Managing Organizational Change - Term Paper Example

? Managing Organizational Change In today’s rapidly changing business environment, the competitive advantage of a firm appears to be in its capability to get adapted to changing scenarios. With the changing external environment and changing needs of the customers, organizations are forced to implement changes in their system. The major changes mainly take place in the form of restructuring, changes in technology, process change etc. A change sometime negatively impacts the employees; on the other hand it also provides growth opportunities to the organization. Through this report the necessity of a change in organization will be uncovered. Along with it the forces which are responsible for the change will be also identified. Once the requirement of a change is identified the most important task is to implement it successfully. Table of Contents Table of Contents 3 Introduction 4 Rationales behind Organizational Change 4 Forces of Organizational Change 5 External Forces 5 Internal Forces 6 7 Types of Changes 7 Resistances to Change 8 Managing and Sustaining Change 9 Conclusion 10 References 11 Introduction Change is a continuous process and involves several stages. A successful change passes through a number of sequential stages. In simple words, change is defined as the way of making things different. In the context of an organization, change is considered as inevitable. Nowadays, organizations operate in a dynamic business environment and to get adapted with the situation they are forced to implement changes in their system (El-Farra & Badawi, 2012, p.161). The major forces of change in an organization are mainly technological factor, political factor, economical factor, legal factor, social factor, and most importantly the labor market environment (Lewis, 2011, p.5). According to Barney & Griffin (1992), the primary rationale behind the poor performance and reduced productivity of an organization is the failure of the managers to properly identify required change. Therefore to some extent change within organizations is necessary otherwise the organizations may find it difficult to survive in the marketplace. Throughout the world organizations have to deal with certain internal resistance which prohibits the implementation of change. Therefore managing the change or properly implementing the change within the organization is of utmost importance. This report will highlight the rationale behind the organizational change. Apart from that the forces which are responsible for making the changes will also be highlighted. In addition, the project will also shed light on the type of changes, the resistances to changes and how the change can be properly managed and sustained. Finally, based on the findings from the study a conclusion will be drawn. Rationales behind Organizational Change Change is important for any organization as without any change, businesses are likely to lose the competitive edge and eventually fail to meet the needs of the customers. The principal rationale of an organization to embrace change in their current state is mainly the customer needs, economical impact, and growth opportunities among others. Economical Impact: - Economy can impact an organization, both in a positive and negative way. Increasing demand and a strong economy indicates that the company needs to expand thereby facilitating a change in the organization. Customer Needs: - Companies need to change their strategies in order to meet the multi dimensional need of the customers. Opportunities of Growth: - One of the most significant rationales behind implementing change in organizations is the opportunity of growth. Employees are able to learn new skills, and can explore opportunities in order to exercise their creativity. This in turn helps organizations to increase their productivity (Hagel, 2002, p.18). Forces of Organizational Change Organizations change due to a number of forces operating in its environment. The forces are both internal as well as external to the organization. Any change in these factors necessitates an organizational change. The forces are elaborated below: - External Forces Organizations do not exist in vacuum it has to operate in some market. In addition, an organization has to interact with the suppliers, consumers, labor union, distributors, government and other organizations among the others. The present business environment is considered to be dynamic and will remain the same in the coming years. Therefore any changes in external environment will necessitate organization to change. Now the major external forces of change are detailed below: - 1. Technology – Technology is probably the strongest factor that forces an organization to change. Nowadays, a business depends heavily upon technology. Moreover, technology is also developing at a rapid pace. Now if a company fails to implement new technology in its system of operation, it will find hard to sustain in the competitive market. Therefore, it is imperative to get along with the latest technology (S. Shajahan & L. Shajahan, 2007, p.235). 2. Market Condition – Every organization has to sell its products and services in a market and hence it has to deal with competition. There are generally two market forces which affect the competitive position of a company in the market. The power of the other organizations who are supplying the same products or services and also the power of the buyers who are not buying the product. Any change in these forces may require appropriate change within the organization. 3. Social Changes – Social changes occur in terms of the aspiration of people, their needs and the way they perform different activities. The factors which led the social changes are higher education levels, feeling of autonomy, urbanization, and impact of the foreign culture. Therefore, companies should make changes accordingly, so as to meet the changing needs of people. 4. Legal and Political Changes – legal and political factors define the activities that an organization has the authorization to undertake and also the methods which the company needs to following while carrying out its operations. Therefore any changes in these factors will directly affect the organization. Internal Forces The changes not only occur due to the external forces only, but, to a large extent internal forces are also responsible for driving organizational change. Any change in the organizations internal factors, may also create the need of an organizational change. Some of the major internal forces are detailed below: - 1. Changes in the managerial personnel: - Beside the changes in environment, a managerial change can be also emphasized as an organizational change. For example, replacement of an old manager with new managers or other factors such as retirement, dismissal and promotion is also a change. 2. Deficiency in Existing organization: - A change becomes necessary due to improper organizational process and arrangement. Some of the common forms of this type of changes are unmanageable span of management, lack of co-ordination between various departments, and obstacles in communication among others. 3. Nature of the work force: - Due to the changing nature of work force, organizations are forced to bring on some kind of changes. An organization comprises of workers of all age groups and hence to direct them towards the same objective it is necessary to implement changes in organization after a certain period of time. 4. To avoid developing inertia: - One of the most common causes of organizational change is for avoiding any form of inflexibility. Figure 1 (Source: Phalpher, 1999, p.50) Types of Changes Organizational change occurs at different levels of the organization. The different type of organizational changes is highlighted below: - 1. Individual Level Change: - The individual level changes may take place due to the changes in job role of an employee, transfer from one location to the other, departmental transfer etc. However individual level changes hardly have any impact on the organization. Although there is no impact but the organizations should not take it lightly as individuals will impact groups which will then affect the whole organization. 2. Group Level Change: - it is imperative for the management of an organization to consider the factors pertaining to groups while implementing any changes. This is primarily because, any changes in the organization mostly affects at the group level. The groups are either formal or informal. Both of these groups act as a major barrier to change. For example trade union which is a formal group in any organization, can strongly resist changes proposed by the administration. On the other hand informal group can also pose major threat to change as they fear that any changes in the organization will disrupt their present state of action and may affect their work flow and performance. Moreover, they also fear that, a change may disturb the communication pattern in the organization. 3. Organizational Level Change: - The organizational level change takes place on a large scale and impact both individual as well as group levels. The decision about such changes is mainly taken at the higher levels of the organizational hierarchy. Moreover such large scale changes takes place over a longer period of time and require substantial amount of planning for implementing them. The changes are either first order change or second order change (Palmer, Dunford & Akin, 2009, p.4). Some of the general type of organizational change are as follows: - Strategic Change: - Strategic change can be regarded as the change which takes place at the basic level. For example change in the mission and objective of the organization. In addition, the company may also pursue changes in the operation strategy, marketing strategy or business strategy. Structural Change: - The structure of an organization reflects the relationship patterns among the various positions of the organization. The structural changes involve changes in the internal structure. However it can affect the whole hierarchy of the organization. Process Oriented Change: - The process oriented changes points out to the changes that occur due to the recent developments in the field of technology, automation and information processing. The changes in this context are mainly retraining or replacing the employees, and operational changes. The process oriented change affects the organizational culture thereby distressing the behavioral pattern of the employees. People Oriented Change: - The people oriented changes are mainly implemented for improving the performance of the employees, dedication, group cohesion, and also for enhancing the loyalty of the organization. Apart from that it also develops the sense of self actualization. Resistances to Change According to Bovey & Hede (2001) change in an organization causes employees to feel reaction process. Consequently, Scott & Jaffe (1988) stated that the reaction process comprises of four phases. The phases are namely a) initial denial, b) resistance, c) gradual exploration and d) eventual commitment. According to Palmer, Dunford & Akin (2009) there are several reasons for which resistance to a change takes place in an organization. Some of the major causes of change are as follows: - Discomfort with Uncertainty: Employees resist change thinking that, their existing comfortless may get disrupted by a change. This also creates uncertainty in their minds. Negative Effect: Employees also resist change anticipating that, it may negatively impact their current working environment. Attachment to the organizational Culture: - One of the greatest resistances to change arises due to the existing organization culture. Employees get accustomed with a culture but have doubts whether they will be able to get familiar with change or not. Ethical Clash: - Sometime a change becomes so necessary that organizations even need to violate the ethical guidelines. In this context resistance takes place due to the fact that some employees desire to act in accordance with the ethical guidelines and does not like ethical guidelines to be violated. Managing and Sustaining Change Organizations that learned to cope with the changing situation have sustained and flourished and others who failed to do so have been wiped out from the market. The changes which take place in an organization are mostly unplanned and gradual (Burke, 2010, p.1). However at times, organizations also embrace planned changes, which are generally carried out on a large scale. Managing and sustaining change is probably the most important factor in an organization. In order to implement a successful change, organizations need to follow certain steps. The steps are as follows: - Define goals and objectives: - The Company should identify what they wish to achieve from the change. Therefore the first step is to define the objectives. Select change agent: - The next step is to authorize a person who will be responsible for initiating and overseeing the entire change process. Diagnosis of the issue by the agent: - The person who is authorized to administer the change process must gather information about the area of concern. Developing a methodology and plan: - The most important step is to select a methodology by which the change will be implemented. Important areas such as communication, employee emotion, resistance must be considered in the context. Simultaneously, an implementation plan also needs to be developed by which change will be put into practice. Implementation: - The final step is to incorporate the changes in the organization and to notify the stakeholders about it. Conclusion The study was about identifying why organizational change takes place and the major causes of such a change. In addition, the aim was also to uncover how a successful change can be managed and sustained. The report revealed that the principal rationale behind a change is economical factors, and growth opportunities among others. The major forces of change as identified in the study are both internal as well as external. For example technology is an external factor whereas changes in the organizational structure can be cited as an internal force. Hence it is concluded that at times change is necessary to sustain in the market place but to implement and sustain that change is more important. References Barney, J. B., & Griffin, R. W. (1992). The management of organizations: strategy, structure, behavior. Massachusetts: Houghton Mifflin Co. Bovey, W. H., & Hede, A. (2001). Resistance to organizational change: the role of cognitive and affective processes. Leadership & Organization Development Journal, 22 (8), 372-382. Burke, W. W. (2010). Organization change: Theory and practice (3rd ed.). California: SAGE. El-Farra, M. M., & Badawi, M. B. (2012). Employee attitudes toward organizational change in the coastal municipalities water utility in the Gaza strip. EuroMed Journal of Business, 7 (2), 161-184. Hagel, J. (2002). Out of the box: strategies for achieving profits today & growth tomorrow through web services. Massachusetts: Harvard Business Press. Lewis, L. K. (2011). Organizational change: Creating change through strategic communication. Chichester: John Wiley & Sons. Palmer, I., Dunford, R., & Akin, G. (2009). Managing organizational change: A multiple perspectives approach. New York: McGraw-Hill Education. Phalpher, R. (1999). Sustaining organizational change. Engineering Dimensions, (March/April), 49-51. Scott, C. D., & Jaffe, D. T. (1988). Survive and thrive in times of change, Training and Development Journal, April, 25-27. Shajahan, S., & Shajahan, L. (2007). Organisation behavior. New Delhi: New Age International. Read More