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Written Assignment

Unit 1: Organizational Theory

- Anonymous -

Master’s of Business Administration, University of the People

BUS 5910: Management Capstone

Dr. Samantha Linden

September 7, 2022
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Introduction

Valio is a well-known dairy company in Finland with a lengthy cooperative history and a

significant regional distribution across Europe. The company reorganized in the late 1980s and

early 1990s to join the European Union (EU). Joining the EU was a crucial environmental shift

that dramatically affected all aspects of their business. It would force them to give up their

protectionist policies and expose them to fierce competition from firms from other EU member

states. The literature on organizational change and adaptation includes everything from broad

change models and theories to literature on change management theory and strategy. This

Written Assignment discusses a case study in The Transformation of Valio: A Case Study

(Lamprinakis, 2013) by addressing the following areas:

The core problem of the case study

Valio had to modify its organizational structure in 1990 after operating for more than

eight decades. The company cut back on its system, reorganized it, and made R&D investments.

Additionally, it created new markets. After joining, Finland had to adhere to EU trading rules,

which posed a danger to Valio’s firm (Lamprinakis, 2013). In Valio, two things changed. One

was the internal setting in which Valio boosted its investments in R&D, improved the quality of

its products, developed new ones, and adopted cost-efficient practices through reorganizing and

changing its production and management. Additionally, several of the company’s plants had to

be reduced. Concerning the second aspect, external surroundings, Valio expanded into new

markets, enhanced its brand, and increased its revenue streams.

The root cause for the issue in this case study

Valio had to make structural modifications due to Finland joining the EU. EU policy

permitted international rivals, and at the same time, Valio had the chance to conduct business
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outside of Finland. Therefore, we can conclude that the organization was significantly impacted

by the internal shift in the country that was joining the EU and the external elements that were

adhering to the EU’s trading policy and observing foreign competitors.

Possible alternatives

Since Finland entered the EU, Valio’s reorganization has focused entirely on the external

business environment. Their proactive attitude demonstrates their knowledge of the situation.

Actions like investing in R&D and quality improvements show that they are prepared to compete

with EU members who have the same product and business strategies, which impacts their

choices in internal environmental strategy. It is because they will be exposed to the EU trade

policies. Externally directed actions focused on the market included market discovery and

development, increased marketing efforts, and brand building to highlight the external

environment approach.

The business expanded its customer base and diversified its revenue streams by finding

and growing its “natural markets” (Lamprinakis, 2013). Because the management team’s

impression of the business was significantly influenced by its strong coop heritage, particularly

when considering everyday operations and routines, their experiences demonstrate that its

managers and executives make excellent decisions. Some executives with more “business-

oriented” backgrounds perceived the corporation as a vestige of a lobbying organization

(Lamprinakis, 2017).

Recommendation of a plan of action

Valio’s extremely significant action is to focus on growth, innovation, and learning.

According to Peter Senge’s Argyris model, the manager should enable their staff to grow

personally by learning innovations (Laegaard & Bindslev, 2006). Senge claims that creating
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creative tension between the vision and the current status is crucial. Without an idea, it is

impossible to develop innovation, which is essential for creating a framework for the learning

organization. Valio must successfully manage and spearhead the transformation while educating

its staff about the new direction.

The importance and relevance of a study of business

The transformation of Valio demonstrates the need to conduct an initial environmental

scan in business through internal and external study of various settings. Both internal and

external variables influence the organizational environment. The environment must be surveyed

to ascertain the evolution and projections of factors influencing organizational success (Albright,

2004). Businesses must foresee the future to plan for their next brilliant strategy, and they can

only do this by comprehending the elements that affect their surroundings.

Furthermore, a study of business includes the analysis of change management. Managing

change is crucial in boosting output, quality, and beneficial outcomes. A company with solid

experience in change management will be able to present the difference and guide its personnel

effectively (Jennings, 2002). Such management equips its staff to accept change and helps them

get ready for it.

In conclusion, the environment can present opportunities and challenges for a business.

Opportunities are occasions and patterns that offer chances to raise a company’s performance

level. Events and trends that could negatively impact an organization’s performance are called

threats. Because doing so will enable managers to predict the future and make informed

decisions on time, business organizations must study their business environments.

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References

Albright, K. S. (2004). Environmental scanning: Radar for success. Information Management

Journal, 38(3), 38–45.

https://www.researchgate.net/publication/239970846_Environmental_Scanning_Radar_f

or_Success

Jennings, D. (2002). Strategic management: An evaluation of the use of three learning methods.

Journal of Management Development, 21(9), 655–665.

https://doi.org/10.1108/02621710210441658

Laegaard, J., & Bindslev, M. (2006). Organizational theory. Bookboon.com.

https://my.uopeople.edu/pluginfile.php/1600672/mod_page/content/7/TEXT%20organiza

tional-theory.pdf

Lamprinakis, L. (2013). The transformation of Valio: A case study. Journal of Business Case

Studies, 9(1), 85–88. http://cluteinstitute.com/ojs/index.php/JBCS/article/view/7549/7615

Lamprinakis, L. (2017). How to successfully change an organization: Management perceptions

and practices. OIDA International Journal of Sustainable Development, 10(05), 39–48.

https://ssrn.com/abstract=3061960