What is an organization?

It is a group of people that work together, they are coordinating each other in different methods. Those people work towards a common goal or a set of goals that they want to achieve. Another important element is that the organization works
on a continuous basis, they usually have a long-term horizon. The fourth main element is that each organization has identifiable boundaries.
Organization  social entity (group of people) with identifiable boundaries that functions on a relatively continuous basis to achieve a common goal or set of goals.
The goal orientation and the fact that people must share the same goal is a prerequisite for being an organization.
Organization and the environment  an organization operates in an environment, and it is influenced by the environment in which it operates. The organization wants to keep its competitive advantage and, to do so, it has to evolve together
with environmental changes.
Macroenvironment  economic forces, political forces, technological forces, social forces.
Microenvironment –> industry-level in which the company operates. (Suppliers, customers, stakeholders, competitors, intermediaries.)
Then, we have the internal environment (marketing, finance, research and development, personnel).

What is a business organization? System that takes inputs from environment (tangible and intangible resources) in order to produce an output, such as goods and services.
The aim of the organization is to exist in the long-term. How? Sustainability. There are three main definitions of sustainability:
- It has to be sustainable in an economic point of view: revenues need to be higher/equal than costs. The company operates in the break-even (revenues=costs) or with revenues > costs. Companies are made to create value,
they cannot operate in loss, destroying value, they have to make enough revenues in order to cover the losses. The goal of the organizations is not only to make profits, but also to be economically viable, able to pay for
materials, to pay employees, and to provide outputs. We have profit or no profit organizations, but the aim is not to destroy value.
- Environmentally sustainable (natural resources and climate).
- Socially sustainable: nowadays companies are more and more accommodating the needs of the employees, also on mental issues, they make programs to support work-life balance, equality in companies, human rights.
Companies are implementing changes in order social sustainability standards.
Environment: set of entities that influence each other, and therefore it influences organizations that are part of the environment.
Process:
-Suppliers provide inputs
-The organization takes the inputs and transforms them into outputs
- These outputs are sold in the market to the customers.

Environment influences this process. An example of an economic force that can influence the organizations is financial prices: for example, companies can have less disposable income.
A technological force that may influence companies can be innovation, such as the introduction of AI (artificial intelligent). A social force can be
A political force can be the introduction of a law or a regulation, or the incentives to buy a good, for instance electric vehicles.
Thus, there are different environmental forces. The environment can be divided into three elements (micro, macro and internal). The forces can be classified according to their origin (technological, political), or according to the degree of
proximity (micro, macro).
Covid-19 belongs to the macroenvironment, and it corresponds to a social force, with repercussions on the economic aspect.

PESTEL ANALYSIS
The pros of the Pestel are that there are a lot of different views, but the main con is that the analysis is a picture of today, it need to be constantly updated, especially in countries that are continuously developing.
Why are organizations so important? They permit to accomplish a complex task, composed by many small tasks. There are two main principles: division of labor, so different people are responsible for different tasks in order to achieve the
final goal, and coordination.
The effectiveness is fundamental, but also the efficiency. The former refers to attaining organizational goals, the latter to getting the most output for the least inputs. How can the company reach efficiency? Through the economies of scale
and scope.
The economy of scale means that the company is able to reduce the cost of production, increasing the number of goods produced (ex. If I produce a number of outputs, the cost of production decreases compared to when I produce only one)
 mass production.
The economy of scope means that the companies are saving some costs when they use the same resources for several purposes.
Organizations contribute to a more effective and efficient creation of public value for the society.

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The environment and the individuals affect the outcome of the organization. The people inside the organization, through their values, affect how they behave inside the organization.
It is important to understand the personalities and attitudes, how they perceive the environment, how this affects their behavior.
Human Capital (visible characteristics): refers to knowledge, education, and characteristics of the individuals:
- Gender
- Education: higher level of education leads to identifying opportunities better, but those people will see better also the risks, so they will prefer low risk opportunities. The time and effort invested in education can influence
life career choices discouraging risk-taking propensity.
- Age: metrics of experience. It can affect the decision-making  young people usually prefer risky opportunities, while adults are averse to risk.
Personality traits (invisible characteristics): individual behavior’s characteristics which explain why people behave differently in different situations. Personality is generally stable over time; there can be a particular event that shapes our
personality. Our personality affects the career choice, stress, leadership, and even performance.

UPPER ECHELON THEORY: “organizational outcomes- both strategies and effectiveness – are viewed as reflections of the values and cognitive bases of powerful actors in the organization”

They underline the importance to investigate the personality traits because they affect the organizational outcome.
Personality is something that is inside us also from biological heritage and life experience.

BIG FIVE MODEL  OCEAN

- Openness to experience (fantasy, action, ideas). Those people are usually considered original, have a variety of stimuli and interests, they are not narrow-minded, in fact often risk-taking. They are open to new experiences.
At the individual level, there are a lot of studied that show that openness to experience is fundamental for entrepreneurs that want to start a new business, because it is important for them to use creativity. At the group level,
people characterized by this trait, they are usually more flexible, open to learning.
- Conscientiousness (competence, order, self-discipline), it describes to what extent people are careful, scrupulous, and persevering, organization and discipline are the fundamental concepts under conscientiousness. At the
individual level, it is something in the middle (good and detrimental). Considering conscientiousness at group level, people are generally those that put more efforts into their work, they follow the rules and especially drive
the group somehow.
- Extroversion (positive emotions, warmth): people who experience positive emotional states, feel good about themselves and the world around them. At the individual level, papers show that it is a positive trait, because an
entrepreneur needs to have a lor of relationship with a variety of different stakeholders. At the group level, people are more emotional, easily relate to others, and dominate socially.
- Agreeableness (trust, straightforwardness): someone that takes care of others, usually team players. People characterized by low agreeableness are usually antagonistic and uncooperative. Thus, it is negative at the
individual level. Ciavarella et al. believe that a minimum level of agreeableness is necessary to receive the required support to start a new venture. At the group lev el, they are more likely to comply with rules and
regulations.
- Neuroticism (anxiety, vulnerability): negative meaning: these people are usually distressed and feel negative emotional states. Someone who is always stressed. In the long term, this trait can lead to lower job satisfaction
and higher stress level.
These traits show that they allow to describe entirely the tendency by which a person thinks and act. Each dimension is composed by specific traits.

Locus of control: the extent to which people believe that their behavior has a real effect on what happens to them. There is external LoC (behavior depends on something external, such as fate, luck), and internal LoC (ability, effort
determine what happens).
People with internal locus of control perform well, they are likely to attribute their performance to their qualities.
People with external locus of control will not perform that well, or they will not put that much effort, because they think it will depend on something external.

Narcissism: controversial trait. A narcissist is a person that is self-centered, self-focused, and self-serving. There are a lot of studies that showed the presence of narcissism in top management teams. If we consider narcissist entrepreneurs,
they prefer highly visible initiatives rather than incremental elaborations, they like implementing radical innovations.
They usually think that the world need change, they employ rhetoric, able to persuade, they are perseverant and very competitive and risk-takers. A lot of those characteristics are useful for a strong performance.
Narcissistic individuals tend to emerge as leader in organizations, have compelling visions for companies, and have an ability to attract followers through their public speaking. Many papers analyze the effects of narcissism in business
performance. Narcissistic CEOs tend to generate extreme performance, have wide fluctuations in performance from one period to the next, and are likely to develop new products.
- Employee’s point of view: narcissists typically perform well at interviews. Upon first meeting narcissists, people often rate them as more agreeable, competent, open, and entertaining. They display friendlier facial
expressions and exhibit more self-assured body movements.
People who work with or interact with a narcissist tend to show higher levels of stress. Narcissism is positively related to counterproductive workplace behaviors, such as sabotaging the work of others, finding excuses to
waste other people’s time, and spreading rumors. These aggressive acts raise the stress of employees, which in turn increases absenteeism and staff turnover.
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Personality affects the role that you have inside the group (ex. extroverted people usually cover leadership roles, they are good in establishing relationships with other people); it affects our interaction abilities (ex. A person characterized by
agreeableness takes care about others and has a lot of propensity in investing in relationships); finally, it affects the values (core belief) of the group (a group should have a common value, meaning if the common aim of the group is to
achieve a goal in an ethical way, it is impossible that someone in the group will be not so ethical).
Liang et al. shows that groups characterized by people with high levels of sensitivity will obtain better results, because they have a prosocial behavior among the group: they work better and avoid conflicts, while achieving the goal.
Another study shows that team member personalities influence both the cooperation among members, the ability to share information, and the team performance in general. Thus, personality strongly affect group dynamics.

ATTITUDES

Difference between attitude and abilities: ability enables people to perform a task, an attitude determines how well somebody performs a task.
What are the main differences between attitude and personality? Attitudes can change and they are stable, they can just be improved, while personality cannot change, and it is stable.
In which ways attitude can be improved?
- Through direct experience
- Observing others
- Talking with others, asking advice
- Socialization process: linked to the fact that there is someone that is good into something, and a person will improve because of the vicinity of the other.
Attitudes are composed by three factors:
- COGNITION: a person that knows something about a topic (ex. My pay is low)
- AFFECT: a person has feelings and emotions toward something (I’m angry because my pay is low)
- BEHAVIORAL INTENTION: linked to the action that you put in place to solve a situation (ex. I look for another job, because my pay is low)

The path is 1) Cognition, 2) Affect, 3) Behavioral intention.

RESILIENCE : it is possible to be studied at different levels. It is defined as the ability to adapt to adversities and stress, but also the ability to prevent a crisis. The most common word used to explain how resilience works is the ability to
bounce back. Characteristics are: flexibility into planning, withstand shock, adapt to change, pursue your goal, anticipate risk, protect weak spots
characteristics that an entrepreneur should have to be defined resilient.
People characterized by high level of reliance are tolerant towards ambiguity and adapt better to changes. Other studies show that resilience allow people to be more creative and optimistic about the future.
Also, the attitudes of people affect their behavior.

PERCEPTION

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It is the sum of the environment and the individual.
Perception is the process by with individuals select, organize, and interpret the input from their senses to give meaning and order to the world.
- Perceiver: person who is trying to make sense of something
- Target of perception: what we want to perceive
- Situation: the context in which the perception takes place

1. CHARACTERISTICS OF THE PERCEIVER

Two biases:
- Motivational state: related to the values and the need of the perceiver in the moment of the perception (ex. I want a bag, when I see it, I think it is essential because I want it)
- Mood: the feelings at the moment of the perception (ex. If I feel sad, the thing that I see can result sad even if it is not).
Schemas are structures that are stored in memories and allow people to interpret information without biases. It can be based on past experiences, and they are resistant to change. But schemas can have a negative meaning
(STEREOTYPES) because something they force us to link our knowledge to our previous knowledge (ex. If we don’t know the characteristics of a chair, but we know the characteristics of a previous chair we saw, our perception
can be influenced by the previous knowledge). These dysfunctional schemas are based on inaccurate information.
2. CHARACTERISTICS OF THE TARGET
Three biases:
- Ambiguity: a lack of clearness that makes it difficult to determine what a person or an object is really like
- Social status: the real or perceived position in society of a person or an organization.
- Use of impression management: the efforts to control others’ perception on us
3. CHARACTERISTICS OF THE SITUATION
Two biases:
- Additional information: information that the perceiver uses to interpret the target
- Salience: the way the target appears better that the other group of people or things (my perception can be biased by somebody else’s opinion)

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ORGANIZATIONAL DESIGN AND ARCHITECTURE

 An organization, as we said, is a social entity, so people that work together for a common goal in a continuous way.
People are responsible for different tasks; they need to be coordinated for the common goal. Organization design means an approach to create communication, leadership, practices. The organization design refers to all the processes and the
structure and the culture that an organization needs to put in place in order to achieve the common goal, while coordinating people.
There are two main principles of an organization design:
- Division of labor and specialization: if there are ten people, managers assign the specific tasks that the people in the organization need to perform. Thus, it means to divide the entire work into small tasks and to assign these
tasks to different people.
- Coordination of the tasks: tasks are divided among the people in the organization, but at the end it is necessary to coordinate and integrate the work in order to reach the final aim.
Organizational design is the process of creating, implementing, monitoring, and modifying the structure, processes, and procedures of an organization.
SPECIALIZATION: high degree of specialization, if a person can perform a very narrow and complex task and is able to perm it in a perfect way. Low degree if we would ask someone to perform many tasks. It goes hand in hand with
division of labor, it is a kind of consequence of it.
There are three main ways of coordinating:
- Mutual adjustment: it is the easiest way of coordination. It is implemented by very small companies made of two or three people (startups) and also when tasks are not that complex. Coordination occurs via informal
communication.

- Direct supervision: there are two levels managerial level: managerial team is responsible for assigning the task within the people and controlling for these tasks. The manager is not performing the task himself but is
controlling the final product of the work. The two individuals at the end are not talking and coordinating each other, they just need to report to the manager.

- Standardization: means to conform an activity or process to a standard. Why should organization standardize? Because over time they found the best way to perform a certain task, they prefer to make it a standard. There
are three main elements that an organization can standardize to achieve coordination:
1. Inputs: used for high skills tasks. It means to set a standard for the ex-ante coordination, such as skills and abilities.
2. Operations or processes: standardizing a process of doing something (ex. assembly chain or process of cooking something – Mc Donald’s), so that people that are part of the process perfectly know what people
before them did and what people after will do. They will know what to do.
3. Outputs: used when there are processes that are very knowledge oriented. It means to set standards for the output

The coordination that the organization decides to put in place depends on the complexity of tasks.

GRAPH EXPLICATION  Increasing the complexity of tasks there are some coordination methods that are more feasible. Mutual adjustment and direct supervision are the most suitable coordination methods to implement.
When the organization comes global and has more complex tasks needs to have a more sophisticated method such as the standardization. When there is a radical innovation task, there is the need to go back to less complex
coordination methods such as mutual adjustment. So, in the last sage, although the organization is global and advance, when it has to come up with a new idea it has to come back to mutual adjustment, there I no one else that know
what to do, and nobody will supervise at this stage (ex. People around the table brainstorming and coming up with an idea).

INTERNAL ORGANIZATIONAL DYNAMICS

- Internal organizational processes
1. Recruitment/Hiring process (scouting process, interview process, assessment (individual/group)  is there any soft skill that you are looking for? Motivation, flexibility (ex.)
2. Innovation process (focus on a specific type of innovation, how are you innovating within teams? How are you promoting creativity? How are you conducting brainstorming without meeting in person?
3. Communication/ coordination among teams. (How, what kind of knowledge/content is communicated online/offline?
4. Training (existing and new)
5. Transfer of tacit knowledge
6. Organizations’ structure
7. Work-life balance

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ORGANIZATIONAL DESIGN
1. The microstructure refers to the design of individual position:
- Specialization (degree to which a task is divided)
- Formalization of behaviors (the extent to which employee behavior is guided by rxplicit and codified rules and procedures)
- Centralization (degree to which decision making is concentrated at the top of the organization)
- Hierarchy (stipulates who reports to whom)
2. The macrostructure refers to the grouping of organizational units
3. Culture

A simple structure is used by small firms that are not that complex at the organizational level. In these firms, the founders make all important strategic decisions and run the day-to-day operations.
As the firm grows, the organizational structures change accordingly.

- FUNCTIONAL FORM:

There are groups of employees according to the distinct functional areas based on domani expertise. It Is centralized, and the corporate is responsible for strategic decisions, while function is responsible for operational
design. A higher specialization allows for a greater division of labor, and this is linked to higher productivity.
There are some advantages, such as the specialization of resources, economies of scale and effective control by cost.
It is the ideal form for single businesses and dominant businesses.
Although, there are some disadvantages, such as the lack of coordination across functional specialties, and the lack of control and decision-making overload at a corporate level caused by hypothetical increasing size.

- MULTI-DIVISIONAL FORM (M-FORM)

It is based on grouping by product, service, client and market. It is decentralized in decision-making and resources. Corporate is responsible for strategic decision In resource allocation, whereas function is responsible for
operational decisions, such as the product strategy.
There are some advantages, such as the coordination in relation to output, it contains reciprocal interdependence. It permits effective management of large firms, flexibility to changings in the environment. The performance
is measured by profit related to product, service or market. It is the preferred organizational structure for firms that pursue either related or unrelated diversification.

- MATRIX FORM

In this form employees report to two or more managers rather than one overseeing every aspect of a project.
The advantages refer to the specialization of resources and coordination related to outputs. It is flexible related to changings in the environment, and it permits the personnel motivation and development (in fact, there is a
clear relationship between specialized work and output). It is effective for developing new activities and for coordination complex multiple interdependencies in business, function and geographical areas.
The disadvantages are confusion, stress and conflicts, due to dual authority. It requires highly developed interpersonal skills, and there is the problem of maintaining the balance of power.

Circular Form
4 Principles

1. Consent instead of command & order hierarchy

2. Elections: open an by consent
3. Circle Membership
4. Double Link
Outcomes
1. More effective meetings
2. High levels of employee motivation
3. Knowledge transmission
4. Procedural justice/fairness
I-Form
Network provides : Administration , Infrastructure , Service , Point of contact for members
Achieved by: Rules of the game“ , Social norms, Fairness/justice,By enforcing, Codes of conduct,Standard operation procedures
Aim Governing knowledge commons

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MOTIVATION
Personality is a trait that is stable over time and enduring, it is difficult to change and was born with us (intrinsic). In the work environment, management can change our personality. Motivation is a state, linked to a situation. Motivation
can change through a situation; thus, it is malleable. In the work environment, management tries to manipulate our motivation.
Motivation derives from Latin “movere”, which means “to move”. It is something that involves psychological forces within a person. Motivation is affected by personality and situations around us.
It is important if we consider the work environment, it helps people to achieve a goal, pushes people to work hard and it is linked to the persistence in obstacles. Resilience and motivation, though, are different: resilience is an attitude,
instead motivation is a state, behavior. It helps us to face an obstacle, even if we are NOT resilient.
How does motivation work?
We have a need or an expectation, which allow us to put in action a behavior in order to achieve the desired goal. This goal provides a fulfillment that, through feedback, allow to calm and satisfy our needs and expectations.

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Some problems: our need could not be fulfilled, maybe the action that we put in place were not good in order to achieve the goal. Those problems could weaken our motivation flow.

Definitions:
1. Motivation is a process of generating, directing and moving a certain behavior to achieve a desired goal.  it perfectly represents the graph above.
2. Motivation is a decision-making process where the behavioral change directed toward the desired goal.  before behaving, we should implement a decision-making process that allows to understand the goal that we have
to achieve and what behavior we should put in place.
3. Motivation can be defined as a willingness of an individual or group to expand energy to achieve a goal or reward.  linked to the way we put effort to achieve a goal, not linked to the behavior (1).

Types of motivation:
- Intrinsic: it means that the source of motivation comes from performing the behavior itself. Example: a singer likes singing and likes performing in front of the audience. The motivation is linked to the fact that he can sing
in front of the audience. It comes from the behavior.
- Extrinsic: the source of motivation is linked to the acquirement of material and social reward or the avoidance of punishment. Example: an employee will work well but this work is related to the fact that at the end of the
month he will be paid.
Methods to motivate employees:
- Financial methods: salary, bonus, rewards.
- Non-financial methods: promotions, increase in responsibility.

Reinforcement theory: it is linked to the fact that giving a price to the employee will motivate the employee himself. It refers to the extrinsic motivation, that through reinforcement will work better.
- Positive reinforcement: to encourage the behavior of the employee offering a reward. If the employee achieves a goal or performs well, he will get a reward.
- Avoidance reinforcement: encourage a behavior in order to avoid negative consequences. If the employee achieves a goal, he will not have a punishment.
- Punishment: to provide a negative consequence to decrease a negative behavior.
- Extinction: to discourage undesirable behavior by withholding reinforcement when the behavior occurs. There is a negative behavior, you don’t underline the desirable behavior, because if you do so, it will not be
performed well.

Motivation theories  in organizations we can push the motivation of people in three different times:
- Inputs: what motivates people? Effort, time, education, experience, skills, knowledge, job behaviors

If the effort to perform a task is equal to the pay that I will get, my motivation is high. If the effort is higher than the pay received, in this case my motivation decreases. People will be motivated by factors that are related to
people themselves. BEFORE WORK
- Performance: Why do they become motivated? motivating people considering factors such as: quantity of work, quality of work, level of customer service

If the work environment and the work is safe, people will be motivated. PROCESS
- Outcome: How do they sustain the motivation? the CEO will act to sustain motivation, through pay, job security, benefits, vacation, job satisfaction, feeling of accomplishment, pleasure of doing interesting work
AFTER PERFORMING
Common motivation theories:
- Early ideas on work motivation:
1. Scientific management (Taylor): Taylor was a researched that investigated how to organize companies to make them more efficient. The scientific management model tries to understand the most efficient way to
perform any job. Taylor did not consider the real human need of workers, because the main goal is to get people to work efficiently through an incentive. The main incentivizing factors are pay and money, they are
the only two ways that allow people to be more incentive.

Generally, employees don’t enjoy working. They have the tendency to take it easy or slack off. It is important for the CEO to monitor and control employees.
Bite-sized tasks: the manager should divide the entire work of employees in small parts to make it easy to perform each task for the employee.
Training: the leader should train the employee to perform the work efficiently.
Piece rate: the employee is paid based on how much he produces.
These three factors allow profit-maximization.
2. Human Relations Approach (Mayo): he did not focus on efficiency, but on motivation, considering the social need of workers. Managers should take care of employees and treat them as people that have a
worthwhile opinion, realizing that employees have relationship among each other. Work should be sum to the socialization process (employee-manager and among employees); this leads to get a reward and
appreciation. Socialization allows to humanize the organization, it is a goal from the manager point-of-view, but also from the peers.
It is important that workers are motivated, this is supported by a better communication, a greater manager involvement in the employee’s working life, and working in groups.
3. Human Resource Theory: it combines the two models above. It recognizes the importance of relationship of people, but it underlines the importance of working efficiently. This model guides most thinking about
motivation today, but three approaches conceptualize motivation more completely: need-based, process-based, and reinforcement-based approaches.
There is the work (Taylor) summed to collaboration (Mayo), which lead to money, which is the compensation, with appreciation and self-actualization.
Managers should not be viewed as someone that need to control employees, but his task is to create an environment in which all resources can be utilized.
- MASLOW Content theories: emphasis on what motivated individuals

It groups all the need of the employees. Physiological relates to the survival. Safety needs are also related to survival. Love is related to our relationships. Esteem to confidence, achievement and respect of others. Self-
actualization is related to creativity and problem solving. They affect the motivation in the work environment. Physiological need is related to receiving a minimum for buying necessities, safety need is related to job
security and adequate medical benefits. The love need is related to having good relationships with co-workers and supervisors. Esteem is related with giving promotions and being recognized accomplishments. Self-
actualization to using our skills to the fullest to achieve a goal.
These five needs should be achieved following a certain path: to achieve safety need, I should first achieve the physiological need.
Process theory: emphasis on actual process of motivation

- ALDERFERS’S ERG THEORY: difference in the degree of needs:

1. Existence
2. Relatedness
3. Growth
The five needs in Maslow can be reconducted to these theories. The need of physiological and safety can be the existence theory. The social belonging need and self-esteem of Maslow can be reconducted to the relatedness. Finally, the self-
actualization need of Maslow can be reconducted to the growth need of Alderfers. The second difference between Maslow and Alderfers is related to the fact that the Alderfers model is more flexible. In the Maslow model, you can pass to
the second need only if you have satisfied the previous need.
In this model, there is more flexibility in terms of movement between levels. You can satisfy the growth need without taking care of the previous needs.

Another difference between the two models is the fact that according to Maslow you can satisfy one need at the time. Here, you can satisfy also more needs at the same time.
Some examples about these needs in the organization life:
There are some arrows: SATISFACTION AND PROGRESSION. When you satisfy the existence, moving towards the relatedness need, you feel satisfaction. These arrows are related to the feelings of people that achieve to satisfy a
particular need. If you satisfy the relatedness need and you move towards the growth need, you will feel the progression feeling. Same for the other arrows: REGRESSION AND FRUSTRATION.

- HERZBERG: only two types of need.

1. Hygiene/Maintenance need: they allow employees to work hard inside the organization. If these factors are not present, the employee becomes unmotivated. The word “Maintenance” refers to the fact that the Hygiene need
is more stable than the Motivators factor.
- Salary: the pay should be appropriate and reasonable, equal and competitive
- Job security
- Level & Quality of supervision: acceptable and appropriate, no conflict or humiliation
- Working conditions: safe, clean and hygienic environment
LACK OF HYGIENE FACTOR  DISSATISFIERS
2. Motivators/Growth need: they allow people to improve their ability, reason why there is the work “Growth”.
- Sense of achievement: ability of people to perform a difficult task or being problem-solvers. It is something that belongs to us and could be different according to our personality and skills
- Recognition: linked to the reward that you will have at the end of your work. It is not stable, because the pay is linked to experience, level of education, and the role that people cover inside the organization.
- Responsibility: linked to the fact that each person should care about his work. The employee should be responsible for the work he performs.
- Nature of work: according to the activity that the employees do, there is a different activity that motivates the employee. It is linked to the aspiration of people.
- Personal growth
IF NEEDS SATISFIED  SATISFIERS
The factors can change during time.

- Low-low: worst situation. In this case employees are not motivated and complain.

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 - High-high: defined as the ideal situation. Employees do not complain and are motivated. Generally, these environments retain employees for a long time.
- MCCLELLAND THREE NEEDS THEORY: used by HR, in order to march the need of individuals with the role they cover inside the organization.
1. Need for achievement: it is the design to perform challenging tasks and to meet one’s own high standards. It is something related to our ability to overcome issues, and even if we encounter problems, having good
performance.
2. Need for affiliation: it is the deign to establish and maintain good relations with others.
3. Need for power: design to exert emotional and behavioral control of influence over others.

Three different profiles of people  the first need is related to someone who is challenging, a problem-solver, resilient. For this reason, if we need someone who is a problem solver, we can hire someone with a high level of need
for achievement.

Now we try to consider the process behind the motivation.

- EXPECTANCY THEORY:
1. Effort: what the employee puts in place to perform a task
2. Performance: achievement of the goal, how well the task is performed
3. Outcome: the reward

There are external forces that allow the employee to work hard to have a good outcome. Between effort and performance, we can have EXPECTANCY: it should be high, because employee should perceive that if they put a lot of
effort, they will perform well. Between performance and outcome, we have INSTRUMENTALITY: it should be high, because employee should perceive that if they allow to have good performance, this result is positively related
with the outcome  the higher the result, the higher the reward. The last force considered in the expectancy theory is VALENCE: it is related to the outcome; employee should desire an outcome related and consistence with the
effort they put.
Here, the focus is on the process that allows to maintain a high motivation in employees.

-EQUITY THEORY: related to expectancy theory: the effort should be related and equal to the bonus that I get.
According to Adams' theory, the individual's motivation and willingness to invest
energy on work is a function of comparison with the commitment of others and the
rewards received. The individual perceives a situation of fairness when his
perception of the relationship between what he/she gives to the organisation (culture and professional
training, skills and abilities, time, etc.) and what he receives (money, recognition
etc.) coincides with the perception of the analogous relationship in another person assumed
as a term of comparison.
When individuals in organisations perceive that there is no
fairness, this injustice generates tension and individuals implement a series of
strategies to diminish it, either through cognitive restructuring, or with
specific behaviours..

- GOAL SETTING THEORY: useful theory because the ratio behind is “in order to be motivated, the employee should perform goals that are clearly stated”.
To explain well what the tasks behind the work are, this goal should be SMART (specific, measurable, achievable, realistic, time scaled) .
This theory assumes that human work behaviour is driven by objectives, i.e. what the individual wants to achieve, the target towards which his or her his action is directed towards. At the same time, the goal becomes a
challenge that motivates the person to achieve it. Locke focuses the analysis of motivation on the relationship between conscious goals intentions and professional performance.
Objectives (goals) are seen as the strongest cognitive determinants of work behaviour: they influence and direct attention, mobilising concentration and facilitating the elaboration and development of
strategies.

- ATTRIBUTION THEORY: it is related to the fact that each person has bounded rationality. The outcome that you receive after performing could be interpreted as a success or a failure. Our emotions depend on the
outcome  outcome-dependent emotions: our first reactions are something like to happiness or sadness.
According to our way of living, a reward could be considered in two ways. An assumption of the attribution theory is that people will interpret their environment in such a way as to maintain a positive self-image.
There are three main categories of attributes for explaining success or failure:
• Internal or external
• Stableorunstable
• Controllableoruncontrollable

Why do we investigate all these theories about motivation? Fundamental in HR department.

Advantages of a well-motivated workforce:

- Better productivity
- Better quality
- Lower levels of absenteeism
- Lower levels of staff turnover (employees leaving the business)
- Lower training and recruitment costs

CROWDING-OUT EFFECT:

- It stipulates that intrinsic motivation is substituted (crowded out) by extrinsic motivation due to extensive use of high-powered extrinsic incentives, e.g. bonuses.

- It refers to an undermining effect of rewards that is opposite to the relative price effect of standard economic theory, whereby reduced costs should increase behavior, and increased costs should reduce it.

- Monetary incentives crowding out the motivation to undertake an activity may be considered a major anomaly because it predicts the reverse reaction to the one expected according to the relative price effect, on which
much of economics is based.

The S line is the traditional supply curve based on relative price effect. If we consider an employee who puts effort E1 to perform a job, after that at the end of the month he receives a bonus is B1.
If we trace a line until the S curve, we have a value that if we report it in the effort axis shows that to have this bonus, our worker should put an effort E2 that is bigger than the effort that he really performed.
For this reason, the supply curve shifts to S1
It creates a new level of effort –> paradox because now the effort is less than the initial one. Now, with the level of bonus B1, the effort is E3.
Instead of incentivizing more effort, there is the possibility to decrease the effort.
This paradox is not only in the work environment, but also in other contexts.

Lezione 08/03 - COMMUNICATION

Communication is composed by two important points: sharing information and reaching a common understanding. An important point is the fact that the receiver of the communication should understand what information means. It is not
important to share, but we should take care about the fact that the respondent understands.
The functions of communication are:
- PROVIDING KNOWLEDGE: to perform the job in a good way. The leader should explain the goals, how to perform a job and the standards that should be reached. It is about making the employees capable to perform a
task.
- MOTIVATING ORGANIZATIONAL MEMBERS: strong link with motivation. In this way, we can say that through communication we are able to improve the motivation of the employees. If we consider an employee
that has to perform a difficult task, the leader, through the communication, can increase his motivation.
- CONTROLLING AND COORDINATING GROUP ACTIVITIES: enhancing roles, rules and norms is useful to avoid and reduce the duplication of roles. This is something that we use also in our daily life.
- EXPRESSING FEELINGS and emotions such as positive and negative moods, excitement, and anger.

MODELS OF COMMUNICATION
- Berlos’ SMCR (Information-Transfer approach): there are four factors that allow to understand what communication is:
1. Source: the person who starts the process of communication
2. Message: what we want to communicate
3. Channel: the way through which we communicate
4. Receiver: the person who receives the message.
Noise: it can affect the transmission.

Encoding Process: it allows the idea of the sender to be transformed in a message.

Decoding Process: it allows to decode the message, to make it understandable for the receiver.
These two processes are fundamental to make the message understandable.

The factors should have some characteristics:

- The sender and the receiver should have the same characteristics
1. Communication skills: the ability to read, write, speak and listen.
2. Attitudes: to learn and speak

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 3. Knowledge about the topic: fundamental to see if the message will be understood
4. Social System: values, beliefs, culture and religion
5. Culture

- Message
1. Content: body of the message
2. Elements: language, gestures, and body language
3. Treatment: the way in which the message is delivered
4. Structure: example  when you write mail to a professor or to a friend
5. Code: the means through which it is sent and in what form

Berlos’ model is the first model  static model

- Palo Alto approach  dynamic model. It is composed by 5 axioms, not considered in a linear way

Let’s explain them one by one:

1. One cannot NOT communicate: the fact that a person does not reply or is in silence could be a way to communicate. Also, a misunderstanding is a way to communicate.
2. Communication implies a relationship: Communication is composed by a message (WHAT) and a relationship between the communicants (HOW). You should consider both the information and the relationship
between the two parties.
3. Punctuation of the sequence of events: in a communication path, there is a sender and a receiver. People interpret their own behavior as an answer to the other person’s behavior. To an outside observer,
communications appear as an uninterrupted sequence of interchanges. Each person perceives different patterns of cause and effect, or different structures of interaction, in fact each of them organize their ongoing
interaction into various sequences. A person with a certain behavior will be considered a leader, while the other person will be considered an adept.
4. Digital and analogic communication: the transmission of the content generally is called digital communication, while the way through which the communication is transmitted is called analogic level. The analogic
communication refers to the non-verbal communication, such as body movement, posture, gesture, facial expression, voice inflection. For this reason, it is more complex to understand and ambiguous.
Relationships are mainly based on analogic communication, rather than digital.
5. Symmetrical and complementary interaction: it is important to consider the relationship between sender and receiver. Partners tend to mirror each other’s behavior (symmetrical). One partner’s behavior
complements that of the other (complementary)  leader-follower.
The successes in communication between individuals will be given by:
- It is important to use the same code, not altered by the channel used
- Take in to account the receiver’s situation
- Analyze the framework in which the communication happens
- Digital communication should be in line with the analogic communication
- The punctuation should be well-defined
- A communicator should have a receiver.
DIFFERENT TYPES OF COMMUNICATION (SMEs and START-UPs)
It is important to understand how the communicate to understand how the messages move throughout the organization.

1. Wheel: used in small enterprises. At point A there is the leader, while the other pints are the followers. The leader is a central figure and is the source of information for internal and external people. The followers
have no authority to communicate with each other. Authoritarian type of work. Faster and suitable for simple routine types of work.

2. Chain: a person can communicate with immediate superior and subordinate. There is a hierarchy inside the organization. In position A there is the CEO of the firm, in B there could be the
middle manager, in C it could be the normal employee and so on. This type of work is common in all the organizations where hierarchy and responsibilities are clearly defined among the
members.

3. Circle: a person can communicate to another person next to his right or left but not with others. If you are in A, you cannot communicate with C, but only with B and E.

It is used in organizations that have a functional structure. In formal organizations, a production manager communicates to the marketing and finance manager to get official information.

4. All-Channel: all members can communicate without any formal restriction. It is an informal form of network, there are no boundaries about how to share communication. Generally, it is used in startups.

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LEZIONE 17/03 – BARRIERS TO COMMUNICATION

The importance of culture – it refers to the complex collection of knowledge, folklore, language, rules, beliefs, lifestyles and customs that give a common identity to a particular group at a specific point in time. It is complex and
multifaceted, subjective, it evolves of time and is largely invisible (relationships and language).

HOFSTEDE’S MODEL OF NATIONAL CULTURE:

National culture explained more of the differences in work-related attitudes then did position in the organization, profession, age, and gender.
1. POWER DISTANCE: extent to which the less powerful members of institutions and organizations expect and accept that power is distributed unequally.

 power distance – organization level: power distance index refers to the differences in the work culture as per the power delegated to the employee.

2. INDIVIDUALISM VS COLLECTIVISM
- Collectivism: the groups is more important than the individual and group members follow norms that stress group rather than personal interest (members of the group look after each other in exchange for loyalty in the
group and there are no universal rules but different values for different groups).
- Individualism: a society in which the ties between individuals are loose: anyone is expected to look after self and immediate family only.
 individualism vs collectivism – organization level: there are organizations that strongly rely on teamwork. Individuals with a common interest come together and work in unison as a team. These organizations believe that output is always
more when individuals exchange their ideas, discuss things among themselves to come out with innovative ideas. The employees share a healthy relationship and take each other’s help when required.
Certain organizations follow a culture where individuals do not believe in working as a single unit and prefer working individually.

3. MASCULINITY VS FEMININITY
- Masculinity: refers to the degree of traditionally masculine values: materialism, lack of concern for others. A high score indicates that society will be driven by competition, achievement, and success, with success being
defined by the winner of best-in-the-field. High masculine society women are expected to stay at home and raise a family.
- Femininity: emphasized feminine values – preference for cooperation, modesty, caring for the weak and quality of life. A low score indicates that the dominant values in society are caring for others and quality of life. A
feminine society is one where quality of life is the sign of success and standing out from the crows is not admirable. Division of roles in a society. More women in high-level jobs.
 masculinity vs femininity – organization level: organizations where male employees dominate their female counterparts will follow different policies as compared to organizations where females have a major say in the decision-making
process of the organizations. Male employees would be more aggressive as compared to female who would be more caring and softhearted. The responsibilities also vary per sex of the employees. The female employees are never assigned
something which requires late sittings and frequent travels.

4. UNCERTAINTY AVOIDANCE: refers to the extent to which people feel threatened by ambiguous situations and create beliefs to avoid such situations.

 uncertainty avoidance – organization level: it refers to a culture where employees know how to respond to unusual and unforeseen circumstances. It deals with the tolerance level of employees in both comfortable and uncomfortable
situations. Organizations try to avoid such situations and prepare employees to adjust well in all conditions, through establishing formal rules, rejecting deviant ideas and behaviors, and providing career stability.

5. LONG-TERM VS SHORT-TERM ORIENTATION:

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 long-term vs short-term orientation – organization level: there are some organizations which focus on long term relationship with the employees: in such organizations people have a steady approach and strive hard to live up to the
expectations of the management. Employees get attached to the organizations and do not look at short-term objectives. On the contrary, some organizations have employees that are more concerned with their position and image: they follow
a culture where people move on in a short span of time and nothing is done to retain them. The employees are concerned only with their profits and targets and leave as and when they get a better opportunity.

6. INDULGENCE VS RESTRAINT

 indulgence vs restraint – organization level: employees in indulgent cultures place more importance on freedom of speech and personal control, while in restrained cultures there is a greater sense of helplessness about personal
destiny. In the workplace this has an impact on how willing employees are to voice opinions and give feedback. In cultures that are perceived as placing greater importance on personal happiness and freedom, employees are more
likely to leave an organization when they are not happy in their role.

Critiques of this model:

- Use of national culture group as unit of the analysis  but some cultures are spread across the national boundaries, and there are also heterogeneous societies like USA in which there are several minorities.
- The dimensions may have different meanings in different cultures: for example, individualism is a positive term or means being selfish??

DIFFERENCES IN CROSS-CULTURAL LINGUISTIC STYLES

LEZIONE 22/03 – PRODUCT DEVELOPMENT PROCESS

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In order to develop a new product, there are 6 stages to follow.
1. Idea generation: it is useful to use some creativity techniques that allow to have new ideas. For instance, a brainstorming process can be used to have a new product concept.
2. Production definition: it is related to identifying the scope and redefine the concept of the product.
3. Protoyping face: constructing a visual group presentation of the new product
4. Initial design: producing an initial mockup of the final product
5. Validation and testing: also related to the other services of the product that we want to create
6. Commercialization: give the final product to consumer and developing and implementing of the product

1. Create a new product, very different from the products that the company already has.  RADICAL INNOVATION
2. Construct and implement an increase of quality of a product that already exists in the organization  INCREMENTAL INNOVATION

1. IDEA GENERATION: it is important to analyze consumers’ need, prices of substitutes and make market research. The most used technique is brainstorming. It is important ot target the market (identifying the profile of
customer base to create a product that is useful and understandable for clients), analyze existing products (to differentiate), understand the functionality (why someone would be interested in buying our products and what
are the main characteristics that this product should have).
Then, it is important to apply the SWOT analysis (strength and weaknesses of the product, opportunities and threats that could undermine our product – this allows to differentiate form competitors and allows to identify a
market gap in order to create a product that allows to solve the gap).
Then, another useful method is the SCAMPER method (identifying the substituting, combining, modifying and adapting the product concept – technical issues related to the product).
At the end of this stage, we will have an idea of the product that we want to produce.

2. PRODUCT DEFINITION: better defining the product. It is important to conduct:

- Business analysis: distribution, ecommerce, competitor analysis. The purpose is to begin building a clearly defined product roadmap
- Value proposition: consider how the ideated product differs from other products in the market. The value can be useful for market research and for developing the marketing strategy.
- Success metrics: KPIs – identifying the goals that should be achieved to satisfy customers
- Marketing strategy: channels that we want to use to distribute and promote the product

3. PROTOTYPING: create the first draft of the product. It is not important to draft only the product itself, but also to think about the services that are behind the product. We should think to all the packages. During this
phase, we should:
- Make research of risks: associated to the production
- Development strategy
- Feasibility analysis
- MVP: minimum viable product: products that includes the necessary characteristics of the product

4. INITIAL DESIGN: the design should be created with the target audience in mind and complement the key functions of the product. Important to consider:
- Source material: install relationships with stakeholders (working with vendors and order materials or create our own)
- Connect with stakeholders: keep tight communication during the design phase in order to verify the initial design is on the right track
- Receive initial feedback: from senior management and project stakeholders: then revise the product as needed until the final design is ready to be developed

5. VALIDATION AND TESTING: to ensure good quality for the product, important to:
- Concept developing and testing: develop all the packages related to the product (software if needed, start to produce some pieces…). Also test the functionality of the product with the help of team members and beta testers
to ensure quality
- Front-end testing: checking the ecommerce functionality and ensuring it is stable for launch.
- Test marketing: review the marketing plan and set up the timeline for launching all the campaigns.

6. COMMERCIALIZATION: test product and related services

- Product development: physical creation of product that will be released to clients. It requires production
- Ecommerce implementation: it could be required to test again

Then launch the product.  measure success

Who is part of the product development team??

- Product management
- Design
- Marketing
- Senior management
- Project management
- Sales
- Development

Groups allows the creation of a participative work environment. Groups allow creating team-based organizations in which there is no hierarchy, and some decisions are delegated.  democratic environment.
GROUP DECISION MAKING: it is a type of participatory process in which:
- Multiple individuals that act in a collective way
- Analyze problems or situation
- Consider alternatives and actions
- Among the alternatives, they identify solutions that allow to cope with a problem
Advantages:
- Different people with different skills and knowledge and diversity is important to improve the group performance.
- Enhanced memory: someone in the group always remembers past errors and tries to avoid them again
- Greater decision acceptance – it could be also a problem
Disadvantages:
- Time-consuming: if you consider the individual decision making, it takes less time to decide, while in a group, to arrive to a common thought, it takes time.
- Group conflict – different point of views and you should be able to manage conflicts to arrive to a decision
- Groupthink
Risks:
- Conformity effects: related to the fact that the opinion of one member is influenced by the opinion of the majority of the group (Asch’s experiment). It is detrimental for the group, because a different opinion could be useful
for the overall group decision making. It strongly biases the performance of the group. How is it manifested? This effect manifests itself when only a few people think differently but do not express their opinion, to avoid
conflicts, to preserve harmony inside the group.
- Groupthink: it occurs in cohesive groups whose members strive for agreement at the expense of assessing the right information which is relevant to the decision. Very difficult to break down, if you are completely in
agreement you think to be in the right track. All members are aligned about a topic, because of that it means that they are right, but this is not always true. Everyone into the group is required to agree to each other. What are
the main symptoms??
1- Illusion of invulnerability: each member is optimistic and takes risks
2- Stereotypes of other groups: other groups with different views are viewed as incompetent
3- Illusion of unanimity: they think that they are in total agreement, but it is not reality many times. If there is someone in the group that has a different point of view, other members ask to rethink about the topic, in
order to align with the others in the group.
There are different ways to minimize groupthink: the leader can implement some steps to minimize groupthink. The leader can encourage to express criticism to push the member to think outside the box, not to uniform the idea to those of
the majority of the group. The leader can encourage the group members to talk with other people outside the group, helping them to avoid groupthink, because they will not be biased by the ideas of the member of the group and will have the
opportunity to open their minds. The leader can assign the role of devil’s advocate (being forced to think in the opposite way). Another way is to take important decisions in a second meeting.
- Group polarization: generally, groups take more extreme decision than individuals. Because people are in groups, they have a sort of diffusion of responsibility (the group as a whole rather than any one individual is
accountable for the decision) and overconfidence that allow them to feel protected. There is more likelihood to take more extreme decisions. The presence of the leader is fundamental to avoid group polarization.

CREATIVITY TECHNIQUES
These techniques could be used both to create new products and to solve some problems inside the organization. For this reason, they are useful for different point of views.
The common methods used are:

1. Brainstorming: very common method to have new ideas for products and services and to solve problems. How does it work? There I a group people who start to say something about the product that has
to be created inside the organizations. There are not rules inside this method: everyone can say whatever is in their minds, there are no barriers. It is something to express freely what you think. There is
only a common starting point: everyone who is involved in the brainstorming should know the topic. It is important to have a common knowledge base inside the group. Also, there is the need of a
facilitator: someone who guides the discussion among the members. He allows to stay in the boundary of the conversation and allows each member to speak freely.
Rules:
1. Generate as many ideas as possible
2. Not allowed to criticize ideas
3. Ambitious (not so real) ideas are welcome
4. People are encouraged to build on other ideas: the union of different ideas can give the solution to the problem
Advantages:
1. Useful for creative people, those who have high self-esteem
2. There is a free environment: there are no rules. It is a friendly environment
3. In this technique, there can be an equal participation among the members
Disadvantages:
1. If someone is not confident, maybe he will not participate so actively to the discussion because of his personality.
2. It is a time-consuming technique: to arrive to a common point, it takes a lot of time
3. Sometimes someone can suggest ideas that are not so real: it is important the role of the facilitator, who tries to shape the idea inside a real framework.
4. The facilitator is needed in order for the technique to work well

2. Nominal group technique: it is like the brainstorming, but there are some steps that should be followed to be efficient. There is a group of people:
1. Each person should start thinking about how to solve the problem on their own.
2. Everyone starts writing and recording the idea on a paper individually.
3. Discussion session: each member is asked to provide one item of his idea

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 4. Voting on idea: there is someone who ranks the solutions that each member has given. At the end, there will be a list of solutions ranked by the preference inside the group. (Prioritization:
hypotheses ordered by the preference of the members  solution)
Advantages:
1. It allows to generate several ideas
2. No hierarchy: anybody can express his opinion without bias
3. No competition among the members: they think alone on how to solve the problems
4. Democratic thinking: prioritization of ideas
Disadvantages:
1. It requires preparation
2. It is a single-topic meeting: one topic at a time, thus it is more time-consuming
3. It minimizes discussion, it does not allow for full development of ideas

3. Dialectical inquiry: group decision-making technique that focuses on ensuring full consideration of alternatives. It involves dividing the group into opposing sides, which debate the advantages and
disadvantages of the topic. Each member of the group has to be prepared about the topic. The final solution will be the result of a strong discussion inside the group. A similar method is devil’s advocacy.
Advantages:
1. It is possible to talk about different ideas
2. It allows to underline the criticism behind each solution
3. Greater number of alternatives
4. Participative decision
5. Better understanding of final decision
Disadvantages:
1. Interpersonal conflicts can arise, because the group is divided into two sides, which are opposite
2. More time-consuming
3. There should be someone who can dominate the meeting because of his strong personality  this could lead to groupthink, which is another disadvantage
4. Everyone cannot express their ideas

4. Delphi technique: used to estimate the likelihood outcome of future events. It is important to select different people with a strong base of knowledge about a topic.
Main steps:
1. Choose facilitator, who helps to identify who are the experts
2. Identify the experts
3. Define the problem
4. Round one questions: the facilitator administers a questionnaire to the experts and at the end collects the answers, which he will analyze afterwards. He will remove the irrelevant material.
5. Round two questions: it could be the same of the first round or different, meaning entering more questions in detail about what they should solve. He receives the answers and analyzes them.
6. Round three questions: if they arrive at a common idea, the process ends, but if they don’t have a consensus among the experts, they continue with another survey.
7. Act on your findings: experts reached a consensus and will have a view of future events.
Advantages:
1. People with a strong background: the solution will be strong for sure because the committee has a strong knowledge base
2. Anonymity that avoids bias
3. The answers are weighted: no answers are more important than others
4. Questionnaires provide no noise that could bias the communication
Disadvantages:
1. Very long process
2. No common methodological guidelines
3. It is needed to ask many times questions to the experts
4. If they arrive to a consensus, it does not mean that it is the correct answers: the experts could be biased

5. Design thinking technique: new method  it allows to enter indirect contact with clients. Before start thinking on how to solve a problem, it is necessary to talk with clients directly. There is an immersion in the
contest of the problem.
It is important to use experimental data to assess the quality of the solution found.
Main characteristics: focus on problem identification through customer empathy, human-centered, includes processes, tools and techniques to achieve the objective.
It is important to use this method when there are no data.

Steps:

1. Emphatize: getting in touch with consumers and understanding their needs

2. Define: analyze all the data and define what the problem to solve is
3. Ideate: collecting ideas to arrive at the solution
4. Prototype: select two or more ideas and design
5. Test: launching the project and implement the scenarios of the previous phase and check the results via feedback.

It is used also inside the organizations to solve problems, not to create products. In recent years, experts understood that it could be useful also to create products.
There are tools:

1 Visualization using imagery to envision possibilities and bring them to life

2 Journey Mapping assessing the existing experience through the customer'seyes
3 Value Chain Analysis assessing the current value chain that supports the customer's journey
4 Mind Mapping generating insights from exploration activities and using those to create design criteria
5 Brainstorming generating new possibilities and new alternative business models
6 Concept Development assembling innovative elements into a coherent alternative that can be explored and evaluated
7 Assumption testing isolating and testing the key assumptions that will drive the success or fallure of a concept
8 Rapid Prototyping expressing a new concept a tangible form for exploring, testing, and refinement
9 Customer Co-creation enrolling customers to partecipare in creating the solution that best meets their needs
10 Learning Launch creating an affordable experiment that lets customers experience the new solution overan extended period of time, to test key assumptions with market data

Design thinking has transformed into one of the preferred methodologies to address intractable problems that business tools fail to address. It finds its legitimacy in the notion that facing complexity requires making choices, leveraging
specific and promising assumptions. It is booming, especially in industries where digital transformation requires new capabilities to develop customer experiences.

Lezione 29/03  Digitalization, how does it influence organizations?

Woodward (1958): scholars were looking at how technology can change organizational structure. Technology allowed automation of labor, greater of productivity. As for more advanced technology, it allows engineers to use CAD to design
products and to use that software to control machines and equipment to produce cars. Technology changes the way tasks were allocated.
Later, technology has replaced people that once were assigned to perform a specific task, and also increased and allowed a more efficient way of communication, which goes hand in hand with coordination. This not only between people but
also among people performing tasks. People can process more information compared to the past.
Due to the benefits of IT, the span of control that a single person is able to control within the organization has increased. Still, also efficiency has increased. We should expect that organizations would benefit in terms of production.
Nevertheless, studies show that the investment in IT were not related to an important increase in terms of growth and efficiency  paradox.
Why if we are investing so much money in IT in order to increase the speed of production, span of control, speed of communication, reduce number of people, we don’t see more revenues?
- IT, at the time, was mainly used to replace all the existing processes that were already in place.
- The organization is divided into different departments and each functions collects all the information, store the relevant ones, and perform the task. IT made it possible to improve the functions inside each department and
the communication among the different departments.
PRODUCTIVITY PARADOX: the IT was seen only as automated plumbers and to replace all the existing processes that were in place, it was not combined with changings in the organization. A greater investment in IT will be associated
with greater productivity growth only with complementary investments, such as decentralized decision making, job training and human capital, redefinition and redesigning of decision process.
Redesigning business processes: in order to benefit as much as possible from IT.
If the span of control would be large, it was also important that decision making could be decentralized: a single individual controlling too much, he/she would be very slow
Job training and human capital: people need to be able to use technology
Redesigning: the introduction of technology would benefit the organization only if the processes would be redesigned in terms of the technologies to be used

One of the main benefits:

- Visualization of the entire process (for communication and decentralized decision making).
- Real time flexible product: related to possibility to involve people outside the organization to participate  open innovation
- Virtual collaboration
- Coordination
- Mass collaboration and open innovation

1. First Generation Innovation Process – Technology Push= basic research-> applied research and engineering-> manufacturing-> marketing

Innovation would mainly come from the internal lab of the company. Scientists would decide which product to bring in the market, they will create prototypes tested by manufacturing, and then marketing.
One of the main cons: lack of market demand, you should first check if people appreciate the innovation.
No feedback loop: the market would not give feedback to the market  high rate of innovation failure. The market was tested only when the product was ready, they would spend too much money in producing,
sometimes it was not even worth it.

2. Second Generation Innovation – Market pull = market need->development -> manufacturing -> marketing

In this case they start from the market, there was a heavy market research upfront. Only when companies understood the market needs, they would start to produce.
Cons: again, there are no feedbacks loop.
More successful than the first one. But company were mainly able to have an incremental innovation (not radical). Why? Because people don’t know what they actually want, the company should rely on a
RADICAL innovation, which is something that nobody thinks they actually need.

3. Third Generation Innovation Process – interactive model

Basically, companies try to learn from their mistakes  mix of first and second model.

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 4. Fourth Generation Innovation Process – chain model

Chesbrough (open model – exploit external knowledge): he was trying to understand why companies in the US were failing to bring inventions. Until the invention is not commercialized, it cannot be called an innovation. Companies were
mainly relying on project development within the organization, and this would lead to failure. Some other companies would adopt an open innovation model and were able to gain research ideas from external boundaries, but they were able
to manage these ideas inside the organization. Not all the ideas need to be processed inside the organization, but some of them could be managed by external people and brought to the market with the creation of a new market. Market will
become more fluid, creating more radical and successful innovation, and exploiting external resources.

Everything would happen within the firm boundaries  traditional model.

By using this model, companies were just making small innovation to their existing product, they were not impacting the market. (es. Blockbuster)

Chesbrough realized that companies that could make a radical innovation would use this model.

The boundaries of the firm are not well defined, the company would not only rely on internal capabilities to come up with the next big idea, but it would also seek ideas from the market, from people outside the company. They would bring
ideas to the company, which are studied, and those projects that were combined internally and externally would be able not only to serve the market and bring incremental innovation, but also, they would allow to radically innovate the
market.

Up to a certain point, openness would lead to an increase in innovative performance. Too much openness would lead to lower innovative performance.
Why?
- Information overflow: time-consuming and costly
- Losing focus: companies may be suggested to pursue some innovation which could be interesting but are not aligned with the company’s mission and internal competences, so that they lose focus on what they are actually
doing.

P&G: they wanted to innovate in snacks. They tried to find new ways to innovate

CROWDSOURCING: online, distributed problems olving and production model. The crowd can sort through the solutions, finding the best ones. The best solutions are owned by the entity that broadcast the problem in the first place – the
crowdsourcer. The winning individuals in the crowd are sometimes rewarded. Many participate just for intellectual stimulation or because of emotional ties to products or services.
Benefits:
- Problems can be explored at comparatively little cost
- Payments are by results
- The organization can type a wider range of talent than might be present in its own organization
- Turn customers into designers and marketers

OPEN INNOVATION: P&G CASE

The traditional model of P&G was the innovation from within and hiring and holding the best world’s talents. In 1970s they used to have a centralized approach, then in the 80s global research facilities. At the end, in 2000 the research and
development appeared to be flat and innovation costs were rising fast.
 P&G Connect and Develop: P&G launched a new line of Pringles. It might have taken two years to bring such a product to the market, but by applying a new approach to innovation, they accelerated Pringles Prints from
concept to launch in less than a year.
In 2002 they were brainstorming about ways to make snacks more novel, they asked suggestions and clients said to print pop culture images on snacks. It would be very costly and time-consuming. They then created a
technology brief that defined the problem to solve and through the European network they found the solution.
 From R&D to C&D: for generations, P&G created most of its phenomenal growth by innovating from within (building global search facilities and hiring the best talents in the world) – but that was not enough.
 Creation of Connect and Develop innovation model  identifying promising ideas throughout the world and apply P&G R&D, marketing, manufacturing, and purchasing capabilities to them to create better and cheaper
products, faster.
 Surveillance to three environments:
1. Top ten customer needs: the needs lists are developed into science problems to be solved
2. Adjacencies: new products or concepts that can help the company to take advantage of existing brand equity
3. Technology game boards: to evaluate how technology acquisition moves in one area might affect products in other categories.
 PROPRIETARY NETWORKS: Technology entrepreneurs and suppliers
 OPEN NETWORKS: NineSigma and others

NEW BUSINESS MODEL:

Thanks to information technology, companies have started around 2000/2010 to organize in a different way: network-based organizations. Airbnb, Uber: Companies that have as main asset the network of people. Information technology has
now allowed smart working and smart teaching.
AirBnb and Uber: they have introduced a new way of commuting, taxi service and accommodation. Every company operates in a network of suppliers ….

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They do not own any asset. They do not employ suppliers or customers, drivers, people who own apartments. The company is really a network – the aim of the company is to put together demand and supply with very small capital.
- No capital requirements: turn under-utilized asset into business (drivers have their own vehicles and host apartments)
- Lower prices: nowadays it is not always true. In the main cities accommodation prices are similar.
- Born-global: despite they launch their product in one country at the beginning, given the structure of the organization and given that the network IS the organization, they were able to expand very quickly – the organization
is light and flexible, and it has low requirement in terms of capital, thus it is able to expand from one country to another in a very short time.
How are they organized?
- Flat organization: no hierarchy managers, very few people oversee conducting the company (5/7 people).
- Drivers are not employees but subcontractors
- Replaced managers with software – flat network is managed by algorithms
- Coordination through the app which connects drivers and passengers
- Referrals and rating system

Multi-division organizational form – division by geographic region  several countries for each region
Innovation bottom-up approach: the decentralized decision making – innovation, ideas would come from people. Top manager had to approve the idea, but no approval. The boss would just help the managers to get through the idea and get
approval from the CEO. The top levels were just helping low level managers to execute the ideas.

How did the Internet influence their organizational structure?

- From decentralization to recentralization:
1. Coordination through software
2. Software replaced managers
3. Eliminate hierarchy of managers, fewer employees
4. Network-based reputation system – brand and adv are less necessary
5. Rating system replaced management performance assessment
6. Organic growth: thanks to the flexibility and lightness of the operations, the company could grow organically – expand operations in other countries without changing too much its structure. – the company does
grow through acquisitions. /Nonorganic growth – accompany enters in a new country through the acquisition of a company that already works in that country.

Pros of a network-based
organisational structure
- global expansion/operations with fewer resources
employees, managers, ecc
- less investments in marketing and adv - network reputation
- lower costs, accessibility
- last decision making, Bottom-up approach flexibility

Pros and Cons of this network -based organisational structure?

• No direct interaction with drivers - -> you cannot explain your
needs (i.e. carry beers, # of people, etc.)
Customer experience: how to make sure that clients around the
world will have the same product/service quality?
Drivers are the final point of contact of clients: How can Uber
control that drivers respect company's values/goals (before it's too late)?
• Low barriers of entry
Low barriers: because of low capital requirements (network is the main asset), ideally everybody could start a platform company. On the other hand, it is not easy to compete with such “big companies” in this market.

Environmental change

Change is not always bad; it can be good if organizations are able to respond through the adaptation of the organization itself to the change.
Environmental change creates opportunities: like Ryanair, it created an opportunity of allowing a new business model to be implemental. Changes create markets, lower barriers of entry (very few capital requirements).

Organizations need to react to environmental changes to keep the competitive advantage. They need to redefine their goals and values, acquire new resources and capabilities, needs of new soft skills (flexibility, adaptability).

RED QUEEN EFFECT: metaphor to describe unsuccessful effort of companies. The red queen takes the girl’s hand and runs fast. The girl did not have the strength to say anything to the queen. At one point, when the queen stopped, the
girl asked why they are running so fast, while they remain in the same place (tree): the queen said “yes, of course, where do you think we are going? We are running so fast in order to stay in the same place. Alice said in her country when
you run fast is to change place”. The queen said that in her country they run to remain in the same place, and she has to run at least as fast as that.

Organizations compete hard to keep the competitive advantage. In order to eat the competition and renew the competitive advantage, the story is not enough that you run fast. They need to do something different and better: it is not only
enough to run fast in the existing business, but to pursue a different strategy to beat the competition.

Organisations are engaged in catching up with increasingly turbulent environments and hypercompettion.
Compelition as a race to manta n the stalus quo.
Running harder is easier lo do, il shows short term success and is less risky in the near horizon, but ultimately holds long term (fall Businesses cannot survive by just running harder, but especially by running differenty and smarter than
competitors (changing industry rules).

“You need to run at least twice as much”

If companies keep doing better, it is not enough to invest, but if the company wants to renew, it is not enough to run harder, but also smarter and differently.

Why organizations face difficulties in keeping up with changes?

They need to create a stability: it is a good thing. Organizations have a stable configuration of people, structure, processes, routines, processes embedded in the organization, stable way of working, stable way of processes. The organization
is successful in doing things, it is hard for them to change what a successful strategy is. Being a stable organization (heavy procedure processes) allows a well-functioning of the organization.  they know the goal, the resources. Stability is
good for efficiency and functioning of the organization.
At the same time, it leads to inertia inability to change. It is good to have stable procedures, on the other hand, when it is too stable, the organization feels in a trap of not being able to change the status quo.

From stability to inertia:

- Human nature: human beings are reluctant to change because change requires a cognitive effort and a different way of thinking. (Blockbuster) – cognitive rigidities
- Cognitive rigidities
- Size and age: when organizations become bigger because they are successful (become hierarchical and more bureaucratic) leads to when organizations have more difficulties in embracing changes.
- Structural rigidities: business as usual, routines. It is very difficult to acquire new knowledge. Believing a new industry could be as profitable as the one they work on is difficult. Companies usually want to maintain their
status quo. (Kodak)
- Path dependency: the future path is dependent on what the organization has been doing in the past. If an organization has been doing for years for example in food industry, it becomes very knowledgeable about that
industry, and they cannot switch too far from that industry.
- Doing just well enough: organization defends the existing position

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Dilemma to abandon a product that is obsolete, but are still reluctant to change, despite they know that the world is changing. They don’t want to abandon a business that is profitable. At that point, you just lose what could have been your
dominant position and competitive advantage and leading position in the market, but reluctance to change would lead to company failure.

INNOVATOR’S DILEMMA. The dilemma is to keep investing in an existing technology and making it better (exploitation – it refers to the action that the company does to exploit the resources to maintain the competitive advantage).
Dilemma: do I invest in a new technology even if I have to develop new capabilities and resources to meet the requirements of clients? The answer is the ideal solution: to pursue both exploration (try to understand what the market wants)
and exploitation (keep doing cash cow product). It is not easy, because sometimes the core capabilities become the core rigidities: being the leader in the market in the production of a product, could make the company become so rigid to
switch the competencies they already have. The company will not recognize that the market does not want that product anymore. The core capabilities become an enemy because the company ignores the changings in the market.  core
capabilities can turn into core rigidities.

Why some companies that were leaders failed to innovate?

When companies find a good fit in the market, it becomes successful. If the product is successful, automatically they will grow, become more structured and bureaucratic. Size and age are one of the elements that make organizations to be
reluctant to change (inertia). The organization is unable to change: it will be successful if it works in a stable environment (ex. Organizations operating in the industries producing primary needs – food and beverage industry – within the soft
drink sector, it is very stable, because for example companies producing water the consumer habits rarely change), while in an environment that changes fast they will die (failure) (ex. Mobile phones industries, technologies get updated
month by month – nokia, blackberry).

Stability can be good or not depending on two factors. When organizations are stable, there are factors that make them unable to respond to the environment  they can still survive, if they operate in a stable environment. On the other hand,
it is unable to change and it operates in an unstable environment, it will fail.

First curve: companies start with the operations, then there is growth. When they reach maturity, the organizations are stable in the market and in revenues, it offers a needed product, stable market share. Maturity can lead to decline when
there is a shift in the environment. If shift in the environment if not followed by a strategic movement, companies will fail. The first curve is the first example, then there is a shift in a market, and the company has to strategically innovate,
and restart from the bottom. Either the company fails if it does not update, or it keeps innovating and survives. It has no end if they innovate strategically every time it comes to maturity stage and change in the environment.
Two different changes that the organizations can make: linked to exploration and exploitation.
Exploitation refers to incremental changes in the organization – extremely compatible with existing production. It is basically what Apple does with the incremental change of the product in terms of introducing little improvements – the
way the organization deals with the market preferences through updating the product.
Radical change (exploration) – means to start doing something completely different, radical changes in terms of developing a new strategy, creating a subunit of the company, hiring people with different skills, creating new products – it
requires heavy changes in the organization

AMBIDEXTROUS – organization that is able to manage simultaneously incremental and radical innovation. Organizations that will be able to pursue both changes will be able to survive in environments that change rapidly and frequently.
It is able to exploit existing resources to make their product better and better, but on the other hand it is able to explore different markets, rules and products, to acquire different skills and strategies. (ex. Google – it keeps updating the
existing product, on the other hand through a separate business unit they explore business in completely different industries. They are able to keep improving, but they also create a completely different structure, and, in this way, they are
able to explore different sectors often time not linked to the core business) – Tushman & O’Reilly

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What is the best organizational structure? Doing something different requires flexibility and can be in contrast with the core points of the organization.
- Ambidextrous organizations: created two different parts: one company looking after existing businesses, and another company completely different that would mainly look at exploring emerging businesses (Google)
Ambidextrous structure would be the most profitable and would lead to the most satisfying performance.

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