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dineshbabu
Student (MBA)
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Why do Organizations Change?
We all know that organizations change. They have to. But exactly why do organizations change? In other words, what are the causes or reasons for change to occur in organizations?
How can these reasons be categorized in a logical way? Is there some kind of model of causes for organizational change?
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Jaap de Jonge
Editor, Netherlands
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Why do Organizations Change? Causes Thanks for your excellent question... A first breakdown of such reasons or causes for companies or public organizations to change could be:
| WHY DO ORGANIZATIONS CHANGE?
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A. Factors in the external environment
Factors outside the firm, generally beyond its control |
B. Internal factors in the organization
Factors inside the firm, generally under its control |
| A1. Political |
B1. Leadership |
| A2. Economic |
B2. Vision |
| A3. Social |
B3. Mission (statement), purpose |
| A4. Technological |
B4. Strategy |
| A5. Competition |
B5. Culture, values |
| A6. Customer demands |
B6. Policies, procedures, systems |
| A7. Environment, climate, pollution |
B7. Merger |
A useful model for external factors: PEST Analysis.
A useful model of internal factors: McKinsey's 7S Framework.
Any of the 14 main causes could be further split up into a large number of sub-factors. For example A2. Economic could be further split up into: economic growth, recession, interst rates, government spending, unemployment rates, taxation, infaltion, consumer confidence, globalization, etc.
Note that some of these main causes can be viewed as external or internal. And also that certain sub-factors can be viewed as being part of multiple main causes. As usual, the reality is always more complex than the management model. But how could we manage :-) without them?
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Emilio Ferrero
Management Consultant, Venezuela
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Triggers for Organizational Change Mr. de Jonge's list is quite thorough and is usually part of strategic planning. In my experience, however, what really causes organizational change to occur is some form/degree of CRISIS.
For example, sadly enough, few organizations monitor their external environment regularly. Late reactions to changes in that external environments can even make changes no longer useful (Polaroid).
Likewise late awareness of culture clashes after mergers can also make business very difficult (HP/COMPAQ).
In summary, the root causes are those in Mr. de Jonge's list. A crisis in those causes is what (in most cases) triggers change.
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Dilip Khanal
CEO, Nepal
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Change Factors in Small Organizations Further to Mr de Jonge's list, I would like to add that organizational changes also occur when some influential member of the organization has a different thought. In small organizations, where vision, mission, strategy and policies are not spelled out, In such situation, thinking of a key person brings many organizational changes.
Editor: thanks for your contribution. Though we might consider it part of B1: Leadership.
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Robert Gerth
Project Manager, Sweden
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Change Factors and the Resistance to Change This is an interesting question but I think it could be complemented with another one. When there is awareness that a specific firm must change: why are organization still resisting change?
Numerous times I have met top managers and employees fully aware of the need for change, but they are doing nothing….
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Jaap de Jonge
Editor, Netherlands
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What are Causes for Organizations NOT to Change? @Robert: Thanks for your excellent contribution. Indeed that is the opposite, equally interesting subject. For more info and to discuss that topic, you can go to: List of Motives to Resist Change elsewhere on 12manage.
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Dilip Khanal
CEO, Nepal
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Organizations Keep on Changing, But we don't Notice it @Dilip Khanal, Editor: I am talking of small changes that go unnoticed. For example changing the placement of staff - a very regular activity in any organization - which is also resisted sometimes. Or a new employee joins. Some behavioral aspects in the organization might change because of that, even if nobody notices it or considers it a change. People mostly talk about organizational reengineering after a merger/acquisition, changes in business strategy, a tactical response to a competitor's move and the like.
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FREDDY VILLAVICENCIO
Business Consultant, Venezuela
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Why Organizations Change? It is Just a Reaction to Survive The theory of a change can illustrate why some organitations were forced to change themselves. The learnings serves as fundamentals to others who make the decision to improve performance or to strength a market share. Normally the change readiness comes up when numbers shows trouble and the risk to miss the required business pace is too high.
Only at that point some organizations try to leave behind some practices and look for management tools or talent to refresh the organization´s structure and results.
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Jaap de Jonge
Editor, Netherlands
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What are the Causes of Organizational Change? @FREDDY VILLAVICENCIO: Thanks for your excellent build for this topic. Indeed the first phase of Kotter's Change Phases Model is: a Sense of Urgency.
Without that it's unlikely any organization is ever going to change.
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Francis
Manager, Thailand
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What are the Causes of Organizational Change? I think the main causes of the organizational change are somehow related to the human / organization 7 levels of needs...
I have done some simple case study on some organization that change, be it be...
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Jaap de Jonge
Editor, Netherlands
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7 Levels of Organizational Consciousness (Barrett) @Francis: I think you are referring to Barrett’s 7 Levels of Consciousness. This model is meant to apply to both individuals and human group structures—organisations, communities, nations.
The idea b...
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Frik Reynecke
Management Consultant, Saudi Arabia
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7 Levels of Consciousness - Building a Change Agility Capability Agile organizations will preempt change and keep working on the 7 levels of consciousness by anticipating, responding and reacting to various change catalysts to move their organization forward and be...
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Graham Williams
Management Consultant, South Africa
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Why do Organizations Change? Causes Lovely, informative discussion so far. Frik - nice to bump into you again! Regarding the overall framework, whether step change or incremental change we could consider adding:
A7: Environmental (Clim...
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Miguel Sacramento
Business Consultant, Brazil
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Organizations Must Change Richard Daft, in his book "Organizations", says that "Organizations are open systems and, therefore, must be adapted to the environment to survive." Since nowadays, "the only certainty is change", org...
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Gandhi Heryanto
Management Consultant, Indonesia
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Causes of Change in Organizations Many factors cause change in an organization. Gleeson mentions these ones:
1. Societal and technological changes external to the company.
2. Failures as opportunities for change and demonstrated wha...
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Charles Tombazian, United States
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The 3 C's of Change I see many good thoughts in the stream-- I'd synthesize some contributions here by saying Organizations, like people, change for 3 reasons-- Crisis, Convenience and Conviction. Now those three things ...
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Muhammad Moeen
HR Consultant, Pakistan
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Internal versus External Factors Respected Sir, I think the external factors trigger the need for change of the organization or restructuring of the organization and these factors needs to be judged by leaders to decide when there is...
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Moses Osofero
Student (Other), Finland
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Why Organizations Need To Change? To Survive! Yes, organizations do change and must change; any organization that remains stagnant stands the risk of death. Putting this in 2 perspectives:
CUSTOMER PERSPECTIVE: human needs are dynamic, and a...
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Ramon Perley M.Pandaan
Professor, Philippines
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Why Organizational Changes Occur in Practice In my experience, organizational changes commonly or typically happen when:
1. Organizational structure is flawed
2. Trusted personnel were appointed
3. New regulations and internal rules were crea...
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Maurice Hogarth
Consultant, United Kingdom
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PEST Factors can be External and Internal @Jaap de Jonge: Indeed Political, Economic, Social and Technological can be considered as both external and internal factors:
- External Political is to do with legislation etc., internally with poli...
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Graham Williams
Management Consultant, South Africa
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Why Organizations Change? Evolutionary Dynamics To understand WHY organisations change, another interesting concept is: Evolutionary Dynamics. It is a 2x2 matrix of internal and external factors - and individual and collective factors. Each of 4 in...
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Sridhar Gopal
Management Consultant, India
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Triggers of Organizational Change I have Seen Going over the responses here has been a good learning for me. Jaap's table seems to explain it all in one go. Flipping my ‘book of experience’ I saw the org. change as a manager in IT services a few ...
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Maurice Hogarth
Consultant, United Kingdom
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Organizational Well-being Health Check Asking organisations to carry out a "well-being" check following major legislative, economic-market, or other changes helps them to keep track of their 'health' status in relation to their operational...
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Charles Tombazian, United States
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People are Often at the Basis of Org Change I'd like to play a bit off Graham's, Emilio's and others who have either explicity stated or eluded to org changes occur because people in them change. Yes, we as strategists and organizational develo...
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FREDDY VILLAVICENCIO
Business Consultant, Venezuela
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The World is Constantly Changing There is not an specific answer to the original question because even the perspective of the analysis will introduce a change. Organizations must find their niche and their way to be and stay competit...
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Anonymous
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Why Organizations don't Change Despite of Being Aware they Need To @Robert Gerth: consider the resistance factors:
- Afraid for the unknown
- Lack of knowledge of what change consist
- Lack of Information
To resolve this, with presence of the leaders, provide tha...
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BELLALI Abderrahmane
Investor, Morocco
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Why Organizations Must Change? The business world is constantly changing, so to survive, the business must evolve.
Change within companies is essential to improve individual and collective performance. The reasons are many, it can...
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A McClintock
Lecturer, Australia
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Organizational Change Due to Continuous Learning @Jaap de Jonge: Thank you for this. It is clear that Barrett's work would answer the above question (why organizations change) particularly with the concept of continuous learning....
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