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This assignment was undertaken with the intention of analysing what organisational change is within the business world, what are the drivers of organisational change and the different types of organisational change, it will look at four different schools of change in particular the classical approach, human relations, systematic approach, the contingency approach and it will finish off with a conclusion.
The following quote identifies the reasons for change within the business world:
"If the environment were perfectly static ... and if tomorrow were always exactly the same as today, organisational change would have little or no relevance to managers" (Robbins & Judge 2008:280)
Change happens daily as the world transforms and alters, because of this organisation's must be willing and able to change along with the world so to be in a position to be able to meet the expectation of everybody and everything linked with the organisation in order to stay competitive within the business world, everybody in business is affected by organisational change from the minor changes such as the implementation of a new type of software into the company to the bigger changes such as a merger with another company or a take-over which could involve the implementation of new systems and protocols (Senior, 2002).
Change is affected by drivers and drivers are affected by environmental factors which can be shown under the following levels, the Macro level also known as the Far Environment which includes all outside influences upon which the business operates in however, the business has little or no control over these influences and as such cannot identify when or how changes within these factors will occur. PESTEL is commonly used to identify factors within the Far Environment and this is broken down below.
P - Political Drivers for Change hold alot of weight over the regulations of a company as they form the foundation upon which a company must operate within, these factors can include consumer, competition and employee laws, product and service regulations, also these factors can be influenced by terrorism such as the bombings in London which brought about huge change with the airline industry security such as the restriction of liquids on planes.
E - Economic Drivers for Change are huge factors for organisations as they include the type of taxation within an area, interest rates, exchange rates and inflation. Economic factors will have a huge impact on the type of workforce available to a company as it can identify how educated the population is, can suppliers be accessed and how customers will react. An example of economic factors affecting business can be the recent recession in which many builders went out of business as people stopped buying and building houses.
S - Socio-Cultural Drivers for Change vary from each country and must be recognised to identify the cultural changes in different societies, they can include changing trends within a specific society such as religion in India where people say prayer daily, how well educated the society is e.g. IT companies looking for a technologically educated population for their business, the state of the health system and ethnicity. It is also identified as how a company chooses to sell or market themselves E.g. Fair Trade not only benefits the company who sells the product but also guaranteed work for people in poor countries from which the product originated.
T - Technological Drivers for Change define new and existing developments as technology is now a key component in the everyday activities of businesses as it helps the organisation to work faster e.g. the use of email in communication, changes in technology can be expensive as the purchasing of equipment is a factor and the training of employees.
L - Legal Drivers for Change identify the regulations which companies must adhere to, what they can and cannot do in order to obey the law o matter the cost such as the smoking ban.
E - Environmental Drivers for Change affect more businesses in recent times as more customers are becoming environmentally aware, demanding environmentally friendly products and services, i.e. reduced carbon footprint, selling Fair Trade products. On the other hand with the Meso level also knows as the Near Environment of the organisation tends to have more control over factors as it includes the Stakeholders of the business who are better able to push change as communication is much easier and more flowing, three groups are formed the first being Dependant Stakeholders which rely heavily on their connection with the business, Co-Dependent Stakeholders have a mutual association with the business as it benefits both side for the firm to succeed e.g. shareholders investing in a company to gain from its success, and finally Independent Stakeholders being people on the outside of the company that feel they need to intervene to sway the decision of a business e.g. Americans banding together in a bid to prevent Wall Mart from setting up shop in their towns as they felt the store would negatively affect businesses in the area (Wall Mart, the high cost of low prices). And lastly the Micro level known as the Internal Environment which has to do with the business itself and is primarily dictated by management within the business, its identified by the relationship between employees, employers, business structure, culture, processes and systems and is the starting point of organisational change as this is where people start wanting change, development and improvement within the business however, change in one area of the organisation will have a direct affect on another part of the business and this must be taken into consideration when making a decision on change (Price, 2009).
Due to outside influences driving change organisations are forced to keep up to speed with these changes and have organisations in a position whereby if change is required the appropriate changes are implements to reflect these external environmental factors in a timely and smoothly manner so as not to put any added pressure on the company (Price, 2009). Grundy identified that lots of managers viewed change as being all the same whilst others viewed it as having a negative impact on the organisation, he identified three types of change as is shown in "Grundys (1993) three varieties of change", the first being "smooth and incremental change" which is change that is implemented gradually, continually and in an orderly fashion, Grundy states that this type of change was more so typical in the UK during the 1950s and 1970s and would be rarely seen in the business world of today, the second type of change is recognised as "bumpy incremental change" which identifies infrequent stages of certainty within the external environment but in no way continuous enough to enable the measurement of the change involved therefore causing sporadic change which upsets the organisation, and lastly "discontinuous change" is due to a huge shift in the environment internally or externally, this can be due to such things as opportunities within the market like merger/take-over or a large change in the external environment such as the currently economic recession which has forced many organisations to implement changes to counter the effects of the recession. This type of change needs to be implemented quickly and is instructed to staff rather than being discussed as it is usually implemented in an emergency situation (Senior, 2002; Price, 2009).
Burnes (2004) also identifies another two type of change the first being Punctuated Equilibrium, this recognise that fact that change can occur at erratic explosive periods and secondly is Continuous Transformation which identifies the need for regular dramatic adjustments in organisations change such being regular training for staff (Senior, 2002; Price, 2009).
Moving on to Schools of Change it should be noted that at present there is no one "approach to change that is theoretically holistic, universally applicable, and which can be practically applied", the task for a business is to find a theory and identify the strengths and weaknesses of that theory in order to recognise how it can be best implemented into the business. This assignment will look at four of these approaches starting with the Classical approach which was developed in the nineteenth century and works off the idea that there is only "one best way" to perform a task "portraying organisations as machines, and those in them as mere parts which respond to the correct stimulus and whose actions are based on scientific principles." The approach is completely geared towards management making all decisions in the business and employees being viewed as only a part in a working machine. This approach is also known as the Scientific-Rational approach and has three similar concepts: to view an organisation as a machine that once set in motion will pursue and achieve its goals, the organisation is only interested in workers that can assist the company in achieving its goals, people are motivated to work only by money and management must stay in control at all times. The most important theorists of the classical approach were Fredrick Taylor, Frank and Lillian Gilbreth, Henri Fayol and Max Weber. Taylor's principle of scientific management is based on the idea of efficiency and is deemed to be the starting point of the "development of organisation and management theory". Taylors theory focused on creating the best and way to do a job and that workers are money motivated with management detailing what each jobs is, the outcome expected from each position within a specified timeframe, workers have to be micro managed to ensure the work is being completed whilst being motivated by money (bonuses), more work equals more pay and as with the classical approach workers are only viewed as objects and not valued by the organisation that can be replaced at any time (Burnes, 2004).
Taylors theory worked off of three parts: gather all knowledge about the job to enable detailed "job rules, laws and formulae" to be drawn up that must be adhered to by each worker, limiting worker involvement to the extent of actually physically doing the work and managers micro managed to ensure the work was being done the time allocated, this theory take all responsibility away from the worked and places it with the manager "each man receives in most cases complete written instructions, describing in detail the task which he is to accomplish, as well as the means to be used in doing the work (Taylor, 1911a: 39)". Taylor also believed in hiring the best worker for each specific job and only by doing this would the organisation get the best results, this further solidified the idea of workers being classed as "human machines" and of no value to the organisation as their knowledge was limited to the specific job they held in the organisation, tasks became limited which in turn made it easier to teach to new workers and therefore the need for a skilled workforce was reduced and this lowered wages. This theory is still very popular in large organisation such as factories like Dell where employees are required to work off lines however; this theory would not be possible in smaller organisations such as recruitment agencies as this role required a high input from the workforce in order for the business to succeed (Burnes, 2004).
The next approach to be looked at is Human Relations which was developed in the 1930's as a reaction to the "de-humanised" approach of classical. Theorists to develop the approach were Myers in the 1920's and Mayo in 1933, in their search they recognised workers had more to offer an organisation that the classical approach let its workforce proving that organisations were social Mecca's and thus required input from the workforce, it was almost completed different to the classical approach in that it viewed employees needs as having great influence on the organisation compared to employees only being offered monetary incentives, that workplaces are not just machines but social areas where employees form relationships with others and casual activities are the norm compared to the formal activities of the classical approach, where as classical is a predictable machine driven by rules and time frames, human relations is a more casual and laid back approach best suited in small organisations such as the recruitment industry where it will gives consultants the freedom to work on their own merit and achieve their own targets. Similarities do exist in that both approaches believe in being changeless entities once structures have been out in place and that they are both the best way forward. Elton Mayo is famed for his word on "The Hawthorn Experiments" on Western Electric during the 1920s and 30s, these experiments identified workers need to be recognised as it showed it was not the changes in the structure of their work that saw an increase in productivity but the fact that they were being singled out to be studies that gave the workers a sense of responsibility and usefulness. Mayo identified two core aspects that would come to form the basis of the human relations approach, one being the need for social groups within the workforce and for employees to work together rather an as individuals, the second being the need for employees to be recognised for their work, this approach shows that motivating employees and viewing employees as a valued part of the organisation benefits the business which is completely contradictory to what Taylor viewed in the classical approach (Burnes, 2004).
The Contingency theory approach was developed during the 1960's and works on the basis that there is more than one best was forward for an organisation as all organisation face different uncertainties so the theory needs to be tailored for each organisation separately and not be viewed as one as the classical and human relations approached show, it proves that organisations are not closed systems but are reliant on external environmental factors such as technology identifying all organisations have different structures, three of the most important contingencies are the unpredictability of environmental factors to the organisation whether internal or external, the use of technology as it has become a core part of the activities of organisation in the modern world and the size of the organisation being a significant variable, Tom Burns and George Macpherson conducted the first studies in 1961 that identified a link between organisations environmental factors and structures and proved that "one best way" as identified by the classical and human relations was in fact not the best way forward, their research identified five environment types that affected the organisation on different levels and two types of structure they names as Mechanistic (similar to classical) which worked positively in stable conditions and Organic (similar to human relations) in un-predictable conditions, their research does not disprove the classical or human relation but identifies the dependency on the type of environment in which they will be applied to (Burnes, 2004).
And finally the Systems approach which was also developed in the 1960s viewed "organisations as both a whole, and as part of a larger environment" made up of a number of different sub-systems that in times of change will affect other parts of the organisation and instead of being classified as closed and cut off from the external environmental factors, as shown in the classical and human relations approaches, organisations are in fact "open systems" within the internal and external environments. This system is used in identifying these sub-systems therefore recognising if there is a need for change to improve performance on an overall level. Miller (1967) identified four organisational sub-systems as organisational goal and values, technical, psychosocial and managerial with Burke (1980) as stated in Burnes (2004) identifying when taking an over all view of the organisation the following factors need to be looked at, sub-systems are interdependent as a change in one area is going to affect the organisation in another area.