Question

Explain with an example, the need for change in organizations. OR why should organizations change?

Answer 1

Considering the changes taking place in the external environment and technological up-gradation the organisation have to constantly change & adapt. Here are some of the reasons which signify why the need for change in an organisation is must:

The constant capitalisation of advanced technology & business orientation of globalisation: Business operations in the past 5 years are going global and becoming technologically very advanced hence it becomes important to plan strategies for such an environment. New technologies and methods like social media, newer software & hardware systems etc are being adopted and is making business more accessible across the world.

Globalisation and technology will keep moving further in the coming decades and it is imperative that the organisation take into account these factors while forming a strategy. Exports and FDI (Foreign Direct Investment) are expected to grow rapidly hence a major portion of revenues and foreign markets will depend on resolving this challenge.

For the above here are the examples of what needs to be done:

• It is important for managers to encourage creativity and develop high adaptation to such changes
• With e-business penetrating every level it is important for managers to resolve this by accommodating e-commerce & other tech motives into business strategy
• The management has to ensure that business has updated knowledge regarding subjects like International Human Resource Management, International Finance, International marketing etc.
• Extrapolation, prediction markets, futurology & simulations are some of the modern techniques that must be used as part of the strategy.

Government & Business relationship management has influenced a lot of business practices in past 5 years: Firms have to ensure that the relationship between local government & business is less complicated and constant communication is there with relevant departments. Government body regulates trade, enforce labour laws and bring constant changes in tax structures making it important to plan future strategies to plan revenues & operations scale.

Changes:

• The first step is to ensure that the organisation takes an active interest in Government at state, federal & even at the global level. The business needs to maintain a truthful and ethical relationship with the Government.
• Scenario-based strategic planning - the organisation must plan its operations considering both positive and negative laws and taxation policies.
• By preparing for different pictures in the future it can increase its potential to increase the quality of decisions, improve performance and face challenges in a better manner.
• Strategic management processes should involve the latest techniques like SWOT analysis, BCG portfolio matrix to be able to predict such external changes & manage the relationship with the government.

Embracing the social challenges and making constructive social change for society is another important factor that has influenced the business landscape in the past 5 years.

The business at the core of its operation needs to ensure that it conducts its practices in a socially responsible and ethical manner. In the 21st century, there is an existence of many pressure groups in the society that operates in areas like environmental activism, consumer protectionism etc.

Changes:

• It is important for a business to plan social change as an opportunity than a crisis management strategy.
• Environmentally beneficial practices & focus on accessible and local employment can help a business earn public trust and increase credibility.
• Strategic planning should involve & ensure investment in CSR initiatives to manage the reputation of the firm and also improve competitive advantage.
• Plan for broader stakeholders - The business need to ensure it meets quality standards, have a modern and effective customer feedback mechanism, grievance redressal, adherence to various laws should be given top priority.

Here is how change helps an organisation & why it must be implemented:

• It helps to bring employees and team members involved in the process of executing the strategy/change management policies together. It makes them understand and align daily decisions and tasks in the direction of the company.
• The top leaders and senior members of the organisation need to communicate and cascade the message from the top making sure no communication is lost and synergies are well defined hence it is important to have a clear understanding.
• It is important to have a clear understanding so that leaders can communicate the value and what is in store for employees of the organisation as it helps to drive down behaviors and defines the expectations for recognition and rewards.
• The alignment and understanding of change management amongst top leaders ensure that all team members are able to figure out how their individual job descriptions are related to overall strategies. The alignment stage makes the overall strategy understandable in a simplified manner and avoids misunderstanding and confusion.
• The clarity and understanding also help the business leaders to bring a degree of innovation and creativity into play. The customer-centric behavior should be at the heart of alignment as it helps to bring change management in the organisation.  

Example - Google has introduced many changes to the organisation since the start and here is the example explained in detail:

• Google has introduced innovation and creativity as a part of its core behavior. Since it has highly skilled employees and keeps investing in education & research it has been effective in bringing the culture of innovation.
• It has challenged the conventional thinking style and work ethics as followed in other companies.
• Google has been able to integrate, develop and re-develop the internal & external skills to build a diverse and highly talented workforce who can adapt to the changing environment.
• It is a fast workplace. It doesn't believe in delaying problems or challenges and addresses them as quickly as possible.
• Another approach to bringing change management has been being people-centric in the entire process. The organisation believe that employees need their creative freedom and it provides that environment to facilitate the same.
• Google is a completely open organisation when it comes to networks and collaborations. Due to the constant exchange of information and knowledge, it has been able to adapt to change and grow faster.
• Google management and leadership body have played a great role to demonstrate the right values, skills, insights to help the organisation forecast the right opportunities and important areas in future.
• Management has shown greater trust in its people. An example of assigning several hundred employees for the Google+ project is evident.
• The organisational culture of transparency and openness has helped to develop trust and faith in its employees.
• Google has focused every year to remove unnecessary processes and bureaucratic features to ensure freedom, faster & effective communication and collaboration across various departments.

In order to bring change, it is important to focus both on productivity and innovation aspect of employees and Google has done that right. The management and leadership model has allowed it to be out of the box and not orthodox bringing change and trust in people.

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