The quest for profit in the competitive marketplace requires businesses
to leverage capabilities at every opportunity. Many businesses
use information technology as a strategic asset to improve their
competitive positions. In the context of this study, information
technology includes the technologies of computers and telecommunications
(hardware and software), (Sprague & McNurlin, 1993).
In contrast to computers and telecommunications, case study has
provided a low technology method to learn about business capabilities.
Case study has produced insights that help businesses leverage
or avoid situations similar to those documented in business cases.
Presently, a typical way that decision makers are trained to
prepare for business careers is learning through the case study
of hypothetical or actual business situations. In general, the
case study process involves reading the case text to determine
the facts of the case, the issue or problem, the business decision,
and lastly, some reasoning as to whether the decision is supported
by the factual results of the case from the readerís perspective.
With the advent of computerized information systems, a new tool
is available to help businesses use information technology and
case study as a competitive, strategic asset, System Dynamics.
According to Wolstenholme (1990), System Dynamics is a rigorous
method for qualitative description, exploitation and analysis
of complex systems in terms of their processes, information, organizational
boundaries and strategies. Additionally, System Dynamics facilitates
quantitative simulation modeling and analysis for the design of
the system structure and control.
Within System Dynamics, causal diagramming offers a convenient
way to represent the structure and behavior of systems composed
of interacting feedback loops. Causal diagrams identify the principle
feedback loops without distinguishing between the nature of the
interconnected variables. These diagrams play two important roles
in System Dynamics:
1. They serve as preliminary sketches of causal hypothesis during model development.
2. They can simplify the illustration of the model as a ìmental
In both roles, causal diagrams will allow the business analyst
to quickly communicate the structural assumptions underlying a
case study. The combination of causal diagramming and case study
will support the business analyst in achieving a ìsystemicî
view of a business to learn more about its fundamental attributes
The effective use of case study and causal diagrams fits well
in a learning organization framework that requires a consistent
examination of the whole business system, rather than just trying
to fix isolated problems. According to Dodgson (1993), a learning
organization is a business that purposefully constructs structure
and strategies to enhance and maximize organizational learning.
The ìfifth disciplineî uses this conceptual framework
of examination of the whole and tools of systems thinking to clarify
problems to understand how to change them most effectively, Senge
(1990). System Dynamics readily lends itself to learning organization
environments in this context. Forrester (1991) describes System
Dynamics as the theory, method, and philosophy needed to analyze
the behavior of systems in not only business, but also in environmental
change, politics, economic behavior, medicine, engineering, and
other fields using simulation technology.
Statement Of The Problem
Businesses need to continuously find better and faster ways to
adapt to the competitive marketplace in order to compete in todayís
high technology and fast paced environment. Learning organizations
provide a framework that encourages finding better and faster
ways to adapt in todayís high technology and fast paced
1. Looking at the ìwholeî vs. the ìpartsî, a systemic perspective
2. Detecting and correcting errors
3. Improving actions through knowledge, and
4. Developing the broad skills of their work-force.
Businesses that are ìlearning organizationsî will
capitalize upon techniques and tools that improve competitiveness.
A learning organization that uses case study and causal diagramming
to inquire into the systemic consequences of their plans or actions
will potentially improve its competitive nature.
Case study represents a vast source of past business knowledge
available for learning. Causal diagrams will help the business
analyst identify the major influencing factors of a case study
and the feedback mechanism that impacts the case results. This
study presents the hypothesis that the collaborative effect of
case study and information technology using causal diagramming
in a learning organization will improve the potential of businesses
to adapt to new competitive situations.
Brief Description Of The Research Method And Design
A comparison of a case study and its causal diagram was performed
to illustrate the collaborative role of information technology
in a learning organization to test the study hypothesis.
The methodology consisted of the following procedures:
1. Determined the attributes of a learning organization as defined
and referenced in the research material. This is the work of
Argyris and Schn (1978), Fiol and Lyles (1985), Dodgson
(1993), Kofman and Senge (1995), Nevis et al. (1995), and Senge
(1990). Once a list of the attributes of a learning organization
for each author was established, an analysis of common and unique
attributes was conducted. This procedure established a basis for
determining what is a ìlearning organizationî based
on a set of shared attributes. This set of attributes was needed
in order to support the next steps of the methodology.
2. Reviewed case study material to identify the attributes of
a case study. Briefed the case in order to gather case study
results in a uniform manner for comparison to the causal diagram.
3. Reviewed the System Dynamics material to identify the attributes
of causal diagrams. Diagrammed the case for comparison to the
4. Compared the case brief and causal diagram to determine their
collaborative role in satisfying the attributes of a learning
The Xerox case study was selected for the purposes of this study,
Cash et al. (1992). After completing the case brief and causal
diagram, the results were compared to each other and to the learning
organization attributes to determine the collaborative manner
in which the two methods complement a learning organization.
Major Findings And Their Significance
As a starting point, this study adopts the definition of a learning
organization as an enterprise that purposefully configures itself
to improve its future performance by learning from its past and
current experience. Based on the literature, there is a set of
characteristics that describe learning organizations. These characteristics
were derived from attributes of learning organizations as discussed
by various authors; they are summarized in Figure 1. Related
attributes were clustered based on similar features. Each cluster
represents a distinguishing characteristic of a learning organization.
For example, attributes such as ìInquire into systemic
consequencesî (6), ìAcknowledge primacy of whole
v. piecesî (9), ìFacilitate-systems perspective (systemic
relationships)î (26) and ìSystems thinking (exam
whole v. parts)î (31) from Figure 1 are clustered as the
distinguishing characteristic - 1.0 ìTotal Systems Perspectiveî,
Table 1, below.
|Attributes||Senge||Nevis||Kofman &||Dodgson||Fiol &||Argyris &|
|1||Detect & Correct Errors||Yes|
|2||Act on knowledge & understanding||Yes|
|3||Constructs structures & strategies to improve||Yes|
|organizational & workforce skills|
|4||Build community of servant leaders||Yes|
|5||Arise through performance and practice||Yes|
|6||Inquire into systemic consequences||Yes|
|8||Use "managerial practice fields"||Yes|
|9||Acknowledge primacy of whole v. pieces||Yes|
|10||Use nonlinear thinking||Yes|
|17||Facilitate-scanning imperative (aware of environment)||Yes|
|18||Facilitate-performance gap (actual v. desired state)||Yes|
|19||Facilitate-measurement (strive to quantify)||Yes|
|20||Facilitate-experimental mindset (act like researcher)||Yes|
|21||Facilitate-open climate (share problem/error/lesson)||Yes|
|22||Facilitate-education (sense that learning is never over)||Yes|
|23||Facilitate-operational variety (diversity v. singularity)||Yes|
|24||Facilitate-multiple advocates (no one champion)||Yes|
|25||Facilitate-involved leaders (engage in vision actions)||Yes|
|26||Facilitate-systems perspective (systemic relationships)||Yes|
|27||Team Learning (suspend assumptions & think freely)||Yes|
|28||Build Shared Vision (truly shared picture of the future)||Yes|
|29||Mental Models (separate the map from the territory)||Yes|
|30||Personal Mastery (to be the best possible)||Yes|
|31||Systems Thinking (exam whole v. parts)||Yes|
1.0 ìTotal Systems Perspectiveî (6, 9, 26, 31, 10)
1.1 Inquire into systemic consequences (6)
1.2 Acknowledge primacy of whole v. pieces (9)
1.3 Facilitate systems perspective (systemic relationships) (26)
1.4 Systems thinking (exam whole vs. parts) (31)
1.5 Facilitate-scanning imperative (aware of environment) (17)
1.6 Use nonlinear thinking (10)
2.0 ìPerformance and Practiceî (1, 5, 18, 2)
2.1 Detect and correct errors (1)
2.2 Arise through performance and practice (5)
2.3 Facilitate performance-gap (actual v. desired state) (18)
2.4 Act on knowledge and understanding (2)
3.0 ìServant Leadersî (4, 24, 7, 3, 25)
3.1 Build community of servant leaders (4)
3.2 Facilitate-multiple advocates (no one champion) (24)
3.3 Construct structures and strategies (organization & workforce skills (3)
3.4 Facilitate-involved leaders (engage in vision actions) (25)
4.0 ìExperimental Mindsetî (8, 19, 20)
4.1 Use ìmanagerial practice fieldsî (8)
4.2 Facilitate-measurement (strive to quantify) (19)
4.3 Facilitate-experimental mindset (act like a researcher) (20)
5.0 ìShared Problem Solvingî (21, 22, 27, 23)
5.1 Facilitate-open climate (share problem/error/lesson) (21)
5.2 Facilitate-education (sense that learning is never over) (22)
5.3 Team learning (suspend assumptions & think freely) (27)
5.4 Personal Mastery (to be the best possible) (30)
6.0 ìShared Visionî (23, 28, 29)
6.1 Facilitate-operational variety (diversity v. singularity) (23)
6.2 Build Shared Vision (truly shared picture of the future) (28)
6.3 Mental Models (separate the map from the territory) (29)
Next, the case, Xerox Corporation: Leadership of the Information
Technology Function (A), was briefed. The brief is presented
below as Figure 2.
Issue: Will the new mission statement direction for CIM provide
the information technology and business leadership the corporation
Decision: Yes. Allaire will endorse Barronís new mission
Lastly, the Xerox case was diagrammed as illustrated below in Figure 2. The causal diagram presents three feedback loops that affect the corporate profit. The first one represents the negative impact of CIMís role considering the new mission statement relative to IT Strategy, Business Unit Revenue and Profit. The negative impact that this loop has on Profit is a major, internal to Xerox, reason that the new mission statement emphasizes the Advocacy Role to improve business knowledge by the technologist in the CIM organization. The second loop, which represents the issue of the case, shows that the new CIM mission statement positively impacts the Advocacy Role which in kind positively impacts the Business Unit revenue that still results in a Profit decrease. This last deduction is ìconjectureî since there are no facts in the case to substantiate the result one way or another. At minimum, there will be some siginificant time delay before there is an increase in Profit, considering the magnitude of revenue increase required to make Profit positive. Based on the case, the Business Unit profit was $240M on $9.4B in revenue ($7B of which was from copier sales) or 2.6% Return on Sales. Financial Servicesí profit was $278M based on an estimated $3.6B, or 7.7% Return on Sales. The Business Unitís ability to generate enough revenue to approach 7.7% Return on Sales or to cut costs enough to improve the profit margin to approach the same return on sales is dramatic; therefore, supportive of the deduction that the Business Unitís contribution to profit will continue negative in the near term. Moving the causal diagram to a System Dynamics model would support ìwhat ifî scenarios and a managerial practice field approach to learning about the problem. As it is, Xerox appears to believe that the change in CIMís mission statement will move them along the way to improved business operations and profit. Lastly, the Financial Services loop shows that as Financial Services revenue increases so does its contribution to profit; this is supported by the case facts. It appears that the primary influencing factor on the Business Unitís profit is the loss of patent rights by expiration. The subsequent loss of market share has directly impacted Xeroxís Business Unit profitability and will continue to have a significant effect based on the case information that competitors sell copiers at prices that it costs Xerox to build them.
Case study and causal diagrams will collaboratively affect a learning
organizationís ability to adapt to competitive situations.
For the Xerox case, both case study and causal diagramming provide
insights to the problem at hand. The case approach as presented
in the brief clearly frames the Xerox facts and issue. The causal
diagram presents a picture of the case dynamics and the role the
new mission statement will play relative to profit. Taken together,
it is easier to see that the act of writing the new mission statement
may have little influence on the course of the Business Unitís
profitability; however, more detail with direct regard to revenue
generation and profit margin are needed. Similarly, both approaches
recognize that Financial Services is a profit maker; some may
say it is more clearly evident from the causal diagram than the
case brief. One might speculate that failure to recognize the
potential of Financial Services to impact profit may be an opportunity
Comparing case study and causal diagramming to the learning organization
attributes of Table 2 shows that both techniques complement each
other in some instances. Table 3 presents a comparison of their
collaborative nature for the Xerox case.
|Clustered Learning Attribute||Case Study||Causal Diagram|
|Total System Perspective||No||Yes|
|Performance and Practice||No||Yes|
|Servant Leaders||Not Applicable||Not Applicable|
|Shared Problem Solving||Yes||Yes|
Argyris, C & Schön, D.A. (1978) . Organizational
learning: A theory of action perspective. Reading, MA:
Cash, J, McFarlan., McKenney, J., Applegate, L. (1992) . Corporate
information systems management: text and cases. Illinois:
Dodgson, M. (1993) . Organizational learning: A review of some
literature. Organization Studies, 14/3, 375-394.
Fiol, C.M., & Lyles, M.A. (1985) . Organizational learning.
Academy of Management Review, 10/4, 803-813.
Forrester, J. W. (1991) . Systems dynamics and the lessons of
35 years. In Kenyon B. De Greene (Ed.), Systemic basis of policy
making in the 1990s (pp. 5-34). [http://tfnet.ils.unc.edu/~gotwals/stella/sdg/sdlessons.txt].
Kofman, F., & Senge, P. (1995) . Communities of commitment:
The heart of the learning organization. In Sarita Chawla &
John Renesch (Eds.), Learning Organizations (pp. 15-43).
Productivity Press: Portland, OR.
Nevis,.C., DiBella, J, & Gould, M. (1995) . Understanding
organizations as learning systems. Sloan Management Review,
Senge, P. M. (1990) . The fifth discipline: the art &
practice of the learning organization. New York: Doubleday/Currency.
Sprague, H. & McNurlin, C. (1993) . Information systems
management in practice. New Jersey: Prentice Hall.
Wolstenholme, E. F. (1990) . System enquiry: A system dynamic approach. Chicester: Wiley & Sons.
ISDC '97 CD Sponsor