Organizational Change

What is Change?

Change involves the process of transition from one state to another. In the organizational context, it involves shifting from one set of routines, norms, culture or structure to another. Organizational change is often a complex, time-taking and cumbersome process. The change agents might have a very good plan and hope for a very positive outcome, yet it is often encountered with resistance and failures.

In this article, we will find out why organizations need to change and why they often fail in their attempts to change. Let us begin by understanding the different types of organizational change.

Types of change

Proactive versus Reactive Change

A proactive change is one where the organization plans a change by foreseeing future events. The current functions of the organization have not failed yet and there are no apparent threats to the organization. Therefore, the change is solely for the purpose of betterment and enhancement of the future potential of the organization. As you may have guessed, a proactive change is met with a lot of inertia from the organizational members. They may ask why change when everything is fine.

A reactive change, on the other hand, is one where the organization has a do or die situation. If they fail to embrace the change, they would perish. Hence the change is in response to some external or internal threat. Since the threat is apparent to the organizational members, the inertia and resistance are likely to be low.

Radical versus Incremental

A radical change is one that is fast-paced and aims to alter the basic structure or culture of the organization. A famous researcher, Schein proposed that a culture change is one of the most difficult changes as it aims to alter the values and belief systems of the organization. Therefore, it is likely to be a high-risk game because the core value system of the organization changes here.

An incremental change is like a transactional change where the aim is to modify surface-level processes. It is a slow process and may result in a major change after a considerable period of time. Since it alters the surface-level processes without attempting to alter any values, it is likely to be met with much less resistance.

Why is change needed

Technology

With the advent of technology, the style of doing work changes drastically. For instance, before the popularity of social media, brands had television and newspapers to advertise. Television ads were typically long whereas newspaper ads typically had images. However, now social media ads need to be very engaging and short video ads (less than 20 seconds) typically perform better. Hence, organizations had to change their advertising strategy in order to reach their target audience. Another example is that of automation, where machines are increasingly replacing human labor for faster and error-free production. Hence, manufacturing organizations need to adopt change if they want to thrive and compete successfully.

Changes in regulations

Many times, organizations adopt change in response to government regulatory policies. For instance, many factories had to regulate their emission of green-houses gases due to climate action regulations.

Another example is that of inclusion. Many organizations are hiring individuals from diverse backgrounds in order to comply with government and organizational policies.

Natural events

Natural events, like the Covid-19 pandemic, has forced organizations all over the world to adopt massive changes. For instance, employees have to work from home, which was earlier an employee-friendly initiative. However, now organizations are figuring out how to balance between employee productivity and burnout. Covid-19 has also impacted the supply and demand chain of products. Items like masks and sanitizers which were earlier not high demand products have suddenly seen an exponential rise in demand. While products like cars and garments have seen a decline in demand. Concerned organizations had to adapt to such shifts.

Economic Conditions

Economic factors like recession, high rates of unemployment, inflation affect the demand-supply equilibrium. Organizations that are insightful and apprehend such changes are often better able to cater to the changed needs of the customers.

Mergers and acquisitions

Mergers and acquisitions often require radical organizational changes. The integration stage of mergers and acquisitions may be very stressful and it may take years of persistent effort to successfully integrate the organizations.

Steps in change process

Lewin proposed the force-field theory of organizational change. According to this theory, there are two forces in a change scenario. One that favors the change and one that resists or opposes the change. Leaders need to strengthen the change favoring forces or minimize the resisting forces in order to implement the change successfully.

There are three steps to do so.

1. Unfreezing: In this stage, the aim is to prepare the organization to change. Common activities of this stage are communicating about the change and obtaining employee trust.
2. Change: This is the stage of implementation of the new routines and processes. It may be a fairly difficult task because employees may find it difficult or there may be flaws in the plan itself.
3. Refreeze: This stage begins when the change becomes the new normal.

Organizational change is often a cyclical process where refreezing if followed by unfreezing.

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