Managing Organizational Changes

Introduction

Organizations should inherently adapt and change consistently to remain competitive and effective. In the modern economy, shaped by global factors and shareholder vision, organizations are often driven to change by environmental and external factors. These may vary, ranging from new technologies and practices to shifts in political and economic climates. However, organizational change is primarily driven by the desire to adequately respond to external pressures and maximize value and effectiveness.

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Organizations vary significantly in their structure and management, which reflects on their ability to change and the effects of external pressures. Palmer, Dunford, and Buchanan (2009) note that there four factors that may affect the organizational response. The pressure should lead to innovation rather than rigidity in decision-making. The external threat should be adequately understood and trigger an appropriate response. In light of potential calls of change, there may those attempting to use tactics of stability and conservatism. Finally, instead of outright adaptive change, leadership may choose to adopt incremental and buffering practices.

Organizations may fail to change in times of crisis because of the systemic and complex nature of the pressures as well as the necessary innovation. Solutions to resolve problems requires understanding the root of the issue as well as forming a systemic solution. However, many organizations adopt a blameworthy culture after crises that attempts to shift blame and use defensive tactics rather than preventive ones to implement progressive reforms.

Internal organization factors can also lead to necessary change. Growth is a naturally occurring aspect of any successful organization, requiring a change in management, rules, and overall expansion. Integration and coordination is also a factor, particularly in larger organizations, which requires solutions in the integration of cultural, structural, and communication aspects among various departments. Corporate identity is an ideological aspect that may lead to change in a company’s vision and purpose that ultimately affects the internal culture and management practices.

There are various images of managing change that should be adopted based on circumstances and can be used to better navigate certain pressures. A director can be used in times of strategic pressure, such as entering new markets or implementing internal structural change due to pressures of growth. A navigator used to find solutions for internal problems may be viable for pressures such as new senior management or office relocation. An interpreter helps to understand external pressures, may be helpful in pressures such as evolving political or economic climates.

Case Analysis: The Sunderland City Story

A recession can create potential challenges for organizational change, as both external and internal pressures increase exponentially. Factors may include workforce motivation, as employees begin to fear for the stability of their jobs and focus on attempting to save it. It can be demoralizing and significantly affects the culture in the workplace as well as the development of new ideas. Furthermore, declining profits or funding leads to decreased spending on implementing innovative changes, opening new projects, and limits the use of organizational resources necessary to introduce change (Shatonhoka & Yazdanifard, 2015).

On the other hand, an economic downturn can lead as a driving force to organizational change. In the economic climate that is wrought with constraints on spending and constant pressures, effective managers will attempt to adapt their leadership styles, workplace procedures, and organizational structure to the realities of the external environment. To preserve successful indicators, prevent large layoffs, and ensure completion of projects, organizations must implement straightforward changes that would balance spending and eliminate waste. Managers would seek to introduce innovative solutions that would distinguish the organization from competitors and ensure profits or funding. Recessions can help significantly in creating a lean, adaptive, and innovative organizations.

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This was evident in the Sunderland City Council as they successfully navigated the crisis by introducing radical and highly innovative practices for the public sector. Programs focused on a significant issue of staff layoffs and motivation by offering internal incentives. It can be argued that the ability to competently assess both internal and external pressures and following a restructuring of the organizational system led to success in maintaining most of their services.

The Reputation Trap: Can You Escape?

The case reveals that successful businesses are faced with the challenges of changing environments, such as consumer preferences. It is a challenge of constantly adapting to the environment, which may be difficult for huge corporations with large amounts of moving parts ranging from marketing to logistics which have been perfected to support the original brand. Success is relatively abstract but enormous success carries responsibilities and recognition for the organization which forms its reputation that can last for decades.

Organizations are dependent on profit and shareholders. Therefore, one way to evaluate the business environment is to observe statistical figures of sales and consumer outreach. Successful organizations commonly have marketing departments that observe consumer trends, conduct interviews, and produce research reports on the topics that managers should use for their decision-making.

The case highlights the importance of reputation as it is one of the primary ways that consumers perceive businesses. Unfortunately, reputation often overshadows any change in the company as it takes a significant amount of time to shift the public perception of an organization. The case argues that organizations such as McDonald’s that built their success on the reputation and brand of fast-food for decades are now experiencing difficulty with organizational identity as the consumer environment calls for healthier choices.

The evident trend for healthier meals will persist shortly as the public’s awareness of health and diet increases. The best solution would be to offer iconic products, with a few additional choices, but begin to shift supply-chain logistics and preparation procedures in a way that would offer fresher and healthier ingredients. Eventually, in combination with competent marketing, the reputation will begin to shift, positioning Big Food companies as offering choices for everyone.

Summarize

The external environmental pressures in logistics are relatively easy to identify. Due to the nature of the service and organization, most pressures come from hyper-competition and geopolitics. Logistics companies must continuously innovate to improve service and efficiency, decreasing costs, and delivery times. The vast number of industries and organizations which rely on logistics, often choosing to hire external contractors, makes this sector extremely competitive.

Meanwhile, geopolitics such as the economic environment and global climate change affect logistics as it directly influences both the costs of conducting business and may create physical barriers that limit the efficient transfer of goods and services. Influencing change is difficult unless one is a senior executive, but it can be achieved through collective means. I can offer innovative ideas and share them with my direct supervisor to be passed along to the top or I can collaborate within my department and other managers to push the company towards a certain direction.

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I relate better to the caretaker image of managing change because, in the context of the organization, it feels to be the most effective and only method I am capable of adapting to change. With overwhelming pressures, as a manager, I believe it is my responsibility to protect the organization and my employees using the limited capabilities and tools that I am provided.

One of the reasons that I witnessed in avoiding change, is the complexity of such innovations. As logistics is an inherently complex and multifaceted sector, any change would require comprehensive overhauls to all parts of the logistics supply chain and system for it to operate effectively. Therefore, to avoid such massive and costly changes, avoidance is a common tactic, but also causing the technology and processes to fall behind inefficiency.

I could have helped to overcome such tactics by offering concrete evidence and input on the direction of the company. Conducting a long-term business analysis of the industry and environment to demonstrate the detrimental tendencies of using such strategies and presenting this to executives could have had a potential impact on the decision-making processes. The success for such attempts may not be high but appealing to the profit and shareholder aspects of the company may initiate competent strategies for change.

Raising issues within the organization as a rationale for the change is not difficult, but not effective. There are several channels through that employees and managers can voice concerns and ideas. However, it is relatively rare that these become a topic of discussion or consideration amongst key decision-makers. The dominant rationale is to maintain competitiveness and ensure profitability for the company. This is due to the nature of the business as logistics is an industry of constant competition and ensuring the most efficient methods to create profit.

Personal criteria to initiate change should be focused on potential operational or financial benefit for the organization and the long-term impact of the initiatives on the well-being and function of the company. Key questions may include:

  • Does the change improve existing processes or procedures?
  • What are the costs and benefits of implementing this change?
  • Does the initiative meet the criteria of the company and industry standards?
  • How would the change impact the organization in the current and future economic environment?
  • Is the change realistic in implementation within the context of the company and structural capabilities that it offers?

Role Play

A global technology and household appliance company Dyson underwent a significant organizational change when it attempted to revolutionize its most popular product, a vacuum. It attempted to create a handheld vacuum with a battery long enough last an hour and with powerful suction to ensure the device’s functionality. This was a risky endeavor since handheld vacuums remain less popular and experience various issues ranging from power to longevity and battery problems. However, the company was suffering some stagnation and wanted to enter new markets globally with innovative products.

The management images for change selected for this scenario are director and coach. A director image is vital for the management of strategic pressures and entering new markets as they can oversee the process of organizational and operational change to improve efficiency. A coach image can coordinate a company’s values, team, and vision that creates necessary change and organizational outcomes that can address environmental pressures.

The coach image is more appropriate and effective in producing a rationale in the described scenario. This image can serve in an advisory capacity to an organization, independently evaluating all factors and producing objective reasons to implement certain changes in the company. While a director’s image can create oversight and control, it lacks the innovation and guidance that may be necessary for such situations. A coach image provides the intended management of shaping the capabilities of a company. Dyson is not only offering a new product but with it attempting to enter a new era of technological innovation and consumer appeal at a rapid speed greater than before. Coaching management of change is necessary to achieve these set outcomes.

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The criteria for selecting the image was primarily focused on identifying the potential styles of each management type and the benefits it provided, particularly within the context of the specific scenario and environmental pressures. The comparative advantage was based on the organizational impact that the image has and how it affects the outcomes. Each image is inherently varied in its approach and capabilities in terms of both influence and real power to lead to change. Therefore, in a situation requiring significant reforms, changes in mindset, and fostering innovation in the company for the foreseeable future, the coach image seems appropriate as it teaches people in the organization to carry out change through their initiatives and ideas.

Personally, the caretaker image is the most preferential to me, in large due to my character and management style. I enjoy working to resolve issues, drive change from within, and support the company and employees in the process. I believe that control is not effective, and low-level managers often lack real control due to internal and external forces. The caretaker image allows one to guide the organization and protect it while being less impeded by particular limits of power and scope. Caretakers can adapt easily to a variety of environmental pressures and utilize management and institutional theories to guide decision-making.

References

Palmer, I., Dunford, R., & Buchanan, D. A. (2009). Managing organizational change: A multiple perspectives approach (3rd ed.). New York, NY: McGraw Hill Higher Education.

Shatonhoka, E.N. & Yazdanifard, R. (2015). The challenges of managing an organisation during and after the economic crisis. International Journal of Economics and Management Sciences, 4(2), 1-4. Web.

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StudyCorgi. (2021, January 18). Managing Organizational Changes. Retrieved from https://studycorgi.com/managing-organizational-changes/

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StudyCorgi. (2021) 'Managing Organizational Changes'. 18 January.

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