The Constantly Changing Business Environment - Essay Example

Introduction The constantly changing business environment demands that organizations have to adapt to changes for survival. SAP a software company operating from Germany has to compete in the global market and sustain its profitability. The organization decides to implement change in its operation. The success of transforming an organization lies in effective communication. This paper is a case analysis of how SAP approaches the change and the effect on the organization. Evaluation of sap leadership team SAP was a success in the initial years of it operation. The organization became the largest world maker of software systems. The software of this company was written in Walldorf, they took several months to develop, and their installation would require a team of experts. The coming of the internet brought turbulence to the SAP business. Internet brought completion in the software market. Other companies were producing software that were easy to install and were relatively cheaper than those of SAP. The management of SAP was suspicious of the internet business. However, they decided to experiment on it by creating of subsidiaries dealing exclusively with internet. The move by management to give internet a trial was a prudent one. Creation of subsidiaries was also a safety precaution that the outcome of internet business would not have an effect on the core operations of the company. In addition, the company made acquisitions. One of the acquisition companies head was Mr. Agassi who was a founder of four companies by the age of twenty-four. The management of SAP is in the hands of Mr. Kagermann and Mr. Plattner as co-chief executives. In the making of decisions concerning the operation of the organization, one does not see consultative meeting between them. Mr. Plattner argues with Mr. Agassi in their first meeting. As a result, he challenges him by giving him difficult assignment. Further, he places Mr. Agassi in charge of hundreds of staff and web units. The decisions by this executive seem to be authoritative. The mode of communication is top to a bottom. Mr. Agassi becomes a success in his responsibility. The executive decides that it is time to let go of their conservatism and drive the organization into trending business strategies. This is a major decision. Proper implementation of this decision would make the organization profitable and competitive in the global market. The executive needs to offer leadership which can be done through communication and involving all stakeholders. The management puts Mr. Agassi in charge of taking the organization through the technological transformation. As part of the leadership team, he is aggressive in what he believes in. He makes decisions and imposes them on those he works with. In developing of new technologies, he is successful. However, he is dismal in the creation of interpersonal relationship. The leadership team equally does not concern with the human element of the business operation. The lack of concern for the perspectives of employees on changes leads the organization to a decline in profitability. Methods used to introduce change The leadership team of the company is a top to bottom approach. Decisions are made at the top and trickles down the hierarchy. The top to bottom model of leadership started with the inception of change in the organization (Polsky and Gerschel, 2010). During the formation of the company, and when it was purely German, decision-making was a process that workers were able to participate. A veteran worker comments and says” we used to be kings here.” The workers were now observers and unwilling followers. The organization was rapidly expanding to other nations. The expansion brought about the employment of non-Germans to forty percent of the total workers. There was a transfer of jobs and organization functions to other areas outside Walldorf. The changes were rapid for the organization’s veterans; they were creating internal conflicts that led Mr. Palo, the head of department to resign. The foreigner felt the changes were slow. The organization sponsoring of cultural sensitization classes for the employee did little to enlighten the employees on handling the changes. The human system within the organization was a crisis. Mr. Agassi noted that some managers were resisting change, and used a challenge to enlighten them. He assigns them a project to develop a program and limits the time for its completion. They succeed, but that does not change their opinions about the organizations’ transformation. Thus, the change method the organization was using was not successful since it did not conform to the human relations theory. Leadership failure from a communication perspective The leadership failure of SAP was due to lack of effective communication skills. Communication is a process that creates meaningful relationships in an organization (Polsky and Gerschel, 2010). The leadership of SAP uses c communication to pass information. In doing this, the organization is operating in parts rather than as a single entity. The lack of effective communication weakens the collectivity within the workplace. The veterans in the company view themselves as the insider and employees that are non-Germans as outsiders. The culture of this organization is predominantly of German culture. The introduction of foreigner employees brings the problem intercultural communication. The company starts to carry out corporate meetings in English. The new development weakens the attachment that the veteran employs have toward the company. Communication to all stakeholders is important while making major changes in an organization. The organization members should have been given some time for a change to diffuse. Recommendations to the organization The root cause of problems in this organization is a lack of communication. Upon joining of this organization, it was important to learn the culture of the organization (Kotter, 2012). Mr. Agassi comes from a culturally different environment; therefore, he needs to learn voluntarily to become a member of this organization. Learning of the culture will give him an insider point of view of the other employees of the organization. Working from a leadership position, he will have the advantage of understanding the thought pattern of his subjects. The transfer of functions such analytical tools to India and the examination of feel and look of products to Palo Alto made employees feels their losing their jobs. Devolving of functions is a good business strategy, however, in this case it elicit negativity. The leadership of the organization should have a meeting with those affected, and explanation on the importance of this decision should have been done. Assuring of employees about their importance in the company is critical. Change is a process that diffuses through an organization gradually (Polsky and Gerschel, 2010). There are innovators who take the risk of accepting change as it occurs. The second group is the early adaptors uptake change after the innovators (Kotter, 2012). The leadership of this organization should include these two groups in the transformation process. The success of this group would slowly help ease resistance towards changes. The other members of the organization would then enthusiastically want to participate in the changes. In a change process, the veteran member out of fear of losing their job ended forming a workers council to agitate for their rights. The management should create a supportive environment for the workers. Communicating of the vision of the origination and allowing members to participate by giving of their opinion in the decision-making would assure the employees. Employees would not suffer from anxiety, hence would corporate to the changes. Change is a series of actions that are systematically implemented (Polsky and Gerschel, 2010). Therefore, timely, concise and accurate passing down of information is fundamental. It is vital to understand the communication networks in the organization. After this understanding then it is easy to manipulate the system towards the outcome of your desire. The audience, information to communicate and the expected response determines the network to use. The management should use the knowledge of information networks also assists to counter negative information about the organization. The management should use credible means to pass information. The members of the executive units can be in use to influence the minds of employees easily. In casual talks while taking coffee, they can purposefully pass information that the employees would take seriously. Additionally, face-to-face communication with supervisors serves as an effective communication way. The information should be direct, considerate, and consistent. Decentralization of the company’s functions made the member feel the company had lost autonomy. The management should apply the system metaphor to decipher this feeling (Bell and Smith, 2010). They should let the employer know that the organization is growing. Together with that, every member is imperative for the success of the organization. The management should then foster interdependence between the various branches of the organization. In doing this, the members will develop feelings of belonging together even when operating from geographically different locations. The organization was hiring many personnel. The majority of the new employees were starting at high ranks. The veteran members of the organization were unhappy with this regard. Logically, an organization should have an induction process. The process design should enlighten the new comer about the organization and get to interact with the members of the organization (Kotter, 2012). The management should have this in place as part of the organization protocols. The company does not seem to advertise for managerial positions. There is random assigning of roles. The organization should have a meritocratic method of promotion. Every member of the organization should be aware of what it takes to join the management. The communication of this will enable employees to work hard to achieve better positions within the organization. Thus, in the event of transforming of the organization the leaders will have a moral authority to persuade the employees on trying of new ways. The organization is now international. There is an interaction of the different culture. Developing of intercultural communication skills is essential (Bell and Smith, 2010). The organization is sponsoring classes where employees are being taught how to interact. However, the attitude of employees about each other is negative. For example, the foreigners complain that the German employees are not accepting them. A manager advises them to work hard and show their counterparts that they are productive. An advice like this does not solve the problem. It leads to negative internal competition, which is counterproductive. This situation calls for a communication process that would build a positive relationship between these two groups. The organization should have its own culture, which forms the basis for a common ground even to culturally diverse groups (Bell and Smith, 2010). In addition, the organization should have work experiences that the two groups can share instead of the lunches and beer outing that it organizes. References Kotter, J. P. (2012). Leading change. Boston, Mass: Harvard Business Review Press. Polsky, L., & Gerschel, A. (2010). Perfect phrases for communicating change: Hundreds of ready-to-use phrases for maintaining focus and productivity during organizational change. New York: McGraw-Hill. Bell, A. H., & Smith, D. M. (2010). Management communication. Hoboken, N.J: John Wiley & Sons. Read More