Term Paper: Open Systems Theory the Model

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SAMPLE EXCERPT:

[. . .] A few of previously discussed models, lacked in explicit consideration of the mentioned assumed inherited characteristics, though there was implicit adherence.

The outputs generated from components of organizational behavior are in the form of tangible products, intangible services, employees' effectives and organizational performance. These outputs are generated through organizational systems which are based on certain organizational arrangements (both formal and informal), task structures and efforts of employees.

McKinsey 7S Framework

McKinsey 7S Framework was developed by the consultants working in a firm known as McKinsey and Company. The firm dealt in applied research of industrial practices and business related matters (Pascale & Athos, 1981; Peters & Waterman, 1982). The model was named after the model of the consulting firm. It had worked out seven variables that were referred to levers by the author consultants. All seven variables began with the English letter 'S'. The consultants applied this model in the seventy plus large organizations, hence it emerged as commonly known and easy to remember model in business sector.

Like traditional models, this model also overlooks the presence of external environmental behaviors. Another shortcoming of this model is the absence of effectiveness and performance metrics, though theses two dimensions are touched in the model. The authors stated that there could be many other influential variables which are not included in the model as they chose the pertinent ones to their requirements in business settings.

Use of Open Systems theory to assess BMW

The choice of using open systems theory to assess BMW is that other OD models discussed so far highlight the impact of variables only and miss the role of feedback and external environment. Open systems theory covers this aspect. Furthermore, the use open systems theory to assess the current inputs and environment becomes all the more critical due to the current economic meltdown in Europe and America.

BMW is shown over and over again that it is one of the most successful high-quality car producers in the world. The headquarters of this company is located in Munich, a German city. The company primarily produces, distributes and markets luxurious brands including Sedans, Convertibles and Coupes along with motorcycles (Radinger and Schik, 1996). The company functions in three separate business environments:

1. Automobiles,

2. Motorcycles and

3. Financial Services.

BMW's Main Rivals: In the luxurious car market, the main rival for BMW is the Mercedes group. This is true for markets in both America and Europe. However, in Western Europe, other rivals also exist, which comprise of Volkswagen (with bards like VW, Audi, Bentley) along with Fiat's major brands like, Ferrari, Lancia, Alfa Romeo and Maserati. Similarly, Ford with its car brands like Jaguar, Aston Martin, Land Rover and Volvo also poses tough competition in Western Europe. Four other competitive car manufacturer groups include General Motors (with brands like Saab, Opel, Vauxhall) Porsche, Renault, and Toyota (Pavelec, 2007; Kiley, 2004).

Similarly in the United States, the BMW faces major competition from Ford with its Lincoln luxury brand; Nissan's Infiniti also poses a strong threat; Honda's Acura is another popular brand; Toyota Lexus; Porsche; Volkswagen's Audi, VW and Bentley; along with Saab and Cadillac produced by General Motors. However, it should be noted that the main rivals of BMW's luxurious Rolls-Royce brand are Bentley sedans and Maybach brand produced by DaimlerChrysler (Pavelec, 2007).

Market outlook for BMW: With inflation and unemployment on the rise, one would have thought that car manufacturers would be suffering heavy losses. However, BMW have managed to calm down the storm and show higher sales volume and profits. As a result of these higher profits, the corporate governance board of BMW has decided to increase its investments in the luxurious car brands as they predict that the market will rise and the company will achieve higher profits and growth rate. Furthermore, BMW is also on the lookout for new and emerging markets to expand their influence and operations. In addition, they also financing marketing operations to maintain and increase their market share in the current market (Kiley, 2004).

The company is expected to maintain its earnings in 2011 when compared with that of 2010. This is because a weak dollar and higher steel prices will probably cut down the increase in sales they may experience in 2011. Nonetheless, the company has shown its faith in all its brands as they predict sales increase for all their brands. Furthermore, the top management has also announced that they will be introducing new brands in the near future after they overhaul their production facilities. Currently, while the external factors like the weakening dollar and higher steel prices may offset the company's earnings to some degree, it appears that the company has decided to face this storm with innovation and creativity as its hallmark (BMW Group Annual Report, 2009).

References

Baker III, G.A. (1996). National Initiative for Leadership and Institutional Effectiveness: Personal assessment of the college environment. Unpublished Manuscript. Raleigh, NC: North Carolina State University.

BMW Group Annual Report 2009: Available at BMW group homepage: www.bmwgroup.com

Falletta, S.V. (2005). Organizational Diagnostic Models: A Review & Synthesis. White Paper. Leadersphere, Inc.

French, W.L. & Bell, C.H. (1995). Organization development: Behavioral science interventions for organization improvement. Fifth Edition. Englewood Cliffs, NJ: Prentice Hall.

Fuqua, D.R. & Kurpius, D.J. (1993). Conceptual models in organizational consultation. Journal of Counseling and Development, 71, 607-618.

Howard, A. (Ed.) (1994). Diagnosis for organizational change: Methods and models. New York, NY: The Guilford Press.

Katz, D. & Kahn, R.L. (1978). The Social psychology of organizations. (2nd ed.). New York, NY: Wiley.

Kiley, D. (2004). Driven: Inside BMW, the Most Admired Car Company in the World. John Wiley and Sons, p 5-211.

Leavitt, H.J. (1965). Applied organizational change in industry. In J.G. March (Ed.), Handbook of Organizations (pp. 1144-1170). New York, NY: Rand McNally.

Lewin, K. (1951). Field theory in social science. New York, NY: Harper.

Likert, R. (1967). The human organization: Its management and value. New York, NY: McGraw-Hill.

Nadler, D.A. & Tushman, M.L. (1980). A model for diagnosing organizational behavior. Organizational Dynamics, Autumn, 35-51.

Nelson, L., & Burns, F.L. (1984). High performance programming: A framework for transforming organizations. In J. Adams (Ed.), Transforming Work (pp. 226-242). Alexandria, VA: Miles River Press.

Pascale, R.T. & Athos, A.G. (1981). The art of japanese management: Applications for American executives. New York, NY: Simon & Schuster.

Pavelec, S.M. (2007), The Jet Race and the Second World War, Greenwood Publishing Group. Retrieved from http://books.google.com/?id=dSLBdP22fq0C&pg=PA31 on December 22, 2011.

Peters, T.J.… [END OF PREVIEW]

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