Organisational Change and Development - Article Example

Change Management Scott (1995) defines s as follows: s consist of cognitive, normative and regulative structures and activities that provide stability and meaning to social behavior. Institutions are transported by various carriers – cultures, structures and routines – and they operate at multiple levels of jurisdiction.(Scott, 1995: 33). The use of metaphors such as machine or organism to facilitate the understanding of organizations may in fact, aid organizational change and knowledge development. (Oswick and Grant, 1996). One of the changes that have been proposed by Bill Hartmann is improving the product quality. This proposal is in response to his finding that two percent of Anderson’s products are defective as compared to half or one percent of the average firm in the industry. When broad societal or industry-level changes are very strong, then individual organizations must respond to them if they are to remain competitive.(DiMaggio and Powell, 1983; Meyer and Rowan, 1977; Scott, 1995). As Meyer and Rowan (1977) have pointed out, an organization is an organic part of its environment, hence from this perspective, a retailer’s actions will reflect the economic as well as the cultural-moral norms of the environment it exists in, and it must engage in action that reflects an adherence to these norms. The failure of an organization to respond to the institutional pressure to adapt to new ideas or an unwillingness to do so can lead to legitimacy problems. Organizational actions are the result of a competition for the achievement of legitimacy within the institutional framework in which the organization operates. If Anderson is to be able to compete effectively with other organizations that are also in the business of manufacturing consumer products, they must be able to conform to institutional standards and match or exceed them. The industry level standard in this instance reflects a much lower level of defective products as compared to Anderson’s output, suggesting that there has been an increasing trend in the industry towards improved quality of products but Anderson has not kept pace with these changes. There is an increasing trend within organizations to incorporate principles of quality improvement through the implementation of measures such as Six Sigma, which is a quality program geared towards improving organizational efficiency to make it more competitive. It is an organizational process that is focused upon (a) improving the process design and (b) reduction of error and waste. The implementation of these methods requires collaborative action planning and implementation of measures for improvement, based upon feedback obtained from data and research, in order to make the organization more effective (Harvey and Brown, 2005). There is an increasing industry level emphasis on the quality of products, but Anderson has failed to adhere to these standards and keep up with these changes. Scott offers the view that through the incorporation of institutional rules within their own structures, organizations become “more homogenous, more similar in nature over time.” (Scott, 1995:209). The evolution of quality as a standard has been more in response to consumer demands for improved quality of products in a globally competitive environment. In today’s global marketplace, creativity and innovation have assumed a great deal of importance and it is important for a Company to have a fresh and novel strategy if it is to succeed in the market place. “Competitive strategy is about being different.” (Porter,1996:64). Porter also states that “Strategy is the creation of a unique and valuable position, involving a different set of activities……different from rivals.” ( Porter 1996: 68). This requires a process of continuous improvement and innovation and the ability for the organization to be responsive to changes in the environment and customer preferences. But Anderson has remained reliant on a new product it has developed during the 1980s, during as time when the emphasis on quality as mandated by changing preferences in a globalizing economy were not so high. Hence, Bill Hartmann has correctly identified the need for the Company to focus upon the development of higher quality standards in its products, which may help to ameliorate some of the losses the Company has been suffering. Another aspect that Hartmann has identified where change is necessary is the number of employees. Anderson appears to be adhering to an older institutionalized system in terms of its employees, where a bureaucratic set up was favored. Meyer and Rowan characterizes such practices as “institutionalized products, services, techniques, policies, and programs” which many organizations adopt in a ceremonial manner in order to achieve legitimacy (Meyer and Rowan, 1977:340). Such systems of bureaucratic control may have earlier been useful in dealing with political processes calling for standardization, but are no longer relevant in a changed global economy. Increasingly, the employee assets that are being valued in a globalized economy are practical skills, knowledge and creativity of individuals, unlike assets such as machinery, land and other natural resources which were the major drivers of the economy earlier.(Rikowski, 2000:158). Potter argues that in the modern day economy, production itself does not ensure that a firm enjoys a competitive advantage, rather it is intellectual capital or the knowledge base of a firm which ensures that this objective is attained.(Potter, 1999). At Anderson however, there appears to be an abundance of individuals performing routine, standardized tasks and a dearth of skilled individuals with knowledge and soft skills. Increasingly, the assets that are being valued in a globalized economy are practical skills, knowledge and creativity of individuals, unlike assets such as machinery, land and other natural resources which were the major drivers of the economy earlier.(Rikowski, 2000:158). Potter argues that in the modern day economy, production itself does not ensure that a firm enjoys a competitive advantage, rather it is intellectual capital or the knowledge base of a firm which ensures that this objective is attained.(Potter, 1999). Anderson’s failure to keep up with the changes occurring in the global context has resulted in the losses it has suffered recently. In order to sustain the competitive advantage gained from the development of its new product in the 1980s, the Company should have ensured that there is a process of continuous innovation occurring within the organization. But the Company has not taken necessary steps to continuously develop its product to satisfy the changing requirements of customers. Hartmann has also identified another significant limitation in Anderson’s policy, which again points to its failure to adapt to changes in its environment, i.e, a failure to pay attention to marketing. Muffatto and Panizzolo (1995) propose that consumer satisfaction with a product is one of the factors designed to provide a competitive advantage and one of the best indicator’s of a firm’s future profits. Customer satisfaction with Anderson’s product appears to have declined due to its high levels of defects, which may serve to explain its large losses. Customer satisfaction is the leading criterion to determine brand quality, in terms of price, performance and quality of the product, including satisfaction with the ongoing business relationship and because it has met customer expectations. (Vavra, 1997). Customer perceptions as gleaned through the people they are associated with and the information available about the product through advertising or other channels are also likely to influence consumer buying decisions. Li and Miniard (2006) have reported the results of two studies which suggest that advertising can help to generate trust in customer’s minds about the quality and satisfaction inherent in the advertised brand, by influencing their cognitive thinking processes. But in the case of Anderson, very little effort has been made to effectively promote the product through a strong sales and marketing network. Drobis (1993) suggests that in order to counteract the growing customer trend to switch brands and to ensure that brand equity in a product is built up so that people remain loyal to the product, an effective public relations campaign may be necessary. Therefore, good marketing will not only comprise effective advertising, it may also include product endorsements. Anderson may also required a sustained sales and marketing effort in order to promote its products. On the basis of the above, it may be noted that Anderson requires change to be implemented within the organization to make it more responsive to changes in the global environment. Change involves the process of moving from one condition to another and enables an organization to find new ways to reach and serve its customers. The Company may need to aggressively adopt Business Process reengineering, which Hammer and Champy (1993) define as the reconsideration and radical redesign of organizational processes such that they can achieve drastic improvements over the current levels of performance in terms of cost, service and speed by streamlining process management. This may be achieved through organization around outcomes rather than tasks, building additional controls into business processes ad linking parallel activities rather than merely integrating their results. One of the most important aspects is integrating work activities in such a manner that there is attention paid to the production of information. This would enable Anderson to focus upon end results and objectives such as sales figures, profit levels and customer feedback, which would provide the Company with the much needed information to be able to respond quickly and effectively to changes in the environment. The Company is likely to face employee resistance to the changes that Hartwell is proposing, especially from administrative employees who may be worried about their jobs or employees used to the bureaucratic framework, who are worried about new ways of doing things. The Six Change approach developed by Kotter and Schesinger (1989) is a useful model that is specifically designed to prevent or reduce the degree of resistance from employees to change. These means include education of employees and increased communication with them, involving employees in the change process so that they develop commitment through participation and providing emotional support to let employees vent their fears. Additional measures include negotiating with employees and working out agreements with them; a measure that is especially effective if workers are losing their positions, manipulation and coercion of organizational players to accept the changes that are being instituted and reduce levels of resistance. All of the above measures may be useful in bringing about the necessary changes within Anderson, so that the pattern of losses sustained in the previous three years may be reversed. 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