Organisational Change: Meaning, Causes and Its Process

After reading this article you will learn about:- 1. Meaning of Organisational Change 2. Causes of Organisational Change 3. Response 4. Process 5. Resistance.

Meaning of Organisational Change:

Organisational change refers to any alteration that occurs in total work environment. Organisational change is an important characteristic of most organisations. An organisation must develop adaptability to change otherwise it will either be left behind or be swept away by the forces of change. Organisational change is inevitable in a progressive culture. Modern organizations are highly dynamic, versatile and adaptive to the multiplicity of changes.

Organisational change refers to the alteration of structural relationships and roles of people in the organization. It is largely structural in nature. An enterprise can be changed in several ways. Its technology can be changed, its structure, its people and other elements can be changed. Organisational change calls for a change in the individual behaviour of the employees.

Organizations survive, grow or decay depending upon the changing behaviour of the employees. Most changes disturb the equilibrium of situation and environment in which the individuals or groups exist. If a change is detrimental to the interests of individuals or groups, they will resist the change.

Causes of Organisational Change:

(A) External Pressures:

i. Change in Technology and Equipment:

Advancements in technology is the major cause (i.e., external pressure) of change. Each technological alternative results in new forms of organization to meet and match the needs.

ii. Market Situation:

Changes in market situation include rapidly changing goals, needs and desires of consumers, suppliers, unions etc. If an organization has to survive, it has to cope with changes in market situations.

iii. Social and Political Changes:

Organisational units literally have no control over social and political changes in the country. Relations between government and business or drive for social equality are some factors which may compel for organisational change.

(B) Internal Pressures (Pressures for Change from Within the Organisation):

i. Changes in the Managerial Personnel:

One of the most frequent reasons for major changes in the organisation is the change of executives at the top. No two managers have the same style, skills or managerial philosophies.

ii. Deficiencies in the Existing Organization:

Many deficiencies are noticed in the organisations with the passage of time. A change is necessary to remove such deficiencies as lack of uniformity in the policies, obstacles in communication, any ambiguity etc.

iii. Other Factors:

Certain other factors such as listed below also demand a change in the organisation.

Employee’s desire to share in decision-making

Employee’s desire for higher wage rate

Improvement in working conditions, etc.

Response to Organisational Change:

Every change is responded by the people working in the organisation. These responses may be positive or negative depending upon the fact as how they affect people.

Before introducing a change, the manager should study and understand employee’s attitudes so as to create a positive response. Three sets of factors-psychological, personal and social- govern the attitude of people.

Process of Organisational Change:

Unless the behavioural patterns of the employees change, the change will have a little impact on the effectiveness of the organisation.

A commonly accepted model for bringing change in people was suggested by Kurt Lewin in terms of three phase process:-

(1) Unfreezing:

The essence of unfreezing phase is that the individual is made to realize that his beliefs, feelings and behaviour are no longer appropriate or relevant to the current situation in the organisation. Once convinced, people may change their behaviour. Reward for those willing to change and punishment for others may help in this matter.

(2) Changing:

Once convinced and ready to change, an individual, under this phase, learns to behave in new ways. He is first provided with the model in which he is to identify himself. Gradually he will accept that model and behave in the manner suggested by the model. In another process (known as internalisation), the individual is placed in a situation where new behaviour is demanded of him if he is to operate successfully.

(3) Refreezing:

During this phase, a person has to practice and experiment with the new method of behaviour and see that it effectively blends with his other behavioural attitudes. Reinforcement, for creating a permanent set in the individual, is provided through either continuous or intermittent schedules.

Resistance to Organisational Change:

Resistance to change is perhaps one of the baffling problems a manager encounters because it can take many shapes. People may resign, they may show tardiness, loss of motivation to work, increased absenteeism, request for transfer, wild-cat strikes, shoddy work, reduction in productivity etc.

Classification of Resistance to Change:

Resistance to change may be classified as:

1. Industrial Resistance

2. Organisational Resistance

1. Industrial Resistance:

Individual resistance may be there because of the following reasons:

A. Economic Reasons:

(a) Obsolescence of Skills:

When a person feels that with the introduction of newer processes, his skills will just become obsolete, he will resist the change. For example, a twenty years experienced accountant is quite likely to resist the introduction of a computer for preparing the wage bills because he feels that might affect his pay and position.

(b) Fear of Economic Loss:

People resist change if it opens the possibility of lowering their income directly or indirectly.

B. Personal Reasons:

(a) Ego Defensiveness:

A sales manager may turn down the suggestions of a salesman simply because the manager perceives that his ego may be deflated by accepting the suggestion.

(b) Status Quo:

Most of the people feel comfortable with status quo and strongly resist change as it may involve uncertainty and risk.

(c) Fear of Unknown:

Change presents unknown and unknown poses a constant threat and sores people. For fear of unknown, a manager may refuse promotion that requires his relocating in another state.

C. Social Reasons:

(a) Social Displacement:

Introduction of change (e.g., relocating) may result in breaking up of work groups and thus result in disturbance of the existing social relationships of people.

(b) Peer Pressure:

Whenever change is unwilling to the peers, they force the individual subordinate employees who are bent of accepting the change, to resist it.

2. Organizational Resistance:

Resistance may also be present at organizational level. Some organizations are so designed that they resist innovations.

Some of the reasons of organizational resistance are:

(a) Threats to Power and Influence:

Some people (especially sitting at the top levels) resist change because they feel that a change might affect their position, power and influence in the organization.

(b) Organizational Structure:

Some organization structures (e.g., bureaucratic structure) have inbuilt mechanism for resis­tance to change.

(c) Resource Constraints:

Non-availability of financial, material and human resources may also act as a resistance to change.

(d) Sunk Cost:

In some companies, heavy capital is blocked in the fixed or permanent assets. If such an organization wishes to introduce change, then difficulty arises because of these sunk costs.

Overcoming Resistance to Organisational Change:

Change creates tension and emotional turmoil in the minds of employees. Change thus results in resistance quite frequently, negative reactions doom the success of the change program espe­cially when a manager is unable to handle it properly.

Some of the techniques to handle the change properly and to deal with resistance to change are:

(a) Education and Communication:

One of the easiest techniques to overcome resistance to change is to educate the people who resist it. In many cases, people do not properly understand the change and hence become afraid of its consequences and resist change.

(b) Participation and Involvement:

If subordinates are allowed to participate and involve themselves in the change process (decision-making regarding the implementation of the change), their misunderstandings about the consequences of change are cleared, they generally feel satisfied and do not oppose change.

(c) Support:

Support may be facilitative and emotional. Managers sometimes deal with potential resistance by being supportive. This includes listening, providing emotional support, providing training in new skills etc.

(d) Incentives:

Offering incentive is another fruitful way to overcome resistance to change.

(e) Manipulation:

Managers generally indulge in manipulation when all other tactics have failed to overcome resistance to change.

(f) Coercion:

At times, there is no way except to deal with resistance coercively. People are forced to accept change by threatening them with loss of their jobs, promotion possibilities and so forth.