Today’s organisations are facing both external and internal forces that drive inevitable changes. External forces such as changes in market trends, demographics, customer satisfaction, differing expectation about quality and as well as emerging new technologies are having profound impact on organisations across the world. Internal factors that may also lead to need change are financial constraints, the requirement to do more with less cross functional teams, mergers and acquisition and due consideration for employees which play significantly important role in organisations ability to compete in a globalised business environment. “Planned organizational change occurs when there is failure of people to make the business continuously adaptable. Thus, organizational change is a by-product of some kind of failure” (Cuizon, 2009).
I have decided to discuss a business owned by a family member that is or has under gone some major changes after operating for a decade without a major change. It is a medium sized t-shirt printing business in London providing garments as souvenir items. As a result of a turbulent financial market, most businesses have suffered setbacks in some ways but in contrast the tourism industry in London has witnessed a boom defying beliefs. It essentially remains a low barrier entry business which attracted many new entrants leading to hyper competition. As a result the business lost market share in a market that was not declining. New businesses were able to deliver goods cheaper and quicker and managed to seize market share from established businesses. There were mandatory pressures where new EEC directives were for use of environmental friendly chemicals affecting profit margins which also impeded desired change. The basis of its early success became the source for arrogance and believing that it could maintain market dominance hence profit. According to Palmer such practices lead to organization become “learning disabled” as they do not respond appropriately to pressure for change (Palmer, 2009, p.62).
The formal coercive external pressure from EEC and internal pressure in the form of hyper competition, forced the business to make fundamental and strategic changes hence became more adaptive to factors affecting its survival conditions. The management decided to increase its profit margins as opposed to business growth by collaborating with its suppliers to provide finished products hence reducing its production capacity in the UK. Before the change was implemented it was discussed with employees where some remained skeptical and had reservations. The management over a period maintained open communication channels and with the help of training, employees were able to adjust to changes.
The second scenario is where the government had plans for restructuring and restraining funds for the treatment of National Health Service (NHS) Patients within the dental service. Plans were drawn to meet target base treatment making dentists feel uncomfortable with their profession believing that appropriate care could not be delivered under such circumstances. Funding was allocated to Primary Care Trusts who then decide on the individual practices as to how much funding they ought to receive. This implied that dentists who reached their target early were unable to treat any more patients until funding was issued again. The unwelcoming changes imposed by the government were met by further changes that were designed by dentists who then began offering private treatment. This eventually became the mimetic isomorphism where practices began imitating this new trend which was more profitable as patients’ perceived private treatment to be superior (Palmer, 2009, p.52). As Palmer points out that “it would encourage new entrants to do the likewise up to a point where the competitive effects of the market take hold and entry become less attractive (Palmer, 2009, p.53).
The external coercive pressure forced to meet new guidelines which also became the internal pressure in the form of reputation and credibility of each practice. The discussed practice attempted to move away into private market and became innovative where it offered various dental plans that could be tailored made according to one’s desire. Maintaining and enhancing dental reputation became an important part of the practice’s survival. The forced change meant that power remained very concentrated that led to decisions being quicker in response to changes by allocating resources. The introduction to other treatments being offered less than one roof made it distinctive practice where new broom changes proved successful.
Both examples discussed above faced external and internal pressures that resulted in change. Failing to meet its desired objectives would ultimately force the business to cease or to take corrective measures in the form of radical changes. Depending on the size and the nature of the organization these pressures would produce trouble dissimilar effect. The garment printing business was primarily affected by internal pressure followed by the outside mandatory pressure whereas the dental practice providing service experienced the pressure in reversing order where mandatory pressure was primary and internal pressure for reputation was secondary.
CIPD (2010) Change Management. [Online] UK: Chartered Institute of Personnel and Development. Available from: http://www.cipd.co.uk/subjects/corpstrtgy/changemmt/chngmgmt.htm
Cuizon, G (2009) What is Organizational Revolution? [Online] Canada: Suite101.com Media Inc. Available from: http://www.suite101.com/content/what-is-organizational-revolution-a94409
Palmer, I., Dunford, R., and Akin, G., (2009) Managing Organizational Change. 2nd Edition. New York: McGraw-Hill Irwin.