Internal and External Impacts

Assignment 1: Internal and External Impacts

In this module you examined globalization and environmental changes and trends. You also learned that leaders need to stay current on both internal and external forces that impact organization in order to successfully lead/manage change. Therefore, in this discussion assignment, you will investigate how cultural diversity, technology, and communication play a role in impacting the organizational change.

Tasks:

Research the forces that impact organizations, such as globalization and cultural diversity, technological advancements, and communication channels, etc. Use resources from professional literature in your research. Professional literature may include the Argosy University online library resources; relevant textbooks; peer-reviewed journal articles; and websites created by professional organizations, agencies, or institutions (.edu, .org, or .gov).

On the basis of your research and experience, in a minimum of 400 words, respond to the following points:

• Describe the cultural diversity, level of technology, and communication channels at your current (or previous) organization or organizational unit (team). You may also consider within the context of an organization with which you are familiar.
• Reflect back on some of the past change initiatives. Based on the information you have accumulated in this course thus far and your understanding of the change process, assess and discuss to what extent these factors might have played in the level of success of change initiatives at your organization (or in your team). You may also consider within the context of an organization with which you are familiar.
• If more than one factor had an influence, identify the one that you believe had the greatest impact. Explain.

Module 7 Overview

Globalization and environmental changes and trends will be covered in this module. You will study the critical role of cultural differences, technology, and communication in modeling desired changes. A successful change leader stays current on global and environmental factors that may affect the organization in order to know how best to anticipate, respond to, and manage change.

Factors in macroenvironment include economics, demographics, legal, political and social conditions, technology, and other natural forces that impact an organization. The social, economic, political, and technological factors can affect organizational stability and influence the organization to implement changes in order to remain competitive. The factors in the macroenvironment may cause an organization to consider implementation of change because they are basically uncontrollable.

In this module, you will review the different global and environmental factors that affect organizations, and how these factors might impact organizations’ ability to implement change. Furthermore, you will be introduced to appreciative inquiry (AI) philosophy—an approach that enables leaders to understand best practices to overcome hurdles and sustain organizational change.

Future Trends in Change Leadership

The external environment basically consists of the marketing environment, the industry’s environment, and the overall macroenvironment outside the organization.

Let’s look at these in greater detail.

The marketing environment refers to those stakeholders that are in the competitive domain of the organization and its competitors.

The industry’s environment consists of those organizations that compete within the same area, providing like offering of the same products or services.

The macroenvironment is always of a foremost concern to the leader when implementing change as the macroenvironment focuses on the broader social, technological, economic, and political factors that can have a major direct or indirect effect on the organization.

Effect of Globalization

For some leaders, implementing change will have to do with organizational entry into the arena of globalization. Trends in the global arena force leaders to develop a greater understanding of the movement of capital, etc., to take advantage of more attractive situations for generating greater profit for stockholders. Globalization also forces leaders to consider the impact of cultural differences when developing strategies to implement change.

Effect of Social Media

Now and in the future, leadership has to give far more attention to trends in technology and communication when developing strategic plans for implementing organizational change. The vast amount of social media forces more transparency, and therefore, while making the communication of strategies easier, social media has the possibility of making the marketplace far more complex.

The transparency caused by social media allows the internal and external environments to become far more knowledgeable about the organization’s change process. This process of using technology and communication to compete in the global arena will definitely be a major trend affecting change in the future.

Environmental Changes and Trends

Organizations must be aware of changes in the macroenvironment that may affect their organization. This can be done through the process of external environment analysis through an environmental scan.

External Environmental Analysis

Environmental analysis uses scanning, monitoring, forecasting, and/or assessing to identify possible changes and trends taking place in the macroenvironment. This type of evaluation can inform an organization about external opportunities and threats as well as help to develop change strategies that are appropriate for the external environment.

If social, technological, economic, environmental, and political trends reveal any factors that have a negative impact on an organization’s performance, adjustments should be made to accommodate external factors. The changes can include changing business practices, product lines, or performance measures.

The following trends should be considered when implementing organizational change.

• Social trends: The social factors pertaining to lifestyles, attitude, families, education, or criminal statistics can provide a wealth of information about changes in these areas in the social environment. Any change in these areas in the social environment cannot only affect the organization as to how it does business, but these changes can also cause major change in the marketplace.
• Technology trends: Technology is consistently showing us the way business operations may have to be changed. Technology, especially in the area of social networking, can enable small businesses to be more competitive and, therefore, gain a great share of the market.
• Economic trends: Information pertaining to the economy can reveal changes that can be devastating to the organization. Any major issues pertaining to income or labor force, etc., can actually cause business failure, if changes are not implemented very quickly. A rise in minimum wages or an increase in the cost of living can witness major changes in the amount of discretionary income.
• Environmental trends: Of course, the environmental concerns such as basic costs of fuel for operational activities, chemicals, and biological concerns, and protection of food and water can affect business operations because of possible need to change procedures and for the costs of some of these resources.
• Political trends: Political arena can have a major influence on policies, legislation, regulation, political participation, and other court decisions. They can all have an overwhelming impact on an organization. Even a small change in the amount of taxation can be disastrous to an organization by cutting into anticipated income.

A shift in any of the trends in these factors discovered during an external environment analysis can be cause for a major change in organizational procedures. Next, we’ll focus on the impact of the globalization when considering future trends in the organization change.

Globalization

To examine or anticipate future trends in the organizational change, consideration must be given to the global environment. Growth rate in developing countries, escalation of trade exchanges, and establishment of global organizations themselves all add to pressure for the organizational change; this is mainly due to the movement of capital as the aforementioned factors increase.

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The trends in globalization are very attractive from an income standpoint, and make the organizations willing to implement the changes necessary to try and homogenize into the global arena. In short, change management can make the organization willing to embrace globalization.

Now, let’s explore the role cultural differences play in the organizational decision-making process.

Cultural Differences

Culture is the result of continuous interaction between different groups of people, and it plays a significant role in the organizational decision-making process. Culture is a powerful force that becomes ascertained through the behaviors and thinking of those that are involved.

Culture can be easily observed, or it can otherwise be silent and invisible. It determines what and who is valued, or invisibly defines unspoken beliefs, standards, and views. Since a culture is created every time a group of individuals comes together, an organization may have subcultures within a culture that will complicate these characteristics.

Finally, organizational culture will change over time as individuals come and go, and new employees, actions, and communications are integrated into the organization. Organizational leaders must prepare for such change by understanding the way organizational culture affects daily activities and operations.

There are many differences among the cultures of different societies; but it is also important to remember that there can also be numerous differences within one culture. The cultural differences can be one of the reasons that some organizations may implement change since the cultural change can also be strategic change. For example, when a leader decides to change the vision of an organization, this can usually lead to a change in the culture of the organization.

Subcultural Differences

Any type of strategy formulation to implement the change is also a cultural activity. Hence, one of the important aspects of understanding the organizational change is recognizing that the difficulty of implementing change is very much tied to the difficulty of changing people or their mind-sets. For this reason, organizational leaders should be aware that the person influencing a change may not always be the formal leader.

The person influencing the change may be an informal leader within the subculture of the organization, and often this informal leader has a much stronger influence than the formal leader who is in a position of authority. If an organizational leader underestimates this fact or does not recognize this situation, he/she may be surprised with the resistance when implementing the change or leading a project.

Societal Cultural Differences

Because of societal cultural differences, one of the main problems with implementing the change is that some biases are deeply rooted. The cultural conditioning from family, friends, peer groups, books, idols, religions, ethnic groups, etc., can make it very difficult to change mind-sets that have already been established.

Our cultural conditioning shapes our perceptions and views, and therefore it is very difficult to accept the changes that go against those views/perceptions. Since the cultural conditioning can allow individuals to develop either positive or negative attitudes and perceptions, as individuals filter and process new information, they may develop a resistance to certain aspects of proposed or implemented change strategies.

It is essential that organizations pay attention to the cultural differences because culture matters in the management of an organization and its change strategies. Organizations now function and operate in a global arena; therefore, the various cultures of the world are the potential customers of any organization. Due to the competition, the organizations will have to implement changes to address new target markets and to ensure that market segmentation addresses the entire global marketplace.

Since the World Wide Web allows large and small organizations to reach a large customer base, strategies for implementing the change must include activities to deal with all types of cultural differences in order to remain competitive. Organizational culture is very powerful. Organizations have been able to turn themselves around from imminent bankruptcy to prosperity by influencing the ways in which people live and act through cultural norms and values. If done successfully, individual consumers may forget or look past an organization’s poor reputation.

Furthermore, as organizations globalize, their workforce will grow and encompass employees from differing societies/cultures. It is vital that the organizational leaders be aware, understanding, and flexible of when to manage a global workforce because what one employee deems of high value may not be considered in the same regard by another.

Next, we’ll take a closer look at the impact of technology in the organizational decision-making process.

Technology

Technology is a rapidly changing factor in the macroenvironment. It affects markets very quickly because it can develop new products and change workflow faster than what the organizations and markets can adapt.

The impact of technological changes can result in a reduction in the amount of time it takes to complete the tasks, which can lead to the elimination of certain processes and job positions. Hence, the pursuit for organizational effectiveness and the constant need to reduce costs and remain competitive will continuously force organizations to implement technological changes. Essentially, the driving force behind the utilization of technology in implementing the organizational change is efficiency.

Evaluating Cost and Benefits

However, because of the costs of technology, organizations implementing change as a result of technological factors must evaluate the cost and benefit analysis associated with the purchasing process.

With an implementation of change because of technology, organizations may also have to concern themselves with the possible costs involved with having to train personnel to use new technologies adopted. A downside to this is also the resistance to change by some personnel because they now must learn a new process, equipment/tool, or software. This is when a leader really has to communicate the vision and necessity for change.

Access to Greater Expertise Using Virtual Teams

One of the major benefits of technology is that it has provided organizations with the benefit of access to greater expertise. With technological advancements, organizations are now able to implement change to remain or become more competitive because they can create virtual teams, comprising of subject matter experts who are no longer limited or bound by geography.

Virtual teams will enable some organizations to communicate across borders and utilize talents and improve supply chain management with far less costs involved than in the past. To be able to utilize the talents and expertise of others around the world resulting from advancements in telecommunications will greatly enhance the ability for some organizations to grow and compete. This will have a major influence on many organizations during their process of developing strategies for the organizational change.

Technology has vastly increased the utilization of globalization activities, whic

Communication

Clarity of communication is definitely the most important tool in the change process.

Ensure Everyone Receives the Message

Change leaders must be aware of the best means of communicating within their organization to ensure that everyone will receive and understand their messaging. The leader must be prepared for employee feedback and reactions and must be able to hold meetings to accommodate two-way communications.

It is not enough to provide information on the proposed changes, leaders must plan for time so that affected individuals can react and be available to answer questions that may arise. Without keeping employees informed and allowing time for their input and feedback, the organization can create an environment of resistance to change rather than the support it needs.

Communication with the Middle Management

When it comes to communicating the change initiatives within an organization, the organization has a tendency to focus on letting the top-level management be responsible for communicating all components of the change process. It is worth remembering that the middle management is often the one that actually performs a lot of the key communications and that it is often composed of these individuals who will handle the majority of ongoing questions from the employees.

Therefore, it is essential for the top-level management to ensure that the middle-level management is well informed and to try and develop employee buy-in among these individuals. This is an opportunity to create the guiding coalition proposed by Kotter (1995).

Impact of Social Media

When discussing communication, it is important to remember that social media has a vast impact on why organizations may have implemented changes. As the utilization of social media increases, leaders will have to evaluate its usage to find out the following: (a) who matters, (b) how these individuals may be able to influence others, and (c) try to figure out how to engage these individuals. In essence, this would create the guiding coalition needed to support the change.

This trend in using social media enables those willing to communicate and evaluate these communications to be able to be competitive by increasing the size of their market. The vast number of individuals using social media will force organizations to develop communication strategies for strategic changes to benefit from this vast amount of media growth.

Social media will also cause businesses to operate more transparently, and they will have to communicate their positions for change more effectively. Therefore, the integration of all communication channels will be necessary to convey change information, but fully utilizing these channels will help to facilitate the change in a much easier way.

Reference:

Kotter, J. P. (1995). Leading change: Why transformation efforts fail. Retrieved from http://moravian.org/images/Leading_Change_-_John_K…

Appreciative Inquiry to Sustain Change

Effective follow-up and long-range support plans are required to sustain change as even the most skillful organizational change might falter without these two elements. AI—an approach encouraging understanding of best practices in organizations—can enable leaders to sustain the organizational change.

Following Up

Achieving positive change is a major achievement; however, effective follow-up to sustain such change is even more critical. Kotter and Cohen (2002) stresses the importance of the follow-up because though short-term wins in the early stages of successful change generate a lot of enthusiasm, they might also decrease the team’s sense of urgency and momentum when these are most needed during any resistance.

To do this, in addition to implementing Kotter’s original eight-step change model, leaders can maintain a sense of urgency by constantly comparing the organization’s performance to its competitors’ and evaluating future performance avenues that will give it an edge. This will require considerable input on part of the leaders and their guiding teams. Usually, facilitating change requires leaders to empower guiding teams with strategies aimed at removing barriers to change and breaking the pattern of change resistance in the organization (Kotter & Cohen, 2002).

Reference:

Kotter, J. P., & Cohen, D. S. (2002). The heart of change: Real-life stories of how people change their organizations. Boston, MA: Harvard School Business Press.

Maintaining Change

One of the most challenging steps in change management is maintaining change or “making it stick,” as Kotter refers to it. The leader’s task is to sustain the sense of urgency and enthusiasm until the change initiative takes root and integrates into the organizational culture.

AI is a process, which engages individuals within an organization to maintain change through renewed and focused performances. Cooperrider, Whitney, and Stavros (2003) defined it as follows:

AI is based on the simple assumption that every organization has something that works well and these strengths can be the starting point for creating positive change. Inviting people to share stories about their past and present achievements, assets, unexplored potential innovations, strengths, elevated thoughts, opportunities, benchmarks, high-point moments, values, traditions, core and distinctive competencies, expressions of wisdom, insights into the deeper corporate spirit and soul, and visions of valued, and possible futures can identify a positive change core. (p. 3)

AI, therefore, positively appreciates the organization’s present and potential strengths; additionally, it encompasses Kotter’s notion of using stories and examples to weave change into an organization’s culture. The philosophy encourages members of an organization to consider the following: What does the organization look like at its best? What will the organization look like at its future best? What capabilities does the organization possess to move to its future best?

To enable an organization to reach its potential, AI utilizes the 4-D process, which involves the following steps:

1. Discover: The identification of organizational best practices
2. Dream: The envisioning of an organization’s potential
3. Design: The creation of processes, which maximize an organization’s potential
4. Destiny: The sustenance phase, involving the implementation of processes, which helps members to adapt to change

AI can be used as a process to sustain the positive change in an organization, to continually bring new members into the culture, and to maintain focus on the need to improve. The philosophy supports broad participation and is compatible with Kotter’s eight-step method, or any of the change methods covered in this course. AI does not eliminate the need for occasional large-scale change, but it enables change sustenance and creates a change-friendly organization.

Reference:

Cooperrider, D., Whitney, D., & Stavros, J. (2003). Appreciative inquiry handbook. Bedford Heights, OH: Lakeshore Communications.

Summary

In this module, you examined the significance of globalization and environmental factors and the trends that impact the organizational change. You explored the critical role of cultural differences, technology, and communication channels. The successful change leader stays current on all these factors in order to know how best to anticipate, respond to, and manage change. And to sustain change and “make it stick,” the AI philosophy and technique was introduced.

Here are the key points covered:

• A successful change leader stays current on both internal and external factors that may affect the organization in order to know how best to anticipate, respond to, and manage change.
• The social, economic, political, and technological factors of the macroenvironment can affect an organizational stability and influence the organization to implement change to remain competitive.
• Leadership must attend to future trends in technology and communication when developing strategic plans for implementing the organizational change.
• Organizations must constantly be aware of changes in the macroenvironment that may affect the survival of the organization. This can often be done through the process of external environment analysis or a basic environmental scan.
• Culture is a powerful force that becomes ascertained through the behaviors and thinking of those that are involved. Culture is created every time a group of individuals come together; an organization may have subcultures within a culture.
• It is essential that organizations pay attention to cultural differences because culture matters in the management of an organization and its change strategies.
• The impact of change because of technology is mainly due to technology being able to reduce the amount of time it takes to complete certain tasks and the fact that technology can also eliminate certain processes and job positions all together. The driving force behind the utilization of technology in implementing the organizational change is efficiency.
• Clarity of communication is definitely the most important tool in the change process. The change leader must be aware of the best source of communication within the organization to ensure that everyone will receive the message.
• The rise in use of social media has a great impact on the communication channels of an organization and can substantially impact change efforts.
• Effective follow-up is almost as critical as the introduction of a positive change. The leaders can facilitate follow-up through the implementation of Kotter’s eight-step method and maintaining a sense of urgency among the members.
• AI can make change stick; additionally, it supports Kotter’s eight-step method. AI’s core philosophy assumes that each organization can use its past and present achievements as well as its potential strengths to facilitate positive change.
• AI uses the 4-D process to enable an organization to reach its potential and create a change-friendly organization.