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managing_organizational_change.docx

Running head: BUSINESS MANAGEMENT 1

BUSINESS MANAGEMENT 2

Managing Organizational Change

Renita Wickes

CTU

Business Management

Introduction

What is off-shoring?

The off-shoring is a term used to describe the reallocation of the business process or a company from one country to another country. A company may reduce costs such as tax among many more costs, it may decide to put some of its money or even manufacture their goods. This process is called offshoring. Therefore the things that the manufacturer may look at including the economic conditions and the labor costs whereby the person may consider better economic conditions that are affordable or cheaper labor costs. I have chosen Nordex’s production processing Off-shoring which happened in the years 2013. This was very important off-shoring event as it has clear impact on the stakeholder and it is a classic example of off-shoring. Nordex is a Jonesboro based wind energy company and it used to manufacture engines in their plant.

How were the stakeholders affected?

When a company decides to relocate its manufacturing activities to another country then the life all the stakeholders are affected this event. This includes the employees in the country of origin. As this may be one of the key reasons as to why the country is offshoring, they may lose their jobs. The vendors in the country of origin may start leaving a low-quality life as they experience a loss market. In this Nerdex off-shoring event, the more 40 employees were laid off from the production department which was a setback to the US as already many companies had done this before because of the high cost of production in US. The Nordex production facility was moved to Germany and it was extended to meet the increasing demand. The employees were laid off with only one month notice which has great impact on the life of the employees and the community. Other business was also impacted from this decision as the suppliers lost their demands (Garus, 2013).

What initiated the change?

As indicated earlier the need to offshore is as a result of increased labor costs and also the tax imposed on the production business of the company thus so that the company may save on the production and increase the profitability there may be the need to establish an offshore manufacturing company to take advantage of the cheaper labor in the respective new country of production. Nordex just like many other companies had the ambitions of the making it big but they were facing high cost of production because of the high labor prices and tax rates. The off-shoring option was good for the company.

Why this is considered a transformational change

Offshoring is considered as a transformational change. But what is a transformational change? This refers to a change in the strategies of a company in the way it has been operating. Thus this may include things like change in the geographical location, vendors, and the management. So as we see the Nordex’s production process off-shoring, this fulfills the definition of a transformational change as the way of working has been changed. The German government was expecting that this off-shoring will employee more 700 people that are why they allowed and encouraged to do it. This was the start of the transformational change for the company.

Why can the firm not just keep doing what it has been doing?

Presently there are so many firms that are being started, thus there is increased competition in terms of product markets and the efficiency. Therefore the new upcoming companies re really branding their products and making them serve as many purposes as possible. The market for Nordex in its reality used to be abroad in tender of reality that the way of life is additional agreeable of restore essentialness and option wellspring of imperativeness. In U.S.A. With are getting their all things considered it's requiring us a litter all the more subsidizing. Given that the association couldn't get by method for without official stipends it used to be destiny to fail unless it started to look for determinations'. This was Nordex beginning for transformational trade and to improve. Nordex used to be surely not fit to contract 750 supporters cherish it got down to do because of the market offers for its contraptions. The primary concern for Nordex to do was to head abroad and see what unmistakable worldwide areas dropped at the table and what the market for their things used to be (Garus, 2013).

What is management's role in the transformational change?

So that transformation may be effective there is the need to have an effective leadership that will drive the process until a time that the business will have picked up operations. It is so saddening that a company may have been struggling so much to come to terms in the market but all the struggles do not result in an achievement. This is because the company may not be fully involving some of its most important stakeholders ("The Role of Leadership in Organisational Transformation", 2016). Thus the leadership that is effective enough should be the key to such a transformation. Hence the role of such leadership should be ones who are able to manage issues, here as an organization is transforming, there are usually issues to do with the technical and emotional aspect that needs to be handled by the management. The second function for the management is that they are shapers; here they are expected to control the process to ensure that they go as per the plan.

Are there easier alternatives to accomplish the goal of remaining competitive?

Transformational change say offshoring may be one way of remaining competitive. However, it is not the only way businesses can gain competitive advantage; there are a number of options that can be emulated. The first option is to align effective models of operations with strategy plans for growth. This is because in the event of business operations, as time moves operating models as change. Thus it would be advantageous if businesses adopted the models that are flexible enough to enhance the growth of the business. The second way is having the right size of assets and capabilities that are able to be aligned with the strategic plans of the company, by focusing on the assets and the size of the workforce the company has so that it may not be very expensive to manage the business.

References

KPMG. (2015). Remaining Competitive in the Technology Industry. Retrieved November 30, 2016, from https://home.kpmg.com/content/dam/kpmg/pdf/2015/10/remaining competitive.pdf

Strategic Management for Competitive Advantage. (2016). Harvard Business Review. Retrieved 30 November 2016, from HYPERLINK "https://hbr.org/1980/07/strategic-management for-competitive-advantage" https://hbr.org/1980/07/strategic-management-for-com petitive-advantage

Bradsher, C. D. (2012, January 21). New York Times. Retrieved October 8, 2015, from Business Day: http://www.nytimes.com/2012/01/22/business/apple-america-and-a-squeezed-middle-class.html?_r=1

Garus, K. (2013). Sun & Wind Energy. Retrieved October 7, 2015, from The Magazine for Renewable Energy: http://www.sunwindenergy.com/news/nordex-closes-plant-jonesboro

Moritz, R. (2013, June 28). Arkansas News. Retrieved October 6, 2015, from http://arkansasnews.com/sections/news/arkansas/update-nordex-end-wind-turbine-production-jonesboro.html