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  • Ambidextrous OrganizationsManaging Evolutionary & Revolutionary ChangeSource: Michael L Tushman &Charles A OReilley III

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  • *How to Cook Sweet & Sour

    Recipe forLong-term Success

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  • *Value Creation: What A Business Aims to AchieveCommittedmanagementCommittedEmployeesContinuallyRefineProcessesDeliverGreaterPerceivedValueDelightedCustomersIncreasedMarketShareRevenueGrowthDelightedShareholdersReducedWasteGreaterProductivityLowerCostsImproved MarginsImproved Asset UtilizationImprovedCompetitive Position

    INNOVATIOn+ Flexibility

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  • *ChangeInProfitsChangeInCostsChangeInRevenuesChangeInOutputPriceChangeInOutputQuantityChangeInInputQuantityChangeInInputPrice

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  • *ChangeInProfitsProductDifferentiationProductivity &OutputAdjustmentChangeInOutputPriceChangeInOutputQuantityChangeInInputQuantityChangeInInputPrice

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  • *Semiconductor Industry 1955-95

    1955Vacuum Tubes1955 Transistors1965 Semiconductors1975 Integrated Circuits1982 VLSI1995 sub-micron1 RCATITIMotorolaIntel2FairchildTINEC3 GEMotorolaNECToshiba4GIIntelHitachiHitachi5TIGEMotorolaNationalMotorola6 GERCAToshibaSamsung7RCAIntelTI8RCAPhilips9MotorolaFujitsu10RaytheonFairchild

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  • *Throwing Away the Quartz Advantage to the Japs (Seiko)

    Chart1

    230070000

    190084000

    160089000

    120063000

    90047000

    60032000

    Firms

    Employees

    Year

    No. of Firms

    No. of Employees

    Employment in Swiss watch Industry 1955-85

    Sheet1

    YearFirmsEmployees

    M-55230070000

    M-65190084000

    M-70160089000

    M-75120063000

    M-8090047000

    M-8560032000

    Sheet1

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    &A

    Page &P

    Firms

    Employees

    Year

    No. of Firms

    No. of Employees

    Employment in Swiss watch Industry 1955-85

    Sheet2

    Sheet3

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  • *Of 10 leaders in Vacuum Tubes in 1955,only 2 were left in 19753 Types ofERRORSDecision not to invest in New TechnologyInvest, but in Wrong TechnologyCultural inability to play 2games at oncee.gBSEe.gEssar,IOL,e.g.JindalSteel

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  • *Consider two fundamentals.How organizations grow and evolve

    How discontinuities affect this process

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  • *Punctuated Equilibrium andOrganizational Evolution

    CriticalTasksCultureStructureSkillsStrategyInnovation(Variation)Differentiation(Selection)Cost(Retention)

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  • *The Success SyndromeFitSuccessSize & AgeInertia Structural Cultural

    Success instable marketsFailure whenmarkets shift

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  • *Two Invisible Forces: Technology Cycles & EvolutionRate of InnovationProcessInnovationProductInnovationProcessInnovationProductInnovationDominantDesign # 1SubstitutionEventDominantDesign # 2Time

    VHSBetamaxWindowsMac

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  • *Organizational Evolution (has parallels in) Evolutionary Biology

    Organizational EcologyEvolutionary Change(Gradual Changes in temperature/vegetation etc)VariationSelectionRetention

    Revolutionary ChangeDiscontinuous change( temperature/food etc)Punctuated equilibriumSurvival of those species which can exploit the new environment

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  • *The Paradox of Culture: Both helps and hinders organizational progress

    Culture mentioned as a factor of success or difficulty in these varied firms..AmericanEuropeanJapaneseP & GBAKaoCoca ColaSiemensNissanHPRoyal Dutch/ ShellToshibaGEPhilipsMatsushitaMotorolaNokiaSamsung(Korea)

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  • *ExamplesGood news from

    BA

    Nordstrom

    Bad news from

    IBM

    Sears

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  • *British Airways (BA)1987 Profitable

    with sameWorkforceRoutesTechnology

    culture change!

    1981 BA = Bloody Awful

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    Ambidextrous Manager: role is one of a symphony conductor rather than a general

    Variation: decentralize, eliminate bureaucracy,individual autonomy, accountabilitySelection: winners in the market (co. selects)Retention: by the market (market selects)

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  • *Ambidextrous Organizations

    Mature markets incremental innovation

    Emerging markets Discontinuous innovation

    HPHP WayJ & JThe CredoABBPolicy BibleInstrumentsComputerPrintersConsumer productsPharmaProf. Medical productsPower plantsElec. Transmission Transportation SysEnvironmental Con Sys50 divisions165 companies5000 profit centres of ~ 50 persons eachTolerance for failuresBarneviks 7-3 formulaQuick decisionsNo fragmentation } social controls/ normative controlsNo loss of synergy } Autonomous Groups

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  • *Multiple CulturesSocial Controls simultaneously tight & looseTight:

    Corporate culture broadly sharedEmphasizes norms critical to innovationInnovation norms: openness, autonomy, initiative, risk taking

    Loose:

    Manner in which common values are expressed according to type of innovation required.Common standards but unique personalities.

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  • *Most Traditional CompaniesConstraintComplianceContractControl

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  • *Organizational RenewalSTRETCHDISCIPLINESUPPORTTRUSTPersistenceConfidenceCommitmentLearningCollaborationInitiative

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  • *Cash Flow for a Magazine or RestaurantTimeCashFlow+-0InvestHarvestGrowth Option

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  • *Cash Flow for Disc Drive BusinessTime+-0CashFlow1485.252.5RealityProjection

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