A Guide to Change
Understanding the pressures for change
"Karl Marx had it right: those who hold capital exercise power. Today intellectual capital is the scarce resource.
Henri Fayol is also correct. Managers plan, organise, co-ordinate and control. Only now the managers who perform these functions are the holders of intellectual capital."
Are you faced with any of the following challenges?
- Customer demands for greater product variety and quality
- Exposure to pressure from other parts of the supply chain
- Loss of market share
- Mergers and take-overs
- Need to improve industrial relations
- Improvement of productivity / performance / profitability / customer service
- Need to reduce costs
- New technology
- Pressure for quick response from customers
- Price based competition from low wage countries
- Product innovation
- Rapid response to fluctuating market conditions
- Out of date working practices (e.g. demarcation, multiple job grades)
- Smaller, more frequent orders
New Forms of Work Organisation
New forms of work organisation are being adopted throughout the industrial and service sectors of Europe as a means of improving competitiveness. The result has been that the organisational leaders have had to make radical changes to their own styles and practices, as well as re-organising the structures, systems and procedures of the business as a whole.
Whilst the technology market continues to progress and influence work organisation, consumers are becoming more discerning about quality, variety and speed of delivery and the labour market is demanding improved working conditions. Likewise the saturation of existing markets has resulted in a changing market base, further influenced by the globalisation of the economy, opening up new markets to consumers and putting pressure on organisations to become more flexible and quality conscious in order to compete with imports.
"People expect good stuff. They have become used to great value for money. And they can get that from almost all companies around the world. So, being great is no longer good enough. To succeed we have to surprise people." (Nordstrom, K. and Ridderstrale, J. April 2000. Vikings Inc. British Airways Business Life.)
Within the organisation, structures and cultures are also changing to foster direct and open communication with clients, better internal communication and greater empowerment for employees through cross-functional working, working in teams and agreement with employees about quality and productivity. This internal change enables employees to utilise their innovative capacity and unfold their creativity to help the organisation to meet the new requirements, whilst at the same time satisfying their own needs for good and inspiring working conditions.
Organisations are not just confronted with the aim of making a profit but must adhere to legislation regarding working conditions, working hours, employment protection and minimum wages. Similarly regulations concerning pollution the environment and consumer health are also key to strategic development. The relationship between work organisation, employment and competitiveness is not as straight forward as we might hope; it is important to note that it is impossible to identify what would have happened to work places if the organisation of work had not been changed.
Companies are able to increase their market share through product innovation, thus producing more goods or services, thereby compensating for effects of higher productivity on employment.
The Revolution in Achieving Change
This constant need to re-invent products, services and processes is forcing far-reaching changes to the way work is organised. It is particularly challenging working relationships that for too long have been modelled on outdated notions of workforce subservience.
"Karl Marx had it right: those who hold capital exercise power. Today intellectual capital is the scarce resource.
Henri Fayol is also correct. Managers plan, organise, co-ordinate and control. Only now the managers who perform these functions are the holders of intellectual capital."
(Belasco, J.A. and Stayer, R.C. 1994. Why empowerment doesn't empower: the bankruptcy of current paradigms'. Business Horizons, vol. 37, no. 2, 29-41)
The real source of competitive advantage in Europe lies in our heritage of accumulated knowledge, skills and experience - a source that cannot be easily imitated by competitors.
Innovative enterprises appreciate that they have distinctive competencies, which competitors find difficult to copy. Long-term survival and growth depends on nurturing and harnessing this knowledge, and on exploiting distinctive competencies. As a consequence, the case for promoting individual and organisational learning is overwhelming. It is essential both to gain and sustain competitive advantage.
Innovative enterprises also understand that the way work is organised, and the way people are motivated and treated are crucial to business success. Expanding the scope of people's jobs and humanising unpalatable work not only makes the enterprise more attractive to skilled workers but also improves motivation and performance. This is one of the most important hallmarks of emerging forms of work organisation in Europe today. New forms of work are essential to achieve product innovation, process innovation and process control, and are key performance requirements of the new economy. The challenges facing contemporary enterprises are so fundamental that there is now no option but to change.
