The change agent must have some understanding of the position of the organization in its environment. The central question here is whether the environment is of such a nature that it allows the organization to survive and flourish:
Ĺ Does the organization stand a real chance?
Ĺ What does the organization have to do to attain its objectives?
Ĺ What opportunities does the environment provide?
Ĺ What can the organization learn from the developments in its environment?’
Ĺ What differences of opinion are there on this issue?
Seek information about the following issues to gain a picture of the turbulence and hostility of the environment:
Ĺ new technological developments relevant to the organization
Ĺ the economic environment and the position of the organization in market developments Ĺ socio-cultural changes
Ĺ political and legal developments Technological Developments
Technology is changing more quickly than ever. When I was a little kid, the only man who could program a computer in The Netherlands was a professor, who happened to be a world chess champion as well. Now toddlers are so familiar with their Game Boys that they develop RSI complaints. Thirty years ago, an IBM electronic typewriter, the one with the golf ball, was a mean piece of technology. Now we can buy one, for a considerable price, at an antiques auction. Think of all the developments in IT, telecommunications, genetics, biotechnology, nanotechnology, new materials, agriculture and construction. The development of the Internet and all kinds of expert systems, for example, has made it possible for western companies to take their call centers to countries such as India or Bulgaria, where the wages are a fraction of those in western countries, and people are quite willing to learn the languages of all the countries that the call centers serve.
So here too, some questions have to be answered:
Ĺ What are the decisive technological innovations in the organization’s field of business?
Ĺ What are the consequences of these technological innovations for the organization and how can it cope with these consequences?
Ĺ What opportunities do these developments generate?
Ĺ How is the competition dealing with these innovations?
Ĺ What is the influence of the Internet in this line of business?
Ĺ What are the opportunities here?
Ĺ How can and should the organization make use of these opportunities?
Ĺ Again how do the opinions of organizational members differ here?
Economic Environment
The economic environment involves the organization’s market, its competition and its suppliers. Markets are changing quickly today. Apart from the sheer increase in the number of people living on the planet, global communications, transport and trade have increased at an unprecedented rate. The economies of countries such as China and India are growing spectacularly. The number of member states of the European Union doubled in recent years, resulting in greater availability of relatively cheap labor from the accession countries. The separate national economies of the world, stemming from completely different cultures, are becoming more and more interdependent. In many lines of business competition has become a global affair, making the fight for sufficient market share much more fierce and complex.
The grueling competition has forced organizations to adapt by reorganizing themselves.
Some of these reorganizations have proved to be quite successful for the moment. Conse- quently, there is the possibility that competitors may have gone through one or more such transformations, which may have made them much stronger while making the approach of other players completely obsolete.
A number of different principles have given rise to all kinds of transformations. However, many of these transformations are only successful in financial terms, and often only in the short term as well. When we look at the development, motivation, pleasure and health of the employees involved, a different image arises. The main objectives of these transformations are higher production speed, lower production costs, better product quality and/or being more oriented to the (end) customer (Hammer, 2001). Here follows a – far from exhaustive – list of principles underlying these transformations:
Ĺ Minimizing labor costs, by automation or by taking production to countries with lower wages.
Ĺ Making more efficient use of the means of production, for instance by using them 24 hours a day, seven days a week, 365 days a year.
Ĺ Deploying employees to do (more) different tasks.
Ĺ Deploying employees only when, and as long as, needed.
Ĺ Introducing a kind of ‘neo-Taylorization’ in jobs; that is, simplifying and standardizing work by hooking employees up with highly computerized robots – for example on production lines – or expert systems, as in call centers.
Ĺ Introducing production lines that can manufacture different products, in huge or small quantities on demand.
Ĺ Accomplishing better coordination between marketing, production and research and development.
Ĺ Reducing the number of hierarchical levels and pushing responsibility down to the lowest level possible, for example by forming autonomous task groups or quality circles, to improve product quality and reduce errors.
Ĺ Just-in-time management and other logistically driven forms of organizing, to prevent needless investment of money in materials, half-products and products that do not generate an immediate return on investment and take up too much storage space.
Ĺ Outsourcing all kinds of staff and service departments, in order to be able to focus on one’s own core competencies.
Ĺ Integrating one’s company in a product chain with other specialized companies, in which each company does what it does best, aiming at bringing products to the end client at maximum speed, for a minimum price and at optimal quality.
Ĺ Strategic alliances with other companies, in order to be able to influence all kinds of developments.
Ĺ New forms of organizing, such as in matrix, project and network organizations.
Ĺ Mergers or acquisitions, to accomplish advantages of scale or vertical integration, at a national or international level.
Ĺ Trying to become a learning organization, resulting in the development of core compe- tencies that cannot easily be copied.
It is important to realize that none of these approaches isthecure. In fact most of them have serious undesirable side effects, many of them can fail and some of them are mutually exclusive. Still, it is crucial to know whether, and how, the competition is using these ideas and which – if any – of them is appropriate for the organization that is the subject of the change. Studying the economic environment therefore has to encompass studying how the competition has adapted to its economic environment and keeping oneself informed of the latest developments. It might turn out that the company has much to learn. This implies that, as a change agent, we should have – and maintain – some general knowledge about the different approaches and their advantages and disadvantages. It is also recommended to have some specialists in that discipline in our own organization or professional network.
All in all, studying the economic environment of the organization implies finding answers to the following questions:
Ĺ Is the market in which the organization operates growing, shrinking or stable?
Ĺ Are there big changes in the market?
Ĺ Can the organization deliver in such a way that it keeps up with the competition?
Ĺ What does the competition look like?
Ĺ What kinds of adaptations have the competitors made to changes in the market?
Ĺ How successful were these adaptations?
Ĺ What can be learned from that?
Ĺ Is the organization reaching the right customer population?
Ĺ What is the situation with suppliers?
Ĺ What can and should the organization do in all these respects?
Ĺ How do the organizational members differ in opinion here?
These questions are essentially similar to or the same as those in the section about adaptation (see Chapter 1).
Socio-cultural Changes
Almost all organizations are confronted with the challenge of feeling at home in a rapidly changing, multicultural environment, where they have to cope with the influences of vaguely known powers from all over the world. Some of these developments open windows of vast opportunity, other options are far from friendly. A shortlist of socio-cultural developments would involve the following phenomena:
Ĺ the increase in worldwide transport and telecommunications and the resulting globaliza- tion of our whole life
Ĺ the increasing control over our life by computers and databanks Ĺ the increasing role of the Internet
Ĺ the greater role of television Ĺ global streams of migration
Ĺ the increasingly multicultural nature of our societies and workforces Ĺ the ageing of the working population in the West and in Japan
Ĺ changing relations between the sexes in different cultures (division of roles; increase in divorce rate; the declining incidence and importance of the ‘classic’ family)
Ĺ the shift from agriculture to industry to services Ĺ the shift from manual work to knowledge work
Ĺ fundamentalist opposition to all this and the reactions to this opposition, resulting in still wider gaps, terrorism and wars
Many of the above-mentioned phenomena imply that change has become a part of our culture. Though this may seem a simple conclusion, it is also a highly paradoxical one, because a culture, as we saw in Chapter 1, is supposed to be a set of standard solutions to standard problems. In some tribal societies, people still consult their parents when they need advice. If they don’t get a suitable answer they go to their grandparents, and if their grandparents don’t know the answer either they can still turn to the spirits of their ancestors. That is what culture is all about. It is telling that in western society when we do not know whether to use control-alt or alt-delete we’re unlikely to ask our grandmother.
All in all, it is becoming more and more important to be able to adapt to big changes in the nature of work and organizations. This is a matter of learning and acquainting ourselves with the right knowledge, time after time, because knowledge and skills tend to become obsolete at an increasing rate. Consequently, it is no longer sufficient to be only well educated when we enter the labor market. We should be, of course, but on its own it is not enough. In order to adapt to ongoing changes, we must learn and educate ourselves again and again during our whole working life: life-long learning has become a necessity.
Though continuous adaptation to change and life-long learning are necessary, it has proven to be far from easy, especially when the changes are forced on us. When these demands are felt to be infringements and intrusions on the way we want to live, they will induce stress and threaten our well-being and health in a major way (see for example Benson, 2001). These problematic consequences imply that the change agent – and all other stakeholders for that matter – must be very alert to stress reactions, try to implement changes so that these changes evoke the least stress responses and abstain from needless
changes. Being able to bring about changes without inducing needless stress may well become the most critical bottleneck for the survival and flourishing of our organizations (Schabracqet al., 2000; Schabracq, Cooper & Winnubst, 2003).
For a change agent who aims at cultural change, the story about change described above implies that they must examine whether the above-mentioned forms of change and development are relevant to the organization in question:
Ĺ What socio-cultural changes in the organization’s environment are relevant here?
Ĺ How do they affect the organization?
Ĺ What possible implications are there for the workforce?
Ĺ What opportunities do these changes and developments carry with them?
Ĺ What can and should the organization do with these opportunities?
Ĺ What differences in opinion play a part here?
Political and Legal Developments
Though political and legal developments have their own dynamics, they often are a response to the other changes in our societies as well. After all, politics and law are supposed to be ways to regulate our societies as well as possible; that is, so that everything more or less runs well, preferably in a way that is not morally offensive. As a result, there are a lot of political decisions and laws that are specially focused on mitigating or preventing the negative effects of the developments in the previous sections. Though these laws and rules have very understandable and even laudable objectives, they often do interfere with the easiest ways of arranging things in organizations. Examples of legislation focusing on mitigating the effects of some of these developments can be found in the fields of working conditions and working in general. Other examples are environmental and antitrust laws and changes to them.
For legal and political developments the same applies as for the previously discussed developments: some can interfere with organizational interests, while others may provide all kinds of opportunities by opening up lucrative niches. Political decisions and laws do not have to be limiting and restrictive per se. As it is, sometimes governments intentionally open up spaces of opportunity by providing infrastructure and subsidies. Because a change agent specializing in cultural change is less likely to be specialized in such subjects, it may be advisable to consult experts in these fields. Examples are a specialized lawyer, an expert in subsidies and a knowledgeable civil servant.
All in all, the change agent can get some idea of the relevant legal and political develop- ments by answering questions such as the following:
Ĺ Have there been changes in the political environment, for example because of recent elections, that are of influence to the organization?
Ĺ Have there been changes in taxation?
Ĺ Has legislation changed recently in a way that affects the functioning of the organization?
Ĺ Is it possible to structure the project in such a way that it takes advantage of any subsidies or tax advantages?
Ĺ How has the competition handled these changes?
Ĺ What can and should the organization do in these respects?
Ĺ And what about differences of opinion on these issues?