Nature of Organizational Change

 27 July 2017

 Pallabi Sarkar

 15189 views

Nature of Organizational Change: The term change refers to an alteration in a system whether
physical, biological, or social. Thus organizational change is the alteration of work environment
in organization. It implies a new equilibrium between different components of the organization-
technology, structural, arrangement, job design, and people. Thus organizational change may have
following features:

 When change occurs in any part of the organization, it disturbs the old equilibrium necessitating
the development of the a new equilibrium. The type of new equilibrium depends on the degree
of change and its impact on the organization.
 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.
 Organizational change is a continuous process. However, some changes which are of minor type,
may be absorbed by the existing equilibrium; others, which are major ones may require special
change efforts.

Planned Change : One of Newton’s laws is that “bodies in motion tend to stay in motion; bodies
at rest tend to stay at rest”. There is an organizational version of this truth. Those who believe in
growth and forward movement tend to be exemplars of change, while those who believe in this is
how we do things around here” lead to doom. Therefore, bringing change in a planned manner is
the prime responsibility of all managers who are forward looking. Planned change aims to prepare
the total organization, or a major portion of it, to adapt to significant changes in the organization’s
goals and direction. Thomas and Bennis have defined planned change as follows:

“planned change is the deliberate design and implementation of a structural innovation, a new
policy or goal, or a change in operating philosophy, climate or style.”
Planned change attempts at all aspects of the organization which are closely interrelated:
technology, task, structure, people as shown in fig:

Technology – related Changes: Technology refers to the sum total of knowledge providing ways
to do things. It may include inventions and techniques which affect the way of doing things, that
is designing, producing, and distributing products. Technology-related changes may include:

1. Changing problem-solving and decision-making procedures.

2. Introduction of automated data processing devices like computers to facilitate managerial

planning and control.

3. Change in methods of production like conversation of unit production to mass production.

Task – related Changes: Technology-related changes determine the types of task that may be
required to complete an operation. However, what alternatives are chosen must consider the core
job characteristics- skill variety, task identity, task significance, autonomy, and feedback from the
job. Task-related changes must focus on:

 High internal work motivation

 High quality work performance

Structure – related Changes: Structural changes redefine nature of relationships among various
organizational positions and may include:

 Changing the number of Hierarchical levels.

 Changing one form of organization to another form
 Changing span of management
  Changing line-staff and functional authority

When structural changes are effected, these may affect the formal reporting relationships, formal
interaction pattern, and consequently informal relations.

People – related Changes: Changes of any type as pointed out above require changes in people
in an organization. These changes may be of two types- skills and behavior. The magnitude of
these changes depends on the type of change. For example, if there is a change in technology, say
from manual to automated, it requires different type of skills in the operators as compared to the
previously used skills. Similarly, changes in behavior and the socio-psychological factors
determine behavior are required.

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1. Small Business»
2. Human Resources»
3. Change in Organizations»
Why Is Change Important in an Organization?
by Leigh Richards; Reviewed by Jayne Thompson, LLB, LLM; Updated March 08, 2019

Any business in today's fast-moving environment that is looking for the pace of change to slow is likely to
be sorely disappointed. The world is changing everyday: the population is changing, customer trends are
 changing, technology is changing and the economy is changing. Businesses who fail to embrace change
can easily wind up as dinosaurs – out of touch and unable to compete under current trading conditions.
Tip

 Change is important for any organization because, without change, businesses would lose their competitive
edge and fail to meet the ever-changing needs of customers.

The Ever-Changing World of Technology

Without change, business leaders still would be dictating correspondence to secretaries, editing their words
and sending them back to the drawing board, wasting time for all involved. Change that results from the
adoption of new technology is common in most organizations. While it can be disruptive at first, ultimately
the change tends to increase productivity and service delivery.

Technology also has affected how we communicate. No longer do business people dial a rotary phone, get
a busy signal, and try again and again and again until they get through. No longer do business people have
to laboriously contact people, in person, to find out about other people who might be useful resources.
Now, they can search for experts online through search engines as well as through social media sites.
Today's burgeoning communication technology represents changes that allow organizations to learn more,
more quickly, than ever before.

Customer Needs are Constantly Evolving

Customers who were satisfied with doing business during regular opening hours just a few years ago now
expect your business to be always open – and available with the swipe of a smartphone. As the world
evolves, customer needs change and grow, creating new demand for new types of products and services.
This opens up new areas of opportunity for companies to meet those needs.
The Changing Global 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.

Change Means 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.

Challenging the Status Quo

Simply asking the question "Why?" can lead to new ideas and new innovations that can directly impact the
bottom line. Organizations benefit from change that results in new ways of looking at customer needs, new
ways of delivering customer service, new ways of strengthening customer interactions and new products
that might attract new markets.

New employees joining an organization are especially valuable because they can often point to areas of
opportunity for improvement that those who have been long involved in the company might have
overlooked. But even existing employees should be encouraged to question why things are done a certain
way and look for new ways to get work done faster, better and with higher levels of quality and service

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ORGANIZATION PICKS

What are Factors affecting Organizational Change? External and

Internal

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Change is inevitable in the life of an organization. In today’s business world, most of
the organizations are facing a dynamic and changing business environment. Also
Learn, What are the Participation and Organizational Change? Factors affecting
Organizational Change, External and Internal. They should either change or die,
there is no third alternative. 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 labor market environments.
Explain are Factors affecting Organizational Change,
Difference between External and Internal Factors.
Introduction to Contents:

 Explain are Factors affecting Organizational Change, Difference between External

and Internal Factors.
o

 #EXTERNAL FACTORS:
 1. Technological Changes:
 2. Changes in Marketing Conditions:
 3. Social changes:
 4. Political and Legal Changes:
 #INTERNAL FACTORS:
 1. Change in Managerial Personnel:
 2. Deficiency in Existing Organization:
 3. Nature of the workforce:
 4. To avoid developing inertia:
 Reference:
o Articles Share to:
o Related
In very simple words, we can say that change means the alteration of the status quo or
making things different. “The term change refers to any alterations which occur in the
overall work environment of an organization.”
“When an organizational system is disturbed by some internal or
external force, change frequently occurs. Change, as a process, is simply
the modification of the structure or process of a system. It may be good
or bad, the concept is descriptive only.”

Organizational changes are required to maintain equilibrium between various external

and internal forces to achieve organizational goals. Therefore various factors that may
be important for necessitating organizational changes may group into two categories:
external and internal.
#EXTERNAL FACTORS:
Every organization exists in some context: no organization is an island in itself.
Each must continually interact with other organizations and individuals – the
consumers, suppliers, unions, shareholders, government – and many more. Each
organization has goals and responsibilities related to others in its environment. Thus
not only an organization must deal with its environment in conducting its affairs, but
it must also give considerations to the goals of others as it establishes its foals and
conducts its operations.
The present-day environment is dynamic and will continue to be dynamic. Changes in
social, political, economic technological and legal environments force organizations
to change themselves. Such change may result in organizational changes like major
functions, production process, labor-management relations, nature of competition,
economic constraints, organization methods, etc. to survive in the changing
environment, an organization must change.

How the change in various environmental factors necessitate the change in the
organization may see in the following context:
1. Technological Changes:
when there is a change in technology in the organization’s environment and other
organizations adopt the new technology, the organization under focus becomes less
cost-effective and its competitive position weakens. Therefore, it has to adopt new
technology. When the organizations adopt new technology, its work structure is
affecting and a new equilibrium has to establish. For example computers and
automation have made a significant impact on organizational functioning. Also
read, Explain Organizational Culture.
2. Changes in Marketing Conditions:
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 that may affect the
competitive position of an organization – other organizations supplying the same
products and buyers who are buying the product. Any change in these forces may
require suitable changes in the organization. For example, when the Indian economy
was liberalized (the process continues), many foreign organizations entered the Indian
market.

This forced many Indian organizations to realign themselves with the new situation.
The result is that there have been many cases of divesting the businesses and
concentrating on the core businesses, acquiring core businesses, 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 force the organizations to bring those products which meet the buyer’s
requirements.

3. Social changes:
The social changes reflect in terms of people’s aspirations, their needs, and their way
of working. The social change has taken place because of the several forces like the
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. Therefore it is required to adjust its working so that it matches people.

4. Political and Legal Changes:

Political and legal factors broadly define the activities which an organization can
undertake and the methods which will follow it in accomplishing those activities. Any
change in these political and legal factors may affect the organizational
operation. Don’t forget for learning, Dimensions of Organizational Climate.
#INTERNAL FACTORS:
It is not only the change in external factors that may necessitate organizational
change, but any change in an organization’s internal factors may also necessitate
change. Such a change is required because of two reasons: a change in managerial
personnel and deficiency in existing organizational practices.
1. Change in Managerial Personnel:
Besides environmental; changes, there is a change in managerial personnel. Old
managers are replaced by new managers which are necessitating because of
retirement, promotion, transfer or dismissal. Each new manager brings his ideas and
way of working in the organization. The manager brings his ideas and way of working
in the organization. The relationships more particularly informal ones, change because
of changes in managerial personnel. Moreover, attitudes of the personnel change even
though there is no change in them. The result is that an organization has to change
accordingly.

2. Deficiency in Existing Organization:

Sometimes, changes are necessary because of deficiency in the present organizational
arrangement and process. These deficiencies may be in the form of an unmanageable
span of management, the large number of managerial levels, lacks in coordination
between various departments, obstacles in communication, the multiplicity of
committees, lack of uniformity in policy decisions, lack of cooperation between line
and staff and so on.

3. Nature of the workforce:

The nature of the workforce has changed with time. Different work values have
expressed by different generations. Workers who are in the age group of 50 plus value
loyalty to their employers. Workers in their mid-thirties to forties are loyal to
themselves only. The youngest generation of workers is loyal to their career. The
profile of the workforce is also changing fast. The new generation of workers has
better educational; they place greater emphasis on human values and questions the
authority of managers. Their 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 puts the strain on the management.

4. To avoid developing inertia:

In many cases, organizational changes take place just to avoid developing inertia or
inflexibility. The conscious manager takes into account this view of the organization
that the organization should be dynamic because any single method is not the best tool
for management every time. Thus, changes are incorporated so that the personnel
develops liking for change and there is no unnecessary resistance when the major
change in the organization is brought about.