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Nokia Absorptive Capacity

Essay by   •  July 7, 2019  •  Case Study  •  1,660 Words (7 Pages)  •  592 Views

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Absorptive capacity

  • Acquisition capacity - a firm's ability to locate, identify, value and acquire external knowledge that is critical to its operations
  • Assimilation capacity - a firm's ability to absorb external knowledge that it will later analyze, process, interpret, understand, internalize and classify
  • Transformation capacity - a firm's ability to develop and refine the internal routines that facilitate the combination of previous knowledge with the newly acquired or assimilated knowledge
  • Application (or exploitation) capacity – a firm’s ability to incorporate acquired, assimilated and transformed knowledge into their existing and future operations and routines

Decision-making Traps

  • Anchoring: Giving disproportionate weight to the first information you receive Example: A marketer projects future product sales by looking only at past sales figures. In a fast-moving marketplace, poor forecasts result. Avoiding the Trap: • Pursue other lines of thought in addition to your first one. • Seek information from a variety of people and sources after thinking through the problem on your own.
  • Status quo: Favoring alternatives that perpetuate the existing situation Example: A key merger stumbles because the acquiring company avoids imposing a new management structure on the acquired company. Avoiding the Trap: • Ask if the status quo really serves your objectives. • Ask if you’d choose the status quo if it weren’t the status quo. • Downplay the effort or cost of switching from the status quo.
  • Sunk costs: Making choices in a way that justifies past, flawed choices Example: Bankers who originate problem loans keep advancing more funds to the debtors, to protect their earlier decisions. But the loans fail anyway. Avoiding the Trap: • Get views of people who weren’t involved in the original decisions. • Remind yourself that even the best managers make mistakes. • Don’t encourage failure-fearing.
  • Confirming evidence: Seeking information that supports your existing point of view Example: A CEO considering canceling a plant expansion asks an acquaintance, who canceled such an expansion, for advice. She, of course, says to cancel. Avoiding the Trap: • Check whether you’re examining all evidence with equal rigor. • Ask a respected colleague to argue against your potential decision. • Avoid “yes-men.”
  • Estimating and forecasting: Being overly influenced by vivid memories when estimating Example: Lawyers overestimate probability of large awards because the media aggressively publicizes massive awards. Lawyers then offer too large settlements. Avoiding the Trap: • Be very disciplined in forecasting. • Start by considering extremes, and then challenge those extremes. • Get actual statistics, not just impressions.

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Five disciplines:

Discipline 1: Systems Thinking, The first and perhaps most important discipline is systems thinking – the ability to integrate the critical elements of an organization and to understand how each impacts the other.

Discipline 2: Shared Vision, Apple’s success, for example, is centered on its strengths in design and in creating simple user interfaces. By having this clear understanding of what makes them different and what makes them successful, they have moved from being simply a computer company to one where whatever it makes or does is embraced by consumers.

Discipline 3: Team Learning, Cisco Systems and Ideo, a Palo Alto-based design firm, have deeply embraced Senge’s discipline of team learning. They have integrated functions as disparate as human resources, engineering, design, sales, and software development into a single team where leadership is shared and communication is open. By doing this they have created products that not only beat the competition, but that are clearly superior in design, construction, and function.

Discipline 4: Mental Models: We assume that most things will be the same today as they were yesterday and that the ways we have responded to issues will remain relevant in the future. But in the fast-paced world of today, with new challenges and new global competitors it is important to understand our assumptions, articulate them, and decide which are still relevant and which are not. Pete Senge called these assumptions our mental models — those operating models about business, organizations, our products and services and about employees that need to be examined.

Discipline 5: Personal Mastery

Know thyself is a concept as old as the Greeks, but few of us take the time to really find what our core beliefs, passions and strengths are. The why of work

Path goal leadership:

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  • Directive leadership – high explainer - found mostly in Type I leader behavior 
  • Supportive leaders – high listeners - found mostly in Type II (i.e., to move the organization out from conflict) or Type III organizations (where mentoring is needed to foster creativity)
  • Participatory leaders – high interviewers - found in mostly Type III organizations as organic organizations demand greater consensus among members
  • Achievement leaders – some combination of the above

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Tuckman model:

In team and group development, they may include the following:

  • Forming -> formulation of the psychological contract – are we expecting a group or team
  • Storming -> conflict or misunderstanding – possibly one or more people might expect a group/directive leader whereas other people might affect a team/participatory process
  • Norming -> a refinement of these expectations
  • Performing -> if these expectations and conflicts are resolved, the group or team can adequately engage in performance

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To me, the current communication and leadership challenges exist in following areas:

the medium of communication; what ways of communication should leadership use for different scenarios or situation; the cultural differences of communication; what confusion might be brought to the leadership when dealing with another culture. The gender misrepresentation of communication, when the leadership fail to recognize one’s contribution based on their gender’s communicating style. The lack of disciplines, how leaders communicate effectively with a team/group setting.



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