Organizational Change simply refers to alteration in the existing conditions of an organization. Even in most stable organizations change is necessary to maintain stability. The economic and social environment is so dynamic that without adapting to such change even the most successful organizations cannot survive in the changed environment. Therefore, management must continuously monitor the outside environment and be sufficiently innovative and creative to implement these changes effectively.
Two Approaches to Organizational Change
As organizational change is a complex process, therefore managers must approach it systematically and logically. Some organizational changes are planned whereas other changes are reactive. Planned change is designed and implemented by an organization in an orderly and timely fashion in the anticipation of future change.
- Reactive change results from a reaction of an organization to unexpected events. In contrast to planned change, it is a piece-meal response to circumstances as they develop. External forces that the organization has failed to anticipate or interpret always bring about reactive change. Since reactive change may have to be carried out hastily, it increases the likelihood of a poorly conceived and poorly executed Program.
- Planned change is always preferable to reactive change. Managers who sit back and respond to change only when they can no longer avoid it are likely to waste a lot of time and money trying to patch together a last-minute solution. The more effective approach is to anticipate the significant forces for change working in an organization and plan ways to address them. To accomplish this, managers must understand the steps needed for effective change.
Comprehensive Model of Organizational Change
The comprehensive model of change have seven steps that can lead to effective organizational change. This model is useful for both planned and reactive organizational change. The seven steps of comprehensive model of organizational change are as follows:
- Recognize need for change: The first step in this model is recognizing need for change. For marketing managers who anticipate needed . change, recognition is likely to come much earlier, as a result of marketing forecasts indicating new market potential, expert indications about impending socio-economic change or a perceived opportunity to capitalize on a key technological breakthrough. These managers tend to ‘initiate change because they expect it to be necessary in the near future in any case’.
- Establish goals for change: The manager must then set goals for the proposed change. It is important for the manager to specify goals that the change is supposed to accomplish. The goals can be set to maintain or increase the market standing, to enter new markets, to restore employee morale, to reduce turnover, to settle a strike and to identify good investment opportunities.
- Diagnose relevant variables: An important next step is diagnosing organizational variables that have brought about the need for change. Turnover, for example, may be caused by a variety of factors such as low pay, poor working conditions, poor supervision, better alternatives in the job market or employee job dissatisfaction etc. Thus, if turnover is the recognized stimulus for change, the manager must understand what has caused it in a particular situation in order to make the right changes. To carry out this diagnosis, the manager may discuss the situation with employees and other managers.
- Select change intervention: After the manager has developed an understanding of the problem and its causes then he must select a change intervention that will accomplish the intended goal. An intervention is a specific change induced in an organization with the intention of solving a particular problem or accomplishing a specific objective. For example, if turnover is caused by low pay, then a new reward system is required and if the cause is poor supervision then interpersonal skills and training for supervisors is required.
- Plan implementation of change: The manager must then carefully plan the implementation of change. Planning the implementation of change involves consideration of the cost of the change, how the change will affect other areas of the organization and the degree to which employees should participate in bringing about the change. Hastily implemented change can result in more harm than benefit. For example, if the change involves the use of new equipment, the manager should not make any changes that rely on the use of new equipment until it has arrived and been installed and workers know how to use it. Moreover, if change is thrust upon them too quickly, their resistance may stiffen.
- Implement change: A systematically implemented change is more likely to proceed smoothly and to encounter fewer obstacles than is a change that is implemented too quickly and without adequate preparation.
- Read More: Organization Change Management Models
- Evaluate implementation: Finally, after the change has been implemented, the manager should verify that it has accomplished its intended goals. A change may fail to bring about the intended results. This may be due to inappropriate goals or inaccurate diagnosis of the situation or wrong selection of intervention.