Organisational Change and Its Role in Management

Introduction

Organisational change refers to a process where an enterprise transforms its strategies or chief departments. It is also known as corporate turnaround, restructuring or reorganisation (Armenakis & Harris 2009). It assists an enterprise to address emerging crises, cope with dynamic business environment and boost operations. Armenakis and Harris (2009) allege that successful organisational change demands adequate management capabilities.

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The objectives of organisational change are multifaceted. However, the primary goal of organisational change is to minimise operation costs. Other goals include improving business, overcoming competition and managing crisis. Before an organisation decides to execute changes, it should focus on three key issues. These are business’ goals, measurement system and implementation procedures. This article will discuss the importance of organisational change to a business and factors that contribute to effective organisational change. Besides, the paper will examine factors that contribute to poor organisational change.

Importance of Organisational Change

Cummings and Worley (2001) warn that in today’s competitive world, any organisation that is waiting for the rate of change to slow is bound to fail. In fact, institutions should adopt change. They allege that organisational change is essential to all enterprises. Without change, corporations would lose their competitive edge. Besides, businesses would lose customers to rival companies. One reason organisational change is necessary to companies is because it helps businesses to cope with and initiate new technologies.

Technology may at first seem disruptive and to slow operations. However, its ultimate results are rewarding. Elias (2007, p. 79) claims “Organisational change is necessary in coping with emerging technological advancements in the business world”. Aligning an enterprise with modern technologies assists it to edge out its rivals. Technological progress helps a company to increase productivity and quality of its goods and services. For instance, invention of compact discs in the 1980s was a core example of the importance of change in technological growth. Record firms that started using compact discs made huge profit since their production was cheaper compared to long plays (LPs).

Organisational transformation not only facilitates enterprises to develop superior commodities, but also helps them to conceive novel ways of discharging diverse tasks. Communication is paramount to any business enterprise. Organisational change enhances communication between departments and organisations. Besides, it helps institutions to learn from one another, thus, improving their productivity. Fernandez and Rainey (2006, p. 170) state “Today’s burgeoning communication technology represents changes that allow organisations to learn more, more quickly than ever before”. Communication technology allows institutions to seek and hire qualified personnel. Organisations search for qualified staff from online databases, thus, saving time and financial resources.

Crisis management challenges always confront organisations. Failure to deal with a crisis may slow down operations and affect profit margin of an enterprise. Organisational change helps in crisis management. Greenwood and Hinings (2004) assert that change is a necessity when a company experiences crisis. Some of the factors that lead to crisis include poor working conditions and wages.

Organisational transformation helps to improve working conditions or activities that cause problems. Instigating changes to discard unproductive working methods helps a business to survive turbulent moments. Moreover, organisational change saves a corporation from extra costs of satisfying the incompetent methods. It is imperative that employees understand the urgency and need for change to allay fear that might lead to employee resistance.

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In 2006, Belgium recorded an outbreak of Mad Cow Disease. Before it could resolve the problem, there emerged allegations that animal feeds were contaminated with carcinogen; dioxin. Customers’ grievances followed this new crisis that they had noticed a funny flavour and odour in Coca Cola’s soft drinks. In addition, over 100 consumers claimed that they had sought medical help after consuming the drinks (Johnson & Peppas 2006).

The Belgian Health Ministry responded to the allegation by requesting Coca Cola Company to pull out all its soft drinks from the market. The impacts of this catastrophe were widespread, and the company lost a lot of money. Afterwards, Coca Cola Company discovered manufacture and supply challenges that could have led to the health crisis. Following the ministry’s directive, the company took immediate steps to resolve the crisis. It introduced novel and healthier production and supply methods to guarantee that such an incidence does not reoccur. Even though Coca Cola Company incurred a tremendous loss due to the crisis, it was able to resolve the problem and salvage its brand and reputation.

Globalisation has led to changes in marketing culture. Hence, enterprises should change their organisational culture to meet modern market demands. Corporate cultures include fundamental beliefs, internal interactions and values. Their adjustment can contribute to improving productivity and efficiency. Fernandez and Rainey (2006) claim that efficient corporate culture enhances customer satisfaction and attracts new clients. It also helps an organisation to retain competent staff and reduce operation costs. Organisational change helps management to transform and improve corporate culture.

Apple Computer Company enjoys its present growth due to changes in organisational culture. The company’s management team sought to introduce innovations to overcome competition. It realized innovations by changing the company’s culture. The management initiated a corporate ethic that encouraged employees to work hard. Besides, the management encouraged employees to commit to deadlines. Armenakis and Harris (2009, p. 133) argue “Apple adopted a culture that was not too formal or hierarchical and a more results-driven approach that worked best for the company”. It helped the company to remain competitive in the global market and maintain a huge customer base.

Effective Organisational Change

According to Hoag, Ritschard and Cooper (2002, p. 11) “Change management process should include creative marketing to enable communication between changing audiences, as well as deep social understanding about leadership’s style and group dynamics”. Organisational transformation management supports employees’ expectations, brings employees together, communicates and controls employee training. Therefore, the success of organisational change depends on the ability of the management team to discern and delineate measurable stakeholders’ objectives.

Besides, it depends on the capacity of the management to monitor and control risks, and to establish a business model for the intended change. For any change to succeed, it should win political support from management. In an organisational setting, politics refers to influence. It is hard for an organisation to implement change without support from top management or board of directors. In most cases, change leads to transfer of authority from one person or department to another (Armenakis & Harris 2009). Hence, it is imperative to win support of all power players during change implementation.

The reason Apple Company enjoys its current success is because it enjoys political support from all its key political players. The company’s chief executive officer works together with the board of directors, departmental heads and supervisors to promote and discharge changes. Moreover, the company enjoys support from professionals, who are responsible for change discharge.

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Effective organisational change depends on resourceful communication, which affirms the urgency and importance of change. Workers are unlikely to support change if they do not understand its significance. It is important to inform employees about the benefits of a designed change and its expectations (Jones 2004). Besides, employees should know their responsibilities prior to change discharge. Communication guarantees that workers stick to their duties.

Moreover, it helps to establish benchmarks, which employees and management use to determine if change implementation process is going as expected. It is hard for managers to implement changes if they do not have a clear picture of what comprises a successful transformation. Therefore, communication assists them to know the start and end of change implementation process and if the process meets established goals.

The success of organisational change relies on company’s endeavour to train and equip its workers with novel skills. Organisational change is dynamic. Hence, companies should improve their operations and products regularly to remain competitive. They need innovative workforces to implement change (Jones 2004). Additionally, management should monitor and fine-tune organisational changes to meet their expectations.

Toyota Company is renowned for developing superior and fuel efficient vehicles. The company has a well-managed organisational change strategy. It holds regular workshops to train its workers to develop superior and efficient engines. In addition, Toyota Company has numerous branches across the globe, which work together to meet the needs of diverse customers (Jones 2004). Leaders from the different branches monitor and evaluate implemented changes to guarantee that they yield the desired results.

Poor Organisational Change

Varied factors contribute to poor organisational change. The factors include inadequate readiness, fast solution prospect, absence of logical plan and poor management (Yang, zhuo & Yu 2009). For a change to be successful, an organisation should demonstrate positive approval of the change. The more an institution is prepared, the more it is likely to approve and embrace change. Lack of preparation may lead to employee resistance. For example, an organisation should ensure that employees know how an intended change will affect their activities. Failure to inform them may result in resistance and employee turnover.

Another factor that contributes to poor organisational change is lack of logical plan. Some organisations do not use systematic perspective to plan and execute change. Many institutions only use employee training to introduce changes. They neglect factors like corporate culture and structure, which influence employee behaviour. According to Kanter, Stein and Jick (2003), some corporations perceive all departments as equal.

Hence, they use identical strategies to discharge change in all departments without considering their unique functions. Eventually, it becomes difficult for the departments to fulfil their duties. Samsung Company conducts thorough departmental analysis prior to change implementation. The company has established a holistic change plan that pays attention to the needs and functionalities of individual departments. It underlines why Samsung Company dominates the Smartphone market (Palmer & Dunford 2008).

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In most cases, organisations make quick solution prospect errors. They frequently presume that implementing a set of organisational transformations can address all challenges. Besides, some companies hire a private professional with hope that he or she can help to resolve their problems. Hiring private professionals discourages innovation (Palmer & Dunford 2008). Hence, a company is forced to terminate a change plan prematurely after it realises that the strategy does not meet outlined expectations. When developing organisational transformation, employees frequently take the change process too seriously but overlook its objectives. Therefore, they participate in transformation process actively, but fail to achieve desired results.

Poor management of a change process is another factor that contributes to the failure of organisational change. There has to be a link between change strategy and organisational context. Palmer and Dunford (2008) allege that organisational change creates novel models of behaviour and thoughts. Change managers should ensure that new models do not contradict the old ones to prevent employee resistance. For instance, if a company’s culture embraces employee empowerment, it is important to make sure that an intended change promotes empowerment. Otherwise, it is likely to trigger resistance.

Conclusion

Organisational change refers to a process where a business alters its operations or departments to improve productivity. It helps organisations to cope with dynamic business environment and reduce transaction costs. Organisational change is vital to the management because it contributes to upgrading an existing technology and introducing modern expertise. Besides, organisational change helps institutions to learn and acquire novel skills. Organisational leaders use change to address emerging crises through operations transformation.

Moreover, organisational change helps corporate management to cope with challenges of globalisation. Organisational transformation has to gain political support for it to be effective. Besides, there should be effective communication between individuals responsible for change discharge. Employee training and development reinforce the success of organisational transformation. Several reasons lead to failure of organisational transform. They include inadequate preparation, lack of a logical plan and poor management of change implementation process.

Reference List

Armenakis, A & Harris, S 2009, ‘Reflections: our journey in organisational change research and practice’, Journal of Change Management, vol. 9, no. 2, pp. 127-142.

Cummings, T & Worley, C 2001, Organization development and change, South-Western College Publishing, Cincinnati.

Elias, S 2007, ‘Employee commitment in times of change: Assessing the importance of attitudes towards organisational change’, Journal of Management, vol. 3, no. 1, pp. 78-94.

Fernandez, S & Rainey, H 2006, ‘Managing successful organisational change in the public sector’, Public Administration Review, vol. 66, no. 2, pp. 168-176.

Greenwood, R & Hinings, C 2004, ‘Understanding radical organisational change: bringing together the old and the new institutionalism’, Academy of management Review, vol. 21, no. 4, pp. 1022-1054.

Hoag, B, Ritschard, H & Cooper, C 2002, ‘Obstacles to effective organisational change: the underlying reasons’, Leadership & Organization Development Journal, vol. 23, no. 1, pp.6-15.

Johnson, V & Peppas, S 2006, ‘Crisis management in Belgium: the case of Coca‐Cola’, Corporate Communications: An International Journal, vol. 8, no. 1, pp.18-22.

Jones, G 2004, Organization theory, design, and change, Addison-Wesley Publishing Company, New York.

Kanter, R, Stein, B & Jick, T 2003, The challenge of organisational change: how companies experience it and leaders guide it, Free Press, New York.

Palmer, I & Dunford, R 2008, ‘Organizational change and the importance of embedded assumptions’, British Journal of Management, vol. 19, no. 1, pp. 20-32.

Yang, R, Zhuo, X & Yu, H 2009, Organization theory and management: cases, measurements, and industrial applications, Yeh-Yeh, Taipei.

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