Not all the forces for organization change are the results of strategic planning. Indeed organizations often are responsive to changes that are unplanned – especially those derived from the factors internal to the organization. Two such forces are the changes in the demographic composition of the workforce and performance gaps.
- Changing Employee Demographics : It is easy to see, even within our own lifetimes, how the composition of the workforce has changed. The percentage of women in the workforce is greater than ever before. More and more women with professional qualifications are joining the organization at the junior and the middle management levels. In addition to these, the workforce is getting older. Many of the old retired employees from government and public sector are joining the private sector, thereby changing the employee demographics. With the opening up of the economy and globalization, the workforce is also continually becoming more diverse. To people concerned with the long-term operation of organizations, these are not simply curious sociological trends, but shifting conditions will force organizations to change. Questions regarding the number of people who will be working, what skills and attitudes they will bring to the job, and what new influences they will bring to the workplace are of key interest to human resource managers.
- Performance Gaps : If you have ever head the phrase, “It is isn’t broken, don’t fix it,” you already have a good idea of one of the potent sources of unplanned internal changes in organizations – performance gaps. A product line that isn’t moving, a vanishing profit margin, a level of sales that is not up to corporate expectations – these are examples of gaps between real and expected levels of organizational performance. Few things force change more than sudden unexpected information about poor performance. Organizations usually stay with a winning course of action and change in response to failure; in other words, they follow a win-stay/lose-change rule. Indeed several studies have shown that a performance gap is one of the key factors providing an impetus for organizational innovations. Those organizations that are best prepared to mobilize change in response to expected downturns are expected to be the ones that succeed.
Further, one of the greatest challenges faced by an organization is its ability to respond to changes from outside, something over which it has little or no control. As the environment changes, organizations must follow the suit. Research has shown that organizations that can best adapt to changing conditions tend to survive. Two of the most important unplanned external factors are governmental regulation and economic competition.
- Government Regulation : One of the most commonly witnessed unplanned organizational changes results from government regulation. With the opening up of the economy and various laws passed by the government about delicensing, full or partial convertibility of the currency, etc., the ways in which the organizations need to operate change swiftly. These activities greatly influence the way business is to be conducted in organizations. With more foreign players in the competitive market, Indian industries have to find ways and mechanisms to safely and profitably run their business.
- Economic Competition in the Global Arena : It happens every day, someone builds a better mousetrap – or at least a cheaper one. As a result, companies must often fight to maintain their share of market, advertise more effectively, and produce products more inexpensively. This kind of economic competition not only forces organizations to change, but also demands that they change effectively if they are to survive. On some occasions, competition can become so fierce that the parties involved would actually be more effective if they buried the hatchet and joined forces. It was this ‘If you can’t beat them, join them’ reasoning that was responsible for the announced alliance dubbed “the deal of the decade” by one financial analyst.
Although competition has always been crucial to organizational success, today competition comes from around the globe. As it has become increasingly less expensive to transport materials throughout the world, the industrialized nations have found themselves competing with each other for shares of the international marketplace. Extensive globalization presents a formidable challenge to all organizations wishing to compete in the world economy. The primary challenge is to meet the ever-present need for change i.e., to be innovative. It can be stated that organizations change in many ways and for many reasons. The norm of pervasive change brings problems, challenges and opportunities. Those individual managers and organizations that recognize the inevitability of change and learn to innovate or adapt to and manage it while focused on creating world class best value will be most successful. But people and organizations frequently resist change, even if it is in their best interest, especially in large and established organizations.
Credit: Organisational Development And Change-MGU