Developing Capacity in Organisations - Literature review Example

Running Head: ORGANIZATIONAL CHANGE Organizational Change Name Institution Date Introduction Capacity development refers to individual, associations and society’s ability to administer their activities effectively. Capacity advancement is the procedure of allowing, and sustaining of such capacity. Capacity advancement describes enhancement in the social association and the ability to attain the objectives an organization. According to Senior and Swailes (2010), capacity of an association is the association potential to carry out its capability to effectively, relate its skills and assets to achieve its objectives and satisfy hopes of its stakeholders. The objective of capacity enhancement is to develop the possible organization performance as it is revealed in the organization administration and assets. Often there are arguments on inventive types of organization that associations require to extend their ability for rapid adjustment, elasticity and inventive. The difficulty of creating elastic, connected arrangements has been tackled from different views. Innovation has often been a basic leadership problem. Currently we live in a period of rapid amend and development that principals must continually work to expand the capacity for constant change and regular adaptation, as we make certain that uniqueness and standards stay constant. The principles therefore need to know individual’s natural capacity to adjust and create-to innovate. Organizations must develop the capacity for fast learning and fast reaction if the organizations are to stay useful and applicable. To create loyalty in the current competitive world, the organization must be able to change constantly (Collins 1998). Collins (1998) argues that organizations expansions are being hindered by declines in economic, fast technological creativities, and the move to a knowledge-based labour force. Organization expansion may be affected positively. These problems develop good chances for programs that are creative, widening of programs that exist and familiarization of new viewers to programs expansion. But in some cases organizations expansion are affected negatively. Economic draw back and reductions in funding can bound any public sector imaginative focus on its mission. Important changes in an organization always occurs, for instance, when an organization amends its general plan for success, puts in or takes away main part or practice, or desires to amend the environment in which it functions. It also happens when an association develops through different stages of life, in the same way individuals must develop successfully through the life stages. For organizations development, they must frequently experience important changes at different development stages. Principals and managers constantly work hard to finish successful and important amend. Some principals are good at this work while others constantly try and fail. Therefore the purpose of rapid change in an organization is to ensure workers finish their jobs efficiently (Cummings & Worley 2008). Fast and constant change does not occur by itself. To develop to your organization you need a blue print that gives you and others clearness. The strategy must be lively and react to environmental change. Dunphy and Griffiths (1003) argue that change not only affects you but also your team. Nowadays employees mind where and what they will be working in the coming years. They admire to progress both professionally and individually. If the job environment does not constantly give them challenges, with time they might be discouraged with the work. This mainly happens to the top performers, and frequently makes them to stop working with the company. Rapid changes in an organization directly support its business objectives. The organization need to evaluate their position in the market and find out the talent, knowledge and skills to be successful. The general responsibility for change normally falls under the department of human resources. According to (Cummings & Worley 2008), through rapid and constant change, an organization will be able to invest in costly and specialist machinery. For instance, a fast growing organization can easily invest in latest database technology that develops stock management and lowering the costs of distribution and transportation. Research has shown that highly costly and efficient units of capital are available in about all the organizations that have a room for rapid and continuous change. The organization always engages in the specialization of labour force. The process of production can be divided into different activities to improve productivity. The law of increased dimensions is highly applicable whereby replicating the breadth and tallness of a structure, tanker directs to a more than increase in the capacity. Application of this rule opens up the opportunity of economies of scale in freight sector and in sectors of travelling and leisure. A big organization can extend its expenditure in advertising and marketing over a greater production and it can buy factor of production in large quantity at lower prices as long as it has the purchasing power in the market. According to Thaw (2000), organization that grows rapidly can easily use experts to control systems of production. Improved investment in human assets and the expert’s equipment application, such as computers that are networked can develop communication, increase productivity and thereby lower unit expenses. Larger organizations are normally categorized by the money markets to be extra credit worthy and be able to acquire credit facilities with good rates of borrowing. These organizations also pay lower interests on bonds because of favourable credit rating. As organization sets up and grows in a given region, the government will always construct good transport and communication network to make the area easily accessible. This reduces the cost of transportation for organization in the region as the travelling time is minimized and the good road network attracts many potential customers. Higher institution of learning will provide more studies appropriate for a career in the organization that occupies large portion of the market nationally or regionally. Rapid organization change also encourages other support industries to be established close to the rapidly growing industry. Therefore creating a room for rapid and continuous change gives an organization an opportunity of getting efficient suppliers near them. As an organization grows, they need to order production inputs at large quantities. For instance, since the organization purchases raw materials in bulk, the value of the purchase increases and they gain a lot of bargaining power which in turn enable them to acquire raw materials at cheaper cost and at a discounts. Rapid growth of an Organization has a good impact on organization profits and company confidence. The state finances are recurring in nature since a developing organization improves the tax revenues going into the treasury thus giving the state enough money to finance government expenditure. Fast growing organization implies the availability of resources to invest in technologies that are clean. This implies that with constant organization changes environment tend to benefit. Most relay on how the number of resources an organization is able to dedicate to environmental advancement and protection (Thaw, 2000). Rapid organization growth result to an increase in labour demand as organization is producing more. Therefore unemployment rate will fall. This has many benefits such as less social problems. Organization growth implies that the organization is producing a lot of commodities and services, consumers therefore have a variety of goods to consume and thus human welfare is improved. Increased production by organization means increased collection of taxes by government. This is because individuals will pay a lot of VAT and tax on income. This is an advantage because the state can utilize these higher revenues to minimize the level of state borrowing and direct the finance to public services and asset in the state infrastructure. In today world we stay in a technological period that has some strange features. These features are about the innovation and improvement of both the commodities the organization produces and how rapid the stuffs are done inside the organization. Since improvement on how stuffs are done in an organization is required we enter into people dimension of stuff. Change management is necessary in an organization since it facilitate the progress plus the changes that direct our organization toward greater and better things. For instance, think of a bank transaction. In the past a person would approach a bank teller and complete all the transactions that he or she needs; then followed the ATM machines; internet banking was also introduced; and lately we have mobile banking. Think of two finance officers. In the past they could speak in their local language and complete all their bank transactions. With the coming of ATM machine they were forced to learn English and control a monitor driven terminal. For those adult person who are machine phobia and cannot read English find it had to complete a simple transaction because of the change in technology (Herrero 2006). Horton (2003) argues that slow-growth organization are organizations that have higher sales and income for at least three years, but at a rate less than gross domestic product growth rate. Many organizations in this group are known to be continuous, with increasing income yearly. Many organizations regardless of their slow change make great investment. Though the organization gives a stable record of change, it continuously creates high cost less cash flows, sometimes exceeding its statement of net income. These slow-growing organizations always generate more costless money flow. Slow organizations permit for set-up period to experiment and refuse ideas, improve the form of the business and build up a winning culture, then expand slowly. They have a good strategy to innovation. These organizations concentrate on a few commodities and eventually emerge as the market leaders. They then invest into latest innovative customer assistance. The organizations create customer stand via their commodities proposition value. They then develop through advertising and marketing to strengthen the brand. These organizations never try to grow big until their time approaches. When these organization approaches the speeding up point, the rapid growth always set in automatically. With more free money flow these organizations always return the cash flow to their shareholder s informs of dividends. A part from giving back money directly to shareholders via buybacks, they usually get high return on its shareowners money. For slow-growth organization to create a good investment, it needs always to be priced like a sluggish grower. They always pay high for their income in order to benefit in future that will be better than before. These organizations always make effective investments as long as they give back for their sluggish change by displaying other attractions and trading at good prices. Although organization growth can be measured in terms of its total output, earnings and expenditure, if an organization change rapidly, it can lead to problems. There is a problem of demand-pull inflation if the growth in demand is rapid than the potential of an organization to produce. Cost-push inflation is also a problem if an organization grows rapidly. The high inflation rate can affect organization progress in that it causes interest rates to rise thus reducing local business competition in international markets (Horton, 2003). Rapid industrial advancement always has negative impact on environment. Rapid production and consumption expansion causes negative externalities, for instance, noise and air pollution and road congestion. This environmental pollution negatively affects our life standards. Higher industrial growth leads to global warming. Global warming has a great negative impact on our environment. The benefits of growth are not all equally distributed. The GDP might be high due to rapid organizations growth yet income and wealth inequality in our society is high which is depicted by high relative poverty. Therefore the gap between the poor and the rich will widen as the organization rapidly grows which intern results into regional disparities. The gap between various regions widens. This rapid increase in output might go on and then followed by a recession. Thus enhance in the growth rate above maintainable rate can be damaging. These limitations always force many organizations to advocate for slow-change. Some of the changes needed are limited by the workers intellectual ability. Some organizations have workers who have approached the end of their intellectual ability. This does not signify that they have stopped being specialist in their discipline. This signifies that they are not able to go with the current technology. Therefore there is need for slow-growth to cater for these kinds of workers. Conclusion Surplus capacity cannot be believed to be a temporary occurrence linked with business decline trend. Excess capacity can be considered a permanent phenomenon for practical reason tied to the fundamental tendency in the direction of stagnation. Through reduction in the amount of output produced and decreasing capacity usage in an economic slowdown monopolistic organizations are capable to change to shortfalls in demand as they sustain the margins of their profits thus preventing the problems of full-fledged competition in prices. During growth, these organizations may implement a particular degree of excess capacity plan that is created ahead of demand so that they can get rid of larger part of the market. For efficient production organizations therefore need to develop their capacity in a way that it allows for both rapid and slow changes. References Thaw, D. (2000). Capacity development: developing capacity in organisations. Sheffield. Olive books. Horton, D. (2003). Evaluating capacity development: experiences from research and development organizations around the world. Austria: IDRC publishers. Senior B. And Swailes S. (2010). Organizational Change Edition4. Montreal: Pearson Education Canada. Collins O. (1998). Organizational change: sociological perspectives. London: Routledge. Herrero L. (2006). Viral Change: The Alternative to Slow, Painful and Unsuccessful Management of Change in Organizations. New Jersey: Meetingminds Publishing, Cummings, T. G. Worley C. G. (2008). Organization development & change Edition9, Cengage Learning, Dunphy D. C. Griffiths A. (1003). Organizational change for corporate sustainability: a guide for leaders and change agents of the future London: Routledge. Read More