ORGANIZATIONAL CHANGES AND IMPACT ON DECISION MAKING 2
The environment in which organizations operate change so quickly that managerial plan is often redundant as soon as they are made. The organization environment refers to some pressures and forces that an organization is enclosed within, they tend to impact the way the organization is operated. When tackling the organization environment, the following are the external forces that are often tackled they include; demographics, political, international, environmental, technological, and economic factors. On the other hand, the internal forces that influence the rapid change in the management decisions include; suppliers, competitors, unions, customers, governments and distributors (Jones, 2010).
The factors that often instigate the rapid changes in the environment are often the aspect of uncertainty. Some factors cause uncertainty within the organizational environment they are complexity, dynamism, and richness (Jones, 2010). Apple incorporation is a company that deals with the exploitation of simple technology and transform it into complex forms. The company focuses on the creation of mobile phones, Mac laptops and other software that are integral in the operation of their products (Mana, 2013).
The second factor is environmental dynamism; this refers to the extent to which specific and general environments are altered over time. It is divided into two facets unstable and stable. The unstable refers to a dynamic environment that rapidly changes hence resulting in the long term decision made by the management being redundant (Jones, 2010). The Future first company deals with the stock market which is a very unstable industry. The stock market alternates from time to time with the fluctuation caused by the immense changes in the environment. The aspect makes the operation of the environment unstable, and the management has to be flexible when it comes to making decisions. The decisions are made within a short span of time to ensure that they meet the demands of the fluctuating market (Futurefirst,2016). Contrariwise, the decisions of management are at times based on predictable factors. The predictable of the factors within the environment often lead to a stable environment.
The last factor refers to the environmental richness which is the varying amounts of resources that are present in the success of the organization (Jones, 2010). A good example is a multinational company that operates on a larger scale. Unilever Company is a multinational company that offers diverse products to their customers. The company has a wide range of resources that have to be exploited to ensure that their supply chain and distribution network are interlinked with their global objective (Unilever global company website, 2016). Unilever company is categorized under the environmental rich organizations, the decisions made by the management have to be altered from time to time to reflect the changes taking place in the different countries that it does conduct its activities.
When focussing on this notion, it is important to narrow down the scope of individual forces that render the decisions made by the managers redundant. The first aspect is the political factors; the political environment rapidly alternates between periods of calm to turmoil, from sound to unjustifiable policies made by the governments among other aspects. Organizations are not often party to the policies that are made by the governments on the exploitation of resources. At times the political situation tends to change all of a sudden, and the management decisions are impacted negatively resulting in them going back to the drawing board (Study.com, 2016). An example is a political insecurity as a result of terrorism; organizations are not prepared for terror attacks since they happen all of a sudden and cause devastating effects. In France, the terror attack that occurred happened suddenly, the management of the hotel were not prepared for the tragedy and they had to revise their disaster management strategies. The revision was done to ensure that they prevent the magnitude of the impact of the attack from occurring (Galliard, 2016).
The second aspect is the economic factors; the economy changes from one moment to another. Inflation tends to affect the prices of goods in the market. The increase in the levels of inflation often results in the increase in the prices of commodities while the reverse is true. The inflation persists for a long time the economy is often driven to periods of depression that have a negative impact on the organizations (Study.com, 2016). With time the economy does begin to recover and enters periods of revival which later transcends into periods of boom. During boom the organizations operate on a full scale and the chances of making long-term stable decisions becomes easy (Bolman, & Deal, 2003). The above summary is the analysis of the business cycle that impacts the economy and in the case of faster changes the manager’s previous decisions are rendered inapplicable.
The third aspect focuses on the rapid changes in consumer preferences. The consumer tastes often change with respects to their wants and needs. The changes in consumer needs tend to affect the decisions that the managers make on the production, distribution, and marketing of their products (Bolman, & Deal, 2003). A good example is McDonald’s; the management extended their menu to satisfy the needs of their customers. When the company was venturing into Asia, they were forced to include spicy dishes in their menu to meet the needs of their customers. The spicy dishes were introduced to complement their customer needs in the new environment (Thetravelalmanac.com, 2016).
The fourth aspect refers to the labor unions. The labor unions protect the needs of the employees, and they are formed to carry out a collective bargaining for the employees to improve their welfare. When the labor unions are campaigning for the welfare of their employees, they rarely inform the organization’s management of their decisions (Bolman, & Deal, 2003). At times the decisions made by the management are often rendered redundant when there is a strong labor union in the country.
The fifth force deals with the distribution aspect. The distribution network is made of many members and for the organization to succeed they have to integrate the various members into one unit. The aspect results in the creation of strategic alliances with the members to ensure that they establish symbiotic and competitive relations. The rapid changes in the distribution network on the resource available and the number of members often impact negatively on the decisions made by the management (Bolman, & Deal, 2003). A real life example is the expansion of Target retail store into the Canadian market, the store deals with the supply of consumer goods in retail stores. The company undertook the rapid changes in the distribution network as a result of the expansion led to the company being overstretched. The impact was that the distributors failed to supply the products to the stores within the expected time. Most of the stores opened in the country were partially full (Wahba, 2015). The management had not underestimated the failure of the distribution network, and their expansion plans were rendered redundant in Canada.
In conclusion, the environmental forces have a significant impact on the decisions that are being made by the management. The managers have to be flexible and fast when it comes to making sound decisions on the changes in their environment. The forces and pressures that impact the organization as discussed in the essay can be internal or external. The external forces are based on the PESTLE analysis while the internal forces are based on the SWOT analysis.
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