Business Needs and Organizational Change

Discuss About The Journal Organizational Change Management.

Change is an alteration in operations that occur in the business environment by changing the accustomed way of doing things. Paton and McCalman (11) argue that as businesses expand, they face new challenges that come from the need to improve business operations to minimize costs and increase profits while at the same time it may be the external pressure that pushes the business to develop new ways of overcoming such threats or adapting to them (By 370). The business environment keeps changing, thus organizations have to ensure that they change according to what the environment dictates. Pepsi was operating in a competitive environment that required reducing operational costs to increase profits. Further, the changing environmental demands, and pressure to do away with plastics led Rajendra to develop a new bottle for the beverage. This essay analyses the forces of change based on Pepsi case study to show how they influence the changes in the business.

Forces of change are factors that determine the nature and way of change that takes place in an organization. One factor of change that influenced the change was the business need of creating a thinner bottle for the beverage. Robertson and Robertson (12) business needs can be defined through an analysis that leads to the setting of goals and objectives that have to be achieved within the organization. In functional management, Moran and Brightman (114) suggests that, managers are charged with functional units that they control to make decisions and take appropriate measures to meet the needs of the organization. As the head of the engineering department, Rajendra saw the need to develop a better bottle that will lead to greater business benefits within Pepsi and the whole beverage industry. Although the innovation may be expensive at first, the forecast returns that the organization was set to realize were projected in millions of dollars. The business need for change starts with identifying the problem which is creating a thinner bottle and relating it with the opportunity that the business will reap which reduced production costs.

Technology affects the organization through influencing business operations that take place in the organization. The force creates business competitiveness by ensuring that organizations develop appropriate processes to meet the business needs that keep on changing (Rieley and Clarkson, 169). Once the organization has adequate technological capabilities, it can institute any change process. Pepsi had the relevant technological capabilities that were used to develop the new business idea. Technology can be regarded as both an internal and external force that pushes the organization to develop business competitiveness by inventing new products. This is the reason why the head of the engineering department developed the process of creating a new product for Pepsi.  

Accordinng to De Wit and Meyer (12) when the iindustry changes and regulation may also have influenced the change in Pepsi. Internationally there has been pressure to reduce the amount of plastics and other non-organic products that are produced by industries. The engineering department manager suggested that the innovation will be important for the company and the industry at large. Reducing the size of the bottle by making it thinner was regarded as a positive stride in reducing environmental degradation and complying with international regulations. Since the size of the bottle is standard in all companies in the sectors. Then reducing the weight and size of material used to make the bottle will have positive impacts and will enable the organization to save allot. The head of the engineering department saw the innovation as a new business opportunity that will both reduce the costs and at the same time revolutionize the industry.

Technology and Organizational Change

However, acceleration has been used as a force of change where organizations keep changing their business processes to remain competitive and keep pace with the ever-changing business environment. Pieterse, Caniëls and Homan (799) identify these business challenges like globalization, commoditization, social mediaization and turbulence that keep shaking organizations. As a way of remaining competitive, Pepsi has to develop business strategies that ensure that it reaps the best out of the market while remaining competitive. These elements are mutually independent thus they push the organization slowly to adapt any new change that take place and industry. This change is evolutionary since the organization adapts to these force slowly to achieve the intended business benefit.

Kotter (23) gives eight steps for managing organization change within the context of the organization. From the arguments of Kottler, I agree with the change process that was taken by the engineer in executing the change process even though the change itself was not pushed to the end. Step one invoves creating the urgency through developing a sense of uergency around the whole process. the process entails conving management of the benefits that the organization will reaslise should the process e implemented. This is the reason why the decision was said to save the company millions of dollars inrevenue.

Step two involves forming a powerful coalition throug convincing people that the change process is necessary. In the case of Rajendra he used the power of management to recommend his decision to create a new bottle that was lighter than the original which weighed 63grams. The momentum for change was built around the economic benefits that the company will reap from the new bottle.

Step three entails creating a vision for change by linking the idea of the new bottle to the future benefits and the revolution that will be witnessed in the industry. Rajendra had projected that reducing the amount of plastic used in the bottle will lead to both economic and environmental benefits for the organization and the industry. Therefore, the innovation was bigger than Pepsi itself since it was opening new doors for the industry. The engineer developed a clear strategy that was to be used in executing the innovation through using it when launching a new product in Russia as a way of testing. It was planned to be introduced in a new market to determine how effective it will be.

In step four entails communicating the vision where Rajendra used different stakeholders to communicate the vision. Through assembling people from personnel department, Lipton, the bottle maker, the nitrogen dosing company, the filling company and the Russian operations team, Rajendra ensured that the process was clear and management could see the zeal in developing the innovation.

In step five the Spector (79) states that the obstacles for the change have to be removed to ensure that the process runs well. Through assembling the right team, Rajendra ensured that technical obstacles have been taken care of since every individual came with relevant expertise that lead to the development of the right product.  Through testing, the team discovered that 10% of the bottles were not fit for the market and worked to discover the problem which was filling of nitrogen.

Step six involves creating short-term wins that were achieved through the final test of removing obstacles. Discovering a process for keeping nitrogen from evaporating was regarded as a short-term win that defined what the team had achieved after fourteen months.

The second last step is building on change by trying the product to see if it works before declaring victory. Kotler (25) suggests that quick celebrations may fail to address challenges that may develop during implementation. This is the reason why Pepsi chose not to patent the idea but share with other companies in the industry to boost the success of the product.

The last is incorporating the changes in the corporate culture which is where the change process in Pepsi was left at. Companies within the industry were to analyze and share any concerns about the innovation before it can adopted as a new bottle in the beverage industry.

Conclusion

Organizational change is an element that organizations cannot run away from. From both internal and external forces, organizations may be forced to adjust their business process or change to new strategies in the quest for competitive advantage and increased profits. Sometimes, the change process may start as a functional need within the organization that changes the whole organization and leads to greater business benefits. Pepsi developed the new bottle as an internal need to improve its processes and reduce operational costs.

References

By, Rune. “Organizational Change Management: A Critical Review.” Journal of Change Management 5.4 (2005): 369-380.

De Wit, B. and R. Meyer. Strategy Synthesis: Resolving Strategy Paradoxes to Create Competitive Advantage. London: Thomson Learning, 2005.

Kotter, John P. Leading Change, With a New Preface by the Author. Boston: Harvard Business School Press, 2012.

Moran, J. W. and B. K. Brightman. “Leading organizational change.” Career Development International 6.2 (2001): 111-118.

Paton, R. A. and J. McCalman. Change Management: A Guide to Effective Implementation. 2nd. London: Sage Publucations, 2000.

Pieterse, Jos H., Marjolein C.J. Caniëls and Thijs Homan. “Professional discourses and resistance to change.” Journal of Organizational Change Management 25.6 (2012): 798-818.

Rieley, J. B. and I. Clarkson. “The impact of change on performance.” Journal of Change Management, 2.2 (2001): 160-172.

Robertson, Suzanne and James C. Robertson. Mastering the Requirements Process. 2nd Edition. Addison-Wesley, 2006.

Spector, B. Implementing Organizational Change: Theory into Practice. New Jersey: Upper Saddle River, 2013.