Transcript Legacy Sectors and Organizational Growth

Longitudinal thinking
and
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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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.
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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).
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There is no ideal organizational structure
Structures can be placed along the
continuum from mechanistic to organic
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As the organization grows, it evolves
into a more organic structure.
Entrepreneurial choices about
organizational structures and processes are
driven by founders’ prior experiences in
specific companies
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Past affiliations are an important and
understudied component of founders.
Beckman (2006)
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The past of the organization
Should mesh in with the previous structure
Should imbibe positive points of the
previous structure
Should modify the parameters which
induced a change in the structure
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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
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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)
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Organizational
Structure
Organizational
Process
Bureaucracy
Organizational
policies
Span of control
Information
processing factors
Organizational
Growth
Technology
Knowledge
management
Job satisfaction
Work design
Change
management
Organizational
factors
Innovative
capability
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The trajectory of organizational growth
can be plotted as
y = mx + c
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c is the legacy variable
Represents the appropriate definition of
the situation
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Longitudinal Thinking can reveal ‘c’ i.e.
the factors that impact the dynamics of the
relation between y and x
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c emerged as a result of
Molding influences during the early stages of
growth
 Contextual factors
 Personality variables
 Process variables
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Has to be factorized/scientifically
decomposed and selectively built upon
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Done by longitudinal thinking
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Any choice the organization makes
invariably reflects
Its past experience
 Its learning from its mistakes
 Present state of affairs
 Its vision for the future
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Organizational legacy, or the
imprinting that comes from prior
work experience in different types
of organizations, is expected to
affect the subsequent
performance of the new firm in
systematic and predictable ways
(Feldman et al., 2006)
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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
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Agarwal et. al (2004)
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1.
2.
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)
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Detailed examination of data and
evidence to reveal trends over time
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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
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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
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Correlation research study that
involves repeated observations of the
same items over long periods of time.
Observational in nature
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Repeated observations at an individual
level
Enable to distinguish between shortterm and long-term phenomena
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Longitudinal
Study
Cohort Study
Panel Study
Retrospective
Study
Grouping done
after the data
is collected
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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
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It seeks to explain an outcome
through exploitation of differences
between cohort
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Cohort Analysis
Prospective
Defines the groups
before a study is
done
Nested Case
New case controls
are applied in to the
cohorts that were
defined before the
study began
Household Panel
Draw representative
samples of
households and
survey them
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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
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1.
2.
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
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•Integration
•Wisdom
•Sharing of Ideas and Views
Inner Process of Renewal
Continue Cycling the Wheel
Making New Ideas
Leadership
•Conviction
•Self-assurance
New Visionary Ideas
Action and Implementation
Accept the Responsibility
How it will be Done ?
•Curiosity
•Innocence
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New Premises for
Learning
Our view of
Movement
learning also
from Crossneeds to
Learning need
sectional to
change from
to be seen as
We need to
one that is
part of every
move from a
Longitudinal
compartmental
performance
thinking.
linear view of
and every
learning to one Learning can
to one that is
relationship
that is circular occur on many
integrative.
or spiral.
levels and in
This means
within an
different
valuing
organization.
Wisdom rather
directions.
than Expertise.
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We need a plan before planning
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High-level planning activities
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Establish the high-level goal
Scan the environment
Analyze the high-level goal
Develop strategies and tactics
Develop schedules and assign
responsibilities
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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’.
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A pharmaceutical company and
the evolution of its
organisation structure
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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
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University
Researchers
From prominent
biotech firms
From
downstream
markets
From the
pharmaceutical
industry
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University
Researchers
• Firms produce innovations
that have greater product
development potential
Pharmaceutical
industry
• Firms have better financial
performance
From prominent • Firms perform well in
Biotechnology
product innovation and
firms
financial performance
From
Downstream
Markets
• Firms do well in financial
terms only
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Human Capital variable
Work experience of the founders
 Number of publications
 Number of citations
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Social Capital variable
Founding alliances: Early stage strategic
alliances
 Later alliances
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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)
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Financial performance
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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
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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
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Organizational legacy plays a
substantial role in shaping
the performance of firms
Prior work experience of the
founder can be aligned with
good performance on
particular performance
criteria
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