Update V: The Organizational Perspectives—Internal Constituents

May 15, 2006

The heart of the new Yale SOM Core Curriculum, the Organizational Perspectives segment, contains interdisciplinary courses structured around the network of perspectives that a leader needs to be able to engage and lead.

Four courses develop the perspectives of key external stakeholders (Investor, Customer, Competitor, and State & Society) and four courses develop the perspectives of key constituents within the organization (Sourcing & Managing Funds, Employee, Operations Engine, and Innovator). Each perspective requires integration of material from different functional areas, such as Finance, Economics, and Marketing.

While details of the Organizational Perspectives continue to be developed, we provide below the focus and rationale for the four internal perspectives. (Read Update IV for a description of the external perspectives.)


• Sourcing & Managing Funds: To be effective in moving capital, a manager needs to understand the mix of capital that is most conducive to the realization of goals for which he or she is responsible. The manager then needs to be able to make capital allocation decisions that recognize risk and environmental uncertainty and put in place financial controls and incentives that ensure the efficient and effective allocation of capital within the organization. The manager also needs to be able to communicate effectively with the external providers of capital; this effective communication requires an awareness of the aspects of the organization on which they will focus in assessing the degree to which their capital is being efficiently and effectively allocated.

• Employee: To be an effective leader, a manager must understand how power and authority are enacted in his or her organization. The manager also needs to understand the motivations of the employees on whom the manager depends. The manager needs to be able to select and recruit talent, instill desired cultural values, set appropriate incentives, provide feedback on behavior, and negotiate effectively. The manager needs to understand the benefits and challenges associated with managing diversity. In some instances, a manager needs to be able to work effectively with organized labor, but in practically all instances, a manager will need to have in place procedures for insuring that employees are able to act on grievances and feel secure in their various rights.

• Operations Engine: Many of a manager’s decisions and actions are focused on transforming organizational inputs into desired outputs. If this transformation is to be as effective and efficient as possible, the manager needs to focus organizational attention and action on various quality and cost considerations. Traditional courses in operations management focus on process analysis, supply chain management, and quality management, but in a fairly narrow way. This course will include these topics, but will be designed from the perspective of the decision maker who deals with these questions in a much broader context. To capture this reality, the course will include issues such as where to locate facilities, the choice of what to make and what to buy, transfer pricing rules, and procedures for pricing and bidding.

• Innovator: The long-run success and adaptability of the organization depends on the manager’s ability to foster a flow of new ideas, products, and services. The manager must have an understanding of the factors that contribute to individual and group creativity, be skilled in managing creative individuals, understand and be able to act on some of the unique challenges of financing creative organizations, and have an appreciation for the legal protections that allow the organization to secure the profits flowing from the creativity that it fosters.