THE BUSINESS ORGANIZATION IS A DYNAMIC SYSTEM

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Dr. John Psarouthakis, Executive Editor, www.BusinessThinker.com and former founder and CEO of JPIndustries, Inc., a Fortune 500 industrial group.

For CV details go to:
https://www.linkedin.com/in/johnpsarouthakis/

Each word in the term, Dynamic Business Planning Model has a special meaning. I use the term dynamic to signify the ever-changing conditions that organizations face outside the firm–and changing management strategies required to keep up with these changes on the inside. Global competition, court rulings, and the changing caliber of job applicants are all examples of these external dynamics.    Because of these dynamics, effective strategy requires frequent review and assessment.

When we speak of a dynamic, I allude to qualities of organizations defined by open systems theory. According to that view, frequent response and adaptation to environmental changes is critical to survival. Though the eight issues remain the same, to grow profitability, the approach you must take to manage each issue changes over time. The open systems view also sees the organization as a collection of interdependent parts. Change one, and it affects the others. You cannot treat any one aspect–be it accounting, marketing, or technical–in isolation.

The words planning model are also important. The Dynamic Business Planning Model offers a new way of thinking about planning which guides your daily thinking. Planning should not be looked at as an annual report you file in a drawer or shelve on the bookcase until next year but as a program you can use on an on-going basis to guide your decisions and action. Strategy for dealing with the eight DSP issues forms the backbone of the plan, guided by your vision for your company.   As events change over the course of the year, you need to revisit your strategy frequently to make sure it is still adequately addresses each issue.

One common problem faced by CEOs of rapidly changing firms is being blindsided in one area while concentrating too hard in another. For example, perhaps you put all your energy into improving sales but ignore medical insurance concerns your employees have. Sales are dependent on positive customer relations.   Can you really improve customer relations while your employees feel miserable about their benefits? You may not be able to resolve all the challenges at once but you are less likely to confront an unexpected crisis if you track all eight issues on a regular basis.

Reference book:
“Dynamic Management of Growth Firms”
Lorraine Uhlaner-Hendrickson and John Psarouthakis
The University of Michigan Press

PDF format copies are available for purchase.
contact drjohn@businessthinker.com

                              

                                

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