In layman's view, change demands surrogacy of current comfort zone. Generally, whenever i) organization analyze prospective risk from pressure, ii) has limited knowledge, iii) hope to maintain the market dominance with the current strategy, they don't change. And, is also strongly affected by the nature of change agent, how he is going to perceive it. Below are some of the reasons for the organization to maintain their status-quo.
Organizational Learning versus Threat -Rigidity
Google phenomenal success stands in its openness to learn (Lachinsky, 2015). It is even said managers learn from the problem and try to close the gap between performance and aspiration. The process of perpetual learning helps the organization to scan various forces of the environment, by the virtue of which organization becomes proactive and move with the pace.
New York Times an international newspaper, if had not been able to learn the changing preference of customers would have failed decades ago. It digitalized its services for its valuable customers. The organization which views environment pressure as a change catalyst always learn whereas some organization is intimidated by the pressure or remain glamorized within their obsolete strategies.
Basically, enterprises in the least Developed Countries (LCD) are worried about environmental pressure, the businesses are not resilient enough to compete or capitalize on those environmental changes. The Maoist insurgency that lasted from 1996 AD to 2006 AD in Nepal had devastated numerous organizations. In this case, organization fails to learn from change due to systematic risk and the inability of owners to refinance their enterprises.
But the tendency to maintain status-quo as elaborated by (Sull, 1999)may be due to the arrogance of the companies where they are trapped by their success. Nokia was mistaken with their obsolete winning formula and lagged back with Android operating systems. The inability of the company to predict the rise of smartphone with Android operating system jeopardizes Nokia.
Further, intensity and pace of learning also defines innovation in business, some use active strategy whereas some are passive. Joint Venturing (JV) between Maruti(Indian Auto Maker) and Suzuki(Japanese Manufacture), similarly JV between Hero-Honda could be the best apotheosis of active learners promoting change. Whereas, Nokia contract with Microsoft for Windows operating system didn't pay off, as Nokia lagged behind to predict the change. So, it is often observed active learner has relatively higher chances to lead than those with rigidity.
Environment: Objective Entity versus cognitive construction
It is often inferred, the organization is tangentially impacted by environment, this ideology envisions that manager should change as per the requirement of its environment, whereas as per (Child, 1972), the reaction to the change is attributed to the cognitive power of the manager. And these personal attributes are shaped by his previous experience, learning, knowledge.
As identified by (Boyd, 1993) manager may inbreed perceptual error (Type1/Type 2), in which he/she may over/underestimate the environmental anomalies respectively. Nokia Corporation CEO, Steve Ballmer underestimated environmental changes (Type 2 error) which lead company to the brink of collapse.
The same had has happened with Kodak, Kodak generated major revenue from photography (photo processing), though the company knew the changing preference of global market towards digitalization, it didn't care and stuck with its own strategy, this incongruity was tapped by Fuji. So, sometimes companies face big losses to liquidation due to an ineffective conscience of its management and change is hindered.
Forces for change versus forces for stability
Empirically it could be stated that Change(C) is the function of various independent variables like the institutionalized mission (M), power structure (P), resource availability(R) and the identifying problem (Pi).
i.e. (YC) = a+b1M+b2P+b3R+b4Pi+ c
Any organization with the predefined strategy to achieve the goal, diffused power throughout the organization, deficit resource and uncontrollable problem, generally retard change. If the above mention variables are favorable organization innovates.
Generally, supportive management promoting creativity, learning from failure, to name Google and Amazon promotes innovation. A specialized R & D department concentrated with required authority and resource abundance dares to change.
Further, if the above mention context is applied on the national level, we can infer why countries like USA, Japan, Canada innovates whereas Nepal, Ghana, Chad lags behind.
Bridging (Adapting) versus Buffering (Shielding)
Amazon.com.inc recently penetrated into grocery trading, the buffering strategy might have been adopted by the company to protect its current and future market from ad-hoc competitors. It helps them to enhance organizational effectiveness in between.
Generally, Qatar Airlines fare from Nepal to the USA in an economy class cost around the US $ 900-1050, but most recently, the airlines introduce a promotion scheme, announcing 25% discount on the tickets, these are actually buffering strategies obtained by Qatar Airlines to smoothen the effect of external shocks(from its competitor in their pricing strategy)
Whereas, the organization also led change directly by adapting to externalities. An organization with progressive agenda assumes this strategy. The CEO of Air Asia, Tony Fernandes transformational strategy to be low-cost carrier against its competitors could be viewed as adapting strategy. The airlines company rather than buffering with defensive strategy undertook progressive action for fundamental change.
Although change could be observed in both ways, bridging will be more rapid and responsive in compare to shielding.
On the basis of the above mention cases we can predict that the organization which lacks versatile learning culture, deficits resource for advancement, where the change manager lacks strong understanding of environmental forces generally can't growth, indeed it could be termed as their skepticism overweights the opportunity that satiates them to remain in status quo.
Bibliography
Boyd, B. K. (1993). Divergence between archival and perpetual measures of the environment: Causes and consequences.Academy of Management Review, 204-26.
Child, J. (1972). Organization structure,environment, and performance: The role of strategic choice. Sociology, 1-22.
Lachinsky, A. (2015, January 22). Search and enjoy. Fortune, pp. 48-57.
Sull, D. N. (1999). Why good companies go bad. Harvard Business Review, 42-52.
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