(MGT5MPT) Management Practice And Theory

INDIVIDUAL ASSIGNMENT
MGT5MPT – MANAGEMENT PRACTICE AND THEORY
Student name: Nguyen Minh Trang
Student ID: 20917410

Introduction
Organizational change and stability have increasingly gained attention among
organization theorists. Notably, a theorist supposes that "Pressure for change originates in
the environment. Pressure for stability originates within the organization". In my opinion, I
agree with these statements since there are a variety of external forces that cause the
change and transformation of the organizations and the organizations themselves need to
have a better understanding of the business environment to maintain stability. In this essay,
the external aspects that are constantly changing, forcing companies to adapt if they want
to survive are shown, including technological changes, regulatory changes, market structure
changes and natural disasters. Changes within the organization that are necessary for
sustainability, such as Industry 4.0 adoption are displayed as well.
Pressure for change originates in the environment
The number of radical changes in the external environment can impact the operation
of companies, which requires companies to transform to adapt for survival. The business
environment involves various aspects that are out of the control of the company's
management in the short term, as a result, creates threats and opportunities to the
company (Ward et al., 2007). Bourgeois mentions that there are three different points of
view of the outside influences to the organization in the history of management research
(Bourgeois, 1980). The first point of view concentrates on the factors having an effect on
activities of the organization like consumers, rivals, suppliers and regulatory agencies. The
following viewpoint emphasizes the attributes of outside influences, including complexity,
dynamism, and generosity. Another one focuses on managerial perceptions about these
external attributes, perceived environmental uncertainty.
Other researchers also reveal their perspectives on the relationship between
environmental variables and organizational changes. Berman and Bell suggest that
technological changes have a tremendous impact on organizations (Berman and Bell, 2011).
Industry 4.0, which is not only technological development but also a socio-economic
phenomenon, is currently happening and generates many challenges for manufacturing
firms. Along with this, following Reddy and Reinartz, the use of computer and internet

technology for a more efficient and effective economic value creation process considered
digitization impacts business models, organizational and management aspects, and entire
supply chain processes (Reddy and Reinartz, 2017). Rapid changes in the digital environment
affect organizations of all types in every industry. Thus, in order to respond to these
changes, businesses have to adapt themselves to keep ahead of the intense competition.
We are now in the world of digital technologies where big data, cloud, mobile are
increasingly affecting firms and the activities of people. Firms that have the abilities to
integrate digital technologies to transform processes, engage talent and drive new business
models will soon be profitable on average, have higher revenues, and achieve a more
extensive market valuation than competitors without a strong vision.
Besides, one of the forces causing firms to transform can be regulatory changes. It
mainly affects firms and agencies within the banking and law industry and the public sector.
For instance, the Glass-Steagall regulations of the United States Banking Act, which were
revoked, impacted the banking and financial services industries. Specifically, commercial
banking was separated from investment banking. Banks and financial services firms were
enabled to expand their offerings and develop new markets, which creates a considerable
chance for firms' development. This means that firms are required to transform to gain
competitive advantages in the new markets in terms of structure, strategy, skills, and
processes.
In addition, changes in the market structure can significantly influence the
companies, which is consistent with the study of Berman and Bell. The forces and changes
to which the organization must adapt include changes in customer tastes and valued
attributes of a product or service, new entrants competing with existing players, global
competition increasing, and economic forces that shift purchasing power or abilities of
different market segments (Berman and Bell, 2011). Essentially, when the competitive
environment changes sufficiently, the organization needs to adapt its internal structure to
remain competitive and effective in the new context. These market changes often increase
slowly on the organizations involved because they result from many small, incremental
forces and shifts in tastes, demographics, competitive pressures, and other economic forces
over time.