How Organizations Overcome Environmental Changes free essay sample

How organizations overcome environmental changes? Organisations need to deal with environmental changes with appropriate strategies. First, organisations may choose to wait and see. Such strategy has its advantages and disadvantages. For example, facing a significant technological change, some companies may choose to integrate the new technology into their products. If they are successful, the rest companies’ ‘wait and see’ strategy is obviously unwise. However, if they failed, the rest companies’ ‘wait and see’ strategy appears wise. As a result, strategic decision making is impacted on and opportunities may either be lost or capitalised on. Second, organisations may choose to change in response to environmental changes through either proactive or reactive. Proactive change involves actively attempting to make alterations to the work place and its practices. Companies that take a proactive approach to change are often trying to avoid a potential future threat or to capitalize on a potential future opportunity. Reactive change occurs when an organization makes changes in its practices after some threat or opportunity has already occurred in the external environment. As an example of the difference, assume that a hotel executive learns about the increase in the number of Malaysians who want to travel with their pets. The hotel executive creates a plan to reserve certain rooms in many hotel locations for travelers with pets and to advertise this new amenity, even before travelers begin asking about such accommodations. This would be a proactive response to change because it was made in anticipation of customer demand. However, a reactive approach to change would occur if hotel executives had waited to enact such a change until many hotel managers had received repeated requests from guests to accommodate their pets and were denied rooms. In reality, companies may use a combination of both proactive and reactive approaches. Proactive approach is highly common when an industry is new with little or no change. The bellwether company entering the industry is making all of the strategic decisions or being proactive. However, because of its success, competitors gradually enter the market, resulting in the turbulent change of the competitive environment. Consequently, the reactive change is on the part of the new competitors as well as the bellwether company. To overcome environmental changes, companies may also choose the merger or acquisition strategy. A merger is defined as the joining of two or more organizations to constitute a new combined, legal entity. An acquisition is defined as the purchase of more than 50 percent of the voting shares of one organization by another, but the two organizations are still separate legal entities with the acquiring organization running as the parent company and another as a subsidiary. For example, recent study discloses that the merger and acquisition strategy in the global automobile industry will be further enhanced in the near future in order to deal with the threat of global financial crisis which decreased the consumers’ disposable income and increased the debt of auto makers and suppliers that have to save their organisations through merger and acquisition Ddiscuss the importance of organisational culture in strategy implementation Organisational culture can be defined â€Å"as the system of shared beliefs and values that guide and direct the behaviour of members, can have a strong influence on daily organisational behaviour and performance. † (1) Reflection to leadership Successful strategy implementation needs strategic leadership. Strategic leadership is the ability of influencing others to voluntarily make decisions that enhance prospects for the organisation’s long-term success while maintaining short-term financial stability. It includes determining the firm’s strategic direction, aligning the firm’s strategy with its culture, modelling and communicating high ethical standards, and initiating, shaping and implementing changes in the firm’s strategy, when necessary. Strategic leadership sets the firm’s direction by developing and communicating a vision of future and inspires the organization’s members to move in that direction. (2) Enable to create mission vision The vision is the source and the main idea of a company. The mission aims to give the direction which presents the unique scope of business, its vision and specific competence competitive advantages, and to tell employees, consumers, and shareholder what the firm is. For example, IBM’s vision is: solutions for a small planet. Mission is: At IBM, we strive to lead in the invention, development and manufacture of the industrys most advanced information technologies, including computer systems, software, storage systems and microelectronics. Create a shared vision to manage strategic change: objectives and vision of both individuals and organization should coincide. There should be no conflict between them. Senior managers need to constantly and consistently communicate the vision not only to inform but also to overcome resistance through proper communication. Strategy implementers have to convince all those concerned that the change is not superficial. The actions taken have to be credible, highly visible and unmistakably indicative of management’s seriousness to new strategic initiatives and associated changes. 3) Help to create a better strategy (4) Staff motivation Strategy implementation requires special motivation to achieve objectives. The motivation system functions according to the qualities and mechanisms of motivation, which is developed during the stage of entry strategy preparation. First and foremost, this system has to inspire employees involved in the process of strategy development and implementat ion to orient their mindset toward a strategic way of thinking. Formalizing the strategic motivation system includes establishing a system of daily incentives for employees, especially those who are responsible for strategy development and implementation. The formal system is presented in a document, where all suggestions about motivation and incentives are developed and described. It includes all moral, social, and financial instruments of motivation of individual employees and groups of employees. Special recognition and awards should be given to those who go above and beyond in creating and implementing strategic ideas. (5) Increase or enhance adaptability skills