Basic Concepts of Organizational Change

The change means the alteration of status quo or making things different. It may refer to any alteration which occurs in the overall work environment of an organization. When an organizational system is disturbed by some internal or external force, the change may occur. The change is modification of the structure or process of a system, that may be good or even bad. It disturbs the existing equilibrium or status quo in an organization. The change in any part of the organization may affect the whole of the organization, or various other parts of organization in varying degrees of speed and significance. It may affect people, structure, technology, and other elements of an organization. It may be reactive or proactive in nature. When change takes place due to external forces, it is called reactive change. However, proactive change is initiated by the management on its own to enhance the organizational effectiveness. The change is one of the most critical aspects of effective management. It is the coping process of moving from the present state to a desired state that individuals, groups and organizations undertake in response to various internal and external factors that alter current realities.

Survival of even the most successful organizations cannot be taken for granted. In some sectors of the economy, organizations must have the capability to adapt quickly in order to survive. When organizations fail to change, the cost of failure may be quite high. All organizations exist in a changing environment and are themselves constantly changing. Increasingly, the organizations that emphasize bureaucratic or mechanistic systems are ineffective. The organizations with rigid hierarchies, high degree of functional specialization, narrow and limited job descriptions, inflexible rules and procedures, and impersonal management can’t respond adequately to the demands for change.

The organizations need designs that are flexible and adaptive. They also need systems that require both, and allow greater commitment and use of talent on the part of employees and managers. The organizations that do not bring about timely change in appropriate ways are unlikely to survive. One reason that the rate of change is accelerating is that knowledge and technology feed on themselves, constantly making innovations at exponential rates.

Organizational change is the process by which organizations move from their present state to some desired future state to increase their effectiveness. The goal of planned organizational change is to find new or improved ways of using resources and capabilities in order to increase an organization’s ability to create value and improve returns to its stakeholders. An organization in decline may need to restructure its resources to improve its fit with the environment. IBM and General Motors, for example, experienced falling demand for their products in the 1990s and have been searching for new ways to use their resources to improve their performance and attract customers back. On the other hand, even a thriving organization may need to change the way it uses its resources so that it can develop new products or find new markets for its existing products. Wal-Mart, Target, Blockbuster Video, and Toys “R” Us, for example, have been moving aggressively to expand their scale of operations and open new stores to take advantage of the popularity of their products. In the last decade, over half of all Fortune 500 companies have undergone major organizational changes to allow them to increase their ability to create value.

Change may be regarded as one of the few constants of recorded history. Often society’s “winners”, both historical and contemporary, can be characterized by the common ability to effectively manager and exploit change situations. Individuals, societies, nations and enterprises who have at some time been at the forefront of commercial and/or technological expansion have achieved domination, or at least ‘competitive’ advantage, by being innovative in thought and/or action. They have been both enterprising and entrepreneurial. It is said that management and change are synonymous; it is impossible to undertake a journey, for in many respects that is what change is, without first addressing the purpose of the trip, the route you wish to travel and with whom.

Managing change is about handling the complexities of travel. It is about evaluating, planning and implementing operational, tactical and strategic ‘journeys’ – about always ensuring that the journey is worthwhile and the destination is relevant. The Industrial Revolution, which developed in Europe between 1750 and 1880, accelerated the rate of change to an extent never previously thought possible. Other economies followed and the rate of change has never declined; indeed, many would claim it has now accelerated out of control. The spear and sword gave way to the gun; the scribe to the printing press; manpower to the steam engine of James Watt; the horse and cart to the combustion engine; the typewriter to the word processor; and so the list goes on.

About Abey Francis

Abey Francis is the founder of MBAKnol - A Blog about Management Theories and Practices - and he's always happy to share his passion for innovative management practices. You can found him on Google+ and Facebook. If you’d like to reach him, send him an email to: [email protected]

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