Change Management and Flexibility - Article Example

Literature assignment about change management and flexibility Strategic flexibility con s the capability of a business organisation to respond and to familiarize to the changes that has happened in the business atmosphere. Thus , by espousing the strategic flexibility , a business may enhance its innovation , its performance and to nurture the competitive benefits of a business in a dynamic atmosphere. This article will make an attempt to demonstrate that there exists a positive correlation between strategic flexibility and environmental dynamism and innovative performance of a business . In organisational development , motivating change is a significant element . For attaining a success by an organisation , change is pervasive and is constant. Change in customers’ needs , markets , economy and trends are the factors that can influence the performance of a business orgnisation. Hence , those business organisations that fail to adopt to changes will definitely fail to succeed. A business may witness resistance to change by its employees or by its managers. Hence , a business is to perceive and educate the employees to respond to changes to remain in the business. This research article will focus on how those companies failed to stay in the business which did not respond to changes by citing real-life examples to demonstrate how significant it is for business to manage the change. The meaning of Strategic Flexibility Today, business managers need strategic flexibility, which is the capability to comprehend major external changes and to fastly respond to it by earmarking the required resources and to acknowledge when a strategic decision is not giving a desired result. As the business managers face a highly uncertain atmosphere in this competitive world, and the strategic flexibility appears to be absolutely needed (Robbins, Coulter & Vohra 2010:175). The following are the essential ingredients of strategic flexibility: To understand what is happening with strategies presently being employed by monitoring and evaluating the outcomes. To boost employees to be open about divulging and exchanging negative information. Open to receive novel perspectives and ideas from outside the organization. To learn from errors (Shimizu & Hitt 2004:44). How can a business attain Strategic Flexibility? To maneuver efficiently in this new competitive setting, to develop and sustain competitive advantage, a business needs a novel type of organization. To attain success, the 21st century business organization needs to exercise strategic leadership, developing economic core competences, spotlighting and nourishing human capital, efficiently employing new information technologies and manufacturing, using cherished strategies thereby employing cooperative strategies and accessing global markets, introducing new organizational cultures and structures, acquiring innovative cultures, and administering the business as a mixture of assets. (Hamel et al 1998:2). Ever increasing globalization and technology innovation offer major confronts to business organizations’ capability to maintain their competitiveness. The major recent significant strategic discontinuities witnessed by the business include fewer differences between services and manufacturing business, elimination industrial frontiers, fast development in logistics sector, use of computer-aided communication and design and opening up of international markets (Hamel et al 1998:2). Thus , to attain strategic flexibility, the most significant quality that businesses should accomplish to operate efficiently in the new competitive landscape as it requires a continuous reconsideration of present strategic actions , communications systems, organization structures , deployment of assets , corporate culture , investment strategies and in all features of businesses’ activities and its long-run health. How Strategic Flexibility helps the businesss ? Strategic flexibility helps the businesses to respond or preempt fastly to the transforming competitive atmosphere and thereby maintain or develop core competitive advantage. Managers with the help nonlinear learning and thinking, which offers an ability to hypothesize conflicting and different scenarios. Thus, assimilating these competencies among managers and other employees of the organization which offers for major strategic flexibility. Further, dynamic core competences assist businesses to develop strategic flexibility and the other traits essential to establish strategic flexibility is the human capital of the businesses. Hence, human capital plays a key role in establishing dynamic core competences. Investment in advanced manufacturing technology (AMT) also empowers the businesses’ strategic flexibility as it offers the way for future technological advancement. Thus, a business with the implementation of CAD / CAM systems and the AMT will facilitate them to integrate their manufacturing units and their design facilities, which would help it to establish a linkage with the customers and suppliers (Hitt et al 1998:31). Some scholars argue that modular product designs are conceivably the most apt resources of strategic flexibility. A modular product design establishes standardized boundaries in a product design that allows a wide range of variations in components without need of changing the overall product architecture or other elements of the product (Hitt et al 1998:31). Some businesses use high end information technology applications to attain strategic flexibility. For example, American Airlines established advanced computerized reservation system namely SABRE for which it spent an aggregate of $30 billion in 1960, which took nearly four and half years and more than 400 persons’ effort to accomplish the task. American Airlines recently introduced EAAsy Saber with open architecture, which is considered to be a revolutionary innovation and which places American Airlines ahead of all other airlines (Hitt et al 1998:32). Multinational companies like Gillette, Sun Microsystems, Goodyear and Gillette are now using horizontal information systems to attain strategic flexibility. For instance, Sun Microsystems offers round the clock technical services through a single phone number by integrating its employee teams in UK, California and Australia. Goodyear with its advanced information technology system can divert the excess tyre stock available in its Turkey plant to European market where the demand remains stable. Thus, horizontal information systems assist companies to coordinate manufacturing and shifting products to locations where demand is stable and strong (Hitt et al 1998:32). MBNA a well-renowned credit card company which employs the latest information technology to make sure the speed and accuracy in its transactions. Due to this, MBNA has norms, which compel it to process the customer address changes within 24 hours, within two rings answering the customer calls, and transferring the customer calls to the right department within 21 seconds. Further, it is able to attend any increase in the credit line within 15 minutes and within 30 minutes for its platinum and standard cardholders respectively (Hitt et al 1998:32). As per Bill Gates of Microsoft, the information highway will become the global department store in the near future. According to him, the products are available for inspection, customization and comparison internationally through the information highway. Thus, as per Bill Gates, the use of new technology can contribute to strategic flexibility and can augment the speed of action and will also facilitate interaction across international operations, including strategic alliances (Hitt et al 1998:32). Attaining Strategic Flexibility through Strategic Alliance Strategic alliance which is a guise of cooperation strategy is becoming more common in both international and domestic markets. Strategic alliances help the companies to push the limits of technology by interlacing their creative and technological resources and by offering more access to capital in addition to managerial capabilities. For instance, in Asia and in Europe, Texas Instruments established strategic alliances with the local associates to establish manufacturing facilities. Thus, this strategic alliance assisted Texas Instruments to save in excess of $1 million in manufacturing plants. Moreover, Texas Instruments gained not only strategic geographic positioning in upcoming markets and also in connecting to associates with knowledge of those markets and of local cultures (Hitt et al 1998:33). One another strategic flexibility is the interorganizational network as these networks can minimize the market power and resource advantages of giant businesses. For instance, the Kentucky Wood Manufacturers Network of small firms was successful in getting a $2.5 million contract from Disney World that was shared among the network firms as per their potentials. Likewise, 11 UK based chemical manufactures established a network namely “UK Fine Chemicals” which they marketed as a virtual company that permits the customer to negotiate with a single organization in that network (Hitt et al 1998:33). Handling the Change by the Business Organisations As per Daft (1995), organizational change may be explained as the perusal of a new behavior and idea by a business organization. It is a way of changing an existing business organization to enhance the organizational efficiency for accomplishing its goals. Change in business organization is chiefly structural in character and it is intended to bring about changes in organizational structure, processes and methods. Business which wants to be as a leader should always be responsive to change that is happening around it thereby responding to the changes immediately like changing customer wishes, economic turbulences, regulatory norms and technological advancements.(Sengupta ,Bhattacharya & Sengupta 2006 :2). The Meaning of Organizational Change Organizational change is the drive over time from an existing to an upcoming and ambiguous future that is occasionally planned and controlled with an aim of safeguarding anticipated goals and occasionally for unforeseen and unplanned for. The process of inspiration, innovation and change includes making the employees in the organization in the creation and translation of innovative ideas into services / products and the movement over time from present ways of carrying out things to new means of working (Hayes 2010:55). The Need to Change by the Business Organizations Process of change, innovation and creativity are pillars to any business organization. A business has to respond to changes that are happening around it like cut-throat competition, oscillating market forces, demanding customers and short-product lifecycles, else it may have shut its doors. Thus, long-run commercial success is now dependent upon the businesses’ ability to manage change, to support creativity and to cherish innovation. Managing the change is not about the management of business organizations, but it is related to how groups, individuals and other stakeholders manage these changes. Through the creative and innovative process, many business organizations have rewritten styles of their competition in upcoming and existing markets, created new means of functioning and competition, become rule breakers and makers, established and nurtured products and services that cater the changing clients’ needs, repositioned and reinvented in the search for new ways to endure, and to repossess and enhance operating efficiencies to guarantee survival of the organization. Business continuity badly needs change and knowledge on how to manage the change successfully which remains a central resource. New innovative products like Kindles, IPads, and IPhones, and services offered through mobile and cable broadband like social networking, instant messaging are just few examples of how technological changes can bring great changes in the operations of businesses (Hayes 2010:72). Tapping technological innovation and to optimize the advantages from social media is significant for an organization to respond to change. For instance, Walmart employs social media to understand its customers’ preferences, to comprehend what they want and trying to know of what trends are. Walmart is engaged in tracking the shoppers’ spending pattern to redesign its customer focus and to enhance their performance by understanding the depth of their customer knowledge. To maintain its competitiveness, Walmart is responding to change that is happening else it would go out of business (Dawson & Andriopoulos 2014:7). Resistance to Change Resistant to change is an ongoing issue. At both the organizational and the individual levels, reluctance to change harms concerted initiatives to enhance the performance. Many business organizations have retorted to change initiatives, which have been incurred enormous costs but only to be frozen by resistance among the employees of the organization. In some cases, organizations as a whole also have noticeable demeanor analogues to that of individuals when witnessed with the necessity to change (Lorenzi & Riley 2000:116). What will happen if business fail to adapt change ? Failure to adopt change may force a business to lose its innovation. For instance, the Bank of America was the first to introduce he plastic money or credit cards and today, even though Bank of America is still there, its famous logos on plastic cards were now disregarded as new companies and entrants dominate the plastic card industry now. Japanese electronics companies like Matsushita, Sony, Pioneer and Panasonic introduced various changes in their manufacturing techniques like value engineering, quality circle and operation research and was able to make many American electronic companies out of business as some of the American companies announced bankruptcy or acquired by either Japanese or European companies as the American electronic companies failed to adopt to changes in time. However, later, Sony was outflanked by Matsushita Electric Industrial Company and Sharp Corporation in flat-panel televisions’ market as Matsushita and Sharp were quick to respond to changes than Sony. Later, Sony lost its portable music segment to Apple Computer due to its new innovative product namely iPod player. Samsung, once an inferior South Korean competitor to Sony edged Sony later by leaping ahead in flat-panel televisions. Sony was also a pioneer in digital photography. Later, Nikon and Canon regained their position as the nodal digital photography suppliers. Further, Sony’s well-known play station is losing their position to Microsoft’s next-generation Xbox. Thus, Sony lost its position because it’s failed to take of changes that have happened and failed to respond to such changes in swift thereby overthrowing its competitors. (“Louis et al 2007: 28”). How the Recycling helps the Business to Prosper ? A business can be able to achieve the nature of efficiency, expanding the concept far beyond cost-reduction exercises. Further, a business can demonstrate how the sustainability outlook ushers a new approach that can expose three cumulative and successive cycles of efficiency-oriented initiatives. Business organization often disseminate about how wasteful are most of the customary production or service processes they have employed. Some business have learnt service systems, redesign of products and its recycle production flows creates sizeable revenues. For instance, recycling of carpets by Interface or remanufacturing of office machine components by Fuji-Xerox; Fuji can result in the savings of millions of dollars, and these recycling will be also benefiting the society and the environment by avoiding toxic waste from the landfill. Attaining Success through the Strategic Flexibility A business can gain strategic flexibility by tapping new competitive advantage and for instance, by moving into fastly expanding its markets for alternative energy as what BP (British Petroleum) is doing now thereby responding to change for tapping renewable-energy sources in the place traditional fossil fuels. Another example of responding to change is the Lend Lease Corporation’s triumphant implementation of Bluewater retail shopping complex at the fag end of the UK’s channel tunnel. This mammoth infrastructure project was established in a local community where unemployment rate was very high. Local unemployed people were trained by the Lend Lease and offered job in the project later. The success of the project in UK and creation of employment for large unemployed facilitated Lend Lease to secure a similar project in Europe. Further, Bovis, Lend Lease development arm was chosen as the preferred contractor for the construction of £200 m hospital at Romford at the outskirt of London (Benn, Dunphy & Griffiths 2014:15). Conclusion Strategic flexibility helps the businesses to respond or preempt fastly to the transforming competitive atmosphere. Investment in advanced manufacturing technology (AMT) also empowers the businesses’ strategic flexibility as it offers the way for future technological advancement. Some businesses like American Airlines use high end information technology applications to attain strategic flexibility. Multinational companies like Gillette, Sun Microsystems, Goodyear and Gillette are now using horizontal information systems to attain strategic flexibility. As per Bill Gates, the use of new technology can contribute to strategic flexibility and can augment the speed of action and will also facilitate interaction across international operations, including strategic alliances. Business which wants to be as a leader should always be responsive to change that is happening around it thereby responding to the changes immediately. Long-run commercial success is now dependent upon the businesses’ ability to manage change. For example, Walmart is engaged in tracking the shoppers’ spending pattern to redesign its customer focus and to enhance their performance by understanding the depth of their customer knowledge. Sony lost its position because it’s failed to take of changes that have happened and failed to respond to such changes in swift thereby overthrowing its competitors. Thus , a business can gain strategic flexibility by tapping new competitive advantage. List of References Benn, S, Dunphy, D., & Griffiths, A. (2014). Organizational change for corporate sustainability. London: Routledge Dawson, P & Andriopoulos, C. (2014).Managing Change. Creativity and Innovation. New York: SAGE Hamel G, Prahalad C K, Thomas H & O’Neal D E. (1998). Strategic Flexibility: Managing in a Turbulent Environment. London: John Wiley & Sons Hayes, J. (2010). The Theory and Practice of Change Management .London: Palgrave Macmillan Hitt MA, Keats BW & DeMarie SM. (1998). Navigating in the New Competitive Landscape. Academy of Management Executive, 12 (4) 22-42 Lorenzi, N. M., & Riley, R. T. (2000). Managing Change. An Overview. Journal of the American Medical Informatics Association, 7(2), 116-124 Louis P, Goodman S & Fandi P. (2007).Management: Challenges for Tomorrow’s Leaders. London: Cengage Learning Robbins S P, Coulter M & Vohra N. (2010). Management. London: Pearson Prentice Hall Sengupta N, Bhattacharya M S & Sengupta RN. (2006). Making Change in Organizations. New Delhi: PHI Learning P Ltd Shimizu K & Hitt M A. (2004). Strategic Flexibility: Organizational Preparedness in Reverse ineffective. Strategic Decision. , 2004, p.44-59. Read More