Change is a law of nature; we live in a dynamic world where nothing remains static. Everything around us keeps on changing.
Organization change refers to the alteration of structural relationships and role of the people in the organization. It is largely structural in nature. These changes may be pressurized by internal or external forces, may affect only one or all the levels and departments or may be related to the organizational structure (hierarchy), people, technology, working or social environment. The change in task and other component sometimes change in organizational structured too. Organization change is required due to dynamism of external variables. To make an adjustment with external environment, organizational changes takes place.
Related Topic: Organizational Change : Concept and NatureOrganization has to survive and operate in an environment. Environment is dynamic and changing fast. Both the external and internal environment forces encourage organization to change. External forces are located outside the organization. They are not control by top management. They bring opportunities and threats to the organization. Generally, the pressure for organizational change may be created by internal and external factors which are described below.
I. External Forces External forces are those that emerge from the sources external to the environment i.e. the macro environment. These forces directly and indirectly affect the working of an organization. These forces are for beyond the control of an organization. Hence, an organization is bound to change itself as warranted by these forces. Such forces are as follows:
1. Market forces of change
Market conditions are constantly changing. Consumer tastes and preferences are changing. Changes in it may include changes in the nature and extent of demand caused by varying consumer needs, goals and preferences; changes in nature and volume of supply caused by the entry of new suppliers, new products and substitutes and new competitors; changes in the factors of production and changes in other market conditions relating to prices, quality, transport, packaging, warehousing, financing, etc. These changes call for necessary adjustments, alteration, expansion or contraction in the organizations.
2. Socio-culture forces of change
Social values, customs, traditions, living patterns, food habits, clothing patterns, conditions of women etc. are constantly changing. Such changes have a great bearing on the organizations relations and system. Political philosophy (capitalism, socialism or communism) move for social injustice and equality, upliftment of the downtrodden and many other such social factors would influence organizations systems of recruitment and selection, technology and structural relationships. It also influences such as in delayed marriage, people's attitude, norms and value toward society.
3. Technological forces of change
Technology is changing at a very rapid speed. Technological changes have even affected the social conditions of work. Mechanization, computerization and automation have greatly affected the functioning of the modern organizations. New processes and methods have become imperative for promoting organizations efficiency, economy, safety and welfare. Similarly, sophisticated information technology, robotics, faster and cheaper computers, innovation and experimentation have reshaped the jobs arising from new developments in technology.
4. Political forces of change
Change in political and legal factors also required change in organizations. The political system, philosophy of the political party in power, the working of judiciary etc. affect the business system. Similarly, changes in labor, corporate and taxation laws; economic policies relating to industry, business, agriculture and export import controls and regulations and incentives and concessions, all of which have a great bearing on the organizations and compel the organizations to change itself accordingly. The change in political forces as changing world political such as SOVIET UNION, reunification of GERMANY, collapse Saddam Hussein regime in IRAQ. The increase in the activities of pressure groups also lead organizational change.
5. Economic forces of change
The economic condition of a country may cause changes in organizations. State of inflation, deflation, recession, boom, saving rate, rate of investment, availability of resources (raw-materials, energy etc.) infrastructure facilities etc. decide the economic condition of a country.
Similarly, the economic policy plays a major role in shaping the pattern of change. The industrial and licensing policy, import-export policy, monetary policy, taxation policy, policy of globalization and liberalization, backward area development policy etc. are the major factors that may cause change in many business organizations.
II. Internal ForcesInternal forces or causes arise from the internal or micro environment of the organization. These forces can largely be controlled by the management but they do cause certain changes in the organization. Such forces include the following:
1. Change in Organizational Goal
The goals of employees change; organizational goals also experience succession and displacement. Sometimes, organizational goals or objectives are changed. The organization may like to change its business or add more and new lines of product, diversify product, start new business and so on. In such a situation, change in organization is inevitable.
2. Existing Organizations Deficiencies In organizations, certain deficiencies and adjustments become apparent in due course of time. There are some of the common organizational deficiencies which obviously call for their removal and hence, necessitate changes in the existing organizations pattern:
- Unnecessary lengthy chain of command
- Unmanageable span of control
- Lack of coordination between the departments
- Barriers in communication
- Disparity in authority and responsibility
- Multiplicity of unnecessary committees
- Lack of uniformity in policies
- Lack of cooperation between line and staff
3. Change in Policies
The organizational policies including production, marketing, personnel and financial policies are changing with needs of the environment. Hence, change in organization becomes inevitable.
4. Sequential change Every organizational change requires re-adjustments, sequential changes and supportive changes. For example, creation of a new department may cause the appointment of some new managerial positions, which in turn may necessitate reallocation of authority, responsibility and duties of the concerned departments. Other departments might have to realign their structure, tasks, objectives and staffing. It is, therefore, necessary that before any significant change is made, the possible consignment of the change must be identified and evaluated and the problem of change should be examined in its total perspective.
5. Changes in Top Management
Change in top management in the organizations may take place on account of new appointments, transfers, promotions or may be caused by expansion and technological changes. Change in the top level managers invariably involves certain organizational changes. Top management introduces sweeping changes in the organizations to suit his style of working.
6. Change in Personnel
The personnel in an organization change very often. It may be due to promotions, transfers, resignations, retirement and so on.
7. Employee Pressure
Every increasing demand of the employees for better job security and job satisfaction, better safety and welfare, congenial working environment, higher wages and incentives, participation in managerial process and more authority and power also appreciate changes in the organizational structure and pattern.
