UNIT 12 EMERGING CONCEPTS OF
MANAGEMENT
Structure
12.1
Introduction
12.2
Objectives
12.3
Knowledge Management
12.4
Technology and Innovation Management
12.5
Diversity Management and Higher Education
12.6
Performance Management
12.7
Summary
12.8
Unit End Activities
12.9
Reference
12.1 INTRODUCTION
Any organization, whether new or old, small or big needs to run smoothly and
achieve its stated goals and objectives. This entails planning, organizing, directing
and controlling of various activities. To achieve the laid down goals and objectives
an organization has to develop its own management concepts. The process of
development of these concepts is affected by numerous factors, both internal
and external. Moreover, in the present era of knowledge economy there has been
a paradigm shift on emphasis from material resources to intellectual capital. It is
not that the former is no longer rele 'ant but intellectual capital plays a very
crucial part in all business operations. In addition, the fast pace of developments
in science and technology has resulted in an ever shrinking globe demanding the
managers to acquire skills to keep up with the latest in not only their own domains
but also in other associated fields. Diversity is another aspect that needs attention
of managers. Diversity itself has numerous facets ranging from human resources,
to types of operations, to nature of organizations and so on. Thus, a manager has
to acquire knowledge and skills to deal with a workforce from diverse ethnic,
social, geographical and educational backgrounds th~t could meet the
organizational goals. Similarly, the variety of operations and organizational
concepts demand skills that can keep pace with a dynamic environment. There
are a large number of tangible and intangible factors that affect the performance
of humanresources. Management of performance of employees in such an
environment requires systems and techniques that meet their intellectual and
material needs. Therefore knowledge management, innovation; managenient of
diversity, setting individual goals that align with those of the organization,
measuring those in a pragmatic manner and the ability to think and operate at
global levels are some of the challenges facing managers today.
12.2 OBJECTIVES
After going through this Unit you will be able to:
•
Explain the nuances of Knowledge
Organisational learning.
Management
and apply these to
57
Contemporary Aspects on
Institutional Management
•
Explain the process of manageinent of technology and innovation in an
organization and how these could be harnessed to achieve organizational
goals.
•
Explain the essentials of management of diversity.
•
Apply latest performance management concepts.
•
Have a grasp of issues impacting management processes due to rapid
globalization of the environment.
12.3 KNOWLEDGE MANAGEMENT
In the present era. the promise of technology is prevalent in 'all that we do, see,
heat, and touch. Technology IS the driving force behind all operations big or
small. It demands an ever greater reliance on know ledge and management of
knowledge. Fot the past few years there has been an increasing level of hype
around the term 'knowledge management'. Therefore, we need to understand
what we mean by 'knowledge' and what is 'knowledge management' and whether
knowledge can really be managed.
12.3.1 What is Knowledge?
The Oxford dictionary describes knowledge as "knowing; what one knows; all
that is or may be known". Webster's new Collegiate Dictionary defines knowledge
as "the fact or condition of knowing something with familiarity gained through
experience or association." Therefore we need to ponder over what is meant by
the term 'knowing'. The word 'know' has been descubed in Webster's dictionary .
as "to perceive directly; have direct cognition of." And, 'cognition' is defined as
"the act or process of knowing including both awareness and judgment."
Therefore, we may deduce that knowledge implies cognition, and cognition
implies awareness.
That highlights the importance of human element in the modem era of technology
wherein computers rule the roost. But then, computers do not have 'awareness' .
Thus, it is people with knowledge who are still key elements or driving force for
utilization and maximisation of knowledge. Today, the age old critical sources
of competitive environment like cost, quality etc are not adequate to ensure success
and growth of organizations. Knowledge is emerging as powerful tool of achieving
competitive advantage. In the modem era of 'knowledge society' knowledge
determines the success and growth of economies. Thus, global business economy
is moving away from material elements to an economy driven by knowledge and
ideas. There are tremendous pressures and challenges that workers have to face
in terms of generating knowledge and transferring it.
12.3.2 Nature and Scope of Knowledge Management
The successful conduct of any operation typically depends upon acquisition of
knowledge by personnel responsible for its execution and the expertise that they
possess to take it to its logical conclusion. Further, whatever is learnt in the
process can be captured, communicated and shared with others to enable
subsequent practitioners to build on earlier experience. In all successful modem
organizations the most valuable knowledge - knowhow in terms of what can be
done to achieve success and produce results - often resides in people's minds.
58
Thus, interactive knowledge-sharing mechanism that enables individuals to share
what they know with others is a key element that determines the success of any
venture .
Emerging Concepts of .
Management
.Knowledge is a fluid mix of experience, values, contextual information, expert
insight and grounded intuition that provides an environment and frame work for
evaluating and incorporating new experiences and information. It originates in
the minds of 'knowers' . Renowned authors Davenport and Prusak, in 1998 stated
that in organizations, kowledge often becomes embedded not only in documents
or repositories, but also in organisational routines, processes, practices and norms.
Therefore, knowledge management can be defined as a process that.enhances an
organisation's ability to take effective action by proper management of knowledge.
Knowledge Management to be effective has to rely on three essential elements,
Knowledge creation.. Knowledge sharing and Knowledge application. It
encompasses management strategies, methods, and technology for leveraging
intellectual capital and know-how to enhance productivity and competiiiveness.
To be effective Knowledge Management requires technology, business strategy,
and people. It also refers to focused approach of an organisation to accumulate,
acquire, develop and utilise knowledge. Therefore, an organisation, ifit aims to
acquire and retain a competitive edge, has to lay stress on skills, competencies,
innovation and creativity. The rate of learning and application has to be more
than that of the change in its business environment.
A higher educational institution often faces a dilemma about the role of its faculty.
Teaching and research are the two areas which require special expertise and skin
sets. The dilemma is, should a faculty member concentrate on teaching skills or
should he be a researcher? In the modern era he requires to develop expertise in
both. In short instead of being just a teacher or a researcher a faculty member has
to be a knowledge worker. Only, then can he claim to be contributing to the
process of knowledge management and to the bank of intellectual capital of an
educational organization.
12.3.3 What is Intellectual Capital?
Intellectual Capital of an organization is a product of the interaction of its human
capital and knowledge management. At the macro level it could be said that it
denotes its holistic capacity and capability to meet challenges and exploit
opportunities present in its business environment. It is directly related to an
organisation's current growth and performance, and 'its potential to grow and
perform in the future. Of course, the knowledge resources and the appreciating
human capital have a direct bearing on it. Thus, intellectual capital of an
organization is the outcome of its ability to create value through innovative
products and services and by incorporating improvements to the existing ones.
Both human capital and knowledge repositories of an organization mutually
augment each other and together these enhance the competency levels and potency
. of its intellectual capital. And the intellectual capital thereafter, sets off a chain
reaction to attract human capital and also adds to the process of knowledge
management. All these are affected by and have the capability to influence the
business environment. Diagrammatically the dynamics involving the Human
Capital (HC), Knowledge management (KM) and the intellectual capital (IC) of
an organization and the impact on these of the business environment and the
reverse of that could be depicted as shown in Figure 12.1.
59
Contemporary Aspects on
Institutional Management
Business Environment
B
B
U
U
S
I
S
I
N
E
5
S
N
HUMAN
KNOWLEDGE
CAPITAL
MANGEMENT
E
E
S
S
E
N
N
V
V
I
I
R
R
o
o
N
N
M
E
M
E
N
N
T
T
Business Environment
Fig.121: Dynamics of Intellectual capital, Human capital, Knowledge management and
Business environment
A healthy interaction amongst these in an organization enhances the learning
capability of an organization. Rather, a learning organization makes a deliberate
effort to ensure the development of its intellectual capital and to have processes
in place to also learn from its environment, own performance, human capital
and processes. Further, the environment gets affected by the performance and
achievements of an organization.
12.3.4 Learning Organisation
Organisational learning is a process that a..Tl orga: .ization builds based on its
environment to enhance its knowledge management process to further improve
its adaptation and competitiveness. It involves continuous adjustments and
changes in the manner in which it utilizes and enriches its organisational
knowledge resources in an effort to adapt to its external and internal environmental
changes. Organisational learning helps an organization in maintaining its
competitive advantage. It is dependent on various factors as described below: -
60
•
Discovering and Obtaining Feedback: It is essential for an organization
to build a discovering system that helps it to monitor and discover changes,
problems, challenges and opportunities in its external and internal
environments. Sensitivity to environmental changes would help in its learning
process and to come up with new ideas or to refine existing ones.
•
Innovating: In addition to discovering an organization must innovate and
fine new ways to deal with changes. It can build upon its core competencies
and develop new products and services only through innovation. Focus and
improvement in management processes and systems are critical in this
direction.
•
Selecting: An organization must devise its own selecting system that enables
it to make the right choice from various innovative ideas. After all not every
innovative idea may be in congruence with the objectives of an organization.
Sound selecting methodologies, processes and activities would help in the
decision making process of the organization.
•
Executing: Organisation learning is incomplete if it has only 'discovering',
'innovating' and 'selecting' but no action. It can be enhanced only if newly
selected ideas can be executed and put in to practice effectively. It may involve
not only changes in perception but also changes in behavior. The trick is to
learn how to quickly get things done and how to turn knowledge in to action.
•
Transferring: Individual learning needs to be transferred to team learning
and organizational learning by sharing ideas, practices, and experiences.
Instead of being local and driven by goals and concerns of individuals and
groups the learning process should serve organizational goals.
•
Reflecting and Adopting: The purpose is to help the organization to learn
from its past experience. It does not matter whether the experience was
successful or not. The most important thing is that the organization can use
this formal reflecting to get knowledge and lessons from experience. In
addition, an organization can benefit by borrowing and adopting best practices
from other organizations.
•
Acquiring knowledge from Environment: An organisation must adopt an
open system to survive wherein there is a continuous exchange of information
and knowledge from its environment. The acquiring system is crucial for an
organization to learn faster and build competitive advantage.
•
Contributing Knowledge to Environment: As mentioned above there
should be continuous exchange of information and knowledge between
organization and its environment. It has to be a two way process. Apart from
enriching the environment from where fresh ideas could flow in, it also helps
in the brand building process of the organisation.
•
Building Organizational Memory: It is the ability to capture, store and
retrieve knowledge and expertise. Ability to build on past successes and to
avoid repeating failures is an attribute of organizational memory. Creating
knowledge banks and incubation centres are examples of this.
I
Emerging Concepts of
Management
INNOVATION
DISCOVERINGI
FEEDBACK
ACQUIRING KNOWLEDGE FROM
ENVIRONMENT
SELECTING
-.
CONTRIBUTING KNOWLEDGE
TO ENVIRONMENT
EXECUTING
EXPLOITING &
EXPLORING
)
•••••• n •••••••••••••••••••••••••••••••••••••••••••
" •••••••••••••••••••••••••
n ••••••••••••••
Fig 12.2: Concept of Organisational Learning
" •••••••
"' •••••••••
61
Contemporary Aspects on
Institutional Management
In today's complex and dynamic environment, organizational learning capability
is vital to organizational performance and sustainable competitive advantage.
Consequently, higher levels of the capacity of factors described above would
result in higher levels of organizational performance and competitive advantage.
These would therefore enhance the capability of an organization in 'knowing
and doing', 'exploiting and exploring', 'taking and giving' and in 'ethical
practices' .A diagrammatic representation of a learning organization is as depicted
in Figure 12.2.
12.3.5 Knowledge Management and Institutions of Higher
Learning
The present era of knowledge economy where multi-disciplinary approach
dominates all walks of life knowledge management assumes significance in
institutions of higher learning. An institution of higher learning has to pay attention
not only to teaching but also to research so that aspects related to knowledge
creation are not ignored. The approach should be to teach students 'how to think'
rather than 'what to think' . Further knowledge sharing should not only be limited
. to classroom teaching but should form part of all the operations of the institution.
It should flow from teacher to mentor, teacher to teacher, one department to
another, and from one institution to another. Rather, there should be no boundaries
for information sharing and dissemination. The institution should also lay
emphasis on learning-centric approach to ensure that students imbibe what is
being taught, are able to critically analyse, and develop the capability to apply
the knowledge they acquire. The institution should endeavour to become a
learning organization where its repository of knowledge - the organizational
memory - is constantly being updated- through the processes of reflecting,
discovering, innovating, selecting and executing. It should have systems to acquire
knowledge from its external and internal environments and also should be ever
ready to share knowledge within and outside its environment. Then only would
it be able to achieve the noble objectivesof exploring and exploiting, knowing
and doing, taking and giving, with an ethical approach and with a sense of
responsibility.
Check Your Progress
Note: a)
Space is given below for writing' your answers.·
b) Check your answers with those given at the end of this Unit.
1) Explain the terms "knowledge" and "knowledge management" .
................................................................................................................
/
62·
2) List the factors that affect organisational learning.
Emerging Concepts of
Management
12.4 TECHNOLOGY AND INNOVATION
MANAGEMENT
The second half of the 20th century ushered in an era of short innovation cycles.
Unlike the innovations like the water power, steam engine, electricity, internal
combustion engine, etc of the 18th and 19th century the innovation cycles in the
second half of the 20th century have been shortening rapidly. The industrial
revolution of the late 20th century based on semi -conductors, fibre optics, software
and genetics is approaching the stage of maturity. It is evident that the innovation
life cycles have shortened from 50-60 years to around 30-40 years. Institutions
of higher learning, at least those with the objective of being counted amongst the
top institutions, have to develop the expertise to manage the rapid technological
developments and innovations. Technology development projects are the
foundations for new products and processes and, therefore, are vital to the
prosperity and growth of an institution of higher learning.
The term 'technology development' implies either creation of either new
knowledge, or new technology, or new processes, or new technical capability or
a new technological platform. These may come about either through fundamental
research or basic or application-oriented research. Projects related to these need
to be properly managed to ensure that these provide attractive returns on the
funds invested in these. Technology development projects need to be handled
carefully and care needs to be taken that the teams working on these are not
bound by traditional management processes but are given a free hand to be
creative. The traditional new-product processes are designed for fairly well defined
and predictable projects whereas technology development projects are by nature
high-risk projects with many unknowns and uncertainties. The high risk and
uncertainties invariably result in incorporation of tight controls' resulting in
sacrificing of creativity. Senior leadership in any organization has to guard against
such tendencies. Rather, the role of senior leadership should be to help create an
environment of innovation and creativity.
12.4.1 Managing Innovations and Technology Development
Projects
Innovations could be of two types; product innovations and process innovations.
Normally these are inter-dependent. However, any innovation or technological
advancement would succeed' only if it is relevant to the industry. Thus,
organizations have to encourage and nurture an innovation driven environment
that leads to products and processes that are beneficial to the society.
63
Contemporary Aspects on
Institutional Management
In his book "Innovation and entrepreneurship", the famous management expert
Peter Drucker lists seven sources of opportunity for innovative organizations as
follows:
•
The unexpected success that makes a company happy.
•
The incongruity between what actually happens and what was supposed to
happen.
•
The inadequacy in an underlying process that is taken for granted.
•
The changes in industry or market structure that catch everyone by surprise.
•
The demographic changes caused by wars, medical improvements and even
superstition.
•
The changes in perception, mood and fashion due to the ups and downs of
the economy.
•
.The changes in awareness caused by new knowledge.
Any organization that encourages creativity and innovation would take up the
challenge, try and see an opportunity and go deeper in to any of the above
contingencies to ,give direction to its research projects. Team members with
creative ideas would invariably reflect on the situations and would tend to decipher
what new can be done to develop a product or process to benefit the mankind.
That is where technology and innovation management comes in. it is all about
nurturing new concepts and introducing these to the market in the most efficient
way.
•
12.4.2 Stages for Commercialisation of an Idea
An idea passes through a number of stages, each difficult from its predecessor,
before it is commercially successful. These stages need to be managed successfully
and adequate funds allocated for each stage.
64
•
Imagining:
The first stage involves imagining .i.e. to sense market
opportunities. Senior leaders in an organisation must possess the instinct
and the capability to spot talented persons in their organizations who have
that penchant to think out of the box and can 'dream'. It is a very nebulous
stage where the chances of pursuing a wrong lead are very high. But any
organization that encourages creativity must be prepared to take that risk.
Moreover, any idea that may not fructify may throw up some other leads
which could be followed successfully.
•
Incubating: It involves nurturing a new idea and technology sufficiently to
help its commercialisation. There may be a requirement to create an
organization for helping in the incubation process where potential
entrepreneurs could visit and assess its efficacy. However, it may not be
possible to manage it by laying down stringent controls and targets. But, a
facilitation process has to be put in place wherein an incubation centre attracts
entrepreneurs and also provides feedback to the organization for product I
improvement.
•
Demonstrating:
Demonstration implies building prototypes that could
display the salient features and cap~bilities of the product. A product before
it is finally accepted for commercial production may go through a number
of models of prototypes based on suggestions of investors and users.
Obviously, it involves financial outlays without any guarantee of return on
the investment. Ajudicious decision making process could help at this stage.
•
Promoting: It involves convincing the potential investors and users to adopt
the innovation. To be successful this stage needs to be backed by sound
logic and a convincing business plan.
•
Sustaining: After a product has been launched in the market it needs to be
sustained through the process of product improvement. It would ensure that
the product or the process has as long a life as possible in the market. It
would also help in generating confidence of the investors in all future products
of the organization.
Emerging Concepts of
Management
The above stages for commercialization of an idea are equally applicable to an
institution of higher learning that is engaged in research. Leading universities in
the world maintain very close contacts with the industry to identify the areas of
research and also to assess the market requirements. Setting up innovation centres
in the institutions goes a long way in promoting research that could finally result
in new products or processes. Incubation centres in institutions also help in
commercialization of the products developed through innovations. Moreover,
such activities help attract funds that the universities and institutions of higher
leaming need so desperately to engage in research.
Check Your Progress
Note: a)
Space is given below for writing your answers.
b) Check your answers with those given at the end ofthis Unit.
3) List the sources of opportunity that an organization may encounter.
4) What are the important stages for commercialization of an idea?
65
Contemporary Aspects on
Institutional Management
12.5 DIVERSITY MANAGEMENT
EDUCATION
AND HIGHER
The shrinking globe, advancements in the means of communication, regional
economic disparities, diminishing gender disparities, human migrations, varying
intellectual capabilities and skill sets, and many other sociological factors are
making today's work place increasingly more diverse. Diversity has different
meaning for different people. It depends upon the nature of their work, cultural
environment and the type of activities their organization is engaged in. Some
people may lay emphasis on gender diversity, while others may feel ethnic and
regional diversity is more relevant whereas there may be others who feel that
work specialization and physical ability are more important as far as diversity is
concerned. Apart from people or the work force, diversity is also applicable to
nature of operations of an organization and also to the types of organizations.
For example, a company may have its R&D facilities in a developed country, its
manufacturing facility in a region where cheap raw material and/or labour is
available and it may have its on-line technical support services outsourced to a
country where skilled manpower is available at lower wages. Similarly, there
could be a government owned organization or a private organization or a joint
venture engaged in the same business.
The education sector also has its own versions of diversity. Co-educational
institutions, institutions having students from different regions or socio-economic
backgrounds. institutions having a mix of domestic and foreign students,
institutions engaged in teaching or in research or in loth, institutions engaged in
imparting er'ucation in specific disciplines or thos having different faculties,
institutions providing educations through the regu ar mode and those dealing
with distance education or a mix of both are all ex, .nples of diversity.
It is felt that increase of diversity of a higher education system should form an
important part of the strategy to meet the student needs. A diversified system
affords better access to students with different backgrounds and capabilities. By
offering varied environments a diversified system would be able to offer different
options to students to study with their peers with similar background. Diversity
also offers different modes of entry in to higher education system and also provides
multiple forms of transfer thereby ensuring social mobility. Modem society needs
an increasing variety of specializations for the skilled manpower and diversity
caters for that. Diversity also serves the political needs of different interest groups
by combining the elite and mass higher education. Further institutional
specialization allows higher education institutions to focus their energy and
attention, thereby ensuring higher levels of effectiveness. Finally, diversity permits
low risk experimentation by offering to the institutions the possibility to explore
innovations created by other institutions. Seniors leaders in educational
institutions today face the challenges thrown up by diversity and need to have
the skills to manage and realize the benefits offered by it.
12.5.1 Factors Affecting Diversity in Higher Education System
<,
66
There are five factors which influence the diversity of a higher education system,
namely the environment, policy intervention, funding, competition and
cooperation and ranking.
•
The Environment: The main conditions that influence the higher education
institution are the student choice, stakeholder influence, the economy, the
local government and history. The variation in these conditions promotes
response from the higher education system and fosters diversity. It provides
prospective students with genuine choices and also affords opportunities to
stake holders such as minority groups, industry and local- government to
have their own different types of institutions.
•
Policy Intervention: It is an obvious fact that policies of the government.
have the most profound effect on systemic diversity. Policy interventions by
the government could establish a binary system of higher education
institutions that guarantees that at least two distinct types of institutions exist
within a higher education system. For example there could be institutions of
higher studies forming part of the university system and the polytechnics
catering to the developments of technical skills in a higher education system.
•
Funding: Providing financial incentives could be a very powerful policy
intervention that could maintain differences between institutions. A funding
policy based on achievements of institutions could promote a healthy
competition and could also usher in the concept of accountability. It could
also differentiate higher education institutions in to research intensive and
teaching only institutions.
•
Competition and Cooperation: A competitive environment, especially when
the availability of funds is limited, could promote systemic diversity. But.
there have also been instances wherein competition has resulted in
convergence because all institutions try to follow the same approach by
emulating those who are performing well.
•
Ranking: A trend that is fast catching up amongst the institutions of higher
learning is ranking of the institutions by various agencies for the benefit of
the stakeholders. Though, not all ranking systems and methodologies may
be reliable and represent the true measure of the standards of an institution.
Ranking may be official and carried out by a government body to rank
institutions based on criteria like research performance or quality etc. It could
be unofficial and promoted by reputed business organizations. The ranking
of institutions exists in most higher education systems thereby categorizing
the institutions based on their ranks. However, there is also a school of thought
that there is no obvious relationship between ranking and institutional
diversity. But it must be conceded that, despite its reliability or otherwise, a
ranking system creates a hierarchy of institutions wherein it becomes
extremely difficult for newer institutions, particularly those trying to be
distinctive and offer a kind of education than that provided by well established
highly ranked institutions, to establish and gain credibility. On the other
hand the hierarchy of institutions created by a ranking system brings in
diversity that satisfies the needs of students with different capabilities.
Emerging Concepts of
Management
Diversity affects almost every aspect of higher education namely access and
equity, pedagogy, student learning, quality of research, academic governance,
social relevance and economy of effort etc. Encouraging diversity helps in
increasing the choices available to students, matching the needs and abilities of
individual students, enabling institutions to have their own character and
67
Contemporary Aspects on
Institutional Management
objectives, and in enabling institutions in responding to socio economic needs.
Finally, it could be said that diversity is an important factor enabling freedom
and autonomy of universities.
Check Your Progress
Note: a)
Space is given below for writing your answers.
b) Check your answers with those given at the end ofthis Unit.
5) Give some examples of diversity in education sector.
6) Which are the factors that affect diversity in an education system?
................................................................................................................
12.6 PERFORMANCE MANAGEMENT
Effectiveness of organizations depends upon their strategic planning, organization
structure, recruitment and retention of staff, effectiveness of internal control,
and a good communication and feedback system. Performance management is
carried out to provide insight in to the strong and weak areas of an employee in
terms of effective performance, style of functioning, traits, qualities, competencies
and impact on others and many other aspects. It also helps in generating data to
serve as a basis for rewards and other personnel decisions. Identification of
development needs of employees could be another objective of performance
management. A good appraisal system could also serve as a basis for performance
linked pay and rewards.
A good performance management system helps in' aligning individual and
organizational vision, goals, objectives and values. It, therefore, has a direct
impact on the culture and ethos of an organization. Team building and leadership
development are considered to be important objectives of an effective performance
management system. At the individual level, it helps in career planning and
development and at the organizational level it s.erves as a good tool for succession
planning, providing role clarity and inculcating a culture of accountability.
68
12.6.1 Performance Management and Higher Education
Institutions
Emerging Concepts of
Management
Performance management as ~ concept has not taken proper roots in higher
education system in India. There have been attempts in recent years to carry out
performance appraisals of faculty and staff in educational institutions but, these
have been rare and mostly have not been very consistent. Moreover, a reliable
performance appraisal system that could stand scrutiny by incorporating various
tangible and intangible factors has not yet developed in higher education
institutions. Some good performance appraisal systems incorporate different
aspects of the role of a teacher like performance in the class, achievements of
students, contribution to organization building at the department and institutional
levels, own qualification enhancement, contribution to research activities, sharing
of administrative responsibilities and introduction of innovation in teaching styles.
In addition, personality traits like team effort, interaction with different stake
holders and social interaction etc also form part of performance appraisal of the
faculty.
Stray attempts have also been made to bring in objectivity in performance
appraisals. Some institutions have developed empirical criteria to assess the
faculty based on the factors outlined above. Reports by superiors and student
feedback are generally the main stay of such performance appraisals. Some
institutions have also introduced performance based compensation systems to
motivate the faculty to give in their best. However, performance management
system as a whole has not made inroads in to the higher education sector and a
deliberate effort needs to be made to usher it in. many new concepts such as
Multi Source Feedback System (360 degree Feedback System) and Balanced
Score Card System have been devised and introduced in the industry. In this
section you would be introduced to Balanced Score Card as applicable to an
institution of higher learning since this is one of the latest innovations in the
field of human resource development.
12.6.2 What Is Balanced Score Card?
The concept of ~alanced Score Card (BSC) was first introduced in 1992 by
• Robert S Kaplan and David P Norton from the Harvard University in their article
'The Balanced Score Card - Measures that Drive Performance' in the Harvard
-Business Review. It is called 'Balanced' because it balances on both the financial
and operational measures. They argues that there are other performance
managemerit systems in place but these suffer from a major drawback that they
do not align the worker's objectives with those of the organization. Kaplan and
Norton propounded four perspectives as the drivers of an organizations's
performance. These are: -
•
Customer
perspective:
It implies
how the customer
perceives
an
organization.
•
Internal perspective: What should an organization excel at?
•
Innovation and learning perspective: Can an organization continue to
improve and create value
•
Financial perspective: What can be done to meet the expectations of the
stake holders?
69
,I
Contemporary Aspects on
Institutional Management
The scorecard endeavours to translate an organisation's strategic objectives into
a set of performance measures. BSC is not only a measurement system; it is a
management system that makes the workers aware of the objectives of the
organization and motivates them to work to achieve those objectives by assigning
measures to different activities and also linking those with the financial objectives.
Instead of focusing on the past performance it concentrates on the future .
. Moreover, it adopts an empirical framework to give measurable targets. The
success of the BSC can be gauged from the fact that almost 50 percent of the
Fortune 1000 companies have adopted this. However, in India the industry has
been slow in adopting this concept.
The process involved in the BSC framework starts with drawing up a Strategy
Map. It passes through four stages (Figure 12.3):
•
Formulating the vision of the organization and translating it in to operational
goals
•
Communicating the vision to the organization and linking it to individual
performance .:
•
Converting it in to a business plan and setting targets.
•
Obtaining feedback and learning and adjusting the strategy accordingly.
Plan the Strategy
..
• Strategy Map/Themes
• Measures/Targets
• Initiative
Develop the Strategy
-
• Mission, Values, Vision
• Strategic Analysis
Portfolios
Align the Organisation
• Institutions
• Support Groups
Strategic Plan
Performance
A
-.-
••
Measures
• Employees-
1
,
A'~~
Plan Operations
",
•••.
..;i.
..
1
• Admission Plan
• Academic Delivery
t
t
Results
Monitor and Learn
-
''P
• Placement Analysis
• Strategy Correlations
• Emerging Strategies
Operating Plan
-
• Key Process Improvement
...
Test and Adapt
• Strategy Map
• Balanced Score Card
-
-
• Strategy Formulation
L
.r
... -
• Reports
• Resource Allocation
~
• Strategy Reviews
• Operating Reviews
• Budget
• Budgeting
t
~ Execution
\
Processes
;;
Initiatives
-
.£L
Results
--)
,-
Fig. 12.3: Balanced Score Card - Process Flow Chart
12.6.~Balanced Scorecard and Higher Education Institutions
Though some renowned universities like Harvard University, University of
.Southern California and the University of Leeds have adopted the Balanced
Scorecard System to great advantage. the education sector has not embraced it
enthusiastically. However, it could go a long way in helping higher echelons in
Emerging Concepts of
Management
not only just monitoring but also managing. At a time when higher education
institutions face financial resources crunch it is imperative that they employ a
management system that combines their objectives with their financial. The
measurement of objectives in higher education is based on both tangible and
intangible parameters, The tangible parameters include variables like faculty/
student numbers, demographics, student pass percentages and dispersion of
scores, absorption of students by industry after graduation, faculty teaching load,
faculty research publications, patents, physical assets etc. The intangible
. parameters include student, faculty and staff expectations and satisfaction levels,
alumni network and industry expectations. Thus, any strategy in a higher education
institution must be based on managing knowledge that creates and deploys an
institution's tangible and intangible assets. The nature of business in an higher
education institution is such that financial perspective instead of being at the top
gets a lower priority. The Strategy Map for a higher education institution could
be developed based on five perspectives as explained below:
•
Learning and Growth Perspective: It should include growth of faculty,
academic infrastructure including IT etc.
•
.Financial Perspective: It should be based on growth of revenue base and
diversifying it and also means of generating additional revenue.
PRODUCT
PERSPECTIVE
Sustained Brand image
CONSTITUENT
PERSPECTIVE
Service Attributes
Admissions
Placement
&
Internships
Relationship
Diverse
Student
Population
Academic
Deliveryse
Additional
Offerings
Image
Alumni,
Parents
Research &.
Development
Brand
Cost
PROCESS PERSPECTIVE
Pedagogical
Processes
.I""'--
Innovation &
Research Process
Regulatory & Social
. Processes
Academic Admin
Processes
F_IN_A_N_C_IA_L_P_E_R_S_P_E_C_T_IV_E
Grow and diversify
Revenue Base Process
-'
.Related Student
Sales
LEARNING AND GROWTH PERSPECTIVE
Existing Faculty
Mentor Faculty
FDP
Academic Infra
•
IT Systems
Fig. 12.4: A Typical Strategy Chart for Academic Institution
71
Contemporary Aspects on
Institutional Management
•
Process Perspective: It is based on pedagogical, research and innovation,
academic administrative and regulatory and social processes.
.
•
Constituent Perspective: It is the equivalent of customer perspective and
includes service attributes, relations ships and image.
•
Product Perspective: Product of any educational institution is its graduates
from where an institution derives its image.
It is a approach from bottom to top wherein the Learning and Growth perspective
deals with the faculty, its development and also the infrastructure required for
the organizational growth. Getting the financial support for the organization is
the next step. That is defined in the Financial Perspective. Thereafter, the processes
that would help in attaining the organizational objectives need to be identified in
the Process Perspective. The effect of the perspectives already defined on the
constituents need to be considered next and thus Constituent Perspective is
formulated. All the above perspectives lead to the Product Perspective. It implies
the quality of the students and how various stake holders perceive the product. .
Based on the above perspectives a Strategy Map as shown at Figure 12.4 can be
drawn.
The strategy map shown helps in arriving at the objectives based on various
perspectives. Thereafter, measures need to be assigned to each objective so that
an empirical assessment can be carried out.
An interesting aspect of BSC is that it is convenient and easy to comprehend,
relates to all levels of hierarchy, and is an easy to understand approach for
performance measurement, review and evaluation. It is an ideal mechanism to
communicate strategy and strategic objectives to all levels of management.
Check Your Progress
Note: a)
Space is given below for writing your answers.
b) Check your answers with those gfven at the end of this Unit.
7)' Name the four perspectives propounded by Kaplanand
affect the performance of an organization.
Norton that
8) List the four stages for drawing up a Balanced Score Card strategy map .
.................
72
;
.
Emerging Concepts of
Management
12.6 SUMMARY
A significant feature of Knowledge Economy is that unlike the conventional
economy the more we use the resources available the more they grow. Therefore,
the emphasis is on Intellectual Capital the basic resour-ce of knowledge economy.
Knowledge management 'therefore is assuming ever increasing importance in
the present era. The environment today is characterized by technology
development and only those organizations can hope to prosper that have the will
and the capability to manage technology and innovation. Creating suitable
organizations to manage this aspect would go a long way in helping its proper
management. The globe is shrinking and mass migration of population in search
of employment highlights the importance of management of diversity. In addition
the varieties of organizations with their own distinctive roles add another
dimension to diversity demanding skills from mana~ers to manage it. The present
day environment is very competitive and complex and demands a performance
management system that not only builds in accountability but also rewards
performance and aligns the objectives of the workers with those of the
organization. Balanced Score Card has emerged as an effective management
tool for performance management and can be gainfully employed in a higher
education institution.
12.7 UNIT END ACTIVITIES
1) Prepare a knowledge management plan for your institution.
2)
Assign some projects to your students. Select an innovative idea from amongst
those and prepare a road map for its incubation and commercialization.
3)
Prepare a Balanced Score Card strategy map fOfYOUinstitution and assign
objectives and targets to key functionaries.
12.8 REFRENCES
1) Davenport T and Prusak L, Working Knowledge: How Organizations Manage
What They Know. Harvard Business School Press, 1998
2)
Armstrong Michael: Performance Management. Kogan Page, 200&..
3)
Kaplan RS and Norton DP: Using the Balanced Score Card as a Strategic
Management System. Harvard Business Review, January-February 1996.
4)
Managing Diversity: Harvard Business School.Press, 2007
5)
Raman AT: Knowledge Management. Excel New Delhi, 2007.
6)
Tidd, JQ~,Bessent, John and Pavit Keith: Managing Innovation, John Wiley,
New Delhi, 2008
'~
12.9 ANSWERS TO CHECK YOUR PROGRESS
1) Knowledge is the fact or condition of knowin.~ something with familiarity
gained through experience or association. The process of knowing includes
both awareness and judgment. It implies that knowledge is associated with
cognition, and cognition implies awareness. Knowledge is a fluid mix of
experience, values, contextual information, expert insight and grounded
73
Contemporary Aspects on
Institutional Management
intuition that provides an environment and frame work for evaluating and
incorporating new experiences and information.
Knowledge management can be defined as a process that enhances an
organisation's ability to take effective action by proper management of
knowledge. Knowledge Management to be effective has to rely on three
essential elements, Knowledge creation, Knowledge sharing and Knowledge
application.
2) Factors affecting organizational learning are: Discovering and Obtaining
Feedback; Innovating; Selecting right innovative ideas; Executing;
Transferring individual learning needs to team needs; Reflecting and Adopting
-learning from past experience; Acquiring knowledge from environment;
contributing knowledge to environment; Building organizational memory.
3) The seven sources for opportunity for innovative organization are: The
- unexpected success that makes a company happy; the incongruity between
what actually happens and what was supposed to happen; the inadequacy in
an underlying process that is taken for granted; the changes in industry or
market structure that catch everyone by surprise; the demographic changes
caused by wars, medical improvements and even superstition; the changes
in perception, mood and fashion due to the ups and downs of the economy;
and the changes in awareness caused by new knowledge.
4) Stages for commercialization
of an idea are: Imagining - it involves
identifying market opportunities; Incubating - it involves nurturing a new
idea and technology sufficiently to help its commercialization; Demonstrating
- it implies building prototypes that could display the salient features and
capabilities of the product; Promoting - it involves convincing the potential
investors and users to adopt the innovation; and Sustaining - it means that
after a product has been launched in the market it needs to be sustained
through the process of product improvement.
5) Some of the versions of diversity in the education sector are - - Co-educational
institutions, institutions having students from different regions or socioeconomic backgrounds, institutions having a mix of domestic and foreign
students, institutions engaged in teaching or in research or in both, institutions
engaged in imparting education in specific disciplines or those having
different faculties, institutions providing educations through the regular mode
and those dealing with distance education or a mix of both are all examples
of diversity.
6) Factors affecting diversity in education sector are: The Environment - the
main conditions that influence the higher education institution are the student
choice, stakeholder influence, the economy, the local government and history;
Policy Intervention, implying that policies of the government have the most
profound effect on systemic diversity; Funding meaning whether aid{d or
unaided institutions or government owned institutions; Competition and
Cooperation - a competitive environment, especially when the availability
of funds is limited, could promote systemic diversity; Ranking - a ranking
system creates a hierarchy of institutions.
74
7) Four perspectives that act as drivers of an organisation's performance are:
Customer perspective implying how the customer perceives an organization;
Internal perspective - asking what should an organization excel at; Innovation
and learning perspective - checking if an organization can continue to
improve and create value; and Financial perspective analyzing what can be
done to meet the expectations of the stake holders.
Emerging Concepts of
Management
8) The four stages of drawing up a strategy map for a Balanced Score Card are:
Formulating the vision of the organization and translating it in to operational
goals; Communicating the vision to the organization and linking it to
individual performance; Converting it in to a business plan and setting targets;
Obtaining feedback and learning and adjusting the strategy accordingly.
75