Module 3

Peter Drucker
Peter Drucker  Father of Modern Mgmt Theory & Practice.

The main contributions of Drucker are as follows:

◦ Nature & Role of Management

◦ Business Objectives & Social Responsibilities
◦ Entrepreneurial Functions
◦ MBO & Self Control
◦ Organization Structures
◦ Decision Making
◦ Key Result Areas (KRA)
Managing Oneself

Michael Porter
Michael Porter (born May 23, 1947) Professor at The Institute for Strategy & Competitiveness,
based at the Harvard Business School.
His main focus is on how a firm/region can build a competitive advantage &
develop competitive strategy.
His important contributions include:
◦ Porters 5 Forces Model of Industry Competition
◦ Value Chain Analysis
◦ Porter’s Generic Business Strategy
Peter Michael Senge
Peter Michael Senge (born 1947) Senior Lecturer at the MIT Sloan School of Management. He is
known as author of the book The Fifth Discipline: The art and practice of the learning
organization from 1990 (new edition 2006).
◦ A learning organization a company that facilitates the learning of its members &
continuously transforms itself.
A learning organization has five main features as in the diagram-
C.K. Prahalad
C.K. Prahalad (1941 –2010) Professor of Corporate Strategy at the Stephen M. Ross School of
Business in the University of Michigan.
His important contributions include:
◦ Strategic Intent
◦ Core Competence
◦ Strategic Architecture
◦ The Future Of Competition
◦ The Future at the Bottom of the Pyramid
Strategic Intent
 Gary Hamel and C.K Prahalad- Strategic intent refers to the pre-defined future state that the
organisation is planning to reach within a stipulated period of time.
 To achieve a certain future state and to achieve certain ends the organisation should take certain
courses of action. These ends can be either long-term or short-term.
 For an organisation to become effective, it is very important for every staff member to have an
understanding of the strategic intent. Hence, the strategic intent should be achievable as well as
understandable.

Attributes of Strategic Intent

1) Sense of Direction:
The sense of direction defines where the organisation wants to go in the future and why. A proper set
direction helps organisation to achieve its long-term strategic intent.
2) Sense of Discovery:
The sense of discovery refers to the ability of inspiring the employees for innovation and creativity.
The strategic intent should motivate the employees to perform the challenging tasks and explore new
concepts. It should introduce new dimensions in the organisation and innovate superior ways to achieve
them.
3) Sense of Destiny:
The sense of density refers to the ability of the strategic intent to provide meaning to the existence of
the organisation. Strategic intent should be meaningful and significant and motivate its employees to
set proper direction for them.
Sumantra Ghoshal (Focus energy matrix- refer article shared)

In a 2002 study based on ten years of research in a dozen large-sized companies, Heike Bruch and
Sumantra Ghoshal proposed “The Focus-Energy Matrix.” The study identified four types of
employee behaviors found in our organizations:
1. Procrastinators – Low energy and low focus
2. Disengaged – Low energy and high focus
3. Distracters – High energy and low focus.
4. Purposeful – High energy and high focus

How to Be the Purposeful Manager

The Focus-Energy Matrix reminds us of the power of focus and how important it is to generate high-
energy. As Voltaire would say, “No problem can withstand the assault of sustained thinking.” What
you want is to guide your way back to high-energy and high-focus through reflective action. By
checking your focus and your energy you can learn to spend your time in a more committed, purposeful,
and reflective way.
As an individual, you can do a few things to help foster and funnel your focus and energy or suggest
it as a manager:
 Find purpose and meaning in your work by changing your WHY or changing your HOW and
connecting your work to your values
 Know what you want to accomplish and set your goals accordingly
 Schedule your time strategically, and make time for creativity and innovation
 Cultivate a supportive network that helps you learn and grow.
 Practice self-renewal and keep your energy strong, drawing from mind, body, emotions, and spirit
 Develop your self-awareness and practice your mindfulness As a leader, you can do a few things
to promote high focus and high energy:
 Create compelling visions and stories of the future to inspire people
 Be clear about goals and expectations
 Create time, space, and energy for innovation and creative thinking
 Find creative ways to reduce or eliminate busywork
 Present people with meaningful challenges and choices to give them a sense of empowerment
 Relax formal procedures
Making “Good Enough” Decisions

The bounded rationality model of decision making recognizes the limitations of our decision-making
processes. According to this model, individuals knowingly limit their options to a manageable set and
choose the best alternative without conducting an exhaustive search for alternatives. An important part
of the bounded rationality approach is the tendency to satisfice, which refers to accepting the first
alternative that meets your minimum criteria. For example, many college graduates do not conduct a
national or international search for potential job openings; instead, they focus their search on a limited
geographic area and tend to accept the first offer in their chosen area, even if it may not be the ideal job
situation. Satisficing is similar to rational decision making, but it differs in that rather than choosing
the best choice and maximizing the potential outcome, the decision maker saves time and effort by
accepting the first alternative that meets the minimum threshold.

Making Intuitive Decisions

The intuitive decision-making model has emerged as an important decision-making model. It refers to
arriving at decisions without conscious reasoning. Eighty-nine percent of managers surveyed admitted
to using intuition to make decisions at least sometimes, and 59% said they used intuition often (Burke
& Miller, 1999). When we recognize that managers often need to make decisions under challenging
circumstances with time pressures, constraints, a great deal of uncertainty, highly visible and high-
stakes outcomes, and within changing conditions, it makes sense that they would not have the time to
formally work through all the steps of the rational decision-making model. Yet when CEOs, financial
analysts, and healthcare workers are asked about the critical decisions they make, seldom do they
attribute success to luck. To an outside observer, it may seem like they are making guesses as to the
course of action to take, but it turns out that they are systematically making decisions using a different
model than was earlier suspected. Research on life-or-death decisions made by fire chiefs, pilots, and
nurses finds that these experts do not choose among a list of well-thought-out alternatives. They don’t
decide between two or three options and choose the best one. Instead, they consider only one option at
a time. The intuitive decision-making model argues that, in a given situation, experts making decisions
scan the environment for cues to recognize patterns (Breen, 2000; Klein, 2003; Salas & Klein, 2001).
Once a pattern is recognized, they can play a potential course of action through to its outcome based
on their prior experience. Due to training, experience, and knowledge, these decision makers have an
idea of how well a given solution may work. If they run through the mental model and find that the
solution will not work, they alter the solution and retest it before setting it into action. If it still is not
deemed a workable solution, it is discarded as an option and a new idea is tested until a workable
solution is found. Once a viable course of action is identified, the decision maker puts the solution into
motion. The key point is that only one choice is considered at a time. Novices are not able to make
effective decisions this way because they do not have enough prior experience to draw upon.

Making Creative Decisions

In addition to the rational decision making, bounded rationality models, and intuitive decision making,
creative decision making is a vital part of being an effective decision maker. Creativity is the generation
of new, imaginative ideas. With the flattening of organizations and intense competition among
organizations, individuals and organizations are driven to be creative in decisions ranging from cutting
costs to creating new ways of doing business. While creativity is the first step in the innovation process,
creativity and innovation are not the same thing. Innovation begins with creative ideas, but it also
involves realistic planning and follow-through.

The five steps to creative decision making are similar to the previous decision-making models in some
keys ways. All of the models include problem identification, which is the step in which the need for
problem solving becomes apparent. If you do not recognize that you have a problem, it is impossible
to solve it. Immersion is the step in which the decision maker thinks about the problem consciously and
gathers information. A key to success in creative decision making is having or acquiring expertise in
the area being studied. Then, incubation occurs. During incubation, the individual sets the problem
aside and does not think about it for a while. At this time, the brain is actually working on the problem
unconsciously. Then comes illumination or the insight moment, when the solution to the problem
becomes apparent to the person, usually when it is least expected. This is the “eureka” moment similar
to what happened to the ancient Greek inventor Archimedes, who found a solution to the problem he
was working on while he was taking a bath. Finally, the verification and application stage happens
when the decision maker consciously verifies the feasibility of the solution and implements the
decision.

A NASA scientist describes his decision-making process leading to a creative outcome as follows: He
had been trying to figure out a better way to de-ice planes to make the process faster and safer. After
recognizing the problem, he had immersed himself in the literature to understand all the options, and
he worked on the problem for months trying to figure out a solution. It was not until he was sitting
outside of a McDonald’s restaurant with his grandchildren that it dawned on him. The golden arches of
the “M” of the McDonald’s logo inspired his solution: he would design the de-icer as a series of
M’s This represented the illumination stage. After he tested and verified his creative solution, he was
done with that problem except to reflect on the outcome and process.

Figure - The Creative Decision-Making Process