Necessity of Change Any business in todays fast-moving environment that is looking for the pace of change to slow is likely to be sorely disappointed. In fact, businesses should embrace change and Change is important for any organization because, without change, businesses would likely lose their competitive edge and fail to meet the needs of what most hope to be a growing base of loyal customers.
Factors Affecting Organizational Change Change is inevitable in the life of an Organisation. In today’s business world, most of the organizations are facing a dynamic and changing business environment. Organizations that learn and cope with change will thrive and flourish and others who fail to do so will be wiped out. The major forces which make the changes not only desirable but inevitable are technological, economic, political, social, legal, international and labour market environments. “The term change refers to any alterations which occurs in the overall work environment of an organisation.” “When an organizational system is disturbed by some internal or external force, change frequently occurs. Change, as a process, is simply modification of the structure or process of a system. There are a number of factors both internal and external which affect organizational functioning. Any change in these factors necessitates changes in an organisation.
Factors Affecting OrganisationalChange External Forces 1. Technology 2. Customer needs 3. Economy 4. Political and Legal Changes 5. Growth Opportunities Internal Forces 1. Change in Managerial Personnel 2. Deficiency in Existing organization 3. Nature of the work force 4. To avoid developing inertia
External Forces1. Technology Change that results from the adoption of new technology is common in most organizations and while it can be disruptive at first, ultimately the change tends to increase productivity and service Technology also has affected how we communicate. Todays burgeoning communication technology represents changes that allow organizations to learn more, more quickly, than ever before. When there is a change in technology in the organizational environment and other organizations adopt the new technology, the organizations under focus become less cost effective and its competitive position weakens. Therefore, it has to adopt new technology, its work structure is affected and a new equilibrium has to be established.
External Forces2. Customer Needs/ Market Needs As the world evolves, customer needs change and grow, creating new demand for new types of products and services -- and opening up new areas of opportunity for companies to meet those needs. Since every organization exports its outputs to the environment, an organization has to face competition in the market. There may be two types of forces which may affect the competitive position of an organization –other organizations supplying the same products and, buyers who are not buying the product. Any changes in these forces may require suitable changes in the in the organization. For example, when Indian economy was liberalized, there were many foreign organizations that entered the Indian market. This forced many Indian organizations to realign themselves with the new situations. The result in that there have been many cases of divesting the business and concentrating on the core business, acquiring core business, and developing competitive competence to face competitive threats. Similarly, there may be changes in buyers in terms of their needs, liking –disliking and income disposal for a product. These changes from the organizations to bring those products which meet buyer’s requirement.
External Forces3. The Economy The economy can impact organizations in both positive and negative ways and both can be stressful. A strong economy and increasing demand for products and services will mean that companies must consider expansion that might involve the addition of staff and new facilities. These changes offer opportunities for staff, but also represent new challenges. A weak economy can create even more problems as companies find themselves needing to make difficult decisions that can impact employees salaries and benefits and even threaten their jobs. The ability to manage both ends of the spectrum are critical for organizations that want to maintain a strong brand and strong relationships with customers as well as employees. Social changes reflect in terms of people’s aspirations, the needs, and their ways 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 of people in the organization. There, it is required to make adjustment in its working so that it matches with people.
External Forces4. Political and legal changes Political and legal factors broadly define the activities which an organisation can undertake and the methods which will be followed by it in accomplishing those activities. Any changes in these political and legal factors may affect the organization operation.5. Growth Opportunities Change is important in organizations to allow employees to learn new skills, explore new opportunities and exercise their creativity in ways that ultimately benefit the organization through new ideas and increased commitment. Preparing employees to deal with these changes involves an analysis of the tools and training required to help them learn new skills. Training can be provided through traditional classroom settings or, increasingly, through online learning opportunities. Importantly, organizations need to do a good job of evaluating employees capabilities and then taking steps to fill the gaps between current skills and the skills required to respond to growth.
Internal Forces Changes in the managerial personnel Besides environmental changes there is a change in managerial personnel. Old managers are replaced by new mangers, which necessitated because of retirement, promotion, transfer or dismissal. Each new manager brings his own ideas and way of working in the organization. The relationships, more particularly informal ones, changes because of changes in managerial personnel. Moreover, attitude of the personnel change even though there is no changes in them. The result in that an organization has to change accordingly.
Internal Forces Deficiency in Existing organization Sometimes, changes are necessary because of deficiency in the present organizational arrangement ad process. These deficiencies may be in the form of unmanageable span of management, large number of managerial levels, lack in co-ordination between various departments, obstacles in communication, multiplicity of committees, lack of uniformity in policy decisions, lack of cooperation between the line and staff, and so on. Beside these internal factors, there are two more internal factors that give rise to organizational changes.
Internal Forces Nature of the work force The nature of work force has changed over a passage of time. Different work values have been expressed by different generations. The profile of the workforce is also changing fast. The behavior has also become very complex and leading them towards organizational goals is a challenge for the managers. The employee turnover is also very high which again put strain on the management.
Internal Forces To avoid developing inertia In many cases, organizational changes take place just to avoid developing inertia or inflexibility. Conscious manager take into account this view of organization that organization should be dynamic because any single method is not the best tool of management every time. Thus, changes are incorporated so that the personnel develop liking for change and there is no unnecessary resistance when major change in the organization are brought about.
The various types oforganizational changes1. Individual Level2. Group Level3. Organisational Level
Individual Level Change Individual level changes may take place due to changes in job assignment, transfer of an employee to a different location or the changes in the maturity level of a person which occurs over a passage of time. The general opinion is that change at the individual will not have the significant implications for the organization. But this is not correct because individual level changes will have impact on the group which in turn will influence the whole organization. Therefore, a manager should never treat the employees in isolation but he must understand that the individual level change will have repercussions beyond the individual.
Group Level Change Management must consider group factors while implementing any change, because most of the organizational changes have their major effects at the group level. The groups in the organization can be formal groups or informal groups. Formal groups can always resist change for example; the trade unions can very strongly resist the changes proposed by the management. Informal groups can pose a major barrier to change because of the inherent strength they contain. Changes at the group level can affect the work flows, job design, social organization, influence and status systems and communication patterns. The groups, particularly the informal groups have a lot of influence on the individual members of the group. As such by effective implementing change at the group level, resistance at the individual level can be frequently overcome.
Organizational Level Change The organizational change involves major programmes which affect both the individuals and the groups. Decisions regarding such changes are made by the senior management. These changes occur over long periods of time and require considerable planning for implementation. A few different types of organization level changes are: 1. Strategic change. Strategic change is the change in the very basic objectives or mission of the organization. A simple objective may have to be changed to multiple objectives. For example, a lot of Indian companies are being modified to accommodate various aspects of global culture brought in by the multinational or transnational corporations.
2. Structural change. Organizational structure is the pattern of relationships among various positions and among various position holders. Structural change involves changing the internal structure of the organization. This change may be in the whole set of relationships, work assignments and authority structure. Change in organization structure is required because old relationships and interactions no longer remain valid and useful in the changed circumstances.3. Process oriented change. These changes relate to the recent technological developments, information processing and automation. This will involve replacing or retraining personnel, heavy capital equipment investment and operational changes. All this will affect the organizational culture and as a result the behaviour pattern of the individuals.4. People oriented change. People oriented changes are directed towards performance improvement, group cohesion, dedication, and loyalty to the organizations as well as developing a sense of self-actualisation among members. This can be made possible by closer interaction with employees and by special behavioural training and modification sessions.To conclude, we can say that changes at any level affect the otherlevels. The strength of the effect will depend on the level or source ofchange.
Role of the Change Agent InOrganizational Change Change agents are the persons who initiate change and manage change in the organizations. They are specialized in theory and practice of managing changes. The change agent may be a member of organization or an outsider such as a consultant. An internal agent very well knows the organization and have ability, knowledge and experience of directing people for changes. But, internal agent is removed from regular duties to concentrate on the transition. However, external agents view the organization from the system point of view and is much affected by the organization norms. Top managers also prefer hiring specialized consultant change agents as they can offer more objective prospective than insiders. External experts are, however, not well aware of the desires and attributes of the employees, therefore, the changes suggested by them are generally resisted by the employees.
Role of Change Agents Change agents have five set of powers as support of managers is essential but not enough. Following are the powers, High status given by the members of the client organization, based on their perception that the change agent is similar to them in behaviour, language etc. Trust based on his consistent handling of information and maintaining proper role in the organization. Expertise in the practice of organizational change. Credibility based on experience with previous clients. Dissatisfied constitutions who see the change agents as the best opportunity to change the organization to meet their needs.
The four subject matters which achange agent can change Structure Technology People Physical Setting
Structure Structure is defined as how the tasks are formally divided, grouped and coordinated. For instance, change in plant layout or new technique can only succeed when the structure is changed according to change in environment. He may also change responsibility, authority, functions, performance according to the need of the change. He might also redesign jobs or work schedule. Technology The introduction of new equipment and work process is technological change. Automation or computerization is the common technological change. Major technological changes involve introduction of new tools and equipment, automation, computerization.
People This involves changing attitudes and behaviour of members through communication, decision making and problem solving. They help individuals to work more efficiently and effectively together. The changes may only be possible in case the members are positive. In case there is lack of agreement, stress and tension occurs with the employees. Physical Setting It involves change in interior design, equipment placement, plant layout, tool placement. These changes are helpful in organizational development. Physical setting considers flow process, information flow and outcome. The smoothness of flow increases the effectiveness of changes. The basic objective of change agents is to increase effectiveness, performance and satisfaction.
Causes of Resistance toOrganizational Change The main reasons for resistance to change are both individual and organization. The research document of individual and organizational behavior has found that organization groups and individuals resist change. Resistance to change provides a degree of stability and predictability to behavior, as it does not allow immediate change. Resistance to change can be categorised as 1. Individual Resistance. 2. Group Resistance. 3. Organizational Resistance.
Individual Resistance Individual arise due to differing perceptions, personalities and needs. Some of these reasons appear to be rational and emotional. These reasons are listed below,a) Economic Factors a) The economic reasons for the resistance to change may be the following: b) In organization when the development or change on technology takes place, employee resists the change. c) Employee may fear that the change will lead to technological unemployment. d) Generally, new technology is associated with education of labor intake and therefore they resist the change. e) For example the introduction of computer in an organization means that employee will have to learn the certain package to work efficiently. They may not be liked by some employees and they develop negative attitude towards computer and resist them.
Economic Factors In organization where pay is tied to productivity individuals usually resists change as they fear that they will not be able to perform new task effectively, thus causing a decline in productivity and a decrease in their income. Workers may fear that they will be demoted if they do not acquire the skills required for the new jobs. Workers resist the changes which lead to high standards which in turn may reduce the opportunities for bonus or incentive pay.
Economic Factors Habit All human being are creatures of habit. Individual generally feel comfortable in the environment that they are habituated to. The modern life is very complex and no one likes to consider the full range of option for the hundreds of decision which has to be made everyday. Instead we rely on habit or programmed responses. When confronted with change, the thought if moving away from the environment they are accustomed to become a source of resistance. Insecurity Safety and security are high priority for every individual. One of the major reasons for resistance to change is uncertainty about the impact of change, especially on the job security. When employees feel that the security of the job is threatened by change, they resist it. The fear unknown always has a major impact on the decision of the individual.
Economic Factors Lack of Communication If the workers are given an opportunity to participate in the process of change, the resistance is likely to be less. But if the change is not properly communicated that to in an acceptable manner to the employees, it is likely to cause resistance. Extent of Change If there is a minor change and the change involves only the routine operations the resistance will be minimum or no resistance. But incase of major changes like reshuffling of staff will lead to major visible resistance. Similarly the process of change is slow, the resistance will be less as compared to rapid or sudden change.
b) Psychological Factors One of the major reasons for resistance can be emotional turmoil that a change may cause especially if the past experiences with the change have not been positive. The psychological reasons for the resistance to change are: Workers may have the fear that the new job will bring boredom and monotony as a result of specialization brought by the new technology. Change in technology brings new method of doing the job and it must be learnt and adopt the new ideas of doing the job. To learn these ideas they need work hard and they do not want to take the trouble in learning new things. The workers may be incapable of understanding the implications of new ideas and method. Workers may not like criticism implied in a change that the present method is inadequate and unsuitable. New changes may lead to reduction of the personal pride of the workers because they fear that new work changes will do away with the need for much manual work.
c) Social Factors Every individual have social needs like friends, belongingness, etc. In organization, while working employee develop social relationship with the other employees. They become members of certain informal group. The change will bring a fear in mind of people because generally people dislike with for new adjustment, breaking present social relationship reduce social relationship, feeling of outside interference in the form change agent etc.
2. Group Resistance While working in an organization the employee form informal group in the organization. The most organizational change has impact in informal group in the organization. Breaking up a close knit work group or changing social relationship can provoke a great deal of resistance. The main reason why the groups resist change is that they fear that their cohesiveness or existence is threatened by it. This is particularly true in case of group which are very cohesive where people have a strong case of belongingness to group and where member consider the group as superior to the other groups.
3. Organizational Resistance Organizational resistance means that the change is resisted at the level of the organizational itself. Some organizations are so designed that they resist new ideas, this is specifically true in case of organizations which are conservative in nature. Government agencies want to continue doing what they have been doing for a number of years even though there is need for the change in their services. Majority of the business firms are also resistant to changes. The major reasons for organizational resistance are: Threat to Power Top management generally considers change as a threat to their power and influence in the organization due to which the change will be resisted by them. The introduction of participative decision making or self-managed work teams is the kind of change which is often seen as threatening by the middle and top level management.
3. Organizational Resistance Group inertia Sometimes, the individuals resist change because the group to which they belong resists it. The degree and force of resistance will depend upon how loyal one is to the group and how effectively the group resists the change. Organizational structure Change is often resisted by the bureaucratic structures where jobs are narrowly defined, lines of authority clearly spelled and flow of i9nformation is stressed from top to bottom. Moreover, organizations are made up of a number of interdependent subsystems, one system cannot be changed without affecting the others. Threat to specialization Change in organization may threaten the expertise of specialized groups. For example, giving computer training to all the employees in the organization and giving personal computers was perceived as a threat by the experts in computer department of the organization. Resource constraints Organizations need adequate financial resource for training change agents and for offering rewards to those who support change. An organization who does not have resources for implementing the change resists it.