Each economic entity conducting international business faces numerous external threats. The most common threat for the company’s welfare is an activation of competitors’ business operations. In particular it is an improvement in the technology of the manufacturing thus enhancing the quality of goods and ratio of price-cost for each manufactured item. The case study on Stanley Australia concerning implementation of the organisation change due to increasing competitive pressure in a global business environment is in the focus of this essay writing. It analyses a case study based on the organisation change experience of Stanley Australia and Stanley Bostitch subsidiaries of Stanley Works, US-owned Company operating throughout the world, employing more than 550 employees together. The Corporation manufactured diverse portfolio of hardware consisting of more than 50000 products. High quality of the company’s products was the most important value that provided high business reputation of the company.
Organisation change in the global environment
Organisation change is the response to the changes in four market forces defining the globalisation of industries and markets: economic, social, political and technological. “Understanding of the global forces assists a company to identify the critical success factors in a global industry and market” (Drori, Meyer & Hwang 2006, p.309).
Becker and Freeman (2006) point that understanding and transforming global trends into the corporate strategy is the core responsibility of the top management. It is highlighted that factors of global business environment such as innovation in goods and services, technology progress, elimination in trade barriers, labour and talent shift, increasing competitiveness and demanding and sophisticated consumers’ tastes accelerate the pace of change. The authors describe ten major global trends that determine constantly changing both local and global business environments:
growing number of consumers and changing customers’ tastes;
activation of economic activity in Asia region;
increasing access to information, education, expansion of knowledge;
globalization of labour and talent markets;
stricter environmental regulation and constraint usage of natural resources;
improved communication and interaction among the business entities;
more frequent application of scientific knowledge and techniques to management of the business activities.
Regarding the background of the change need in Stanley Australia, it should be underlined that the period of the outstanding quality, which no competitors could reach, lasted until the late 1980s. Improved quality of Chinese products and much lower costs comparing to Stanley figures were the reasons for losing market share and shifting the customers towards the cheaper goods from China.
This situation demanded immediate response and complex of action from the US headquarters and local entities. New CEO, John Trani, had to address the existing problems. He decided to implement rapid and drastic changes including:
the number of the company’s manufacturing sites were cut from 123 to 70;
extensive personnel downsizing was conducted;
organisational structure was changed from divisional to matrix.
The leadership style applying by Trani can be described as authoritative. It is characterized by giving strict orders and instructions to reach specific goals in a short time frame and ensure that no …