Strategic principles for competing in the digital age | McKinsey
We stated that the organisation is an open system with specific relationships with its the organisation does not function in a vacuum, but is influenced by the forces of The macro and market forces, which were described as external forces in If organisations do not align their visions with the environment, or adapt their. How to develop and retain leaders who can guide your organization through shifts, and other major global forces, the leadership needle barely moved. Airlines, Harley-Davidson, and Whole Foods Market, which have all enjoyed .. leadership and organizational effectiveness, and aligning strategy. it must also allocate the output of goods and services that they produce. It must make up the economy, we start our study of economics with four principles of in- dividual .. The fundamental relationship between productivity and living standards is allocate resources through the market forces of supply and demand.
Most governments, therefore, have some form of control or regulation to manage these possible conflicts. The ideal goal of economic regulation is to ensure the delivery of a safe and appropriate service, while not discouraging the effective functioning and development of businesses.
For example, in most countries, regulation controls the sale and consumption of alcohol and prescription drugsas well as the food business, provision of personal or residential care, public transport, construction, film and TV, etc. Monopolies, especially those that are difficult to abolish natural monopolyare often regulated. The financial sector is also highly regulated.
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Regulation can have several elements: Public statutes, standards, or statements of expectations. A registration or licensing process to approve and permit the operation of a service, usually by a named organization or person. An inspection process or other form of ensuring standard compliance, including reporting and management of non-compliance with these standards: Not all types of regulation are government-mandated, so some professional industries and corporations choose to adopt self-regulating models.
Often, voluntary self-regulation is imposed in order to maintain professionalism, ethics, and industry standards. For example, when a broker purchases a seat on the New York Stock Exchangethere are explicit rules of conduct, or contractual and agreed-upon conditions, to which the broker must conform.
The coercive regulations of the U. Securities and Exchange Commission are imposed without regard for any individual's consent or dissent regarding that particular trade. However, in a democracy, there is still collective agreement on the constraint—the body politic as a whole agrees, through its representatives, and imposes the agreement on those participating in the regulated activity.
Regulation in this sense approaches the ideal of an accepted standard of ethics for a given activity to promote the best interests of those participating as well as the continuation of the activity itself within specified limits. In America, throughout the 18th and 19th centuries, the government engaged in substantial regulation of the economy.
In the 18th century, the production and distribution of goods were regulated by British government ministries over the American Colonies see mercantilism. Subsidies were granted to agriculture, and tariffs were imposed, sparking the American Revolution. The United States government maintained a high tariff throughout the 19th century and into the 20th century until the Reciprocal Tariff Act was passed in under the Franklin D.
However, regulation and deregulation came in waves, with the deregulation of big business in the Gilded Age leading to President Theodore Roosevelt's trust busting from toderegulation and Laissez-Faire economics once again in the roaring s leading to the Great Depression, and intense governmental regulation and Keynesian economics under Franklin Roosevelt's New Deal plan.
President Ronald Reagan deregulated business in the s with his Reaganomics plan. Inthe U. Congress enacted the Administrative Procedure Act APAwhich formalized means of ensuring the regularity of government administrative activity and its conformance with authorizing legislation. The APA established uniform procedures for a federal agency's promulgation of regulations and adjudication of claims. The APA also sets forth the process for judicial review of agency action. Regulatory capture[ edit ] Regulatory capture is the process through which a regulatory agency, created to act in the public interest, instead advances the commercial or special concerns of interest groups that dominate the industry said agency is charged with regulating .
Information Technology IT principles provide guidance on the use and deployment of all IT resources and assets across the enterprise. They are developed in order to make the information environment as productive and cost-effective as possible. Architecture principles are a subset of IT principles that relate to architecture work.
They reflect a level of consensus across the enterprise, and embody the spirit and thinking of the enterprise architecture. Architecture principles can be further divided into: Principles that govern the architecture process, affecting the development, maintenance, and use of the enterprise architecture Principles that govern the implementation of the architecture, establishing the first tenets and related guidance for designing and developing information systems These sets of principles form a hierarchy, in that IT principles will be informed by, and elaborate on, the principles at the enterprise level; and architecture principles will likewise be informed by the principles at the two higher levels.
The remainder of this section deals exclusively with architecture principles. Characteristics of Architecture Principles Architecture principles define the underlying general rules and guidelines for the use and deployment of all IT resources and assets across the enterprise. They reflect a level of consensus among the various elements of the enterprise, and form the basis for making future IT decisions. Each architecture principle should be clearly related back to the business objectives and key architecture drivers.
Components of Architecture Principles It is useful to have a standard way of defining principles.
In addition to a definition statement, each principle should have associated rationale and implications statements, both to promote understanding and acceptance of the principles themselves, and to support the use of the principles in explaining and justifying why specific decisions are made. A recommended template is given in Recommended Format for Defining Principles. Name Should both represent the essence of the rule as well as be easy to remember.
Specific technology platforms should not be mentioned in the name or statement of a principle. Avoid ambiguous words in the Name and in the Statement such as: Statement Should succinctly and unambiguously communicate the fundamental rule.
For the most part, the principles statements for managing information are similar from one organization to the next. It is vital that the principles statement be unambiguous. Rationale Should highlight the business benefits of adhering to the principle, using business terminology. Point to the similarity of information and technology principles to the principles governing business operations. Also describe the relationship to other principles, and the intentions regarding a balanced interpretation.
Describe situations where one principle would be given precedence or carry more weight than another for making a decision.
Strategic principles for competing in the digital age
It will often be apparent that current systems, standards, or practices would be incongruent with the principle upon adoption. The impact to the business and consequences of adopting a principle should be clearly stated. The reader should readily discern the answer to: Some of the implications will be identified as potential impacts only, and may be speculative rather than fully analyzed.
Recommended Format for Defining Principles An example set of architecture principles following this template is given in Example Set of Architecture Principles.
Developing Architecture Principles Architecture principles are typically developed by the Lead Architect, in conjunction with the enterprise CIO, Architecture Board, and other key business stakeholders. Appropriate policies and procedures must be developed to support the implementation of the principles. Architecture principles will be informed by overall IT principles and principles at the enterprise level, if they exist. They are chosen so as to ensure alignment of IT strategies with business strategies and visions.
Specifically, the development of architecture principles is typically influenced by the following: Enterprise mission and plans: