Concerning the telecommunication industry, this presentation will discuss about the concept of ecology of an organizations, which composes of three main key drivers: social, economical, and political systems. This concept is somewhat similar to business analysis that focuses on external analysis such as Porter’s Five Forces and PEST Analysis.
The structure of the presentation will be led by an ice-breaking slide that describes the fact that many innovation comes from nature. Then, following slides come up with detailed topic on ecology of organizations, the emerging of new organizations, the forming of new organizational population and its influential factors, organizational field and a section on fields’ response to challenge. The last five slides discuss the analysis of the concept on a Saudi company.
In this presentation, the selected Saudi company is Saudi Telecom (STC). This selection is based on the analysis that the company present the real-life example of how a company responds to challenges in the market by growing themselves to be a world class company.
Slide#2 – Innovation Inspired by Nature
Nature presents many secret that gives lessons to human being. There are four examples of how nature inspires human in developing products. Thinkpad Lenovo Gets Owl’s Wings, for example, is one innovation to eliminate the laptop excessive heat in which the design of Owl’s Wings in the fan is enable to lower the sound. This happens when an Owl flies; it produces no noise to pray its catch.
Similarly the design of displays for cell phones that adopted by Qualcomm complies with the colors of butterfly that are always on round the clock. Interestingly, this feature provides the pure and sharp color of butterflies. This technique is adopted in the IMOD display that introduces new technology in display market.
Meanwhile, the world’s swimming champion, Michael Phelps in addition to continuous improvement in his skills and power also use Speedo swimsuit that copy the texture of sharkskin, which varies in roughness that corresponds with variations in the flow of water over its body.
The fourth example is Gecko glue. It is scientists’ researches that find a gecko has millions of tiny branching bristles in its footpads that help it to have superb grip and equally stunning zippy-clean release. This feature is adopted by scientists to make adhesive technology applicable for wall-climbing robot etc.
So, what is the relationship of these natural wonders to my presentation? Simply, it inspires me to adopt the same things to the analysis of ecology of organizations because this theory is closely related to the environmental analysis.
Slide#3 – Ecology of organizations
The concept of Ecology of organizations originates from the Charles Darwin’s theory of selection theories (Hofstadter, 1945). The meaning of his theory in the ecology of organization concept is that organization that is not adaptive will be naturally selected and die out.
In addition, the Ecology of organizations describes the influence of social conditions to the pace of organization and its forms emerge, the speed it transforms, and the rate it dies out. There are three issues that considered influencing the ecology of an organization according to Hannan and Freeman (1989):
- Political systems
Slide#4 – The emerging of new organizations
New organizations are formed by existing organizations due to two main factors: romantic or family connections (Schoonhoven and Romenelli, 2001; Thornton, 1999). In fact, it does not limit to this relationship as the formation of new companies are based on the similar characteristic of a service and a product.
This causes an organization to develop multidivisional companies, each produces specific products or services that further spun off into new companies. Many real-life examples exhibit this type of organization proliferation such as Starwood hotel chain, NTT docomo, and DANONE, to name a few.
Slide#5 - Creation of new organizational population
As resource allocation or resource-based view (RBV), the use of strategy will take into account an organization’s unique bundle of resources and capabilities. Furthermore, it is also associated with author and scholar Kenneth Andrews and a perspective of how to view internal analysis such as SWOT (Strengths, Weaknesses, Opportunities, and Threats) and Value Chain Analysis.
For a large company like Saudi Telecom (STC), managing resource to achieve a goal is significantly importance since the company cannot fulfill all targets in parent company and its subsidiaries at once. In strategic planning, the decision of allocation of resources reveals the plan for employing the available resources.
- New form of organization must comply with available resources, supporting structures, and knowledge
- Joseph Schumpeter (1961) reveals that the technological development also becomes a key factor behind the creation of new companies and industries.
Slide#6 - Organizational Fields (1)
Organizational field refers to aconcept to understand organizing process and structures. It consists of populations and supporting factors (funding, infrastructure etc) and constraints (competitive situation and regulation). Some examples of how to respond to challenges are as following:
- The Big Six of US tobacco industry responds to the health campaign linking smoking and impaired health by conducting lobbying with American Medical Associations to provide cancer-research grants
- Organizations that posses existing field logics must also find ways to respond to changing logics that take the form of changes in market demands
Slide#7 – Organizational Fields (2)
Technology is not merely computers and telecommunications. In fact, it involves processes, materials, and tools that enable the work of the organization and the production of its products and services. In business realms, the use of strategy goes beyond merely using sophisticated machines to produce a product.
Concerning the field restructuration, major technological improvements can lead to the replacement of dominant organizational populations by entirely new forms (Tushman and Anderson, 1986).
Slide #8 - About STC
The sustainable and clear road map of a company’s future state is determined by how far the company wants to go as stated in their mission and vision. Saudi Telecom (STC) has mission to be “leaders in a world of constant change, we strive to exceed our customers’ expectations so that, together, we reach new horizons.” The mission is achieved by committing to their corporate values: Honesty, Commitment, Cooperation, Respect, Initiative, and Loyalty.
Slide #9 - Six strategic actions
In order to focus the achievement of their target and objectives, STC sets their new strategy, called LEAD, which intends to acquire opportunities in coming years. The LEAD strategy composes of six key factors: