The Organization Needs to Change to Maintain Competitive Advantage - Essay Example

Introduction Change has become intrinsic part of socio-economic and political dynamics that is constantly impacting the performance outcome of organizations. The rapid globalization and technology advancements have significantly influenced the decision making of the organizational leadership. Bateman and Zaithaml (1990) assert that organizations must change because the environment within which they operate is constantly changing. They need to incorporate and implement change not only survive but also to maintain a competitive advantage within the industry. The various internal and external drivers of changes are intrinsically linked to performance outcome of the firm. They also influence the perspectives of people in the organization and therefore, directly or indirectly impact the performance of the organization. Therefore, they become vital factors to be evaluated and analysed for efficient exploitation by the managerial leadership. But at the same time, it is equally true that changes are perceived differently by different people and therefore, there is always an element of resistance within a group of people in the organization. Indeed, the different views on change within the organization can be explained because organizations have different goals, structures and organizational culture that may necessitate different response to the defined change. The perception to change therefore is often influenced by multitude of issues which can be defined by individual ideologies and beliefs; group representation; individual and organizational competencies; power dynamics within the organizations; inter-cultural compulsions etc. Arguments A business organization is a value proposition for its various stakeholders and therefore broadly describes how it would function to deliver value based services as per its defined goals and objectives. The various inter-related units of organization comprising of workforce, machinery, infrastructure etc. become major enabling elements of the organization that cohesively create value for revenue generation. The hierarchal structure of human resource within the organization ensures different role and responsibilities for its people for optimal organizational performance. The people therefore develop different outlook on change and perceive them as per their ideology, belief and power equation. The organizations, in totem, also have wide ranging reaction to the environmental changes. They adapt and exploit them to improve and improvise productivity. The people therefore become major factors within the organizations whose perceived value of the changes can have considerable impact on the outcome. The organizational perception to change needs to be evaluated and analyzed for gaining leverage in the highly competitive business environment. Thus, the diversity of issues and factors that promote different outlook to changes within the organizations would be discussed for developing more effective strategy of change management in the organization. Many social scientists have proposed four major determinants of change: the structural-functional, multiple constituencies, organizational development, and creativity and volition perspective (Jackson, 2003; Cyert & March, 1963; Shafritz and Ott, 1991; Pfeffer, 1981). The various propellants are primarily focused on optimal performance by changing inputs into desired output by the organizations. The structural-functional paradigm promotes changes that increase the productivity through increase in functional efficiency and structural modification. The Fordism highlights the increase of productivity through standardization of process. Change intervention becomes essential part of business strategy. Thus, businesses constantly look out for processes and means that would enhance their productivity and financial benefits. Multiple constituencies primarily focus on various stakeholders of the business which can have significant influence on the performance of the organization. The various linkages within and outside the organizational purview impact organizational decisions and therefore, their interests need to be incorporated within the business strategy. Various drivers of change like government policies, external macro environment and microenvironment, investors etc. become key factors for organizational success in changing environment. Effective negotiation with various interests groups and stakeholders becomes hugely critical aspect of the business operation. Organizational development highlights organization’s willingness to create a highly motivating environment of growth and improved productivity. It helps to provide the firms with vital organizational competencies which help to exploit human capital for improved performance. Indeed, organizations which encourage effective communication through shared learning and dissemination of vital information across the organisation vis-à-vis markets, products, technologies, and business processes, help to boost the prospects of the business in the competitive market. Hence, various parameters of organizational development ensure that management promotes the creation of congenial atmosphere of mutual trust and confidence building. Thus, implementation of various theories of human behaviour becomes vital part of managerial initiatives that considerably increase organizational efficiency in meeting the challenges of the time. Creativity and Volition perspective broadly relies on the assumption that people are agents of change. Through rational thinking, the leadership must stress unique activities and approaches for delivering its strategic goals and objectives. Rational thinking aids rational decision through in-depth analysis of the situation. It enables the organizations to make decisions on vital so that decisions do not adversely impact the future of the organizations. The cognitive decision making ability of the organizations acts as major facilitator for organization’s sustainable success and becomes key ingredient for efficient delivery of organizational goals in crisis (Street et al., 2001). Thus, strong leadership is inspirational and promotes collective decision making. This approach integrates the increasingly changing environment of global competitiveness within its wider strategic planning. Indeed the approach helps empower the workforce and the leaders to recognize the wide scope of emerging opportunities in the changing business environment. The various similarities and differences amongst the four major determinants of change are also linked to the one common aspect of organization. Indeed, the productive outcome of the organizations remains the most vital aspect of organizational change management that cuts across the various mechanisms of change. Change broadly highlights the inequality and instability within the system that are detrimental to the growth of the organization. Hence, the factors and dynamics of change factor become highly relevant issues that must be identified and evaluated. Interestingly the perception of change can also become the most enabling factor that can be judiciously exploited for competitive advantage. While technology can greatly enhance the productivity, it can also prove to be highly damaging for the organization if not used with care or is misused by the vested interests. The cyber crimes are examples of the misuse of the same and work against the interest of the organization. The differences in the four determinants of change are key issues that need to be understood and evaluated for optimal results. While the hierarchal structure of the organization facilitates in streamlining the operations for effective delivery of goals, the same could become a major hurdle for the multiple constituencies that are focused on the external exigencies. This is primarily because the need and compulsions of various stakeholders of the organizations must be negotiated for common interest factors so that they work in tandem with other issues for improved productivity. Most importantly, people remain the central part of any change and their response to change factor is critical part of perceived value of change that it (the change) would ultimately bring to the organization. Thus, while the differences in the four determinants of change might expose the weakness within the system, effective organizational leadership initiatives become highly desirable. It helps identify and analyze linkages that promote collective decision of all stakeholders work together to achieve shared goals. The fast changing societal norms and social identity framework in the era of globalization has brought into prominence the issue of diversity and multicultural society. The varying beliefs, value system, ideology and cultural paradigms have become vital ingredients of human interaction. They provide people with unique and an inherent sense of responses towards conflicts and paradoxical situations. Workplace diversity has become common feature and understanding of cross cultural values for mutual trust building has become essential part of organizational learning. Managing diversity has therefore, become a key issue with the firms and needs to be addressed urgently if they want to maintain competitive edge over their rivals. By encouraging creativity and innovative practices through judicious exploitation of diverse opinion on issues, the management can greatly improve productivity and help maintain competitive edge. Hitt et al (2005) have asserted that conflicts can usually be contributed to four major factors: lack of understanding; different assessment; self interest and envy; and low tolerance. Lack of effective communication about changes within the office often leads to acute sense of insecurity amongst the workforce. Cross cultural understanding and proactive participation of the workforce for the anticipated changes in the work environment, encourages easy adaptability to change. Maslow (1943) has placed human needs in a hierarchy of relative effectiveness that are believed to be the major motivator for employees for adapting the change. Maslow (ibid) strongly believes that behaviour of the people is primarily guided by a sequence of need that includes self actualization, status, acknowledgement, reward and retention. He says that needs across culture exist, although, the characteristics and intensity of the same differ between cultures. Hence, if the managerial leadership is able to portray the changes as effective means of gratifying various needs, the workers’ perception to changes would be more positive and promote acceptance for improved performance outcome. In the current environment of changing values, Velasquez’s philosophy is highly pertinent. He asserts that human life is meaningful to the extent that they contribute to the advance of freedom (Valezquez, 2005). He also affirms that life is about making choices. When a man chooses to act in certain manner, he does so because he thinks that is the right way to act and that is how he would expect others to act. Similarly when he makes a choice, he opts for something that he accepts is important and which has considerable value for him. Thus, an individual’s choices are dependent on the values and beliefs that he carries with him and therefore, applies the same in his life when changes occur. One can never deliberately choose evil so it can be correctly interpreted that we always make effort to choose things and actions that are good. When man defines himself, he is actually defining values which he believes to be good and representative of universal values that are accepted by every human as being good. Thus informed choice through effective organizational communication facilitates individuals with the appropriate knowledge so that he can accept or reject the changes. Indeed, power dynamics in organization becomes one of the most important factors which inculcate different outlook towards change. Hofstede (1984) has been quite emphatic that power distance in work environment hugely influences the views and perception of people. Distribution of power and rights in the organization subtly creates inequality with the organizational hierarchy leading to different levels of comfort for the people. Hence, people see the changes adversely if it threatens the comfort zone of the people. At the same time, group dynamics are also intrinsic part of organization which provides the leadership with the knowledge as to how the people would react to change. Sears (2005) also asserts that groups develop their own unique formula to handle the change happening due to an external stimuli or internal conflict. Organizational culture highlights the unique elements of code of behaviour amongst the workforce. It is developed over a period of time and provides them with sense of stability and motivation for improved outcome. Social scientists broadly defined it as behavioural regularities and similarity that is conspicuous by its language, custom and traditions and the way they react to situations (Bloisi, cook and Husaker, 2007; Martin, 2005). Indeed, shared learning and collective goals become critical part of organizational culture that greatly facilitates the workforce to understand the divergent ideologies of the increasing pluralistic society. The social construction of human identity and human needs within the organizational structures are critical aspects that promote differing views on environmental changes. While Marx’s theory of Valorisation may help us to quantify change, it also exposes human vulnerability to the changing demands of the organization (Cleaver, 1992). It is one of the most dynamic theories that evaluate organizational productivity against individual performance and productivity of the workers. Thus, if the need for change is no properly communicated, resistance to change is a natural outcome that not only adversely impacts organizational results but is also detrimental to professional growth of the employee. Most importantly, as Luke (2005) says that application of valorisation theory could have grim consequences for organizational survival as it could reveal the weakness of the organizational strategy and operational efficiency to meet the challenges of change. The value congruities perceived from wider platform of social equity and stability raise important issues within the theory of valorisation. While valorisation promotes segregation of factors of change to evaluate its overall impact, values within the organization strengthen the organizations’ capabilities to meet the challenges of change. Surprisingly, the value system, inherent in the organizational culture and carefully nurtured by strong leadership, becomes the major catalyst of change perspectives. It looks at change with more positive outlook and evolved ways to exploit it for its own gain. Thus, value system and valorisation need to be perceived as complementary to each other and must work together for long term sustainability. Interestingly, empowerment of the workforce has become one of the most crucial issues which provide the people with informed choices so that their perception on major issues could effectively manage change. Empowerment facilitates realization of self worth and instils self confidence in one’s ability to make independent decisions. Empowering the workforce encourages mutual trust building as it helps the person to act on the informed choices and make decisions. It would therefore, would not only affect the person himself but would also have significant impact on the working of the organization thus encouraging responsible behaviour and easy acceptance for organizational change. One of the most critical components of change management is the understanding of the models of management of the organizations. Gareth (1997) asserts that organizations fundamentally follow a defined model of system that provides it with a distinct way of working and influences the power relationship across the organizational hierarchy. Within an organization, interaction among the employees and managers is often laden with diverse interests, work place conflicts and display of power politics. Codetermination model and democratic processes greatly encourage proactive participation of the people and therefore become highly desirable in the contemporary environment fast changing equations of business dynamics. Good leadership believes in relationships based on mutual trust and confidence so that changes are accepted with equanimity and conflicts are resolved early. Indeed, the flexibility of approach and collective decision motivates individuals resulting in improved performance of the individuals. External drivers of change like technology, globalization, transforming socio-political environment etc. are critical aspects of transforming business models that significantly impact the views and perception of people. While technology has provided organizations with huge potential to expand their business across geographical boundaries, it has also promoted doubt and insecurity amongst the workforce. Indeed, the lack of information about the advantages of technologies has been the major reasons. Once, people realized the huge latent benefits of the same, they have embraced it with great enthusiasm. The computers, mobile phones, digital gizmos have all been successful in attracting the people at large. The technology in its myriad format has been one of the most forceful ingredients of rapid advancement of human culture. At the same time, it has narrowed the knowledge boundary amongst the organizations. The organizational competencies comprising of tangible and intangible assets help enable the firm to conceive of and implement strategies that improve its efficiency and effectiveness. Indeed, in the cut throat environment of global business, it becomes hugely pertinent for managerial leadership to involve the workforce in embracing innovation and flexibility in their approach. The labour friendly approach by the managerial leadership greatly helps in adapting to the strategic changes that are brought about transforming business dynamics. The knowledge transfer through various network relationships has become essential part of contemporary business dynamics and participatory approach helps the organization to add value to its exiting competencies. Leaders’ foresight and vision ensures that changes are embraced with more understanding of changing business dynamics. Markets thrive on the processes of the learning organization which continuously make efforts to disseminate information across the organisation about markets, products, technologies, and business processes. It is important that organizations must evolve and develop business capabilities to gain leverage. Strategies and policies must incorporate the changing nature of the society and focus on issues and areas that are vital to maintain its market position. Organizational changes are also necessitated due to the changing preferences of the people at large. Hence the socio-environmental compulsions necessitate different perspective to change. The external environment therefore greatly influences the attitude and outlook of organization and its workforce and helps expedite the process of changes in the organization. McGoldrick (2002) argues that the customers and their changing preferences should become the guiding force for all business activities. This is the reason that organizations are increasingly adopting novel ways to meet the challenges of the evolving business compulsions. It becomes essential for the firms to incorporate the changing requirements of the people. People’s participation and diverse views hugely contributes towards new ideas and development of new products and services that meet the changing demands of the masses. Mintzberg (1990) emphasizes the need to exploit the informed choices, gained through the accumulated knowledge regarding the changing trends and preferences of the people and market conditions. The external environment therefore also projects the need for changes that must be incorporated within the business strategies. The need for organizational change must be disseminated amongst the workforce so that they are able to shift the focus on changes. It would help them in realigning their personal and professional goals with the changing objectives of the organization for overall growth. Conclusion The various drivers of change and socio-economic and environmental paradigms are intrinsically linked to the different perspectives on change within the organizations. The rational approach helps to evaluate and exploit the changes for the wider welfare of the organizations. At the same time, the cultural competencies and paradigms need to be integrated within the strategic decision making processes. In the intensely fragmented market conditions and diversity across the geographical boundaries, the rationale for human behaviour must be understood. It would provide the organizational leadership with important inputs about the different perspectives on change and help to evolve strategies to turn them into unique organizational competencies for competitive advantage. Reference Bateman, Thomas S., and Carl P. Zeithaml. (1990). ‘Management: Function and Strategy’. Homewood, IL: Irwin, 1990. Bloisi, W., cook, C and Husaker, P. (2007). ‘Management and Organisational Behaviour’. 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