Question: Organizations always exist in dynamic environments and are continuously affected by change. Organizations almost always have to go through some strategic change in order to













Organizations always exist in dynamic environments and are continuously affected by change. Organizations almost always have to go through some strategic change in order to survive and be a successful organization. Organizations must create effective responses to the changes that happen around them in order to help them move in the right strategic direction. There are many uncertain internal and external factors that can necessitate an organization's decision to change their strategic direction. Note that changing an organization's strategy is not an easy task and it is certainly a process that does not happen immediately. A strategic change consists of the organization's structure, management processes, human resource processes, and the involvement of technology in order to gain organizational effectiveness whether it's through performance, productivity, or stakeholder satisfaction. One of the industries who were affected by change recently is the shipping industry, but more specically for this analysis The Port Authority of Los Angeles. The Port of Los Angeles was established on December 9, 1907 and is managed and operated by the Los Angeles Board of Harbor Commissions. There are ve members currently on the board and the positions are up for reelection every ve years. The board members are appointed by the mayor of Los Angeles. The port of Los Angeles is known as the busiest port in all of America for international trade in the Western Hemisphere (. . .) and became America's number one port for trade since the year 2000. The port is located in San Pedro Bay and runs 43 miles along the waterfront. \"The port's success has been built on a unique value proposition of providing infrastructure supporting economies of scale, as well as fast, consistent access to major U.S. and pacic rim markets.\"(...). It is very important for the port to focus on building the best world class infrastructure to maintain success in the maritime industry with continuous changes, to keep implementing sufcient supply chains, and incorporating new technology to consistently create job growth in the economy. The Port of Los Angeles is always going through organizational changes because the port is how Americans get their goods and it's the port's number one priority to make sure they can bring in product as fast and efficiently as possible. The world is constantly evolving so the Port of LA has to keep up with the changes that happen. Just recently, the port had to go through some abrupt changes and fast. There was a surge in a virus called Covid-19. Covid kept employees out of work and businesses closed which led to an increase in consumer spending habits and caused severe congestion of cargo at the port. The congestion is causing an increase in prices and supply shortages around the nation so the Port of LA had to come up with some swift changes. These changes consist of changing their hours to operate 24 hours, 7 days a week in order to help clear the supply chain disruption quicker (...). It includes giving fines to containers that are dwelling for too long. The nes are $100 per day for any containers left at the terminals for over nine days (...). There will also be a new queuing process for container ships coming into the Port of LA. This new queuing process will have container ships waiting about 150 miles from shore allowing the ships to slow and spread out (...). The ships will also be placed in the arrival que based on their departure time instead of their current system where ships will enter the que when they cross a certain line (...). Another change is passing an infrastructure bill for improvements at the port and better the supply chain infrastructure. The port is also utilizing sweeper vessels to help move the surplus of empty containers. The strategic changes happening at the port can relate to French's denition of organizational development which \"refers to a long-range effort to improve an organization's problem solving capabilities and its ability to cope with changes in its external environment with the help of internal or external change agents\" (. ..). It is the port's responsibility to think long term with the way their business operates because the port is a major importer of goods for Americans and businesses and always will be. It is crucial for the port to consistently stay up to date with current trends, changes, and be aware of what the future will bring. The results from the changes being presented are to help with the businesses long term goals of growth in the economy as well as good infrastructure. All of the changes are to help the Port of LA to be able to handle future changes within its external environments. The way the Port of Los Angeles brought about these recent changes is through the Lewin's Model of plarmed change which consists of three major steps; 1. Unfreeze the current model, 2. Change the current model, and 3. Refreeze the new change and ensure it becomes permanent (...). The port of LA realized that a change was needed in order to x the congestion at the port so they are slowly moving toward different business processes like operating 24/7, giving nes to dwelling container ships, coming up with a new queuing process to ease the number of ships at bay, and more as previously mentioned. Once the changes take place, which isn't instantly, they will be solidifying the new processes as the new norm. MARINA Analyzing the recent challenges in the Port of Los Angeles, these challenges bring up many questions and other problems brought on by environmental dimensions for example backlogs of shipments that are undeliverable, shipments held at standby making it a health hazard for oceans, lack of information available to the consumers, supply chain being affected in the industry and lastly the social concerns brought up by the port's uncertainty. Reading Chapter 5, Diagnosing Organizational Systems Environments, with tools and a structured format for success and growth, as we understand growth to be in constant movement in all organizations (Organization Development & Change 10th Edition). Analyzing the external and internal factors in the port of Los Angeles we analyze its general and task enviromnents. Contributing to the concerns are politics, economy, technology, and legal factors. Applying the PESTLE Framework to help research key external factors that are inuencing the shipping industry at the port. Another framework applied will be the Porter 's Five Forces to analyze the competitiveness of these forces and how they are inuencing the industry. The 5 forces will be used to identify the threats in the port that are used to organize solutions that allow us to come up with suggestions and recommendations to help alleviate the stresses in the industry and make it competitive. POLITICAL FACTORS Due to the external global inuences in the ports adjusting to change in legislation is necessary due to the lack of stability in the economy. According to an article, Axios: Biden works to expand Port ofLos Angeles to 24/ 7 operations by Nichols Hans, \"The Biden administration acknowledges the importance of improving operations at the port mainly because it is a point of entry for 40% of containers to the US. resulting in challenges in Southern California." Additionally, the International Monetary Fund is citing supply chain problems at the ports that will greatly affect global growth projections (Hans, 2021). The legislation, stated this October, allows approval for more productive and organizational drivers to move along for a betterment of the supply chain after extended logjams. Retail stores may feel condent that the Biden administration announcing extended operations is a signicant way to deal with the massive containers arriving. ECONOMIC FACTORS Financial influences in job growth which alleviate consumer confidence which also raises disposable income is an economic benefit. In an online article, White House Fact Sheet: Biden Administration Efforts to Address Bottlenecks at Ports of Los Angeles, Moving Goods from Ship to Shelf (Targeted, 2021) states, "working hours have improved in Los Angeles moving 30% more containers to help U.S. exporters reach customers around the world and U.S. families and factories get the goods they need." Along with the port expanding to 24/7 operations, night time shifts and weekend hours are making scheduling flexible and opening more opportunities for the operators to work. The benefits are the capacity of double cargo moving out of the docks and onto the highways at different times regularly. Economically, this will influence the need for more workers in logistics for transporting, shipping and receiving. Committing to this new solution is Walmart which is increasing as much as 50% in night time hours. UPS will be increasing use of 24/7 operations and FedEx will be making changes in trucking and rail use to increase volume. Samsung will commit to moving nearly 60% more containers out of the ports and The Home Depot will move 10% more containers during off-peak port hours. Lastly, committing to this extended schedule plan is Target who is mainly moving containers more at night than in the day to help ease congestion at the ports. This strategic move will help significantly reduce concerns that bottlenecks blockages bring.TECHNOLOGY FACTORS Signicant internal inuences in the port are the advancement of technologies. There have been several digital tools that have entered into this playing eld that help align troubling areas that cause time management failures. In an article by Arthur Friedman, Port of Los Angeles Launches 'Control Tower ' Tool to Track Cargo, describes these new technologies. These devices will assist in avoiding bottlenecks, managing congestion, decreasing logj ams, understanding new regulations placed by the government and other disruptions. One instrument is the Control Tower that is linked together to the Port Optimizer, a cloud-based secure digital portal of shipping data. It helps to facilitate more efficient cargo ow through its terminals by implementing the GeoStamp (snapshots) data of averages, volumes and trends that update continuously (Wabtec). Another technology is the Signal that launched this past September. This data tool provides a three-week look at cargo coming into the port with information updated daily. Lastly, launched this past November, the Return Signal tool provides data that lets the trucking community know when and where to return empty containers to cargo terminals. This data is also updated every ve minutes. According to Port of Los Angeles executive director Gene Seroka (Friedman, 2021), \"We are currently the only port in North America offering this array of digital tools, but very optimistic that this type of data will eventually be more uniformly available at every node of the supply chain.\" These resources will improve decision making, uidity, and efficiencies to positively alter situations at the port. LEGAL FACTORS Policies inuenced by the government by making changes in the workplace as the Biden administration is addressing and uniting with private Los Angeles union leaders, The International Longshore and Warehouse Union port ofcials (ILWU). According to Hans Nichols, Walmart, UPS, FedEx, Samsung, The Home Depot, and Target will have the exibility to accelerate the shipments of goods throughout the country (Hans, 2021). The port will expand to all day operations because of the supply chain problems as a major factor in diminishing global economic growth. Planning these new regulations will bring on other issues like ination but the government is helping to nd ways to diminish import predicaments. These changes in legislation impact employment in a time of economic loss and address ways in accessing products and merchandise as businesses are able to cope with past challenges. DIRECT INTERNAL FACTORS PORTER'S 5 FORCES Further continuing our research on diagnosing organizational structure task environments, we recognize the competitive forces in the port by applying the Porter's Five Forces. RIVALRY AMONG EXISTING COMPETITORS Rivalry among existing competitors in the ports is influenced by the delay in merchandise arriving and not being able to escalate to the next part of completion of orders, making time essential. The challenges of controlling operations are what is mounting the issue. Some say it will take a year or two to iron out the impacts of the backlogs. Although with the authorization from the government to find ways to open up hours of operations is an example that it can be resolved and scheduling limitations can be addressed. The question is who and in which order will these operations be managed. Port operators and authorities have a big responsibility in the efficiency of port services. Rivalry among competitors is intense in this industry as competition is high due to similar products being offered by major corporations. Perhaps customers that are able to provide products and merchandise first can have the advantage, making loyalty standards shift.THREAT OF NEW ENTRANTS/COMPETITORS New entrants in this industry are highly unlikely due to the slow growth the industry has experienced due to the effects of the pandemic of March 2020. The major firms are fighting each other to compete by finding ways to get late and delayed products into stores and retail centers. For possible entrants this can be a time to emerge because of the troubles are being redirected to shipping/delivery challenges might be a way in, but a rough time because of its uncertainty. Major companies that are named above, their distribution channels are established and agreements are secured. Another benefit is their product differentiation due to brand loyalty, they have been able to stay afloat. Another example is their economies of scale, they are able to purchase more for less spreading their fixed costs over a larger number of units. These reasons as to why new entrants are most likely not possible will deter new entrants making the incumbent firms profitable. For new competitors entering ports in California it is challenging as all ports small and large are striving to make a challenging situation work. It is highly unlikely that new ports will enter into other areas because of the need for high significant capital. It is estimated that opening another port would run in the billions. THREATS OF POTENTIAL SUBSTITUTES The threat of substitutes for retail stores is high because of attractive prices due to lower costs of alternate products each organization offers. Rivals are having to constantly be researching competitive prices although entrants are not likely, rivalry from organization to organization is definitely intensified. Because of the use of technology customers are able toTHREATS OF BARGAIN IN G POWER PORT USERS Port management is determined by the control of issues impacting the port's operations. Carriers, shippers, and tenants are important in how operations are maintained in the port in the sea and onto the highways. These signicant forces are shaping the competitive scene. This is an extremely delicate situation as these forces are part of a collective systemic operation. The user power is the experience in handling cargo and material safely and effectively and the use of their inventory equipment needed. Concentration of port users deals with who has the most bargaining power. Even the largest port in Los Angeles contends with extremely powerful caniers. In 2020, these where the records, Furniture (644,136) was the largest containerized import, Pet and animal feed (193,936) export, with China and Hong Kong ($115 billion), Northeast Asia (72%) for top foreign trade (The Port of Los Angeles, 2021). BARGAINING PORT SERVICE PROVIDERS The nal force shaping the competition is the bargaining power of the service providers. Currently, container terminal capacity is managed by port operators. Lease agreements and contracts that include guides addressing rights and obligations, contract terms will set boundaries on the port services that the port providers need to enforce. Interrelationships between providers and port users can inuence power and structure. An example, port providers can strengthen their bargaining position by accountability of containers. Like, having carriers publish empty returns daily, making transportation aware of how many units can be accepted in each terminal. Providers need to develop a uniform policy on empty and chassis returns to simplify operations. Another bargaining service of the provider is a new implementation that will be taking effect soon, on a vote to ne ocean carriers $100 per container for boxes sitting nine or more days that move by truck and six days for those scheduled for transport via on-dock rail. The fee will increase $100 each day. In an article, Fee aims to discourage shippers using LA port as makeshift warehouse, (Kulisch, 2021) the Executive Director Gene Seroka describes how MGA Entertainment, a toy manufacturer with seven buried containers can't get its orders to market for Christmas, many other similar situations are occurring. In a Harbor Commission Meeting these punitive charges were to be implemented in mid-November. Port ofcials made clear they won't wait any longer for industry stakeholders to gure out solutions because letting containers sit beyond standard free time and creating disruptions in operations is no longer adequate. Some suggestions to free up space on the docks by discovering large strategic sites in the Inland Empire to store containers, also, storing chassis depots farther east in desert locations. The problems are that many empty ocean containers and chassis are scattered across pop-up parcels, making it incredibly difficult to return to its intended destination for reuse. Having locations where these containers can be inspected and undergo a six-point road worthiness check by an accredited longshoreman, as far away from the ports as possible. Then nally, empty containers can be taken to terminals for vessel loading, during a 3-? am shift. Port service providers have authorization to enforce these measures as empty containers around the port are multiplying. Difficulty in clearing out some 65,000 empty containers sitting on the docks are taking up space and preventing unloading of full containers, this is a headache for the port service providers as most port users are moving slowly
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