The Managerialistic Ideology of Organisational Change Management - Essay Example

Managing Organizational Change Name of Student: Name of Course: Name of Instructor: Date of Submission: Managing Organizational Change Introduction Organizational change is one of the major issues which organizational management has to deal with from time to time. Generally, organizational change is inevitable. Effective organizational change enables an organization to align its processes with the changes in the market (Diefenbach 2007, p.127). Organizational change may be as a result of external or internal factors (Keller & Aiken 2003, p.2). One of the external factors which causes of organizational change is geopolitical pressures. Geopolitical pressures are a part of global crises which have a great impact on an organization and consequently necessitate an organization to undergo change (Palmer & Akin, 2009, p.23). On the other hand, growth pressures, which are a part of internal pressures is also a cause of organizational change. The following paper will discuss geopolitical pressures with respect to 3M and growth pressures with respect to Microsoft and organizational changes in the two organizations. Hyper competition pressures and Gateway Hyper competition is a state of the market which is associated with intense competition amongst the rivals in the market. In a market which is associated with hyper competition, the players in the industry use all the resources available to them to edge out each other out of the market. In such a market, organizations come up with the most appropriate strategies to increase their competitiveness (Ilinitch, D’Aveni & Lewin 1996, p.211). Owing to the intensity of the competition, the establishment of competitive strategies is a continuous affair since each of the players makes moves to respond to changes in the competition in the market. For this reason, it can be acknowledged that hyper competition alters the way in which an organization responds to their customers and their competitors so as to cater for the changing pace of business. This necessitates for an organization to undergo organizational change. Some two decades back, Gateway Inc was one of the reputable computer and electronics manufacturer in the world. However, the company has been undergoing change from time to time so as to cope with the hyper competition in the market. Its business ideals have a close relationship with Dell Corporation; hence the comparison between the two companies in the analysis of hyper competition. The best analysis of Gateway Inc. is to tract its organization changes over its lifecycle since its establishment in 1985. Gateway Inc was established in 1985 as Gateway 2000 ventured in the computer manufacturing and sale industry. The company followed the business model of Dell Computers, a company that had been established a year earlier. Both companies approached the market from a direct sales perspective where they made on order computers. Their target customers were people who had knowledge about computers. As a direct sales company, the company changed its use of technology from mail order, telephone and lastly to the use of the internet. From the medium used for sale, it can be acknowledged that technology plays a major role in hyper competition. The integration of technology in business is one of the sources of competitiveness for an organization (Ilinitch, D’Aveni & Lewin 1996, p.211). This explains the reason as to why changes in technology are associated with many organizations doing business in a market associated with hyper competition. The gradual change in the use of various communication media in both Dell and Gateway is an illustration of the importance of technology changes in a hyper competitive market. Apart from changes in the technology used to make direct sales, Gateway also increased its range of products so as to keep up with the competition in the market. The company included a wide range of personal computers for instance notebooks , storage devices and servers into its product range (IBS Case Development Centre 2004, p.1). This was in an aim of reaching out to specific target markets which required the products. Gateway also included hardware products such as maintenance, trouble shooting and repair services to its clients. With developments in technology, the company ventured into the manufacture and sale of personal devices, entertainment devices and internet services. Differentiation of the products also went a notch higher with special products, for home, small business and big business. This enables Gateway to reach out to a wider market. As Gateway was implementing the changes in its products, Dell was doing the same on the other line; hence intensifying the competition in the, market. From the discussion above, it can be acknowledged that product differentiation and proliferation are important features which enable an organization to cope with hyper competition in the market. In 1996, Gateway Inc changed its business model slightly in a bid to increase its market share. The company established the ‘Gateway Country Stores’ in a bid to bring personalized services to its clients and increase its market share (IBS Case Development Centre 2004, p.1). This was a major step towards enabling the company exploit the retail market. This was one of major miscalculations which the company did. The organizational change was not well planned for. There was no pilot project to test the feasibility of retail market. Generally, it can be acknowledged that this move was a major contributor to the woes of Gateway which followed after that. On the other hand, Dell did nit venture into the retail market wholly as Gateway did. Dell had experimented on the retail market first and identified that it was associated with lower operating margins hence nit good for business. As a result, Dell maintained its two level distribution structure while Gateway adopted the three levels ‘hybrid structure’. From this aspect, it can be acknowledged that Dell’s organizational change was associated with enhanced change management and planning as compared to Gateway. Later on, Gateway Inc entered into a retail alliance with Office Max with an aim of increasing its market share. To the company, this was a strategy which would increase its competitiveness since it would be able to reach out to specific target customers. Developments in internet led to an increased demand for computers and computing devices which had the ability to access it. This led for the need for computer manufacturers to increase their productivity and product distribution. The three level distribution systems was meant to enable Gateway Inc. increase its competitiveness but the lack of planned organizational change plunged the company into years of losses soon after the dot com bust in 2000 (IBS Case Development Centre 2004, p.1). Gateway was acquired by Acer in 2007. This was the last organizational change which Gateway underwent as a company and was meant to revive the company back to its profitable years. Bank of America and New Broom Pressures in Organizational Change As identified in the introduction, organizational change may be caused by external or internal pressures. The above section has discussed hypercompetive markets as an eternal factor influencing organizational change. This section discusses new broom pressures as a factor influencing organizational change. New broom pressures are as a result of changes on organizational leadership and management. On this point, it is worth noting that organizations undergo leadership and management changes as part of their restructuring and continuity processes. The new broom changes may be characterized by overhauls of management staff or changes in the main leaders/managers in an organization. Generally, every manager or leader has different style of management/ leadership from that of his or her colleague. For this reason, new broom pressures are due to occur in instances when the new manager comes with new ways of doing things in an organization. Ideally, the main aim of very manager/ broom is to make maximum impact on an organization; influencing positive changes that in turn impact positively on the performance of an organization. New broom pressures are inevitable in instances when an organization has been on the verge of declined performance hence alluding to the fact new managers have to change the organizational strategy (Palmer & Akin, 2009, p.47). Bank of America is one of the organizations whose change was influence by new broom changes. On this point, it is worth noting that the Bank had been experiencing tough economic times that were reflected in its diminishing profits and incurred losses. As a result of this, the Bank’ board and the government saw the need to rescue the bank from falling by putting in place a new executive (Business Wire 2013, p.1). Additionally, the Bank developed a new organizational structure so as to be able to counter the hurdles which affected its performance in the market. The main aim of the company was to simplify its corporate structure so as to reinvent it importance in the financial and banking industry. Firstly, the company merged with Merrill Lynch & Co., Inc. this merger is expected to have an impact on the securities function of the bank. This will return the Bank back to its top position in the world financial, Banking and financial management industry (Avraham, Selvaggi & Vickery 2013p. 66). The simplified organizational structure is has so far had an effect on all the business functions of the Bank and is expected to reverse the negative trend which the company had experienced in the recent years. In conclusion, it can be acknowledged that organizational change is a product of external or internal forces or both. External forces are those factors which exist in the external environment; hence beyond the control of an organization. On the other hand, internal factors are those which are part of the internal structure / processes of an organization hence can be controlled by an organization. The essay has discussed about the impact of hypercompetition on Gateway Inc. It was identified that hypercompetition influences the way in which organizations respond to the changes in consumer tastes and strategies by theory competitors so as to remain competitive in the market. It was seen that Gateway Inc. had been undergoing organizational change over years so as to keep up with the competition in the market. Firstly, the organization adopted new technologies from mailing to internet so as to empower its direct selling. Towards the end times of the computer manufacturer, it underwent change so as to exploit the retail market and was later acquired by Acer after perennial losses. The essay also discussed the Bank of America with respect to new broom pressures as part of internal factors influencing organizational change. It was identified that new managers often come with new management and leadership styles so as to make impacts on their organizations hence leading them through change. References Avraham, D., Selvaggi, P., & Vickery, J., 2013.A Structural View of US bank Holding Companies, FREBNY Economic Policy Review, pp. 65-72 Business Wire 2013. Bank of America Simplifies Corporate Structure, Business Wire, http://www.fool.com/investing/businesswire/2013/10/01/bank-of-america-simplifies-corporate-structure.aspx Diefenbach, T., 2007.The Managerialistic Ideology of Organisational Change Management, Journal of Organizational Change Management, Vol. 20, No. 1, pp.126 – 144 IBS Case Development Centre, 2004. Dell vs Gateway, Retrieved on 23rd March 2014 from http://www.ibscdc.org/Case_Studies/Strategy/Competitive%20Strategies/COM0036.htm Ilinitch. A., D’Aveni, r., & Lewin, A., 1996. New Organizational Forms and Strategies for Managing in Hypecompetitve Environments, Organisation Science, Vol. 7, No. 3; pp.211-220s Keller,S., & Aiken, C., 2003. The Inconvenient Truth About Change Management, McKinsey& Company, pp.1-20 Palmer, D., & Akin, 2009. Managing Organizational Change : A multi perspectives Approach 2nd Ed.NSW, Australia: Mcgraw Hill Australia Read More