Change Affecting the Current Organization

Change affecting the current organization.

1.0 Change that exists in today’s economy

Change is prevalent in every country’s economy and this has enabled change in the organization’s method of working.

In general, economy is affected by the following factors, i.e. PEST Analysis

• Political

• Economic

• Social

• Technological

A PEST analysis is an investigation of the important factors that are changing which influence a business from the outside.

1.1 Political

The strategic decisions of the business are strongly affected because of the development of political and legal environments. Government legislation has significant effect in today’s economy. Political environment has a very tremendous effect on business operation no matter what is its size, its area of operation; whether the company is domestic, national, international, large or small. Every company has to obey the rules and regulations of the country the company is operating. Every country has its own political system. A government control’s and restricts a company’s activities by encouraging and offering support or by discouraging and banning or restricting its activities depending on the government. The political condition changes from time to time, and so the company has to be able to adjust with the changing environment. In general, political change means a change in government or a government policy.

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1.2 Economic

It comprises all the factors and sub factors related to the economy of the country, and these factors have an impact on the business activities. Some types of business are favorably affected by the government policy; some are adversely, while it is neutral in case of some. Currency exchange rates, Employment rates, Wage rates, Government economic policies, Other countries economic policies, Lending policies of financial institution, Changes from public to private ownership etc also are strong background that affect change in organizations. It is related with the change in economy such as: rise in living standard, level of demand, rise or fall in interest rates, etc.

1.3 Social

Human beings are social by nature, so they want to live in a society. Socio-cultural environment includes many aspects of society and its various constituents, such as beliefs, expectations, attitudes, demographic components, and customs. Demographic trends of customers and employees have significant effect on change. Due to globalization, migration throughout the whole world is taking place, especially from Asia. Social change is related with the change in lifestyles, for example: women going out to work, changes in buying habit, men taking care of their home and children. How we behave, our gender and ethnic group, education level, the conditions and communities in which we live, are all the elements of social environment. The socio-cultural factors, such as buying and consumption pattern of people, their language, benefits and values, customs and traditions, taste and preference, education and awareness are all factors that affect the business directly.

1.4 Technological

Technological factors include the inventions and techniques which affect the way of doing things. A technological change is one which involves the practical application of scientific or other new ideas in a business or industrial context. Technological change is related with the development of new ideas and interventions. Technology is the most important influence upon society, it is autonomous, and causes social change. Latest technologies like: computer, internet, telephone, ATM, is used to manage and provide access to information easily and quickly. The technological environment is changing very rapidly and to compete in this competitive world the any organization has to adopt the latest technology to survive in the market.

2.0 Evaluating the strengths and weakness of bureaucratic organizations.

In general, organization is viewed as group of people working together to achieve goals. Edgar Schein (1965) defines an organization as the rational coordination of the activities of a group of people with the aim of achieving an explicit goal or purpose. An organization normally achieves its purpose through the division of labour and function and through a hierarchy of authority and responsibility.

Organization could be simple or complex depending upon their purposes, size, technology or nature of activities. In 18th century, three streams of concepts, i.e. bureaucracy, administrative theory, and scientific management were developed. These concepts are popularly known as the classical concepts or classical theories of organization.

Bureaucratic organization are such types of organizations which are based on efficiency, hierarchy, written rules of conduct, promotion based on achievement, and a specialised division of labour.

“A system of law where leaders obtain their offices through legal procedures and the power to rule is vested in their positions rather than in themselves as individuals” (Weber, 1947).

Max Weber describes an ideal approach to outline the characteristics of a fully developed bureaucratic form of organization. In general, bureaucracy has come to have a negative implication and many tended to ignore it, however, the features that characterize bureaucracy have become inevitable with the growing size and complexity in organizations, so there is need to understand and improve bureaucracy instead of ignoring it.

2.1 Strengths

Some of the principle, prescriptive, normative functions that bureaucracies hold have significant impact to organizations. Whether and to what extent these positive features really obtain in an organization depends on actual practice. Some of the advantages of an ideal bureaucracy are as follows:

• The rules, regulations, training, specialization, and structure impart predictability and thereby ensure certainty and stability to an organization. Work is performed in accordance with organizational rules, this therefore leads to a standardised high quality product or service; rules are also used to ensure fairness and counter arbitrariness.

• Tasks are divided into specialised jobs, so that everyone becomes an expert in their area of work, and this results greater efficiency in the organization as employees know exactly what to do and how to do.

• Routine work is assigned with fixed responsibilities at various levels.

• Clear distinction between employers and employees with vertical communication channels and clear chain of command.

• Personnel structure with consistent patterns and recruitment. People are selected and promoted on the basis of merit and qualification, and this helps to increase efficiency as only the most able are selected and promoted.

2.2 Weakness

Bureaucracies, particularly in large complex organizations, may have unintended consequences which are often referred to as disadvantages aspects of bureaucracy. The disadvantages of bureaucracy are as follows:

• Rules and regulations of bureaucracy are often rigid and inflexible encouraging status quo.

• It emphasizes on mechanical way of doing things, giving primacy to organizational rules and regulations rather than individual’s needs and emotions.

• Organizational structure does not promote cooperation and participation.

• Organizational “success” (sustainability) and function of ‘smart’ direction from top. The credit always goes to the top, main players are shadowed.

• Much paper and routine type work.

3.0 Comparing alternative forms of organizational development

Today’s organizations operate in a rapidly changing and competitive environment. As a result, one of the most important assets for an organization is the ability to manage change and for people to remain healthy and authentic.

“Organization Development is a system-wide application of behavioural science knowledge to the planned development and reinforcement of organizational strategies, structures, and processes for improving an organization’s effectiveness”, Cummings and Worley, “Organization Development and Change”, Sixth Edition, South-Western Publishing, 1997, p.2. (Free management library)

OD involves working with the organization as a system to bring about the planned and controlled change of an organization in preferred direction, it also attempts to change the organization as a totality by changing the organization’s structure, technology, people or task. It focuses on the interaction between the organization and its environment.