Organizational Flexibility and Sustainability: Organizational Change

Organizational Change: Organizational Flexibility and Sustainability Organizational Flexibility In a rapidly-changing marketplace, organizations need to ensure that they are flexible enough to adapt to new and emerging changes (Halkos & Bousinakis, 2012). Multinational corporations ought to ensure that they can adjust their organizational cultures and structures to respond effectively to technological, legal, and cultural changes in their external environment (Hila & Tzafris, 2011). One of the organizations that has been able to do this effectively is Wal-Mart, the world's largest retailer, which currently operates over 11,000 stores in 28 different countries.

These countries have different cultures, values, and ways of life, but still, the retailer has managed to thrive, adapting its internal systems effectively to respond to the needs of consumers. From a cultural perspective, for instance, Wal-Mart has been successful in both China and the United States despite the two having substantially different cultures. It has been able to adapt by adjusting its internal systems and way of doing things to fit the needs of new markets.

For instance, realizing that its 'Everyday Low Prices' label, which had worked effectively in America, would not align with the Chinese culture given that the Chinese associate low price with poor quality and are extremely quality-sensitive, the retailer shed the same in its branches in China, and chose a new source of competitive advantage -- stocking an assortment of luxury goods and forming coalition with renowned luxury local retailers such as Trust-Mart (Gereffi & Ong, 2007).

Moreover, Wal-Mart's organizational policy originally was offering sea food and meat American-style (in freshness-dated, plastic containers) (Gereffi & Ong, 2007). This policy had worked effectively in the U.S., but the retailer understood that the same would not be the case in China given that the Chinese culture encouraged 'freshness', where fresh meant that meat and sea-food was left exposed and undated as is the case in the open market (Gereffi & Ong, 2007).

In response to this cultural effect, Wal-Mart stopped packing fresh foods in containers in its Chinese branches and introduced new indoor displays to allow Chinese customers pick out their own dinner (Gereffi & Ong, 2007). This has been Wal-Mart's drive for success, with over one-third of its revenues currently coming from its overseas stores (Gereffi & Ong, 2007). Besides culture, another aspect of the external environment that Wal-Mart has managed to keep up with is technology (Gereffi & Ong, 2007).

To maximize efficiency and maintain an edge over its competitors, Wal-Mart operates a private satellite network and innovative supply chain technology that have helped distribution costs extremely low. These instances are perfect illustrations that much of Wal-Mart's success has resulted from its ability to adjust its internal policy effectively to changes in its external environment. Part 2: Organizational Sustainability It has been noted that most successful companies fail because they dwell too much on their strengths and past victories, resulting in over-confidence that eventually lulls them into complacency.

This happens because executives place all their confidence in the specific strategies and brands that propelled them to success and begin to focus only on these. They do everything in their power to retain these and exploit them as much as possible; eventually, becoming blind to changes in the external environment until they are no longer relevant and have fallen so far behind their competitors. One of the best examples of companies that suffered the effects of overconfidence and complacency resulting from success is Firestone Inc. (Sull, 1999).

For decades, Firestone enjoyed uninterrupted growth and held on to its position as the world's largest tire manufacturer. Its continued growth and consistent success was driven by its strong loyalty to employees and its focus on maximizing output. Thanks to these two strategies, Firestone Inc. was able to stay way ahead of its closest rival at the time, Goodyear (Sull, 1999). The executives did everything in their power to maintain the cohesion of the 'Firestone Family'.

To maintain the loyalty of its employees, the company relied primarily on in-house promotions and hiring, and its focus on maximizing output. When Michelin introduced the new brand of radial tires, Firestone found itself unable to compete owing to a lack of innovation and new 'perspectives' (Sull, 1999). Blinded by their confidence in the output-maximizing strategy, Firestone ignored the fact that consumers preferred the new radial brands.