Around 25 to 30 percent of the
existing companies might be forced to stop operations in the country in the
next 2 – 3 years. This trend is likely to take place because of the increasing
change in the Indian economy which has moved from the regulated and protected
regime towards a more open and competitive the regulated and protected regime
towards a more open and competitive
economy. In this changing perspective, only those who have capacity to compete
and survive would emerge and take over the place of old ones.”
FACTORS IN
ORGANISATIONAL CHANGE
Organizational changes are
required to maintain equilibrium between various external and internal forces
to achieve organizational goals. Therefore various factors which may be
important for necessitating organizational changes may be grouped into two
categories: external and internal.
EXTERNAL
FACTORS
Every organization exists in some
context: no organization is an island in itself. Each must continually interact
with other organizations and individuals – the consumers, suppliers, unions,
shareholders, government – and many more. Each organizations has goals and
responsibility related to others in its environment. Thus not only an
organization must deal with its environment in conducting its affairs, but it
must also give considerations to the goals of others as it establishers its
foals and conducts its operations. The present – day environment is dynamic and
will continue to be dynamic. Changes in social, political, economic
technological and legal environment force organizations to change themselves.
Such change may result in organizational changes like major functions,
production process, labour – management relations, nature of competition,
economic constraints, organization methods etc. in order to survive in the
changing environment, organization must change. How the change in various
environmental factors necessitate change in the organization may be seen in the
following context:
1.
Technological
Changes: when there is a change in technology in the organization’s
environment and other organizations adopt the new technology, the organization
under focus becomes less cost effective and its competitive position weakens.
Therefore, it has to adopt new technology. When the organizations adopts a new
technology, its work structure is affected and a now equilibrium has to be
established. For example computers and automation have made significant impact
on organizational functioning:
2.
Changes
in Marketing Conditions: Since every organization exports
its outputs to the environment, an organization has to face competition in the
market. There may be two types of forces which may affect the competitive
position of an organization – other organizations supplying the same products
and buyers who are buying the product. Any change in these forces may require
suitable changes in the organization. For example, when Indian economy was
liberalized (the process still continues), there were many foreign
organizations which entered the Indian market. This forced many Indian organizations
to realign themselves with the new situation. The result is that there have
been many cases of divesting the businesses and concentrating on the core
businesses, acquiring core businesses, and developing competitive competence to
face competitive threats. Similarly, there may be changes in buyers in terms of
their needs, likeing – disliking and income disposal for a product. These
changes force the organizations to bring those products which meet buyers
requirements.
3.
Social
changes: Social changes reflect in terms of people’s aspirations, their
needs, and their way to working. Social changes have taken place because of the
several forces like level of education, urbanization, feeling of autonomy and
international impact due to new information sources. These social changes
affect the behavior of people in the organization. Therefore it is required to
make adjustment in its working so that it matches with people.
4.
Political
and Legal Changes: Political and legal factors
broadly define the activities which an organization can undertake and the
methods which will be followed by it in accomplishing those activities. Any
change in these political and legal factors may affect the organizational
operation.
INTERNAL
FACTORS
It is not only the change in
external factors which may necessitate organizational change, any change in
organization’s internal factors may also necessitate change. Such a change is
required because of two reasons: change in managerial personnel and deficiency
in existing organizational practices.
1.
Change
in Managerial Personnel: Besides environmental; changes,
there is a change in managerial personnel. Old managers are replaced by new
managers which is necessitated because of retirement, promotion, transfer or
dismissal. Each new manager brings his own ideas and way of working in the
organization. The manager brings his own ideas and way of working in the
organization. The relationships more particularly informal ones, change because
of changes in managerial personnel. Moreover, attitudes of the personnel change
even though there is not change in them. The result is that an organization has
to change accordingly.
2.
Deficiency
in Existing Organization:
Sometimes, changes are necessary because of deficiency in the present
organizational arrangement and process. These deficiencies may be in the form
of unmanageable span of management, large number of managerial levels, lacks in
coordination between various departments, obstacles in communication,
multiplicity of committees, lack of uniformity in policy decisions, lack of co
– operative between line and staff and so on.
