Professional Documents
Culture Documents
CHAPTER NO 3
This occurs as a result of reduced demand for products and sales, decrease
in market share and bad investment decisions.
There are six types of environmental pressures for change that organization
faces:
Pressures to carry out fashionable management changes.
Pressures that are forced on the organizations from outside agencies.
Broad changes in geopolitical relationships necessitating changes in
organizational operations.
Pressures associated with declining markets.
Hypercompetitive business pressures.
Pressures to maintain corporate reputation and credibility with
stakeholders.
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6.
1. FASHION PRESSURES:
This occurs when organizations imitate the structures and practices of
other organizations in their field or industry, usually ones that they
consider as legitimate or successful.
Organizations forcefully trying to keep up with trends from other
organizations and industry practices.
Organizational change can occur in response to the latest management fad
or fashion: in order to be seen as professional, modern or progressive
managers may change their organizations in line with the latest innovation
and management practices.
For example: In 2001 Boeing Co. initiated a series of changes under the
direction of its CEO, Philip M. Condit. These changes were said to imitate
those made by Jack Welch at GE, a company that is well recognized as
having made a number of successful transformational changes over the
past two decades.
These mimetic changes included like setting up corporate learning and
training unit, changing the culture, restructuring the business, freedom,
setting high performance standards and access to corporate funding.
Some Fads may assist organizations, others do not deliver their promise of
better organizational performance, still others may have devastating effects
on large numbers of organizations and their employees.
2. MANDATED PRESSURES:
Organizations having to deal with news laws and practices being put in
place by external forces.
This change is forced onto an organization through formally mandated
requirements, where organizations are forced to take on activities similar to
those of other organizations because of outside demand placed on them to
do so.
These mandated pressures may either be formal or informal:
Formal Coercive Pressures: include government mandates such as new
laws and policies.
Organizations are forced to change to meet new legal and other legislative
requirements such as pollution requirements, tax laws etc. Subsidiary
organizations may be forced to adopt accounting standards, performance
criteria.
Informal Coercive Pressures: include commitment to a certain types of
organizational changes such as empowerment.
3. GEOPOLITICAL PRESSURES:
This is in the form of immediate crisis or longer terms geographic
realignments.
4. MARKET DECLINE PRESSURES:
Declining markets for products and services places organizations under
pressure to remain relevant.
When current markets begin to decline there is a pressure to find newer, more
viable markets.
For example Steve jobs returning to Apple and Verizon communications
choosing to focus on wireless.
5. HYPER-COMPETITION PRESSSURES:
Organizations are forced to deliver goods and services more quickly, more
customized and more flexibly.
For example Dell VS Gateway and Dell VS HP and Lenovo.
You tube disrupting television and My Space may next disrupt music.
6. REPUTATION AND CREDIBILITY PRESSURES:
Reputational pressures can come very suddenly.
For example Mattel toy manufacturer recall and Walt Disney company.
Change is associated with maintaining proper corporate governance
mechanisms to ensure a positive corporate reputation.
All organizations are not the same and not all managers respond to external
pressures for change.
Some resist them, some are slow to respond and some may not recognize
them as a real threat as other managers do.
So why external pressures do not always lead directly to organizational
change, there are four debates about this issue:
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1. Growth Pressures
As companies age, Change in the form
of growth is brought about.
Need for rules, policies, and procedures
once an organization reaches a certain
size
Some managers resist the growth of
their organization beyond where they
lose personal control of the day-to-day
operations beyond this point they lost
job satisfaction
2. Integration and
Collaboration Pressures
Some changes are made in order to
better integrate the organization or
create economies of scale across
different business units
Goal is to have better coordination
and collaboration across multiple
business units of the company in
order to produce a customer-oriented
culture
3. Identity Pressures
Employees might lack cultural identity
with the organization and its name brand
Goal is to enhance the identity and
commitment of staff to the organizations
brand as well as to achieve service
excellence
Eg. the U.S. Mint seen as a slow,
inefficient organization became more
modern, customer-focused