External Factors Affecting Organizational Change
Discuss about the Integrating Individual and Ozrganization System.
Change is both a necessary and an inescapable process that organizations go through in its lifespan. Change ultimately is a shift in the status quo, leading to alterations in the overall work process or environments. In the current dynamic world of business, almost all the organizations face a process of change in their business environments. Due to this, it is imperative that the organizations must evolve to adapt to these changes or face extinction; there is no middle ground between them (Benn et al. 2014). Organizations that are able to cope up, adapt and rise to the competition thrives and becomes successful, one that are not able to do so slowly die out. Several forces affect and even necessitate the process of change in an organization, and these can be both internal forces (inside the organization) and external forces (outside the organization) (Hornstein 2015; Burke 2017; Alvesson and Sveningsson 2015).
Various external forces might affect an organization and influence change such as political, social, economic or technological factors. The internal factors that can allow success of an organization ultimately characterize the relationship of the organization to the external environments along these broad factors. An organization that has a clear understanding of its mission can explain itself in a better manner to others (outside the organization) and align itself with the factors that support change in these areas. Also, the leaders can play a key role by learning and communicating their knowledge inside the organization and in turn learn from the external environment and communicate in it, which fosters a continued exchange of knowledge to benefit both the organization as well as the environment (Knoke 2018; Argyris 2017).
The various external factors that brings about such change and which should be considered while considering change in the organization are discussed below:
Technology: Changes in technology within an organization can lead to similar technological changes to be adapted by other organizations. If the technological change is considered and proven effective to provide an organization a competitive advantage, it ultimately affects other organizations which have not adapted to that change and thus putting pressure on them (Introna et al. 2016).
Marketing Conditions: Considering that every organization sends out its outputs and products to the environment, it naturally faces competition from other organizations. The competitive position of the organization is moreover affect6ed by two forces, namely other organizations providing same or similar products or outputs and consumers who are not buying the products or outputs. Changes in these forces also lead to changes within the organization. For example, liberalization of economies in many countries has resulted in the entry of foreign entities entering the market, thereby increasing the competition. The existing organizations in response have often reached to such a change by divesting their businesses, concentrating on the core businesses or acquiring other core businesses to gain a competitive advantage. Similarly changes in the needs of the consumers or buyers also cause the organizations to change their business processes to address these needs (Yoo et al. 2015).
Technology
Social Factors: Social changes can be reflected in the aspirations of the people in the society, as well as in their changed needs and ways of work. Social change in turn are affected by many other factors such as education levels and quality, process of urbanization, autonomy as well as international impacts due to new sources of information. These social changes can lead to changes in the behavior and thinking of people within the organization. This change ultimately necessitates changes in the working process to match with the changed expectations, needs and thinking of people (Stanford 2017).
Political and Legal factors: These factors broadly explain the activities which an organization can partake in and the strategies it can follow to achieve those objectives. Changes in the political and legal aspects can cause significant change in the operations within the organization (Hayes 2018).
Governmental Forces: Regulations from the government also significantly influences the need for change in an organization. These forces can be in various forms, which ultimately determine the need for an organizational change. These can include 1) Deregulation: This is associated with decentralization or power or economic factors at the level of the state or reducing the reduction of interventions of the government in the economy. For example, deregulations in different sectors or industries such as insurance, banking and petroleum in many countries which were previously under direct government control are now transferred to private ownership, as an effect of the process of deregulations. 2) Foreign Exchange: The rates of foreign exchange can directly affect the international trade and business, since changes in exchange rates cause’s changes in the structure of currency payments. When exchange rates have constraints and issues, it can cause the government to impose restrictive measures on the import of certain items or deregulating its economy to attract foreign investment in the country. 3)Anti-Trust legislations: These are enforced by most governments for curbing or restricting unfair business and trade practices. 4) Suspension Agreements: these agreements are finalized between the governing bodies on suspension of certain policies for the organization for example anti-dumping duties. 5)Protectionism: With an increase in pressures due to competition, the government can intervene or enforce regulation to protect and safeguard the organizations most vulnerable. This can be in the form of trade barriers, which can help to protect the local and indigenous industries (Hayes 2018; Doppelt 2017).
Competition: Increase in the global competition from other industries and the challenges faced by an organization due to it can force the organization to change their business strategies to ensure their success, and maintain theory presence. Japanese companies such as Toyota, Mitsubishi or Nissan have continuously relocated their manufacturing and assembling units to south East Asia to gain a competitive advantage in the form of cost reduction in labor costs and economic margins (Booth 2015).
Marketing Conditions
Change in an organization is not only necessitated by the external factors, but also by the various internal factors that necessitate change within the organization. Such changes might be necessary due to two main reasons: change in the management, and deficits in the current organizational practices (Hayes 2018; Gray et al., 2018). The different internal factors that needs to be considered while implementing or considering changes in an organization are as follows:
Changes in Management: Changes in management can be a natural process in an organization, in which old managers are replaced by new managers due to retirement, promotions, dismissals or transfers of personnel. With the advent of each new manager, new ideas, ideologies and working processes are brought into the organization. Change in the personnel also causes changes in the professional relationships as well as informal relationships, and can also cause a change in the attitudes of the personnel, even if there is no change in the behavior of the personnel. As a result, the organization might have to change in accordance to the change in the attitudes of the management personnel (Hayes 2018).
Deficits in the existing process and structure: Deficits in the business process or structure makes it necessary for the organization to change to address these deficits and optimize its performance. The deficits can be in the form of challenges faced by the management, presence of multiple levels of management, lack of coordination between the different departments in the organization, communication challenges, dysfunctions in the different committees in the organization, un-uniform policies and business decisions, absence of cooperation between the employees and faulty business practices (Gray et al., 2018).
Workforce nature: The nature of the workforce itself can change with time. Different generations can express different work values and principles, and thus workers at different age groups might have differences in their professional and personal opinions. Studies have shown that workers who are 50 or above give loyalty to the employers a high importance, while workers in mid thirties show loyalty to themselves, while the workers from the youngest generation shows loyalty to their careers. Also there is a continuous change in the profile of the workforce in many countries, the workers from the new generations often tend to be more educated, and tend to give more focus to the human values and do not hesitate to question the managers or the authorities. Managing such behavior has also challenged the managers to align them to the objectives of the organization, further causing strain on the organization from within (Benn et al. 2014).
Social Factors
Preventing Inertia: Sometimes change in an organization takes place to prevent the setting up of stagnation, inertia and inflexibility. Managers who can envision the organization as dynamic places would be able to realize that it is not possible to use a single tool or strategy to manage various situations, and changes can be incorporated in order to develop an acceptability for the change within the organization’s workforce, and prevent unnecessary resistance in the event a major change in being implemented in the organization (Alvesson and Sveningsson 2015).
Organizational Objectives: The objectives of an organization outline and define why the organization exists, its purpose of business, and describe the missions of the organization. A successful organization generally has a clear sense of objectives and purposes, and of ways to achieve them (Hayes 2018).
Leadership: Good leaders can help to inspire and direct the employees and workforce towards change. They can set up examples, which can be followed by others. Acting as leaders, business managers can pave the way of the organization towards a change (Bolman and Deal 2017).
Communication: Strong and effective communication practices help in the transfer of information at various levels of the organization, and can help to improve the performance in the business. A two way communication up and down the organization’s hierarchy that extends from top to bottom can help to develop trust, or a lack of it can cause mistrust (Cameron and Green 2015).
Conclusion:
It can thus be understood that change in an organization can be caused and also implement5ed through an interaction of the various internal and external factors, which facilitates or challenges the business within the organization. Changes in the external environment can result in an existential threat to the organization, to which it must adapt and modify itself in order to survive and maintain its presence. The various internal and external factors can decide whether the change is feasible in the organization and whether it will be successful in its implementation, the factors can also make changes necessary, and help the organization to optimize its process, to cope better with the challenges. It is vital that such factors be considered by the management while implementing any change within the organization.
References:
Alvesson, M. and Sveningsson, S., 2015. Changing organizational culture: Cultural change work in progress. Routledge.
Alvesson, M. and Sveningsson, S., 2015. Changing organizational culture: Cultural change work in progress. Routledge.
Argyris, C., 2017. Integrating the Individual and the Organization. Routledge.
Benn, S., Edwards, M. and Williams, T., 2014. Organizational change for corporate sustainability. Routledge.
Benn, S., Edwards, M. and Williams, T., 2014. Organizational change for corporate sustainability. Routledge.
Bolman, L.G. and Deal, T.E., 2017. Reframing organizations: Artistry, choice, and leadership. John Wiley & Sons.
Booth, S.A., 2015. Crisis management strategy: Competition and change
Burke, W.W., 2017. Organization change: Theory and practice. Sage Publications.
Cameron, E. and Green, M., 2015. Making sense of change management: A complete guide to the models, tools and techniques of organizational change. Kogan Page Publishers.
Doppelt, B., 2017. Leading change toward sustainability: A change-management guide for business, government and civil society. Routledge.
Gray, B., Kirkwood, J., Monahan, E. and Etemaddar, M., 2018. Internal factors influencing effective opportunity identification in a Tongan social enterprise. Journal of Small Business & Entrepreneurship, pp.1-25.
Hayes, J., 2018. The theory and practice of change management.
Hornstein, H.A., 2015. The integration of project management and organizational change management is now a necessity. International Journal of Project Management, 33(2), pp.291-298.
Introna, L., Kavanagh, D., Kelly, S., Orlikowski, W. and Scott, S., 2016. Beyond Interpretivism? New Encounters with Technology and Organization.
Knoke, D., 2018. Changing organizations: Business networks in the new political economy. Routledge.
Sanford, N., 2017. Self and society: Social change and individual development. Routledge.
Yoo, S.J., Sawyerr, O. and Tan, W.L., 2015. In this study we postulate that a firm’s external knowledge sourcing decision is determined by factors that are exogenous and endogenous
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