Management FuturesManagement FuturesU09068U09068

Introductions:Introductions:Navigating the futureNavigating the future

Unit Coordinator: Dr Zoë DannUnit Coordinator: Dr Zoë DannYour lecturer: Dr Vesselin BlagoevYour lecturer: Dr Vesselin Blagoev

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Welcome!Welcome!

To a unit in scepticism and To a unit in scepticism and crystal ball gazingcrystal ball gazing

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When you leave today you should be able to:

Understand some of the inherent difficulties in predicting the future for businesses

Appreciate the role of modelling and analysis in reducing uncertainty

Be aware of the importance of validity of data

Relate the above to unit learning activities

About the future…the next 50 About the future…the next 50 minutesminutes

Introduction to crystal ball gazing and Introduction to crystal ball gazing and scepticismscepticism– Can we predict the future?Can we predict the future?

– How do we know what is ‘true’?How do we know what is ‘true’?

About the unit About the unit – Teaching programmeTeaching programme

– AssessmentAssessment

How do I get the most from this unit?How do I get the most from this unit?44

Introduction to scepticism Introduction to scepticism and crystal ball gazingand crystal ball gazing

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Mankind has always tried to predict the future…

Comets

‘Red sky at night’

Palm reading

Chicken entrails

Rune stones

Tea leaves

Tarot cards

Crystal ball

The Book of Revelations

Horoscopes

I Ching

Nostradamus

How successful are we at How successful are we at predicting the future? predicting the future?

A little story about the Great Storm ...A little story about the Great Storm ...

http://news.bbc.co.uk/player/nol/newsid_7030000/newsid_7035800/7035868.stm?bw=bb&mp=wm&news=1&nol_storyid=7035868&bbcws=1http://news.bbc.co.uk/player/nol/newsid_7030000/newsid_7035800/7035868.stm?bw=bb&mp=wm&news=1&nol_storyid=7035868&bbcws=1

Business failuresBusiness failures

Dot.comsDot.coms– e.g. Boo.com,e.g. Boo.com,

– e.g. Petsparks.come.g. Petsparks.com

BetamaxBetamax

Sinclair C5Sinclair C5

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Why consider the future for Why consider the future for management?management?

For businesses:For businesses:

As a matter of survival and growthAs a matter of survival and growth

Strategic directionStrategic direction

For you:For you:

Organisations need employees who are Organisations need employees who are ‘enterprising’ e.g. seek opportunities, problem ‘enterprising’ e.g. seek opportunities, problem solverssolvers

Explore factors that may influence you now and in Explore factors that may influence you now and in the futurethe future

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Predicting the future for Predicting the future for organisationsorganisations

Plan the future on the basis of a Plan the future on the basis of a sound sound understanding of the business environmentunderstanding of the business environment

Importance of forecasting depends on Importance of forecasting depends on volatility volatility of the environmentof the environment i.e. change in macro i.e. change in macro factorsfactors

Typical techniques:Typical techniques:– Trend extrapolationTrend extrapolation– Expert opinionExpert opinion– Scenario buildingScenario building

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OrganisationOrganisation

Macro and Micro Business Macro and Micro Business EnvironmentEnvironment

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MacroMacroenvironmentenvironment

LegalLegal

PoliticalPolitical

EconomicEconomic

Social CulturalSocial Cultural

EnvironmentEnvironment

TechnologicalTechnological

MicroMicroEnvironmentEnvironment

SuppliersSuppliers

CustomersCustomersOtherOtherStakeholdersStakeholders

CompetitionCompetition

Organi-Organi-

sationsation

Macro-environmental ‘Hierarchy’

BusinessBusiness

LocalLocal

NationalNational

GlobalGlobal

Macro-Environmental Factors

BusinessSocial

Political

Economic

Technology

InfrastructureEnvironment

E.g. Global warming, green products

E.g. aging population

E.g. Internet, ‘genetic engineering’ E.g. Employment law

e.g. Interest rates, Taxes

E.g. Discerning customers, greater disposable income

E.g. More roads ,cheap flightsbroadband

Demographics

GovernmentImmigration policy

E-commerce

Transportation

Carbon emissions

Global warmingDigital technology

MigrationEmployment info

Resources

Conflict over resources

Rise in sea level

New products

Quality of life

Health ofpopulous

Personal wealth

Employment+

+

+

+

+

+

+

-

+

+++

+

+

+

Materialism

+ +

+

+

-

+

+

+

Income Tax-

Environmental influences

Trends: Kondratiev long waveTrends: Kondratiev long wave

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Electrical engineering and chemistry

Steam engine InformationTechnology

P = Prosperity

R = Recession

D= Depression

I = Improvement

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PetrochemicalsAutomobiles

RailwaySteel

1850 1900 20001950

Wave 1 Wave 3Wave 2 Wave 4 Wave 5

P R D I

Extrapolating Trends

Graph: Temperature change v time Source: New Scientist, , 2007

The Complex Dynamic Business The Complex Dynamic Business EnvironmentEnvironment

Complex System: Complex System: – more than the sum of the partsmore than the sum of the parts

– interrelation of factors e.g. feedback, virtuous interrelation of factors e.g. feedback, virtuous circlescircles

– can be observed on various levels e.g. can be observed on various levels e.g. global, national, localglobal, national, local

– the observer influences how the system is the observer influences how the system is interpretedinterpreted

(Bertalannfy, 1968)(Bertalannfy, 1968)

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How do we know what is ‘true’?

Scepticism - The critical you

Data: Bad Science or Data: Bad Science or Propaganda? Propaganda?

The world is overpopulated…isn’t it?The world is overpopulated…isn’t it?http:// www.youtube.com/watch?v=Ce-0iRrt66ghttp:// www.youtube.com/watch?v=Ce-0iRrt66g

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Extrapolating trendsExtrapolating trends

2020Graph: Different predictions of global surface temperature

Source: New Scientist, , 2007

How do we know it is true?How do we know it is true?

Who is telling the story?Who is telling the story?

What is their agenda?What is their agenda?

Is the data valid?Is the data valid?

What is being measured?What is being measured?

Its it an appropriate measure?Its it an appropriate measure?

Does data come from a reliable Does data come from a reliable source?source?

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Who’s story?

Pro - LifePro - Life

Voluntary Human ExtinctionVoluntary Human ExtinctionSocietySociety

Impacts of TrendsImpacts of Trends

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Impacts of trendsImpacts of trends

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Highly relevant -examine in

further detail

Uncertainty of impact

Magnitude of impact

Reduce uncertaintythrough modelling

Exploit if an opportunityfor growth

Reduce threat

through intervention

High

High

A business opportunityA business opportunity

An example:An example: BBC trend data – business opportunitiesBBC trend data – business opportunities

Question:Question:What were the trends that have What were the trends that have given rise to this business given rise to this business proposition?proposition?

http://news.bbc.co.uk/player/nol/newsid_6300000/newsid_6304100/6304111.stm?bw=bb&mp=wm&news=1&nol_storyid=6304111&bbcws=1http://news.bbc.co.uk/player/nol/newsid_6300000/newsid_6304100/6304111.stm?bw=bb&mp=wm&news=1&nol_storyid=6304111&bbcws=1

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So what does all this mean?

Difficult to predict the future long term

Reduce uncertainty of future by modelling and analysing the business environment

Trends analysis and extrapolation are a means of forecasting future events

Stakeholders influence the presentation of data – what are the view points

About this unit

Key questionsKey questionsWhat are key trends?What are key trends?

What evidence is there to support these trends?What evidence is there to support these trends?

What opportunities & threats do they present ? What opportunities & threats do they present ?

How do we evaluate these opportunities and How do we evaluate these opportunities and threats?threats?

What impact are they likely to have on What impact are they likely to have on organisations and industries?organisations and industries?

How should managers/policy makers respond to How should managers/policy makers respond to these likely changes?these likely changes?

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Some topical subjectsSome topical subjectsGlobalisationGlobalisationConsumer culture and materialismConsumer culture and materialismSustainabilitySustainabilityAging populationAging population24 hour society24 hour societyMass customisationMass customisationWork-life balanceWork-life balanceEuropeEuropeBiotechnologyBiotechnologyEnterprise CultureEnterprise Culture

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AssessmentAssessment

Examination 50%Examination 50%– Essay questions both on knowledge and Essay questions both on knowledge and

techniquetechnique– Question 1 compulsory based on seminar Question 1 compulsory based on seminar

presentations + 1 further question from 4presentations + 1 further question from 4

Coursework 50%Coursework 50%– Individual reportIndividual report– Impact of trends as a threat or trends leading Impact of trends as a threat or trends leading

to an opportunity to an opportunity

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Aims of the moduleAims of the module

1  To explore some of the key issues 1  To explore some of the key issues exercising contemporary exercising contemporary management theory and practice.  management theory and practice. 

2  To examine critically the robustness 2  To examine critically the robustness of knowledge in these areas.  of knowledge in these areas. 

3  To encourage critical evaluation of 3  To encourage critical evaluation of claims to predict future trends in claims to predict future trends in management and business.  management and business. 

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Lecture scheduleLecture schedule

IntroductionIntroductionOpportunity recognition and evaluationOpportunity recognition and evaluationInterpreting trend dataInterpreting trend dataDemographicsDemographicsMicro trendsMicro trendsEnvironmentEnvironmentConsumption, identity and happinessConsumption, identity and happinessChinaChinaFirst lifeFirst lifeThe changing world of workThe changing world of work

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Learning outcomesLearning outcomes

1  Identify a range of contemporary issues 1  Identify a range of contemporary issues shaping management theory and practice.  shaping management theory and practice. 

2  Demonstrate knowledge and critically 2  Demonstrate knowledge and critically analyze the evidence and argument analyze the evidence and argument available to support or challenge the available to support or challenge the claimed impact of such issues.  claimed impact of such issues. 

3  Engage constructively in group activities to 3  Engage constructively in group activities to generate and evaluate knowledge of future generate and evaluate knowledge of future management trends and developments. management trends and developments. 

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How do I get the most from How do I get the most from this unit?this unit?

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Ask: What’s the evidence? Ask: What’s the evidence? Prove it!Prove it!

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Seek evidence from multiple Seek evidence from multiple sourcessources

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Think creativelyThink creatively

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How to get the most out of this How to get the most out of this module?module?

Think creatively – both systematic and Think creatively – both systematic and randomrandomRead around the subjectRead around the subjectBe scepticalBe scepticalAttend seminars for support and advise for Attend seminars for support and advise for seminar presentations and courseworkseminar presentations and courseworkAttend…Attend…Share resources with othersShare resources with others, i.e. via Victory, i.e. via Victory

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SummarySummaryWhat will happen in your world?What will happen in your world?– Inherently difficult to predict futureInherently difficult to predict future– Understanding/modelling the environment Understanding/modelling the environment

will help especially key trendswill help especially key trends

How will managers of organisations How will managers of organisations and industries respond to changes in and industries respond to changes in the environment the environment in the near futurein the near future??– What might happen?What might happen?

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