalization as collective struggle of members of an occupation to define the conditions and methods of their work, to control 'the production of producers' and to establish a cognitive base and legitimation for their occupational autonomy. 
• 2 aspects of professionalization are important sources of isomorphism:
• resting of formal education and of legitimation in a cognitive base produced by university specialists
• growth and elaboration of professional networks that span organizations and across which new models diffuse rapidly. 
• Filtering of personnel: occurs through the hiring of individuals from firms within the same industry; through the recruitment of fast-track staff from a narrow range of training institutions 

These types are not always empirically distinct.

It is important to note that each of the institutional isomophic processes can be expected to proceed in the absence of evidence that they increase internal organizational efficiency. To the extent that organizational effectiveness is enhanced, the reason will often be that organizations are rewarded for being similar to other organizations in their fields.

None of this, insures that conformist organizations do what they do more efficiently than do their more deviant peers.

Predictors of isomorphic change: to predict empirically which organizational fields will be most homogeneous in structure, process and behavior.

A. Organizational-level predictors: 

A-1: The greater the dependence of an organization on another organization, the more similar it will become to that organization in structure, climate, and behavioral focus.
A-2: The greater the centralization of organization A's resource supply, the greater the extent to which organization A will change isomorphically to resemble the organizations on which it depends for resources.
=> Stronger party to the transaction can coerce the weaker party to adopt its practices in other to accommodate the stronger party's needs.

A-3: The more uncertain the relationship between means and ends the greater the extent to which an organization will model itself after organizations it perceives to be successful.
A-3: The more ambiguous the goals of an organization, the greater the extent to which the organization will model itself after organizations that it perceives to be successful.
A-4: The greater the reliance on academic credentials in choosing managerial and staff personnel, the greater the extent to which an organization will become like other organizations in its field.
A-5: The greater the participation of organizational managers in trade and professional associations, the more likely the organization will be, or will become, like other organizations in its field.

B. Field-level predictors:

B-1: The greater the extent to which an organizational field is dependent upon a single (or several similar) source of support for vital resources, the higher the level of isomorphism.
B-2: The greater the extent to which the organizations in a field transact with agencies of the state, the greater the extent of isomorphism in the field as a whole.

B-3: The fewer number of visible alternative organizational models in a field, the faster the rate of isomorphism in that field.
B-4: The greater the extent to which technologies are uncertain or goals are ambiguous within a field, the greater the rate of isomorphic change.
B-5: The greater the extent of professionalization in a field, the greater amount of institutional isomophic change.
B-6: The greater the extent of structuration of a field, the greater the degree of isomophic.

[Study] Sawyer, S. (2004) Software development teams.

Sawyer illustrated:

3 generic archetypes of software development teams:

1. Sequential:
• Linear set of discrete tasks
• Specialized functional people
• Formalized interactions across functions 
• Value individual with the specialized skills
2. Group
• Discrete tasks may need to be repeated until the production is complete (SCRUM)
• Work in interdependent groups
• Value individual skills and ability to work in team
3. Network
• Tasks are tied to individuals (or small group)
• Participants interact with each others
• Group members are value for what they can produce (OPEN SOURCE)

Guidance for practicing professionals:

1. Sequential:
• Difficult for individual to see the value of their individual contribution to the whole
• Limited interaction reduce team cohesion
• Cross-training is suggested
• Interactions through formal channel (cross-functional meetings, product walk-through) is encorraged
• Walkthrough, Checklist and Sign-off are important to maintain standard and generate feedbacks.
2. Group
• Difficult for recognizing enough iterating 
• increasing cross-iteration task linkages such as change and version tracking, release control, and release planning
3. Network
• Require strong product management
• Is the produced module fit and work with the entire system?
• Use automated tasking mechanisms (a public tracking board)
• Stable platforms

Hybrid models:

• Alignment between team's tasks, production methods, and computing technologies (1)
• (1) leads to increased attention to social and behavioral aspects of software development (2)
•  Develop network sensitive methods and tools to reduce reliance on sequence-focused methods and tools. (3)

Reference:

Sawyer, S. (2004). Software development teams. Communications of the ACM, 47(12), 95-99.

[Study] Foote, B. & Yoder, J. (2000) Big Ball of Mud.

Some definitions:

THROWAWAY CODE: is quick-and-dirty code intended to be used only once.

PIECEMEAL GROWTH: elements of system sprawl in an uncontrolled fashion.

KEEPING IT WORKING: a strategy of changes taking place at a specific part, while the whole system continues to function.

SHEARING LAYERS: layers develop between parts that change quickly and parts that change slowly

SWEEPING IT UNDER THE RUG: try to control decline by cordoning off the blighted areas.

RECONSTRUCTION: tearing everything down and start over.

Forces:

Forces that lead to the BIG BALL OF MUD include:

1. Time: deadline pressure lead to bad architecture
2. Cost: architecture is expensive. 
3. Experience: affect on the degree of architecture sophistication
4. Skill:
5. Visibility: hard to make the programe visible for build and evaluate
6. Complexity: the organization of the system reflects the sprawl and history of the organization that built it
7. Change: subsequent change is unavoidable.
8. Scale: small vs large project

Reference:

Foote, B., & Yoder, J. (1997). Big ball of mud.Pattern languages of program design, 4, 654-692.

[Study] Royce, W.W. Managing Development of Large Scale Software Systems

According to Royce, analysis of different implementation step diagrams was summarized as follow:


Diagram 1:

• Apply for sufficiently small project
• End-users/customers are developers (internal use: Shadow IT)
• All steps are directly contribute to the usefulness of the final product (no extra cost).

=> Customers/developers are happy to pay/apply.

Diagram 2:

• Apply for larger IT project
• End-users/customers are usually not developers
• Many steps are indirectly contribute to the usefulness of the final product. (drive up costs)
=> Customers/developers are unhappy to pay/apply

Diagram 3:

• Same with the Diagram 2
• Add iterative relationship between the preceding and succeeding steps, but rarely remote steps.
• Maximize the early work by going back when needed.

=> Feedback is applied but limited.

Diagram 4:

Show the disadvantages of Diagram 3

• Some errors/defects being discovered in TESTING phases cannot easily fix with some patches in CODING phases. It is required that the project must to go back to the PROGRAM DESIGN phase or event to the SOFTWARE REQUIREMENT phase

Suggested steps for Diagram 2 and 3 improvements(Royce):

Diagram 5:

• Add PRELIMINARY PROGRAM DESIGN phase between SW REQUIREMENTS and PROGRAM DESIGN phases.
• [Program designer] design, define and allocate data processing modes (DB processing, excution time, interfaces, modes with OS, in/outputs, ...̣) in System Overview Document
• System Overview must be much details because:
• A tangible evidence for tracking completion
• Document is bad, design is bad
• Easy to concentrate on mistakes in TESTING phase
• Easy to change operating people
• Easy to update, redesign ....

Diagram 6:

• At the time of completion, 6 documents illustrated in the diagram 6 must be currently up-to-date.

Diagram 7:

• Do the simulation for the project so that pure judgement toward timing, storage... can be supported with precision.

Diagram 8:

• [Test specialist] who did not necessarily contribute to the original design can best handle some testings (SOD)
• Human can easily spotted most errors by its nature (not need for expensive detecting computers)
• Every logic paths must be tested with some kind of numeric check
• Detection tool can be run last after all of these tests.
• Customer must be involved in the test (UAT)

Diagram 9:

Summary:

Reference:

Royce, W. W. (1970, August). Managing the development of large software systems. Inproceedings of IEEE WESCON (Vol. 26, No. 8, pp. 328-388).

[Case Study] IONA 1

The case study was interpreted and completed with collaboration between me and Phuong Tran.

Please refer to the link below for details.

http://214483450199324577.weebly.com/mgt-design--development/case-study-iona-1#comments

[Use] Carol Snyder's book titled "Paper Prototyping" - Exercise from Lecturer

Please refer the the link for exercise details.

http://managingdesignanddevelopment.blogspot.ie/search/label/Exercises

Here is my result:

Using paper to design the Searching interface. This interface was designed so that the user do not need to enter any characters/words.

After having the paper prototyping, I used Balssamiq to sketch it a again.

I found out that the more technological involvements, the more limitations that we need to consider when designing.

[Study] Critical Thinking Skills - Fallacies

All of these understandings were taken from:

Critical Thinking Skills - Developing Effective Analysis and Argument
by Stella Cottrell
2nd edition

A. Initial understanding:

Author's position:

Is the underlying point of view that the presenter/author aims to convey to their audience.

It is important to make the author's position clear in the introduction

Assumptions: 

Example: Holidays are a time for relaxation and enjoyment. This year, thousands of people will have their holidays ruined by oil spills along our beaches.

• Assumption 1: holidays are for relaxation?
• Assumption 2: thousands of holiday-markers will want to go to the beach?
• Assumption 3: holiday-markers will not like oil?
• Assumption 4: oil can ruin a holiday?
• Assumption 5: audience can understand words like holiday, beach, relaxation, enjoyment, ruined, our, and oil spill? no need for definitions?

Flaws:

• Confusing cause and effect
• Failing to meet necessary conditions
• Attacking the character of a person rather than evaluating their reasoning
• Misrepresentation
• Using emotive language

Primary source vs Secondary source

Example: Magazine articles written in the 1950s were secondary sources when published, but a primary sources for present-day research into life in the 1950s.

• Primary source materials are those that originate from the time and place of the events being investigated.
• Secondary source materials are those that are written or produced about the event, usually some time later.

B. Fallacy categories:

1. False premises (p.91)

"A leads to B"

"When A is an incorrect assumption" then the Argument is based, or predicated on false premises.

Example: Getting wet in the rain gives you a cold. The builders worked for several hours in pouring rain. Therefore, they will get colds.

• False premise: getting wet in the rain gives you a cold

2. Two wrongs don't make a right (p.120)

"A leads to B"

"A did so and A are similar to B therefore B can" then the Argument can be a flawed argument.

Example: If one person cheats in an exam, then it is not reasonable to argue that other people should be able to cheat too.

• Two wrongs don't make a right: A cheated does not mean B can reasonably cheat too.

3. Stereotyping (p.96)

B is an association of group A (adjectives, job roles, or form of behaviour)

"An idea or a set of A are continually linked to B" then this assumption reinforces the stereotype.

Example: On the left, we have the man's bathrooms, no doubt for the doctors, and over there are the ladies' bathrooms for the nurses.

• Stereotype:  This reinforces the stereotype that Doctors are men and Nurses are women.

4. Lack of consistency in the argument (p.65,67)

Internal consistency:

• Clarity and internal consistency
• all parts of the line of reasoning contribute to the conclusion (clear authorial position)
• nothing then contradicts or undermines the main message
• Example: Apples are good for your teeth. Acid corrodes. Apples consist mainly of acid so they can't be good for teeth. => left wondering whether apples are good for teeth or not. => lacks internal consistency.

• Including opposing arguments
• strong line of reasoning will usually give consideration to alternative points of view
• Make the authorial position clear throughout the line of reasoning
• Introduce an alternative point of view
• Counter arguments to show alternative view is less convincing
• Resolving any apparent contradictions by showing how the main argument holds true.

Logical consistency:

Check whether the reasons given by the author do indeed support the conclusion (authorial position). (checking for logical consistency).

Example: There was a murder near the station last night. There are always young lads hanging around there. One of them probably did it. He local council should ban young people from hanging around the station.

There is nothing to show that:

• These young people did commit the murder;
• Even if they did so, other young people would do the same;
• A general ban on young people would prevent future murders.

5. Unnecessary background information (p.58)

Arguments are not provided separately for other material. They may be surrounded by:

• Introductions
• Descriptions
• Explanations
• Background information
• Summaries
• Other extraneous materials => to be avoid.

6. Lack of precision (p.65)

Imprecise wording is a common cause of inconsistency

Example: He author's opening statement is that 'Apples are good for your teeth.' However, by the end of the passage, the author is arguing that the acid is 'relatively harmless' and that 'apples are more beneficial than alternative snacks' => relative benefits is not the same as the absolute statement that 'apples are good' (authorial position).=> lacks internal consistency

7. Assumption that is not supported by the evidence (p.88-89)

'Non-sequitur' means 'doesn't follow on'. Sometimes, we can guess that there must be a hidden assumption because the conclusion seems to jump out of nowhere, rather than following on from the sequence of reasons.

Example: The number of people in prisons continues to rise each year and is much higher than it was over a hundred years ago. Many prisons are now overcrowded. Rehabilitation of criminals would be a much better option. => doesn't follow on

8. Incorrectly assuming a causal link (p.106)

A and B are found together or occur at the same time

It is flawed reasoning to assume that there must be a link between them.

Example: Wherever dinosaur imprints are found in rocks, there are geologists around. Therefore, geologists must make the imprints.

• Geologists and Dinosaur prints occur in the same place. It is flawed reasoning to assume that geologists fake the prints.

9. False correlation (107)

A correlation assumes some kind of mutual relationship.

A and B having trends move in the same direction, this does not mean there is a correlation between them, as there may be no relationship. If a correlation is assumed whether none exists, this is a false correlation. It is also a flawed reasoning.

Example: The number of car crimes has increased. There used to by only a few colours of car from which purchasers could choose. Now there is much more variety. The wider the choice of car colours the higher the rate of car crime.

• The connection between 2 trends is likely to be coincidental rather than correlated.

10. Meeting necessary and sufficient conditions (p.109-110)

A leads to B (A is a condition of B)

If A is not existed, occurs, then there is no B => Necessary condition

If only A can prove B => Sufficient condition

Example: One way of marking a lot of money is by winning the lottery. In other to win the lottery, you have to have a lottery ticket for the draw. John has a lottery ticket for the draw so he will make a lot of money.

• Ticket is a necessary condition that John met.
• However it is not sufficient to make money because the ticket might not win.

11. Over-generalisation (139)

Generalisations are useful as they help us to see patterns and to make judgements more quickly when this is needed. However, a generalisation should be well-founded, based on a reasonable sample.

An over-generalisation is one based on too small a sample to justify the generalisation. 

Example: My first child slept through the night but the second one was a very poor sleeper. First-born children are better at getting to sleep than their younger brothers and sisters.

• This is a database of two, which is a very small sample. If thousands of other first-born and second-born children showed the same sleeping pattern, then the generalisation might be valid.

12. False analogy (p.112)

A is compared to B due to some similarities between two things.

If the comparison helps to give a more accurate understanding, then it is likely to be valid.

An false analogy is (It is also a flawed reasoning)

• A and B are not sufficiently similar, or
• the comparison is misleading, or
• A used for comparison is described inaccurately.

Example: There was no way the defendant was able to help himself. He had been under excessive strain for some time and his emotions had been building up like steam under pressure. The witness had been goading the defendant, knowing he was likely to get angry. The defendant was like a pressure cooker, just waiting to explode. Eventually, he just reached boiling point and an explosion became inevitable.

• This compares emotions to a pressure cooker. This comparison made in order to argue that emotions cannot be controlled. However, the comparison isn't valid as it isn't comparing like with like: human emotions are not like steam under pressure. The underlying argument is based on false premises: that emotions cannot be controlled and that pressure cookers inevitably explode at boiling point. The comparison does not hep us to understand why the defendant couldn't control his emotions.

13. Deflection (p.114)

An author can use language to suggest there is no need to prove the argument, deflecting the audience from critically evaluating the reasoning. (It is also a flawed reasoning)

• Words: obviously, of course, clearly, naturally
• Appeals to modern thinking: we're not in the 19th now, it's no longer 1940, it;s like being back in the ark!

14. Complicity (p.114) (in group)

A particular form of deflective language where the author acts as if the reader were already part of a group of like-minded thinkers.

Example:

• Everybody knows: as we all know, surely, we all share the view that ...
• People like us: Anyone with any sense knows that women are naturally better at housework than man.

15. Exclusion (p.114) (out-group)

The in-group tends to make the out-group appear inferior and undesirable so that others want to avoid being associated with them. Authors can present opponents of their argument as an 'out-group'.

Example:

• A decent people would agree that...
• As British people, we all want...

16. Unwarranted leaps (e.g. castle of cards; sleight of hand) (p.116)

Where there are unwarranted leaps, the author appears to add two and two to make five. The argument races ahead, leaving gaps in the reasoning, and relying on unsubstantiated assumptions.

• Castle of cards: the argument relies on a set of interconnected reasons and assumptions and is very delicately balanced. If one reason or assumption is proved incorrect, the argument collapses easily.
• Sleight of hand: is a 'cunning trick' that can go unnoticed. Example: the author jumps from a line of reasoning that appears to be discussing tolls, to a conclusion that argues for heavy tolls.

17. Emotive language (p.117)

Emotive language uses words, phrases and examples that intend to provoke an emotional response. Some subjects such as children, parents, national pride, religion, crime and security are emotive. Using these unnecessarily as arguments can manipulate the audience's emotions. (It is also a flawed reasoning)

18. Attacking the person (p.117)

Attacks on the person rather than the argument are often used to undermine the credibility of an opposing point of view - but it is not a valid method of critical reasoning. (It is also a flawed reasoning)

The exception is where there is a valid reason for showing that the opponents either have a history of being dishonest or have not revealed their vested interests in the debate. 

19. Misrepresentation (p.119) [straw man]

One way of distorting an argument is by presenting the options or opposing arguments in an unfair or unbalanced way. (It is also a flawed reasoning)

• Ignoring the main opposing reasons: by focusing on its minor points and ignoring its chief supporting reasons. 
• Presenting restricted options: present an argument in such a way that it looks as if there are only two possible conclusions or options for action
• Misrepresenting a person: focusing on certain characteristics of a person, especially those irrelevant to the main argument.

20. Trivialisation (p.119)

Example: Many of us had intensive training on an instrument such as the piano when we were children, but we obviously did not all turn out to be a Beethoven or Mozart.

The argument is trivialised by focusing on relatively rare cases of 'genius' rather than on how intelligence operates for most people. Besides, by references to potentially common experiences such as childhood piano lessons, These further trivialise the subject. (It is also a flawed reasoning)

21. Tautology (p.120)

A line of reasoning should take an arguments forward. Tautological arguments, on the other hand, merely repeat the same points in different words, without advancing the argument.

Example: More people should be informed of the value of studying maths to a higher level at school or university. A mathematical education can be very advantageous. Therefore, the guidance given to young people should emphasise the benefits of choosing maths.

[Study] [Show&Tell] Separating Signal from Noise: Evaluating Emerging Technologies

Hoang Tran - Show & Tell

Selected Research: Separating Signal from Noise: Evaluating Emerging Technologies

Research question

How to make informed choices-by separating signal from noise-when evaluating emerging technologies?

Why the question is interesting

Number of new emerging technologies dramatic increase over time. According to Tiwana (2014), CIOs are getting more difficulties when perform selecting the worth one for investments and how to successfully do so at the early lifecycle of technologies due to bias and distortion (low signal-to-noise ratio in which signal is the potential of the technology and noise is the uncertainty ) . This question directly address this significant difficulty.

The method of inquiry

This research used qualitative method in which Professor Amrit Tiwana performed in-depth unstructured interviews with senior managers in U.S and Japan in 2012 and 2013. These senior managers came from several industries including appliances, pharmaceuticals, aviation and services with multinational operations.  Besides, 105 senior IS managers were surveyed to gain insights into the governance of emerging technologies (Tiwana, 2014).

How the data was analysed

Cases 's patterns were identified using Cross-case analyses.

Alternative methods that might have been used

The alternative methods can be gathering statistical data related to the Success/Failure rate of implementing emerging project to find out source of noise. Besides, case studies taken from around the world can be used to analyse and therefore, reduce the research geographical  limitation (in U.S and Japan)

The research findings

CIOs can reduce the difficulties of evaluation emerging technologies (low signal-to-noise ratio) either by:
1. Reducing the noise: or reducing uncertainties by understanding the source of bias and distortion that negatively affect the accuracy of evaluation process. Besides, The research mentioned 3 significant source of noise include (1) Illusion of Joint Probabilities; (2) Confusing Different Types of Uncertainties; (3) Timing Misjudgment.
2. Amplifying weak signal: or amplify the potential recognition probability of any emerging technology by using 3 provided broadly applicable framework. They are (1) Innovation Mode, (2) Cube Shifting, and (3) Emerging Technology Governance.

Reference

Tiwana, A. (2014) 'Separating Signal from Noise: Evaluating Emerging Technologies', MIS Quarterly Executive, 13(1), pp. 45-61. Available at: http://misqe.org/ojs2/index.php/misqe/article/view/518 (Accessed 15 September 2015).

[Study] [HBS] SAP 2014: Reaching for the Cloud

In 1972, originally from IBM, SAP staked out new ground in the automation of business processes. Over the next three decades, SAP developed R/1 aimed at automating companies' accounting functions.

In 1980, SAP offered a mainframe database (R/2). R/3 came up as a client/server version a decade later. R/3 could automate all enterprise's business processes.

In 1990s, the Internet exploded.

In 1999, Virtualization, first introduced to servers by VMware (shared server computing resources) - the concept of Cloud computing.

In 2000, the dating problem (Y2K) grind the planet to a halt, prompted massive reevaluations of IT policies, strategies, technologies, and purposes.

In 2000, Microsoft also entered into the ERP market with the acquisition of accounting software firm Great Plains.

In 2003, SAP revealed its NetWeaver based platform (using ABAP programming language) that could be the basic for further application software innovation by third party independent software vendors like EY (ISVs) which is one of the idea for Biological Organizing Logic created an decentralized and self-organized playing field. The advantage of this move is to allow a larger pool of brainpower to be tapped and provide access to a greater diversity of domain insights than R&D departments (Tiwana, 2014). Also based on this idea, the concept of community was core to the SAP ecosystem. For example, the SAP Developer Network (SDN).

In 2004, Oracle acquired PeopleSoft, Siebel CRM to create Oracle EBS.

In 2010, SAP added 3 new categories:

1. Mobility for business
2. In-memory computing
3. Cloud computing

In 2010, Snabe (SAP co-CEO) launched an agile and lean principles that focus on customer and time to market as well as time to consumption.

In May 2010, SAP acquired Sybase specialized solely in Infor. Man. and Mobile Data.

In 2010, SAP HANA released which is designed to utilized an in-memory approach.

In Dec 2011, SAP acquired SuccessFactors specialized in Cloud-based human capital management. 

In May 2012, SAP acquired Ariba a world's largest web-based B2B commerce network.

End of 2013, revenue in each of the new categories had grown by over 50 times

Looking ahead to 2014, it is the time of SAP HANA which empowered with real-time data modelling and analytic functionality. Therefore,working as an platform, it targets to transition SAP into a cloud-based company.

References:

Lakhani, KR., Iansiti, M., & Fisher, N. (2014) 'SAP 2014: Reaching for the Cloud', Harvard Business Review, pp. 1-25. Avalable at: https://hbr.org/product/sap-2014-reaching-for-the-cloud/614052-PDF-ENG (Accessed 16 September 2015).

Tiwana, A. (2014) 'Separating Signal from Noise: Evaluating Emerging Technologies', MIS Quarterly Executive, 13(1), pp. 45-61. Available at: http://misqe.org/ojs2/index.php/misqe/article/view/518 (Accessed 15 September 2015).

[Study] [HBR] Blue Ocean Strategy - Chan Kim and Reneé Mauborgne

Blue vs Red Ocean:

Red Ocean: Known market region where industry and rules are well defined. In order to survive, company tends to apply Operation Effectiveness (OE) to outperform rivals. The space is getting overcrowded and the prospects for profits and growth are dropped.  A bloody ocean.

Blue Ocean: Unknown, but an uncontested market region where everything is unclear. Prospects for opportunities are unlimited.  Supply is overtaking demand.

Products and Services become more and more alike and customers increasingly make choices based on price like promotions.

The Paradox of Strategy:

Companies, when thinking about Strategies, focus on competitions and consider them as the key of success. Competitions happen in Red Ocean. They almost forget about finding new lands for growth and how to protect these prospects.

Toward Blue Ocean Strategy:

Technology Innovation does not lead to Blue Oceans. In fact, the strategic usage or application of  emerging technologies leads to Blue Oceans and technology itself is just the used tool (Tiwana, 2014).

Incumbents often create blue oceans - and usually within their core businesses. Therefore, incumbents are not at a disadvantage in making new lands. Especially these new lands are often just next to the incumbent's red oceans.

Company and industry are not the unit of Blue Ocean analysis. In fact, the only strategic move is the right one. The creation of blue ocean is the product of strategy. Allocating large amount of budget in R&D is not the key, the right moves are the one.

Should Strategy be about beating up rivals or Should Strategy be about creating an uncontested land with unlimited prospects for profits and growth?

Blue Ocean Characteristics

- Never use the competition as a benchmark
- Reject the logic of the fundamental conventional strategy: trade-off exists between value and costs.
- Pursue the strategy of differentiation and low cost simultaneously.

• Cost savings are made from eliminating and reducing the factors an industry competes on.
• Differentiation by creating values the industry has never offered

References:

Kim, C. and Mauborgne, R. (2004) 'Blue Ocean Strategy', Harvard Business Review, , pp. 71-79. Available at: http://www.syv.pt/login/upload/userfiles/image/Reinventing%20Your%20business%20model%20HBR.pdf#page=71 (Accessed 15 September 2015)

Tiwana, A. (2014) 'Separating Signal from Noise: Evaluating Emerging Technologies', MIS Quarterly Executive, 13(1), pp. 45-61. Available at: http://misqe.org/ojs2/index.php/misqe/article/view/518 (Accessed 15 September 2015).

[Study] What is Strategy? Porter (1996) HBR

OE is not Strategy, Porter (1996) said.

He argued that Operational Effectiveness (OE) is to perform the similar activities comparing to rivals but better. Besides, he also differentiated that Strategy/Strategic Positioning (SP) is to act differently different activities or perform similar activities but in different ways.

It is questionable that performing better and performing in different ways can be the same? A company that can perform better than their rivals means the company's activities are different in some way comparing to rival's activities. Furthermore, Porter (1996) said that Activities are the basic units of competitive advantage. Therefore, i can argue that SP include but not limit to OE.

Manager have been preoccupied with improving OE, Porter (1996) said.

I totally agree with this idea because Management and Governance are completely different. In fact in COBIT 5, they actually separate domains into Management and Governance. Managers mainly responsible for improving and managing daily operations which is OE. Governance people tent to govern the company by provide leadership and strategy in a 'big picture'.

Witness the of proliferation of OE techniques accelerated by support from consultants, Porter (1996) said.

Never thinking about this before, as an IT consultants, I have to amazingly admit that we mainly focus on OE  and somehow think that as an Strategic Positioning for our clients.

Using case studies as effective evidences for proving ideas

Thinking about my future thesis, I may also use case studies to as evidences for my arguments. I personally think that it is more practical and easier to be understood.

So sum up, at general management's core is strategy:

- Defining a company's position: to know what we are? how can we be unique comparing to rivals?
- Making trade-offs: the more OE goals the more blur company's strategic position/uniqueness becomes
- Forging fit among activities: to be unique, it is a combination strategy embedded in all company's activities. The level fitness of activities in the company defines the level of difficulty for imitators to do the same. (0.9 x 0.9 = 0.81, 0.9x0.9x0.9x0.9 = 0.656). Therefore, it creates sustainable strategic development for the company as well.

[Use] Ideo (2003) IDEO Method Cards

Identifying phase:

After having some background understandings about the System [Supermarket Self-Checkout] using the Activity Checklist, I continue to use the IDEO Method Cards to further 'Learn', 'Look' and Ask about the System. In this case, I only choose 2 protocols which are

• Protocol 1: 'Flow Analysis' in 'Learn' Category [P1]
• Protocol 2: 'Fly on the wall' in 'Look' Category [P2]

Planning phase:

P1: Flow Analysis

HOW: Represent the flow of information or activity through all phases of  a system or process.

WHY: This is useful for identifying bottlenecks and opportunities for functional alternatives

I am Hoang, want to understand 'Supermarket Self-checkout system'

My procedure will be:

• Step 1: Understand the processes of how customer checkouts the items using the Self-checkout system by 
• using Google
• trying out myself
• observing in the Supermarket
• Step 2: Represent the flow of activity through all phases using Flow Chart
• Step 3: Try to identify any bottlenecks or opportunities for improvement

P2: Fly on the wall in 'Look' Category

HOW: Observe and record behavior within its context, without interfering with people's activities

WHY: It is useful to see what people actually do within real contexts and time frames, rather than accept what they say they did after  the fact.

I am Hoang, want to understand 'Supermarket Self-checkout system'

My procedure will be:

• Step 1: Go to the supermarket and observe what customers do when they perform self-checkout activity.
• Step 2: Try to observer different groups of people like young and old people, male and female...
• Step 3: Try to look for differences by comparing activities performed by these groups
• Step 4: Combine with P1 to identify any bottlenecks or opportunities for improvement

Execution phase:

I found the following:

1. The procedure of using Self-checkout system at Tesco can be briefly illustrated as below:

Figure 1. Flow of activity through phases of Self-checkout system.

2. I found the following inconveniences :

• When scanning items, some customers found it's difficult to allocate the barcode of some products

• It took longer time to perform the process of weighing item(s) without barcode comparing to the process of scanning item(s) due to the 'Choose item name' step.

• There is no container in the left-hand side. Customer need to bring their own bag and it took time to use the machine to scan, put and re-arrange items in the bag simultaneously especially with big size item
• Young people performed the self-checkout activity faster than aged people. 
• In rush hour, people still needed to wait in a queue for using tradition checkout and self-checkout method.

3. My suggestion for improvement:

If we can replace the barcode system with Radio-frequency identification (RFID) technology, there is no need to scan through one by one item. Customers only need to take their shopping carts/baskets and go through the electronic reader that will detect every item in the cart. The last thing to do is payment process. No lines, no waiting.

Considering the price of this technology. Their was an significant drop of RFID tag's price in 10 years:

Figure 2. Global Average Factory Selling Prices for RFID Tags 

I also searched some prices for the RFID tag on Alibaba.com and noticed that the prices were between 0.05 to 0.15 dollar per unit. 

References:

Alibaba 2015, Active rfid tag price, Alibaba, viewed 17 September 2015, http://www.alibaba.com/showroom/active-rfid-tag-price.html.


RFID Journal 2015, U.S. Manufacturers Report Greater RFID Usage, RFID Journal, viewed 17 Setemper 2015, http://www.rfidjournal.com/articles/view?9589/3#back-from-modal.

[Use] The Activity Checklist

Please refer to the [Study] The Activity Checklist for the theory.

It is time for me to use this checklist for evaluating the Supermarket Self-checkout system using Evaluation Version Checklist

1. Means/Ends:

People who use the target tech.:

• Sellers (Supermarket staffs)
• Buyers (Children/ Adults, Girls/ Boys, Young/ Old People, Local/ Foreign People)
• Maintenance staffs

Goals and subgoals of the target actions:

• To help the checkout process faster, therefore reducing waiting time of the customer
• To reduce human resource of checkout process therefore reduce costs
• To be correct in the price calculation of the checkout items
• To avoid items stolen

Criteria for success or failure of achieving target goals

• Self - checkout process must be simple enough and easy to use 
• Ensuring completeness and accuracy of checkout items
• Must be significantly faster than using tradition checkout method
• Must be cheaper than hiring staff in long-term

Potential conflicts between goals

• The completeness cannot be fully ensured using self-check out system due to customer can illegally not put the items into the check-out system. With staffs, they can check completeness more carefully
• The self-check process can only be faster if it is easy to use with all types of customer
• The cost of the entire self-check system may be more expensive than hiring staff.

2. Environment:

Role of target technology in producing the outcomes of target actions

• Replace the staffs for checkout process

Tools, other than targeted technology, available to users

• Checkout staffs
• RFID technology
• Online shopping

Integration of target technology with other tools

• The scanned machine
• The card payment/ cash payment systems
• The gate that checks un-payed items
• Security guard 

Rules, norms, and procedures regulating social interactions and coordination related to the use of target technology

• The self-check out system heavily relies on the people self-awareness of illegal actions. Some countries, where the rate of items being stolen is very high, cannot apply these systems without increasing of guards
• Besides, knowledge and technology required for normal user to use these systems (debit/credit cards, how to use electronic devices) will not be the same for any countries especially developing countries.

3. Learning/Cognition/Articulation

Knowledge about target technology that resides in the environment and the way this knowledge is distributed and accessed

• Sellers (Supermarket staffs) -> interview, observation
• Buyers (Children/ Adults, Girls/ Boys, Young/ Old People, Local/ Foreign People)  -> interview, observation
• Maintenance staffs  -> interview, observation

4. Development

This phase will not be considered for this existing self-checkout system and for the homework as well. 

[Study] The Activity Checklist

The Activity Checklist: A tool for Representing the "Space" of the Context was introduced by my lecturer:

Reading: The Activity Checklist
Using the Activity Checklist...
Comments on the activity checklist

Reference for direct document link: http://dl.acm.org/citation.cfm?id=306431

The Activity Theory does not provide a practical solution that can be directly applied to a specific issue. However, the Activity Checklist does.

This checklist use "Top Down" approach to help researcher gain a holistic understanding of the system context. This understanding is significant for designing system phases or evaluating existing system. The Top Down approach here can be understood as:

1. First, the checklist helps researcher to have a holistic area of interest

2. Secondly, it helps the researcher to concentrate on specific and identified areas in deeper levels.

This article also highlights the interconnection between Human and the around world. In order to gain deep and clear understanding about human/system, it is important to consider the surrounding environment and the "activities" that human/system use to interacts under a specific environment.  

There is also a hierarchical structure of activity includes

1. Activities -> to achieve motives (top-level objectives, need or a desire)

2. Actions -> to achieve goal 

3. Operations (functional subunits of actions, carry out automatically)  -> not have own goal

It is noted that the checklist should be used in combination with other techniques. Besides, it is important to look for patterns occurs across different sections in the checklist. The practitioner also need to be familiar with the tool and already know the ultimate purpose of using the checklist.

Due to the homework given by my lecturer which is about doing some research about an existing digital product and providing some suggested improvements, I will focus on using the Evaluation Checklist Version.

My chosen digital product is "Supermarket Self-Checkout System"

This Activity Checklist can possibly be used within the Step 4 of the IDEO summarized processes  that I mentioned in the [Study] IDEO Shopping Cart Summary to have a holistic view of my chosen digital product.

Then, mentioned in my lecturer's blog: Exercise: Experiment with a research method, I will try to apply one of 27 different interpretive research protocols based on the 'Learn', 'Look', and 'Ask' cards from IDEO to perform Step 5.

It is also significant to follow the instructions mentioned in my lecturer's blog.

[Study] IDEO Shopping Cart Summary

My Lecturer recommended an amazing video regarding how to create "innovation". One most thing that I like about this video is I can significantly absorb information not by reading but watching, listening and experiencing.

During 4 years working with various business industries in Vietnam, Laos and Cambodia, IDEO has incredible assets that mostly missing from other companies. These assets are not related to valuable machines, or buildings or products that IDEO owned. These assets are "Processes for creating product innovation - THE DEEP DIVE methodology" and valuable "human resources"

I was fascinated with these assets, therefore, I would like to summarise and apply these assets in my homework as well.

1. Set a time constraint (This is one of a crucial factor of project success)
2. Project group includes:
• Project Leader (Good to facilitate the project group)
• Project Team Mem.: (Create "Chaos" by multiple viewpoints for a specific product" - the source of innovation)
• MBA 
• Linguist
• Marketing
• Psychologist 
• Biologist
3. Everyone in the team has the same level of participation and contribution (Encourage sharing ideas)
4. Have some initial thoughts related to the product
5. Split into smaller groups to experience the product (Raise the idea of not the bosses are the one decide things, it is the end-users - Customer oriented)
• Observation of different types of user 
• Interview users
• Taking pictures
6. Go back to the Project Team, Communicate and Share everything that they learned.
7. Create different "WILD" Ideas to tag them on the wall
8. Narrow down Ideas by voting for them with explanations (This voting is by team members)
9. Build mock-ups for the narrowed ideas by small groups. (These narrowed ideas are significant concerns for the future product)
10. Try to put these mock-ups together
11. Complete and take the product to reality for experiencing.

[Study] Performance Measures Used for Internal and Outsourced IT, 2012 - 2013

1. The first four metrics are basically the same with the 4 factors in PM Triangle

a. Project delivered on time: Schedule

b. Projects delivered on budget: Cost

c. Increased customer/ client satisfaction: Quality

d. SLA targets: Scope 

2. These metrics can be used for IT Professionals to set up the measurements for their IT project proposals, IT operations effectiveness and so on

Reference:

Leon Kappelman, (2013), Three IT Metrics Used Most for Internal & Outsourced IT [ONLINE]. Available at: http://www.simnet.org/resource/collection/7A70D436-28BA-4E88-B958-C86941C704C3/2013_IT_Trends_SIMposium_Presentation_Slides.pdf [Accessed 07 September 15].