All the organizations in an industry do have good managers and human resources but even then when there is a need for drastic change organizations fail to realize it and the success period of their life ends while the path to failure begins. At times when huge organizational changes are required due to external environment, the financial resources are not enough to cope up with the changes.
The external environmental factors make managers and leaders to act in a certain way, where they have to constantly develop a fit between all the soft and hard organizational resources for the incremental change and success of the organization. At the same time they must be ready to disturb that fit by them when there is a need of discontinuous change. This is the point where firms move towards failure. They are good for creating the ft but when it’s time to destroy that fit by them it becomes difficult for the organizations to do so.
Technological changes are both incremental and discontinuous and the organizations usually are able to gain incremental success for the organization with incremental technological changes while they face difficulty when combating with discontinuous changes. It is difficult for the organizations when they are facing discontinues technological changes because it not only sometimes requires them to leave the old technologies which are direct opponent to new technology but also requires them to make changes in the organizational structure and culture which is the hard part. The reason is that organizations have already invested in the old so much in terms of developing culture and organizational fit that at that time it seems difficult to part away from the old norms.
Organizational success depends upon the Size, Culture and organizational staff. All organizations are very flexible when they are small and growing. They feel the taste of success through evolutionary process where they are able to cope up with the incremental changes in the environment due to their size, culture and procedures. Since the competitive landscape remains the same during these incremental changes period hence the organizations have not worry about their competitive advantages and hence can reap the benefits. However as the organizations grow their own size becomes huge and due to which it leads to structural changes where formal procedures and hierarchies are introduced in the organization and that slows down the process of coping up with the change. This is the time when the managers have to look for the alignment of strategy for the changed internal factors and if done successfully, it leads to incremental growth for the organization. This is the S-Curve effect which comes in every organization’s life cycle.
Culture also plays both a positive and negative role in the organizational evolutionary and revolutionary growth process. Culture plays big roles in terms of age and success of the organization. As the organization grows in size there is a harmony which develops among the employees and these are unwritten rules and procedures understood by everyone the organization. They help in the short term success caused by evolutionary changes. However during the time of revolutionary change, these factors play a negative role sometimes. These are the times when organizations are unable to shift its focus while the market is shifting its focus.
The solution lies in think big act small. These are called the ambidextrous organizations, where they reap both the advantages of being overall big but being small at the same time. These organizations are able to focus on both the incremental and discontinuous innovations and changes and overcome the dilemmas related to size and culture. The organizations like HP develop independent departments which retain their own culture and size is not too big as well. To reap the benefits of bigger size the activities like marketing are centralized in such organizations while they work independently when it comes to operations. In order to remain small such organizations also form autonomous groups and hence are able to overcome the difficulties when it comes to coping with changes. It happens because the change may be related to one department or group and if it is autonomous it would be able to incorporate the changes without disturbing the other groups or departments of the organization.
These organizations work on the basis of two cultures. One is corporate culture, which is common among all the groups and is told by the headquarters while the other is the culture of the autonomous group which holds it together. The later comes under the former. Later can be changed by the group as required and hence they are able to change as demanded by the both evolutionary and revolutionary innovations and changes.
Ref:Ambidextrous organizations: Managing evolutionary and revolutionary change Tushman, Michael L; O Reilly, Charles A III California Management Review; Summer 1996; 38, 4; ABI/INFORM Global pg. 8
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