Successful Development and Innovation - Coursework Example

In what ways might an organisation develop its' capa to innovate successfully While speaking about effective methods and strategies that could lead a company to successful development it is necessary to take into account experience of the companies involved into housing business and financing sector of this branch, as well as theoretical findings of various authors. It is evident that the leaders of the organizations, as well as the teams need to be flexible enough to adapt to changing environment and instability of economical process all over the world. It is also necessary that the company should provide basic changes in the following directions: product, process, position, paradigm. The teams should learn how to learn to build up effective mechanisms of functioning together, and this should be provided by a whole community, rather than individuals. The processes that influence economies of various countries demand new strategies, for instance, cooperation, that should be correctly prepared and implemented by the leaders of organization. The last decade of the XXth century created a favourable background for housing business. With economical conditions that provided for stable progress in economy, and low mortgage rates, increasing demand for buying houses in this period created a favourable condition for housing business and mortgage companies. The other important issue was that the financing those who buy homes was changed by commercial banks and loans and savings from individual mortgaging to new level of mortgage originations that become usual at the market of housing business by the end of the XXth century. According to the data provided by the experts, "At year-end 1996, mortgage banking companies held a 56 percent market share of total industry originations, compared with only a 35 percent market share in 1990. And of the estimated $809 billion in total originations in 1996, $458 billion were secondary market transactions, compared with $276 billion of secondary market transactions in 1990." (Lereah, p. 3) The housing business and its financial sector underwent some more profound and fast changes that influenced real estate credit firms and householders significantly. The process of consolidation within the industry, new findings in technological sphere and narrow margins are the key issues that characterized the atmosphere at the housing market at the end of 90s and determined further development in this industry. (Doggem) While speaking about the future of this industry the specialists usually express positive views on the situation. Current conditions and economical situation are likely to provide mortgage banking firms with efficient business and households with various mortgage alternatives. The experts now speak of housing industry as of a branch of industry that now has the most favourable conditions for successful development. However, various challenges are also to be taken into consideration, and now these obstacles are clear and evident. As the experts state, "as in most mature industries, the surviving companies will be the low-cost producers, and a heavy investment in technology may help companies accomplish this objective". (Doggem) Long-tern perspective of this industry is determined mainly by the following issues: economical decays and booms, that constitute circles in world economy demographic issues advance in technology changing background of the industry regulations that are provided by the government (Doggem) As the historical perspective demonstrates, the most important factor influencing housing industry was changeable nature of interest rates. This branch of industry experiences the same stages of development as other industries: ": downturn, trough, recovery, expansion, and peak". (Doggem) Accordingly, interest rates are also determined by the process and are influenced by the same circular way of development, and all this thus affects background of various branches of industry in general and housing industry in general. It is well-known that availability of mortgage loaning depends upon changes in mortgage rates. According to the statistical data, "Total mortgage origination volumes averaged about $97 billion annually during the 1981-82 period when thirty-year mortgage rates peaked at around 16 percent. Conversely, total mortgage originations volumes averaged around $900 billion during the 1992-93 period due to mortgage rates falling to a cyclically low 7.3 percent. With mortgage rates hovering around 8 percent during the 1996-97 period, industry originations are running between $750-$800 billion." (Norquist) In other words, low mortgage rates positively influence availability and advance transactions in refinancing. At the same time, high mortgage rates negatively influence demand at housing market and householder's ability to buy real estate. Demographic conditions to a large scale determine the situation at the housing markets, and growing population positively influence demand at the housing market. As it is reported, "the percent of two-income families has steadily increased to almost 80 percent of households today from only registering 63 percent in 1980, providing families with greater financial flexibility to purchase homes. Also, the percent of single households has increased by over 5 percentage points to 19.5 percent today versus only 14.1 percent in 1990, increasing the pool of potential homebuyers. Similarly, the percent of divorced households has risen by 4 percentage points to 11.2 percent today from 7.2 percent in 1990. And finally, there has been a surge of immigration into this country during the past decade, helping boost the Asian and Hispanic population growth rates to 44 percent and 22 percent correspondingly. And with each new year, there are increasing numbers of immigrants entering the home-buying marketplace". (Gausa, p. 188) The latest technological innovations allow working out, improving and integrating new systems of loan originations, systems of services. Increasing influence of innovations on technology is supposed to grow in future. Recent findings in technology allow housing companies decrease the costs on their products, which will help them succeed even under worse economical conditions. (Balchin) Technological innovations affect not only housing companies but also consumers. New technologies allow make the processing of loans faster, and decrease the price for the mortgage obtained. In addition, "keeping up with technology means investing substantial capital and resources, and also assuming some risk". (Hemmens, p. 39) Technology develops so fast that currently used systems become out of date rather quickly, and this will make their owners update them in order not to be oppressed by the competitors with more perfect system. One of the most famous authors that observed effective strategies for developing business is Peter Senge. His works provided for business decisions and marketing solutions helpful for the leaders of various organizations. He stated that the companies that look for successful development and innovations should learn to change and to be flexible. One of his writings, "the Fifth Discipline", is devoted to this important topic. In his book the author tries to persuade us that the world is not changed by some separate forces. He insists that this illusion should be destroyed. He speaks about the necessity to make organizations learn, and this would help the people within these organizations achieve desired purposes, forge out new conceptions and patterns, and help people learn together and try to act together. He lists seven "learning disabilities" in organizations and provides a list of five disciplines that are to be examined and used for successful development of organizations. These five key disciplines are as follows: 1. Systems thinking. It is necessary to remember that only united forces change the world. But it is sometimes challenging for the individuals to see the whole scheme. Systems thinking is a framework, that represents knowledge and mechanisms that were worked out within last five decades, and that are to help people see the whole pattern and to recognize how to make the things change effectively and easily. This discipline is useful because it can be represented with the help of a diagram. There are three processes that constitute the system: reinforcing feedback loop (this process leads to decline or growth), balancing feedback loop (this process restricts decline or growth), delays (these are the breaks between the action and the result of this action) 2. Personal Mastery. This discipline provides for mechanisms for deep and profound analyses of personal viewpoints, of making clear focuses for person's actions and behaviour, forging personal patience, and having objective perspective of reality. This discipline begins with clearing up the issues that are of a real importance for people and of building up person's behaviour in accordance with individual aspirations. The major elements of personal mastery are: personal vision, holding inventive tension, and commitment to the truth. 3. Mental Models (or paradigms). These models represent integrated assumptions, viewpoints, notions and images that determine our vision of the world and our behavioural schemes. The schemes of working with these mental models begins with looking deep into one's own personality, learning to recognize and analyze the images of the world that appear in person's mind, and changing them if necessary. 4. Building Shared Vision. This discipline includes the ability to unearth the pictures that person shares with the community, and that determine common meaning and personal experience, instead of real values that should determine them. 5. Team Learning. This discipline begins with dialogue, or skill to postpone mistaken assumptions and forging out "thinking" which is necessary for the members of a team or organization. Another issue that is mentioned in the field of this discipline is different from discussion, "which has its roots with "percussion" and "concussion," literally a heaving of ideas back and forth in a winner-takes-all competition". (qtd in The Thinking of Peter Senge) A process of learning with all the team involved, which presupposes group learning, rather than individual, should be a basic learning strategy in organizations of all levels. "Unless teams can learn, the organization cannot learn". (qtd in The Thinking of Peter Senge) All the disciplines described above should be implemented in long-term process to teach the organization how to build up successful future. The author also speaks about "Learning organizations" - these are organizations that allow people improve their capacity to influence the results and the purposes that wish to achieve, with new forged concepts of thinking implemented, with "collective aspiration", and continuous process of learning how to learn. Such organizations, the author states, will be the most developed innovative organizations, as far as they would be skilful in teaching their team how to learn and how to build up successful strategies for further development. Learning organizations were opposed to the type of organization that the author considered to be most widespread at present - "controlling organizations." (Senge) Changing environment of the business still remains one of the most essential issues for implementing successful innovations. There are some points that define the process. The first of them is the process of consolidation. Increasing competitiveness of the business background of the industry and the profit margins that get narrower demand that the firms act taking into account producing loans, with the help of reducing capacity of origination or changing origination methods to make the costs of producing loans. Lately, this was carried out with the help of consolidation within the industry. (Balchin) References Lereah, D. (1997) Housing finance: a long-term perspective. Business Economics. Available at http://www.findarticles.com/p/articles/mi_m1094/is_n3_v32/ai_19735851 The Thinking of Peter Senge. A summary of a Senge 6/6/95 Seminar and the book The Fifth Discipline. Available at http://www.faithmaps.org/index.html Doggem P., Smeets, J. (2004) Housing Associations and Strategic Sourcing. Available at http://www.enhr2004.org/files/new_papers/Smeet and Dogge- paperenhr2004def[1].pdf Fukuyama, F. (2000) The Great Disruption. Profile Books Ltd. Senge, P. (1993) The Fifth Discipline: Art and Practice of the Learning Organization. Random House Business Books Norquist, J. Is Gentrification Really A Threat Available at http://www.planetizen.com/ Innovative housing in Scotland. John Gilbert Architects. Available at http://www.johngilbert.co.uk/resources/index.html Gausa, M. (2003) Housing: New Alternatives, New Systems.Birkhauser Hemmens, G. (1996) Under One Roof: Issues and Innovations in Shared Housing (SUNY Series in Urban Public Policy). State University of New York Press Balchin, P., Rhoden, M. (2002) Housing Policy: An Introduction.Routledge, an imprint of Taylor & Francis Books Ltd Read More