Internal and external factors that affect organizational change.

1. Internal & External
Factors of Change

2. Factors From the Outside
The external factors that affect change to/in an organization include:
Fashion Pressures
Mandated Pressures
Geopolitical Pressures
Market Decline Pressures
Hypercompetition Pressures
Reputation & Credibility Pressures

3. Fashion Pressures
Organizational change occurs in response to latest management fad or fashion
(e.g. MBO, Employee empowerment, Benchmarking)
Mimetic Isomorphism – occurs when organizations imitate the structures and
practices of other successful companies

4. Mandated Pressures
Organizational change occurs in an effort to comply with mandates relating to
the physical environment, cultural environment and legal environment
(e.g. Company X settled a racial discrimination suit for $100 million.
Management now required to change hiring policies, attend workshops and hire
fairly)
Mandated Pressures usually originate with governing bodies, law makers, etc.

5. Geopolitical Pressures
Organizational change usually arises as a result of geopolitical crisis like 9/11,
Boston Bombing, etc.
Takes the form of downsizing, layoffs, and/or staff evacuation

6. Market Decline Pressures
Organizational change occurs when the demand for products or services start to
slow down.
Oversaturation of the marketplace is a common culprit ( e.g. cell phones )
Strategic changes should reflect the changing environment

7. Hypercompetition Pressures
Organizational change occurs when the company is faced with fiercely
competitive businesses vying for the same market share
Sales and marketing strategies need to be revised in order to attempt to
compete
(e.g. Nike, Under Armour, Reebok)

8. Reputation & Credibility Pressures
Organizational change occurs when faced with maintaining proper corporate
governing mechanisms to ensure positive corporate reputation.
Reputation is defined as, “ a collective representation of a firm’s past actions
and results that describes the firm’s ability to deliver valued outcomes to
multiple stakeholders”.
Accountability & responsibility are the keys
(e.g. Maple Leaf – good, BP – bad)

9. Internal Pressures
Pressures that affect the organization from the inside include:
Growth Pressures
Identity Pressures
New Broom Pressures
Power and Political Pressures

10. Growth Pressures
To grow or not to grow? That is the corporate question.
Timing is essential in the decision making process, as is resources, strategy etc.
Pressure to grow is a common element when internal bodies do not want to
remain motionless.
Success breeds the internal desire to grow. Strategy levels the thought.

11. Identity Pressures
Brand recognition and product identity are fodder for the process of change.
Can consumers identify with our brand? Are our products selling themselves due
to our brand? All good questions.
Changes are made in an organization to deal with them. Promotions take on
different lights, marketing evolves, product and services are improved.
There is always pressure to be the next Facebook…

12. New Broom Pressures
When a new CEO or manager arrives, it may be a signal that the old ways are
about to change.
Out with the old, in with the new. “New Brooms” tend to sweep out established
norms and put their fingerprint on the organization.
Reorientation to a new culture is one of the most common affects of New Broom
Pressures

13. Power & Political Pressures
Changes can be made to alter traditional internal power relationships in order to
speed up decision making processes.
Other power & political pressures leading to change relate to internal conflicts.
How the power base is set up in an organization determines the need for change

14. Conclusion
Organizations feel pressure both internally and externally.
The way they respond to these pressures indicate how successful change will be –
and how companies will operate in the future.
The more successful change managers are likely to be those who have a clear
understanding of the pressures on them to change their organizations- and a well
developed rationale for what they are attempting to achieve, and the likely
affect of their actions.
What pressures are facing your organization?