Giving justifications, propose and explain a Management Principle that you think can be used by

organizations operating in fast changing business environment?

In this dynamic world, if there is any single word that can best describe today’s business, it is change.
This change makes the companies spend substantially on Market Research to survive in the market.

Leading the Change

Organizations as they grow, develop complex structures with an increasing need for co-ordination and
control. To cope and manage such situations, leadership is necessary to influence people to cooperate
towards a common goal and create a situation for collective response.

Leading entails directing, influencing, and motivating employees to perform essential tasks. It also
involves the social and informal sources of influence to inspire others. Effective managers lead
subordinates through motivation to progressively attain organizational objectives.

Personality research and study of job attitudes in Behavioural Science provides important insight on
the need for coordination and control. Thus, it becomes important for leadership to create harmony
among individual efforts to collectively work towards organizational goals.

Important Management Principle for organizations operating in fact changing business environment:

Making sense of Changing Environment:

• Environmental Scanning
• Interpreting Environmental Factors
• Acting on threats & Opportunities

Importance of understanding Macro Environment:

The macro-environment refers to all forces that are part of the larger society and affect the micro-
environment. It includes concepts such as demography, economy, natural forces, technology, politics,
and culture. The purpose of analysing the macro marketing environment is to understand the
environment better and to adapt to the social environment and change through the marketing effort
of the enterprise to achieve the goal of the enterprise marketing. Factors affecting organization in
Macro environment are Political, Economical, Social, Technological, Environmental and Legal.

Importance of understanding Micro Environment:

Company aspect of micro-environment refers to the internal environment of the company. This
includes all Departmentalization departments such as management, finance, research and
development, purchasing, Business operations and accounting. Each of these departments influences
marketing decisions. For example, research and development have input as to the features a product
can perform and accounting approves the financial side of marketing plans and budget in customer
dissatisfaction. Marketing managers must watch supply availability and other trends dealing with
suppliers to ensure that product will be delivered to customers in the time frame required to maintain
a strong customer relationship.

Competitors are also a factor in the micro-environment and include companies with similar offerings
for goods and services. To remain competitive a company must consider who their biggest
competitors are while considering its own size and position in the industry. The company should
develop a strategic advantage over their competitors.
Interpreting Environmental factors & Acting on Threats / Opportunities:

When scanning the environment, the organization need to look at all the influences of the company.
The scanning process makes the organization aware of what the business environment is about. It
allows the organization to adapt and learn from that environment. When the company responds to
an environmental scanning process it allows them to easily respond and react to any changes to both
the internal and external business environment. Environmental scanning is a useful tool for strategic
management as it helps them to create and develop the aims and objectives of the company which
assists with the production of the company or organization.

When looking at the weaknesses of the organization's placing in the current business environment a
formal environmental scanning is used.

Environmental scanning process requires the identification of the needs and the issues that have
occurred that caused the organization to decide an environmental scanning is required. Before
starting the process there are several factors that need to be considered which include the purpose
of the scanning, who will be participating in the processes and the amount of time and the resources
that will be allocated for the duration of the scanning process.

The next step of scanning process is gathering the information. All the needs of the organization are
translated into required pieces of information that will be useful in the process. The third steps
analysing all the information that the business has collected. When analysing the information,
organizations are made aware of the trends or issues that the organizations may be influenced by.

The step four of the environmental scanning process is all about the communication of the results
obtained in step three. The appropriate decision makers analyse the translated information of the
potential effects of the organization. All the information is presented in a simple and concise format

With all the information obtained from steps three and four, step five is all about making informed
decisions. Management creates appropriate steps that will position the organization in the current
business environment

Lead with the culture. Lou Gerstner, who as chief executive of IBM led one of the most successful
business transformations in history, said the most important lesson he learned from the experience
was that “culture is everything.”

Start at the top. Although it’s important to engage employees at every level early on, all successful
change management initiatives start at the top, with a committed and well-aligned group of
executives strongly supported by the CEO.

Involve every layer. Strategic planners often fail to take into account the extent to which midlevel and
frontline people can make or break a change initiative.

Make the rational and emotional case together. Leaders will often make the case for major change
on the sole basis of strategic business objectives.

Act your way into new thinking. Many change initiatives seem to assume that people will begin to
shift their behaviours once formal elements like directives and incentives have been put in place.

Engage, engage, engage. Leaders often make the mistake of imagining that if they convey a strong
message of change at the start of an initiative, people will understand what to do.

Lead outside the lines. Change has the best chance of cascading through an organization when
everyone with authority and influence is involved.
Leverage formal solutions. Persuading people to change their behaviour won’t suffice for
transformation unless formal elements—such as structure, reward systems, ways of operating,
training, and development—are redesigned to support them. Many companies fall short in this area.

Leverage informal solutions. Even when the formal elements needed for change are present, the
established culture can undermine them if people revert to long-held but unconscious ways of
behaving.

Assess and adapt. The Strategy&/Katzenbach Centre survey revealed that many organizations
involved in transformation efforts fail to measure their success before moving on.