Introduction
Today’s businesses are running in a fast moving environment with accelerated technological advancements and changes in customer behavior, politics, and market forces. The need to adapt to changes is more important now than ever. As the environments around the company changes, the business also needs to undergo changes. The companies that refuse to change will perish sooner or later. Companies undergo changes mainly to keep itself ready for the present and future competition. Therefore, to be a successful company, it is highly important to watch the external environment.
According to Drucker, companies need information about the external business environment and using this information, they should evolve a strategy. This will enable companies to successfully handle the inevitable changes that will take place in the company Drucker (1997). Bamford and Forrester agree with the point made by Drucker, buts add that companies must look for wider venues of changes taking place. For example, companies must look into the behavioral changes in customers, suppliers, changes in economic environment, and the changes in the national and international legal systems (Bamford and Forrester, 2003).
Triggers for Change
The need for companies to adapt to change are not entirely triggered by the external factors such as environmental and technology advancements. There can be some internal company factors that will make a company to undergo the process of change. Changes happen in companies as an effective response to the economic events that happen outside of the company and how it has affected the internal structure or strategy of the company. This way, not every external event triggers the change in companies. If the external events have an impact on the function of the company, then that company needs to undergo the change management (Pettigrew, 1985).
External Triggers for Change
The external triggers that make a company to undergo change are technology changes, customer behavior changes, high competition from other companies, new government legislations, global economic conditions, for example the current financial crisis, cultural impacts, supply chain changes, and distribution chain changes.
Internal Triggers for Changes
In addition to the external triggers, there are internal factors that trigger changes in an organization. The internal triggers for change can be new product or service design innovations in the company, low performance of the internal employees, and change of guard in the top management. When an organization see changes taking place in the world of business and when it wants to be highly competitive, it proactively undergoes changes (Buchnan and Huczynski, 2006).
Types of Changes
When an organization experiences any of the triggers for change, whether internal or external, the organization plans to undergo the change management. Typically, there are three types of changes that take place in organizations.
Incremental Change
Incremental change can be defined as a process of undergoing change by improving the existing systems, policies, and procedures step by step. This type of change is a slow process and the changes are in fact modifications to the existing systems in an organization.
Strategic Change
Strategic Change can be defines as a process of changing the existing business strategy of an organization. Here, the organization tries to change its strategies to align it well with the changes taking place with and outside the organization. For example, Primark entered the UK market by focusing on the Cost Leadership Strategy. They made sure they have the lowest price for their products. This worked well in some segments of the market, whereas, some other market segments viewed their products as low quality products. Therefore, to win over those market segments, Primark is focusing on quality and improving its strategy by mixing Differentiation Strategy.
Transformational Change
Transformational Change can be defined as a process of transfiguration from one state to another state which is completely different. When a company undergoes the transformational change, it changes its business strategy, its motto, its business policies, etc. In fact, in transformational change, an organization becomes a new organization with new line of business. For example, WIPRO was into the vegetable oil business focused on the north Indian market. When the market forces changed in India because of the opening of Indian market to the foreign companies, WIPRO underwent a transformation change and changed their business into Information Technology. Now, their major focus is information technology and they are known as one of the leading information technology company in India.
Bureaucratic organizations are the organizations that have policies and strategies to function very systematically and scientifically like a machine. In a bureaucratic organization, the job functions are routine and systematic. Everything they do will be mechanistic and according to the formal rules of the organization. Generally, Bureaucratic organizations tend to have lots of rules and regulations. In some aspects most of the organizations have some futures of the bureaucratic organizations. During the industrial revolution companies moved more toward bureaucratization and made the work environment a routine affair for the employees.
Bureaucratic organizations tend to routinize the work and administration just like the machines routinely do the same work. Bureaucratic organizations emphasize on precision, regular, efficiency, and reliability (Webber, 1968).
Strengths of the Bureaucratic Organization
Clear Planning
In Bureaucratic organizations, planning is given prime importance. The planning clearly states what the organization needs to achieve in a given period. The planning gives the specific tasks to be achieved by each employee. This enables the employees to perform and focus on their individual duties.
Hierarchical Top –to – Down Management
In bureaucratic organizations, the management style is more of hierarchical. The management control is always with the top management. This style gives the managers complete control over the job functions which enables then to monitor the work very efficiently.
Clear Decisions
As the decisions are taken by the management, they take the final decisions very quick and without any confusion. The decisions taken in bureaucratic organizations will be always in favor of the growth of the organization. These decisions are conveyed to all the employees and the employees get to know what they have to do to achieve those decisions.
High Coordination
Usually, bureaucratic organizations will have high coordination among its work force. As the whole system in the organization is controlled from the top management, the bureaucratic organizations have coordination of all the work groups.
Specific Duties
In bureaucratic organizations, each employee does a specific duty. The bureaucratic organizations use the specific skills of the employees and the employees do the same job every time. The work is divided in to specific tasks and each employee does only one task. This makes the employees experts in the tasks they do.
Increased Efficiency
By breaking the work in to several small units of tasks, the bureaucratic organization become highly efficient in whatever they do. By adopting scientific approach to management and mechanistic way of work, the bureaucratic organizations achieve their production capacity in an optimized way. The efficiency of the organization can be increased by assigning the best person to perform a job and also train the employees to perform that job effectively in a routine fashion (Taylor, 1919).
Weaknesses of Bureaucratic Organizations
Bureaucratic Organizations are Slow to Change
The bureaucratic organizations tend to stick to their own way of managing the company affairs. They solve the issues scientifically. The bureaucratic organizations are designed to attain predetermined goals which are clearly laid out. These organizations do not go away from their predetermined goals. As bureaucratic organizations are slow in adapting to changes, they will not survive too long in the ever changing market.
No Motivation for Employees
As the job environment is very routine in bureaucratic organizations, the employees get bored of doing the same task over and over. This in fact affects their performance and the quality of their work. Employees are the greatest asset of a company. When employees are uninterested in doing their job, the whole company’s future is in peril.
Bureaucracy Does Not Encourage Innovation
As the decision in a bureaucratic organization are taken only by the top management and does not involve the lower level employees, the new ideas of the employees are never heard by the management. This prevents new ideas to be explored. For example, Google is very successful because of the fact that it encourages its employees to be very innovative and come up with new ideas. Most of the products are developed from the innovative ideas suggested by their employees. Therefore, it is highly important to encourage innovative ideas from the employees.
Inhuman Treatment of Employees
As the bureaucratic organizations follow the mechanistic approach to management, the employees are treated as machines to perform particular activities. This creates rift between the management and the employees. As a result there will be misunderstanding and clash of interests between the top management and the employees.
Platinum Integrations Limited
Platinum Integrations Ltd. is a management consultancy startup company, established in October, 2009 in London, UK. It provides business consultancy services to the small to medium enterprises helping them to draw effective business plans, marketing strategies, and strategy implementations. Platinum Integrations also helps its clients to effectively manage their finance, project management, and their marketing activities.
Organizational Development
Organizational development can be defined as the process of increasing an organization’s effectiveness through a planned and organization wide endeavor. Organizational development is a process of implementing strategies to change the way the organization works, its culture, values, and organizational structure, so that the organization is well poised to adapt to the changes taking place in the market, such as new technologies, changing buyer behavior, new marketing techniques, and new challenges, etc. (Warren Bennis, 1976).
Objectives of Organizational Development
The main objective of Organizational development is to effectively manage the all levels of business functions both inside the company and outside the company. The Organizational development aims at improving the communications among all the employees, so that they all focus on achieving the same goal. It helps the employee to improve their interpersonal skills and problem solving skills. This way, Organizational development tries to make each and every employee a leader who takes initiative in solving misunderstandings between the employees, solving the disputes, and aligning the professional objectives of the individuals with the organizational objectives of the company. Adapting to the changes lies at the heart of Organizational development.
Stakeholder Analysis of Platinum Integrations Limited
The term stakeholder can be defined as a person or group of persons who are affected by the actions a company takes or implements or who affects the actions of the company. The actions taken by the stakeholders will affect the company either positively or negatively.
Types of Stakeholders
Primary Stakeholders: Primary stakeholders in a company are those who have the majority interest or higher authority in the key decision making process of the company. Therefore any actions or decisions taken by the primary stakeholders will have greater impact of the functions of the company.
Secondary Stake Holders: Secondary stakeholders are the people who are indirectly affected by the actions or decisions taken by a company.
Broadly, stakeholders in a company can be divided into Internal Stakeholders and External Stakeholders.
Internal Stakeholders
Employees: The employees at Platinum Integrations Limited play an important role in the day to day functioning of the company.
Managers: Managers at Platinum Integrations Limited take part in the decision making process which will affect the current and future performance of the company.
Owners: The owners of the Platinum Integrations Limited also play a significant role in such a way that they provide inputs to the company top management as to which direction the company has to take.
External Stakeholders
Suppliers: Platinum Integrations Limited also exports products to the continent of Africa. Their heavily depend on the product suppliers to carry out their export business. Therefore, the suppliers play a key role in the success of Platinum Integrations’ export business.
Customers: No company can survive without customers. Customers are the major external stakeholders for an organization.
Government: Government policies can affect the company negatively or positively. Therefore it is vital that companies always keep track of the changes taking places in the legislations brought in by the government.
Shareholders: Platinum Integrations Limited has no shareholders. It is a privately held company.
Stakeholders in a Company
Whenever Platinum Integrations Limited plans to implement a change in the organization, it is very important to first discuss the change with the internal stakeholders. For every change to be effective, we need the coordination and cooperation of the employees, managers, and the owners. Only after removing the resistance from the internal stakeholders, the company can take the change management forward to the external stakeholders. As Platinum Integrations Limited has only 7 employees, it is easy to manage the changes. The managers can conduct several discussions and brainstorming sessions with the employees and decide how to implement the changes. After taking the internal stakeholders into trust, Platinum Integrations Limited can talk to their external stakeholders, mainly customers and the suppliers about the changes and its benefits.
Whenever a company introduces changes, it faces resistances from stockholders. Stakeholders tend to see the changes as something done against their interests. Therefore it is important for the top management to make awareness about the changes among the employees. Also, stakeholders must be told about the benefits of the changes being implemented in the company. Without the full support of the stakeholders, change management will not be successful.
Mainly, there are 4 main causes of resistance to organizational change management, such as Limited self interest, Misunderstanding or Lack of trust, Contradictory assessment, and Low tolerance for change (Bedeian, 1980).
Limited Self Interest
Generally any change will have negative impact on some of the stakeholders. Therefore, we need to limit the negative impacts as little as possible. Platinum Integrations Limited must talk to the stakeholders and highlight the benefits of the changes. This will increase the interests of the stakeholders.
Misunderstanding or Lack of Trust
The changes in an organization create lack of trust between the stakeholders and the company management. The lack of trust is generally created by misunderstanding of the objectives of the change. Platinum Integrations Limited must clearly state the aims of the changes and how it will affect the stakeholders.
Contradictory Assessment
When the stakeholders do not understand about the changes, they will have difference of opinions about the change. Therefore, we must encourage discussions about the change among the stakeholders, so that we have a clear and same understanding about the change management.
Low Tolerance for Change
Whatever the company does, there will be some stakeholders who will be slow in adapting to the change. As part of the organization change and restructuring, the company must find apt role for these slow changers.
Platinum Integrations Limited is a startup company that provides management consulting to small to medium companies. In this section I analyze the changes to be introduced in Platinum Integrations Limited to gain competitive advantage over its competitors.
Revamp Internet Marketing Strategy
As a management consultancy, Platinum Integrations Limited needs to have a strong presence on the internet. As more number of companies are getting online, it is very important to introduce internet marketing strategy. Right now, Platinum Integrations Limited does not have any plan for promoting its services and products online. As part of this strategy, Platinum Integrations Limited needs to change its Website and make it look more professional.
Have a Separate Marketing Team
Right now, Platinum Integrations Limited does not have a marketing team. The team managers carry out the marketing function. The marketing team in a company is an important factor in the growth of that company. The marketing function must be separated from the team managers and made as a separate department.
Increase the Number of Affiliations and Partnerships
As a startup company, Platinum Integrations Limited must get into partnerships with other leading companies. This will help them to get more businesses through the new partnerships and affiliations.
Organizational Development Models
System Model of Action Research
The action research formulated by Kurt Lewin can be said as the most effective model of managing changes as part of Organizational development. According to Kurt Lewin, every change management process in Organizational development has three main stages, such as Unfreezing, Changing, and Refreezing. Unfreezing refers to the preparation for adapting to the actual change that is going to happen in an organization. The Changing stage refers to the actual changes that are implemented in an organization. The Refreeze stage refers to the monitoring and tracking of the changes that were implemented in an organization. The refreezing or monitoring of the changes will the organization to make sure that the changes produce the expected results (Kurt Lewin, 1958).
Action Research Model by Kurt Lewin
Applying System Model of Action Research to Platinum Integrations Limited
Platinum Integrations Limited struggles to cope with the wide ranging changes taking place in the management consulting space. As a result of the current financial crisis, their clients require the most efficient and effective business strategies that produce results in this tough and highly competitive market. However, the structure of Platinum Integrations Limited was not created keeping the changes taking place on the market. Therefore, Platinum Integrations Limited needs to undergo the change that reflects the requirements of the current and future markets. I suggest that the System Model of Action Research by Kurt Lewin can be applied to Platinum Integrations Limited to become an effective organization in the field of management consultancy.
Unfreezing
In the unfreezing stage, the internal stakeholders and the external stakeholders work together in planning the changes. The planning includes diagnosis, information gathering, and taking feedback of the results. In this stage, the company examines the changes needed to be introduced in the company.
Transformation
Transformation stage is also called the Action stage. This refers to the actual changes implemented. In this stage, the company introduces several actions and the company undergoes vast changes throughout the organization. There is an information loop between the unfreezing stage and the transformation stage.
Refreezing
Refreezing stage is also called the Result stage. In this stage, the company monitors the change management and tracks the results. In this process, the feedback will be taken and the changes will be modified and again implemented.
Implementation Plan
Discuss the Changes with Stakeholders: It is important to know the reactions of the stakeholders about the changes to be implemented in the company. As a manager, I will encourage and facilitate discussion about the changes. This will help the company to arrive at the consensus among the stakeholders.
Involve the Key Stakeholders in the Implementation: To make the changes very effective, I will make the stakeholders as part of the implementation team. This will offer them a feeling of ownership about the changes taking place. Also, by being part of the change management, the stakeholders will try to make the implementation of change a successful exercise.
Inform all the Stakeholders about the Change Plan: On every stage of the implementation of the change, it is important to keep the stakeholders informed. This will help to keep every stakeholder focused on the change management. This will avoid misunderstandings and confusions about the changes.
Encourage Innovative Ideas: Every stakeholder can function as a change agent when given a chance. It is important to create a culture of change. This will enable the company to be adaptive to changes and gain competitive advantage in the ever changing market.
Possible Outcomes/Conclusion
After implementing the changes in Platinum Integrations Limited, the company will witness several results which will provide the company a competitive advantage over its competitors. First of all, the changes will enable the company ready for the present and future market. By implementing internet marketing strategies, Platinum Integrations Limited will gain online visibility and will attract many customers online. By creating a new marketing team, it can increase its portfolio of customers. The new team will streamline the clientele and will increase the sales of its products and services. By creating a new marketing team and shifting the marketing responsibilities to that team, the team managers can now concentrate on their management activities. This will allow the managers to focus on the core strategies of the company.
References
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