12 Forces of Organizational Change: Internal and External Factors

What are the Forces of Organizational Change?

All business organizations establish, operate, and grow within a wide range of changing environments. All such forces affecting the survival and growth of business organizations are known as forces of organizational change.

Mainly, there are two types of forces that lead to a change in an organization consisting of internal and external forces.

  • Internal Forces of organizational change
  • External forces of organizational change

Internal Forces of Organizational Change

All conditions and forces within the organization affecting business operations are internal forces of organizational change. For the internal health of the business, it is essential to manage internal change forces in a useful way.

Internal forces are to some extent controllable to the management. The component of internal forces consists of the following six:

Change in Owner and Board of Directors

When there is a change in ownership or a reshuffling of the board of directors, it can lead to shifts in the organization’s direction and priorities. New owners or directors may bring fresh perspectives, different values, and diverse expertise, which can result in changes in the overall strategic direction and decision-making processes.

This force often encourages organizations to reassess their goals, strategies, and operations to align with the vision of the new owners or directors.

Change in Goals

Goals define an organization’s desired outcomes and serve as a compass for its actions. However, as market conditions, customer preferences, or industry dynamics evolve, organizations may need to adapt their goals to remain relevant and competitive.

Changes in goals can involve revising performance targets, expanding into new markets, diversifying product offerings, or realigning the organization’s mission. This force compels organizations to reassess their priorities and make strategic adjustments to achieve the desired outcomes.

Change in Plan and Strategy

Organizations must regularly evaluate and adjust their plans and strategies to respond to emerging opportunities and challenges. Factors such as technological advancements, shifts in consumer behavior, or changes in regulatory frameworks can necessitate strategic revisions.

Organizations may need to explore new markets, invest in innovative technologies, streamline operations, or modify their value proposition. This force demands agility and proactive decision-making to ensure the organization’s long-term sustainability and growth.

Change in Organizational Structure

As organizations evolve, their structure may need to be reconfigured to enhance efficiency, collaboration, and adaptability. Changes in the organizational structure can involve restructuring departments, creating cross-functional teams, implementing flatter hierarchies, or adopting agile frameworks.

Such changes aim to improve communication, empower employees, and facilitate quicker decision-making, enabling the organization to respond more effectively to market dynamics and customer needs.

Change in Job Technology

Technological advancements have a profound impact on how work is done within organizations. The introduction of new tools, software, automation, or artificial intelligence can significantly alter job roles, tasks, and skill requirements.

Employees may need to acquire new competencies, adapt to digital workflows, or embrace remote work setups. This force compels organizations to invest in training and development initiatives, redesign job roles, and foster a culture of continuous learning to stay ahead in the digital age.

Change in the Work Environment

The work environment plays a crucial role in employee engagement, productivity, and well-being. Changes in the work environment can include shifts towards remote work, flexible schedules, collaborative spaces, or a greater emphasis on work-life balance.

As employee expectations evolve and research highlights the benefits of positive work environments, organizations need to adapt to attract and retain top talent. This force drives organizations to reassess their policies, practices, and physical spaces to create an environment that fosters employee satisfaction and performance.

External Forces Organizational Change

The external forces refer to the environment and institutions outside the organization are potentially can affect the organizational performance. The external environment is formed with two elements, the specific or task environment, and general forces.

Change in external forces gives a great impact on the goal achievement of an organization. Management of an organization can not control the change in external forces, it needs to adapt itself by modifying its goals, plans, policies, and strategies, on the basis of changing external forces.

Let’s discuss the components of external factors of organizational change:

Task or Specific Forces

The task environmental forces consist of specific organizations or groups that influence organizations’ performance. Such forces have a direct and immediate impact on managerial decisions and actions.

Every organization may have a novel task force and it may vary in accordance with interval and state. The task forces consist of a change in competitors, customers, suppliers, government, pressure groups, media, financial institutions, and strategic allies.

General Forces

General forces refer to broad external conditions that may affect the business activities of the organizations. These forces are uncontrollable and require proper monitoring of the components of adapting on the basis of emerging changes.

Change in general forces creates opportunities and threats to business organizations. The following are the factors of general forces in external forces of organizational change:

Change in Political Forces

The political-legal forces refer to government regulation and the legal system for business. The political-legal environment is influenced by three institutions-legislature, execution, and judiciary. These institutions play a major role in directing, developing, and controlling business activities.

Change in Economic Forces

Economic forces indicate the system of producing and distributing goods and services. They refer to all factors which give shape and form to the development of economic activities. These forces involve economic systems, economic policies, economic conditions, and legal institutions.

Change in Socio-Culture Forces

The socio-cultural forces are comprehensive since they include the total social forces within which an organization operates. These forces involve tradition, social values, beliefs, norms, attitudes, customs, and demographic composition. All the elements of the socio-culture environment are adaptable, shared, and interrelated.

Change in Technology

Technology is the process of converting input into output. It focuses on machines and equipment, the transmission of information, new techniques and processes, research, and development. The innovation of automation, robotics, and computerization brings tremendous change in production and distribution systems. The development of mass communication and the internet system is the outcome of technology, which brings a revolution in the communication system of the world.

Read Next: What is PESTLE Analysis?

Leave a Comment

%d bloggers like this: