Edward Deming’s (1994) System of Profound Knowledge describes in order to transform an individual in aim of the system; the transformation requires an outside view.  An outside view consists of four major theories: appreciation for the system, knowledge about variation, theory of knowledge, and psychology.  These four major theories are what enable profound knowledge to act as one unified body.  These four major theories are related and interact with each other and cannot be separated when transforming the individual.  Each theory relies on each other, thus unifying the body of profound knowledge.

Knowledge of psychology is deficient without knowledge of variation.  Variation includes people, output, services, and product, which have stable and unstable states (Deming, 1994).  However, the management of people helps understand the psychological stable and unstable states of people, output, services, and product.  The management of people, since people are different, helps distinguish the difference between the two states of uncertainty, stable and unstable.  Thus, according to Edward Deming (1994) “people must be aware of the differences, and use them for optimization of everybody’s abilities and inclinations” (p. 108).  In addition, “Confusion between the two states leads to calamity” (p. 100).  To prevent calamity between the two states, managers must acquire knowledge about the different sources of uncertainty between stable and unstable states.

Knowledge of variation is incomplete without theory of knowledge.  Use of data requires prediction of the stable and unstable states of variation.  Prediction requires theory, which builds knowledge through observation of the data, thus a need to manage prediction.  Edward Deming (1994) states that management is prediction and “the theory of knowledge helps us to understand that management in any form is prediction” (p. 101).  Prediction of future outcome relies on knowledge since future outcome contains variation.  Management of variation, stable or unstable, without theory of knowledge, has no questions to ask, no learning is established, and no prediction of future outcomes exist (Deming, 1994).  “Experience and examples teach nothing without theory.  There is no knowledge without theory.  Planning requires prediction.  There is no knowledge without prediction” (Neave, 1990, p. 307).  Therefore, variation relies on the theory of knowledge in order to manage prediction of future outcomes in aim of the system.

Theory of knowledge of is incomplete without appreciation for a system.  Appreciation for a system is one of the most important parts of understanding the system of profound knowledge.  “A system must have an aim” (Deming, 1994).  People must work together in order accomplish this aim for future sustainability.  Therefore, as Edward Deming (1994) tells us “management of a system therefore requires knowledge of the interrelationships between all the components within the system and of the people that work in it” (p. 50).  Furthermore, Edward Deming (1994), states that future sustainability of the system requires lifelong learning “preparation for the future includes lifelong learning for employees” (p. 131).  Employees include leaders and managers who can use knowledge to transform an organization in accomplishment of a systems aim.  The systems aim requires a psychological understanding of people, processes, output, services, and product that clarifies values and delivers results.

Appreciation of a system is incomplete without understanding psychology.  Psychology helps us understand the behaviors of the “interrelationships between all the components within the system and the people that work in it” (Deming, 1994).  As Edward Deming (1994) tells us, “people are different from one another.  A manager of people must be aware of these differences, and use them for optimization of everybody’s abilities and inclinations” (p. 108).  People are part of the system, thus, “extrinsic motivation helps to build self-esteem” (Deming, 1994); however surrendering to extrinsic motivation can destroy an individual, which leads to over justification. People have a need to belong, where monetary reward towards people’s center of concern is meaningless and adds discouragement to the system.  A psychological understanding of the system, thus removing personal over justification would indicate, “appreciation to someone may mean far more to him than monetary reward” (Deming, 1994), thus reducing unstable variation.

It is important to understand how Edward Deming’s Theory of Profound Knowledge must synthesize the four major theories of which it is comprised…appreciation for a system, knowledge about variation, theory of knowledge, and psychology.  This related combination of the four major theories allows profound knowledge to act as one unified body.  This unity proves that any one theory is incomplete without the other.  Each theory cannot be separated for it enables a transformed leader to have a greater understanding of a stable system and special causes, and common causes of variation, which is needed to manage a system and its people.  Furthermore, a stable system requires innovative knowledge from commitment of lifelong learning without inducing extrinsic motivation, which could over justify and destroy the system, and transformation of the organization.

References

Deming, E. W. (1994). The New Economics for Industry, Government, Education.

Cambridge, Massachusetts: Massachusetts Institute of Technology.

Neave, H. R. (1990).  Deming ‘88’.  Part 3: The 14 Points Revisited (Points 8-14).

     Total Quality Management, 1 (3), 293 – 308.

Supporting and organizations overall strategy can be viewed differently by many people within the organization.  Therefore, it is the company’s responsibility through leadership to integrate the leadership of people in support of an organization’s strategy.  There are many perspectives that relate to this responsibility.  The four perspectives that will be discussed are diversity, conflict, relationships, and meaningfulness of work.  Organizational leaders must understand each of these perspectives in order to integrate the leadership of people in aim of an organizations overall strategy.  This paper will examine each of these perspectives in forming a concluding argument as to why all four perspectives must be integrated to lead people in aim of supporting an organizations overall strategy.

The perspective of diversity must be understood when leading people in support of an organizations strategy.  In diverse organizations, leaders must focus on people’s passions, provoke multiple cultures, promote creativity and innovation, and change relationships for the better.  Leaders must understand the passions of their organizational members as these passions lead to the tasks that have greater meaning for them.  Thomas (2002) explains, “In any organization, this diversity of passion means that it is important to match individuals with the task that have meaning for them” (p. 53).  Therefore, knowing the passions of organizational members allows the leader to match these passions with the process task.  Matching these tasks will require a leaders understanding of provoking multiple cultures.

Leaders must provoke multiple cultures in order to gain new perspectives for the organization.  Conflicting counter cultures in the organization is required to provoke new perspectives by rotating people between different functions and business units (Stacey, 1993).  Rotating people between different functions and business units creates “cultural diversity as opposed to the current practice of using rotation to build a cadre of managers with the same management philosophy” (Stacey, 1993, p. 16).  Creating cultural diversity by rotating between different functions and business units promotes creativity and innovation.

Diverse organizations promote creativity and innovation.  Organizations must rely on diversity in order to adapt to change.  Adapting to change leads to innovation, thus preventing a system from becoming too homogenous.  Wheatley (2001) explains, “Where there is true diversity in an organization, innovative solutions are being created all the time, just because different people do things differently.  – If, as leaders, we fail to encourage unique and diverse ways of doing things, we destroy the entire system’s capacity to adapt” (p. 2).  Therefore, creativity and innovation relies on the system’s capacity to adapt and change, thus creating a unity, which changes organizational relationships for the better.

The organizations strategy to support diversity improves relationships for the better.  Understanding diverse interpretations of the organization helps leadership lead people in support of an organizations strategy by seeing the different perceptions, which originate from each members center of influence.  Wheatley (2001) explains, “As we become aware of this unity in diversity, it changes our relationships for the better.  – Then, magical things happen to our relationships.  We open to each other as colleagues.  Past hurts and negative histories get left behind.  People step forward to work together” (p. 3).  As people step forward and work together in support of their mutual interest, conflict can arise.

Leaders in support of an organizations strategy must understand conflict management in order to emerge an organization from chaos.  In further integrating the four perspectives, leaders must also lead through conflict, which requires the leader to be a mediator, thus turning conflict into a positive force by use of the mediator’s tools to create order out of chaos.  According to Gerzon (2006), “Leading through conflict involves facing differences honestly and creatively, understanding their full complexity and scope, and enabling those involved to move toward original solutions.  Such leadership requires going beyond the powerful, primordial responses to difference that result in an us versus them mentality” (p. 4).  Going beyond such responses requires the leader to become a mediator in order to turn conflict into a positive force, thus further supporting an organizations strategy.

The leadership of people requires the organizational leader to become a mediator and turn conflict into a positive force.  Turning conflict into a positive force achieves a larger purpose by bringing “the appropriate people together in constructive ways with reliable information” (Gerzon, 2006, p. 50), thus forming a collaborative principle.  A collaborative principle transforms “conflict from a force that can be destructive and diverse into one that is healing and connecting” (Gerzon, 2006, p. 50).  Turning conflict into a positive force that is healing and connecting will rely on the eight tools of the mediator.

Turning organizational conflict into a positive force will rely on the eight tools of the mediator.  The eight tools, which the mediator must rely upon, are; (a) integral vision, (b) systems thinking, (c) presence, (d) inquiry, (e) conscious conversation, (f) dialogue, (g) bridging, and (h) innovation.  Integral vision is necessary in completing the whole and separates dividing lines within the organization.  “Integral vision prevents us from turning any of these lines into walls, and makes us aware of the webs that connect us” (Gerzon, 2006, p. 52).  Understanding the whole and the webs that connect us leads to systems thinking.

Systems’ thinking places a clear understanding on the “whole” conflict, thus allowing the organization to identify all the elements related to any conflict situation.  Identifying all the elements related to any conflict situation requires presence.  Presence transforms conflict by illustrating to organizational members, that it is not the mind that only transforms conflict, it requires the whole being as well.  According to Gerzon (2006), “Presence means that our entire selves are engaged, not just the disembodied thinker.  — It is bringing our full being into the present moment of any leadership challenge we may face” (p. 54).  Being present also requires leaders to ask questions, thus the mediators tools of inquiry, conversation, and dialogue further transform conflict in support of an organizations strategy.

Inquiry, conversation, and dialogue are additional tools the mediator must use in his or her strategy to conquer conflict with aim of leading people in support of an organizations strategy.  Without inquiry there are no questions, and without questions “No one can fully understand complex systems, or challenging conflicts, without asking questions” (Gerzon, 2006, p. 54).  Questions lead to conversations, thus having conscious conversations with organizational members leads to choice.  It is the challenge of the mediator to create an environment, which allows freedom of choice based on how members speak and listen.  It is also the responsibility of the leader to allow dialogue to form from member choices.  Dialogue allows deeper conversations about the choices members make, thus forming new organizational interest and options.  The joining of interest and options relies on the additional mediator tools of bridging and innovation.

Bridging and innovation are the final two mediator tools the mediator must understand and use in order to lead people in support of the organizations strategy.  Bridging connects the member groups of an organization whom want to do something together, however cannot due to conflict.  Organizational leaders must build a bridge between separate organizational divisions in order to lead through the conflict that has separated them.  “To move through conflict, they must change their behavior toward each other or their way of dealing with conflict” (Gerzon, 2006, p. 57).  Changes in organizational behavior builds the bridges necessary to resolve future conflict, innovates the organization in achieving what is imaginable, brings hope to all members of the organization, thus emerging the organization from chaos.  Conquering conflict forms the relationships needed to lead people in the right direction.

Organizational relationships help lead people in the right direction.  Organizational relationships require leaders to be a contributor to its members, use coaching to realize a value added purpose, have strong personal mastery skills, and practice organizational learning disciplines to lead people in support of an organizations overall strategy.  Being a contributor helps leaders produce a shift from a center of self-concern to a center of influence.  According to Zander & Zander (2002), “Naming oneself and others as a contribution produces a shift away from self-concern and engages us in a relationship with others that is an arena for making a difference” (p. 63).  Furthermore, leaders must understand that being a contribution inclines that all people are a gift to others.  However, understanding this gift of being a contribution relies on the leader coaching his/her members towards a value added purpose.

The leadership of people relies on coaching organizational members to realize a value-added purpose.  The coaching of organizational members is a process of continued learning, which builds “on mutual commitment, as opposed to expectation to inspire honesty and risk taking” (Santin, 2010, p. 1).  In addition, coaching serves the short and long-term goals of an organization by drawing talent from internal resources, thus creating “a solid strategy that bolsters retention rates and the attractiveness of the organization to potential talent” (Santin, 2010, p. 2).  Retaining such talent requires the leader to perfect his/her personal mastery skills in order to build stronger leader-employee relationships.

Integrating the leadership of people in support of an organizations strategy also requires the leader’s personal mastery skills, which builds strong leader-employee relationships.  Leaders must possess the ability to develop meaningful relationships with all members of the organization, as these relationships help retain talented employees, thus reducing the cost of training and development for the organization.  Santin (2010) explains, “Strong manager-employee relationships can lead to ensuring employees are fully and effectively utilized and the resultant reductions in turnover, which equal improved retention.  –Through increased retention and the ability to attract the very best candidates, learning curves and the associated cost of training and development can also be dramatically reduced” (p. 1).  As you can see, a leader’s personal mastery skill, delivers a sense of return on investment for the organization by retaining the organizational talent from within the firm.  Further retention of organizational talent will require the practice of organizational learning disciplines.

Leaders must enforce organizational learning disciplines in order to sustain member commitment to learning from within.  Learning disciplines require three practices; (a) systems thinking, (b) shared vision, and (c) team learning.  The practice of systems thinking disciplines organizational members to think in terms of the whole.  Santin (2010) explains, “The technology of systems thinking provides us with a language that can help us to see connectedness and relationship in all of our experience” (p. 1).  Moreover, the experience of organizational relationships inspires personal visions and collaboration with others, thus forming a shared vision.

The learning discipline of shared vision “emerges from personal vision and collaboration with others” (Santin, 2010, p. 2).  However, the shared vision will not be successful unless the leader believes in the shared vision.  In process of the organizations future, the learning discipline of shared vision must focus on “the what of it, purpose is the why of it and values inform the how of it.  Together, these three governing ideas lead the organization to answer the question what do we believe in” (Santin, 2010, p. 2).  Once a shared vision is formed, the learning discipline of team learning further enhances a shared vision by producing a new synergy of knowledge, thus developing an organization’s strategy even further.  According to Santin (2010), “When a team is truly learning, the group as a whole becomes much more than just the sum of its parts” (p. 2).  When organizational groups become much more than the sum of its parts, a greater meaning for the work is formed.

Leading people with a greater sense of meaning supports an organizations overall strategy.  In order to gain a greater sense of meaning in support of an organizations strategy, leaders must promote self-management of its members, thus organizational members gain the intrinsic rewards.  These intrinsic rewards lead to meaningfulness of work.  In order to synergize the whole commitment of the organization, vision is important, however without meaning for the work performed; the organization could not accomplish its aim…what the company believes in.  In order to obtain meaning of work, four intrinsic rewards must be understood in leading people to self-manage.

The four intrinsic rewards, which lead to self-management, are (a) a sense of meaningfulness, (b) a sense of choice, (c) a sense of competence, and (d) a sense of progress.  These four rewards provide organizational members to feel a sense of accomplishment.  A sense of meaningfulness implies…is the work you do based on choice worthy of the task purpose?  A sense of choice allows members to feel the task they select makes sense to them and to perform the task in ways that seem appropriate.  “The feeling of choice is the feeling of being free to choose—of being able to use your own judgment and act out of your own understanding of the task” (Thomas, 2002, p. 44).  Being free to choose provides a sense of competence, which “is the accomplishment you feel in skillfully performing the task activities you have chosen” (Thomas, 2002, p. 44).  In addition, a sense of progress “is the accomplishment you feel in achieving the task purpose” (Thomas, 2002, p. 44).  The four intrinsic rewards mentioned lead to meaningfulness of work; however, the organizational leader must first build a sense of meaningfulness in the organization.

Building a sense of meaningfulness in the organization requires the leader to lead for meaningfulness.  Leading for meaningfulness will require five building blocks, which are (a) building a non-cynical climate, (b) clearly identifying passions, (c) providing an exciting vision, (d) ensuring relevant task purposes, and (e) providing whole task.  Building a non-cynical climate requires members to be energized about the meaningful purpose.  Thus, leaders must suppress cynical comments aimed at embarrassing people and encourage “group norms that encourage idealism and passion” (Thomas, 2002, p. 54).

Leading for meaningfulness allows members to identify their passions.  Identifying the passions of organizational members motivates members toward a greater meaning.  According to Thomas (2002), “Once the team understands the contents of its passions, it can pursue meaningfulness in a more systemic way” (p. 55).  A systemic way of pursuing meaningfulness will drive the organization toward a more exiting vision, thus adding greater purpose for the team.

Providing an exciting vision is a meaningfulness building block, which promotes exiting possibilities and captures the team’s imagination (Thomas, 2002).  All organizational members want a future with their company, thus providing an exciting vision will motivate members of the team to create it.  In order to create this vision, leaders must state the vision, thus backing it up with all integrity in its pursuit.  Once the vision is stated, ensuring relevant task purposes and providing whole task will be the next meaningfulness building blocks to focus on.

Ensuring relevant task purposes guarantees that not all task, which are focused on the exciting vision are pointless.  It is important for the leader to realize in leading people in support of an organizations strategy that each member’s daily task contributes to the vision.  Thomas (2002) explains, “To energize one’s work, it is important that these day-to-day tasks clearly contribute to the vision” (p. 57).  It is also important to understand that the day-to-day task must have a form of identity, thus the final meaningfulness building block of providing whole task provides a more identifiable piece of work to organizational members.  Providing whole task allows members “Completion of a whole and identifiable piece of work” (Thomas, 2002, p. 58), thus providing organizational members greater meaning of accomplishing the whole versus seeing just the day-to-day task.  Overall, leaders who apply all five meaningfulness building blocks in leading people in support of an organizations strategy creates a culture that sustains talented human capital.

The four perspectives that lead people in support of an organizations strategy are diversity, conflict, relationships, and meaningfulness of work.  These four perspectives must be integrated to lead people in aim of supporting an organizations overall strategy.  The perspective of diversity illustrates an understanding of people’s passions, how leaders must provoke multiple cultures, promote creativity and innovation, and how to change relationships for the better.  As diversity blooms in the organization, creating conflict, leaders must lead through the conflict by becoming a mediator, thus turning conflict into a positive force.  Turning conflict into a positive force will require the leader to use the eight tools for the leader as mediator, thus building trust by seeking innovation.  Building trust and innovating relies on the organizational relationships, which lead members in the right direction.  Leading members in the right direction requires the leader to be a contribution, a coach, focus on personal mastery of self and others, and practice organizational learning disciplines, which produces a shift from a center of concern to a center of influence, thus adding value added purpose to the organization.  A value added purpose leads to a greater sense of meaning for all organizational members.  In addition, leading with a greater sense of meaning further develops the organization by allowing members to self-manage processes, which leads to the intrinsic rewards of choice, competence, meaningfulness, and progress.  Furthermore, sustaining a sense of meaningfulness will require the leader to practice the five building blocks of meaningfulness, which are (a) building a non-cynical climate, (b) clearly identifying passions, (c) providing an exciting vision, (d) ensuring relevant task purposes, and (e) providing whole task.  Finally, each of the four perspectives discussed in this paper will need to be practiced and embraced by the company and its organizational members in support of an organizations strategy.

References

Gerzon, M.  (2006). Leading through conflict. Boston, MA:  Harvard Business School Press.

Santin, Claudia. (2010). Personal Mastery and Leadership [Word document]. Retrieved from Week 4 Lecture Notes Online Web site: http://sjcmeol.angellearning.com/default.asp

Santin, Claudia. (2010). Personal Mastery and Leadership [Word document]. Retrieved from Week 5 Lecture Notes Online Web site: http://sjcmeol.angellearning.com/default.asp

Santin, Claudia. (2010). Coaching and Leadership [Word document]. Retrieved from Week 6 Lecture Notes Online Web site: http://sjcmeol.angellearning.com/default.asp

Stacey, Ralph. (1993). Strategy as order emerging from chaos. Long Range Planning, 26(1), 10-17.

Thomas, K. W.  (2002).  Intrinsic motivation at work:  Building energy and commitment. San Francisco:  Berrett-Koehler Publishers, Inc.

Wheatley, M. J. (2001, Spring). Innovation means relying on everyone’s creativity. Leader to Leader, 20 14-20.

Zander, R. S. &  Zander, B.  (2002). The art of possibility. New York, NY: Penguin Books.

COPIES OF THIS INFORMATION IS PROHIBITED WITHOUT WRITTEN PERMISSION FROM THE AUTHOR JIM BOYER!!

Organizational relationships over time have changed dramatically.  Organizational relationships keep the motivational gears turning in aim of a company’s overall strategy.  However, the alchemist leader being the conductor of organizational relationships must understand that relationships are based on culture, meaning, and challenges.  More important, the alchemist leader must possess certain characteristics, competencies, and skills to support a company’s relationship strategy.  In addition, the organization and its people must also support the development of the alchemist leader, thus producing an organizational synergy of transformation.  This paper will examine the relationship between the alchemist leader regarding culture, meaning, and challenge and examine what characteristics, competencies, and skills the alchemist leader will need.  Furthermore, the paper will address how the alchemist leader’s development and creativity is supported, in aim of innovatively transforming the organization.

The relationship among motivation in organizations produces a sense of competence and progress.  A sense of competence and progress comes by allowing workers more choice and participation.  Thus, according to Thomas (2002), “Workers are now asked to be proactive problem solvers.  They must make adjustments, coordinate with other organizational players, innovate, and initiate change” (p. 4).  Choice and participation of workers leads to progress through “feelings of accomplishment related to the performance of activities and attainment of the purpose” (Thomas, 2002, p. 44), thus intrinsically allowing workers to self-manage.  Motivation, in form of self-management, leads to discovering the relationship among the culture-meaning-challenge dynamic.

The relationship among the culture-meaning-challenge dynamic produces a greater sense of organizational meaning.  Organizations must align all three (culture, meaning, and challenge) in the relationship in order to obtain a greater meaning for the organization.  Organizational culture creates a climate of trust by understanding that “collaboration is a social imperative” and “At the heart of collaboration is trust” (Kouzes and Posner, 2003, p. 6).  Trust leads to a greater meaning, thus “When a task is not meaningful to you, in contrast, you have little emotional investment in it” (Thomas, 2002, p. 51).  A greater emotional investment will make it easier for the leader to conquer challenges.  Kouzes and Posner (2003) explain, “To create a climate that fosters the development of leaders, we not only need to set an example and make the challenge meaningful, we also have to promote psychological hardiness” (p. 5).  Psychological hardiness of organizational members is vital in actualizing the potential of organizations by forming a climate that supports progress.

The relationship among the actualizing of potential in organizations starts by building a climate that supports progress within the organization.  A climate that supports progress must employ the psychological hardiness of its members, thus allowing focus on the task purpose.  This focus, along with clear objectives for the organizational team members, makes “sure that team members get a rich supply of evidence to measure progress, and take time to recognize and celebrate their progress” (Thomas, 2002, p. 93).  In addition, leaders and team members must focus on the five building block of progress as Thomas (2002) mentions, which are, (1) collaborative climate, (2) milestones, (3) celebrations, (4) access to customers, and (5) measurement of improvement.  The building blocks of progress create a new realm of possibility, thus alchemist leaders must possess certain characteristics, competencies, and skills in furthering a company’s relationship strategy.

The alchemist leader in supporting a company’s relationship strategy will need certain characteristics, competencies, and skills.  An alchemist leader must possess good character.  Thomas (2002) explains, “Good leadership – like good work of any kind – is not about cutting corners, doing what is expedient, or going for flash or form instead of substance” (p. 89).  Overall, the alchemist leader’s character must “possess knowledge, personality, and persuasive power” (Deming, 1994, p. 116), thus building a greater sense of competence.

An alchemist leader must possess a greater sense of competence.  A greater sense of competence relies on five building blocks, which are, (1) knowledge, (2) positive feedback, (3) skill recognition, (4) challenge, and (5) high noncompetitive standards (Thomas, 2002).  It is important for an alchemist leader to recognize these five building blocks, not only within him/her-self, however within all members whom the alchemist leader interacts with, thus the greater sense of competence leads to recognition of skill.

In order to develop skill, the alchemist leader must recognize the skill of him/her-self, however in members as well.  Recognizing the competence of work (self and others) “strengthens the message that good work is important, valued, and noticed” (Thomas, 2002, p. 82).  Moreover, this message attributes good performance to the factor of “skill recognition”, thus by not recognizing the skill of self and others damages intrinsic motivation.  Therefore, to develop skill, the alchemist leader must recognize competence as it “is important to your intrinsic motivation and also allows you to confidently take on the kinds of challenges you can handle” (Thomas, 2002, p. 88).  This leads to how the organization supports the development of the alchemist leader and creation of leadership alchemy.

The development of the alchemist leader and creation of leadership alchemy relies on organizational support.  The company must support the alchemist leader’s development and creativity – his/her vision in aim of transforming the organization.  Transforming the organization starts with systems thinking as systems thinking is the overall foundation, which allows the alchemist leader to be creative.  “Vision without systems thinking ends up painting lovely pictures of the future with no deep understanding of the forces that must be mastered to move from here to there” (Senge, 2006, p. 12).  System’s thinking provides the feedback necessary for the alchemist leader to create and develop within the organization, thus understanding the organization at a deeper level.  Senge (2006), explains, “The practice of systems thinking starts with understanding a simple concept called feedback that shows how actions can reinforce or counteract (balance) each other.  – Eventually, system’s thinking ultimately “simplifies life by helping us see the deeper patterns lying behind the events and the details”, in most cases the limitations of the system (p. 73).  The alchemist leader should always be focused on the next set of limitations or barriers, which relies on full support of the organization.

The alchemist leader will need the full support of the organization in order to conquer the limitations and barriers, which keep the company from innovating and transforming.  In order to remove these barriers, the alchemist leader must have the support of his/her peers in developing the leadership of other members.  Tichy (1997), explains, “The ability to develop the leadership of others requires three things: a teachable point of view, a story for your organization, and a well defined methodology for teaching and coaching” (p. 1).  An organization, which allows developing the leadership of others, “is going to be far ahead of its competitors” (Tichy, 1997, p. 4).  Furthermore, alchemist “Leaders who invest themselves personally in the process of developing future leaders are also building the most precious of organizational assets” (Tichy, 1997, p. 4).

The relationship between the alchemist leader regarding culture, meaning, and challenge starts by allowing members to have more choice and participation within the organization.  More choice and participation of organizational members allows self-management to form, thus increasing the intrinsic reward of organizational members.  Intrinsic rewards create trusting environments, thus leading to psychological hardiness, which is vital in actualizing the potential of organizations.  The actualizing of potential in organizations starts by building a climate that supports progress.  Building such a climate relies on the characteristics, competencies, and skills of the alchemist leader.  The characteristics of the alchemist leader must possess great knowledge, personality, and persuasive power.  The competence of the alchemist leader relies on five building blocks, which are, (1) knowledge, (2) positive feedback, (3) skill recognition, (4) challenge, and (5) high noncompetitive standards, thus leading to skill (Thomas, 2002).  In order to develop skill, the alchemist leader must recognize the skill of him/her-self and in others as well.  Furthermore, the company must support the development and creativity of the alchemist leader’s, vision in aim of transforming the organization.  Transforming the organization starts with systems thinking as systems thinking is the overall foundation, which allows the alchemist leader to be creative, thus becoming a transformative leader.

References

Deming, E. W. (1994). The New Economics for Industry, Government, Education.Cambridge, Massachusetts: Massachusetts Institute of Technology.

Kouzes, J. M., &  Posner, B. Z. (2003, Spring). Challenge is the opportunity for greatness.  Leader to Leader, 28,16-23

Senge, P. M., (2006).  The Fifth Discipline: The Art and Practice of the Learning OrganizationNew York: Doubleday, a Division of Random House.

Thomas, K. W.  (2002).  Intrinsic motivation at work:  Building energy and commitment.San Francisco:  Berrett-Koehler Publishers, Inc.

Tichy, N. M. (1997, Fall). The mark of a winner. Leader to Leader, 6, 24-29.

COPIES OF THIS INFORMATION IS PROHIBITED WITHOUT WRITTEN PERMISSION FROM THE AUTHOR JIM BOYER!!

Change is something that pressures us out of our comfort zone.  Change for anyone is difficult; however, change in an organizational setting is even more difficult to overcome.  In today’s fast-paced dynamic society, organizational leaders are in charge of transforming the organization to embrace change; however, there are many causes, which influence effective leadership of change.  These causes include; the organization, behaviors within the organization, and types of leadership practices, which affect overall leadership of change.  These causes also have underlying contributors, which strengthen the cause, thus influencing the effect of the leader’s ability to affect change.  Focusing on these contributors weakens the cause, thus allowing leaders to collaborate with the organization and build an infrastructure that provides value and trust in all processes of the organization when faced with change.

The organization influences a leader’s ability toward change.  The organization influences a leader’s ability toward change by promoting flat hierarchies, lack of collaboration, and mismanaged infrastructures.  An organization, which promotes a flat hierarchy; “the less often an executive will intervene in coordination issues involving subordinates” (Kuhl, Schnelle, & Tillman, 2005, p. 178).  Flat hierarchies do not allow the leader to embrace cooperation from all employees from different areas of the firm.  The leader must be able to build collaboration among all members of the firm in order to make change successful.

Non-collaboration of organizational members of the firm is another organizational influence, which influences a leader’s ability of effective change.  Collaboration of all organizational members, top to bottom, promotes a shared understanding, thus aligning everyone’s interest in aim of change.  According to Kuhl, Schnelle, & Tillman, (2005), “The key to collaboration is initiating processes leading to shared understanding” (p. 180).  In addition, non-collaborative organizations promote rigid ways of thinking, thus affecting the infrastructure of the organization, which further influences effective leadership of change.

The infrastructure of an organization further hinders a leader’s ability to influence change.  If the infrastructure of an organization does not facilitate or inhibit the participation of decisions and actions of all its members, then the facilitation of learning and change will not be present.  According to Manz, Bastien, & Hostager, “the strategic challenge for organizational leaders is one of creating infrastructures that facilitate learning and change.  – Van de Ven view infrastructure as a necessary precondition of effective leadership in organizational change” (p. 278-279).  In addition, a poor organizational infrastructure, which does not facilitate learning and change, will not only hinder collaboration and the leaders ability to impact change, the poor infrastructure will also produce poor behaviors of its members, which influences a leaders ability of change as well.

The behaviors, which influence a leader’s ability of change is trust, fear, and defensiveness.  Trust is considered one of the most important factors when addressing change within the organization.  According to Morgan & Zeffane, (2003), “Mutual trust is consistently presented as an essential feature of change and best achieved through consultation, participation, and empowerment.  – Cashman emphasizes that a trust focus is a key to change mastery” (p. 58).  An effective leader must address trust in the organization since “discouraging trust promotes a self reliance” (McLain & Hackman, 1999, p. 169).  Self-reliance forces employees to feel “unable to reduce the perceived risk surrounding a change because they can’t trust the managers” (McLain & Hackman, 1999, p. 153).  Employees who cannot trust the manager will form avoidance behaviors, such as fear, thus adding another influence to a leader’s effectiveness of change in the organization.

Fear is another important factor or cause influencing effective leadership of change.  Change requires us to learn in order to evolve, however fear causes the avoidance behavior of facing reality, thus succumbing ourselves to the negative effects of change and producing self ego’s, which are unwilling to listen and learn when facing possible reality.  According to Gull (1997), “As we continue in this ego-centered mode of behavior, the less likely we are to take part in change and the more likely we are to feel acted upon and victimized by change” (p. 10).  Leader’s who neglect the influence of organizational fear or who do not practice fear-based thinking will be perceived as a threat, thus triggering defensive behaviors of its organizational members.

A final behavior, which influences a leader’s ability of change, is defensiveness.  As change upsets the negotiated order in the organization, defensive behaviors form from criticism of leaders past decisions, which hold intolerable uncertainty (Ashforth & Raymond, 1990).  Employees form defensiveness to intolerable uncertainty, thus reducing the perceived threat of uncertainly by avoiding the demand of the leader’s desire of change.  According to Ashforth & Raymond (1990), “As noted, defensive behaviors are intended to reduce a perceived threat or avoid an unwanted demand.  – More specifically, such behaviors are intended to avoid action, blame, and/or change” (p. 623).  As you can see, it is important for the leader to understand his or her actions/decisions, which hold intolerable uncertainty, stem from the type of leadership processes and practices he/she may employ, thus reducing a leader’s effectiveness of change even further.

The types of leadership, which influence overall effective leadership of change focus on processes, being fearless, and being value-centered.  Leaders who do not understand the change process, in which managers pursue the maintenance of change and leaders facilitate new change, will influence a leader’s ability of organizational change.  According to Manz, Bastien, & Hostager, “Where significant change is involved, effective leadership, in the sense of the classic distinction between managers who pursue maintenance and leaders who embrace and facilitate the new seems to be required.  – Understanding leadership in this context, though, is quite difficult, at least in part because managers enact their own beliefs about leadership, and action coming from these beliefs may or may not contribute to the success of the change effort” (p. 275).  In addition, the process of effective leadership requires embracing the new reality, thus understanding perspective, direction, and involvement of all organizational members when influencing change.  To embrace these new realities, and improve a leader’s effectiveness of change, fearless leadership must be practiced as well.

Another type of leadership practice, which influences overall effective leadership of change is fearless leadership.  Fearless leadership requires six traits; (1) A leader understands the nature of fear, (2) a leader has the courage to recognize fear in their selves and acts appropriately, (3) a leader knows how to handle their fear as well as the fear of others, (4) a leader knows how to communicate in a way that does not make people feel threatened, (5) a leader learns what is important to others, their values, and (6) leaders make people first (Mapes, 2000, p. 9).  By following these six traits, a leader not only will embrace his or her fear, however will be able to help others embrace and conquer their fear as well, thus forming a new model of leadership.  This new model of leadership not only will enhance a leader’s effectiveness of change, it will also help the leader reinvent his or her self, thus becoming value-centered.

Another type of leadership practice, which influences overall effective leadership of change is value-centered leadership.  Value-centered leadership focuses on the leader’s core values, thus producing a center of influence to organizational members, creating organizational integrity, and improving a leader’s effectiveness of change.  A leader who is not value-centered while leading through change has difficulty acknowledging uncertainty.  However, a leader who stands by his or her values earns influence by asking them self …“What do you believe in?  – What are you committed to accomplish” (Behr, 1998)?  These questions help the leader become value-centered, allows their actions do the talking, and focus on work processes.  Being value-centered helps the leader impact changes more effectively by focusing on the core components that drive change, which are people.

Driving change in the organization can be very difficult for a leader.  As you can see there are many system causes influencing effective leadership of change.  These causes include; the organization, behaviors within the organization, and types of leadership practices, which affect overall leadership of change.  The organization influences a leader’s ability of change by promoting flat hierarchies, lack of collaboration, and mismanaged infrastructures.  The behaviors, which influence a leader’s ability of change, are organizational trust, fear, and defensiveness, trust being the key factor.  Finally, the types of leadership practices, which influence overall effective leadership of change, includes the processes that sets perspectives, direction, and involvement, being a fearless leader, and value-centered leadership.  Overall, these causes will influence effective leadership, thus influencing a leader’s effectiveness and credibility.  However, leading through change by focusing on these contributors weakens the cause, allows the leader to collaborate with the organization and build an infrastructure that provides value and trust in all processes of the organization when faced with change.

References

Ashforth, B. E., Raymond, T. L. (1990).  Defensive behavior in organizations: A preliminary model. Human Relations, Vol. 43, No. 7. pp. 621-648.

Behr, T. E. (1998, March) Acting from the center. Management Review. Pp. 51-55.

Kuhl, S., Schnelle, T., Tillman, F. (2005, June).  Lateral leadership: An organizational approach to change.  Journal of Change Management. Vol 5. No. 2, pp 177-189.

Manz, C., Bastien, D., Hostager, T. Executive leadership during organizational change: A bicycle model.  Human Resource Planning, Vol. 14, No. 4. pp 275-267.

Mapes, J. (2000, Dec).  Fearless leadership. Executive Excellence.

McLain, D.L., Hackman, K. (1999). Trust, risk, and decision-making in organizational change. Public Administration Quarterly

Morgan, D. E., Zeffane, R. (2003, February).  Employee involvement, organizational change and trust in management. The International Journal of Human Resource Management. Vol. 14, No. 1. pp 55-75.

COPIES ARE NOT ALLOWED WITHOUT WRITTEN PERMISSION OF THE AUTHOR Jim Boyer.

Dynamic organizations must learn to interact creatively in aim of creating new order.  New order is achieved by building an organizational culture that is relational and adaptable to dynamic change.  Organizational leader’s must understand and embrace the strategies and tactics, which form organizational relationships during constant change in order to maintain quality and innovation.  As well, organizational leaders must understand the organizational traps that can hinder the organizational processes, which build the relationships needed to support and maintain a dynamically creative organization.  It is only through these understandings that the leader will be able to create and maintain new order, thus making it the leader’s role and responsibility.

The role and responsibility of the organization’s leaders in establishing change, is to influence organizational relationships, which creates new order.  One of the responsibilities is to understand change.  Gull (2002), tells us “it is through change that human beings can realize their potential” (p. 6).  Employees who realize their full potential have a greater ability to share characteristics and instill loyalty to the organization, thus “the process by which the goals of the organization and those of the individual become increasingly integrated and congruent” (Ashforth & Mael, 1989).  Matching the goals of the individual and the organization creates new order.  New order is achieved by making quality decisions based on bonding trust.  Although trust is the glue, which bonds creative organizations to form new order, leaders, must be aware of the strategies, tactics, and traps, which hinder the relationships that effect organizational change and creativity.

Social identity theory (SIT) and social classification are strategies a leader must understand in managing dynamically creative organizations.  According to Ashforth & Mael (1989), “Social classification serves two functions…first, it cognitively segments and orders the social environment, providing the individual with a systematic means of defining others.  – Second, social classification enables the individual to locate or define him- or herself in the social environment” (p. 20-21).  The defining of others and self (social identity), may not be formed by the organization, however it can also be formed by age, group, interest, or culture.  Therefore, it is important for a leader to align and understand common identities when influencing order and change.

Another strategy the leader must understand in directing order and change is the organizations evolution and how its members adapt to change.  Creative organizations adapt to change very well and in most cases, the initiation of upheaval has a farsighted approach.  According to Tushman, Newman, & Romanelli (1986), “The key role for executive leadership during convergent periods is to reemphasize strategy, mission, and core values and to keep a vigilant eye on external opportunities and/or threats” (p. 40).  The leader’s farsighted approach will present a convergent approach to change instead of constant frame-breaking change, which is a risky and uncertain venture (Tushman, Newman, & Romanelli, 1986).  During the convergence, the functions of scripts must be understood by the leader in order to gain organizational structure and control.

Leaders must understand how scripts structure event based behavior to sustain creative organizations.  Cognitive schemas such as “scripts” help facilitate control during convergent or frame-breaking periods of organizational change.  Ashforth & Fried (1988) tell us “that much organizational behavior is performed automatically or mindlessly, thus underscoring the oft-noted limitations of cognition in task and role-based behaviors” (p. 322).  Furthermore, scripts serve a number of functions in gaining new order within the creative organization; (1) scripts facilitate sense making, (2) scripts enable the prediction and control of behavior and organize individual behavior, (3) scripts conserve cognitive capacity and provide a basis for evaluating behaviors, (4) scripts moderate role conflict and legitimate organizational activities, (5) scripts develop easily through organizational socialization and experience with repetitive or programmable events (Ashforth & Fried, 1988, p. 322).  In addition, scripts help the leader build structure for his or her members, which further promote organizational advancements and build trusting relationships.

Learning and interacting creatively with each other in groups relies on the strategy of building trust.  In order for organizations to advance, trusting relationships must be established.  Stanley (2005) tells us “Trusting relationships stimulate innovative thinking and lead to organizational improvements” (p. 6).  Organizational improvements only become if the leader learns and appreciates all group task.  Thus, not only is the personal relationship founded, a utility relationship is founded as well.  “When supervisors lack extensive front-line ability in their area of responsibility, management credibility can suffer” (Stanley, 2005, p. 7).  Furthermore, Hackman & McLain (1999) state, “that trust is an assessment of the other’s ability and willingness to reduce the likelihood of negative outcomes to a situation” (p. 157).  Therefore, the leader’s role in building trust is to show his or her ability of understanding the process and being able to paradigm shift in a truthful manner to reduce the likelihood of any negative outcomes to any situation.  A leader must also be aware of the traps trust can impose.

Leaders in creative organizations must be aware of the risk that trust can impose.  Many claim that trust is a risky behavior; however, by accurately assessing trust, a leader can understand how trust serves as a normative tool for risk management (Hackman & McLain 1999, p. 157).  Although trusting requires taking some risk, according to Hackman & McLain (1999), “choosing to trust usually means taking risk that is less than the risk faced if someone is not trusted” (p. 157).  Therefore, the leader and his or her followers must decide if the risk of trust in the relationship is worth the potential of positive outcomes to the organization.

Concluding, we now understand the role and responsibilities of the organizations leader in dynamically creative organizations.  To gain new order in the organization, leaders must understand and embrace the strategies, tactics, and traps, which form organizational relationships and constant change in order to maintain quality and innovation.  Through change, humans can realize their full potential; however, the individual and organization must become integrated; thus, forming a trust in effort of gaining new order in the organization.  Gaining new order in relation to trust poses many strategies the leader must be aware of such as, understanding social identity theory (SIT) and social classification.  The leader must also employ the strategy of understanding the organization evolution of the firm and how its members adapt to change.  This will present a convergent approach to change instead of constant frame-breaking change, which is a risky and uncertain venture.  To reduce risk even further, the tactic of using scripts will help prevent organizational behavior from being performed automatically or mindlessly.  In addition, the leader must build personal and unity relationships in the organization by building trust.  Trust stimulates innovative thinking and reduces the likelihood of negative outcomes.  The risk trust can impose is far minimal than taking risk that is less than the risk faced if someone is not trusted.  Finally, organizations that learn and interact together become a creative organization and create a new order.  However, it is the leader’s role and responsibility to manage this process, which in all cases requires an understanding of the strategies, tactics, and traps that can hinder the dynamics and unity of the creative organization.

References

Ashforth, B. & Fried, Y., (1988).  Mindlessness of Organizational Behaviors. Human Relations. Vol. 41, No. 4. pp 305-329.

Ashforth, B. & Mael, F., (1989) Social Identity Theory and the Organization. Academy of Management Review.  Vol. 14, No. 1. pp 20-39.

Gull, G., (2002).  On Human Nature and Change. Evolving Being, Saint Joseph’s College of Maine.

McLain, D.L., Hackman, K. Trust, Risk, and Decision-Making in Organizational Change. Public Administration Quarterly

Stanley, T.L.(2005, February). Trust: A Management Essential. Supervision Vol. 66, No. 2.

Tushman, M.L., Newman, W.H., & Romanelli, E., (1986).  Convergence and Upheaval: Managing the Unsteady Pace of Organizational Evolution.  California Management Review, Vol 29, No. 1 Fall 1986.

COPIES OF THIS INFORMATION IS PROHIBITED WITHOUT WRITTEN PERMISSION FROM THE AUTHOR JIM BOYER!!

As an expatriate sent to Indonesia to rescue a failing company’s operation, it is imperative to understand Hofstede’s theory and how it can be used to motivate Muslim employees of Indonesia.  Motivating any employee is based on reward preferences…reward types, systems, and criteria.  Moreover, an American based reward preference is different from an Indonesian reward preference.  So, which components of Hofstede’s theory will apply to motivate the Muslim employees of Indonesia?

In Hofstede’s analysis of Indonesia, it shows Indonesia ranking high in Power Distance (PD) scores at seventy-eight and Uncertainty Avoidance (UA) scores at forty-eight “Indonesia has Power Distance (PD) as its highest ranking Hofstede Dimension at 78 and the second highest Hofstede ranking for Indonesia is Uncertainty Avoidance (UA) at 48” (Taylor, S., 2008).  Since PD scores show which members of society will accept unequal distribution of power, inequality can occur in areas of wealth, prestige, and power.  There is a high respect for authority and loyalty in high-ranking PD cultures, which employees of high PD cultures accept rewards differently based on non-performance criteria such as status, positions, age, and seniority.  “Hierarchical structures in the workplace indicate that employees accept reward differentials/inequalities based on “predetermined” non-performance criteria, such as status, position, age, and seniority, more so than individual effort and contribution” (Chiang, F., 2005).  What would influence reward preference of high PD societies?

Uncertainty Avoidance (UA) scores would show a societies tolerance for uncertainty.  The higher the UA score indicates a low level of tolerance for uncertainty.  Indonesia ranks a score of forty-eight, thus leaders in these cultures should place greater value on performance-oriented rewards.  “Individuals in these cultures should place greater value on performance-oriented reward systems” (Chiang, F., 2005).  Individuals of higher UA scores would be less likely to accept performance-oriented rewards, as this may place a threat on future income or advancements.  By combining the understanding of PD and UA components, how will this motivate Muslim employees of Indonesia?

Since Indonesia has the highest percentage of Muslims in the world at eighty-eight percent (Taylor, S., 2008), combining the PD and UA scores indicates the Indonesian society is highly rule/regulation-oriented, thus a hierarchy of controls that reduce the amount of uncertainty.  Leaders of this society have ultimate power, thus not allowing upward mobility of its citizens.  “The combination of these two high scores (UA) and (PD) create societies that are highly rule-oriented with laws, rules, regulations, and controls in order to reduce the amount of uncertainty, while inequalities of power and wealth have been allowed to grow within the society.  These cultures are more likely to follow a caste system that does not allow significant upward mobility of its citizens” (Taylor, S., 2008).  In regards to these facts, motivating Indonesian Muslim employees would require the leader to show ultimate power, provide an environment of strict rules and guidelines “controls” to reduce uncertainty, and provide rewards to employees based on status, position, age, seniority, and not individual effort and contribution.

Hofstede’s theory can be used to motivate Indonesian employees.  By understanding Power Distance (PD) and Uncertainty Avoidance (UA) scores within the country, it is evident that Indonesian employees have a low tolerance for uncertainty, thus relying on strict controls as a motivator.  As well, Indonesians tolerate a balance of non-performance reward systems between superior and subordinate, primarily given as an increase of status, position, age, and seniority.  Incentive-oriented reward systems have an uncertainty of placing the employee’s future income or advancement within the firm in jeopardy, thus the Power Distance (PD) and Uncertainty Avoidance (UA) components of Hofstede’s theory will motivate the Muslim employees of Indonesia and allow the expatriate to rescue failing operation of the Indonesian company.

References

Chiang, Flora.  (September, 2005).  A Critical Examination of Hofstede’s Thesis and its Applications to International Reward Management: Int. J. of Human Resource   Management., 16:9, 1545 – 1563.

Taylor, Stephen.  (1998-2008). Indonesia. Geert Hofstede’s Analysis Indonesia.  Retrieved November 8, 2008, from http://www.cyborlink.com/besite/indonesia.htm

COPIES OF THIS INFORMATION IS PROHIBITED WITHOUT WRITTEN PERMISSION FROM THE AUTHOR JIM BOYER!!

As the globalization of markets increase, so does cross-cultural communication within the multi-national/cultural firm.  Leaders within these firms must understand that language barriers will always exist and that the use of gestures will always be prominent in ease of communication.  However, this ease of communication could have negative outcomes within multi-cultural interactions.  Gestures that mean something elsewhere do not mean the same everywhere, thus adding confusion, disrespect, ager, or shame to multi-cultural organizations.  As a new leader of a multi-national/cultural firm, gestures would be the most important non-verbal communication to master since it is considered the unspoken language.

In multi-national/cultural experiences, most people cannot speak the foreign language of the country they are visiting or doing business, therefore the use of gestures to simulate meaning of speech are used as a way of illustrating ones meaning or need.  Gestures are used unconsciously and are found difficult to articulate the cultural rules for these acts.  “Many other types of nonverbal behavior are genuinely unconscious, and people in all cultures would find it difficult or impossible to articulate the cultural “rules” for these acts” (Archer, D., 1997).  It is evident that the unconscious use of gestures are difficult to articulate, however does the use of gestures add a hierarchy of relational chaos to the multi-national/cultural organization?

Gestures, if not understood correctly, can add a hierarchy of relational chaos to a multi-national/cultural organization.  As employees within the multi-national/cultural firm work together, it must be assumed that a mastery of all the languages does not exist.  Therefore, the assumption of an international language of gestures does not exist, thus the inability to decode or encode such gestures accurately.  “The cross-cultural sojourner without verbal mastery of the local language cannot assume that an “international language” of gestures exists, and it is highly improbable that this sojourner will be able to decode or encode such gestures accurately” (Archer, D., 1997).  The inability to encode or decode gestures accurately poses the potential for confusion, disrespect, embarrassment, anger, or shame, thus adding a hierarchy of relational chaos to the multi-national/cultural organization.  What can be done to help master the use of gestures?

Mastering the use of gestures within a multi-national/cultural firm can be achieved.  The multi-national/cultural firm must provide language/cultural classes to all international employees in order for employees to understand cultural differences and similarities.  Another step would be to have host cultural policies, which does not allow employees of the multi-national/cultural firm to use gestures.  Furthermore, the relational culture of the workplace must encourage employees to show respect, be open-minded, and non-judgmental of cultural indifferences, thus in combination with education will help master the use of gestures within a multi-national/cultural firm.

Language barriers will always exist and the use of gestures add ease in communicating in multi-national/cultural firms.  However, it is now evident that the use of gestures adds a hierarchy of relational chaos within the multi-national/cultural firm.  Language/cultural education, non-gesture policies, and encouraging respect, open-mindedness, and non-judgment of others will allow a leader of a multi-national, multi-cultural firm to master the most important non-verbal communication of cross-cultural gestures in the workplace.

References

Archer, D.  (1997). Unspoken Diversity: Cultural Differences in Gestures.  Qualitative Sociology, Human Sciences Press Inc., 20, 79 – 105.

COPIES OF THIS INFORMATION IS PROHIBITED WITHOUT WRITTEN PERMISSION FROM THE AUTHOR JIM BOYER!!

Throughout history, religion has always had its boundaries, even in the workplace.  As more doctors immigrate to the United States, healthcare organizations are faced with differences of religion.  One of the greatest differences of religion in healthcare organizations is Christianity and Islamic beliefs between doctors.  This difference of religion poses fault lines, which crossed can have negative outcomes for a healthcare facility.  As a leader of a healthcare facility, how will I prevent this fault line from compromising the performance of my organization?

The first thing to consider regarding the Christian / Islamic fault line is to understand the clash of civilizations.  “On both sides the interaction between Islam and the West is seen as a clash of civilizations” (Huntington, S. 1993).  As (Huntington, S. 1993) states, “This clash of civilizations (Western & Islamic) has been going on for over 1,300 years” (p. 31).  As we can see, this conflict between religions has historical roots, which cannot be changed.  So what short / long-term accommodations can be understood to prevent a compromise of performance within a healthcare organization?

Regarding short-term accommodations, it is clear that both the West (Christianity) and Islamic (Muslim) interest would be to promote greater cooperation and unity between each civilization.  “In the short term it is clearly in the interest of the West to promote greater cooperation and unity within its own civilization” (Huntington, S., 1993).  In regards to applying this unity to healthcare, the leader would require the basic understandings of the Christian and Islamic cultures to be understood between all doctors and healthcare employees, thus gaining a better philosophical assumption of each religions interest (respect).  Applying a long-term solution would include building upon the short-term solution, in that both religions build a modern respect, where each culture does not become too Christian or Islamic, thus creating a modern respect for the two cultures within the workplace.

Historical differences of religion have always placed boundaries or fault lines between countries and in the workplace.  As more doctors emigrate from Islamic countries to America, the fault line of Christianity and Islamic beliefs will always pose compromise as history proves.  However, leaders of healthcare organizations can induce a greater understanding of philosophical assumptions between the two religions, thus gaining better cooperation and unity within the organization.  Although Christian and Islamic fault lines exist within the workplace, by placing a short/long-term solution in the organization as discussed, will reduce compromise and provide an overlap of cultural respect, thus making the fault line more transparent.

References

Huntington, S., P.  (1993). The Clash of Civilizations.  Olin Institute, The Changing Security Environment and American National Interest, 22 – 49.

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Telecommunication networks are likely to be placed under excessive pressure as demands on internet bandwidth will more than double in two years, it has been claimed.  Research commissioned by CIP Technologies found annual demand by 2010 will exceed the entire combined broadband network usage of the decade to 2008.  Study author David Payne, of the Institute of Advanced Telecommunications at Swansea University, said that usage could grow to 40 to 100 times the levels seen in networks today by 2012.  “It is difficult to see how operators can economically grow existing network architectures to meet this demand, and further consideration of the types of networks and the technology deployed is required if they are to ensure profitability,” he added.  Earlier this week, Andrew Lim, mobile phones editor at technology publication CNET, claimed using mobile phones to access the internet is increasingly becoming a necessity.  He added that that mobile online access is convenient and allows customers to browse the internet at their convenience, wherever they are.”  (ihotdesk, 2008).

The Problem:

Economies will start to fall under the pressure of not having enough bandwidth to sustain businesses or the demand of consumer technologies.  The behavior pattern of telecommunication companies (operators) trying to grow existing network architectures is difficult to see by experts, thus if the operators do not consider the types of networks and technologies deployed within existing network architectures, they will not sustain profitability or satisfy demand.  So the question remains…how will telecommunication companies deploy new technologies to ensure existing networks can deliver the demand of broadband connectivity, ensure profitability at the private sector, and low cost to the consumer?

The Variables:

The “Limits to Growth” archetype shows by reinforcing the growth process it causes the limiting process to become out of balance with the growth process, thus driving toward the target “limited constraint” of  growing existing network architectures.

The “balancing loop” archetype shows there is movement towards the target of meeting annual demand with delay existing in growing existing network architectures.

The System Archetype Underlying the Situation

The archetype chosen for this problem story is “Limits to Growth”.  The management principle of “Limits to Growth” according to (Senge, 2006) is “don’t push growth; remove the factors limiting growth” (p. 94).  Looking at the nine variables regarding the problem of meeting “annual demand” of bandwidth, it shows the need of “growing existing network architectures” and “types of networks and technology deployed” has declined.  In order to identify the types of networks and technology to be deployed, the limiting factor of “growing existing network architectures” must be focused upon.

All growth will continuously bump up against limits, however how can one foresee the limit and alter or remove the limit prior to growth being introduced to the limit?  In this case, the limit is “growing existing network architectures” and it is caused by “annual demand” (convenience due to broadband mobile phones) pushing the prediction that Internet broadband demands will double in two years.  Why was this not foreseen two years ago before the limiting factor created the boom of the slowing action?  Now that a visual of the “structure” exist “the casual loop diagram”, it will be easier to foresee and identify the types of networks and technology, thus growing existing networks at a faster pace.

Structure in every process is important to understanding the limiting factors, which create the slowing action regarding the balance of “limiting” and “growth” processes.  “In each case of limits to growth, there is a reinforcing (amplifying) process of growth or improvement that operates on its own for a period of time.  Then it runs up against a balancing (or stabilizing) process, which operates to limit the growth” (Senge, 2006).  So how do we improve the balancing process of the types of networks deployed and technology used in order to grow existing network architectures?

Changing the patterns of behavior would improve the balancing process.  Since the growing of network architectures has become more powerful over time, thus maximizing its peak, the growth pattern has leveled off as demand has increased due to mobile technology (convenience), thus what worked before to conquer the limit or slowing action does not work today.  How do we change the behavior pattern or gain leverage regarding short and long-term strategies?

To gain short-term leverage, the reinforcing process must be identified.  What is getting better and what actions lead to improvements?  “There may be other elements of the reinforcing process, but there are always at least a condition which is improving, and an action leading to the improvement” (Senge, 2006).  To gain long-term leverage, is to foresee the limiting factors and the balancing process it creates.  “What “slowing action” or resisting force starts to come into play and keep the condition from continually improving” (Senge, 2006)?  Once the casual loop diagram is mapped out, thus identifying the limiting process and/or slowing action (growing existing network architectures and types of networks and technology deployed), the reinforcing process must not push the limit of “growing existing network architectures” harder as this will encourage resistance to be stronger.

In order to remove or limit the factors, which limit the growth of existing network architectures; one must be able to map/diagram the structure in order to identify the limiting factor and slowing actions.  Patterns of behavior …what worked before to conquer the limit will not always work, as new demands (convenience) will always change.  Overall, a long-term strategy will overcome the limiting factor of “growing existing network architectures” by identifying and balancing the reinforcing process of the demand for Internet bandwidth and removing or limiting the slowing action of  what types of networks or technology should be deployed in order to visualize the process and gain foresight, thus eliminating future growth problems.

References:

ihotdesk (July 11, 2008). Bandwidth Demand Will Double in Two Years. Retrieved September 27, 2008, from    http://www.ihotdesk.com/article/18681700/%27Bandwidth%20demand%20will%20double%20in%20two%20years%27

Senge, P. M., (2006).  The Fifth Discipline: The Art and Practice of the Learning Organization New York: Doubleday, a Division of Random House.

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Inflation Indexed or Conventional Bonds…What’s the Difference?

Issuing bonds or securities are necessary in order to balance the Federal Reserve in time of war or U.S. needs, such as stimulating the economy.  People who purchase bonds are simply providing the government a loan and obtaining a small interest rate in return over a period.  Typical bonds pay a fixed interest rate, however bonds such as inflation-indexed bonds pay at a fixed adjusted rate as inflation increased or decreases.  Moreover, the inflation-indexed bonds have stirred questions, as I will address.

What do investors get from inflation-indexed bonds that they do not get from conventional types?  Why would the government produce a bond that kept up with inflation?  Since typical bonds are sold at a low fixed rate, over time with the trend of inflation, especially high inflation, the typical bond would not hold much investment.  Meaning, if one were to purchase a bond today for one-thousand dollars, in ten years it would be equal to purchase or less depending on inflation over the ten-year term… example, if the CPI-U in September 2004 was 189.9 and the CPI-U in March 2005 was 193.3 (193.3/189.9 = 1.01790), or a semi-annual increase of 1.790%.  So, semiannual inflation rate = 1.79% and fixed rate = 1.20%.  Instead of the fixed bond paying only 1.20%, with the inflation-indexed bond the interest rate would be 2.99%, thus keeping up with inflation.  According to the New York Times (1997), “Inflation can eat away at the returns on normal Treasury bonds, but buyers who hold the new bonds until maturity will be guaranteed that roughly 3.5 percent return, above and beyond any inflation from now until 2007”.  Why would a shift from conventional government bonds to these new bonds reduce the Treasury’s average borrowing cost?

The shift would allow a lower interest to be paid to the investor over time.  Since the fixed rate conventional bond is paid at a higher rate, in the short run, the Treasury would have to pay more to the investor; however, with inflation-indexed bonds the interest rate is lower.  With low inflation incentives added to the lower fixed rate of the bond, the Treasury would have to pay less over time…the long run.  While paying less over time, the extra interest earned by the investor from inflation-indexed bonds will be taxed, thus producing more annual revenue to the Treasury.  “An investor must pay tax each year not just on the interest that has been received, but on the rise in the principal value, even though the cash from that increase will not come in for years” (Norris, F. 1997).

However, the inflation-indexed bonds could be costly to the government if there is no regulation over the purchase of these bonds.  If there were no regulation and all bonds had inflation protection, the national debit would increase and taxpayers would incur a burden “had all old Treasury securities been issued with inflation protection, the national debt and its burden on taxpayers would be much greater than it is now” (Norris, F. 1997).  This would only be evident if inflation was constantly high; some believe that inflation is no longer a threat?

High inflation since nineteen-seventy has been a threat.  The Consumer Price Index (CPI) has rose steadily from nineteen seventy until now 2007, thus the divided difference (CPI year 1 / CPI year 2 = %).  Families under term of high inflation incur the difference of “money income” and “real income”…”during periods of inflation a family with a relatively fixed income experiences a declining real income” (Mansfield & Behravesh, 2005).  Lenders experience threat from high inflation resulting in the depreciation of money.  “If the price level increases, a dollar is worth less than before” (Mansfield & Behravesh, 2005).  Savers also incur the effects of inflation.  The money saved yesterday with high inflation will result in less money today.  If an investor saved one-thousand dollars at a fixed rate of return of (2.0%) and if the percentage of inflation (3.0%) was higher than the percent of interest earned, then the investor would lose money instead of making money.  As you can see in the graph below, U.S. inflation is increasing, however comparatively low compared to past decades.

If the U.S. is above marginal decade average inflation, it could pose a great threat if not reduced.  What political pressures should be placed on the U.S. government to keep inflation low?  Some argue that if a large amount of securities were issued, it would place less pressure on the government to keep inflation low.  This does not seem reasonable.

If a large amount of securities were issued, it would reduce the amount of reserves within the banks.  The more securities the Federal Reserve’s sell, once presented to the banks for payment, the banks demand deposits and reserves decrease (Mansfield & Behravesh, 2005).  This decrease would not allow the banks to provide as many loans, thus hindering consumer purchasing.  There must be enough currency to back up the paper security transactions (bonds-cash).  Non-regulation of the sale of securities without currency to back them would decrease the value of the dollar as well.  It is necessary to pressure the government to keep inflation low in order to gain better returns from a securities investment.  However, to the consumer, if inflation were high, the return on a one-thousand-dollar security ten-years after purchase would be equal or less if the interest rate of that security did not keep up or excel inflation.  Moreover, high inflation of conventional or inflation-indexed bonds would increase the tax burden to the consumer.  “Specifically, the tax burden rises by the increase in the nominal yield, which is the inflation rate, n, times the tax rate, t, or at. Thus, for an indexed bond, inflation reduces the after-tax real yield by increasing the tax burden” (Pu, S. 1998).

Although inflation-indexed bonds are a great way to protect ones investment against inflation over conventional bonds, they do have their pros and cons.  We have discovered that investors do get a better deal with inflation-indexed bonds.  Inflation-indexed bonds also reduce the Treasury’s average borrowing cost by paying less interest over time and gaining more taxes from earnings gained by the investor.  Inflation is still a threat and will continue, thus it is imperative that inflation remain low in order to maintain adequate reserves in the banking system and to maintain high value of the dollar.  By maintaining normal inflation, investors buying inflation-indexed bonds will gain value from them in future years to come.

References:

Norris, F., New York Times (January, 1997).

New U.S. Bond Promises to Match Cost of Living. Retrieved June 28, 2008, from http://query.nytimes.com/gst/fullpage.html?res=9F02E1DC1F3AF93AA15752C0A961958260&sec=&spon=&pagewanted=all

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Mansfield, E., & Behravesh, N.  (2005). Economics USA:

Seventh Edition.  New York: W.W. Norton & Company, Inc..

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Pu, S. (January, 1998).

Features and risks of Treasury inflation protection securities.  Retrieved June 28, 2008, from http://findarticles.com/p/articles/mi_qa3699/is_199801/ai_n8764628/pg_7

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Inflation Data.  (March, 2008).

Inflation by Decade.  Retrieved June 28, 2008, from http://www.inflationdata.com/Inflation/Inflation/DecadeInflation.asp

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