Describe about the Changing Organizational Culture for Drive Organizational Change.
The company which has been selected for this research is Juice-Cola Company. Operations of this company are being undertaken from the past one year and it is a well-established company. Various activities have been undertaken by the company which include distributing fast moving consumer goods to various retail shops which are operating within the New York City. However, the company has been looking for a shift in the tactics related to the retail shops, employed by it. New focus of the company is on treating the universities established in the New York City as the main retail points. The main objective behind the change in strategy of the company is to ensure that high levels of revenue can be achieved. Moreover, the change in the strategy will help in providing high performance within the organization. Furthermore, this business proposal is drafted with an intention to enhance effectiveness of the organization in employee management. Given the increase in volume of sales, it seems to appear that the proposal is in line with the strategic universities targeted by the company. Change within an organization, emerges out of the market research, which seeks to inform the management of a company about the preferences of the consumer (US Office of Personnel Management, 2016).
The company aims to offer affordable drinks, beverages, and snacks to the university fraternity of diverse brands and tastes at the reasonable prices. The company aims to achieve a growth in its annual turnover by 25%. The growth of the company is based on its capacity to expand. The success of the company will be measured on the basis of the number of stores opened. Company aims to open the stores in all the universities, as soon as the first shop is established in the New York City. In the first year, the operations of the company will be carried out in such a way so as increase the visibility of the company in various universities. Therefore, it can be said that the company wishes to create a significant milestone.
Business proposal which is being discussed in this report majorly concentrates upon the change in the strategy that a food and beverage company is undertaking with respect to their target market. For increasing the visibility of the company in the market, it is essential to increase the market of the products which are being offered by the company. Therefore, the company has opted for a change in the strategy which involves selling their products to the universities rather than the neighbourhood retail outlets. Proposal which is being discussed in this report is significant from the local, national and international point of view. Locally, this proposal will allow gaining an understanding of various parameters leading to increase in the performance of the company. Nationally, the proposal will assist the policy makers in understanding the preferences of consumers of the fast moving consumer goods sector and thus, will help them in framing the policies accordingly. From the international perspective, this proposal will help in laying the consumer choice theory into practical use and various directives pertaining to organizational change. On the global level, organizational change is being implemented for ensuring that the business operations are according to the social, cultural and political environments. On the local level, the proposal concentrates upon the requirement of the business to conduct a research in the market. Setting appropriate timelines are also supported by drafting a proposal. Therefore, it can be sad that the process is participative in nature and helps in bringing about a change in the organization.
Need for organizational change
As per the views of Aykut Berber and Murat Yaslioglu (2016), an organization is like a social environment in which the value of the organization depends upon the people who are working in the organization and not by the assets it owns. Thus, it is often believed that the team must be managed effectively and efficiently, during all times, so that highest standards of performance can be achieved (Berber & Yaslioglu, 2014).
Global economy in the present scenario has had a huge impact on the manner in which organizations operate (Creasey, 2016). As a response to changing economic conditions, the organizations are under pressure to bring about organizational change and maintain the competitiveness of their business continuously. Organizations are required to frame their policies and strategies such that they do not impact the performance of the organization as well as that of the employees (Cristini, Eriksson, & Pozzoli, 2012). Various ways are available through which the organizations can maintain their competitiveness. One such manner is to ensure continuous engagement of the employees despite the changes in strategies of the organization (Hewitt, 2013).
Most important issue in the business organization is the matter related to organizational change. Organizational change can be said to be a process in which an organization seeks change as a response to meet the growing needs of people (George & Jones, 2007). Success of this process is not only dependent upon how well the organization adapts itself to such changes but, it also is dependent on efficient managing capabilities of the management of the organization. As per Chen, Suen, Lin and Sheih (2010), organizational change “is a process in which an organization optimizes performance as it works toward becoming its ideal state” (Chen, Suen, Lin, & Shieh, 2010). However, it has been often argued that organizational change “is triggered by a progressive manager” (Chen, Suen, Lin, & Shieh, 2010).
As discussed above, organizational change is inevitable for an organization that wishes to become successful in the long run. Every organization is required to undergo changes so as to remain competitive. Organization change is not a one-time process rather an organization has to undergo certain changes every now and then to maintain a high position in the market (Haveman, Russo, & Meyer, 2001). However, analysing and evaluating the factors that require change is essential for an organization because only then, it will be able to find out the factors that require certain modifications (Isern & Pung, 2007).
There are various reasons due to which an organization makes certain changes in the manner it operates. First reason for changes in the organizations can be attributed to enhancing effectiveness of the organizations. Factors that influence the effectiveness of an organization are widespread and incorporate in it all the factors which are related to changes in the external environment and internal environment. Hence, before undertaking any kind of change in the working of an organization, it is essential that the managers must consider the external as well as internal environment (Burke, 2013).
The next reason due to which an organization might undergo certain amount of change is when it wishes to increase its market share or enhance visibility and mark its presence in the market (Brazzel, 2014). This will ultimately lead to increase in competitiveness of the organization and it indirectly leads to increase in profitability of the organization. Organizational changes might also occur due to the change in mission, vision, strategy, structure, technology, culture, system and style of leadership (Yang, Zhuo, & Yu, 2009). When any of the mentioned factors change, it becomes essential to bring about certain changes in the organization. As per (Chen, Suen, Lin, & Shieh, 2010), “Vision includes a firm’s organizational core value but one that also adapts accordingly to the external environment”. This means, if there are changes in the external environment, an organization is required to bring about change in its vision accordingly. The term strategy has been defined as “the organization’s long term goals and the steps and resources needed to be considered in its decision-making” (Chen, Suen, Lin, & Shieh, 2010). Change in strategy calls for certain important changes in the organization which may have an impact on the employees of a company as well. The company which has been selected for undertaking this research has changed its strategy that focused on concentrating upon the retail stores. Rather, the company is now focusing upon establishing new stores within the university campus so that more and more students get attracted to the store and it would ultimately increase the visibility and presence of the company. The company chosen for study now aims to open up stores in all the universities which are working in the New York City. This clearly evidences the change in the vision and strategy. However, such changes are not that easy to be introduced. Various factors affect the successful implementation of the organizational change (Harrington & Voehl, 2012). One such factor is the resistance to change by the employees of the organization. If the changes are not implemented strategically then, it can lead to an adverse impact on the performance of the employees (Jones & Brazzel, 2014). On the positive note this can also be termed as readiness for change. “Readiness for change refers to the degree of positive acceptance of the necessity of change, and the positive attitude toward the effect of change on self and the organization” (Armenakis, Harris, & Mossholder, 1993). If all the employees are ready for change then only, all the strategies framed by the organization will be fulfilled in the long run. Thus, employee engagement during the times of organizational change is quintessential (Tripon & Dodu, 2011).
Increase in the complexity and interconnectivity of various economic, business and regulatory trends since the past few years have led to significant changes in the organizations across the world. Moreover, increasing competition has further fuelled the urge to bring about certain changes in the style of operations which are being undertaken by the organizations (Senge, 2014). Thus, the past few decades have witnessed changes such as mergers and acquisitions, restructuring and transformation of strategy for increasing the presence of the organizations in the market. As per the report by (Hewitt, 2013), in a survey which was conducted on the employees of the United States of America, the engagement level of employees during the event of some changes in the organization has been highlighted. The below figure depicts the level to which the employees engaged themselves in the organization during the time of certain changes:
Figure 1: Impact of certain organizational changes on employee engagement (Hewitt, 2013)
During the time, when the organization was undergoing restructuring, which had a significant influence on the jobs, 10% of the employees were actively engaged while 19% of the employees were actively disengaged. Similarly, when the organization was undergoing changes or transformation in the business strategy which was supposed to have a huge impact on the jobs of the employees, 10% of the employees were actively participating in the transformation of the organization and on the other hand, 19% of the total employees were actively disengaged. This study reveals that the participation of the employees during the times of change is essential so that the performance of the employees is not hampered. Managers must work towards improving the performance of the employees so that the organization is able to retain the best of employees. Therefore, the managers must devise certain ways through which positivity can be instilled in the employees regarding the organizational change (Purce, 2014).
Organizational changes such as restructuring, transformation of business strategy and mergers and acquisitions hugely affect the performance of the employees, sometimes favourably and at other times adversely. Hence, the management of an organization must frame effective policies and strategies, which will help in improving the levels of engagement during the times of organizational change. As per the research conducted by (Hewitt, 2013), five most important drivers which can definitely ensure high level of engagement of employees were identified. The below figure depicts the drivers during the times of change and during no change, which can positively impact the level of engagement of employees:
Figure 2: Drivers which ensure high level of Employee Engagement during change and no change in the organization
(Hewitt, 2013)
During the time, when there are certain changes that are being made in an organization, the first thing that the management of an organization must undertake is to involve all the employees in the process of decision making. They are not required to be involved in all the decisions but being involved in making certain decisions will create a sense of responsibility and ownership in the employees which in turn will increase employee engagement. The next important thing that can affect the employee engagement positively is by making the employees understand that such organizational change is essential for their overall development, which in turn would lead to a strong career path for them in future (Appelbaum, 2013). With the development of a sense of ownership, the employees of the company will make some personal sacrifices in order to make the organization grow. If organizational change is taking place then, the management of the company must ensure that the employees are encouraged at all points of time. Encouragement can be in the form of monetary incentives or praising the employee verbally (Bhalla, et al., 2011). These will act as a source of motivation to perform better in the long run. The last but not the least is the establishment of two way communication system. This will address the issue related to creation of misunderstanding which is normally a result of lack of appropriate communication system (Hewitt, 2013).
However, these above mentioned drivers are different for different types of organizational changes. The below figure enumerates the top five drivers for various organizational changes:
Figure 3: Drivers to increase employee engagement in varied situations
(Hewitt, 2013)
Related to our research are the drivers which impact employee engagement during transformation of strategy. Since, our research concentrates upon the change of strategy of the company with respect to target market, detailed discussion about drivers to improve employee engagement in that situation will be discussed. The first driver which can enhance the engagement of employees in the event of strategy transformation is by involving them in the decision making process of the company. The employees must be asked to share their views on the strategy framed by the organization to improve market presence (Alvesson, 2015). Also, the employees of the organization must be given an understanding about various personal benefits that can arise to them due to the transformation of strategy. Furthermore, the management of the company must ensure two way communication systems, which will lead to reduction of ambiguity and increase transparency (Fullan, 2014). The most important driver is that the employees must be provided adequate training in a case there has been a change of role due to the implementation of new strategy. Most of the times, changes create a spark of fear in the employees which has the capability to hamper the performance of the employees (Anderson, 2013). Thus, appropriate training must be provided to them so that they are able to understand the new role and give their best to the organization. Moreover, training is essential for the personal development of the employees as well. The last driver that increases the engagement of the employees during the change of strategy, which also turns them into high performing employees, is by providing them with adequate resources so that they face no issues related to lack of available resources. Adequate amount of resources are essential for the effective performance of the task allotted to them (Kirby, 2005).
Thus, it can be said that the organizational changes if implemented cautiously and effectively will ensure increase in performance of the employees and also improve their engagement in the organizational tasks. Furthermore, the management of human resources will also become easy with effective implementation of strategies and policies.
References
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