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In this lesson, we will identify several challenges that are prevalent in many of today’s organizations. The lesson will also review how these challenges may be overcome.

Problems with Today’s Organizations

Imagine that it’s 1985, and you’re on a beach in Miami, Florida. You’ve decided to take a nap and when you awake, you realize that it’s now 2015. Everything has changed within a small amount of time.

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Your clothes are now considered vastly outdated, along with your taste in music. How do you adjust in just a matter of hours? Businesses and organizations also change just as frequently, and along with these changes are challenges. Let’s take a closer look at some of the contemporary challenges that organizations face today.

Diversity in the Workforce

Today’s world is often described as a melting pot.

The term melting pot is a metaphor used to describe how various cultures and ethnicities have joined together in our society (just as a melting pot blends different ingredients). Similar to you waking up in 2015 after a 30-year nap, organizations also must adapt to the changes in society in order to remain functional. One of the contemporary challenges that organizations face is diversity. It’s a challenge primarily because those organizations which are lacking a diverse workforce are viewed as outdated, and in many circles, discriminatory.The lack of diversity in the workplace also presents a challenge because it does not account for the perspectives and opinions of others.

A successful organization provides a diverse workplace, that allows various opinions from different cultures and backgrounds, which helps to breed new and inventive ideas. To combat the challenge of having a homogeneous (similar) workforce, the following can be done:

  • Interview diverse applicants.
  • As part of the hiring process, target qualified minorities and make them aware of job vacancies.
  • Create partnerships and initiatives with key organizations designed to work with minorities.


Outsourcing can be defined as moving jobs out of an organization to another company or party in an effort to lower costs, and save money. To better understand outsourcing, let’s assume that you are the owner of a manufacturing company. One of your primary duties is to hire all of the employees of your business. After a thorough review, you have decided that instead of hiring an in-house accountant, your business will outsource those duties to an independent firm.

That firm will now handle all of the accounting duties at a fraction of the cost of performing the duties in-house.Outsourcing also occurs internationally as well, with many organizations choosing to have services performed overseas to save money. Outsourcing is a challenge for organizations, because it is often perceived by many that it eliminates jobs from the U.S., which can damage the economy.

This public black-eye hurts the reputation of the organization. The following can help organizations deal with the challenge of outsourcing:

  • Investigate ways to lower costs in other areas in the organization.
  • Look at ways to improve the current technology, eliminating the need to outsource.


Organizations such as Pepsi and Nike have become global brands. Globalization is defined as the process of activities that help a business or organization to become global. Obviously, this comes with multiple challenges (It’s difficult enough to become successful in an organization’s home country). The first is deciding just where to begin in the mission to spread the brand of the organization globally.

The external environment of every country is different, and must be taken into account. Some of these factors include geographical issues as well as political. Some countries may pose a physical risk and threat to the organization and any of its employees, if it were to set up a location in that country. Lastly, globalization may lead to instability due to not understanding the nuances of other countries.

The challenges of globalization can be overcome by the following:

  • Research & visit any candidate countries.
  • Consider a joint partnership with a business already in that country (to make the transition easier).
  • Participate in various events and activities with organizations in candidate countries.

Lesson Summary

Organizations are presented with many contemporary challenges including diversity in the workforce, outsourcing, and globalization. Although they each present unique challenges, correcting each challenge will help organizations to become more productive.

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