Theory of business

Question 1

Theory of business consists of?

Answer 1

Assumptions
Strenghts & Weaknesses
Values
Behavior of the organization

Question 2

What kind of assumptions are there in the Theory of business? What do these assumptions define?

Answer 2

Assumptions about

• the environment: defines what an organisation is paid for
• the mission: defines what an organisation considers to be meaningful results
• core competences: defines what an organisation must excel in to maintain leadership

Question 3

Assumptions about the environment are?

Answer 3

• why would someone be your client?
• Why would someone stay your client?
• What client prefrences are going to be developed?
• Customer (development)
• Competition (development)
• Technology (development)
• Laws and regulations

Question 4

Assumptions about the mission are?

Answer 4

• What is the added value of the organization
• On what is the assumption based that the organisational mission is worth to realise?
• On which assumption is the feasibility of the mission based?

Question 5

Assumptions about the core competences are?

Answer 5

• Which core competencies are needed to achieve the mission
• Why exactly this one and not another one?
• Are the same competences still relevant in a next year?
• Develop core competencies, or buy them?

Question 6

General criteria for good assumptions

Answer 6

• Must fit reality
• Must fit eachother
• Theory of business must be known and understood throughout the organization
• Theory of business has to be contested constantly

Question 7

How to use the Theory of business

Answer 7

1. General: As tool for mapping the existing assumptions, to subsequently challenge them. Periodic test.
2. Specific: As check to explore for each proposed change to which assumption it belongs. a: Is the proposed change in line with our assumptions? b: If so, is the assumption still right?