Question 1:
The turnaround change consists in a radical change in the organization, in their mission, vision, and goals to achieve new objectives. The turnaround change, different to the constant change phenomenon as developmental transitions and task-focused transitions. The paradigms of an organization are the current framework where the company is, what is good and bad for an organization is inside the paradigm that influences the organizational climate and the employees behavior. A company with a complex structure and more than 500 hundred employees develop in the time resistance to changes, necessary to the organization to adapt to the changing business environment. A company that is not able to adapt to the economic and social changes will fall in growth in the future. The companies to get over the resistance to changes needs a radical change or turnaround change, change its paradigms and thinking structures. For that reason, a new leadership in its management with a hard-nosed strategy is necessary in the new times for the company (BMZ, 2015).
A company with more than 500 hundred employees, twenty years with the same structure and decision-making frame requires a frame-breaking change or turnaround. Examples of a frame-breaking change are General Electric Company (GE) and BHP Billiton. The case of General Electric Company represents the change of paradigm to go from a company that produces home and industry appliances to a financial services company. Jack Welch, the former Chief Executive Officer of General Electric from 1980 to 2001 transformed the company using normative and coercive tactics (Euchner, 2013). He had to use the existent normative of the company and at the same time transform them with the goal to increase the cash flow of the company with new activities of the company as the financial services. Today the company has more than 50% of revenues from the financial services maintaining its previous core business, the home, and industry appliances by license to other companies worldwide. He understood that the brand of GE is very powerful, but the current businesses of the company won't grow (Graetz, et al., 2011).
The second case is the BHP Billiton and the pursuit of the company to take over the Rio Tinto company by hostile ways. That intention required a new CEO, Marius Kloppers, with a frame breaking style with the goal to accomplish a takeover of Rio Tinto by BHP Billiton (Barnett, 1953).
Question 2:
Empowerment is a multidimensional and social process where leadership, communication and self-directed groups replace the mechanistic pyramid structure for a more horizontal structure in which the participation of each within a system are an active part of control of it in order to promote the wealth and potential of the human capital that later will be reflected not only in the individual but also in the community in which it plays (Euchner, 2013).
The relational empowerment focuses on the conditions in the workplace such as variety, autonomy, workload, organization, and support position within the company; these are the structural characteristics of employment. Variations of these conditions result in a form of job satisfaction but put aside the perception that the worker has such variations in environmental conditions (BMZ, 2015).
The motivational empowerment is defined as the mental performance of each structural change in the work environment. Such interpretations generate four dimensions: a) the meaning is a congruence between an employee's beliefs, values, behavior and job requirements; b) competition referred to rely on the skills in the course of employment; c) the determination referred to feelings of control over d) the impact work is defined as the sense of being able to influence important outcomes in conjunction with the organization (MacKechnie, 2015).
The general idea of empowerment is the complementarity of the two types and which to analyze the process is necessary to know whether there are favorable conditions for an empowered environment and also how employees perceive these conditions.
This process of empowerment starts stimulating leadership of middle managers in the organization to fulfill a role of guides to the objectives of the company and not of supervisor's compliance with them (Steinberg, 2012).
The advantage of an empowerment program in a company is the shared values between the directors of the company, the middle management and the employees of the company. An empowered employee and middle manager facilitate the execution of the objectives and goals of the company. The empowerment may generate a force of growth and change from the bottom to the top of the company that benefits the company as a whole (Tidd & Bessant, 2013).
The disadvantage of an empowerment program is when the empowered employees did not follow the same values and goals of the administration of the company bringing a phenomenon of control failure in the company affecting the performance of the company in production and sales (Steinberg, 2012).
Question 3:
Trust and openness: When an organization trusts in his employees and staff gives the confidence to the employee to open his mind and give ideas to the company. An open environment gives incentives to the employees to make mistakes until a successful idea is achieved. An incentive policy in the organization for innovations and creative thinking will develop an innovative climate for the organization and improve the organizational climate. The organization must transmit confidence that the employee will be congratulated and promoted thanks to an innovative approach and will not affect its performance if the innovative proposal is not useful for the organization. The open doors policy improves the communication of innovative ideas from employees to managers (Tidd & Bessant, 2013).
Conflict and debate: The conflict is not necessarily bad for the company, by definition the conflict is a difference between the aspirations of two or more individuals or organizations. The conflict in organizations brings new opportunities to innovation. A scenario without conflict means that all directors, managers and employees are comfortable with the current situation of the company (Graetz, et al., 2011). A conflict scenario brings the necessity to innovate and change. The debate between the different levels of the organization helps to create innovative solutions to the previous conflicts. The relation between management and unions in organizations are a traditional example of conflicts where each entity has particular interests.
Risk taking: The innovation process brings an intrinsic risk in the process. The innovation process consists in a change in the procedures and know-how of the company. Changes due to an innovation process may bring successful results in sales and revenues in the company or bring bad economic results. The risk is a decision that companies do not have the opportunity to choose or not. In a changing environment, the worst risk for the company is to do anything; the company must adapt to the external changes in the economy, demographics, and geopolitics. For an oil industry company represents less risk to invest in renewable energy sources than not to invest; the energy map has changed dramatically in the last twenty years and represents a high-risk decision not to invest in other sources of energy (Euchner, 2013). An example of risk taking are the investment plans of energy companies where they must invest with current conditions of the market, but with the risk that the conditions may change in two or three years. A refinery construction may take five to seven years, that is, an economic cycle of depression and booming.
Question 4:
The demand-side factors have a follower innovation attitude that imitates the innovation of other leader organizations to avoid losing competitiveness or to maintain position in the market (Graetz, et al., 2011). In a first glance, the demand-side factor reduces the risk of the organization to adopt an innovation that does not have proven results for the organization. The negative aspect of the demand-side factor is that the company cannot be a leader in the market due to its follower attitude and always will be a leader (which took a risk) before the studied organization (BMZ, 2015). An example of demand-side factors are the steel shops or oil companies that adopt a new technology of extraction or mineral processing offered by a technology company that has been tested before to its adoption in the company.
The offer-side factor has a leader innovation attitude that has a higher risk than the demand-side factor but with the possibility to obtain more competitiveness and economic benefits in the market sector of the company (Graetz, et al., 2011). An offer-side organization with a successful innovation will have followers that will emulate its behavior bringing benefits to the leader company (Euchner, 2013). The negative aspect of the offer-side factor is that the innovations are not successful, and results may affect the economic results of the company, and the ability of the company to leave the innovation may be difficulties by the economic costs of the innovation (MacKechnie, 2015). An example of offer-side are the mobile technologies companies that manufacture tablets and cell phones. The successful company is the company that creates a new product in the market where others follow the design and technology.
The company must have a multifactorial demand-offer strategy where the main goal of the company is a long-term economic growth (Barnett, 1953). One example of that strategy was Nokia, the electronic manufacturer that in the nineties was a leader in the cell phone market, but once other companies as Blackberry and Apple surpass Nokia, the company adopted a follower strategy adopting bigger screens and third-party software (Microsoft Windows) to survive in the market.
Reference List
Narayanan, V. K., 2000. Managing Technology and Innovation for Competitive Advantage. New York: Prentice Hall.
Barnett, H. G., 1953. Innovation: the basis of cultural change.. s.l.:s.n.
BMZ, 2015. GIZ. [Online] Available at: https://www.giz.de/akademie/de/downloads/Lehrbrief_15_-_Managing_Change_and_Innovation.pdf[Accessed 16 January 2016].
Euchner, J., 2013. Industrial Research Institute. [Online] Available at: http://www.iriweb.org/Public_Site/RTM/Volume_56_Year_2013/July-August_2013/Innovation_is_Change_Management.aspx[Accessed 16 January 2016].
Graetz, R., Rimmer, M., Smith, A. & Lawrence, A., 2011. Managing organisational change. 3rd ed. Milton: John Wiley & Sons.
MacKechnie, C., 2015. Chron Small Business. [Online] Available at: http://smallbusiness.chron.com/innovation-change-business-1501.html[Accessed 16 January 2016].
Steinberg, S., 2012. Change management 101: How businesses win with innovation, Huffington Post. [Online] Available at: http://www.huffingtonpost.com/scott-steinberg/change-management-101-how_b_2371384.html[Accessed 16 January 2016].
Tidd, J. & Bessant, J., 2013. Managing innovation: integrating technological, market and organizational change. 5th ed. West Sussex: John Wiley & Sons.
