Importance of Change in an Organization

One can try to predict the future. However, predictions produce at best a  blurred picture of what might be, not a blueprint of future events or  circumstances. The effective and progressive management of change can assist  in shaping a future which may better serve the enterprise’s survival prospects.  Change will not disappear or dissipate. Technology, civilizations and creative  thought will maintain their ever accelerating drive on-wards. Managers, and the  enterprises they serve, be they public or private, service or manufacturing, will  continue to be judged upon their ability to effectively and efficiently manage  change. Unfortunately for the managers of the early twenty-first century, their  ability to handle complex change situations will be judged over ever decreasing  time scales. The pace of change has increased dramatically; mankind wandered  the planet on foot for centuries before the invention of the wheel and its  subsequent “technological convergence” with the ox and horse.

Importance of Change in an Organization

In one ‘short’ century a man has walked on the moon; satellites orbit the  earth; the combustion engine has dominated transport and some would say  society; robots are a reality and state of the art manufacturing facilities resemble  scenes from science fiction; your neighbor or competitor, technologically  speaking, could be on the other side of the planet; and bio-technology is the  science of the future. The world may not be spinning faster but mankind  certainly is! Businesses and managers are now faced with highly dynamic and  ever more complex operating environments. Technologies and products,  along with the industries they support and serve, are converging. Is the media  company in broadcasting, or telecommunications, or data processing, or indeed  all of them? Is the supermarket chain in general retail, or is it a provider of  financial services? Is the television merely a receiving device for broadcast  messages or is it part of an integrated multi-media communications package? Is  the airline a provider of transport or the seller of wines, spirits and fancy goods,  or the agent for car hire and accommodation?

As industries and products converge, along with the markets they serve,  there is a growing realization that a holistic approach to the marketing of goods  and services is required, thus simplifying the purchasing decision. Strategic  alliances, designed to maximize the ‘added value’ throughout a supply chain,  while seeking to minimize costs of supply, are fast becoming the competitive  weapon of the future. Control and exploitation of the supply chain make good  commercial sense in fiercely competitive global markets. The packaging of what  were once discrete products (or services) into what are effectively ‘consumer  solutions’ will continue for the foreseeable future. Car producers no longer  simply manufacture vehicles, they now distribute them through sophisticated  dealer networks offering attractive servicing arrangements, and provide a range  of financing options, many of which are linked to a variety of insurance  packages.

Utility enterprises now offer far more than their original core service. For example,  Scottish power have acquired utilities in other countries and have recently  moved into water, gas and telecommunications, to become a ‘unified’ utilities  company offering ‘one-stop shopping’ to domestic and commercial customers.  How can we manage change in such a fast moving environment without losing  control of the organization and existing core competencies? There are no easy  answers and certainly no blueprints detailing best practice. Designing,  evaluating and implementing successful change strategies largely depend upon  the quality of the management team, in particular the team’s ability to design  organizations in such a way as to facilitate the change process in a responsive  and progressive manner.

Imperatives for Organizational Change

Any organization that ignores change does so at its own peril. One might  suggest that for many the peril would come sooner rather than later. To survive  and prosper, the organizations must adopt strategies that realistically reflect their  ability to manage multiple future scenarios. Peter Drucker, for example, argued that :  Increasingly, a winning strategy will require information about events and  conditions outside the institution. Only with this information can a business  prepare for new changes and challenges arising from sudden shifts in the world  economy and in the nature and content of knowledge itself. If we take an  external perspective for a moment, the average modern organization has to come  to terms with a number of issues, which will create a need for internal change.

Six major external changes that organizations are currently addressing or will  have to come to terms with in this century are :

  1. A large global marketplace made smaller by enhanced technologies  and competition from abroad. The liberalization of Eastern European  states, the creation of a single European currency, the  establishment of new trading blocs such as the ‘tiger’ economies of  the Far East, and reductions in transportation, information and  communication costs, mean that the world is a different place from  what it was. How does an organization plan to respond to such  competitive pressures?
  2. A Worldwide recognition of the environment as an influencing  variable and government attempts to draw back from environmental  calamity. There are legal, cultural and socio-economic implications  in realizing that resource use and allocation have finite limits and that  global solutions to ozone depletion, toxic waste dumping, raw  material depletion, and other environmental concerns will force  change on organizations, sooner rather than later. How does an  individual organization respond to the bigger picture?
  3. Health consciousness as a permanent trend amongst all age groups  throughout the world. The growing awareness and concern with the  content of food and beverage products has created a movement away  from synthetic towards natural products. Concerns have been  expressed about salmonella in eggs and poultry, listeria in chilled  foods, BSE or ‘mad cow disease’ and CJD in humans, genetically  engineered foodstuffs, and the cloning of animals. How does an  individual organization deal with the demands of a more health-conscious  population?
  4. Changes in lifestyle trends are affecting the way in which people  view work, purchases, leisure time and society. A more morally  questioning, affluent, educated and involved population is  challenging the way in which we will do business and socialize. How  will people and their organization live their lives?
  5. The changing workplace creates a need for non-traditional  employees. Many organizations have downsized too far and created  management and labor skill shortages as a result. In order to make  up the shortfall, organizations are currently resorting to a  core/periphery workforce, teleworking, multi-skilled workers and  outsourcing. A greater proportion of the population who have not  been traditional employees (e.g., women with school aged children)  will need to be attracted into the labor force. Equal opportunity in  pay and non-pecuniary rewards will be issues in the future. How will  an individual organization cope with these pressures?
  6. The knowledge asset of the company, its people, is becoming  increasingly crucial to its competitive well being. Technological and  communication advances are leading to reduced entry costs across  world markets. This enables organizations to become multinational  without leaving their own borders. However, marketing via the  internet, communication via e-mail and other technology applications  are all still reliant on the way you organize your human resources.  Your only sustainable competitive weapon is your people. How do  you intend managing them in the next millennium? The same way as  you did in the last?

What is important, however, is recognition that change occurs  continuously, has numerous causes, and needs to be addressed all the time. The  planned change is not impossible, but it is often difficult. The key point is that  change is an ongoing process, and it is incorrect to think that a visionary end  state can be reached in a highly programmed way.

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