Introduction
Organizations, like people, are in a constant flux of change. In the past, however, organizations have often been accused of changing at a much slower pace than is optimally effective. In today’s increasingly global and competitive marketplace, however, it is important to study and better understand how organizations change in order to maintain that competitive advantage that sets them apart from others. Organizational change is an entire discipline that leaders focus on in order to determine the best course of action to take when condition warrant a different course of action than is currently being taken. This brief essay will argue that organizations change as a result of shifting demographics, technological innovation, and increasing globalization.
Shifting Demographics
Many organizations change because of a direct response to various changes within and throughout the environment. One example of this is reflected in the reality that the global workforce today, particularly in the West, is aging. The average age of the employee is gradually rising in line within increasing life expectancy and better healthcare options. As a result, organizations are changing to better account for this fact and by streamlining their existing pool of labor. One way that organizations have changed in this regard is reflected in the types of benefits that are offered to their employees (Gunnar, 2015). More flexible work arrangements, for example, are often implemented, such as flexible work hours and job sharing opportunities. These changes are resulting in older individuals desiring to work even beyond the traditional age of retirement. Another way that organizations change in terms of shifting demographics occurs when employees begin to leave because of unhappiness or some other factor. When this happens, there is a corresponding loss of knowledge that occurs quickly within the organization. As a result, organizations need to develop strategies that effectively enable them to retain these employees and to help them plan for retirement in such a way that is mutually beneficial to all parties involved.
Technological Innovation
Organizations are also thrust into a period of change as a result of technological innovation. This is even more noticeable today, as rapid developments in technology are pervasive through all levels of many organizations. This is reflected by Moore’s Law, which stipulates that the complexity represented within computer circuits will actually double every 18 months (Volkoff, Strong, & Elmes, 2007). This increase in complexity will actually result in no increase in cost, but organizations will be forced to adapt and change on a near continual basis in order to keep up to date. There will be occasions where technology almost certainly produces such noticeable and radical developments that make it difficult for companies to adapt to. The resulting paradigm shift may be uncomfortable, but change requires organizations to leave their comfort zone in order to realize more positive benefits down the line.
Perhaps an easy example of how technology forces certain organizations to change can be reflected in the music industry. Going back to the 1980s, compact discs were first introduced as a more appealing product when compared to the traditional LP record that had long dominated the market. Essentially, music labels were able to charge double for the compact disc, yet technology enabled them to mass produce the product for a fraction of the cost in comparison to the record. This illustrates how technology can lead to organizational change.
This technology, however, led to complacency in the industry, as organizations enjoyed record profit for the better part of two decades (Weick & Quinn 1999). When technology had evolved to the point that music sharing became a possibility on the Internet, startup software companies such as Napster and Kazaa became am almost immediate threat to the core of the music business. In fact, most music companies industry wide found themselves totally ill prepared for the technological advances that were occurring at near break neck speeds. Today, the industry has responded be developing paid services such at iTunes, but it took years to get them to market, during which time untold billions of dollars were likely lost to the slow pace of the impending change.
Increasing Globalization
The world, while not shrinking physically, is becoming more interconnected than ever before in the history of mankind. This means that a business that once operated only within a regional and limited scope can now, literally, engage in business activities halfway around the world with relative ease. This has not only served to increase opportunity, but it has effectively elevated the level of competition as well. Within this genre, globalization can be seen to be a direct threat to many organizations today, while at the same time being the source of tremendous opportunity as well. This all depends on how the organization in question chooses to adapt to such changes (Tsoukas & Chia 2002).
Today, organizations are discovering that it is often much cheaper to produce and manufacture certain goods in various regions of the world as opposed to others. In a similar realm, it also cheaper to deliver certain services to people in various sections of the world, effectively increasing the possibility of increased and sustained revenue growth. This new paradigm shift has caused many organizations around the globe to begin to avail themselves of various manufacturing facilities built in a country other than their home base. China is an often cited example in this regard, but numerous other countries are possible targets as well, depending on the industry in question (Cameron & McNaughtan 2014). To account for globalization, one way that organizations today are changing is by engaging is more outsourcing opportunities than ever before.
Outsourcing involves an organization in one country making use of facilities or the labor force in another. While this began largely with products being manufactured and produced, this has now evolved into services being offered and moved to places where cheaper wages are possible. An example of this can be reflected in many western owned software development companies moving many of their key operations to Indian companies. Other examples include call centers in the Philippines, garment factories in Cambodia and Bangladesh, and the list goes on.
Many organizations are adapting to this change because they realize that outsourcing, in effect, forces them to operation within an institutional environment that is almost entirely different from the one they are typically used to in their home country. There is a great deal of employee stress that is to be considered when making such a move, and an entire workforce must be retrained in order for the organization to continue to compete globally in the new marketplace. These changes may occur gradually, but they are noticeable. They often result in the complete overhaul of various divisions and departments within the organization, and often times they result in the cut of products and services that have long been offered. Globalization means that an organization who used to be on the top in one particular product quickly finds themselves outgunned by a competitor, forcing them to rethink the products and services that they offer. In the end, globalization, even with all of its negative components, has often resulted in organizations being able to cut their costs while still offering its products and services at the same price that they are used to (Weick & Quinn 1999).
Conclusion
What have been mentioned to this point are just a few of the many ways that organizations are changing today. There are certainly many more that could be discussed in a more exhaustive and analytical study about the topic. One such way is through growth. Organizations typically start out small, but many grow quite quickly. When this happens, change is almost certainly a given. Successful companies are forced to adapt by moving to larger locations, enter into new markets, streamline the products and services that are offered to the end consumer, and ultimately measure its growth to ensure continued and sustain profit growth in both the near and long term (Succeeding with organizational change 2015).
Other organizations may change on the basis of poor performance. Consider an athletic team as a prime example. A poorly performing team will almost certainly make changes to personnel. If the team cannot attract a suitable based of fan support, it is not unheard of for the entire organization to either collapse or move to another city where they hope that their fortunes will be greater. Other organizations must change because of similar poor performance related factors. If an organization is performing poorly, then there is a perceived threat to its continue viability and ability to stay functioning. In such cases, radical change may be necessary (Weick & Quinn 1999). In this situation, the organization would change out of necessity. Either the change occurs in a positive way, or the organization will have to shutter its operations. Changes in leadership might come about, new technology be implemented, and possibly new markets explored. Each of these areas are certainly avenues by which today’s organization begins to change.
BIBLOGRAPHY
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VOLKOFF, O., STRONG, D.M. and ELMES, M.B., 2007. Technological Embeddedness and Organizational Change. Organization Science, 18(5), pp. 832-848.
WEICK, K.E. and QUINN, R.E., 1999. Organizational change and development. Annual Review of Psychology, 50(1), pp. 361-386.
