Organization Change

Organizational Change and Intervention Strategies

Organization Change

The change means the alteration of status quo or making things different. It may refer to any alteration which occurs in the overall work environment of an organization. When an organizational system is disturbed by some internal or external force, the change may occur. The change is modification of the structure or process of a system, that may be good or even bad. It disturbs the existing equilibrium or status quo in an organization. The change in any part of the organization may affect the whole of the organization, or various other parts of organization in varying degrees of speed and significance. It may affect people, structure, technology, and other elements of an organization. It may be reactive or proactive in nature. When change takes place due to external forces, it is called reactive change. However, proactive change is initiated by the

management on its own to enhance the organizational effectiveness. The change is one of the most critical aspects of effective management. It is the coping process of moving from the present state to a desired state that individuals, groups and organizations undertake in response to various internal and external factors that alter current realities.

Survival of even the most successful organizations cannot be taken for granted. In some sectors of the economy, organizations must have the capability to adapt quickly in order to survive. When organizations fail to change, the cost of failure may be quite high. All organizations exist in a changing environment and are themselves constantly changing. Increasingly, the organizations that emphasize bureaucratic or mechanistic systems are ineffective. The organizations with rigid hierarchies, high degree of functional specialization, narrow and limited job descriptions, inflexible rules and procedures, and impersonal management can’t respond adequately to the demands for change. The organizations need designs that are flexible and adaptive. They also need systems that require both, and allow greater commitment and use of talent on the part of employees and managers. The organizations that do not bring about timely change in appropriate ways are unlikely to survive. One reason that the rate of change is accelerating is that knowledge and technology feed on themselves, constantly making innovations at exponential rates.

Organizational change is the process by which organizations move from their present state to some desired future state to increase their effectiveness. The goal of planned organizational change is to find new or improved ways of using resources and capabilities in order to increase an organization’s ability to create value and improve returns to its stakeholders. An organization in decline may need to restructure its resources to improve its fit with the environment

The Imperative of Change

Any organization that ignores change does so at its own peril. One might suggest that for many the peril would come sooner rather than later. To survive and prosper, the organizations must adopt strategies that realistically reflect their ability to manage multiple future scenarios. Drucker, for example, argued that : Increasingly, a winning strategy will require information about events and conditions outside the institution. Only with this information can a business prepare for new changes and challenges arising from sudden shifts in the world economy and in the nature and content of knowledge itself. If we take an external perspective for a moment, the average modern organization has to come to terms with a number of issues, which will create a need for internal change. Six major external changes that organizations are currently addressing or will have to come to terms with in the new millennium are :

1. A large global marketplace made smaller by enhanced technologies and competition from abroad. The liberalization of Eastern European states, the creation of a simple European currency, e-trading, the establishment of new trading blocs such as the ‘tiger’ economies of

the Far East, and reductions in transportation, information and communication costs, mean that the world is a different place from what it was. How does an organization plan to respond to such

competitive pressures?

2. A Worldwide recognition of the environment as an influencing variable and government attempts to draw back from environmental calamity. There are legal, cultural and socio-economic implications in realizing that resource use and allocation have finite limits and that global solutions to ozone depletion, toxic waste dumping, raw material depletion, and other  environmental concerns will force change on organizations, sooner rather than later. How does an individual organization respond to the bigger picture?

3. Health consciousness as a permanent trend amongst all age groups throughout the world. The growing awareness and concern with the content of food and beverage products has created a movement away from synthetic towards natural products. Concerns have been expressed about salmonella in eggs and poultry, listeria in chilled foods, BSE or ‘mad cow disease’ and CJD in humans, genetically engineered foodstuffs, and the cloning of animals. How does an individual organization deal with the demands of a more healthconscious population?

4. Changes in lifestyle trends are affecting the way in which people view work, purchases, leisure time and society. A more morally questioning, affluent, educated and involved population is

challenging the way in which we will do business and socialize. How will people and their organization live their lives?

5. The changing workplace creates a need for non-traditional employees. Many organizations have downsized too far and created management and labour skill shortages as a result. In order to make up the shortfall, organizations are currently resorting to a

core/periphery workforce, teleworking, multi-skilled workers and outsourcing. A greater proportion of the population who have not been traditional employees (e.g., women with school aged children) will need to be attracted into the labour force. Equal opportunity in pay and non-pecuniary rewards will be issues in the future. How will an individual organization cope with these pressures?

6. The knowledge asset of the company, its people, is becoming increasingly crucial to its competitive wellbeing. Technolgical and communication advances are leading to reduced entry costs across world markets. This enables organizations to become multinational without leaving their own borders. However, marketing via the internet, communication viae-mail and other technology applications are all still reliant on the way you organize your human resources.

Your only sustainable competitive weapon is your people. How do you intend managing them in the next millennium? The same way as you did in the last?  What is important, however, is recognition that change occurs continuously, has numerous causes, and needs to be addressed all the time. The planned change is not impossible, but it is often difficult. The key point is that

change is an ongoing process, and it is incorrect to think that a visionary end state can be  reached in a highly programmed way.

Stimulating Forces

What makes an organization to think about change? There are a number of specific, even obvious factors which will necessitate movement from the status quo. The most obvious of these relate to changes in the external environment which trigger reaction. An example of this in the last couple of years is the move by car manufacturers and petroleum organizations towards the

provision of more environmentally friendly forms of ‘produce’. However, to attribute change entirely to the environment would be a denial of extreme magnitude. This would imply that organizations were merely ‘bobbing about’ on a turbulent sea of change, unable to influence or exercise direction. The changes within an organization take place in response both to business and economic events and to processes of management perception, choice and action.

Managers in this sense see events taking place that, to them, signal the need for change. They also perceive the internal context of change as it relates to structure, culture, systems of power and control, which gives them further clues about whether it is worth trying to introduce change. But what causes change?

What factors need to be considered when we look for the causal effects which run from A to B in an organization? The change may occur in response to the :

• Changes in technology used

• Changes in customer expectations or tastes

• Changes as a result of competition

• Changes as a result of government legislation

• Changes as a result of alterations in the economy at home or abroad

• Changes in communication media

• Changes in society’s value systems

• Changes in the supply chain

• Changes in the distribution chain

Internal changes can be seen as responses or reactions to the outside world which are regarded as external triggers. There are also a large number of factors which lead to what are termed internal triggers for change. Organization redesigns to fit a new product line or new marketing strategy are typical examples, as are changes in job responsibilities to fit new organizational

structures. The final cause of change in organizations is where the organization tries to be ahead of change by being proactive. For example, where the organization tries to anticipate problems in the marketplace or negate the impact of worldwide recession on its own business, proactive change is taking place