Organizational Change in Companies

Organizational change is common when companies go through a transformation and need to either change business strategies or restructure the operation. Organizations are open systems that survive by maintaining good standing with the economic environment around them. By fundamentally changing the environment of a company, it means altering ways and means of production, downsizing, or even dropping dead weight as Ford did eliminating whole brands such as Mercury. In some cases the whole culture may need to change in order to rebrand a struggling company.

According to McShane, effective change occurs by unfreezing the current situation, moving to a desired condition, and the refreezing the system so that it remains in the desired state. (McSane, 2014) Easier said than done because some of the main challenges when it comes to organizational change involve the employees who are restraining the driving forces of upper management. Resistance can prove toxic if untreated or left unnoticed creating silos or just counterproductive thoughts, words, and actions.

Communication and employee involvement reduce the restraining forces and promote an open learning environment. In Ford’s case, the fear of unemployment for many workers due to the economy was motivation enough to embrace change with open arms hoping to float by in the financial hurricane. This open-mindedness kept them ahead of the competition and rallied them behind the creation of the Fusion and Escape. Focusing more attention on smaller fuel-efficient cars has paid off mainly because of rising gas prices and environmental considerations.

According to Rosevear, while the V8-powered GT version of Ford’s Mustang sells well, higher-performance models are typically niche products. That niche is growing — Ford says that sales of high-performance models have risen 70 percent in the U.S. since 2009, and 16 percent in Europe over the same period — but it’s still small. High-performance versions of mainstream models generally make up less than 10 percent of the model’s total sales. But those sales can be very profitable.

Ford’s compact Focus starts at under $17,000, but the sticker price on a loaded high-performance ST model is close to $29,000. There’s a lot of profit for Ford in that $12,000 difference. (Rosevear, 2015) The profit margin seems to be growing as production methods become faster and more efficient, creating an environment worth changing towards. When companies look back for examples to give about successful organizational changes, Ford should be on the forefront of their minds as a good example.

McShane, S., & Glinow, M. (2014). Introduction to the Field of Organizational Behavior. Organizational Behavior (2nd ed., pg. 273). Boston: McGraw-Hill/Irwin. Rosevear, J. (2015, January 10). How Ford Will Chase Younger Buyers in 2015. Retrieved from http://www.dailyfinance.com/2015/01/10/how-ford-will-chase-younger-buyers-2015/