Changing Organizations Is as Messy as It Is Exhilarating - Essay Example

1. Introduction Change is inevitable and tends to force people out of their comfort zone. They tangibly or intangibly make adjustments with it to move forward in life. In organizational setting, managing change becomes a key component of success within the transforming dynamics of business (Alvesson & Sveningsson, 2007). According to Bateman and Zaithaml (1990), organizations need to change because the environment within which they operate is in constant flux. In the current times, coping with changes tests the fundamental of human imagination and its capabilities to address it. It is complex in its paradigm and encompasses myriad issues which directly or indirectly impact organizational performance. Palmer et al., (2009) argue that changing organization is ‘as messy as it is exhilarating, as frustrating as it is satisfying and as creative a process as it is a rational one’ which actually sums up the challenges of meeting them successfully. The paper would be analysing the statement from myriad perspectives and would look at the change per se because they bring with them the paradoxes that are confusing but pose challenge for the managerial leadership to identify new opportunities in them (McMillan, 2008; Osborne & Brown, 2005). Indeed, they are exhilarating experience for the leadership as they would like it to change into facilitators of success. Thus, businesses make efforts to identify drivers of change to anticipate them and exploit them for not only competitive advantage but also for survival. 2. Drivers of change Changes become important factors that serve as motivation for management to introduce new ways to improve and improvise performance. Organizations need to change mainly because of pressures from external and internal factors that significantly impact organizational performance and credibility (Morgan, 2006). The major drivers of change are described as below: 2.1 Globalization Scholars have defined globalization as ‘the diffusion of goods, services, capital, technology, and people (workers) across national borders’ (Sirgy et al., 2004: 253). The movement of people across geographical borders has been important paradigm that has redefined social structure and considerably influenced business dynamics in terms of inter-dependency of resources. People have become key elements of business necessitating understanding of human psychology in a multicultural society. Diversity has become a reality and business needs to utilize their competencies for improved outcome. At the same time, globalization has considerably expanded the scope of business with new market and larger database of prospective customers. 2.2 Technology Advancing technology has emerged as important factor that impacts all aspects of business. It has also redefined communication and promotes linkages across wider network of people and places. Most importantly, it judicious application improves and improvises outcome by increasing efficiency, timeliness and quality. Hence, operational and managerial efficiency brought about by technology need to be understood by the workforce so that it can be exploited by them for optimizing productivity (Hayes, 2007; Hughes, 2006). 2.3 Geo-political relationship and different socio-economic and legal environment of nations In the era of globalization, changes in geopolitical relationship and the wider implications of national laws and constraints are vital features that need to be addressed. Within the new environment of expanding market and situations, the organizations must be prepared to introduce changes within its structure and processes (Mintzberg, 2008; Lynch, 2006)). FBI is prime example that had to restructure and introduce new process of meeting the challenge of terrorism after 9/11. At the same time, when businesses expand across globes, the economic and legal paradigms of the countries in which they intend to operate, become major issues. They require changes in organizational structure as well as operational processes. 2.4 Environment and climate change In the contemporary times, sustainability of resources has become critical issue. People and organizations have become more aware of environment and therefore promote practices that support environment conservation and preservation. The wider imperatives of environment and drivers of climate change become pertinent issues for organizational changes. They require new mechanisms within and across the business processes so that they can be addressed efficiently and on a sustained manner. 2.5 Recession Currently, tough financial conditions and the global economic downturn has been major reason for the declining market. The recession has forced businesses to change strategies and adopt flexible approach to survive. McDonald’s strategy is commendable as it customizes its product to suit the taste and pocket of its customers while emphasizing unique uniformity in its production process (Ritzer, 2004). 2.6 Hyper competitive business Globalization has been a catalyst to evolving new market that thrives on hyper competition. The economic liberalization and technology have been important elements that have helped overcome the barrier of entry and allowed mushrooming of small and big businesses across the sectors that pose threat to the existing business. 3. Challenges of change Change is inevitable but it is still resisted by people! In organizations, changes are often perceived as threats with wide scale ramifications on the job security and emotional stability of workforce (Knight & Willmott, 2007). The environmental changes have considerable influence on the performance of firms by affecting its market, operations and processes. It is true that the driving force behind a business is success that enables it to constantly strive towards higher goals and achievement. But the success and failure depend on its perspectives on transforming environment and the way it handles challenges of time. Changes become critical tools of success when they are exploited within and across the organization through new mechanisms and restructuring as and when required. The response and impact of change would become visible only when appropriate measures vis-à-vis structure, process and interoperability of situations are redefined to suit the changes. Thus, changes produce paradoxical situations which challenge mental and physical limits of managerial leadership. They endorse lateral thinking and creative input to overcome the obstacles to succeed against odds. 3.1 Organization environment or culture Organization culture is one of the most important platforms that influences workers’ outlook towards change. A facilitating culture promotes constant learning that is ready to embrace change because they are looked up as positive forces which can provide the firms with distinct leverage in tough times. It is developed over time and is exclusive in its shared learning that not only highlights stability but also an integrated approach of the workers (Schein, 1990). They are encouraged to develop common goals and make empowered decisions. Indeed, when they are looked upon as human capital with unique competencies, organizations tend to gain leverage in the market. The main reason is that they are better equipped to exploit the tacit knowledge of their workforce. 3.2 Management and leadership initiatives The managerial and leadership initiatives in identifying and evaluating change are critical paradigms that help organizations to cope with changes successfully. They respond to adverse conditions with high degree of involvement as it helps to assess them critically and come up with solution that is creative. Shapiro, Slywotzky and Tedlow (2000), stress that strong leadership is key aspect of companies that is able to sustain their performance through tough environmental changes. Good leaders anticipate the changes and tackle it timely with high sense of resolve. Through innovative practices, they are able to explore and identify the opportunities in the failing business and exploit the same to turn failures into success. Drucker (1999) asserts that managerial leadership acknowledges external environment as important factor that impacts organizational performance and therefore ensures that they facilitate growth. Leadership initiatives therefore become hugely critical issue within the organization that inculcates confidence amongst the people and motivates them to face change with greater understanding and fortitude. They use effective communication to disseminate information and empower people with knowledge. This helps the workforce to understand changes and make empowered decisions based on informed choices. Moreover, this also helps leaders to make tough decisions for ensuring sustainability of business. They correlate and integrate data, information and knowledge to align them with the broader organizational goals and gain competitive advantage. Sull (2000) says that people are caught into a web of active inertia that makes them complacent and they continue to follow established path even in adverse circumstances. They have the ability but lack initiative in taking appropriate action mainly because they prefer to stay in their comfort zone. But dynamics of change necessitate proactive response to change. An effective leader challenges the established norms and brings about changes to face fast transforming macro and micro environmental factors. Leaders evolve well defined course of actions that are flexible and incorporate changes to meet the desired goals and objectives of firm. Jackson and Parry (2008) agree that leaders are enabling factors that challenge assumptions and therefore are better prepared for changes. The dynamic leadership initiatives therefore become the vital ingredients that help people to understand change and meet them through creative input. 4. Key issues arising from management of change Change management can broadly be described as managerial initiatives that address the dynamics of change (Wallace et al., 2009). It promotes proactive mechanisms to understand, anticipate, evaluate and analyze changes to identify the drivers of change and seeks fresh ways to exploit its potential as new opportunities. Change management primarily adopts flexible approach that is able to incorporate changes to move forward against odds. The approach therefore calls for highly innovative measures that are designed to create new avenues of opportunities for optimizing outcome (Tidd, 2001). The organizational changes also reveal paradoxical choices and provoke reactions from people (Lewis, 2000). Success therefore, depends on the way people are likely to react to tensions created through paradoxes. Assertive actions would lead to critical analysis and development of new ideas and innovation which would provide firms with competitive advantage. Thus key issues arising from effective change management describe major initiatives of the firm that help them to manage changes optimally. They are described as below: 4.1 Strategic innovation Strategic initiatives of the firm are crucial factors that significantly contribute to innovation that is unique and may come from the mundane practice within business processes. Kim and Mauborgne (2005) claim that strategic innovation, hugely provides the firm with competitive advantage which is sustainable over a long period of time. They describe two types of spaces within which business operates: red ocean space; and blue ocean space. In red ocean space, businesses operate within the defined parameters of constraints vis-à-vis socio-economic and legal environment that defines the market segmentation; products and services; rules and regulation within which they operate. Thus the competition is mainly on the basis of business competencies and focused on the requirements of the customers. Supermarket chain, food restaurant like McDonald’s, fashion houses etc. exploit elements of Red Ocean to compete and gain market position. In such a market, there is huge competition, cutting edge rivalry and cost competitiveness that considerably reduce margin of profit and adversely impact growth prospects. Blue Ocean strategy, on the other hand is based on new ideas derived from within the products of existing industry which are used to create new firm with no competition. It helps them to maintain competitive advantage for long time. Blue ocean industries therefore materialize from the red ocean industries. They can be created in two ways: like eBay, they can be conceived as completely new idea from within the industry. eBay was the first online auction site that had little competition for a long time in cyberspace. The other one strives to stretch the limits of existing industries to innovate new products and concepts. BIC Pens is prime example that had redefined writing tools with the invention of ball point pens that were cheap but useful products. They were important innovations that were designed to meet the needs of the common man. The other products like disposable lighters of French company BIC also went a long way in giving them leverage in the global market. The innovations had targeted common man and produced for mass consumption. Indeed, through Blue Ocean strategy, firms create new space rather than divide the existing one for new products and are thus able to create long lasting brand equity. 4.2 Hyper-competition The advancing technology and rapid globalization has greatly increased competition across the globe. While globalization has expanded markets through economic liberalization, the technology has considerably empowered people with knowledge and information. D’Aveni (1997) contends that hyper competition relies on disruptive measures that firms use to disturb market equilibrium. Intense competition within market happens due to four key reasons: people have become more informed; changed business dynamics due to technology; reduced entry barrier because of economic liberalization that lead to expansion of business across globe; and increasing use of money power to reduce competition through business alliances, takeover etc. The firms constantly innovate because hyper competition significantly reduces the life cycles of products. They also tend to diversify laterally to disturb market in order to create their own position. Samsung and Sony are excellent examples of hyper competitors who are constantly improving and creating value for their products to keep their competitors in suspense. One of the most interesting features of hyper competition is the readiness of firms to diversify when market saturation occurs. It is for this reason that firms are not only diversifying but also strive to gain leverage though acquisitions and partnerships. This helps them to offer customers more options of differentiated products and compete at multilevel. 4.3 Critical success factors In the current environment of fast transforming business dynamics, firms continuously strive to identify factors that are important to their success. Various industries are formed with different objectives which maximize profits through available resources and exploiting their competencies. There can be number of elements within the firms that can be used for gaining leverage. But the organizations like to identify those elements within their resources which contribute to their success on a sustainable basis. Rockart (1959) has described those elements as critical success factors which are necessary for firms to maintain their niche position in the market. For example, Microsoft exploits its knowledge to maintain its edge in the market while Wal-Mart’s logistics play pivotal role in its market position. The dynamic strategies of the business hugely support evolving measures to face the challenges of change and compete on unique competencies. Various methodologies like TQM, Six Sigma etc. are tools that are used by firms to improve processes and quality standard in order to improve performance and increase market credibility. 4.4 Balanced scorecard Kaplan and Norton (1992) assert that businesses are value proposition for various stakeholders and therefore fundamentally work on the principle of maximizing profits. The managerial leadership strives to achieve the broader objectives of the firm through increased operational efficiency and customer satisfaction. Performance evaluation provides the necessary linkages that impact profits. It is especially true in new product development which must corroborate with the changing requirements of the customers as they are motivated towards improved performance and profitability of the organizations. Any dissonance would adversely impact profits and therefore defeat the purpose of the business. Scholars believe that balanced scorecard can identify the area that is adversely impacting the performance when it is used as tool to give an overview of the performance (ibid). The strategic performance metric is widely used on various elements like customer satisfaction, internal processes, innovation and improvement activities etc. which are weighed against financial measures as well as operational efficiency. Balanced scorecard is highly efficient way of gauging performance against financial gains. It promotes transparency in the working and supports measures and controls used for refining the performance of the firms. It not only lends credibility to the firm but also maximizes its profits for its stakeholders. McDonald’s exemplifies the imperatives of balanced scorecard and maximizes its profit through operational efficiency and meeting the changing needs of its customers by customizing its products as per the changing demands of its customers. 4.5 Rational approach and effective decision making The rational approach allows the organizations to not only make empowered decisions on the current issues but also ensure that these decisions do not adversely impact the future of the organizations. Scholars affirm that rational approach uses critical thinking to articulate the pros and con of the situation and issues to identify the root cause of the problems (Street et al., 2001). Thus, it delineates problems to highlight areas of new opportunities that can be exploited for growth and sustenance. This is critical factor in the changing environment of business. Besides, social scientists believe that irrational decisions are taken in businesses because of unrealistic goals, false judgment and people’s unwillingness to move away from established pattern of work (Bazerman and Moore 2008). They continue to believe that financial investments would yield results given time! Indeed, many scientific studies have revealed that firms take risks to reduce loss rather than with the intention of making profits (Bailey & Alexander, 1993). Effective decision making based on informed choices that can be validated at various levels of operational processes become hugely pertinent issues for leaders. It opens plethora of choices for people and demonstrates the efficacy of their decision making prowess when risks are taken for testing new approaches for success. Conclusion Indeed, the myriad challenges of transforming socio-economic compulsions are reflected by the messy but exhilarating paradigms of change management that is distinct in its creativity and high degree of commitment to organizational goals. In the emerging environment of global competitive business, effective leadership becomes crucial agent of change. It encourages innovative business practices and creative input to overcome the challenges of market volatility and changing technology. Flexible approach of managerial leadership emerges as highly desirable factor because it promotes critical thinking that challenging the assumptions. Most pertinently, it looks at paradoxes within the broader framework of new ideas and opportunities rather than barriers that need to be overcome. One can therefore, conclude that changing organizations are full of challenges which provide organizational leadership with new incentives for growth. They do so because they are able to rationalise changes in the right perspectives and with positive approach. Moreover, they not only empower their followers but also promote lateral thinking amongst them so that changes can critically evaluated. Hence, good leadership helps people to look for new opportunities in changes so that they can be exploited for higher productivity and gaining leverage in the market. (words: 3026) Reference Alvesson, M & Sveningsson, S. (2007) Changing Organizational Culture: Cultural Change Work in Progress, NY: Taylor & Francis. Bailey, J. J., & Alexander, R. A. (1993) ‘Organizational social cues, framing and justice: Effects on management’s ethical decisions’, The International Journal of Organizational Analysis, vol.1, pp.133-160. Bateman, T and Snell, S. (2009) Management: Leading and Collaborating in a Competitive World, 8th edition, NY: McGraw hill. Bateman, T, and Zeithaml, C P. (1990) Management: Function and Strategy, Homewood, IL: Irwin. 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