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Organizational change which is considered as an ongoing aspect of any business organization is essential to modern companies not only to maintain competitive advantage but also to succeed in this ever changing business environment. At this hypercompetitive business world, we can observe that most successful business organizations are very successful in keeping pass with the changes they face. It is very essential for any organizations to have the ability to adapt to maintain level of success. Just look at Apple, a faltering computer manufacturer on the brink of extinction, brought back to life by changing their organization into a funky and stylish commodity producer and the branching out into music by the invention of the iPod, which is now the must have gadget of recent times. There are a number of factors such as environment, organization structure, politics, leadership, culture that affect organization change, but in this project I will focus on the culture of an organization and how that is central to the organization's ability to change, adapt and maintain itself.
Why a change management strategy needed
Everything in this world is changing very rapidly. So it is not a surprise that changing is also the factor of the organization. For successful change in any organization it is essential to know about change management. A "one-size-fits-all" approach is not effective for change management. Think about the following factors of change:
Acquiring a company with equal size of operation
Getting suppliers to use a new technology based information system
Implementing an ERP (Enterprise Resource Planning) solution
Three important principles are central to managing change:
Change management is not the goal itself: It is a means to an end, and the end is an improvement in an organization's performance. It is about effectively managing a process that will lead to an environment where an improvement in performance is realized.
The "targets" of change must play an active role in realizing the change: Successful change projects are supposed to identify and communicate the vision, letting the employees know that they are expected as well as empowered to have an active role in realizing the planned benefit.
An organization's employees are their greatest asset: It is also can be said that potentially they are also the greatest challenge for any business organization. For a vision to become reality, they must have the desire to achieve it in case of any project.
Factors Forcing Change
Organizations in today's business world face huge pressure to change, from both internal and external sources. Internal forces to change in reality are often as a result of long-term external forces. For example, a bank's internal pressure to adopt an Internet banking system is the result of more and more other banks being online.
Internal Factors forcing change
The factors which are internal to an organization force changes can be identified through a formal analysis method. SWOT analysis is a common method among those methods. This method has four dimensions for analysis. A SWOT analysis is done based on those four dimensions.
An organization's strengths, which help the business firm to identify a competitive advantage which is very important while deciding on changing the focus of the company. Deciding to push certain products or features in favor of dropping others can reinvent the organization.
An organization's weaknesses are the core factors leading to change. Weaknesses which can be in operation or company's product or service, need immediate attention and changing for survival in the market. In most cases especially service industry the weakness would be resolved by a cultural change.
Opportunities force changes in the company. Very simply it can be as a result of new working hours. Modern companies need to remain flexible in operations as they face different type of customers with different expectations. Flexibility is a major cultural change that needs to be introduced.
An organization very usually faces threats in the form of competitors and substitution products that force a company to react to sustain and fight in the market. To react effectively and efficiently, companies are to react quickly, which is a cultural change in a business firm.
External Factors Forcing Change:
The external factors which force changes in an organization can be identified through the PESTELI acronym. PESTELI stands for Political, Economic, Social, Technical, Ecological, Legislative, and Industry.
Political factors have impact on business operations. Political factors include the current and potential influences from political pressures.
The impact of local, national and world economy can force an organization to change their operation or even to reset their product prices.
Changes in lifestyle absolutely force changes in organizations. Social change or attitudes towards work or ethical issues can also have effects on the inside culture of an organization.
Technological change has the most profound effect on organizational culture of all external factors. Technical advancement allows the employees to work being at any place. Anything that changes the day-to-day work of the employees has a profound effect on the organization's culture.
The local, national and world ecological and environmental issues having impact on culture at national levels filter down into the organizational culture within a company.
Both local and international legal issues such as taxes and working time regulations also have effects on culture at a national level, which leads to change in organizational culture within a company.
Changes in industry have huge impact on national culture. The move away from agriculture into industrial and now information economies has greatly changed the national working culture.
Developing System to Involve Stakeholder
Stakeholder Management is a very important aspect of any business organization at this modern age. It helps them to ensure that their projects succeed where others fail. Stakeholder Analysis is a technique which is used to identify the key people who have to be won over. The selected organization has to use Stakeholder Planning that helps to succeed. The benefits of using a stakeholder-based approach are as follows:
Organization in need can use opinions of stakeholders to reshape projects at an early stage.
Gaining support from powerful stakeholders can help the organization to have more resources.
Through early and frequent communicating with stakeholders, the organization can ensure what the organization is doing and understand the benefits of project .
The organization can anticipate people's reactions about project, and build into plan the actions that will help to win people's support.
How to use the tool:
The steps of Stakeholder Analysis are explained below:
Identifying Stakeholders: The first step in stakeholder analysis is to find out who are stakeholders. As a part of it, to find out the stakeholders think about the people who have influence , are affected by or have an interest in its success or failure. The items mentioned below might be stakeholders of a business or project:
It is also noticeable that stakeholders may be both organization and people; but the organization has to communicate with people.
Evaluation System to Involve Stakeholders:
A monitoring and evaluation system is required for managing change in the organization. Only very few companies in practice are able to track changes and they may never be able to attribute such changes to intervention. Good co-ordination is required for better use of resources.
Adapting as necessary
Recording and monitoring the change
Measuring progress against targets
Have the desired result been achieved?
Has the process been successful?
How do those affected feel about the new situation?
What might have been done differently?
Sustaining the change
Strategies for Managing Resistance to Change
Any strategy developed to manage change needs to anticipate resistance. Resistance is natural and it may come from different sources such as employees, partners and clients. If you are making changes impacting clients, the degree of resistance will be correlated to the client's view of the level of risk vs. potential benefit to them. Client resistance to change is very important that is why we have devoted a separate paragraph to the subject below.
What Type of Resistance
Passive resistance involves worrying, grousing and otherwise complaining about the change management strategy. Active resistance means to organize others, to refuse participating in a change program or activity. Active resistance has to be confronted very quickly. It is required to acknowledge individual right to their opinion and concern. Then acceptable and unacceptable behaviors have to be defined.
Addressing Acceptable Resistance
This is the point where there is no behavior problem; one still needs to get people past their concern.
Six ways of overcoming resistance to change:
Education and communication
Participation and involvement
Facilitation and support
Negotiation and agreement
Explicit and implicit coercion
Organizational Model for Implementing Changes
Centralized Organizational Model
This model is generally recommended for the organizations with similar products or services, common distribution channels, and one to a few core competencies. This organizational structure remains very strong central control. All types of operating policies of business are determined at corporate level.
Decentralized Organizational Model
Under Decentralized Organizational Model, an organization generally has autonomous business units and decision-making authorities. Operating decisions are made within the business units. At the corporate level, all corporate policies as well as financial goals are set.
Transitional Organizational Model
In the Transitional Organizational Model, either certain internal functions or businesses are segregated from the rest of the business. Policies/procedures are particularly modified in need to allow for unencumbered decision making. It is also widely known as a "satellite" operation.
Plan to Implement Model for Change
Eight-step change process is explained below.
Step One: Create Urgency
For any change to happen, it will be helpful if the whole company wants it really. A sense of urgency has to be developed around the need for change in the organization. This is not a simple a matter like talking about increased competition.
Step Two: Form a Powerful Coalition
People have to be convinced that change is actually necessary. This requires leadership and visible support of key people in the organization. Managing change is not enough at all. We are to lead it. For this effective change leaders are required, whom we find them in the organization.
Step Three: Create a Vision for Change
While thinking about change, there will have many great ideas and solutions. These concepts and ideas are to be linked to an overall vision which people can easily grasp as well as remember.
Step Four: Communicate the Vision
The vision has to be communicated throughout the organization. The message may have strong competition from other day-to-day communication within the company. It is very urgent that communication is to be frequent and powerful as well as it has to be embedding within everything done by the organization.
Step Five: Remove Obstacles
It is required to remove all types of obstacles in change process. Very hopefully, staff of the organization wants to get busy in achieving the benefits that the organization has been promoting.
Step Six: Create Short-term Wins
Success is the most effective motivating factor. The company has to be given a taste of victory at the early stage of change process. It is required to have results within a short period that the staff of the organization can see. In absence of this, critics as well as negative thinkers may hurt progress.
Step Seven: Build on the Change
Many experts argue that many change projects fail because of declaration of victory too early. Real change actually runs deep. Launching a new product by using a new operating system is great. But if 10 products are launched it means that the new system is working well. It is very urgent to keep looking for improvement while needed.
Step Eight: Anchor the Changes in Corporate Culture
At the final stage, it can be said that it has to be core part of organization. The corporate culture very largely determines what is to be done. For this reason, values behind the vision must be shown in day-to-day work.
It is very imperative to have continuous efforts to ensure that the change is seen in every aspect of the organization. It is also required that organization's leaders continue to support the change.
The operations and environment of any business organization is changing very rapidly for some certain reasons. The organization has to keep pass with ongoing changes to be successful and sustainable in this hypercompetitive business world. Organizational change is essential aspect of modern business organizations. It is required not only to maintain competitive advantage but also to succeed in today's rapidly changing business environment. There are many certain factors affecting organization change. As a result, to be competitive and to sustain in this ever changing business situation, every business organization has to work very strategically. So it is a continuous process and the organization has to be very strategic in case any organizational change.