Factors Influencing Organizational Change
Factors Influencing Organizational Change: In the life of an organisation, change is unavoidable. In today’s business world, most businesses are operating in a dynamic and ever-changing environment. There is no third option; they must either change or perish. Organizations that learn to adapt and deal with change will prosper, while those that do not will be wiped away. The technical, economic, political, social, legal, international, and labour market settings are the primary drivers that make changes not only desirable but also unavoidable.
Shift may be defined as a change in the status quo or a change in the way things are done. “Any changes that occur in an organization’s entire work environment are referred to as change.”
“Change is common when an organisational structure is disrupted by an internal or external cause. Change is the changing of a system’s structure or process as a process. It doesn’t matter whether it’s excellent or awful; the notion is just descriptive.”
Organizational performance is influenced by a variety of internal and external variables. Any change in these variables needs organisational modifications. The following are the most essential factors:
Factors Influencing Organizational Change
- External Factors
Every organisation lives within a larger context; no organisation exists in isolation. Consumers, suppliers, unions, shareholders, the government, and a variety of other groups and people must all contact with one other on a regular basis. In the environment, each organisation has objectives and obligations that are tied to one another. The current environment is dynamic and will remain so in the future.
Organizations are forced to evolve as their social, political, economic, technological, and legal environments change. Organizational changes such as main functions, production processes, labor-management interactions, type of competitors, economic restrictions, organisational methodologies, and so on may come from such changes. Organizations must evolve in order to survive in a changing environment. How numerous environmental, organisational changes must alter. The following scenario demonstrates how changes in numerous external conditions imply organisational change:-
- Technology
When the organisational environment changes and other companies embrace the new technology, the organisations under consideration become less cost efficient and their competitive position deteriorates. As a result, it must accept new technologies, change its work organisation, and develop a new balance.
- Marketing circumstances
Because every business exports its results to the environment, it must compete in the marketplace. Other companies selling the same items and consumers who are not purchasing the product are two sorts of influences that might impact an organization’s competitive position. Any changes in these forces may necessitate appropriate organisational changes. When the Indian economy was liberalised, for example, several international companies joined the Indian market.
Many Indian organisations were obliged to adjust to the changing circumstances as a result of this. As a consequence, numerous situations of divesting a company and focusing on the core business, acquiring core business, and establishing competitive competency to address competitive challenges have arisen. Similarly, purchasers’ demands, preferences, dislikes, and income disposal for a product may alter over time. These modifications are made by organisations in order to provide items that fulfil the needs of buyers.
- Social shifts
People’s goals, demands, and working styles are all reflected in social developments. Several influences, such as degree of education, urbanisation, sense of autonomy, and worldwide effect owing to new information sources, have resulted in social changes. People’s conduct in the organisation is affected by these societal developments. It is necessary to make adjustments to its operation so that it is compatible with humans.
- Charges in politics and the law
Political and legal variables, in general, dictate the activities that an organisation may engage in and the means that it will use to carry out those activities. Changes in these political and legal elements may have an impact on the functioning of the organisation.
- Forces from inside
Changes in external variables aren’t the only thing that may force an organisation to change; any change in the company’s internal components can also force a change. Two factors need such a shift: changes in management people and deficiencies in current organisational processes.
- Changes in management staff
In addition to environmental changes, there has been a shift in management personnel. Because of retirement, promotion, transfer, or dismissal, old managers are replaced by new managers. Each new manager adds his or her unique ideas and methods to the company. In the organisation, the connections are more important. Because of changes in management people, relationships, especially informal ones, shift. Furthermore, even when there are no changes in the staff, their attitudes alter. As a consequence, an organisation must adapt properly.
(a) Inadequacy in the current organisation
Changes are sometimes required due to flaws in the current organisational structure and procedure. These flaws may take the shape of an unmanageable management span, a high number of administrative levels, a lack of coordination between departments, communication barriers, a plurality of committees, a lack of consistency in policy choices, a lack of collaboration between line and staff, and so on. In addition to these internal causes, there are two other internal elements that cause organisational changes.
b) Workforce composition
The nature of the labour force has evolved throughout time. Different generations have articulated various work values. Employees above the age of 50 place a high emphasis on loyalty to their company. Workers in their forties and fifties are solely devoted to themselves. Workers in their twenties and thirties are committed to their jobs. The workforce’s profile is likewise rapidly changing. The new generation of employees has received better education; they put a higher weight on human values and challenge employers’ authority. Their conduct has also gotten more sophisticated, making it difficult for managers to guide them toward business objectives. Employee turnover is also significant, putting further burden on management.
(c) To prevent the onset of inertia
Organizational reforms are often made to prevent growing inertia or inflexibility. Conscious managers take into consideration this perspective of the company, which is that it should be dynamic, since a single management approach is not always the greatest tool. As a result, adjustments are included so that employees acquire a like for change and there is no unneeded opposition when substantial organisational changes are implemented.