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Organization Change and Development

Country Road Limited is a company that deals with sourcing, licensing, design, wholesale and retail distribution of home ware, apparel and other related accessories. This company has over 60 stores and 70 departmental outlets. It began operating in 1974 and has grown both in Australia and internationally. In 1987 the firm ventured to the American market after seeing an opportunity to invest in this country. The company enjoyed profits for over a decade before signs of financial strains began to appear.

In 1999, the company started experiencing financial challenges, and by 2001, the company made a loss of over $7 million in its American, Asian and Australian operations. The sales revenues also declined during this year by over $3 million, with sales in the US alone declining by 6%. Failure in meeting the customer needs and increasing local competition were cited as the major causes of the declining performance. The terrorist attacks on US during the same year, compounded the situation by causing further decline of sales, which eventually led to a decision to exit the market in US.

The process of exit was smooth, with the US staff providing the required assistance throughout the whole process. This marked a starting point

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for organizational change that would transform the organization, so that it would be able to face future challenges in the business environment. Change perspectives. According to Cummings and Worley (2005: 55-62), there are three perspectives that can be used to effect organizational change. These are strategic design, political design and cultural deign, The strategic design views the organization as mechanical systems that are made into parts that are compatible, and serve to meet the market demand.

In this change perspective, the organization should be divided into new departments with new responsibilities delegated to each department. The departments are afterward linked to the overall goals of the organization. The management should also emphasize the importance of rewards in such organizations. In the political design perspective, the organization is viewed as a social system which has different goals and interests, some of which are conflicting. In implementing change using this perspective, social interests of various stakeholders are emphasized upon, and influence and power used to achieve them.

The leadership resolves conflicts, builds coalitions and effects change through shifting the dominant coalition, and change in stakeholders’ powers. Charisma is an important tool in achieving change through this means. Finally, in cultural design, the organization is viewed as a system which encompasses values, routines, artifacts and meanings which make up organizational culture. Implementing change using this strategy involves implementing traditions and norms which guide behavior, that becomes habitual in the organization.

The leadership creates an organizational culture which is consistent with the goals of the organization. In my opinion, the best perspective to use is the third perspective, since it involves motivation of the employees. It also involves building habits among employees which enable them to work independently. Country Road Limited needs an overhaul of the current system, and cultural design would enable it build a new organizational culture, which is the best way of motivating employees. Employees are the most valuable asset that any company possesses, and motivating them would enable it achieve its objectives.

Drivers for change. These are factors which necessitate the change of organizations, in redefining their goals and objectives. Organizational change involves the realigning the systems and processes of organization. These include objectives, goals, structures, culture and others, and they are changed in order to adapt to the business environment at the time. The organizational change is implemented in order for the business to be able to survive in the industry in the long run. There are several drivers for change, and one of them is financial performance.

When companies begin making losses, or performing below their targets, they need to implement organizational change in order to rectify the weaknesses that cause the adverse performance. Another factor is the change in objectives of a business. For instance, if a company alters its approach from customer centric to product centric orientation, it is necessary to implement new processes that will facilitate the change. The implementation of new processes can be said to be organizational change. According to Burke (2002: 43-47), another factor that can cause organizational change is the end of life cycle of a product.

Each product has a life cycle that involves introduction to the market, growth and finally saturation. When products reach the end of their life cycle, it is necessary to alter production or even exit markets. This therefore necessitates the need for organizational change. Mergers and acquisitions also lead to organizational change, since processes are introduced to align the organizational structure and culture of the two firms. Finally, the emergence of new technology may lead to organizational change, in a bid by the organization to maximize the use of technology, so that it may stay ahead of its competitors.

In the case of Country Road Limited, the major change drivers can be said to be poor financial performance and the inability to meet customer needs. It has been seen that this company made huge losses for two consecutive years, which brought about the exit from the US market, and re-inventing of the company. The losses can be attributed to failure to meet market needs, which led to decline in sales, hence profits. The company had to implement change so that it could study the market needs and trends, which would enable it make a foundation for growth in future.

Balanced scorecard. According to Niven (2002: 5-7), this is a tool used by businesses in determining if the small and large scale operations in an organization are compatible. The scorecard analyzes the operational, developmental and marketing aspects of businesses, as opposed to analysis of the financial aspects only. According to Kaplan and Norton (2000: 10-14), the scorecard analyzes factors such as research and innovation by the company, view by customers on products in the market, the organizational culture and attitude of the human resource among other factors.

In terms of the financial aspects, Country Road Limited was performing poorly and made losses of over $7 million. In analysis of innovation and development of products, the company can also be said to have performed poorly, since it was unable to develop products which satisfied the market needs. This is shown by the decline in sales revenue, which caused the losses. In analysis of the view by customers with regards to the products, this was also poor and can be explained by the same observation of low sales.

In analyzing the balanced scorecard of Country Road Limited in totality, it can be concluded that the company performed poorly. All aspects analyzed had negative comments, which shows that Country Road Limited has a negative scorecard, and this necessitates organizational change. Without organizational change, the scorecard cannot improve, which means that it cannot survive in the competitive business environment in the long term. Conclusion and recommendations. Country Road Limited performed poorly due to its failure to predict market trends, which led to decline of sales and hence profits.

Its decision to leave the US market was a wise one, since it cut its loses early enough, and has an opportunity to implement organizational change and experience profitability. It is therefore imperative that the company invests in research and development. Country Road Limited should carry out a comprehensive research on the market needs as well as a SWOT analysis of the organization. With this information, the company can come up with a plan on how it can meet its goals and objectives.

The company should also carry out research on the latest technology, since this will help manufacture higher quality products and at lower costs, which will attract more customers. Bibliography. Burke, W. W. 2002. Organization Change: Theory and Practice. New York: SAGE. Cummings, T. G. , Worley, C. G. 2005. Organization Development and Change. Washington: Thomson South-Western. Kaplan, R. S. , Norton, D. P. 2000. The Balanced Scorecard: Translating Strategy Into Action. UK: Harvard Business Press. Niven, P. R. 2002. Balanced Scorecard Step-by-Step: Maximizing Performance and

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