Concord Bookshop Paper
June 19, 2012
Steve Young, BS, MBA, Ph.D.
Concord Bookshop Paper
Organizational change means many things. It can mean introducing a new enterprise resource planning system to coordinate and standardize internal processes, shutting down a factory, selling off a noncore business, or laying off employees. It could also mean entering a global market, integrating acquired companies, and outsourcing nonstrategic activities (Spector, 2010). Three faces of organizational change were identified to help leaders search for effective strategic renewal efforts. These are turnaround, which aimed at financial improvement, tools and techniques, which aimed at improving internal organizational processes, and transformation of employee behaviors, which aimed at enhancing human capabilities. Although leaders have the option to use each of the faces of change as separate and independent, effective change efforts combine the three (Spector, 2010). Turnaround is an attempt to improve the immediate financial position of an organization by focusing on the income statement and the balance sheet. Although it may be necessary, it is not sufficient to ensure long-term effective change. The activities of the turnaround effort include reducing capacity, shutting down facilities, reducing levels of pay, health insurance, and retirement benefits. Turnaround does not by itself create sustained outstanding performance. Psychological impact of the workforce reductions on employees lead to a sense of insecurity, which shows less productivity and less commitment to the organization. Companies that engage in downsizing cannot count on those efforts finding their way to the bottom line, it does not provide a “quick fix” in a sinking consummation. Turnaround efforts that initiate strategic renewal guarantee that financial discipline will follow behavioral change (Spector, 2010). Another non-behavioral face of change targets on tools and techniques. Some technique and tool changes occur in a virtual behavior vacuum, requiring no significant alteration in patterns of behavior. One most common tool used to help achieve an effective strategic renewal in recent years is outsourcing. Outsourcing is a deliberate decision to farm out certain value chain activities to external specialists and strategic allies. Companies find the techniques of outsourcing to be of strategic importance for three main reasons: First, the outsourcing saves money by transferring jobs to lower-paid workers. Second, it enables companies to concentrate on core competencies. Last, it offers a hedge against shifting technologies and customer preferences by lowering fixed costs and building flexibility. Although outsourcing used as a change tool to enhance organizational performance, its effectiveness can, and often is, undermined, by the manner in which that tool is applied (Spector, 2010). Also in particular, effective use of outsourcing mandates attention to the behavioral percussion to those employees who stayed with the company. According to Barthelemy (as cited in Spector, 2010, p. 17), “Outsourcing has a negative impact on employees’ sense of job security and loyalty.” This means that outsourcing causes an employee atrophied commitment with the company that leads to decrease in quality of job performance. Outsourcing is one of many change techniques and tools that necessitate special attention to accompanying behavioral change to gain the needed organizational benefits and advantages (Spector, 2010). Transformation of employee behavior enables the organization to meet the demands of its strategy while achieving and sustaining outstanding performance. Behaviors involve what employees do and how they do it, how much effort they bring to their roles, and how persistent they are in achieving desired outcomes. Behavioral change desires for a long-term alteration. New behaviors incorporated for a short period and...
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