The changes in organizations based on the economic conditions
The management normally acts as interpreters of the organizations environment; strategic level managers formulate the interpretation -of the environment -through the process of translating events and developing shared understanding and conceptual schemes among members of upper management. At least to some degree, top managers are influencers of an organizations environment; they advertise, lobby and educate to make the environment friendly for their organizations. By so doing, they influence the flow of environmental demands and resources.
To argue that environmental changes lead to organizational changes does not mean that the management is denied a chance to play a major role in organizational change; this is because they are exclusively influential in initiating the business re-engineering process. An organizational redesign is the process of total configuration of its technologies, structures and processes to make them-the factors- interact well with each other and to be suited with the organizations environment.
If these factors are not properly matched, the organizations performance may not be as expected and sustaining its survival may be tricky. These changes relate to strategies, it would be hard to imagine implementing changes in strategy without having to change the organizations processes, such changes normally appear as re-designs or reconfigurations of the business
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Notably, to a great extent, an organizations design determines the requirement in personnel and changes in designs subsequently leads to changes in personnel, this explains why business process re-engineering more often than not leads to downsizing of employees (Antonelli, 1988). Organizational change is fundamental if a firm is to experience success: to a great extent, redesign determines distribution of resources, authority and information, consequentially, it directly impacts on the ability of managers to make timely, technically sound and generally objective economic decisions.
The ability to make and implement such decisions dictates the effectiveness of an organization. Secondly, the design of an organization affects the managers’ ability to coordinate and control the activities of subordinates in order to ensure the organizations performance; proper organizational design therefore makes a difference between having an effective, well running organization and having inefficiencies and recurrent crisis in the organization.
Organization environments are changing rapidly than ever before: because the effectiveness of an organizations design erodes over time in relation to environmental changes, re-design is done to meet current and future environments. Innovative technologies are being introduced to the modern organization at a rapid pace; the effectiveness of organizational design is determined by the technology and the processes by which work is accomplished, explicitly, change in technology certainly declares some business processes redundant.
Modern communicating and computing technologies facilitate the process of coordination and control to make new organizations designs feasible and this also increases organizational effectiveness in the current and previously abandoned designs. Changing organizational designs to meet new challenges and opportunities involve a dynamic process, the effectiveness of an organizations design is partially a function of procedures established in the past and the training and experience provided to organization members by the previous organization design.
Many of the important organizational previous circumstances of individual change can be captured by the categories of an organizational socialization process, organizational training, organizational change programs and various managerial behaviors that contribute to employee change both intentionally and unintentionally. The effects of these influences are moderated by three dimensions of individual change: changeability, time and depth. Individual change encompasses changes in behavior and changes in cognitive, affective and co native characteristics of that person.
People have from time to time resisted change: it is therefore of importance to understand how to deal with this. It has been reported that resistance to change can be minimized by communicating the need for change and having the people affected by the change help in planning it. Organizational change and development involve people and the organizations and is about people in the organization and how they function. This is about planned change: getting people (individuals, teams and cross-departments) and systems (human resources, management and administration) to function more efficiently.
Planned change involves logic, hard work, time, goals and the use of valid knowledge and information about the organization and how to change it (Clegg, 1979). Re-engineering and downsizing help a company to catch up; it may not necessarily help a company get out front, when sales growth and margins stagnate, most organizations try to increase the return on investments by reducing the denominator (their investment) through choosing to cut back on their major and virtually important asset (the employees).
Many former industry leaders fail to keep themselves in a leading position by failing to keep up with the changes taking place in their industries. The 1980’s saw a huge movement towards manufacturing effort in North America, hundreds of organizations-including the big three-jumped into the quality bandwagon and adopted change techniques that embraced the notion of quality manufacturing. In the late 1970s and the early 1980s, the best known and the most frequently adopted change plan was the Total Quality Management. Following in the heels of this now infamous business strategy was Business Process Re-engineering.
Ford rescued one of its main suppliers in 2005 by acquiring twenty-four plants and seventeen thousand workers in the glass, power train and Chassis manufacturing divisions from the troubled company, this was a massive restructuring that placed Ford in a position to effectively compete with other players in the industry including General Motors. Ford was the first of the big three (General Motors, Chrysler and Ford) to investigate the quality movement when it sent hundreds of its employees to Japan to study manufacturing methods in the early nineteen eighty’s.
All these efforts were done in order to gain a competitive edge over the other players especially in the key areas of total quality management and business process re-engineering. This concluded that Japanese organizations were more efficient in the processes of manufacturing and this was attributed to how well Japanese employees worked together: this new viewpoint however was not consistent with Ford’s emphasis on military precision in manufacturing. In 1981, Ford hired Demin –known as the number one expert in quality management-as a consultant in their quality efforts.
Remnants of the quality movement can still be seen in the organization, for instance Ford still requires its suppliers to achieve a Q1 status-a quality standard – if they want to continue supplying the organization. General Motors embraced innovative new sales strategies and new automobile models, all these were deemed necessary to ensure it had a competitive edge in the tough automobile market. General Motors also collaborated with the United Auto Workers to form the UAM-GM Quality Network.
Chrisler (a company formed in 1998 by the merger of Deimler-Benz and Chrysler Corporation) was experiencing a loss in sale of the Mercedes but above overall growth in other divisions. The merger of the two companies would ultimately be deemed a failure and they would be separated in 2007. These efforts of the companies reinvigorated the United States manufacturing processes through their leadership and exemplary practice of Business Process Re-engineering ,thereby demonstrating management, commitment, total team effort and perseverance that inspired others to attain similar achievement.
Explicitly, a change in emphasis from mass production to quality production through an emphasis on people and teamwork can play a vital role in making an organization achieve dominance in its industry: total quality is deemed central in an organizations success. Corporate cultural change is one aspect that should not be overlooked in organizational change: this is what the Scandinavian Airlines, British Airways and NSP came to learn in the 1980s.
All these three companies reached a crisis point in the 1980s and therefore decided to implement a planned culture change to overcome these problems, their choice of change strategy was no coincidence. In the mid 1980s when consultants and managers started to recognize the power of culture: managing corporate culture and defining organizational values became some of the hottest management fads in the history of organizational change.
There was disagreement about whether culture could be changed and managed, what actually constituted culture, extensive time commitments, difficulty in measuring outcomes and varying degrees of what could be deemed success. Using Ford Automobiles as our object of study; we appreciate that its relationship with Mexican suppliers is the main reason for Electronic Data Interchange success in the Mexican automobile sector. Ford first introduced Electronic Data Interchange in Mexico in 1989.
Long term contracts and tight partnerships therefore became the defining components of their relationship and transfer of information maintained equality in this association. Electronic Data Interchange has clearly played a role in not only creating a radical change in the business processes but also removing political imbalance between the two trading partners. Ford was characterized by morphostatic change (changes that occur as steps of a gradual, development sequence where the possibilities of change are contained within the routines coded into the organization).
This concept and its implicit application at the Ford Motor Company is an example of an organizations effort at morphostatic state: increasing plant size and production volumes led to a variety of improvements in the production process, workers skills and methods of organization. This is the evolutionary view of organizational change that pictures adjusting incrementally, responding locally to local problems. Incremental patching up allows the organization to learn from its pervious actions while retaining control and ability to remedy them (Ford & Kozlowski, 1996).
At Ford, domestic developments had even more specific and important implications for the conduct of overseas operations: first, Fords organizational commitment to a single model (Model T followed by Model A) until 1932, was strictly carried over into its foreign operations with positive results. Subsequently, the dominance of Fords V8 engine in the 1930s played a similar role: the mass production of the V8 was considered a major mechanical triumph and it pooled Ford out of a period of decline.
Launched in 1932, the V8 rapidly became Fords major technology and by 1934, Fords United States headquarters wedded itself wholly to the V8 technology in the United States of America, resolutely resisting pressure to produce other types of engines. The V8 sold well in the 1930s because Ford’s primary strategy was to sell the V8 in large volumes though low pricing, achieved by conservative production changes and heavy investment in modern plant.
Four areas are used to asses the degree to which Ford has globally dispersed its value chain of production, that is: corporate organization, vehicle and parts production, product development and design and competitive strategies which include sales, marketing and trade strategies. A discussion on Ford’s global strategies can not be complete without making a reference to the strategic alliances and international joint ventures with other automobile companies (most notably with Mazda but also with other Asia, European and other auto mobile makers in the United States).
These alliances were majorly made in order to jointly develop, engineer, design, market and even to produce vehicles in the United States and abroad. These associations, which preceded Ford 2000, have proliferated and have become of essence in maintaining a competitive position for a company not only in specific domestic markets but also at a global level.
They also represent a marked change both from Ford’s previous practices that maintained full ownership of their operations and protected know-how and other ownership advantages, and from the United States anti-trust laws that prohibited large companies from entering into such associations. Through them, Ford was able to serve both the domestic and the global market, to reduce production, market and development and to adequately cope with excess capacity in the market (Suzanne &Griffiths 2003).
These partnerships also contributed to geographic dispersion and inter-regional integration of different functions of the value-chain of production. While this integration took place out of the borders of the corporation, it complemented Ford’s efforts to design a global configuration of its organization and network of subsidies. In this period, Ford seemed to have positioned itself well to build a global and flexible structure that responded strategically to changing conditions in the automotive industry and markets around the world.
Among other considerations and compared with other auto makers, Ford’s management had more experience working with foreign subsidiaries. Later, Ford implemented different corporate organization strategies that aimed at integrating specific corporate functions on a regional, inter-regional and global basis. Ford 2000 was a more ambitious program that sought to reorganize the company’s network of subsidiaries on a global basis by centralizing Fords strategic leadership.
While one of the main goals of Ford 2000 was to improve the company’s product development process, the reorganization virtually touched on every aspect of the corporation and strove to create a single ,global set of worldwide processes and systems in its’ product development, manufacturing, supply and sales activities. One example is Ford’s worldwide engineering release systems, a computerized global communication network established in 1989 to facilitate the coordination between subsidiaries.
Today, this system allows Ford’s workers around the world to share design and manufacturing information as they develop new products. References Antonelli, C (1988). New information technology and industrial change: the Italian case. Springer. Clegg, S. (1979) The theory of power and organization Routledge. Ford, J. K& Kozlowski, S. WJ. (1996). Improving training effectiveness in work organizations. Lawrence Erlbaum Associates. Suzanne, B &Griffiths, A. (2003). Organizational change for corporate sustainability. Routledge.