What is Organizational Change?

Organizational change is the alternation of organizational activities in other to meet the expectations of a dynamic business environment. It is a management process that seeks to achieve competitiveness.

Change is the fact and reality of the universe and it is unavoidable. Chane is the alternation in a work environment that affects all the members of the organization. The world is dynamic and every aspect of society is changeable. The change may come either in terms of revolution or evolution.

Business organizations operate in a dynamic environment. They need to consider the “change or die” philosophy. They have to face the transition stage while wanting to reach the desired future stage of the affair from the current stage.

An organization is said to be successful if it is able to face the transition stage effectively. The transition stage would be affected by both internal and external factors. These factors involve people, technology, structure, competition, the world political system, and so on. Thus, organizational change takes place.

Managing change is of utmost necessity for every successful organization. Organizations having static and stationary, in practice, are less successful as compared to other organizations having a flexible, adaptable, and modifiable basis for changing environment of society.

Therefore, organizations need to emphasize managing change in every sector of society so that it becomes possible to survive and operate in a competitive environment. It is the reason for the change in a business environment that individuals doing narrow, specialized, and routine work are being replaced by teamwork where members can perform multiple tasks and activities participating in decisions.

The Language of Organizational Change

The languages of organizational change mean the considerations managers must think about while bringing or implementing change in the organization.

The Learning Organization: The notion that learning is central to success and effectiveness. Management must learn to see the big picture and understand subtle relationships among parts of the system.
Reengineering: A fundamental rethinking and radical redesign of systems and processes. Work should be organized around outcomes, not tasks or functions.
Core Competencies: The notion that companies need to identify and organize around what they do best. The strategy should be based on these core competencies rather than products or markets.
Organizational Architecture: The idea that managers need to think broadly about the organization in terms of how work, people, and designs fit together.
Time-Based Competition: The notion that time is money. Time is manageable and can be a source of competitive advantage affecting productivity, quality, and innovation.
Growth Strategies: Methods to lift profits by expanding revenues, not just cutting costs.
Mission and Vision Statements: Description of what the company will become and how it will get there.
Strategic Alliance: Ways to create business partnerships among customers, suppliers, and even competitors.

Types of Organizational Change

There are different types of organizational changes managers can opt to implement change in the organization. From them, the most common types of organizational change include the following seven.

Strategic Change

Strategic change refers to deliberate and planned adjustments made by organizations to achieve specific goals or respond to market opportunities and threats. It involves modifying the organization’s policies, processes, or structure to enhance its competitive advantage and meet changing market demands.

People-Centric Change

The people-centric change focuses on the human aspect of organizational change. It involves implementing new policies, practices, or initiatives that directly impact employees, such as introducing flexible work arrangements or improving work-life balance.

Effective communication, empathy, and leadership are crucial in managing employee resistance and facilitating a smooth transition.

Structural Change

Structural change entails modifying the organization’s structure and design. It may involve redefining roles and responsibilities, altering reporting lines or creating new departments or teams.

Structural changes are often driven by factors such as mergers, acquisitions, market shifts, or the need for greater efficiency and adaptability.

Technological Change

Technological change involves adopting new technologies or upgrading existing systems to improve business processes, increase productivity, and stay competitive in the digital age.

This type of change may include implementing new software, automation tools, or digital platforms. Managing technological change requires proper planning, training, and support to ensure a smooth transition and minimize resistance.

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Unplanned Change

Unplanned change refers to unexpected or unforeseen events that necessitate organizational adjustments. These events may include natural disasters, economic downturns, or sudden market disruptions.

Related: What is Planned Change?

Effective change management during unplanned change involves quick decision-making, clear communication, and agility to adapt to new circumstances.

Transformational Change

Transformational change involves comprehensive and profound shifts in an organization’s strategy, culture, and operations. It often results in a radical rethinking of the organization’s purpose, values, and business model.

Transformational organizational change may be driven by factors such as market disruptions, industry shifts, or the need to address long-term sustainability challenges.

Remedial Change

The remedial change focuses on correcting existing issues or problems within the organization. It aims to resolve inefficiencies, address performance gaps, or rectify organizational weaknesses.

Remedial change may involve implementing new processes, restructuring departments, or enhancing training and development programs to improve overall organizational effectiveness.

Factors Affecting Organizational Change

Different factors force management to think about organizational changes. These factors are external and internal to the organizational environment. Some, but not limited to, include the following.

Change in Owners

When there is a change in ownership, such as a merger, acquisition, or new leadership, it often brings new perspectives, strategies, and priorities.

The new owners may have different goals, values, or visions for the organization, which can drive the need for change. They may introduce fresh ideas, implement new processes, or restructure the company to align with their vision and enhance performance.

Change in Goals

Organizational goals are the desired outcomes that guide an organization’s activities and decisions. Changes in goals can stem from internal factors such as performance review or strategic planning, or external factors like market trends or customer demands.

If the current goals are not aligned with the organization’s desired outcomes or market conditions, it may necessitate a shift in strategy, processes, or resources to realign and achieve the new goals.

Changes in Technology

Technological advancements have a profound impact on organizations. New technologies can improve efficiency, streamline processes, and enable innovative solutions. Organizations must adapt to changes in technology to remain competitive and meet customer expectations.

This may involve implementing new software, adopting automation tools, or leveraging digital platforms to transform operations and enhance productivity.

Competition

Competition is a driving force behind organizational change. When organizations face intense competition, they must constantly innovate and improve to gain a competitive edge. This can lead to changes in products, services, marketing strategies, or operational processes.

Organizations may need to invest in research and development, upgrade infrastructure, or enhance customer experiences to stay ahead in the market.

Changes in Customer Expectations

Customers’ expectations and preferences continually evolve, driven by factors such as changing demographics, cultural shifts, or technological advancements. Organizations must adapt to these changes to remain relevant and meet customer needs.

This may involve developing new products or services, enhancing customer service, or leveraging technology to provide personalized experiences. Understanding and anticipating customer expectations is crucial for organizations to stay customer-centric and maintain a competitive advantage.

Techniques for Organizational Change

Organizational change requires a systematic approach. For best practice, managers can opt for the following five steps for change in the organization.

Identifying the Need for Change

The first step in organizational change is recognizing the need for it. This involves assessing the current state of the organization and identifying any issues, challenges, or opportunities that require attention.

It could be triggered by factors like market trends, customer demands, internal inefficiencies, or changes in the external environment. Recognizing the need for change sets the stage for further action.

Determining the Organization Elements to be Changed

Once the need for change is identified, the next step is to determine which elements of the organization need to be changed. This could involve processes, systems, structures, culture, leadership styles, or employee behaviors.

It requires a thorough analysis of the organization’s strengths, weaknesses, and areas for improvement. Understanding the specific elements to be changed provides clarity and direction for the change effort.

Planning for Effective Change

Planning is a critical step in ensuring successful organizational change. It involves developing a comprehensive strategy and roadmap for implementing the desired changes.

This includes setting clear objectives, defining milestones, allocating resources, identifying key stakeholders, and establishing a timeline. A well-designed plan helps to manage risks, anticipate challenges, and ensure a smooth transition throughout the change process.

Assessing the Change Force

Assessing the change force involves understanding the driving and restraining forces that impact the change initiative. Driving forces are factors that push for change, such as the benefits, opportunities, or rewards associated with the change.

Restraining forces, on the other hand, are factors that resist change, such as fear of the unknown, resistance to change, or lack of resources. Evaluating these forces helps to identify potential barriers and develop strategies to address them effectively.

Actions for Change

This step involves the implementation of change through a process known as unfreezing, changing, and refreezing. Unfreezing refers to preparing the organization and individuals for change by creating awareness, building support, and addressing any resistance.

Changing involves implementing the actual changes, whether it’s introducing new processes, training employees, or altering structures. Refreezing is the final step, where the changes become the new normal, and the organization stabilizes around the new state. This step emphasizes the importance of reinforcing and sustaining the changes made.

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What is Organizational Change? Definition, Language, Types, Factors, and Techniques