Importance of Change in Business

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Everybody in this lifetime has more than likely heard the saying, “If it ain’t broke, don’t fix it”, but unfortunately in today’s world and economy – change is extremely crucial. In businesses all over the world, most companies won’t make it without change within their organization. The world is changing daily along with the population, customer trends, and most importantly, technology. Discussed in the text it’s been proven that, “To date, major change efforts have helped some organization adapt significantly to shifting conditions, have improved the competitive standing of others, and have positioned a few for a far better future” (Kotter, 2011, pg 3).

Businesses who fail to embrace change can easily end up out of touch and unable to compete under outdated conditions with other businesses and markets. This paper is to discuss the everchanging demands within the globalization of the markets and competition while specifying the forces that drives the needs for change from Kotter’s Leading Change. This paper will also compare and contrast with ideas about how conflict might effect change from the text: The Dynamics of Conflict written by Bernard Mayer.

The problem is, is that no one likes change so organizations and their managers must learn how to embrace and implement change efficiently and effectively. It’s up to managers to discover and create ways to overcome their employees’ natural repulsion to change, because managing change effectively can make all the difference between staying in business and becoming irrelevant to customers and society itself. Today’s managers and leaders must worry about addressing customer needs in a fast-paced environment impacted by social, economic, political and cultural shifts. In the business environment, the concept that stays the same is the continuous presence of change happening.

Before in the older days such as the 1960’s, people did not have much to worry about when it came to change within organizations, again if wasn’t broke why fix it? But the challenges, most companies face today are completely different forcing leaders to adapt to making dramatic improvements to accommodate the hazards appearing and more opportunities for individuals. According to Kotter, “Globalization, in turn, is being driven by a broad and powerful set of forces associated with technological change, international economic integration domestic market maturation within the more developed countries, and the collapse of worldwide communism (Kotter, 2011, pg 20).

Most companies and organizations are unable to avoid these types of forces that cause changes no matter what. Because change was not common before and because it’s frowned up most times, leaders do not have the ability sometimes to lead change in an efficient and competent manner. Kotter even reports there are general organizations and agencies that even must succumb to change such as school systems, hospitals, charities, and government departments.

For organizations, technological change can be the most positive transformation a company can make which according to Kotter in figure 2-1, can be “Faster and better communication, faster and better transportation, and more information networks connecting people globally” (2011, pg 20). The goal for any new office technology is to speed up workflow processes, giving employees the ultimate capital, which is more time to focus on the important tasks and goals. Streamlining mobility and remote connectivity would allow companies allows organizations to connect with the best talent, all over the world, instantly Implementing the newest technology.

According to Mayer, “Sometimes communication takes more energy and focus than we are able or willing to give at critical point, and it is easy to become discouraged or hopeless about communicating effectively in serious conflicts” (Mayer, 2012, pg 12). Improving communication tools within organizations can have a tremendous impact on the conflict it sometimes may cause. Communication is king and organizations are continually looking to improve and accelerate communication, and new technology is built with that obligation in mind. Investing in new systems will help to streamline both internal and external communication with clients and vendors so that everyone can always be in the know.

Mayer says that, “Successful communication requires that people enter into a de facto partnership with each other in which informal but powerful norms and strategies are developed to allow communication to occur. This involves a reciprocal process of sending and receiving messages about how to communicate, what is working in an interchange, and how to adjust communication to make it work better” (2012, pg. 12). When communication is clear and concise within the internal network of a company, effective interactions occur and conflict most times can be lessened or avoided completely.

Another driving force for the need of change in various organizations comes with international economic integration. In Leading Change, Kotter notes that international economic integration can sometimes mean few tariffs (GATT), currencies linked via floating exchange rates, and more global capital flows (2011, pg. 21).

Economic integration is the agreement between countries, which aims to reduce costs for both producers and consumers and it’s end objective is to remove barriers to the free flow of goods and services in order for member countries to share a common market and harmonize their fiscal policies. With economic integration, it encourages trade liberation and leads to market expansion, more investment into the country and greater diffusion of technology. Importantly, it creates more employment opportunities for people to move from one country to another to find jobs or to earn higher wages. As an example, industries that require mostly unskilled labor tends to move production to low wage countries within a regional cooperation.

With advantages, there are also disadvantages to economic integration such as trading blocs being created, trade diversion, and national sovereignty. Sometimes due to trade barriers, trade is redirected from a non-member country to a member country in defiance of the inefficiency in cost. A country sometimes has to stop trading with a low-cost manufacture in a non-member country and trade with a manufacturer in a member country which that has a higher cost. National Sovereignty requests member countries to give up control to some extent over key policies like trade, monetary and fiscal policies. The higher the level of integration, the greater the degree of controls that needs to be disposed of especially in the case of a political union economic integration which requires nations to give up a high magnitude of sovereignty.

When countries integrate, these disadvantages are likely to take place which can cause a loss of power, according to Mayer “Power is the currency of conflict” (2012, pg. 67). It is true that, “In fact, almost every move we make to further our goals in a conflict situation involves the exercise of some kind of power, no matter what our role is” (Mayer, 2012, pg 67) meaning although countries may intend to do better for everyone as a whole, this still creates conflict no matter what function they play. Decisions are sometimes made that do not always seem for the best in the beginning, which is why “If we do not understand the nature of power and how power affects conflict, we cannot understand conflict itself” (Mayer, 2012, pg 67). Economic integration in its entirety aims to establish peace and security with member countries and while protecting shared interests from external risks. It also promotes the exchange of goods and increases labor flexibility.

Kotter states that economic and social forces driving the change in organizations also create more hazards including more competition and increased speed but more opportunities as well such as bigger markets and fewer barriers which then in turns creates more large-scale changes in organizations (2011, pg. 21). These transformation methods include reengineering, restructuring, quality programs, mergers, and acquisitions, strategic change, and cultural change.

Although these success stories are great, Kotter notes this does not happen without a couple things, one importantly being “…this process is never employed effectively unless it is driven by high-quality leadership, not just excellent management – an important distinction that will come up repeatedly as we talk about instituting significant organizational change” (2011, pg. 22). Leadership is mostly the biggest source of resistance to change. Leaders accept the business case for change and are some of its biggest advocates.

However, change often requires leaders to relinquish control, and that might decrease their power in the organization. A good leader will consider the employee’s humans needs within the organization. Mayer states “A the center of the wheel of conflict model are the human needs that drive people’s action, including their engagement in conflict” (Mayer, 2012, pg 21). Basic human needs according to Maslow’s theory are food, clothing, and shelter. Being a leader, one must understand these needs because they are powerful motivators when it comes to change. The application of effective leadership means,

“Effective leaders must be flexible and responsive to new realities. Leaders must recognize that their success in helping group members solve any given problem or fulfill any given need will result in a new set of circumstances and a new set of needs. Leaders who can’t move up the levels will be left behind as followers cease to be motivated by the needs they have already fulfilled. Effective leaders are flexible, not stubborn or unwilling to address new realities” (paras. 8).

The key to conflict intervention is the capacity to get to the right intensity of understanding and communication in each conflict.

Overall change is an everlasting thing that is constant in both the world in general and in organizations. Change is to always be embraced rather than feared. Also, with businesses will change allow them to be able to lay the foundations for long-term success. In today’s world, I’ve noticed the business environment has been changing at a considerably faster pace compared to barely not that long ago. More and more of these changes are caused by people’s lifestyles and how they shop, work, and spend their leisure times are uncertain to remain the same.

Since the age of the internet, lots of these changes have been occurring at significantly faster rates. Look at the way we interact via social media before it was just messenger services and before that emails were barely being invented. An organizational change is a detrimental for any company that wants to survive and thrive especially in today’s age, but conflict will be present and it’s up to leaders how to navigate themselves and employees through it all to see success.

Cite this paper

Importance of Change in Business. (2021, Mar 21). Retrieved from https://samploon.com/importance-of-change-in-business/

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