Environmental pressures

Introduction

According to Sorensen (2002), he describes the organization environment as the regulative, normative, and cognitive structures and activities that provide the firm’s activities with stability and meaning. In this structures, the firm tend to face many pressures from within itself and from outside. The organization pressures normally produce the net effect of more homogeny in the organization’s structures. In this report, I will present a table of three organizational and three environmental pressures in the organization and rank the pressures according to their influence. The report will also explain how the environmental and organizational pressures impact the financial perspective of the company. Finally, the paper will explain how the organization reacted to the pressures and at least propose strategies to reduce the identified environmental and organizational pressures.

Organizational and environmental pressures

The environmental and organizational pressures are usually the reason organizations change. The environmental pressures arise from the external sources while organizational pressures arise from sources within the organization and deal with integration, collaboration, growth, leadership moves, and identity (Sorensen, 2002).

Organizational pressures

Environmental pressures

Identity pressure

Fashion pressure

"New broom" pressure

Reputation and credibility

Growth pressure

hyper competition pressure

Environmental and organizations pressures in the organization

The environmental pressure normally occurs when the organization’s resource base decreases because of reduced demand for sales and products, bad investment decisions and a decrease in the market. Organizational and environmental pressure are essential when going through change and being able to manage the pressures help in preserving the identity of the organization in the marketplace and also determining failure and success factors.

The environmental pressures are essential to an organization. The reputation and credibility usually depend on how the organization reacts to the environmental pressures (Akin et al. 2009). An organization will face a crisis that present opportunities to boost or even destroy their reputation. However, the way the organization responds and actions it takes to address the crisis will determine the impact of its reputation. When working at Toyota, the company faced a recall crisis. The investigators in the case exposed the major flaws in the organizational culture and, as a result, the confidence of consumer’s dropped. As a result, the company decided to provide its past customers who bought a new car up to one and a half years of maintenances as a thank you for sticking with the company. The company made some changes; however, it did its best to protect its reputation and credibility.

Hyper-competition pressure normally affects how the firm responds to their consumers and competitors to cater for the increasingly rapid pace of the business. In Toyota, the Toyota Racing Development tends to differentiate itself with the hypercompetitive racing business in technology innovation (Stockstrom et al. 2006). So as to always be ahead of competitors, the Toyota Racing development usually evolves its racing software and to lead, the company must always be the first to adopt new technology. The company considers working with Microsoft that helps it to be at the forefront of the racing technology. The fashion pressure includes the organization cogently trying to keep up with trends from other industrial and organizational practices (Akin et al. 2009). About the fashion pressure, Toyota opened a bank that benchmarks the General Motors Acceptance Corp. The establishment of Toyota Financial Savings Bank aimed at emulating the success of GMAC in providing home mortgages and also vehicle financing for dealers and consumers.

The organizational pressure includes identity, growth, and new broom pressure. Growth is very important to organizations and failure to recognize growth can result in the organization being left behind. The phenomenon of the company is to continue improving and with this philosophy, the company has been improving every single day and also embracing change at every opportunity. The managers are usually responsible for writing annual growth plans and submitting them to their supervisors. The managers will decide on what he needs to grow and every quarter they sit and review the growth plans with the bosses.

The new broom pressure considers a change at the senior management level as being a catalyst for significant change in the organization (Akin et al. 2009). In March, Toyota did announce its biggest management overhaul since Akio Toyoda took over in 2009 (Stockstrom et al. 2006). The reorganizations occurred so as to enable the company to handle growth. The change happened as a way of rebuilding the organization where people would be able to take ownership of their work when entering the new phase of the sale of vehicles. With the new idea, the company appointed Takeshi Uchiyamada as the chairman and he has been the driving force behind the Prius, hybrid car.

The identity pressure is normally important in an organization and mostly to the minds of employees, investors, and customers (Akin et al. 2009). When a company has a powerful identity, it tends to increase the value of the company and also provides the motivation and direction for employees. The organization’s identity also enables clients to select the company for a business relationship easily. In May 2006, Toyota launched a rebranding campaign that was a technique to change its image (Stockstrom et al. 2006).

Impact from financial perspective

Every organization should work within a framework of particular environmental forces, and there is a continuous interaction between the environment and the organization. Organizations are usually not the same, and they tend to respond to a change in a different way (Sorensen, 2002). The changes have had a positive impact on the company’s financials. When Toyota created the hybrid vehicles, the public loved them, and the global sales of the gasoline-electric cars surpassed five million in an area where the innovation experienced great skepticism. Both organizational and environmental forces drove the company’s decision to make the hybrid car. Toyota saw an opportunity and decided to make a change in responding to the environmental changes.

Impact of the environmental and organizational pressures personally

The organization usually operates in an environment that presents threats and opportunities to it. Hence, the way the organization will take the best use of the opportunities and threats imposed is a matter of major concern. The organizational and environmental pressure has had a great impact on me and mostly with concerns about the change in managers. As Toyota has been experiencing a change in the past year, it also considered making some changes in its management. With some of the changes, the company considered appointing a new manager who would oversee the change process that resulted in the success of the change. Toyota made some changes in the attendance policy. The management considered making the change and amending the policy that has had a great impact on all employees as it provide a more work-life balance to staff.

Organization reaction to the changes

Based on the identified pressures in question one, the company did react to the changes in a proactive way that helped in securing its place as one of the top three car manufacturers. The company did publicize its strategic commitment towards the organizational change that integrated the environmental goals into its business processes. While considering the different changes that it has been making, Toyota enhances its existing capabilities in maintaining a sustainable competitiveness. When reacting to the pressures, the company continues to search for new development capabilities before its capabilities can become totally obsolete in the competitive market. The way the company reacts to the pressure enable Toyota to be more successful than most automobile firms.

Strategies to reduce environmentally and organizational pressure

A strategy that the organization can use in reducing the organizational pressure of fashion pressure has a strategic vision. Having a vision is very important because, with a clear vision, it will be able to attract the right strategy (Sorensen, 2002). In the case of the fashion pressure changes, if the organization has a vision of where it wants to be, the pressure of imitating the strategies of other organizations will reduce. A strategy for the growth pressure is for the organization management to create a culture of growth. The research and development team should have the necessary resources so that they can be able to come up with new ideas that may be helpful in the growth of the company.

Conclusion

Change tends to be a risky activity and most organizational changes fail. The pressure to changing usually comes from the internal, organizational pressure and external, environmental pressure. In this report, I discussed three environmental and organizational changes about the organization I worked for.

Reference

Dunford, R., Palmer, I., & Akin, G. (2009). Managing the organizational change. New York: McGraw-Hill

Sorensen, J. B, (2002). The strength of Corporate Culture and Reliability of Firm Performance. Administrative Science Quarterly

Tschirky, H., Herstatt, C., Nagahira., & Stockstrom, C (2006). Management of technology and innovation in Japan. Springer-Verlag

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