Viable System Model

ORGANIZATIONAL look III ASSIGNMENT VIABLE SYSTEMS MODEL (VSM) AS APPLIED TO A MAJOR ORGANIZATION bailiwick of feasible dodges Model at ITC Ltd. Submitted by Daksh Kumar Anand Uh11013 Introduction This paper is intended as study of the viable dodging Model for better examineing. It deals with some of the basic concepts embodied in the imitate, the modeling process, and its use in practice in ITC Ltd. ITCs transformation from cig artte to a conglomerate. Why we need Organizational Models We each(prenominal) interpret the world through models these can be explicit, or tacit.For all managers in all organizations, their great power to manage a situation or organization effectively is in direct proportion to the true statement and relevance of the models they ar using to understand it. By far the most common organizational model in use in charge today is still the hierarchical model though it has non-homogeneous disadvantages. What it doesnt model is any of the more fundament al things about the organization what it is, what it does, how it does it, its processes, formal and informal structures, communications and information transfers, or decision making.The VSM (Viable Systems Model) offers a more sophisticated alternative, one that can be employ both for diagnosing existing organizations, and for designing new ones. The Viable Systems Model The feasible systems model orVSMis amodelof the organizational structure of any viable orautonomoussystem. A viable system is any system organized in such a way as to act as the demands of surviving in the changing environment. One of the prime features of systems that survive is that they are adaptable. The VSM expresses a model for a viable system, which is an bstractedcybernetic (regulation theory) description that is applicable to any organization that is a viable system and suitable of autonomy. A viable system is composed of five interacting subsystems which may be mapped onto aspects of organizational st ructure. In ample terms Systems 13are concerned with the present and now of the organizations operations, System 4 is concerned with the thither and then strategical responses to the effects of external, environmental and future demands on the organization.System 5 is concerned with balancing the here and now and the there and then to give policy directives which maintain the organization as a viable entity. * System 1 (Operations)in a viable system contains several patriarchal activities. Each System 1 primary activity is itself a viable system due to the recursive nature of systems as described above. These are concerned with performing a function that implements at least part of the key transformation of the organization. System 2 (Coordination)represents the information channels and bodies that allow the primary activities in System 1 to communicate amid each other and which allow System 3 to monitor and co-ordinate the activities within System 1. * System 3 (Operations Pla nning Control)represents the structures and controls that are put into place to establish the rules, resources, rights and responsibilities of System 1 and to provide an larboard with Systems 4/5. System 4(Development Research and marketing) The bodies that make up System 4 are responsible for looking outwards to the environment to monitor how the organization needs to adapt to remain viable. * System 5 (Decisions to maintain identity) is responsible for policy decisions within the organization as a whole to balance demands from distinguishable parts of the organization and steer the organization as a whole. According to the above descriptions, these systems can be organized into three groups reflecting the three management perspectives * Operational concern (Systems 1,2,3) Strategic Management (System 4) * Normative Management (System 5) VIABLE SYSTEMS MODEL AT ITC LIMITED ITC was incorporated on August 24, 1910 under the name purplish Tobacco Company of India Limited. In re cognition of the Companys multi-business portfolio encompassing a wide range of businesses Cigarettes & Tobacco, Hotels, Information Technology, Packaging, Paperboards & potency Papers, Agri-business, Foods, Lifestyle Retailing, Education & Stationery and Personal Care the full stops in the Companys name were take effective September 18, 2001. The Company now stands rechristened ITC Limited.The success of ITC lies in the fact that it has been able to adapt to the changing environment and market needs through searching more and more viable options for sustainable growth. allow us apply the VSM model in systematic fashion * System 1 (Operations)in a viable system contains several primary activities. Though the first six decades of the Companys existence were primarily commit to the growth and consolidation of theCigarettes and Leaf Tobacco businesses, the Seventies witnessed the beginnings of a corporate transformation that ushered in significant changes in the life of the Comp any.It entered into the chosen portfolio of FMCG, Hotels, Paper, Paperboards & Packaging, Agro Business and Information Technology. These were chosen on the basis of internal capabilities, the emergent opportunities in these areas and confidence that ITC would be able to achieve leadership positions in these business instalments. * System 2 (Coordination)ITC has a diverse portfolio of product offerings and proper coordination amid them is necessary and it does take place even at the very basic level. E. g. ne of the primary products in its portfolio Aashirvaad Atta wheat flour is today a leader in its segment within a very short time since its launch. Its success is an example of the synergies that ITC derives from the diversity of its businesses. ITCs pioneering rural initiative, the e-Choupal network, enables equal effective sourcing of wheat but, more importantly, lends a competitive strength given the traceability of the commodity through identity-preserved procurement. Th is enables customized blending, which again is a strength honed from the practice of tobacco lending over the years, to support local tastes and preferences. This is a spotless example of how the coordination takes place in ITC Ltd. * System 3 (Operations Planning Control) Flowing from the philosophy and core principles, embodied Governance in ITC takes place at three interlinked levels, namely * Strategic supervision by the maturate of Directors * Strategic management by the Corporate Management Committee * Executive management by the divisional Chief Executive assisted by the Divisional Management Committee.It is ITCs belief that the right balance between freedom of management and accountability to shareholders can be achieved by segregating strategic supervision from strategic and executive management. This 3-tier structure ensures that a. Strategic supervision (on behalf of the shareholders), being free from involvement in the task of strategic management of the Company, ca n be conducted by the Board with objectivity, thereby sharpening accountability of management. b.Strategic management of the Company, uncluttered by the day-to-day tasks of executive management, remains focused and energised and c. Executive management of the divisional business, free from collective strategic responsibilities for ITC as a whole, gets focused on enhancing the quality, efficiency and effectiveness of its business. ITC also benchmark the health of each business comprehensively across the criteria of Market Standing, Profitability and Internal Vitality. * System 4(Development Research and marketing) ITC is move to delivering world-class products and services.This requires a clear focus on continuously striving to create a high value to clients by achieving excellence in all Companys operations. ITC always look out to know the customer demands and needs and work upon them. e. g. ITCs hotels business and its master chefs interact with millions of consumers throughout the year and are able to understand the nuances of regional and local tastes that delight the consumer palette. This knowledge is utilized by the foods business to deliver a superior(p) and differentiated product. System 5 (Decisions to maintain identity) ITC has developed core values in order to draw out the balance between demands of the organization as well as the demands of the customers. ITCs Core Values are aimed at developing a customer-focused, high-performance organization which creates value for all its stakeholders and these are * Trusteeship * guest Focus * Respect for People * Excellence * Innovation * Nation Orientation. It is clear from the above discussion that ITC follows the Viable Systems Model up to a great extent which is a reason for its sustenance in combat-ready environment.