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Factors that affect an organization's capacity and willingness to change need to be examined and exploited. Organizational culture, which is a set of shared values and assumptions that are followed by the members of an organization, plays an important role in affecting the attitude of an organization to change. If an organizational history has been unwelcome to change in the past, it is highly unlikely that an organization will be willing to accept change in the future. Sometimes, core competency can assist in the process of change (Porter, 1980).
Lastly, at the individual level, the process of change is completed when it is implemented within a company. The task of the general manager then becomes of envisioning the future of the change and of facilitating cooperation among the workforce. He is also responsible for implementing change at various levels of production, development and distribution. In particular, what needs to be examined is with what speed change ought to be brought into the company and how businesses will strive to attain it. Company employees may sometimes favor change in certain areas but can be opposed to other types of change in the rest of the divisions. In this case, it is beneficial to alter the type of changes sought after by the company instead of changing the way of implementation (Porter, 1980).
Managing the Industry Environment
Strategic management is one of the primary concerns and tasks of the general managers which includes setting the direction and goals and allocating resources efficiently so that unwanted costs are avoided and the targets achieved (Chandler, 1963).
The general managers are required to be far-sighted so that threats and opportunities for the business can be identified and their operations adjusted with these external events while putting strategies into practice (Mintzberg & Waters, 1985). Other companies in the industry need also be considered while drawing up and following strategies.
Thorough Industry Analysis
Change can be referred to as novelty or originality or anything new, in general. It can also refer to the changes within the company, even if it is the last company in the industry to adopt the change already initiated in other organizations. These are the two opposite extreme cases with regard to change and in reality; cases will dwell between these two extremes. These cases call for competitor's attention and it is essential to know how the competitors are responding to change (Porter, 1980).
Porter (1980) identified some of the key forces that operate in the industry's environment which are now, highly considered while drawing up business strategies. Porter claims that general managers should not only look out for present competitor's strategy and behavior to change but they should also look after those firms that could enter the industry and bring in more competition.
Porter also claims that a third kind of force, that is, substitute products need also be identified while pursuing business strategies and implementing change. Sometimes, even the present competitors can become a serious threat, if they take advantage of change and find other substitutes and start manufacturing it (Porter, 1980).
The basic idea of Porter's recommendation is that a company needs to look out for its competitors and the possibility of substitute products and general managers should deal with it accordingly. The general manager should also contemplate about the customer's views and opinions concerning a product or a service of different companies, so as to bring improvement. Generally, for this purpose, a marketing analysis is carried out by specialists but this research can be very helpful for the general manager, who should have the big picture of the industry in mind while setting and implementing important business policies related to change (Porter, 1980).
Timing of Change
Generally, if a company brings in change before the other competitors have time to do so, it can avail some major competitive advantages and customers will be largely attracted. For instance, in a pharmaceutical industry, allowing patents to medicines ensures that competitors can not come in while the industry can enjoy high-level profits. Likewise, in the software business, there are copyrights to restrict the entrance of competitors (Porter, 1980).
If the product finds favor with customers, it is likely to generate loyalty who might stick to the company even after the entrance of other firms. Therefore, the company who introduces change first can take advantage of all these situations and can ensure a long-term standing for its company (Porter, 1980).
While appraising change for investment and other purposes, general managers sometimes need to be reassured that their company will actually be the first one to implement the change in the industry. For this information, research is carried out on the competitors, their willingness to implement change and their current plans. Michael Porter has also highlighted a number of ways through which research on competitors can be carried out (Porter, 1980).
However, in some cases there are times when the competitive advantages are not enjoyed by the company to introduce change first but come to those organizations who decided to wait and implement change later. This is because, the later companies can see whether there is a customer preference of the product introduced by the first company by weighing up the first company's success (Porter, 1980).
Moreover, the other companies can identify some of the mistakes and threats that could occur which they can work out while implementing change themselves after a while. The delay in implementing change can be compensated well by gauging customer preferences, identifying other factors, making important decisions and finding newer ways to bring change into the company (Porter, 1980).
Rapidity of Change
One of the factors that are important to the general managers includes the speed with which change is brought in the industry. In industries, where the velocity of change is high, general managers have to be on the look out for every single opportunity to bring the right type of change in their company to be the first one to avail competitive advantages (Porter, 1980).
Semiconductors and computers industries experience change and change at a high pace because of immense technological development and advancement (Eisenhardt, 1989). Some of the complexities faced by general managers include the problem of obtaining recent information. As the process of change is rapid, it is very difficult to find up-to-date, complete and accurate information (Porter, 1980).
Moreover, general managers also have to suffer setbacks in recovering research and developments costs when a product becomes out dated due to rapid change in other companies. On the other hand, furniture industry is very resistant to change and undergoes change at a very slow pace. Service industries, such as of life insurance and banking also lag behind when it comes to change (Porter, 1980).
Therefore, mainly there are three factors which determine the feasibility of change, such as the industry analysis, the timing and pace of change. This research is necessary to carry out, as the international markets are continuously evolving and the companies who do not take advantage of change at some point of time are likely to go bankrupt or face closure (Porter, 1980).
Managing the company environment for change:
Innovation and constant change is considered to be a novel and contemporary method for designing and executing corporate strategy. By constantly changing and innovating, the company sets itself apart from its industry rivals. This level of competence cannot be easily copied and brought into the market. Both innovation and change can take place at any corporate department be it finance or accounts or marketing or sales (Porter, 1985).
The core competence approach recommends that the set of unique abilities of a business that enabled it to have a competitive edge over the other companies, should be emphasized and used to the maximum while engaging in any business activity, such as production, distribution or marketing (Prahalad & Hamel, 1990).
Automotive companies such as Honda and Volvo usually advertise about their core competence to attract a bigger market share. Honda prides itself in developing and designing engines for small motors while Volvo exhibits that its core competence lies in maintaining the safety and comfort of the car. Thus, core competence can not only be used in differentiating a company from its competitors but can also be used to commercialize or market goods and services (Porter, 1980).
A general manager, as was mentioned before, can gradually bring about a change in the culture of an organization. Same is the case with core competence which can be managed by general managers for the better of the organization, as they are entitled to a higher level of authority and responsibility. The general manager can facilitate coordination and communication to facilitate change (Porter, 1980).
As of date, change has not been defined as an organization's core competence but it can be referred to as part of the core competence. The Hewlett-Packard Company, for example, is popular for developing and marketing innovative aids and tools for scientists and has also started to develop better, up-to-date and innovative models in computers…[continue]
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