Project responsible organizations 2
Hoorcollege 1
Business organizations has impacts to various aspects in society: economic, social,
environmental, technological, and political.
Responsible organizing is about creating multiple types of value simultaneously. There is not
a focus on a single objective function like only profit maximization or shareholder value
creation. Social & environmental consideration. It is creating multiple values for their
stakeholders. (See stakeholder theory).
Multiple value creation is complex stakeholder theory, affects different parties in the
environment.
System approaches is a tool to help to understand and manage complexity.
Trying to see the greater whole
Interrelations between entities of the organizations
Feedback: closed chains of causal connections feedback loops
Non-linearities, delays behaviours of the system
Stakeholder theory = a view of capitalism that stresses the interconnected relationships
between a business and its customers, suppliers, employees, investors, communities, and
others who have a stake in the organization. The theory argues that a Firm should create
value for all stakeholders, not just shareholders. The organization should consider all those
stakeholders, even if they have a negative influence, like they are considering their own
organization.
Stakeholder = any group that can affect or is affected by the organization. They can
influence companies by putting rules on them (for example Greenpeace).
The integrated reporting framework = an integrated report aims to provide insight about
the resources and relationships used and affected by an organization. It also seeks to explain
how the organization interacts with the external environment and the capitals to create
value over the short, medium, and long term.
The capitals are stocks of value that are increased, decreased, or transformed through the
activities and outputs of the organization. They are categorized in this Framework as
financial, manufactured,
intellectual, human, social and
relationship, and natural
capital.
This framework looks to
account for different values
that the organization affects,
not only finance, but also
social and environmental
aspects.
This framework represents
the integrated reporting
framework. On the left side
,you see the six input values, which leads to six outcome values that organizations can create
with their business activities.
A system is an interconnected set of elements that is coherently organized in a way that
achieves something. Systems always have purposes. The system is very difficult to observe,
but you can look at the purpose of the system.
The system lens is dependent on the scope you are looking at. What are you looking at,
what connections are you trying to reveal. If you see a problem only in a linear way, without
looking at the whole scope, you will miss important things. You are trying to see the complex
systems around you.
Basic building blocks: outflows, stock, inflows. This is the basic process of the organization.
Stock gives you a sense of security. Stock can be both tangible and intangible. The stock is a
cumulation point in a system.
Tangible stock = products and storage (or data/information)
Intangible stock = reputation
You have positive feedback loops (left) or negative feedback loops (right).
Positive feedback loop = an initial increase in A leads to a further increase of A, an initial
decrease in A leads to a further decrease in A. A positive feedback loop can also be called a
reinforcing feedback loop.
A negative feedback loop is the other way around, so an initial increase in A leads to a
further decrease of A and the other way around. A negative feedback loop can also be called
a balancing feedback loop.
Example of stocks (units between brackets)
Inventory (products)
Production capacity (euro)
Workforce (full-time equivalents)
Reputation (net promotor score)
Products in use (products)
Wellbeing from employment (jobs)
Air quality (pollution concentration)
Environmental quality (species abundance)
Units means how the stock is counted. Pay attention: the inflow and the outflow of a stock is
ALWAYS counted in the same unit!
,Example of the visualization of stock in a company. Here you can see what the company
could do to make it more responsible.
Seminar 1
Stocks are the foundation of any system
Stocks are what you can see, feel, count, or measure at any given point in time
Stocks can only change through flows
A stock increases if the sum of the inflows is greater than the sum of the outflows
A stock decreases if the sum of the outflows is greater than the sum of the inflows
A stock remains the same if the sum of the inflows equals the sum of the outflows
STEP function in Vensim: this shows a change, when it reaches a time, it will get to a certain
height STEP(height, time). So, after a certain time, the variable reaches that height.
Example: consumer demand = 20 + STEP(10,5), consumer demand starts at 20, and after
time 5, it gets higher with 10, so after time 5 it should be 30.
Lecture 2
Systems and system thinking
A system is an interconnected set of elements that is coherently organized in a way that
achieves something. With system thinking you break up this process in their set of elements
and look at all of them individually. These simple individual elements can work together to
make something complex and difficult to understand. They behave differently together than
you would expect them to do individually. The system is basically a purpose.
Example of individual elements: human resources, product design, forecasting, R&D, strategy
and finance.
System Thinking: a perspective, a language, and a set of tools.
, Holistic & integrative (you see the collective of elements) vs analytic & dissective (you
try to see how each part works individually).
Causality, unintended consequence, non-linearity, self-organization, emergence, etc.
(these are words that you use to explain the behavior of a system).
Example of tools: Causal Loop Diagram, Stock and Flow diagram, behavior-over-time
graphs, System Dynamics modelling, etc.
The iceberg – a tool for guiding systemic thinking.
What do we mean by system
thinking? The things that we DO
see happing are the events.
Beneath that are things we don’t
see; you can figure them out by
looking at the system.
The event is created by patterns
or trends, which are influenced
by underlying structures. The
mental model is the layer of
system thinking that you go to,
each individual experience this
differently. The mental model is
also influenced by the culture of
the company, so the beliefs and norms and values of the company.
Key differences between conventional and system lens
Conventional thinking = a connection between two things is very clear, which makes it easy
to trace. The source of the problem is something else to blame on, something external or
maybe yourself. You can work aggressively or peacefully, but aggressively will tackle more
problems.
Hoorcollege 1
Business organizations has impacts to various aspects in society: economic, social,
environmental, technological, and political.
Responsible organizing is about creating multiple types of value simultaneously. There is not
a focus on a single objective function like only profit maximization or shareholder value
creation. Social & environmental consideration. It is creating multiple values for their
stakeholders. (See stakeholder theory).
Multiple value creation is complex stakeholder theory, affects different parties in the
environment.
System approaches is a tool to help to understand and manage complexity.
Trying to see the greater whole
Interrelations between entities of the organizations
Feedback: closed chains of causal connections feedback loops
Non-linearities, delays behaviours of the system
Stakeholder theory = a view of capitalism that stresses the interconnected relationships
between a business and its customers, suppliers, employees, investors, communities, and
others who have a stake in the organization. The theory argues that a Firm should create
value for all stakeholders, not just shareholders. The organization should consider all those
stakeholders, even if they have a negative influence, like they are considering their own
organization.
Stakeholder = any group that can affect or is affected by the organization. They can
influence companies by putting rules on them (for example Greenpeace).
The integrated reporting framework = an integrated report aims to provide insight about
the resources and relationships used and affected by an organization. It also seeks to explain
how the organization interacts with the external environment and the capitals to create
value over the short, medium, and long term.
The capitals are stocks of value that are increased, decreased, or transformed through the
activities and outputs of the organization. They are categorized in this Framework as
financial, manufactured,
intellectual, human, social and
relationship, and natural
capital.
This framework looks to
account for different values
that the organization affects,
not only finance, but also
social and environmental
aspects.
This framework represents
the integrated reporting
framework. On the left side
,you see the six input values, which leads to six outcome values that organizations can create
with their business activities.
A system is an interconnected set of elements that is coherently organized in a way that
achieves something. Systems always have purposes. The system is very difficult to observe,
but you can look at the purpose of the system.
The system lens is dependent on the scope you are looking at. What are you looking at,
what connections are you trying to reveal. If you see a problem only in a linear way, without
looking at the whole scope, you will miss important things. You are trying to see the complex
systems around you.
Basic building blocks: outflows, stock, inflows. This is the basic process of the organization.
Stock gives you a sense of security. Stock can be both tangible and intangible. The stock is a
cumulation point in a system.
Tangible stock = products and storage (or data/information)
Intangible stock = reputation
You have positive feedback loops (left) or negative feedback loops (right).
Positive feedback loop = an initial increase in A leads to a further increase of A, an initial
decrease in A leads to a further decrease in A. A positive feedback loop can also be called a
reinforcing feedback loop.
A negative feedback loop is the other way around, so an initial increase in A leads to a
further decrease of A and the other way around. A negative feedback loop can also be called
a balancing feedback loop.
Example of stocks (units between brackets)
Inventory (products)
Production capacity (euro)
Workforce (full-time equivalents)
Reputation (net promotor score)
Products in use (products)
Wellbeing from employment (jobs)
Air quality (pollution concentration)
Environmental quality (species abundance)
Units means how the stock is counted. Pay attention: the inflow and the outflow of a stock is
ALWAYS counted in the same unit!
,Example of the visualization of stock in a company. Here you can see what the company
could do to make it more responsible.
Seminar 1
Stocks are the foundation of any system
Stocks are what you can see, feel, count, or measure at any given point in time
Stocks can only change through flows
A stock increases if the sum of the inflows is greater than the sum of the outflows
A stock decreases if the sum of the outflows is greater than the sum of the inflows
A stock remains the same if the sum of the inflows equals the sum of the outflows
STEP function in Vensim: this shows a change, when it reaches a time, it will get to a certain
height STEP(height, time). So, after a certain time, the variable reaches that height.
Example: consumer demand = 20 + STEP(10,5), consumer demand starts at 20, and after
time 5, it gets higher with 10, so after time 5 it should be 30.
Lecture 2
Systems and system thinking
A system is an interconnected set of elements that is coherently organized in a way that
achieves something. With system thinking you break up this process in their set of elements
and look at all of them individually. These simple individual elements can work together to
make something complex and difficult to understand. They behave differently together than
you would expect them to do individually. The system is basically a purpose.
Example of individual elements: human resources, product design, forecasting, R&D, strategy
and finance.
System Thinking: a perspective, a language, and a set of tools.
, Holistic & integrative (you see the collective of elements) vs analytic & dissective (you
try to see how each part works individually).
Causality, unintended consequence, non-linearity, self-organization, emergence, etc.
(these are words that you use to explain the behavior of a system).
Example of tools: Causal Loop Diagram, Stock and Flow diagram, behavior-over-time
graphs, System Dynamics modelling, etc.
The iceberg – a tool for guiding systemic thinking.
What do we mean by system
thinking? The things that we DO
see happing are the events.
Beneath that are things we don’t
see; you can figure them out by
looking at the system.
The event is created by patterns
or trends, which are influenced
by underlying structures. The
mental model is the layer of
system thinking that you go to,
each individual experience this
differently. The mental model is
also influenced by the culture of
the company, so the beliefs and norms and values of the company.
Key differences between conventional and system lens
Conventional thinking = a connection between two things is very clear, which makes it easy
to trace. The source of the problem is something else to blame on, something external or
maybe yourself. You can work aggressively or peacefully, but aggressively will tackle more
problems.
