Business – Change Management

organisational change – definition
– Organisational change refers to how an organisation adapts or modifies how it operates due to any alterations in the internal or external environment
– Organisations can approach change in two ways:
*proactively, meaning they anticipate, initiate and embrace change
OR
*reactively, meaning they only respond to change as it becomes necessary to do so
managing change effectively
Being able to successfully adapt and implement change:
*enhances a business’s competitiveness
*increases an organisations’ chance of survival/success
*improves productivity
*contributes to staff satisfaction and motivation
internal environment as a source of change
*poor financial performance
*poor corporate culture
*the occurrence of a crisis
*low employee morale, productivity, motivation
operating environment as a source of change
*customers
*competitors
*suppliers
*interest groups/trade unions
macro environment as a source of change
*globalisation
*technological development
*economic conditions
*legal and political decisions
*socio-cultural factors
driving forces vs. restraining forces
driving and restraining forces – management & management style
driving – if management believe in the necessity for change and have the leadership qualities to drive the change this can greatly assist in its implementation

restraining – having an autocratic management style or not having the skills to effectively lead the organisation through a period of change can cause resistance

driving and restraining forces – employees
driving – employees that posses a culture aligned to innovation and adaptability, and who have faith and trust in management decisions will be instrumental in the successful implementation of change

restraining – employees that feel change is being forced upon them, and who harbour a ‘fear of the unknown’ will be unwilling to accept the change

driving and restraining forces – financial performance of the organisation
driving – to reverse a trend in an organisation’s poor financial performance change is often a necessity. this ‘change’ can come in a number of forms e.g operations, reducing staff numbers etc. these actions will have the intention of improving the organisations current financial position

retention – if financial performance has been strong, an organisation may be reluctant to alter how they operate. however, this may place the organisation in a vulnerable position as both future opportunities and threats need to be continually identified and recated to in order to remain successful

driving and restraining forces – compeditors
driving – lack of competition in a market may help to support and justify the change competitors may set a precedent that another organisation can follow e.g. home delivery service, on-line ordering

restraining – attempting to enter into a marketplace that is crowded with already established competitiors may make it difficult for an organisation to successfully implement its desired changes

driving and restraining forces – productivity
driving – if the change will result in improved productivity, it can provide support for the change. if the impact on productivity is low during the implementation of the change, this could also provide support for the change

restraining – if the impact on productivity is negative during the implementation stage or after completion, it can cause resistance

driving and restraining forces – organisational inertia
driving – N/A

retraining – organisational inertia refers to management’s inactivity or lack of response when faced with proposed changes because they are satisfied with the ‘status quo

driving and restraining forces – legislation/ political and legal
driving – changes in Government, government funding and the passing of new laws mean it is mandatory that an organisation accept and implement change

restraining –

driving and restraining forces – cost
driving – the cost of the change may be within budget. the change may also result in lowered long-term expenses which will help support the change

restraining – the change may incur large costs which may result in the change being abandoned or not implemented as well as it should be