Page 339 - DMGT402_MANAGEMENT_PRACTICES_AND_ORGANIZATIONAL_BEHAVIOUR

Management Practices and Organisational Behaviour

Notes information technology is also making organisations more responsive. The team
approach adopted by many organisations leads to flatter structures, decentralized
decision making and more open communication between leaders and team members.
(b) Globalization: The global economy means competitors are likely to come from across
the ocean. The power players in the global market are the multinational and trans-
national organisations. This has led companies to think globally. There are no longer
any mental distinctions between domestic and foreign operations. Globalization of
an organisation means rethinking the most efficient ways to use resources,
disseminate and gather information and develop people. It requires not only
structural changes but also changes in the minds of employees. Successful
organisations will be the ones that can change in response to the competition. They
will be fast on their feet, capable of developing new products rapidly and getting
them to market quickly.

(c) Social and Political Changes: A firm's fate is also influenced by such environmental
pressures as social and political changes. Many new legal provisions in the corporate
sector get introduced every time that affects organisations.
(d) Workforce Diversity: Related to globalization is the challenge of workforce diversity.
Workforce diversity is a powerful force for change in organisations. The demographic
trends contributing to workforce diversity are

(i) The workforce will see increased participation from females, as the majority
of new workers will be female.
(ii) The workforce will be more culturally diverse than ever (part of this is
attributable to globalization).
(iii) The workforce is aging. There will be fewer young workers and more middle
aged workers.

(e) Managing Ethical Behaviour: Employees face ethical dilemmas in their daily work
lives. The need to manage ethical behaviour has brought about several changes in
organisations. Most centre on the idea that an organisation must create a culture that
encourages ethical behaviour. Society expects organisations to maintain ethical
behaviour both internally and in relationship with other organisations. Ethical
behaviour is expected in relationships with customers, environment and society.
These expectations may be informal or they may come in the form of increased legal
requirements.

These challenges are forces that place pressures to change on organisations. Organisations
cannot afford to be rigid and inflexible in the wake of environmental pressures, rather
they must be dynamic and viable so that they survive.

Example: For Tata Iron and Steel Company, foreign investors (suppliers of capital)
are a new force for change. In the past, Tata emphasized the creation of jobs in its community
of Jamshedpur, a city in eastern India.

Tata’s 78,000 workers receive lifetime employment, along with free housing, education
and medical care. The company, in turn has benefited from a complete lack of strikes in 60
years. But investors interested in Tata have asked how the company might improve its
profit margin of only 3.7 percent. (Note: Tata’s managing director Jamshed Irani, “We will
now be forced to balance loyalty against productivity).
2. Internal Forces: Besides reacting to or anticipating changes on the outside, an organisation
may change because someone on the inside thinks a new way of doing things will be

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