- Change is inevitable, especially in the organizational environment.
- Change is a continuous phenomenon and companies must be proactive in affecting it.
- Resistance to change is not desirable.
- Forces to change: Technology, market forces, and socio-economic factors
The primary reason cited for organizational problems is the failure by managers to properly anticipate or respond to the forces of change.
Barney and Griffin
Organizational change could involve changing your company culture, people, product, infrastructure, technology or processes.
Harvard Business School
Factors affecting organizational change
External factors
- Technology
- Financial decisions or operations
- Product features and new product development
- Market potential and marketing strategies
- Customers and competition
- Suppliers, labour and stakeholders
- Political and legal
- Economic and socio-cultural
Internal factors
- Change or process
- Modification to human behaviour
- Training and development of workforce
- Adopting new technology and policies
- Wage and salary implementation
- Promotion policy
Types of organizational change
- Strategic change: A strategic change includes making changes to the business’s policies, structure, or processes. The upper management and the Chief Executive Officer often bear the responsibility for strategic change. Updating your mission as you grow.
- Structural change: Decentralization of authority and the introduction of a flatter organizational structure enable employee to experience a sense of autonomy in the work environment. The chain of command, job structure, and administrative procedures.
- Process-oriented change: Process changes are necessary to keep pace with the development in technology and automation.
- Cultural Change: Due to electrifying changes in communication, an individual is exposed to social changes. Promote value system among employees and practice ethical approach in business.
Kurt Lewin’s organizational change management model (three stage theory)
flowchart LR
A("Unfreeze") --> B("Change/Transition")
B --> C("Refreeze")
1. Unfreeze: Make sure that the employees are ready for change.
- It involves improving the readiness as well as the willingness of people to change.
- Moving from the existing comfort zone to a transformed situation.
- It involves making people aware of the need for change and improving their motivation to accept the new ways of working for better results.
- During this stage, effective communication plays a vital role in getting the desired support and involvement of the people in the change process.
2. Change: Execute the intended change
- This stage can also be regarded as the stage of Transition or the stage of actual implementation of change.
- It involves the acceptance of new ways of doing things.
- This is the stage in which the people are unfrozen, and the actual change is implemented.
- During this stage, careful planning, and encouraging the involvement of individuals for endorsing the change is necessary.
- It is believed that this stage of transition is not that easy due to the uncertainties or people are fearful of the consequences of adopting a change process.
3. Refreeze: Ensure that the change becomes permanent
- During this stage, the people move from the stage of transition (change) to a much more stable state which we can regard as the state of equilibrium.
- The stage of Refreezing is the ultimate stage in which people accept or internalize the new ways of working or change, accept it as a part of their life, and establish new relationships.
- For strengthening and reinforcing the new behaviour or changes in the way of working, the employees should be rewarded, recognized and provided positive reinforcements, supporting policies or structures can help in reinforcing the transformed ways of working.
The Expectancy Theory of Motivation at play during the acceptance of organizational change:
When changing a company policy, work process or job responsibilities, expectancy theory predicts the employee’s motivation to go along with the change. Resistance to Change: Getting employees to buy in and go along with organizational, department or job changes is a key to the success of such changes. ENSURE this for each employee:
- Expectancy with Change
- Instrumentality with Change
- Valence with Change
A case study of Nokia and things to learn from its downfall
- Always account for what your customers want
- Marketing is as important as your product
- Ensure all your departments work in alignment
- Don’t foster a “shoot the messenger” culture
- Manage your company’s resources
- Focus on hiring the most qualified people
- Make data-driven decisions
- Do thorough analysis
- Take a holistic approach to assessing all risks and opportunities