rule-based systems institutionalisation and problem solving

Rule-Based Systems

Institutionalisation and Problem Solving

Dr Nikzad [email protected]

MSc Environmental Technology Global Environmental Change and Policy

21 February 2014

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Lecture Content

1. Introduction to Organisations

2. Business Strategy

3. Rule-Based Systems

4. Case study

5. Team work

6. Presentation

Ⓒ Nikzad Oraee-Mirzamani 2

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• What is an Organisation?• Are they real?• What do they do?• Why do we need them?

• Organisations are product of conscious design, as well as the evolution of informal & organic networks, constructed to seek specific goals and serve a purpose• They are not the end; they are the means

• What if the purpose becomes irrelevant?• Why study organisations?

• To learn about and conceptualise the past• To understand the present trends• To predict the future• So as to influence the future and prevent the unexpected

Introduction to Organisations


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• Organisations from a structural perspective• The Model

• Technical Rationality and Control • Clear inputs → Transformation process → Outputs

• Main Assumptions• Organisations require clear goals and rules• Success comes from effective response to environmental

demands

• Source of Advantage• People understand clear focus on structure and cause-and-

effect

• Think about the problems this model creates

Introduction to Organisations


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• Examples of Organisations• Government• Judiciary• Companies• NGOs• Charities• The Church (and other religious governing bodies)

• Labour Unions• International Agencies (e.g. UN and related entities)

• Trade Organisations

• Institutionalisation• Problem or Opportunity?

Examples of Organisations


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• Organisations, just like people, tend to create rules to achieve their purposes and goals

• Desire towards Institutionalisation • Thinks of how industries and sectors developed• Legal system seek to regulate industrial activities (inter alia)

• Follow the precedent simply it has been successful in similar circumstances

• Organisational theory: due to market uncertainties in the long run• Such that predicting the future of business climate is deemed

extremely complex and somewhat impossible» Theories developed by Royston and Hinings 1996, DiMaggio and Powell

1991, Meyer and Rowan 1977

Institutionalisation Theories


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• “Been here for 50 years” • “In here, he’s an important man; he’s educated”• “These walls are funny”• “He’s institutionalised”• Are companies in a prison? • Organisations create their own set of rules and follow

them to reach their purpose• Prison Walls = Thinking Boxes

• Creativity and innovation

• So, often difficult to convince firms that new models of operation could be more efficient and effective



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• Two stands: the old and new institutionalism• Old Institutionalisation: influence, coalitions, and competing

values, along with power and informal structures (Royston and Hinings 1996, DiMaggio and Powell 1991)

• New Institutionalisation: legitimacy, the embeddedness of organisational fields, and the centrality of classification, routines, scripts, and schema (Meyer and Rowan 1977, Royston and Hinings 1996)

• Irony: Institutionalisation theories need to become “institutionalised”!

• If firms are already creating rules, why not redesign sustainable thinking into such a framework of rules?

• Sustainability: a set of rules embedded within a continuing process



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• What is strategy?1. Our strategy is to be a low-cost provider

2. Our strategy is to provide unrivalled customer service

3. Our strategy is to become more sustainable in order to achieve our ultimate goal

4. Our strategy is to produce our goods in the most sustainable way

• Where does it originate from?• Strategy is a central, integrated, externally oriented

concept of how the business will achieve its objectives• Has many factors; a coherent strategy will bring all factors in

as a whole and ensure that they work together

• Why do firms need/makes it?• Is copying successful firms a strategy?

Business Strategy


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• Within the core of institutionalisation lies the inherent need for firms to follow rules. Because• Has been successful in similar cases• Makes replication easy

• Current examples of rule-based frameworks• Market based: GRI, ISO, SBSC• Regulatory based: H&S, Anti Trust

• But sustainability is extremely difficult to regulate• Definition of sustainability?• Constituent factors?• Limited or Unlimited?

• Thus, mostly not required by law, but by stakeholders

Rule-Based Systems


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• Abiding by sustainability rules is beyond compliance• But without laws, how do we measure extent of

sustainable development?• Cannot be intellectually defined within the realm of

human knowledge• Strongest weakness and / or critique that sustainability

defies explanation or a comprehensive definition• So how is it understood?• Requires a rules-based system embedded within a

continuing process• Help understand sustainability in relation to the current

challenges and requirements

Rule-Based Systems


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• Current examples of Rule-Based Systems• GRI• SBSC• ISO

• Are they really effective for the purpose for which they are designed?• GRI: No indication of sustainability, only reporting• SBSC: Has goals and KPIs for reaching goals• ISO: only a methodology with no need for organisation to

understand the objective

• What’s the alternative?• Does one size fit all?

Rule-Based Systems


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• How research needs to be developed in this area + potential other benefits such as regulations

• The basis of sustainable development as one that requires deliberate decision making in order to “direct global development and system evolution towards a more sustainable route”

• Rule-based systems have to become the norm in firms to for sustainable development

• But rules should be bespoke – meet the company’s needs. Not just generic rules

• Rules for industries with high impacts on environment (and other sustainability factors)

Future of Rule-Based Systems


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The Case Study


Main focus on Health, Environment and Community issuesHealth

• Provide extensive guidelines on the effects of their products on consumers’ health

• Strive to be healthy while maintaining ingredient transparency• BUT: subjected to growing criticism on health related issues• Growing concern over acidity and tooth decays

» Coca Cola website has a specific section on keeping healthy teeth!

Environment• Use sugarcane to produce new drink bottles• Introduce new web-tool called Recyclometer™

» calculating amount of energy saved through recycling • BUT, concerns remain over packaging; Coca Cola strongly opposes

legislations on sustainable methods and processes of packaging• India, concerns over the cleanliness of the water used in production

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• Coca Cola is one of the largest international firms• Has over 80 products• Has significant market share globally• In the UK, Coca Cola market share was 17% in 2012• In 2012, sales up by 0.8%, but volume sales drop by

3.3%• Pepsi in 2012, sales up by 7.4%, volume up by 10%• Huge investment in London 2012 sponsorship – but

almost no effect on sales• 20 Minutes reading time (use as break also)

The Case Study


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• Sustainability, Mitigation, Adaptation and Risk Tool – appraisal tool

• Used often in large organisations in managerial training

• Designed to prioritise different elements of business activity

• Link challenges to goals of CCE• 15 Minutes

Case Study – SMART Framework


Team ASMART

Team BSMART

Team CStakeholders

Team DStakeholders

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• Identify 3 most important stakeholders of CCE• Identify 3 most pressing requirements of each

stakeholder• 15 Minutes

Case Study – Stakeholders


Team ASMART

Team BSMART

Team CStakeholders

Team DStakeholders

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Case Study – Final Teams


• Stakeholder group should convince CCE group for addressing their needs

• Conflict is good – but ensure your conflicts are aimed at reaching objective results

• Ensure to resolve your conflicts• 20 minutes

Team ACSMART + Stakeholders

Team BDSMART + Stakeholders

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• Each team will present for 15 minutes• 2 representatives from each team• Typically 5 slides• Address:

• Challenges, priorities and solutions of Coca Cola• Challenges, difficulties, priorities of stakeholders• Areas of conflict between the two sub-teams and how you

resolved them• Have you addressed aspects of sustainability?• What is the implication of your results on rule-based systems?

• There will be a winner

Case Study – Team Presentations


rule-based systems institutionalisation and problem solving

Documents

problem solvingdr nikzad

study organisations

clear goals

clear focus

new institutionalisati

new models of operation

informal structures

purposeprison walls