Defining Environmental Uncertainty
Question:
Discuss About The Organization Strategies Chang Environments?
The environmental uncertainty is defined as a degree in which lack of competent data of the company is influenced by the external and internal atmosphere. The environmental uncertainty is occurred by constant modification in a business environment. The management is unable to control uncertainty from the environment. This section explores the value of increasing uncertainty in the business with the effective organizational plan for change management. This report also discusses the conceptual theory of organizational change.
Cummings and Worley (2014) organizational change is the situation of an organization that occurred from one state of affairs to another. The organizational change is defined as an evaluation process by which organization implements the innovation in the working place.
Besides this, environmental uncertainty is a degree in which the factual data or competent information of firm is influenced by the internal and external operating atmosphere. It is also stated that there are many external factors that influence the whole process of business such as product availability, customer demand, competition, political influence, and resource availability. For illustration, construction organizations make a contract with EPA (Environmental Protection Agency) at the time of building new sites. Furthermore, the organizational change policy is depended on their sector. Each sector is used different policy to deal with environmental uncertainty and get a favorable outcome.
According to Grant (2016), Business to customers (B2C) organization is used online data security policy as compared to other policy for securing their data and get a positive benefit. It would make enable the company to effectively deal with changes in the working policy.
According to Booth (2015), environmental uncertainty is defined as an extent where the organization has lack of factual data regarding operating the external and internal business environment. There are certain external factors like economy, government rules, and regulation, social, and political factors as it could influence the performance of the business. For illustration, the economy of the country could change then they direct impact on the demand for company’s product. As a result, it could decline the existing financial performance of the organization. In addition, it is also found that lack of utilization latest technology in the working place could modify the landscape of business. In the current scenario, the organization has needed to select skilled employee as it could be supportive to retain the position of the firm in the marketplace. A company could control their cost and diversify risk for improving the growth of the business.
On the other hand, Smither et al. (2016) argued that an organization has moderate power to control on the environmental uncertainty. Hence, organizations should need to develop policies or strategies for effectively dealing with uncertain changes and obtain a reliable outcome. These situations require a modification of the current business strategies for getting success. A firm could concentrate on making effective strategies with respect to the environmental uncertainty. A depth assessment of macro-environment is known as PESTLE analysis. It is effective for managers and strategic makers as it defines the existing and future position of the market. The following table demonstrates the PESTEL analysis:
Conceptual Theory of Organizational Change
In support of this, Burke (2017) stated that an organization produces a high range of products and services as it could create a higher probability of environmental uncertainty. An organization should be competent to make changes in those products that are easily influenced by the business. Further, organization could hire an adequate size of individuals for managing with environmental uncertainty and obtain a reliable result. The emergent changes could influence the culture of the firm. It also enables an organization to create new understanding about the corporation and make an effective team (Botha et al., 2014). As a result, it would be supportive for the team members to work together at the same place.
It could be stated that PESTLE analysis of business demonstrates that there are vital opportunities for business development. The corporation can take advantages by making technological strategies to improve the efficiency and increase the productivity. The company should also offer superior quality of products and services to identify sociocultural and political external factors. This analysis signifies that the corporation should deal with a number of significant threats. The company should also measure the economic external factors by investing the capital into high-growth economies like Hong-Kong. PESTLE analysis depicts that the corporation has different opportunities and threats with respect to international expansion and growth. The company should also use different strategies like enlargement in developing economies, business sustainability, innovation in the product to identify concern of product and diversification of supply chain (Ho, 2014).
In opposition to this, Dibrell et al. (2014) illustrated that internal factors include uncertainty, the power of diverse interest group, and knowledge distribution. In addition, it can also be said that most carefully planned and executed cultural change could have emergent impacts on business. Hence, an organization should focus on two different aspects of managing the changes in the organization. The first aspect is that company should need to determine, and explore the managerial decision for managing challenges of an organization. Another aspect is that company should gain their understanding towards the whole process of changes for improving existing situation of the firm and deal with factors that could observe by perception and insight analysis.
Kerzner Kerzner (2017) addressed the complexity theory, which defines that how firm regulates to their environment and how they survive in the situation of uncertainty. Moreover, there are certain elements that could be supportive for determining environmental uncertainty like regulatory, statutory, economic, and political conditions. This situation has the capability to decline ability of organization for choosing their existing strategy. Another method is competitive uncertainty as it could influence the growth of an organization. It is the inability to determine the strength of competition in the industry for long-term.
On the other side, Booth (2015) examined that an organization could determine activities and strategies of competitors as it could help to make a unique strategy for their firm and retain their image in the marketplace. Marketing uncertainty could be major factors that influence the business environment and decline existing situation of an organization. Lack of clarity in a dynamic market could create environment uncertainty. It will directly impact on the demand, supply, and organizational operation of the industry. Beside this, technical uncertainty could influence the environment and growth of the business. Uncertainty could affect to make modification in the capabilities of business and technological resources of particular industry. Techniques uncertainty has the potential challenge for the organization because it is based on competitive level.
Factors Influencing Environmental Uncertainty
In the view of Stark (2015), economic situation is influenced by the recession and competitive landscape that could directly impact on the consumer behavior. It will directly impact on the business environment. This whole procedure is dependent on technical progress (Cummings and Worley, 2014). These kinds of issues could create continuous risk for an organization hence organization should make a strategy for handling the business uncertainty. In addition, it is also addressed that a manufacturer that produces single product could face certain issues as compared to those organizations that produce a huge amount of product and services. Since, a firm that produces a large number of product and services could deal with many external and internal factors. But, it could be complicated for the firm to obtain a favorable result (Lipper et al. (2014)
As per the view of Botha et al. (2014) organization could use the ADKAR model to deal with change management. Through this, the organization is considered five different factors like awareness, desire, knowledge, ability, and reinforcement. In the first step of this model, an organization should must aware to the employees towards the changes for effectively deal with change management. If organization effectively communicates with employee towards causes of organizational change then they could give their positive response at the time of change. It will also support to accomplish the specified goal of the company. In the second phase, employees desire to engage and contribute in the change. Desire could be related to the resistance management. In the third step of ADKAR model, the organization should gain the knowledge of employees regarding change by considering the training and development method. Consequently, the organization will be capable to obtain higher profit in the limited time frame. Ability is the fourth phase of ADKAR model where the organization could implement changes in the required performance level. It could be supportive to effectively manage the changes and obtain a favorable result. In the last step of this model, the organization could provide the reward to their employees with respect to positive performance at the working place during the change. In addition, it can be said that organization should imply the ADKAR model at the working place at the time of changes in the organization policy and get positive outcome (Dibrell, et al., 2014).
In the view of Charter (2017) Organization could avoid aggressive strategies for making the positive atmosphere in the working place and obtain a favorable result. Instead of quickly growing in the business, a firm could decline the new hires. The company should not open any new branches due to the shortage of money and effectively deal with the financial shortfall. An organization would avoid aggressive growth approaches when they are not confident about the accuracy of environmental forecasts. It is identified that there is no single best strategy for managing the environmental uncertainty. Moreover, fluctuation in the market could decline the opportunity for an organization that would negatively impact on the business growth (Grant, 2016).
Conclusion
From the above discussion, it can be concluded that the business atmosphere is becoming complex. It is also evaluated that organizational leaders deal with challenges to improve the performance of the company. It is also analyzed that business leader could avoid the failure by focusing on both long-term and short-term concerns. It could also be summarized that leader who has accurate mindset would be capable to track multiple factors and manage uncertainty at the global level.
References
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Booth, S. A. (2015) Crisis management strategy: Competition and change in modern enterprises. USA: Routledge.
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Burke, W. W. (2017) Organization change: Theory and practice. USA: Sage Publications.
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Grant, R. M. (2016) Contemporary strategy analysis: Text and cases edition. USA: John Wiley and Sons.
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Lipper, L., Thornton, P., Campbell, B. M., Baedeker, T., Braimoh, A., Bwalya, M., and Hottle, R. (2014) ‘Climate-smart agriculture for food security’, Nature Climate Change, 4(12), P. 1068.
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Stark, J. (2015) Product lifecycle management. In Product Lifecycle project Management (Volume 1) (pp. 1-29). USA: Springer, Cham.
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