Issues in Contemporary Business Essay Example | Topics and Well Written Essays - 2500 words

Issues in Contemporary Business - Essay Example The way change is implemented and managed in an organization, such practice is known as organization change management.† (McNamara, n.d.) 1.3 Explanation Turner (2011) has explained that organizational change is generally referred to as that transformation through which a company goes as result of change in management, restructure, strategic orientation, development of new goals, merger of acquisition etc. Challenges which result from the events of organizational change have a ripple effect on the whole organization. According to Turner (2011), this happens because business units are completely integrated and therefore a change in one unit has a domino effect on the other units. Effectively managing this procedure is an art upon which a lot of consideration and expertise is provided so as to make it a new area of expertise known as Change Management. The process of change management is evolving due to changes in the preferences of customers, business landscapes, improved proces s and technologies etc. (Organizational Changes, n.d.) 1.4 Factors driving Changes and Innovations in Organizations Some primary drivers behind the process of organizational change include: Inadequate Financial Performance According to Soosay (2005), those companies which do not get able to meet their benchmarks of financial positions are compelled to examine their business processes and objectives. This is the major driver behind the organizational change. If a new competitor enters into the same industry having advanced technology or cheaper labor, companies those were formally ruling the market and enjoying prosperity can find that their market share is cannibalizing. A failure to maintain its position as a major competitor stresses the company to rethink and reformulate the resource disposition and opportunity cost of capital. (Soosay, 2005) Product Life Cycle Mecca (2004) state that when life cycle of a product comes to an end, companies are compelled to cut down the operating cost of production or prepare in order to get exit from the market. At this stage, many companies prefer in getting merged or acquired by larger companies. This leads to structural changes in which a company can either refocus on new business opportunities or maintain its profitability. Strategic Objectives Lloyd (1998) states that if a company prefers to change its strategic objectives then it also leads to change in entire organization for instance if a company plans to shift its focus from customer oriented to product oriented, then new business procedures and processes will be required to assist this re-orientation. This type of change can result in firing redundant staff and enhancing production process. Mergers and Acquisitions According to Govindarajan (2011), significant re-engineering and cost cutting is required when firms plan to consolidate its operations or getting merged with some other company. Significant challenges are developed when the companies integrate. These c hallenges force to streamline the operation of both the companies. (Govindarajan, 2011) New Technology Lloyd (1998) further states that significant driver of organization change can be the adoption of new technology. Consider an example of internet