Driving Forces for Organizational Change - Apple Incorporated - Case Study Example

Running Head: DRIVING FORCES FOR ORGANIZATIONAL CHANGE Driving Forces for Organizational Change [The Writer’s Name] [The Name of the Institution] Driving Forces for Organizational Change Executive Summary In contemporary business scenario, change has assumed an integral and inevitable process. Marketing strategy has emerged as an ever changing phenomenon due to tough competition among business promotion. The desired future state of the organization involves picturing the ideal situation for the company after the change is implemented, conveying this vision clearly to everyone involved in the change effort, and designing a means of transition to the new state. There are two kinds of changes that occur in a certain company. One is called internally driven change while the other externally driven change. Table of Contents Driving Forces for Organizational Change Introduction Apple Incorporated is a large corporation with many product lines. One of their major strengths as a company stems from the popularity of one of their products, the iPod. The iPod has put Apple on the map in the MP3 world and has brought their other products to the forefront with it. The major strength that the iPhone Ultimate brings to the table is that it provides many different functions all in one handheld device. By combining several popular features into their new product while feeding off the success of the iPod and the original iPhone, Apple Incorporated has played on their strengths in this industry. Apple Company has gone through significant changes. This change was internally driven. Besides this, there are many other driving forces for this change. Organizational change is a concept that regularly occurs due to the nature of today’s business environment. (McNamara, 2006, 238) It is common in business communications, strategy, management and leadership. (McNamara, 2006, 239) Change occurs when an organization revolutionizes parts or its entire strategy and/or wants to change the way it operates. (McNamara, 2006, 240) Thus, it involves the realigning of organizational processes and operations. In order to remain competitive and successful in today’s business environment, organizations must continually undergo changes by being innovative. (McNamara, 2006, 240) Therefore, change plays a major role in the longevity, maturity, and success of any organization. In today’s business environment, there are many factors that compel organizations to change internally or externally. "Organizations must change because their environments change,” according to Andrew Sturdy in his article Management Beneath and Beyond Organizational Change Management: Exploring Alternatives. (Sturdy, 2003, p. 652) Today, businesses are bombarded by incredibly high rates of change from a large number of internal and external sources. (Nadler, 1981, 193) On the other hand, external pressures tend to arise from changes in the legal, competitive, technological, and economic environments. People have deep attachments to their organization’s normal work groups, duties, processes, and operations. (McNamara, 2006, 241) Therefore, every internally driven change in an organization experiences some level or sort of resistance. Change resistance involves the pessimistic feelings and thoughts about a change(s) in an organization. (McNamara, 2006, 242) It can result in jeopardizing or experiencing losses in productivity and profitability in an organization. (Oreg, 2006, 88) Thus, managing and overcoming the resistance to change in an organization is essential to its survival. Organizational change proposals often come about as a result of problems faced by an organization. According to McNamara (2007), “Change commonly occurs because the organization experiences some difficulty,” (McNamara, 2006, 242) Internal driving forces or factors that stimulate change originate from inside the organization via employees and/or managers. Some internal driving forces that influence or stimulate organizational change are budget, working conditions, and/or internal politics. Thus, the decision to implement organizational change can arise from problems that the organizations face or from presented opportunities. Some examples are: when an organization reallocates its resources to enter a new area of business or when an organization makes productivity improvements to increase cost efficiency. Many organizations tend to implement internally driven changes in order to increase cost efficiency either through budget cuts, layoffs, and/or equipment upgrades. These internally driven changes are not always permanent in nature due to the fact they are stimulated by problems faced by the organization. If organizations overcome their issues, they usually rehire those who were laid off and raise their budgets to standards. (McNamara, 2006, 243) On the other hand, if equipment upgrades necessitate a specific knowledge or skill, this could lead to a continued effect of the change and employee replacements. Managers and employees also have the capability to initiate and influence organizational change. (McNamara, 2006, 243) Managers who want to incorporate improvements in the organization have the power to authoritatively initiate internally driven change. (McNamara, 2006, 243) However, it can be sometimes difficult for managers or employees to influence change in an organization based off leadership alone. (McNamara, 2006, 244) The power of influence in organizations rests with those who are held in high regards concerning expertise and merit by their peers and/or co-workers. (McNamara, 2006, 244) Therefore, employees often times hold more influential power than managers in this case. Driving Forces To Change According to Hoisington (2007, 137-43), there are several external driving forces that spark and influence organizational change such as increases in scientific knowledge and technology, global competition, etc. (Hoisington, 2007, p. 137) As new technology arises, organizations must change or adapt in order to consistently compete with their competitors. (McNamara, 2006, 245) As organizations globalize, the number of competitors increases and make it more important for organizations to be flexible when it comes to change in order to remain competitive. (Hoisington, 2007, p. 137-138) As organizations enter the marketplace internationally, they are susceptible to foreign regulations and government policies. There are strong reasons to support the notion that the increase in scientific knowledge and the explosion of technology is a major external factor that drives organizational change. (Hoisington, 2007, p. 141) As technology increases and the demand for specialized knowledge increases, organizations are pressured to change. (Hoisington, 2007, p. 141-142) These changes include retraining current employees, hiring specialized workers, and updating archaic equipment. (Sturdy, 2003, 655) Technology enables an organization to expand in terms of output and input while reducing the number of necessary personnel. Moreover, technology and scientific knowledge are linked to the deskilling of the workforce even though it can also be linked with increases in the employment. (Sturdy, 2003, 655) Technology has lifted the ratio of skilled to unskilled workers due to the fact that skilled workers are called upon to maintain and interact with apparatus that has replaced unskilled workers. (Sturdy, 2003, 655) Resistance to Change The most common cause for organizational change efforts to fail is resistance from employees. For many employees, change appears threatening which makes it hard to receive their support to implementing changes. The notion of change resistance suggests that pessimistic feelings and thoughts about change exist. Resistance to change can be thought of as a barrier to any organization’s goals and/or strategy. Resistance to change is defined as “behaviour which is intended to protect an individual from the effects of real or imagined change.” (Dent & Goldberg, 1999, p. 34) It is also defined as “any conduct that serves to maintain the status quo in the face of pressure to alter the status quo.” (Muir, 1996, 477) In addition, it is defined as “employee behaviour that seeks to challenge, disrupt, or invert prevailing assumptions, discourses, and power relations.” (Muir, 1996, 480) In today's economy, internally driven change is customary in all organizations and it usually happens at a fast pace. Employees usually hasten to defend the “status quo” when their comfort zone or security is threatened. (Armenakis, et. al. 1996, 685) Resistance is an unavoidable reaction to any major change in an organization. Thus, it can hinder organizational prosperity if not handled properly. It is important to differentiate between the behaviours of resistance to change, which are active resistance and passive resistance. Behaviours of active resistance consist of blaming, ridiculing, and manipulating. (Self, 2007, 13) Behaviours of passive resistance consist of verbally complying with the new rules but not actually abiding by them. Typically, employees resist change if they are forced to learn or perform a new task. (Bovey, 2001, 376) In addition, resistance is caused when there is a fear that a person will not be able to become accustomed to the new required skills. Therefore, employees may resist due to fear of job loss or status, because they may be ignorant to the purpose of the change or because they disagree with management on the change. (Bovey, 2001, 381) Furthermore, when implementing change in an organization, managers should anticipate to some resistance from employees. (Oreg, 2006, 94) Apple Company Change In case of Apple Company, it may be declared that its organizational change was altogether due to internally driven forces of change. Apple Company was a very successful firm from its beginning in late 70’s to the middle of 80’s. (Robbins, & Coulter, 2007, 190) Then was the time, when its co-founder, a man with vision but without school left the company from Cupertino. After him, in a position of CEO, there were hired well educated and successful managers from other multinational companies like Pepsico or National Semiconductor. Under their control, the company started to fail in many business area, and in the middle of 90’s the Apple Company was on the edge of bankruptcy. Then the board decided to hire the man that thinks different. (Bordia et. al, 2006, 615) In 1997 Steve Jobs returned to Apple and the company started to change. Now it is all different then 10 years ago. Today, Apple recovered the former glory, its shares are a splendid investment, and new inventions each time conquer the market. About no product from the competition there was as loud as about iPhone - the telephone "invented again". (French et. al., 2005, 68). Now, Apple is a driving force of the branch. The Jobs return in 1997 on the position of CEO caused that the firm which lost 700 millions dollars a year, within few months glanced off the bottom. Today, Apple is worth over 135 milliards dollars, with yearly revenue around 20 milliards dollars, and the interest in its shares is so large that regularly makes them split. Apple has also an impressive growth rate - in the second term 2007 the firm sold 1,5 millions of computers (36 percent more than a year ago) and 10,5 millions of iPods (24 percent more than a year ago). 36% increase in sales is three times quicker tempo than the market average. (DeLuca, 2007, 176) Jobs understands the paradigm of the market of modern technologies to which there is need of the continuous innovation. Besides, he understands the influence of the aesthetics and the lifestyle on decisions of consumers and uses these mechanisms at full strength. During Black years of Apple the chiefdom in persons of Michael Spindler, John Sculley or the Bullfinch Amelia led the business in compliance with all rules of the art of the management. These were good managers who splendidly to themselves advised with such enterprises as PepsiCo or National Semiconductor. However they led Apple Computer on the edge of precipices. Apple produced a lot of devices which did not sell well and filled in distributional channels. The number of changes in the firm introduced by Jobs was gigantic. He began from releasing of people about which judged that were not suitable to the new project of Apple. Through first weeks lasted the dismissal terror. Jobs changed also the designing division. To shops hit shapely and collared iMacs- instead of in beige or grey boxes appeared in casings in good taste. Besides, Jobs seriously diversify the production and the activity of the firm. Conclusion Apple company has successfully gone through an internally driven change. Organizational change is inevitable and organizations must be prepared to deal with planned or unplanned change accordingly. Knowing how to deter some of the potential negative resistance to change can aid in the success of an organization’s overall strategy. Understanding organizational change in conjunction with the behaviours of resistance to change is optimal for any firms’ success. Thus, organizational change efforts with little or no resistance improve the performance of organizations and the employees in those organizations. Employee resistance to organizational change is a multifaceted issue facing management in the diverse and ever-changing business environment of today. The process of change is unavoidable and employee resistance has been recognized as main contributor to the collapse of many efforts to implement change within organizations. Regularly, large amounts of resources are expended by organizations in order to familiarize employees in innovative operations and processes. The tendency for employees to preserve the status quo displays challenges that management must overcome in order to bring about desired change. In short, the process of managing and overcoming change resistance involves influencing employees to buy into the idea of the change(s) as well as handle any resistance that may occur. This investigation emphasizes that organizational change can at times be a good or bad idea. In addition, organizations should also plan to encounter resistance to change in every aspect of their proposal to change. Organizations should never change for the sake of change, because fixing a problem that doesn’t exist is creating a problem in my eyes. Conversely, I do believe that organizations should change if necessary and try to keep up with the times concerning technology and competitors. Furthermore, if organizations study change management, then they can better conceive on how to reduce or eliminate employee resistance to change if it occurs. The only true way to effectively manage and overcome resistance to change is to understand the exclusive circumstances within each employee that is causing the resistance to change. References Armenakis, A., Harris, S., & Mossholder, K. (1996). Creating Readiness for Organizational Change. Human Relations, Vol. 46, No. 6, 681-703. Bordia, P., Jones, E., Gallois, C., Callan, V., & DiFonzo, N. (2006). Management Are Aliens: Rumors and Stress during Organizational Change. Group & Organization Management, Vol. 31, No. 5, 601-621. Bovey, W. & Hede, A. (2001). Resistance to organizational change: the role of cognitive and affective processes. Leadership & Organization Development Journal, Vol. 22, No. 8, 372-382. DeLuca, Joel. (2007). Overcoming Resistance to Change: Overcoming Intellectual, Emotional, and Behavioural Resistance in Organizations. Evergreen Business Group. 174-79 Dent, B. & Goldberg, S. (1999). Challenging "Resistance to Change". The Journal of Applied Behavioural Science, Vol. 35, No. 1, 25-41. French, W., Bell, C. & Zawacki, R. (2005). Organization Development and Transformation: Managing Effective Change (6th Ed.). 66-69 Hoisington, Steven. (2007). Implementing Strategic Change: Tools for Transforming an Organization. New York: McGraw-Hill. 137-43 McNamara, Carter. (2006). 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