Changing Organizations

In recent years, many companies have launched new products or services while also making cutbacks. Such changes can be vital to a company’s survival, but employees may find themselves working harder than ever, and facing an uncertain future.

The language of change

Acquisition: the purchase by one company of the controlling interest in another.

Alliance: a connection between two organizations for their mutual benefit.

Flattening: widening the scope of jobs by compressing organizational hierarchy.

Globalizing: marketing products or services worldwide.

Merger: the combining of two or more organizations into one.

Privatizing: selling a state-owned firm to the private sector.

Quality Managing: setting up company systems to monitor product quality.

Re-engineering: completely rethinking and redesigning organizational processes.

Restructuring: reorganizing the structure and processes of work within an organization.

Responding to pressure

The upheaval triggered by the need for cost-cutting and increasing productivity has two main causes:

• Globalization has left local suppliers facing stiff competition and led to aggressive cost-cutting in the marketplace;

• Information technology, including fax machines, e-mail, and video conferencing, has accelerated the speed at which many business transactions can be performed, and put pressure on the workforce to be ever more productive.

Rethinking companies

New competition and pressures on companies to be more productive have led them to pursue certain strategies that put their workers under stress. Mergers and acquisitions between corporations have been taking place at an increasing rate and, when these occur, they usually bring job losses. This is because they tend to create one large corporation in which key positions at many levels are duplicated, making redundancies inevitable.

Changing operations

In the search for improvement, companies look closely at how they operate – the way production processes work, for example, and ways of keeping track of stock. Many companies have experimented with re-engineering their structures and involving employees in controlling product quality and ensuring continuous improvement.

The introduction of robots on to assembly lines has eliminated many manual jobs once required for mass production, so that manufacturing jobs are often relatively isolated, with little social contact.

Encountering new work cultures

The changes occurring in the workplace in recent years have radically altered the work culture of many companies, large and small. For example, opportunistic takeovers have put old-fashioned organizations into the hands of ambitious and fast-moving entrepreneurs with very different values. Widespread privatization has turned state-owned enterprises into private enterprises, which tend to be more committed to maximizing profit than to maintaining the workforce.

Reaching the limits

All these changes in the workplace – technical, strategic, operational, and cultural – have had profound and far-reaching effects on the employees of the organizations that undergo them. A number of studies have pointed out that, although workers are adaptable, there are limits to the amount of change that human beings can absorb. If organizations keep reaching and exceeding these limits – moving the goalposts – they may find that eventually their workers can no longer tolerate the demands made of them.