Environment Uncertainty

1.0        INTRODUCTION

Business organizations are in consistent changes, when they go up against new difficulties and adjust to the turmoil of their working environment (Oreg & Berson, 2011). In general, the organizational changes refer to the changes in their management style, that can be in terms of their resources, budget, business strategy, supply chain management and many more, these changes may occur depending on the organizations in which they operate (Örtenblad, 2004). Changes in the organization bare its risks, as the changes can be difficult to effectively accomplish as proved by the outcome of the change endeavors embraced by the organization (Grimolizzi-Jensen, 2015). Similarly, changes in the organization is proven successful even though the rate of failure is high because of the organizational leader; where the leader understand when the changes is needed and take the necessary initiative for the changes to occur and furthermore, the leader takes responsibility for its plan, leading and support the changes with proper framework (Haque & M.M, 2008)

However, one the key element that causes the organization to change is environmental uncertainty. The idea of uncertainty has been focusing in many research activities that concentrated on the structure of the relationship between organization and environment (Smircich and Stubbard, 1985). Therefore, continuing in the rise of dynamism and complexity in the environment, where business organizations operates will turn out to be progressively uncertain. As a result, management of uncertainty, will keep on being the primary undertaking of management including the development of mechanism to lessen, retain, counter, or completely avoid it (Jauch and Kraft 1986).

2.0         IMPACT OF ENVIRONMENTAL UNCERTAINTY ON ORGANIZATION CHANGE

Uncertainties happen due to lacking in information and have not enough knowledge and experience in decision-making (Duncan, 1972).  It is also assumed that uncertainty can be a reason for unclear and complex relationship between the organization and the environment; internal operation of the organization and many more (Collis, 1992). Furthermore, uncertainty is additionally seen as a substantial feature of the external environment (Milliken, 1987) such as political, economic, social, technology, environment and legal.

Based on my research, political, economic and technology, plays a huge impact on the organization change.

2.1        Political Uncertainty

         The impact Political environment of a country can affect significantly to business organization, which may lead to risk factor and cause them to endure losses a and that directly impact on the economy of the country. Moreover, legislative issues are a fundamental cause for uncertainty, since government officials outline the institutional environment of organizations by, like, setting up the taxes and framework directions and labor market (Rime, 2016).

U.S Presidential Election 2016, where Republican candidate Donald Trump was elected as the 45th President of the United States, by defeating Hillary Clinton, a Democrat candidate. During his presidential campaign President Trump, promised to bring many changes in policies, infrastructure, trade deals and many more (BBC, 2017). When the former President Obama ended his term in January 2017, and President Trump took over the Oval office he began to execute his action on changing the polies that Obama administration passed (White House, 2017), such as, overtime regulation of DOL (U.S Department of Labor), the Affordable Care Act, Immigration law and many more (Uzialko, 2017).

Considering change in Immigration Law, according to many experts, this new law will affect the reputation of the U.S.A in a negative manner, as a good place to do business. Moreover, this statement is agreed by CEO of Facebook, Google, Goldman Sachs and many more; because they might lose their key employees and face difficulties attracting potential employee (Wharton university of Pennsylvania, 2017). The new law affects not only big companies, but it creates huge impact on the small businesses across the country (Dishman, 2017). Hence, this change will affect the business entirely, now the organization need to come up with alternate solution for the employee that are affected by this this law, as a result organizational forced to change their plan and structure from the way they use to run.

Another example, building a wall U.S-Mexico border, the following step taken by President Trump, may give rise to a trade war among US and Mexico, and this shows a strong negative impact for the organization that do business with Mexico, because Mexico is 3rd largest trading partner with the U.S.A (Chopra and Avgerinos, 2017), if this is the case then trading organizations, transport organization, and many will suffer the consequences, resulting damaging in sales, that leads in decline in profits. (business.gov.nz, 2017). If the hold of doing business for long term that entirely depend on Mexico-U.S. relationship, then there might be possibility that the organization may undergo bankruptcy or may lead to downsizing of their organization, where the organization will be forced to cut cost by laying off its employees (Woody, 2015).

Another factor is political risk, China is especially perilous regarding political hazard. The likelihood of nationalization of business organizations should be considered, because in 1994 its already seen happening in China. Thus, there are the dangers of expropriation, appropriation, cash capricious and contract disavowal. Currency downgrading and uncontrolled inflation are conceivable situations in numerous nations, that causing problems for insurance limits and many more. Moreover, it also brings risk to the organization and its employees.  The political risk in China quite unique, where central, provincial, and local government fight for appropriate policies. Thus, it makes the organization in China having a difficult time for operating their business, as they often undergo many changes in their business plan according to the policies of the country (China Political Risk Management, 2009). For example, as there risk in their political sector, the foreign organizations are constant in fear that did local governance have different opinion in the policies than that of central government, so in order to be in safe side, the organizations spends huge amount capital for the  political party, so that they can do business comfortably, on spending lots of capital in politics, the finance department in the organization be in tight schedule, so, they don’t have enough resources for their goal. Therefore, to save money they change their strategy and start cutting cost (Adam, 2011).