Managing Change in the Organization Often Centers Term Paper

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Managing change in the organization often centers on one of several change strategies or approaches for implementing changes in an organization. Some are more applicable to some situations than others. A directive change strategy occurs when management takes all responsibility for the change and imposes it throughout the organization, using formal management channels already in place. This has the advantage of using existing personnel and structures and may be effective in gaining employee support through simple fiat. This approach works best if management is well-regarded and takes an active leadership position. The approach has the disadvantage of not soliciting information form all subordinates, who might have useful input. In addition, it can generate resistance if management is resented. A second approach is called negotiated change and occurs as the result of give-and-take between different interests. This has the advantage of involving all interested parties and so tends to eliminate resistance, a disadvantage is that the outcome may be different than what is desired by management. A third approach is the participative method, and this method involves the maximum number of people to achieve higher levels of agreement. This can be effective when management wants to create a culture of change so change can be more rapid in the future. This approach creates work teams and informs them at the same time, but this process also takes longer than others to achieve results and is the most complex from the point-of-view of management (Elliott, 2004).

2. Companies may pay dividends to investors or may institute a dividend reinvestment program which adds to the number of shares an investor owns and keeps the money invested in the company. Still, some companies may pay dividends even when funds could be better reinvested in the business or when the firm has to tap outside sources to pay the dividends. Changes in tax law could explain this, though currently the law favors companies with reinvestment programs, though there is also some uncertainty about that law and about how current proposals might change it. The advantage to the investor is that a cash payment is taxed as income, while an investment gain is taxed as long-term capital gains. A company might pay out dividends to keep investors happy, but this would only pertain if the investors have invested in a tax-deferred account, in which case the issue becomes one of who can best invest the profits. If the investors trust the corporate managers to invest the profits, they will encourage such a move. If the shareholders are better suited to make these decisions, then they will want that option. It is believed that if profits are high, managers may find spend their added money unwisely, and it could be that paying a premium to repurchase its stock may not be a sound investment for the company. Another possibility would come if the company pays a premium to acquire stock in another company, which might also be an unsound investment.

3. Forward integration refers to a company expanding its products or services to areas related to its primary product or service to provide for the needs of customers. Whether this is a good strategy for a company depends on the nature of its business to a great extent. Forward integration is often contrasted with horizontal expansion and is itself a form of vertical integration. Horizontal integration is a strategy for a company seeking to sell a type of product in different markets by creating several small subsidiary companies, each of which markets the same product to its own market segment or geographical territory. Companies thus expand by adding units or subsidiaries. Forward integration is tantamount to vertical integration, which in one form involves a style of ownership and control in which the companies are joined by means of a hierarchy with a common owner. Each unit of the hierarchy may produce a different product, and the central organization combines the products to satisfy a common need. Forward integration may occur when a producer decides to sell his products directly to a market rather than to a distributor or undertakes to be a distributor himself. Forward integration is not the general trend today, when horizontal integration is more common as a way of expanding a business and reducing costs. In addition, there is the perception that vertical integration does not work. Some analysts see this as a good thing given that horizontal integration has a number of advantages by allowing for maximal innovation and competition in every piece of a product or service, which in turn drives down costs and advances technology. Forward integration offers more opportunities for small operations or when only a small market segment is being addressed.

4. Strategy evaluation can be both qualitative and quantitative. Several specific criteria are often used for qualitative evaluation. One type of quantitative measure is the financial ratio. This allows for comparisons of performance over different periods if time to determine trends. Also, performance can be compared to that of the competition or to the industry as a whole. Any criteria can be quantitative if they provide measurable and verifiable elements for comparison and analysis. Measures can also address whether a given strategy has or can make significant progress toward accomplishing long-term or annual objectives, and if this is not the case, it shows that there is a need for corrective actions. The quantitative measures used may also depend on the type of business involved or the aspect of the business being addressed. A strategy for improving turnover, for instance, would measure employment matters. Marketing measures might show the reach of advertising or the number of stores carrying a product. Sales figures serve as a measure, when compared to other companies or the industry as a whole. Rates of change can also be significant, showing if a strategy is effective or not.

5. Product positioning refers to shaping the image and presentation of a product or service so that it appeals to a selected market segment. Market researchers consider all relevant pieces of information to understand how consumer purchases are made, and from this they decide how a given company can capitalize on the process. Many companies develop a target marketing strategy that includes determining demand, establishing the base of segmentation, identifying potential market segments, targeting the market, selecting the market, developing the strategy, and outlining the marketing mix. The process of dividing the market into different target groups is segmentation, leading to the development of demand patterns and segmentation bases. The company has to analyze the level of diversity for consumer needs in a particular category of goods or services. Segmenting the market is the process of classifying a market into two or more parts, each of which share common characteristics (Evans & Berman, 1995, p. 240). Target marketing uses sales forecasting techniques to help the company and the marketing department develop budgets, allocate resources, and adjust the market program as needed.

A market is defined as any individual or group of individuals "willing, able, and capable of purchasing a firm's product" (Simpson, 2000, p. 212). As noted, the separation of markets into distinct groups based on similar characteristics and similar needs is market segmentation, which is critical for reaching consumers who have different needs for a given product. The company decides which market segments to reach, and these are its target markets. A target market consists of a specific group of customers who are targeted for the company's marketing efforts.

Effective product positioning involves stages including identifying competing products, determining the defining characteristics of the product, collecting customer information, determining the preferred target market, deciding on the optimum fit with existing products, and selecting the optimum position for the product. The optimum position is related to a company's competitive advantage.

6. Rumelt offers four criteria for evaluating strategies: consistency, consonance, feasibility, and advantage. The consideration of consistency is important because different departments or units may develop strategies that are not consistent with one another, which then creates the possibility that one unit may succeed while and even because another fails. Clearly, this would not be an efficient strategy to pursue. Often, as a strategy is being implemented, such inconsistencies can be observed, as when changes in personnel do not solve management problems as intended. A strategy might offer inconsistent goals or policies, and this should not be allowed as it will lead to inconsistent outcomes.

Consonance refers to the need for matching internal and external factors as a strategy is formulated and implemented. This can be difficult, but it is important to bring the two forces together as much as possible for a clear outcome. Strategy is perceived as an adaptive response to forces in the external environment, but the capabilities of the internal structure must be matched with these external forces through the strategic decisions and moves made. In a way, this seeks another form of consistency so that the response matches the external threat or demand and does not veer off on a tangent.


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