More and more organizations today face a dynamic and changing environment. So the organization is required to adapt this change . “Change or die” is the rallying cry among today’s managers worldwide. Therefore, in this dynamic society surrounding today’s organizations, the question before the managers is not whether change will take place or not. The relevant question is how to cope up with this inevitable change.
According to Organisational Development and Research Organization
Organizational change is the implementation of new procedures or technologies intended to realign an organization with the changing demands of its business environment , or to capitalize on business opportunities.
Nature of organizational change
Change can be defined as an alteration in the existing field of focus which tends to affect the equilibrium. It implies a new equilibrium between different components of the organisation-technology,structure arrangement, job design and people. Keith Davis beautifully explains the nature of work change by drawing a parallel with an air-filled balloon. He explains when a finger(which represents change) is pressed against the exterior of the balloon (which represents the organization) , the contour visibly changes at the point of impact. The molecules of air in the balloon represent the firm’s employees. Repeated pressure at a point may unnecessarily weaken the balloon at that point and motion creates friction and heat. Eventually a rupture occurs and the organisation collapses. But an organization is more complex than a balloon, and real people are quite different from the molecules in the balloon. This comparison is merely intended to emphasis eth point that just as molecular equilibrium is essential, an organization also seeks equilibrium in its social structure. By equilibrium we mean that people come to expect various relationships within their working surroundings. The essence is that change requires new adjustments and new equilibrium.
Features of Organizational Change
1. When change occurs in any part of the organization, it disturbs the old equilibrium leading to development of a new equilibrium. The type of new equilibrium depends on the degree of change and its impact on the organization.
2. Any change may affect the whole organization, some parts of the organization may be affected more, others less; some parts are affected directly , others indirectly.
3. Organizational change is a continuous process. However, some changes which are of minor type, may be absorbed by the existing equilibrium; other, which are major ones may require special change efforts.
Types of changes
1. Evolutionary change
Some changes are evolutionary in nature and do not greatly violate the tradition and status quo expectations. They usually take place one by one. They seldom promote great inclusion, evoke deep resistance, or give dramatic results. One limitation of these changes is that it is very slow and the organization may fall behind the expectations.
2. Revolutionary change
Sometimes, change may be cataclysmic. A revolutionary change results in overturning the status quo arrangement and causes violation, rejection, or suppression of old expectations. The revolutionary churning generally faced strong resistance and sometimes only an exercise of power can implement such changes. Revolutionary changes are rarely introduced except where the situation becomes highly intolerable and there are no other acceptable options.
3. Proactive Vs Reactive change
Proactive change is change that is initiated by an organization because it is desirable to do so. It is brought out if the anticipation of the likely behavior of the forces having impact on the organization. Such organizations are known as prospectors which constantly interact with their environment to identify new opportunities and threats. Before these opportunities or threats force them to change, they incorporate the required change.
Reactive change is undertaken when it is pressed by some factors, either external or internal to the organization . Most of the organization which believe in traditional pattern of working often for reactive change. These organizations introduce certain methods or systems when they are forced for that.
Factors/Forces in Organizational Change
Various factors which may be important for necessitating organizational change may be grouped as :
1. External Factors
2. Internal Factors
1. External Factors
No organization is an island in itself. Each organisation must continually interact with other organizations and individuals- the consumers, suppliers, unions, shareholders, government and many more. The present day environment is dynamic. Changes in social, political, economic, technological and legal environment force organizations to change. Such changes may result into organizational changes like major functions, production processes, labour management relations, nature of competition, economic constraints, organizational methods etc. In order to survive in the changing environment, organization must change. How the change in various environment factors necessitate change in the organization may be seen in the following context.
i. Technological Changes
The world is presently characterized by dynamic technological shifts. The technological advancements, particularly in communication and computer technology, have revolutionized the workplace and have helped to create a whole new range of products/ service. When there is a change in technology in the organization’s environment and other organization adopt the new technology, the organisation under focus becomes less cost-effective and its competitive position weakens. Therefore, it has to adopt new technology. When the organization adopts a new technology, its work structure is affected and a new equilibrium has to be established.
ii. Changes in Marketing Conditions
Since every organization exports its outputs to the environment, an organisation has to face competition in the market. There may be two types of forces which may affect the competitive position in the origination. Other organizations supplying same products and buyers who are buying the products. Any changes in these forces may require suitable changes in the organization.
iii. Social changes
Social changes reflect in terms of people’s aspirations, their needs and their way of working. Social changes have taken place because of the several forces like, level of education, urbanization, feeling of autonomy, and international impact due to new information sources. These social changes affect the behavior in its working so that it matches with people.
iv. Political and Legal Changes
Political and legal factors broadly define the activities. Any changes in these legal and political factors may affect the organizational operation.
v. Changing Competition
The global economy means that competition are as likely to come from across the ocean as from across town. Heightened competition also makes it necessary for established organisations to defend themselves against both traditional competitors who develop new products and services and small, entrepreneurial firms with innovative offerings. Successful organizations will be the one that will change in response to the competition. They’ll be fast on their feet, capable of developing new products rapidly and getting them to market quickly.
2. Internal Factors
It is not only the change in external factors which may necessitate organizational change, any change in organization’s internal factors m ay also necessitate change. Such a change is required because of the following reasons.
i. System Dynamic
An organization is made up of subsystems similar to that of the sub personalities in the human beings. Subsystems within an organisation are in constant and dynamic interaction. The factors that influence the alignment and relationships among the various subsystems in the context of an organization are, for example technology, internal politics, dominant groups/cliques and formal and informal relationships within.
ii. Inadequacy of Administrative Processes
An organisation functions through a set of procedures, rules and regulations. With changing times and the revision of organisational goals and objective, some of the existing rules, procedures and regulations could be at variance with the demands of reality. To continue with such functionally autonomous processes can lead to organisational ineffectiveness. Realization of their inadequacy is force that induces change.
iii. Individual/Group Speculations
The organization as an entity is a confluence of people, each one raring to satisfy his/her needs and aspirations. Positive factors such as one’s ambitions, need to achieve, capabilities, career growth, and negative aspects such as one’s fears, insecurities and frustration operate ad complex inter-individual and inter-group processes including change in an organization’s functioning and performance.
iv. Structure Focused Change
It’s a change that relates any of the basic components of an organization’s structures or overall designs. Organizations make structures changes to reduce costs and increase profitability. Structural change can take the form of downsizing, decentralization, job redesign etc.
v. Person Focused Change
This is the change concerned with human resources planning and with enhancing employee competence and performance. The availability or non-availability of employees with the required skills also influences and organization’s plan for expansion, of venturing into new products/services and of profitability.