MGMT 1000 Notes
• The knowledge economy: A world where the ownership of knowledge as opposed to
the ownership of financial capital, is becoming the formative force”
o Organizations as “machines” versus “brains”
• Contingency Approach: Analyzing relations between organization and environment.
o prospector, defender and analyzer organizations.
o Defender organizations focus on sustaining a profitable environmental niche by being
highly costeffective and use price competition, an emphasis on quality, and other
“barriers” to discourage entry from potential competitors (Exxon Mobil)
o Prospector organizations focus on developing a relationship with the
environment based on finding, developing, and exploiting new opportunities (3M)
o Analyzer organizations try to combine the strengths of both the defender and
the prospector by developing an ability to produce a range of high-quality
products very efficiently, while remaining open to new opportunities (Apple)
• Trained Incapacity:
o Individuals and organizations often miss valuable opportunities for learning and
development because they have been conditioned and trained to perform in
ways that have outlived their usefulness.
o One result of "trained incapacity" and self-limiting beliefs is that people can easily
get locked into rigid patterns that lead them to underachieve and "do the
o People get "turned off" by their work. Instead of setting goals and aspirations that
are energizing and challenging, they accept the way things are. They under-
perform because they feel undervalued and under-challenged.
o The problem of trained incapacity and self-limitation often creates corporate
cultures characterized by stalemate or deteriorating performance
1.1 Meeting The Challenge of a Knowledge Economy
• More than ever, we are living in a knowledge economy where the key factors of
production reside in the capacities and ingenuity of the human mind.
• As the experts suggest, this means that increasing emphasis must be placed on:
o Continuous Innovation: Products become obsolete almost overnight, successful
companies are those that consistently create new knowledge
o Collaborative learning: Learning organizations where people continually expand their
capacity to create the results they truly desire, where new and expansive patterns of
thinking are nurtured
o Competitive advantage: Competitive advantage no longer belongs to the biggest or
those blessed with abundant natural resources, or the most capital. In the modern
economy knowledge is king • The rise of knowledge work and a knowledge economy creates a powerful synergy
between individual and corporate interests in ways where all can gain
Key Implications on Individuals and Organizations
• Downward pressure on wage rate resulting from automation, the deskilling of work, and the
ability of corporations to globalize operations to take advantage of the lower labour costs
• The key to success is one’s ability to join the knowledge economy
• People and organizations need to lever their ability to learn and most importantly their ability to
learn to learn at a rapid rate. This will increase their employability and intellectual capital
• Knowledge is not tied to any country; it is transnational, portable, can be created everywhere,
quickly and cheaply thus anyone with a competitive advantage based on knowledge will be
challenged soon, and often by a total newcomer.
o This means that lifelong learning is now a necessity
• Organizations and Workers have to work together to share this knowledge in order for both
employee and organization to be successful
• Large organizations are finding ways of spawning fresh initiatives and transforming themselves.
Smaller/newer organizations are growing fast (e.g. Nike, Nokia, Netscape)
1.2 – The Rationale for Developing Learning Organizations
• In times of change learning organizations that promote the creativity of people at every
level are absolutely necessary to deal with the new challenges presented.
• Old styles of thinking, and organizational routines that stifle creativity, have to give way
to fresh approaches th