How can you align IT to the business strategy - Free Essay Example

Sample details Pages: 7 Words: 2019 Downloads: 3 Date added: 2017/06/26 Category IT Essay Type Narrative essay Did you like this example? ABSTRACT In their drive to achieve alignment, CIOs often run head first into a conundrum: How can you align IT to the business strategy when no two people can describe the strategy? Unlike financial plans, which all contain income statements, balance sheets and other uniform elements, there is no single framework for describing a companys strategic plan. And without a common language for discussing strategy, companies can turn into towers of Babel. Leaders might stress different strategic goals causing confusion among the management team and disconnects between management and the rank-and-file employees. Don’t waste time! Our writers will create an original "How can you align IT to the business strategy" essay for you Create order The connections that should link internal processes and information systems to customer value and financial goals can be buried and severed. The result? A failure to execute on strategy and a widening gap in IT-business alignment. In this article it shows how to overcome this problem by creating strategy maps of both an enterprises strategy and its IT strategy. A strategy map describes how an organization intends to create value for its stakeholders-the goal of any business strategy. It identifies the specific processes, competencies, cultural attributes and technologies, and how they are connected to satisfying customers and increasing long-term shareholder value. Similarly, the IT strategy map defines how an IT organization delivers value to the business it serves. Strategy maps are not tools for creating strategy; they only describe strategies. However, by using strategy maps, IT and business executives can ensure that the strategies they have chosen are well understood, and se e if their IT strategy is well aligned with their enterprise strategy.. Strategy Maps Strategy means Converting Intangible Assets into Tangible Outcomes A strategy map is an invaluable tool that demonstrates how implementing one strategic theme has an impact on other themes. Corporate strategy views from four perspectives: Financial, Customer, Internal and Learning and Growth. Favor to long term interest if there is an option of long term and short term. There will be a picture of future clients and what best we can offer them. External outcomes like profitability, share price and customer satisfaction all depends on internal business processes, such as learning initiatives and training. Take care of HR and IT department strategies. Before implementing make sure of your strategies for small, medium and long term. 1. How to balance various forces that affect your organization: tangibles, intangibles, current profit and future innovation. 2. How value-added strategies differentiate your firm and your products. 3. How to create and implement a strate gy map and achieve its goals. 4. What the Balanced Scorecard method involves. 5. How other companies have applied the strategy map concept. The powerful concept of measuring the elusive intangibles that affect organizations help them for successful management of business. CEOs instinctively draw arrows to explain their goals. This led to a breakthrough realization: Objectives should be linked in cause-and-effect relationships. The graphic display of these relationships is a strategy map. It expands the concepts of strategic themes and value-creating processes, and explains a system for aligning the organizations strategy with its intangible assets. Keep Your Balance Making the Strategy Map The solution At first glance, it seems daunting is the strategy map, a graphic depiction of strategic objectives and the factors linked to measure assets to them. The map graphs a firms strategy from four related perspectives: financial, employees customer, internal and learning and growth. These four perspectives ensure those capabilities and alignment, the strategy balances tangible versus intangible assets, and short-term needs versus long- information range opportunities. Physically, a strategy map is a single page split into four horizontal bands or rows -for each perspective, plus information listing areas of alignment, such as strategic change. Each band displays its areas priorities with the names circled. These priorities defined by their intangibility, but range from long-term shareholder value on the financial band to the customer value some measure- proposition on the customer band. Arrows link related subjects, up and down, from one band to another. This map grap hic can become complex, but its purpose remains clear: to align the priorities of different domains and to help balance the tangible and intangible elements in the overall strategic plan. The result is one page that describes the companys value proposition and growth strategy, plus the linkages that explain how those objectives will be achieved. The strategy map template acts as a checklist to assure that no element is inadvertently omitted. The map helps your organization align Without its strategic themes. The core assumptions about strategy and business that underlie the strategy map include: 1. Strategy balances contradictory forces- Strategy should re ¬Ãƒ ¢Ã¢â€š ¬Ã… ¡ect balance. For example, the important role of intangible assets, such as teaching workers new skills, must not be overlooked for todays  ¬Ãƒâ€šÃ‚ nancial gain. Weigh the present goal of cutting costs and upping productivity versus the long-term goal of future revenue growth. 2. Strategy is based on a differentiated customer value proposition To draft a clear strategy, articulate who your customers are and the unique value proposition that you plan to offer them. This may well be the most essential element of any strategy. 3. Value is created through internal business processes Internal processes lead to external outcomes, such as customer satisfaction or increased sales. These processes include  ¬Ãƒâ€šÃ‚ nancial operations, learning initiatives, training, organizational systems and procedures. Key processes support your differentiating value proposition. 4. Strategy consists of simultaneous, complementary themes Pursue several themes simultaneously. Each strategy involves at least one strategic theme from each of the four internal clusters so that you push multiple themes forward simultaneously. 5. Strategic alignment determines the value of intangible assets This perspective drives the growth of your companys intangible assets: the human capital of your skilled, talented, trained employees; the information capital vested in your data, systems and technology base; and the organization capital that resides in your leaders, teams, know-how, internal coordination and corporate culture. Strategy and Internal Operations Every organization has four internal operational clusters, each encompassing several internal systems. Internal operations ultimately will determine how you create and maintain value. Your strategy map will help you focus on a few internal processes strategic themes that are critical to your overall success and your distinct value proposition. The four internal business-process clusters are: Operations management These operating procedures and systems produce and deliver your goods and services. Many companies focus on this area, although by itself, operational excellence is not a sufficient long-term strategy, especially in a changing marketplace. Operations management includes building and nurturing ties to your suppliers, turning out goods and offering services, getting your products and services to the consumer, and handling any risks involved. Customer management This involves identifying which customers to pursue, shaping your value proposition to them, marketing to acquire them, keeping them and enhancing your relationship with them over time to earn more pro ¬Ãƒâ€šÃ‚ ts. Innovation- Innovate to remain competitive. Avoid the risk that a competitor will eventually imitate some aspect of your value proposition, at which point your product or service may become a commodity. Innovation involves four key processes: 1) Identify opportunities for new products and services; 2) Manage the research and development portfolio; 3) Design and develop the new products and services; 4) Bring the new products and services to market. Regulatory and social These activities encompass legal provisions and societal norms. Companies that fail to comply with such rules and customs face costly litigation and possible shutdowns. This cluster includes environmental and health concerns, safe practices, workforce policies, and social and civic responsibility. Studies say that some 66% of organizations do not relate their strategies to their human resources and IT practices, so they probably are not realizing a full return on their investments in these areas. In contrast, organizations that align their human capital and growth maintain high readiness and  ¬Ãƒ ¢Ã¢â€š ¬Ã… ¡exibility. They can mobilize to respond to change. Unique Value in the Marketplace To assure that your products have unique positions and extra value (and never become commodities), consider the following strategies. Make sure your strategy map depicts the themes that support whichever value-added approach your company selects from this list: Low total cost strategy The primary goal of such companies as Southwest Airlines, Dell Computer and Wal-Mart is to deliver low total cost. This involves quality and price, since defects and returns increase the customers expenses. These  ¬Ãƒâ€šÃ‚ rms minimize costs by limiting their stock while offering enough products to satisfy most clients fully. A strategy map for this approach has several unique characteristics, including proven relationships with extremely dependable suppliers. These companies must offer short response times, ease of consumer access and simple ordering. This may mean online ordering (Dell, Amazon) or it may mean rapid check-in (airlines, car rentals). These  ¬Ãƒâ€šÃ‚ rms must have a keen understanding of which products address the broadest range of consumer demand. Because they tend to be followers rather than leaders, they seek efficiency and invest relatively little in technological research and development. Product leadership strategy Sony, Intel and Analog Devices, for instance, emphasize product leadership and innovation, as do several biotech and pharmaceutical  ¬Ãƒâ€šÃ‚ rms. These organizations strategic maps stress being the  ¬Ãƒâ€šÃ‚ rst to bring signi ¬Ãƒâ€šÃ‚ cant innovations to market. These companies cater to early adopters or lock buyers into speci ¬Ãƒâ€šÃ‚ c technical systems. Their operations management processes must be strong and nimble to accommodate new products. Pro ¬Ãƒâ€šÃ‚ t margins from original products have to cover the increased costs of innovation. These companies learn from their best customers and educate consumers about using new products. Because their strategy depends on having technologically adept employees, these  ¬Ãƒâ€šÃ‚ rms seek the best talent and nurture their people. Complete customer solutions Like IBM, Mobil and Goldman Sachs, these companies emphasize long-term customer relationships. They bond with their customers and can generate high pro ¬Ãƒâ€šÃ‚ t margins. Their hallmarks are complete not partial solutions and superb service even after the sale. They strive for high customer retention and measure their customers lifetime printability. Their research focuses on understanding customers future needs and their operations management encourages frequent customer interaction. Their IT departments create elaborate databases describing customers buying patterns and product preferences. Lock-in strategies These companies fortify their consumer base by making it very costly for customers to switch to other networks. For example, Apple computer owners who switch to an IBM clone with a Windows system lose their ability to run much of their current software. Lock-in strategies require superb innovation. These companies draw new customers by reducing their switching costs, while keeping their current customers by raising theirs. Due to high revenues, these  ¬Ãƒâ€šÃ‚ rms often experience less pressure to cut operational costs. To implement a dynamic strategy, de ¬Ãƒâ€šÃ‚ ne three elements on your strategy map: Quantify your goals -Set strategic targets. Verify your maps cause-effect links. De ¬Ãƒâ€šÃ‚ ne the time line -To be sure your value-added proposition is workable and sustainable over time, determine how it will generate value in short-, medium- and long-term periods. Select initiatives -Prioritize your organizations actions, programs and initiati ves, including investments in order to achieve its goals within the required time frames.Because strategy maps provide a snapshot view of your organizations overall strategic posture, you can use them to develop action plans. Take these six steps: 1. De ¬Ãƒâ€šÃ‚ ne the shareholder/stakeholder value gap This gap is the difference between your current performance and your targeted future aspirations. 2. Reconcile the customer value proposition De ¬Ãƒâ€šÃ‚ ne your buyers and their wishes. 3. Establish the time line for sustained results Show the phases and time periods during which the value gap will be narrowed and eventually eliminated. 4. Identify the strategic themes What are the critical processes your strategy depends on? 5. Identify and align intangible assets De ¬Ãƒâ€šÃ‚ ne your degree of readiness, identifying the readiness gap you intend to bridge with new programs. 6. Identify and fund strategic initiatives to execute the strategy Authorize the funding to support your plan. Installing a Balanced Scorecard approach takes more than objectives arrayed on a strategy map. Allocate resources and set strategic initiatives in motion to accomplish those goals. If executing your overall strategy is tantamount to winning the war, each strategic theme represents a battle. Now, move from planning to implementation and onto succes

The Importance Of Expression And Emotion, Emotion And Fear

Importance of genogram combining touch, attachment, emotion and fear The use of focused genograms can aid therapists by highlighting the psychological bonds that confine an individual or couple. By highlighting the bonds, they can be explored through a conceptual framework such as; an attachment lens or and emotional lens, to determine the impact on the system and individual. The genogram reflects the family of origin and can illuminate a pattern of connectivity (Magnuson Shaw, 2003). While this exploration is beneficial, a deeper knowledge or clarification can be obtained if several focused genograms are combined to create the roadmap for the individual. A genogram combining the touch and bonding level of attachment theory genogram†¦show more content†¦Intimacy can be explored with an intimacy genogram to help show the family constellations that show a pattern (Sherman, 1993). A deterrent to intimacy in a relationship is fear, at many levels, such as fear of loss of powe r and fear of loss of self (Sherman, 1993). Fear can manifest from previous life experiences such as abuse or assault or it can be a manifestation of family-of origin influences. This fear can be manifested as individuals that do not have secure attachment styles and have difficulty expressing emotion through touch. By exploring the attachment styles of the couple a starting point can be identified. Attachment styles have been researched for thirty years beginning with Bowlby (1977) so extensive theory is available to begin the conceptualization of the case. Once the attachment is identified, then touch and bonding can be explored to further develop the picture of the couples functioning. The questions can expand both members of the couple’s tactile expression and if there is any overlap. Lastly, the emotional questions are explored to determine the emotional intelligence of the individuals and their willingness to express themselves. By addressing fear within the couple , the therapist can evaluate the level of anxiety and trauma that is involved. In highlighting the intergenerational patterns, the therapist removed the blame of the problem away from the lower tactile

An Article On Physician Compensation Essay - 788 Words

Physician Compensation Article Review This paper contains a critical analysis of an article on physician compensation practices. It will summarize the article including the author s approach and conclusions, and it will evaluate the article s strengths, weaknesses, and validity. Article Summary In the article Physician Compensation: Are Physicians Paid to Promote Health and Well-Being? author William Martin argues the need to align physician compensation with the interests of patients. Martin, an associate professor at DePaul University, establishes a case that physician compensation must be designed in a way that not only benefits financial interests of physicians but also the health status/quality of life of patients. (Martin, 2015). Martin relays statistics from the Center for Medicare and Medicaid Services that physicians only account for 21.2% of the total health care spending, yet decisions physicians make in their practice make up the vast majority of health care spending based on ordering and referrals. Health care spending impacts health insurance premiums provided by employers and dollars spent by the U.S. government on Medicare, Medicaid, the Veterans Administration and the federal/state correctional system. Four models of compensation are described: fee-for-service, capitation, hybrid and fee-for-value. Under the fee-for-service model, physicians are paid for productivity, which encourages physicians to see more patients and perform more proceduresShow MoreRelatedHealthcare Management and Article Critique709 Words   |  3 PagesHealthcare Questions and Article Critique: 1. Incentive compensation is a major practice that has continually been adopted by healthcare organizations, especially for managers. 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Reading is Important Free Essays

At the same time, technology like pods and cell phones may distract potential readers from books. Caleb Grain’s and Stephen Kings arguments were both professional and compelling for the readers which Grain talks about how a decline in reading might be affecting the culture by providing statistics and evidence to back up his assertion; conversely, Kings argument was more entertainment and descriptive by including the Harry Potter series into his article, and at the same time, reassuring that the kids are alright. Exemplification is the essential key that Grain used to convince his audience that a decline in reading might be affecting the culture; his several examples were given in each of his paragraphs which make his point more clearly and logical to the readers. We will write a custom essay sample on Reading is Important or any similar topic only for you Order Now Grain writes, â€Å"In 1970, according to Editor Publisher International Year Book, there were 62. 1 million weekday newspapers in circulation? about 0. 3 papers per person. Since 1990, circulation has declined steadily, and in 2006 there were Just 52. 3 million weekday papers?about 0. 7 per person†¦ † (308). Indeed, facts and comparisons about how reading is on decline in our contemporary ultra, and how it used to be back in the day was the main point in his article, not only in this paragraph. The author relied on testimony that would make a large percentage of people realize the effect of ignorance and how books are falling down because they aren’t interactive enough. In his first example, he says, â€Å"In the fourth millennium B. C. E, the Sumerians developed cuneiform and the Egyptians hieroglyphs†¦ Traders had to recognize hundreds of symbols†¦ † (311). Likewise, this paragraph gives examples of how people used to read hundreds of symbols to get informed and educated, but on the contrary, nowadays, fewer children and adults are reading. By emphasizing exemplification, Grain uses results and statistics to convince his readers to support his specific opinion. He combines statistics with other kinds of evidence when he states a statistic, and then he gives an example reinforcing the number. Statistics can always be powerful evidence and command the attention of the audience. Grain warned, â€Å"During the next two decades, reading continued to fall and television watching to rise, though more slowly. By 1995, adding which had occupied twenty-one per cent of people’s spare time in 1995, accounted for Just nine per cent†¦ † (309). According to these statistics, reading for pleasure is continuing to decline, and people’s leisure time will be eroded by television, computer games, and internet activities. Equally important, Grain also depended on results to convince and encourages his readers to take the passion and enjoy reading with using the comparisons between the non-readers and readers. Grain says, â€Å"The N. E. A reports that readers are more likely than non-readers to play sports, exercise, and visit art museums†¦ (318). Which would give the readers the motivation to read more efficiently. Stephen king looked critically into J. K. Railings â€Å"Ministry of Magic,† which is a fascinating book for children, who became focused on reading the Harry Porter’s story. King, however, presented his view that Railings book was not perfect since most of the sections in it were too long in the narrations. On the other hand, King uses entertainment as a rhetorical strategy to explain the lifestyle of Harry Potter, which creates a sense of rich and elegant content whereby the reader gets to concentrate more. King writes, â€Å"And sometimes she falls prey to the Robinson Crusoe syndrome. In Crusoe, whenever the marooned hero requires something, he ventures out to his ship-which has conveniently run aground on the reef surrounding his desert island†¦ † (324). Entertainment as a rhetorical strategy plays a vital role in ensuring the reader is not bored. King uses creative spells like the Cruse’s ship that brings out an astonishing level of fantasy. Entertainment sets a scenario whereby the reader opens up to think critically while analyzing and evaluating the purpose of the story. Entertainment ensures that the reader becomes vitiated by the story; hence it increases the level of concentration and interest in reading the story. Description is another crucial aspect of rhetorical strategy used to create vivid images in the minds of readers. King has used subjective description to keep the readers intense, since he emphasizes on the reader’s feelings. The author writes, â€Å"One day in my hometown of Bangor, I was walking up the street and observed a dirty-face boy of about 3 with scabbed knees and a look of extreme concentration on his face†¦ † (322). He uses words that give a description, which illustrates a picture in the reader’s view. Also, King describes how Harry and his friends get into a tight corner and create a new spell, turning into a slide, thus making a child react gleefully. He used this strategy to capture the attention of his readers. Critically speaking, King did not succeed in compelling and convincing other people that Railings book was long. King himself comes to acknowledge that Roiling is a talented author that had an amusing story to tell and conveys her ideas without talking down. Further on, King compliments Roiling for setting standards which today’s writers cannot achieve as easily as she can. Society’s seeming disinterest in books and literature projects negative impacts on not only education and literacy, but on the general future as well. Inspiring people to read stories and articles about movies will increase literacy and would re-establish reading for pleasure in society once again and would lead the path to reading being the main medium for information and knowledge. In addition, non-readers lack the analytical and comprehensive skills of fluent readers, whereas the latter will most probably have built themselves a stronger vocabulary, impressive communication skills, and a rater knowledge of literature and composition. Reading is an integral part of culture, and human literacy is what primarily set us apart. It is crucial that it be re- introduced so that generations to come will be able to benefit from reading. In fact, school is the primary source of education that comes after parents’ duty. Nowadays, many parents ignore and neglect their children in many different aspects, focusing on their Jobs and businesses, and they forget about their children, whom they depend on schools to teach them everything, starting with education and ending with social life. How to cite Reading is Important, Papers

Behavioural Determinants

Question: Identify the culture to which the behavior belongs and explain your assignment of the behavior to the cultural category? Answer: Introduction Cultural factors and determinants impact the business execution quality. Different cultural factors are important to be analysed, as it helps in analysing the challenges associated with handling people at the workplace. There are different types of cultural factors and behavioural pattern that determines task execution. The behaviour aspect of the employees is determined by the cultural practices followed by the company (Eckel et al., 2005). Discussion The determinant factors are associated with analysing the differences individuals and companies face at the time of evaluating the risks. The risk factors impact the business performance and the performance of the employees and individuals. Behavioural aspects of the individuals depend upon various factors which needs to be analysed and corrective measures has to be introduced for implementing the changes. The cultural behaviour of the individuals is associated with cultural practices introduced in the company. The challenges and limitations associated with the process have to be analysed, as this will help in implementing the changes that re necessary for increasing the business performance (Loewenstein et al., 2001). Different factors that affect the business cultural practices are Attitude The attitude of the individuals towards others are some of the important factors that helps in determining the behaviour. This is one of the important tasks that need to be undertaken by the management of the company. The factors affecting the cultural views of an individual are the cultural practices, values, and practices followed. The views of an individual about the cultural practices followed by another individual are an important factor, which needs to evaluate (Guiso et al., 2002) Culture values The practices and the values, an individual believes in is associated with the cultural values. Through this process, the factors affecting the behaviour and attitude of an individual are evaluated. This would assist in evaluating the challenges that can impact the business performance and communication process adopted by the management. Barriers Communication process has to be simple and effective. This would reduce the barriers that might exist at the workplace. The challenges have to be undertaken and analysed in the corrective manner. The management of the company has to reduce the barriers that occur due to communication limitations (Schupp and Wagner, 2002). Ethnicity The values associated with cultural practices and ethnicity is evaluated. This helps in determining the factors that could affect the business execution process. Workplace culture Developing and implementing corrective measures for increasing the workplace culture is an important factor. This would help in providing fair opportunities to the members working with the company. Changes can be adopted and introduced by the management in an effective manner, as this will help in increasing the business performance (Cramer et al., 2002). Factors that affect the cultural behaviour of an individual are- Behavior The behaviour of the individuals depends upon the process followed for discussing different factors related to business Practices This includes analysing the expectations of the people and introduces an effective interaction process. Values The cultural factors are related to identifying the values followed by the people and the process followed for respecting others. Barriers It includes unwillingness of the people to interact with others and adopt the right process for communication Communication The process followed for interacting with people and method adopted for communicating with people for solving the cultural factors. Conclusion By analysing the cultural values and differences it is possible for the company and the individual to introduce an effective system for handing the differences. The challenges faced by the members can be effectively handled by introducing the right process for increasing the performance of the staffs. For this, the factors associated with the cultural differences can be handled and overpowered in the right manner. The process followed has to be analysed, as it will help in implementing the changes that are necessary for improving the performance. References Cramer, J. S., Joop Hartog and Nicole Jonker and C. Mirjam van Praag (2002): Low Risk Aversion Encourages the Choice for Entrepreneurship: an Empirical Test of a Truism, Journal of Economic Behavior and Organization, 48(1), 2936. Eckel, C., C. Johnson, and C. Montmarquette (2005): Saving Decisions of the Working Poor: Short- and Long-Term Horizons, in Research in Experimental Economics Volume 10: Field Experiments in Economics, ed. by J. Carpenter, G. Harrison, and J. List, pp. 219260, Oxford. Elsevier Science Guiso, L., T. Jappelli, and L. Pistaferri (2002): An Empirical Analysis of Earnings and Employment Risk, Journal of Business and Economic Statistics, 20(2), 241 253 Loewenstein, G. F., C. K. Hsee, E. U. Weber, and N. Welch (2001): Risk as Feelings, Psychological Bulletin, 127(2), 267286. Niederle, M., and L. Vesterlund (2007): Do Women Shy Away From Competition? Do Men Compete Too Much?, Quarterly Journal of Economics, 122(3), forthcoming. Schupp, J., and G. G. Wagner (2002): Maintenance of and Innovation in Long-Term Panel Studies The Case of the German Socio-Economic Panel (GSOEP), Allgemeines Statistisches Archiv, 86(2), 163175.

The Individual and Game Theory Criticisms and the Evolutionary Theory

Introduction The individual choice/game theory uses a very strict definition of individual rationality. On the contrary, the evolutionary game theory does not make any rationality assumptions. In this paper, the focus is going to be on commenting on whether the evolutionary approach is successful in addressing the criticism that, in neoclassical economics, the profile of the rational individual is not very realistic.Advertising We will write a custom essay sample on The Individual and Game Theory Criticisms and the Evolutionary Theory specifically for you for only $16.05 $11/page Learn More Evolutionary Theory Provides a Satisfactory Answer to the Criticism In my view, the evolutionary game theory, which is a dynamic process, possibly offers the coordination mechanism which aligns beliefs with behaviour. It brings the game theory closer to economics by looking at economics as the product of an adjustment process instead of being looked at as a thing that simply springs in to existence. The classical game theory, which was a standard theory until the 1980s, is set up on the assumptions of ideal rationality as well as common knowledge (Hodgson 2007). However, it is without a doubt that not only an assumption is made that each individual makes an effort to maximize utility, there is also need to make an assumption of common knowledge of rationality and consistently aligned beliefs (Griine-Yanoff and Lehtinen 2010). According to my judgement, the evolutionary theory has offered some sort of solution to problems that are associated with the classical game theory. By making the relaxation of the perfect rationality assumption legitimate, the revolutionary turn overcame the hurdle which the refinement programme could not overcome. The issue was in the fact that â€Å"classical game theory facilitated generation of predictions were disconfirmed by evidence† (Sugden 2001, p.116). Economists had interest in game theory for the reason that they had hopes of utilizing it in explaining the actions of the â€Å"real economic agents†. Therefore, in the setting, there was an assumption that ‘real economic agents’ like the perfectly rational players of the theory, must possess some explanatory strength. However, the evolutionary theory is not confined to prescribed actions of ‘ideal’ agents as it focuses on the agents’ behaviour which is predetermined by successful actions of other agents. In other words, the evolutionary theory focuses on specific behavioural patterns which have already been checked and proved to be successful. Therefore, economists do not try to work out some patterns on the basis of certain assumptions. The economists can have more specific material. The evolutionary approach offers particular settings and particular examples to operate on.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More One of the strengths of the evolutionary game theory is that it does not focus on individuals but on the strategies themselves. It is those strategies that are successful themselves which attract the agents and the individuals do not consciously make choices. It is only that with time, in one way or the other, they learn to make choices of strategies which, in regard to expected utility, are better for them. This might come about for the reason that â€Å"individuals learn from past play, they copy the behaviours of other players that are successful, or they adapt† (Patokos 2011, p.3). Therefore, the evolutionary theory addresses limitations of the game theory which is too ‘theoretical’. The evolutionary theory leaves behind certain theoretical notions like rationality to focus on more specific points like strategies used by the agents. The individual choice/game theory offers models which can hardly fit the modern (i.e. real) world, whereas the evolutionary theory provides in-depth analysis of behavioural patterns and various strategies developed by agents. In simple terms, instead of theorizing (which is the case with game theory), the evolutionary theory is more concerned with analysis of situations which are true to life. It is possible to claim that the evolutionary theory addresses the criticism that the neoclassical approach is unrealistic. The evolutionary approach verifies that it is possible to work out specific strategies which can be used in real life settings. The evolutionary approach enables economists to work out new ways to analyse various processes which take place in the business world. Finally, the evolutionary approach addresses one of the weakest points of the individual choice/game theory. The evolutionary theory does not try to suggest some sort of rationality. The approach suggests that agents’ actions can be justified by previous experiences of agents. In other words, the evolutionary th eory is not confined to analysing rationalities which influence agents’ choices. The evolutionary approach suggests a simple answer to one of the major questions concerning motives and stimuli. The evolutionary theory focuses on successful strategies agents develop. Usefulness of the Evolutionary ApproachAdvertising We will write a custom essay sample on The Individual and Game Theory Criticisms and the Evolutionary Theory specifically for you for only $16.05 $11/page Learn More The evolutionary approach is very useful in addressing the problems associated with the individual choice/game theories that have been pointed out by critics. In an interesting manner, it is not that the evolutionary game theory does not need to make any assumptions on rationality; in the actual sense, it can be proved that the individual rationality assumptions as they are known must not apply for evolutionary theory to take off. Therefore, I view this theory as being a response to the criticism that rationality in neoclassical economics is too restrictive and it offers a very strong answer by leaving out all the rationality assumptions. Furthermore, I assume that evolutionary approach is more applicable in the contemporary business world. Admittedly, game theory proved to be quite effective in analysing certain processes. However, it is too concerned with the concept of rationality. In the ideal world where agents are guided by ‘ideal’ rationality, this theory could be the best option. However, the modern competitive business world is more like the animal world where species try to adopt and simply survive. Likewise, evolutionary approach can explain many of the on-going processes. I assume that modern agents tend to strive for success which presupposes fitness to certain conditions. Thus, evolutionary approach is more concerned with agents’ actions and choices which lead to some kind of development, rather than tracing agentsà ¢â‚¬â„¢ choices based on specific rationality. In the evolutionary game, agents do not work out strategies based on their rationality. Agents â€Å"inherit† strategies which have already proved to be effective under certain conditions (Vincent Brown 2005, p. 74). In other words, according to the evolutionary theory agents have specific patterns to use in this or that situation. What is more, every pattern undergoes certain ‘mutation’ which makes it applicable in other situations. Thus, agents work out successful behavioral patterns based on previous experiences, and, at the same time, prepare ground for the next generations of players. The evolutionary approach reveals one of the most important phenomena in the business world. It is possible to claim that one of the advantages of the evolutionary game theory is that it has two layers. Thus, the evolutionary approach presents an outer and inner game (Vincent Brown 2005). These two layers can enable economists to carry out in-depth analysis of various trends.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More The first layer takes into account players, their activities and the ways they develop new strategies. The second layer is concerned with the strategies worked out. Advantages, disadvantages and overall fitness of this or that strategy is under analysis. Admittedly, such thoroughness can help economists find answers for many questions. For instance, economists not only analyse successful strategies and behavioural patterns. They are able to analyse settings that make people come to this or that conclusion. Economists are also able to understand factors that influence agents’ decision making. Admittedly, this understanding can help to predict changes which can take place in the nearest future. In fact, the evolutionary approach makes economists prepared to various changes as it provides specific solutions to particular problems. This is one of the most important advantages of the evolutionary approach over the neoclassical game theory. Therefore, I assume that the evolutionary approach is more complete as it suggests explanations which are more true to life. This approach enables the economist to analyse former experiences of the agents, and this, in its turn, can enable the researcher to predict behaviour of agents rather than contemplate (and seek for) ideal rationalities. This approach can be applicable for analysis of various processes taking place in the contemporary world. Another advantage of the evolutionary approach is that it enables the researcher to work out (predict) certain behavioural patterns agents can follow in this or that situation. The approach suggests greater degree of certainty which is very important for such disciplines as economics. It is also important to note that the evolutionary theory can help to trace changes that occur in the business world. Thus, agents develop specific behavioural patterns to fit the ‘environment’. Basically, agents evolve to successfully operate in specific settings. By tracing the change s in behaviours, the researchers can single out trends and principles that appear. Therefore, the evolutionary approach extends to the analysis of agents’ behaviours as well as analysis of the settings. This approach can help researchers to carry out in-depth analysis of the major principles existing in the business world. The evolutionary approach can help to predict changes that are about to occur, or to work out the most effective strategies to cope with up-coming issues. Basically, the evolutionary approach offers effective solutions applicable in the rapidly changing world. Conclusion The evolutionary theory has given some solutions to problems that are said to be associated with the individual choice and game theories. By bringing a dynamic process to the game theory, this has rationalized the existence of several equilibriums. The evolutionary approach focuses on particular strategies which have been worked out by agents on the basis of successful experience of other a gents. The evolutionary theory offers specific solutions which can be applicable in the contemporary world, which is one of the advantages of the approach. Reference List Griine-Yanoff, T Lehtinen, A 2010, Philosophy of game theory, Elsevier BV, New York. Hodgson, MG 2007, ‘Evolutionary and institutional economics as the new mainstream’, Evolutionary and Institutional Economics Review, vol. 4 no. 1, pp.7–25. Patokos, T 2011, ‘Evolutionary game theory – an introduction: issues in applied economics, Lecture notes for session 4’ (University of Hertfordshire). Sugden, R 2001, ‘The evolutionary turn in game theory’, Journal of Economic Methodology, vol. 8 no. 1, pp. 113–130. Vincent, TL Brown JS 2005, Evolutionary game theory, natural selection, and Darwinian dynamics, Cambridge University Press, New York. This essay on The Individual and Game Theory Criticisms and the Evolutionary Theory was written and submitted by user GorillaMan to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here.

Path Analysis -- What it Is and How to Use It

Path Analysis What it Is and How to Use It Path analysis is a form of multiple regression statistical analysis that is used to evaluate causal models by examining the relationships between a dependent variable and two or more independent variables. By using this method, one can estimate both the magnitude and significance of causal connections between variables. Key Takeaways: Path Analysis By conducting a path analysis, researchers can better understand the causal relationships between different variables.To begin, researchers draw a diagram that serves as a visual representation of the relationship between variables.Next, researchers use a statistical software program (such as SPSS or STATA) to compare their predictions to the actual relationship between the variables. Overview Path analysis is theoretically useful because, unlike other techniques, it forces us to specify relationships among all of the independent variables. This results in a model showing causal mechanisms through which independent variables produce both direct and indirect effects on a dependent variable. Path analysis was developed by Sewall Wright, a geneticist, in 1918. Over time the method has been adopted in other physical sciences and social sciences, including sociology. Today one can conduct path analysis with statistical programs including SPSS and STATA, among others. The method is also known as  causal modeling, analysis of covariance structures, and latent variable models. Prerequisites for Conducting a Path Analysis There are two main requirements for path analysis: All causal relationships between variables must go in one direction only (you cannot have a pair of variables that cause each other)The variables must have a clear time-ordering since one variable cannot be said to cause another unless it precedes it in time. How to Use Path Analysis Typically path analysis involves the construction of a path diagram in which the relationships between all variables and the causal direction between them are specifically laid out. When conducting a path analysis, one might first construct an input path diagram, which illustrates the hypothesized relationships. In a path diagram, researchers use arrows to show how different variables relate to each other. An arrow pointing from, say, Variable A to Variable B, shows that Variable A is hypothesized to influence Variable B. After the statistical analysis has been completed, a researcher would then construct an output path diagram, which illustrates the relationships as they actually exist, according to the analysis conducted. If the researcher’s hypothesis is correct, the input path diagram and output path diagram will show the same relationships between variables. Examples of Path Analysis in Research Lets consider an example in which path analysis might be useful. Say you hypothesize that age has a direct effect on job satisfaction, and you hypothesize that it has a positive effect, such that the older one is, the more satisfied one will be with their job. A good researcher will realize that there are certainly other independent variables that also influence our dependent variable of job satisfaction: for example, autonomy and income, among others. Using path analysis, a researcher can create a diagram that charts the relationships between the variables. The diagram would show a link between age and autonomy (because typically the older one is, the greater degree of autonomy they will have), and between age and income (again, there tends to be a positive relationship between the two). Then, the diagram should also show the relationships between these two sets of variables and the dependent variable: job satisfaction. After using a statistical program to evaluate these relationships, one can then redraw the diagram to indicate the magnitude and significance of the relationships. For example, the researcher might find that both autonomy and income are related to job satisfaction, that one of these two variables has a much stronger link to job satisfaction than the other, or that neither variable has a significant link to job satisfaction. Strengths and Limitations of Path Analysis While path analysis is useful for evaluating causal hypotheses, this method cannot determine the  direction  of causality. It clarifies correlation and indicates the strength of a causal hypothesis, but does not prove direction of causation. In order to fully understand the direction of causality, researchers can consider conducting experimental studies in which participants are randomly assigned to a treatment and control group. Additional Resources Students wishing to learn more about path analysis and how to conduct it can refer to  the University of Exeter’s overview of Path Analysis and  Quantitative Data Analysis for Social Scientists  by Bryman and Cramer. Updated by Nicki Lisa Cole, Ph.D.