Business Changing Environment - Essay Example

Introduction In the rapidly changing environment of globalization, change is essential for development and organizations tend to adapt to the constantly evolving business environment. “Organizations must change because their environments change” (Bateman, 1990). They implement necessary changes in the organization to not only survive but compete with their rival with confidence. While it is true that people tend to resist any kind of change, effective planning and implementing changes in a manner that mitigates the resistance of the employees, often goes a long way in instilling confidence in them. The changing times have made the businesses more competitive, thereby making it obligatory for them, as well as for the working force to become more flexible and swiftly adapt to the changing technologies and work environments. The current scenario of working populations therefore, faces much more challenges than the people who were earlier working in different work environment. The compulsions of the present times require versatility in the working force. The working within the organizational structures with well defined parameters and values promote and facilitate the organization to strive for its long term mission with short term goals and objectives. The workforce along with their leaders are important part of the organization who work together to achieve their organizations’ goals and objectives. Interaction among the workforce comprising of employees and managers is often fraught with diverse interests, work place conflicts and display of power politics. Hence, organizations’ working ideologies are often compared with the power plays of various political modalities which give it a unique identity. We would be analyzing the case study: ‘Digital Equipment, Scotland: The VLSI Story’, focusing on the impact of managerial attitude to the structural changes in the organization and the needed leadership initiatives to overcome the resistance, if any. The VLSI Story Digital Equipment Corporation, Scotland, came into existence in 1983 as a small scale test facility for computer chips made in Hudson, America. Digital is one the largest computer manufacturing company of America and its plant in Ayr, Scotland, became the first overseas plant to launch world wide distribution of computer system which was locally designed and developed. When assembling operations were added in 1985, there was impressive growth in the output of VLSI chips and the strength of the employees grew from 14 in 1984 to 470 employees in 1989. VLSI volume rose from 2000 per week to whopping 35000 per week in 1989 which were not only more complex and sophisticated in design but also comprised of forty different product types that needed to be packed in lots of batch sizes from 50 to 100! The plant is non unionized and has 24 hours working schedule that is divided into three shifts with total floor area of more than 25,000 square feet. Working conditions are generally good and the skilled and non skilled jobs are well defined and streamlined for smooth functioning. The hierarchal managerial supervision does not encourage much collective decision making. Employees in the operation and assembling units are trained for specific jobs and have no wider understanding or knowledge of the production processes. The work is repetitive with hardly any scope for individual growth. The organization singularly lacks effective communication and knowledge sharing processes. Apart from solving the processes related problems, there is neither any interaction of the employees with the management nor any type reward system as a token of appreciation. While the management believes in strict hierarchical style of functioning, relying heavily on the managerial decisions, which often seem to be self assertive, the employees feel the need for more proactive management who would strive for better understanding between the management and employees and perhaps encourage inputs from them. The employees feel that with limited scope for personal and professional development within the plant, their potential is not being fully exploited. The management, on the other hand are not overly anxious to change the organizational culture to include major restructuring in the organization that would take into account the wider interests of the employees and which might endanger their hierarchal superiority of their status within the plant or organization. The management is reluctant to embrace any change because according to them ‘we don’t need to change….it’s both effective and successful. It ain’t broke, so why fix it?’ (case study). Analysis The company is indeed successful and has shown a healthy production and profitable balance sheet. But it is equally relevant to state that the organization lacks the fundamental principles of corporate management which are vital for the realization of long term mission and vision of the organization. Employees are very important part of organizational culture and their welfare is an intrinsic part of corporate responsibility. In the era of advancing technology and rapid globalization, it is imperative that the workforce is encouraged to share mutual knowledge and ideas but they must also be involved into collective decision making to work towards common goals. The organization needs to change and develop its unique organizational culture with well defined vision and mission statements which are effectively communicated to their employees. The shared vision promotes better understanding among the employees and provides impetus for improved performance and easy changeover. The shared learning must become an intrinsic part of the work methodology, characterized by the stability provided by the system and the integrated approach of the workers. Sjostrand and Tyrstrup, in one of their article, have argued that managerial leadership needs to be approached as a relational, ongoing social construction process rather than as a single clear cut phenomenon (2001). Hence, it is imperative that the changes within the organization need to be pursued with effective implementation strategies and appropriate feedback and remedial measures for a sustainable improved performance of the company in all its areas of operations, especially in an environment of competitive global business. Eminent social scientists, Christensen & Raynor state that ‘good theories are valuable in atleast two ways. First they help us to make predictions… sound theories help us interpret the present, to understand what is happening and why. Theories help us to sort the signals that portend important changes from the noise that has no strategic meaning’(2003). Indeed, for any organization to expand and succeed, it is crucial that its people are recognized as vital part of its strategy and organizational goals and objectives be interpreted in the context of the changing paradigms of the times. Another very important factor within the organization is the lack of effective communication and scarcity of leadership initiatives. In the absence of union, the employees solely rely on the management for their welfare which may not always look for their interests. In an article from Leader to Leader Journal, Frances Hesselbein has said that ‘Leadership is a matter of how to be, not how to do’ (No. 41, 2006). The organization needs to promote leaders who are not only able to communicate the important messages but they must be able to inspire and motivate the people to achieve great heights. Workplace motivation is a remedy for dispelling monotony and infuses fresh enthusiasm and outlook towards the work. Hence, effective leaders are versatile and are adept at exploiting the potential of their followers or workers as per the demands of the situation. Organization culture and behaviour was distinct in its approach by facilitating better understanding, prediction and improvisation in work place, leading to improved performance. The workers must be encouraged to share mutual experiences and learn new technologies and methodologies to improve individual and team performance. Open communication effectively solves grievance, if any, thereby establishing stronger interpersonal relationship that is based on understanding and mutual cooperation. It therefore, makes valuable contribution to the organization, promoting a sense of togetherness and collective responsibility that reflects in the increased output and improved performance of the organization. Another very pertinent issue is the need to create opportunities within the organization for personal and professional growth. The employees need to feel secure in their employment and know that their good performance would not only result in improving the overall growth of the organization but they would also be duly acknowledged for their role. This is basic human trait and serves to inspire others to excel in their work area. Hence, the management must change to become more proactive and encourage their workers and exploit their potential to the benefit of the organization. A happy workforce is a far more effective tool to achieve faster the long term and short term goals of the organization. Yet another important aspect of the management theory is the impact of social changes that occur as a result of globalization. The technological advancement and rapid globalization have brought in a more complex set of paradigms that necessitate a drastic change in corporate strategy. The changing socio-economic environment made it imperative that more consideration be paid to socio-cultural and political environment so that the requirements of the people became the focal point in the development of strategy. In the changing times, the human behaviour became more formal and often less predictive. The corporate strategy, therefore, started incorporating the changing human behavioral pattern and taking into account the collective decision making and participatory approach to corporate decisions. Last but not the least important is the fact that the fast changing dynamics of the current business processes necessitate corresponding change in strategy that take into considerations of the emerging risks which may influence the overall development of the business enterprise. The case study lacks the vision to forecast the probable risks that it might encounter. It is a fact that changing paradigms in the global business environment have brought forth a new set of uncertainties and risks that need to be addressed urgently. While it is good to think that organized structure of business management and operation would be able to tackle the emergency situations, it would be crass bad business sense not to adapt to changing environment of competitive business that is fast incorporating global values. In such circumstances, one cannot discount the unanticipated problems and conflicting issues that might emerge as a result. It has, therefore, become important that business must try to formulate strategies to combat the anticipated and unanticipated risks in all areas of business. The corporate strategy must incorporate the module to periodically assess the risk factors. One can therefore conclude that the Digital Equipment Corporation needs to change its organizational culture and incorporate latest management theories and implement strategies. Business areas in the era of rapid globalizations such management theories need to be incorporated into the management strategies and applied as per the changing dynamics of the global business environment. To maintain a healthy competitive edge over their rivals, The organization needs to meet the challenges of the time with a creative approach that promote independent thought and actions with good analytical and rational approach towards innovative ideas. Therefore, organizational strategies and implementation processes must be designed so as to have collective approval of its workforce, thus facilitating and building a firm and stable organization. In the fast advancing times, the role of leaders, managers and the administrators of the organizations have become more challenging when new strategy and policy decisions are introduced in the organizations. Reference Bateman, Thomas S., and Carl P. Zeithaml. Management: Function and Strategy. Homewood, IL: Irwin, 1990. Christensen, Clayton M and Ranor, Michael E. 2003. ‘Why hard-nosed executives should care about management theory’. Harvard Business Review. September. pp. 67-74. Hesselbein. Frances. (2006). Moving Peter Drucker’s Works and Wisdom Around the World. Leader to Leader Journal, No. 41, summar 2006. Available [Accessed on 19 Augst, 2008]. Sjostrand, S and Tyrstrup, M. 2001. ‘Recognized and unrecognized managerial leadership’, in invisible management – The social construction of leadership. S Sjostrand, J Sandberg and M Tyrstrup (eds.). Thomson. pp 1-27. Read More