The business environment

The business environment

Introduction.

The business environment in which organization operate has continuously experienced a drastic shift with rapidly changing conditions which have made the environment become more complex, dynamic and operating within an uncertain framework. Bearing that these uncertainties affect the business environment the evolution and introduction of practical measures of how corporate organization should be managed has gained considerable attention which has pushed for the implementation of strategic system thinking as an innovative way of regulating the business environment.

Systems thinking gives a broad perspective of things through how we view something like a comprehensive network of interrelationships, rather than only focusing on any single fragment of a system. A more simplified view of system thinking is emphasized by Dr Russel Ackoff, who used a car, as an illustration, to explain system thinking. Ackoff posits that different parts of a car need to be assembled for the car to function as each piece is dependent on the other for functionality. The interdependencies are what makes it a system (). Therefore, refining the respective portion of a structure via using the finest existing fragments does not necessarily improve system performance; instead, it is the means through which these parts collectively work together that outlines system performance. We must evaluate the function of each part of the system to gauge the effects of changing a portion on the system since disassembling means that the system loses the essential properties and the components. Furthermore, systems thinking has the potential of offering resolutions to intricate issues that cannot be resolved using traditional reductionist thinking (Monat and Gannon, 2015)

According to Dhir et al. (2018), system thinking has been extensively dwelt upon and subdivided into divisions and differently identified by academics, skilled researchers/consultants, applied and understood differently by managers. Similarly, Jackson (2001) supports this statement arguing that the evolution of system thinking and theories have attempted to examine, follow and learn the multifaceted social and structural issues and their interrelatedness and develop an innovative way of resolving the problems and creating a comprehensive strategy.

Concerning Stacey (2011) statement that “system thinking essentially seeks to understand phenomena as a whole formed by the interaction of parts” this paper will critically evaluate the perceptive of system thinking in relation with the various themes of strategic thinking within the context of my company’s approach to strategic management

Therefore, the embodiment of strategic system thinking influences the organization into making strategic management decisions which if fully implemented as a strategic power that to a high degree influences the success of any organization.

Literature review.

Systems thinking can be regarded as the new marvel, which can be applied to natural, scientific, social and business environments. Throughout our everyday lives, we actively or unconsciously apply the principle of systems thinking to decision making. For this, therefore, it is paramount to have a conceptual framework of what strategy is. According to Roberts and Stockport (2009), strategy is a plan for the future. Similar, Chandler (1962) defines strategy as the establishment of the primary long-term goals and aims of an organization and then implementation of a course of action and the allocation of resources geared towards achieving the established goals. Furthermore, the strategy is the long-term plan and scope of an organization that benefits the company through its resource configuration in a changing environment to meet business needs and stakeholder expectations. The strategic policies adopted by managers to achieve the goals set are greatly influenced by the manager’s perception of the operating environment. (Johnson, Scholes & Whittington, 2011).

In reference to more practice perception, Jarzabkowksi (2005) posits that strategy is a socially accomplished activity, formed through relations, actions, and dialogue of various players and the state practices through which they draw. With the encompass of the future plan, Aluko (1995) states that strategy must also make consideration to the unknowns. Therefore, a strategy should be a process that allows for rethinking and rebuilding of innovative course of action and grasping new prospects. These activities should be inconsequential with the firm’s competitive advantage, long-term strategic direction, existence and the outcome. (Johnson et al., 2003).

Approaches to strategic thinking.

Effective utilization of strategic thinking gives an organization a tactical edge over competitors. Strategic thinking is concerned with strategic organizational growth to create a vision for the future of an organization through creativity and innovation. According to Goldman, Cahill and Filho (2009), strategic thinking is an individual thought practice that an organization can use to determine strategic plans to place the future direction of the organization based on projected environmental conditions. Strategic thinking consists of five elements: system perspective, centred purpose, intelligent opportunism, time-oriented thinking and hypothesis-driven thinking (Liedtka 1998). Given the competition and the multifaceted, dynamic world faced by companies, organizations should take advantage of strategic thinking to push forward towards a different and more prosperous future.  Strategic thinking analyses the current organization state, future direction, strategic and identifies the gap and creates alternative tactics to antedate and offer solutions. This looks at the corporate priorities and how those goals can be accomplished. Besides, strategic thinking is all about determining accurately to achieve given outcomes as a purposeful practice that can be categorized as directional, analytical and decision-oriented (Zhu, 2014).

Mintzberg and Waters (1985) stipulate that strategies may be either be formally organized (planned) or emergent. In deliberate strategy, the importance is on the cardinal direction and hierarchies, and these are aligned with structured strategic development, concentrating on control and undermining strategy-as-practice as opposed to evolving approaches, focus on learning-focused group actions and concurrent behaviour. Deliberate strategies signify strategic formalization that is built and includes only top management. Emerging methods are correlated with processes resulting from everyday operations or actions, such as the participation of the whole company and is built from the bottom up (Cardoso and Lavarda, 2011). Deliberate strategy is process-based, generated by an entity’s main stakeholders ‘ synergetic initiative and intellectual reasoning. It is typically implemented in process operations. On the other hand, the new approach is adaptive, a situation where when relevant knowledge and opportunities arise, organizations slowly and continuously refine their strategies (Brews and Hunt, 1999).

The so-called emerging model looks at an ever-changing policy based on new information and prospects and has been categorized as rational incremental (Quinn, 1980), or learning school (Brews and Hunt, 1999). This model views strategies as being contemporary, although the organization, and links their creation and execution (Mintzberg, 1999). The schools of control, economic, environmental, and configuration are embedded within the emergent paradigm.

This power is deeply rooted in both the micro-and macro-level. Micro-level is focused on how organizational players use their negotiation, persuasive, and confrontational abilities to give the organization a strategic path called organizational complexity (Mintzberg, 1999; Kelly, 2001). The macro-level deals with the willingness of the organization, in its interest, to use its power to impact others. The cultural school illustrates how a company takes advantage of its culture to put itself above its rivals (Mintzberg, 1999). Therefore, the evolving model perceives an organization as a structure that needs continuous monitoring of the environment both within and outside to establish clear strategies for the survival of the organization.

According to Ackoff (1970), strategic decisions are messes, also described as an interconnected network of related issues. Systems thinking in strategy includes concepts ranging from the theory of complexity, regarding strategy as order out of chaos and strategic decision-making as dynamic, involving multiple issues and several overlapping variables and stakeholders (Aligica, 2005; Broman et al., 2000; Stacey 1995). Therefore, strategic thinking is the practice of establishing a mutual direction that links to the firm’s activities. These activities should be derivative from the organization goals, plans and objectives (Dhir et al., 2018).

Also, with specific directions from the management, the emergent strategy is visibly practised within my organization and realistic practised regularly.  In particular last year, we had an order from the administration to integrate customer banking with Mpesa, which was due to forecasts and at the time business needs. At first, we had a stumbling block given the sensitivity of personal information and controls from the Central Bank of Kenya. Our projections for the introduction of a mobile system product was estimated to take three months. The directive from the central bank Kenya came less than one month to the expected product launch date. Thus, adjustments had to be made to accommodate all of this issue; we had guys coming in to work extended shift, my company had to source for an external software company from India to meet the changing evolving business climate. These adaptive measures are supported by Mintzberg (1985), who posits that the management must become versatile by being on its toes and being vigilant in adjusting to any changing situation. The business environment which my organization operates in is practically subjected to uncertainty. Therefore, the management incorporates both an emerging strategy and deliberate strategy as a strategic plan to give room for organizational learning and also exercising control. This new perspective is supported by Mintzberg (1999), who argues that recently the formulation of a plan that blends both models has gained considerable attention. The entire process of formulating the plan rest on how the two models are combined in relation to the organization’s conditions. For example, the theory of chaos can be seen as a combination of schools for learning and the world (Mintzberg, 1999). This then formulates to the notion of a system in which actions as a whole are expressed, performed and accounted. It is generally accepted that system thinking can help managers and others understand complex organizational problems and complicated problem situations clearly (Jacobs, 2004). For a long time, system theorists have integrated theory into their works that would appear to be one kind of thought about processes and strategic analysis (Ackoff, 1970).

Approaches to System Thinking.

Systems analysis should be part of every phase of a strategic process, to work most efficiently in a changing market climate. Managing a complex system requires risk-taking for system advancement. Besides, management plays a crucial role in an organization’s development efforts (Pourdehnad and Bharathy, 2004). Leadership needs to be able to accept change and produce an empowering atmosphere for successful transformation that promotes innovation, innovativeness, teamwork and participatory approach.  (Ackoff, 1999).

Pourdehnad and Bharathy (2004) suggest that organizational change will require a paradigm shift which is system thinking oriented that allows organizations to cope with emerging complex issues. We practically use system thinking every day without prior knowledge of what it encompasses. The purpose of system thinking is to study how things relate to one other within some concept of an entire unit (Peters, 2014).  This is a broad approach to the way things work or fit together. A system is an interaction between the parts and their interconnections that come together to achieve an objective. Both parts of a system are connected, changing one component, or link affects other system elements, and all parts are working for a goal

Systems thinking looks at the whole, where the pieces are never as important and should still work to support the whole. System thinking guides strategic thinking and can be described as synthetic, active and expressive. It takes a holistic view of the entire structure, partnership and inter-relationships and involves the sequential focus of strategies found in strategic thinking approaches.  The essence of system thinking is to analyze the system and find out how it can work differently, and consider the interactions and expectations in a more centred way with a view of driving change. (Zhu, 2014) System thinking will improve a plan, as it looks at each aspect of the company in relation to the organization’s productivity and long-term performance

Complexity Perspective.

The complexity perspective to system thinking is a strategic framework that nurtures an empowering environment for personal or group creativity. This developing pattern is enhanced within my work environment. In all aspects and across the line of authority, all employees are encouraged to crack the bureaucratic barriers and think of new and creative ways to enhance their jobs and boost the reputation of the bank. Small groups also collaborate on collaborative projects and other ideas of improving service delivery outside the standard line work environment. Although to some degree creativity and new viewpoints are welcomed, there are still weaknesses and evidence of resistance to change to ensure adherence to and compliance with the bank’s best practices and standards. In this regard, Kelly (2001) noted that it is not easy for most CEOs to follow a complexity approach because transparency creates risk. Within my organization, complexity thinking is actively promoted for easier decisions that do not conflict with the policies and best practices of the bank.

Complex Adaptive System

Cilliers (1998) stipulate that Complex Adaptive Systems (CAS) are described by looking at the system as a whole. The interrelating agents in CAS progress in a growing, irrevocable and erratic manner (Dooley, 1996). In such a state, people, events, and ideas connect unpredictably with one another, and it is from this that change occurs. This transition is nonlinear, happens in unexpected ways and cannot replay their past (Dooley, 1996). The agents ‘ connectedness and interdependence is a rich bed for developing innovation and learning. The appearance of previously unknown solutions to a problem or new, unanticipated result, in other words, adaptive transition, manifests innovation and learning (Uhl-Bien et al., 2007). According to Holland (1995), CAS has the adaptive response capability to scan environmental issues and develop Through diversifying their activities or tactics. This diversification is greater than that of the competitor (Ashby, 1960; McKelvey and Boisot, 2003). The adaptive responses include counter movement’s, altered or different tactics, learning and new information, shifts in work-around, new allies and new technologies (Uhi-Bien et al., 2007).

Complexity emerges from the collaboration, interrelation, and interconnectivity of parts within a system, and between that system and its environment. Connectivity in a system means an individual’s decision can influence another person or system. An essential pointer is that the effect is not going to be of equal or even importance. The impact typically varies depending on system status.  An adaptive system, also known as a complex adaptive system (CAS), can be defined as a system that co-evolves with changes and the environment for better understanding. These improvements are also crucial for the achievement of a system’s set goal or objective (Mitleton, 1998).

The Practice Perspective

Systems thinking as a technique facilitates a greater strategic awareness. In essence, it helps to look at the broader dimensions of every problem space and then consider the impact of establishing limits in that space. Strategic thinking is centred on why and what you want to accomplish in a given context and the whole architecture of interconnected and continuous components and systems that interact. (Zhu, 2014).Ansari and Riasi (2016), suggests that it is evident from the previous research that companies that have implemented a strategic thinking strategy in their projects are highly effective. The traditional planning approach has been questioned by Stacey (2011) in search of ways to explore the steps of an organization’s strategic thinking and dynamics within the boundary of complex issues while offering complex alternative forces of approach development; using the complicated nature conceptual structure. No companies in today’s world will mainly thrive without ongoing cooperation with the internal and external environment as these are forces that are typically dominant based on how much rivalry characterizes them (Porter, 1996).

Stacey (2011) potentially indicates that the manager is aligned with a rational viewpoint with the natural scientist, separated from the program but by designs; variability and express expectations for it. Talking at how scientists concentrate their attention on natural phenomena, administrators are expected to focus on an organization that Stacey explained is understood not as components contributing to a whole, but as a framework in which the interactions between its components are of primary importance in creating a whole that is more than the number of its parts.

In an attempt to channel and analyze the connection between theory and action, an assessment of how the articulation of Stacey (2011) with regard to program thinking impacts strategic organizational analysis, and strategic management strategies can be seen from an evaluation performed by Gerald et al. (2016). In his investigation, it was exposed that most of the participants showed that the overall success of their company was strongly affected by strategic thought. The result also showed that the company successfully developed and implemented strategic thinking in the individual and organizational aspects, thereby making a core competency that would end up being the explanation for its enduring competitive advantage, which imply that the role of strategic thinking is vital to an organization’s future well-being. The investigation continued to ensure that fruitful strategic preparation and implementation requires intimate and enthusiastic participation of all of the organization’s individuals both through formal and informal networks in supplying decision-making details.

In today’s competitive market, consumer or benefactor mandate sensitivity and a broad group of various partners, particularly suppliers, financial lending institutions and régimes, are regularly an unambiguous factor in an organization’s success. The study provided a recommendation that organizations should, therefore, enhance the development of networks with different offices or organizations through strategic thinking of their top executives since these organizations have helpful resources to improve them by using resources to achieve specific administrative objectives (Gerald et al., 2016).

Conclusion.

With varying levels of complexity, each organization has a specific strategic situation that makes the business executives face daily encounters. Hence, the choice of method depends on a particular instance and allows for a change in decision-making mechanisms (Stacey, 2011). The paper has critically appraised system thinking in regards to the changing ideas of strategic thinking. There has been a gradual change from a management aspect over the years from the traditional routine approach of the structures. Systems Thinking suggests that a problem can be analyzed in an evolving set of relationships within a whole or organization. Seeing organizational structure from such a viewpoint means designing business models that support the success of organizations, as well as the robustness of all other structures that communicate with them. All discussed perspective seems to point to the fact that strategic thinking should be conducted in a hands-on manner, with unity, confidence in the free exchange of knowledge and information within the system.

It is evident from the empirical literature stated above that system thinking is formed out of a complete need for interdependence, expansion and the formation of new perspectives. The success, growth and development of people with organizations or system within an organization rely heavily on the robustness of the system or organization as a whole. Therefore, the strategizing practice should not be performed in isolation from organizations but instead, as a whole refers to the principle of talking about structures.

Strategic Planning

The unmet need that I have chosen is the lack of quality and affordable healthcare to the poor population. In America, about 2.78 million people are low-income earners and are living in poverty; they cannot afford to pay for quality health services and end up accessing poor services leading to poor health status. This affects them in that they are not able to work, afford quality education, or seek good job openings. Former President, Barrack Obama, tried to solve the issue of quality and affordable healthcare by introducing the Affordable Care Act of 2010, which aims at providing quality and affordable care to all patients that are insured. All hospitals that enjoy Medicaid provisions are supposed to provide quality care to their patients because they are covered (Cheng, 2013).

However, the ACA has never been fully implemented. According to the report, among the 11 developed countries in the world, the US is the poorest in quality, access to health care. Moreover, it has the highest cost of services care. The cost of healthcare will continue to rise in America, with a rate of 5.5% per year (Potyraj, 2016). This means access will be lowered, and poor populations will suffer. The stakeholders involved in attending to this need include the government, practitioners, insurers, employers, and patients. The vision of this strategic plan is to ensure that all patients are insured and can access Medicare services provided by the ACA. The plan will aim at creating awareness on the importance of insurance covers and getting as many people as possible to be insured. The government should ensure that the act is fully implemented and the practitioners follow its provisions (Institute of Clinical Bioethics, 2011).

References

Cheng, T., Adamides, K., Campos, S., Selbin, J., O’Leary, A. & Fuentes, Rey. (2013). The Obamacare Opportunity: Implementing the Affordable Care Act to Improve Health, Reduce Hardship, and Grow the Economy for All Californians. SSRN Electronic Journal. 10.2139/ssrn.2317415.

Institute of Clinical Bioethics. (2011). Healthcare reform: Duties and Responsibilities of the stakeholders. Retrieved from https://sites.sju.edu/icb/health-care-reform-duties-and-responsibilities-of-the-stakeholders/

Potyraj, J. (2016). The quality of US healthcare compared to the world. Retrieved from https://www.ajmc.com/contributor/julie-potyraj/2016/02/the-quality-of-us-healthcare-compared-with-the-world