Disruptive Technology Perspective of Organizational Change - Literature review Example

Disruptive Technology Perspective of Organizational Change Name Instructor Institution Date Disruptive Technology Perspective of Organizational Change Introduction Today’s organizations are faced with the need to continually make rapid and radical changes due to the social, economic and political environments of their markets. Some of the changes are planned, depending on the goals and objectives of a firm. However, often times, external factors cause organizations to effect changes. Disruptive technology is among key external factors that change the way firms operate as well as their markets. This paper looks at the organizational change from the disruptive technology perspective. The Levitt’s model of change diagnosis and a process intervention (automation of production process) will be used to demonstrate how to manage organizational change from the disruptive technology perspective. Disruptive Change Perspective Disruptive technology refers to technological innovations that change organizations and their markets. It is also referred to as disruptive innovation (Yamagata-Lynch et al, 2015). Lui et al (2016) describe disruptive technologies as innovations which have their origin in information technology and impacts the development processes and outcomes of firms. Similarly, Nagy et al (2016), say that new technologies create new markets and shift the status quo of existing markets. Disruptive technologies revolutionize the way operations are carried out in an organization, they provide the latest developments and equip firms to face changes in the market (Lui et al 2016). The disruption theory posits that there are innovations that can undermine dominant products in the market (Nagy et al 2016). According to Catinean and Candea (2013), disruptive technologies bring to the market different value offers than those in the dominant markets. Additionally, the technologies are discontinuous. Disruptive technology demands change on the basis of competition. Change in response to disruptive technology does not only require disruptive innovations but also sustaining innovations that improve the performance of products already in the market. Disruptive innovations involve putting together components of products and services to make them simpler than those in the market. Technological transformation changes the product from a complicated form, demanding high skill to design, to one that ordinary people with less practical skills can make (Tomofumi & Junichi 2015). Sandstrom et al (2014) describe the process that disruptive technology uses to change the market. They say that at the beginning, disruptive technology underperforms the dominant technology in regards to what customers value. These technologies are introduced or commercialized in markets deemed insignificant or in emerging markets. The disruptive technology has a feature that new and a few old customers value, though most customers would prefer dominant products. The products that result from the disruptive technology are smaller, simpler, cheaper, and more convenient compared to those from the dominant technology. Initially, the firm’s most profitable customers, in most cases, do not want to use the products that are based on disruptive technologies. Most managers are of the view that investing in disruptive technology is not a viable decision for the company. In time, the disruptive technology steadily progresses in performance until it attains the standards of mainstream market. Later, it displaces the dominant technology in the market (Lui et al 2016). Literature shows that at entry level, a disruptive technology often underperforms the dominant technology, but it improves steadily over time to meet and exceed the demands of the market. The reason why incumbents succumb to organizational change and others thrive on it lies in the ability of the leader to execute change. For effective change, leaders should focus on future disruptive technologies and innovate relentlessly to meet the demands of emerging markets. Technological change can be viewed both as a threat and as an opportunity to an organization’s strategy. Disruptive technology perspective of organizational change involves responding to new technology that creates market opportunities, hence improving the competitiveness of the organization. It also involves responding to redundancy and role redundancy due to inefficiencies from new technology. In addition, this perspective implies adopting a new technology to an organization to impact its customers. Change diagnosis (Leavitt’s Model) Predicting the disruptiveness of a new technology is important for incumbents in the market in order to avoid unfriendly consequences that result from ignoring impacts of disruptive technologies (Nagy et al, 2016). Chen et al (2015) note that companies need to analyse and capture the timing of technology disruption. This involves grappling with the question of the exact time a disruptive technology would capture emerging and mainstream markets. In addition, firms must determine the time-based process that the disruptive technology would capture the market so that it can use its financial, physical and human resources in a timely manner (Chen et al 2015). This calls for making the right change diagnosis. As Mcfillen et al (2013) say, organizational diagnosis plays a vital role in organizational change. This will involve taking the best approach as well as choosing the right intervention for the change process. Making organizational diagnosis marks the first stage in carrying out change interventions. Mcfillen et al (2013) argue that, to carry out correct diagnosis, the organization should borrow from the process of medical diagnosis where data is collected to clarify symptoms. The data collected is then interpreted by making comparisons with models in existence. Further, the diagnosis is named and treatment is administered. The Leavitt (1965) model can be applied to manage organizational change in disruptive technology perspective. In this model, the organization is the object of change. Further, the human and structural components are aligned to bring balance to the organization (Janicijevic 2010). This model focuses on four variables; human, technological structure and task variables. The four variables are interconnected. The structure variable entails the work flow, communication and authority systems within the organization. The technological variables represent the machinery and equipment required to accomplish tasks. The task variable consists of all the tasks in the organization involved in the output of products and services. Finally, the human variable means those involved in carrying out the tasks. This model demonstrates that, changing one variable affects all the four variables. In the case of disruptive technology demanding organizational change in technology, all the other variables will be affected. For a company that decides to automate its production processes for reduced costs, increase efficiency and impact on the customers, diagnosis will involve collecting and interpreting data on how the four variable will be affected, both negatively and positively (Hassim 2010). Data is collected by way of questionnaires for the human variable in the organization. For the customers, surveys would produce data on their feelings on improved products. A planned change intervention would be the sustainable change in this context. Such kind of an intervention would require time and prediction of the future of the disruptive technology. As noted by Chen et al (2015), the diagnosis would not only help the organization in determining the change required, but also in knowing the right timing to effect the change. They argue that the timing of the change is as good as the intervention applied. The intervention here would be designed to change the task variable, that is, to improve products and services. The most significant concept in this model is that, changing one variable would result in compensatory or retaliatory change to the other variables. Automation of the production process would mean either training the employees to gain the skills required or hiring new employees with the preferred expertise. As such, some would get laid off, which will create resistance. The structural variable would be affected since the management have to communicate more in preparing the human resource for the change. The human variable is bound to change, that is, the morale of the workers is affected. At the same time, the structure variable changes – where communication from management to staff increases in the process of change. According to Lui et al (2016), adoption of disruptive technologies in a firm are expensive and risky since it leads to disruption in the normal operations and it modifies division of labour. In addition, the adoption of these technologies requires new skills to maintain competitive advantage. Any change that an organization makes is encountered by resistance from stakeholders who perceive that their interested will be compromised. In addition, for firms to adopt to disruptive technologies, they need resources and capabilities. As such, firms without the necessary resources and capabilities are likely to fail. Raising the capabilities of the firm and ensuring the necessary resources are available ensures that the change process will not be hindered. Since the four variables; the management, human resources, tasks and technology will be affected in the change, carrying the change over a period of time ensures that it is sustainable. Conclusion The disruptive technologies perspective of organizational change suggest that as long as technology is evolving, firms need to continually stay abreast with disruptive innovations that can change the market. Predicting what disruptive technology will do to existing and new markets helps organizations to decide the kind of interventions to apply. Although adopting to disruptive technology is expensive and risky, ignoring its effects in the market is equally costly. Therefore, firms need to continually carry out change diagnosis to determine best intervention to adopt in order to remain competitive. 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