Organisational Change Meaning, Definition, Forces, Nature

Table of Contents:-

• Organisational Change Meaning
• Organisational Change Definition
• Nature of Organisational Change
• Forces for Organisational Change
• Types of Organisational Change 
• Process of Organisational Change

Organisational Change Meaning

Organisational change is the changes in attitude, nature and interest of employees, technological and environmental changes related to an organization and changes in rules and regulations affecting the organisation. It involves equilibrium in the situation and environment in which the people and the group exist.

Change refers to any alteration that occurs in a total work environment. Generally, people are accustomed to a well-established way of life and any variation or deviation from that life may be called a change.

Thus, change is the coping process of moving from the present state to the desired state that people, groups and organisations undertake in response to dynamic external and  internal factors that change current realities, 

Organisational Change Definition

According to Francis and Sinclair, “Organisational change is an ongoing process of social construction that comprises spiral patterns of discursive change and restructuring of collective meanings.

As per the Organisation Development and Research Organisation, “Organisational change is the implementation of new procedures and technologies intended to realign an organisation with the changing demands of its business environment or to capitalise on business opportunities”,

According to Van de Ven and Poole, “Organisational change was expressed as an empirical observation of difference in form, quality, or state over time in an organisational entity. The entity may be a person’s job, a workgroup, an organisational strategy, a product, a programme, or the overall organisation”.

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Nature of Organisational Change

The nature of organisational change includes:

1. Change Disturbs Old Equilibrium
2. Change Affects the Whole Organisation
3. Change is a Continuous Process
4. Change is Perceptual and Behavioural
5. Change Affects Individuals in the Multiple Roles
6. Change is Natural

1) Change Disturbs Old Equilibrium: When change occurs in any part of the organization, it disturbs the old equilibrium necessitating the growth of a new equilibrium. The type of new equilibrium depends on the extent of change and its effect on the organisation.

2) Change Affects Whole Organisation: Any change may affect the whole organisation; some elements of the organisation may be affected more, others less; some parts may be affected directly or indirectly. 

3) Change is a Continuous Process: Change in an organisation is a continuous process. However, some changes which are of negligible type may be absorbed by the existing equilibrium; others, which are the main ones, may need special change efforts. 

4) Change is Perceptual and Behavioural: It is a way of thinking and a set of behaviours to enact that thinking. 

5) Change Affects Individuals in the Multiple Roles: Change affects individuals in the multiple roles they assume in their lives- as individuals with personal goals and interests; as members of workgroups, organisations, or both; and as members of families responsible for the welfare of others. Human beings often respond negatively to change because they sense a resultant loss of control over their jobs, routines, and lives. 

6) Change is Natural: It is the rule, not the exception. Slow change, which does not characterise many contemporary organisations, seems easier to adjust than rapid change, which individuals often equate with disruption.

Forces for Organisational Change

The changes stem from several factors or sources. Some of these are external forces that arise outside the organisation, whereas others are internal, arising from sources within the organisation.

Various factors leading to or influencing organisational change are as follows:

1. External Forces
2. Internal Forces

1) External Forces

External forces include the following factors:

1. Technology
2. Marketing Conditions
3. Social Changes
4. Political Forces
5. Globalisation
6. Workforce Diversity
7. Changing Economic Conditions

i) Technology

It is a major external force that calls for change. Computer technology and automation have made a remarkable impact on the functioning of organisations in recent times Technological advancement is thus a permanent fixture in the business world and it continues to demand a manager’s attention as a pressure for change.

ii) Marketing Conditions

Marketing conditions are not static. They are in the process of rapid change as the desires, needs, and expectations of the customers change frequently. Moreover, there is tough competition between suppliers and manufacturers in the market. New media of advertisement and advertising are being used to influence buyers. All these factors put great pressure on modern organisations to change their technologies and marketing strategies. 

iii) Social Changes

Because of the spread of education, knowledge explosion and government efforts, social changes are taking place at a fast speed. The aim for social equality has posed new challenges for management. The management has to follow social norms in shaping its marketing, employment, and other policies.

iv) Political Forces

Political forces that lie outside and inside the country have an important influence on large business houses, particularly multinational companies. The interference of government in business has risen tremendously in most countries.

Many laws have been passed to control the movements of the corporate sector. The organisations have no control over the political and legal forces, but they have to adapt to meet the pressure of these forces.

v) Globalisation

In today’s open market economy, the power players are multinationals or transactional in every country across the globe. This has undeniably raised the level of competition for every concerned party. Now to survive and remain afloat, an organisation will have to compete not only with orders in its own country but also with the best ones from the world.

vi) Workforce Diversity

It is quite apparent that the composition of today’s workforce has changed significantly over the past few years. Today we find more females reporting to work than before. All around, the level of education is higher.

The average age of individuals working also varies a great deal with more and more people joining the workforce after retiring from their previous occupations as well as with a sizable portion coming from the student sections.

vii) Changing Economic Conditions

The constantly changing economy has been very challenging for organisations in recent years. The worldwide recession in the 90s required the laying of work in almost every organisation.

Though for a brief period in the late nineties, there was some improvement in the economy, the recent years are again experienced a downward trend. All these have forced organisations to change their ways of functioning.

2) Internal Forces

Internal forces include the following:

1. Changes in Managerial Personnel
2. Changes in Operative Personnel
3. Deficiencies in Existing Structure
4. Changes in Employee Expectations
5. Changes in Work Climate

i) Changes in Managerial Personnel

Changes in organisations are quite fast when executives at the top change. No two executives have the same philosophy and style. The new executive will follow his style and will like to put into practice his ideas and philosophy.

This may lead to important changes in the organisation in terms of organisation design, allocation of work to individuals, delegation of authority, installation of controls, etc.

ii) Changes in Operative Personnel

The profile of the workforce is changing fast. The new generations of workers have better educational qualifications, place greater emphasis on human values and question the authority of managers. Their behaviour is very complex and leading them to organisational goals is a challenge.

iii) Deficiencies in Existing Structure

Changes may be needed to make up for deficiencies in the present organisational setup. These deficiencies may be in the form of the unmanageable span of management, a  larger number of managerial levels, lack of coordination among various departments, Barriers To Communication, lack of uniformity in policy decisions, and so on. 

iv) Changes in Employee Expectations

It can also trigger a change in organisations. An organisation that hires a group of young newcomers may be met with a set of expectations very different from those represented by senior workers. The workforce is more educated than ever before.

Although this has its advantages, employees with higher education demand more from employers. The new generation workforce nowadays is not only career-minded. Rather they are more concerned with their family and career balance issues, thus often favouring flexitime or opportunities to work at their own pace.

v) Changes in Work Climate

Changes in the work climate in an organisation also stimulate change. A workforce that seems unmotivated, lethargic, and dissatisfied is a symptom that must be addressed. This kind of symptom is common in organisations that have experienced layoffs.

Employees who have escaped a layoff may grieve for those who have lost their jobs and may find it challenging to continue to be productive. They may worry that they will be laid off as well and may feel insecure in their jobs.

Types of Organisational Change 

Different types of organisational change are given as follows:

1. Happened Change
2. Reactive Change
3. Anticipatory Change
4. Planned Change
5. Strategic Change
6. Process-Oriented Change
7. People-Oriented Change
8. Operational Change
9. Directional Change
10. Fundamental Change
11.  Total Change
12. Transformational Change
13. Structural Change
14. Recreational Change
15.  Evolutionary Change
16. Revolutionary Change

1) Happened Change

This change is unpredictable and takes place naturally due to external factors. It is traumatic or profound for it is out of direct control and produces a future state that is largely unknown. This type of change occurs when an organisation reaches a plateau in its lifecycle and falls prey to unwieldy demands from the environment.

2) Reactive Change

It occurs when forces to change make it important for a change to be implemented. New scientific and technological discoveries, new strategic moves made by competitors, and performance problems are common reasons for reactive change.

3) Anticipatory Change

Change that is carried out in expectation of an event or a series of events is called anticipatory change. Failing to anticipate future events can have destructive results for organisations. Their anticipation of change may tune in or re-orient themselves to future demands.

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4) Planned Change

It occurs when leaders in the organisation recognise the need for a major change and proactively organise a plan to accomplish the change. Planned change happens with the successful implementation of a plan for re-organisation, strategic plan, or other implementation of a change to this extent. It is based on a well-done and proactive plan and usually does not occur in a highly organised fashion.

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5) Strategic Change

Strategic change is the change in the very basic objectives or mission of the organisation. A simple objective may have to be changed to numerous objectives. For example, a lot of Indian companies are being modified to accommodate different aspects of global cultures brought in by multinational or transnational corporations.

6) Process-Oriented Change

These changes relate to recent technological developments, information processing, and automation. This will involve re-training or replacing personnel, heavy capital equipment investment and operational changes. All this will affect the organisational culture and as a result the behaviour patterns of the people.

7) People-Oriented Change

People-oriented changes are directed towards performance improvement, group cohesion, dedication and loyalty to the organisation as well as developing a sense of self-actualisation among members. This can be made possible by closer interaction with employees and by modification sessions and special behavioural training.

8) Operational Change

This is necessitated when an organisation needs to improve the quality of its products or services due to external competition, customers changing requirements and demands or internal organisational dynamics. The organisation’s goals remain the same, intended change focuses on how to improve existing operations to perform them better. Operational changes include bringing in re-engineering the work processes, new technology, quality management, better delivery and distribution of products, and improving interdepartmental coordination.

9) Directional Change

A change in direction may become imperative for an organisation due to severe competition or regulatory shifts in government policy and control (e.g., on pricing, import, and export restrictions). Directional change is also critical when the organisation is developing a new strategy incapable of executing effectively its current strategy.

10) Fundamental Change

Fundamental change entails a re-definition of the current purpose or mission of the organisation. It may be necessitated by drastic changes in the business environment, the failure of the current corporate leadership, or problems with employee low turnover or morale.

11) Total Change

For a total change, the organisation is constrained to develop a new vision, and a strong link between its strategy, employees, and business performance. The organisation has to achieve a turnaround. 

Total change is essential to extricate the organisation from the rot that has set in due to the long-term failure of a business, employee-organisation value incongruence, and power concentrated in the hands of a few people who could be furthering their interests at the cost of the organisation.

12) Transformational Change

This change occurs after the transition period. Transformational change may involve both transitional and developmental change. When companies are faced with the emergence of radically different technologies, significant changes in supply and demand, unexpected competition, and lack of revenue, developmental or transitional change may not offer the organisation the solution they need to stay competitive. Instead of methodically implementing new processes, the company may be forced to drastically transform themselves.

13) Structural Change

Structural change involves changing the internal structure of the organisation. This change may be in the whole set of work assignments, relationships, and authority structures.

14) Recreational Change

The word recreation is derived from the Latin word recreate, which means “to create anew, to become refreshed”. It is the refreshment of strength or spirit, reinvigoration or rebirth. Recreation is a “renewing” experience a refreshing change from work and the daily routine.

15) Evolutionary Change

Incremental change is an ongoing process of evolution over time, during which many small changes occur routinely. Over time the cumulative effect of many little changes may be to change the organisation. It is directed at the micro-level and focused on units/sub-units/components within an organisation. These changes are brought in gradually and are usually adaptive.

16) Revolutionary Change

Revolutionary change is rapid, dramatic, and broadly focused. Revolutionary change involves a bold attempt to quickly find new ways to be effective. It is likely to result in a radical shift in ways of doing things, new goals, and a new structure of the organisation.

Process of Organisational Change

Organisational change is a complex process that involves various stages. These stages must follow a certain sequence. The sequences of stages in which the change process must take place are shown in the image.

The process of Organisational Change includes the following steps:

1. Problem Recognition
2. Identifying the Causes of Problems
3. Implementing the Change
4. Generating Motivation for Change
5. Managing the Transition State
6. Supporting the Change
7. Evaluating the Change

1) Problem Recognition

In the problem recognition stage, the management acknowledges that a problem exists in the organisation. The data-gathering processes in the organization highlight the problems in the organisation, which affect its productivity and thus make the management aware that a problem exists. 

Employee turnover, absenteeism, union disputes, employee grievances, high cost of production, role conflicts, and declining profits are some examples of problems that affect the productivity of organisations.

2) Identifying the Causes of Problems

In this stage, management must find out the root cause of the problems identified in the problem recognition stage. For example, if declining profitability is identified as the major problem facing the organisation, it could be attributed to reasons such as a decline in employee productivity, an increase in the production of waste in the manufacturing stages, a reduction in orders from clients, etc.

3) Implementing the Change

After holding discussions with employees and analysing the feedback gathered through questionnaires, the management will be able to identify the underlying causes of organisational problems. The management must then design a change plan to improve the situation and solve the problems.

To convince employees to participate in the change process, management should have a clear vision of the outcomes of the plan and how it would benefit the organisation and its employees in the long term

A change plan can succeed only:

i) If the employees are motivated enough to participate voluntarily in the change process.

ii) If all the concerns of various employee groups are addressed and there is no resistance to change efforts.

iii) If reinforcement of the change continues even after the change process has formally ended.

4) Generating Motivation for Change

Three strategies to motivate employees to embrace change: 

i) Management should constantly make employees realise the shortcomings in the existing system so that the resulting dissatisfaction will make them welcome the change initiatives in the organisation management should ensure that the change programme does not worsen the situation or fall short of the employees’ expectations.

ii) Employees should be given a role to play in the change process. Participation promotes a sense of ownership among the employees towards the change process and encourages them to contribute to its success. 

iii) Employees who successfully adopt the desired behaviour should be rewarded. This is an effective way of encouraging employees to welcome change.

5) Managing the Transition State

The change process disturbs the status quo of an organisation. For example, when an organisation adopts an informal culture, job profiles and reporting relationships change and the old rules and procedures are no longer applicable. 

Employees will be confused during the change from the existing system to the new system. They may not know what their new roles are what skills are required to perform their new roles, whom they should report to, what the new performance criteria are and so on. 

Since change has to be implemented throughout the organisation, one person (for example, a transition manager) should be placed in charge of the entire change process to coordinate the change efforts of various departments and units within the organisation.

6) Supporting the Change

To implement change successfully, management must obtain the cooperation and support of various employee groups. This can be achieved through negotiation, co-optation and compromise. Failure to obtain the support of employee groups may result in resistance to the change programme. 

Some of the influential employees in an organisation should be assigned the task of implementing change. Such employees have the power to influence and educate other employees about the benefits of change and motivate them to accept the change. Thus, they play a key role in facilitating the process of change in the organization.

7) Evaluating the Change

After its implementation, the changes must be evaluated to check whether the new system has been able to solve the problems identified in the old system and whether the desired future state has been attained. If the new system fails to solve the problems, or discrepancies are found between the new system and the expected state, something has gone wrong with the change process. 

In such a case, all the stages of the change process from the problem diagnosis to the evaluation stage must be repeated once again. Sometimes, the change process may solve the existing problems but also create new problems. Management must act quickly to address these problems to enable organisations to benefit from the change process.

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