Thursday, August 29, 2019

The study of product development as the core in transforming medium Literature review

The study of product development as the core in transforming medium size businesses into large multi-national companies - Literature review Example Six different theoretical frameworks have been formulated to explain organizational transformation. They include life cycle, evolutionary, dialectical, teleological, social cognition and cultural approaches to change. Evolutionary models include social evolutionary and biological models. Here it is assumed that situational variables, circumstances and environment faced by each organization determine the change in each organization. Here very little role is given to people in determining the direction of change and change is considered as very slow process.The later version of these models assume managers having ability to respond and anticipate changes.Based on this theory, mergers are considered as a form of organizational transformation to respond to forces outside an organization. Through mergers, there can be overall change in the organizational structure of an existing corporation in a mature product market as a part of its growth strategy to survive in the industry. This happens when the results of the past investment decisions will not be able to produce assets or resources that can finance the activities. Thus, the process of mergers and acquisitions involves the reduction in the resources as a part of the reallocation to new growth areas. In the case of mergers, the firms receive a surplus than they obtain individually through the economies of scale. This surplus increases when the product demand is high and falls when it is low. ... Thus, the process of mergers and acquisitions involves the reduction in the resources as a part of the reallocation to new growth areas. In the case of mergers, the firms receive a surplus than they obtain individually through the economies of scale. This surplus increases when the product demand is high and falls when it is low (Lambrecht and Myers, 2004). In addition to these, during the economic downturns, the unproductive assets existing needs to be sold off to shareholders. The hesitancy of the management in doing so results in takeover activities (Maksimovic and Phillips, 2000).The takeover results in selling the unproductive assets to the acquirer of the firm and thereby reaching the proceeds of the takeovers to the shareholders. Thus mergers result in cost savings and revenue enhancement. The main criticisms of the evolutionary models include their base on mathematical field and not human fields, failure to explain change as a social phenomena, difficulty in linking environme ntal and organizational variables, etc(Collins,1998). The teleological models see change as the phenomenon resulting from the leaders’ perception of necessity to change. Here change is assumed to be dependent on internal decisions in accompany instead of external changes. This model gives the central role to leader and considers leader as a rational agent and change is explained on the basis of scientific management tools. Thus these models are considered as more human than the evolutionary models (Brill and Worth, 1997). This theory focuses on the need for leaders to motivate the followers rather than imposing their behaviour on followers (Trice and Beyer,

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