Causes of organizational change

Causes of organizational change

What is organizational change?

Actions a business takes to make significant changes are referred to as organizational change. The best examples include changing the culture, implementing a new business model, redesigning or establishing new departments, acquiring new talent, and even updating antiquated technology. The goal of these efforts is often to accelerate the company’s expansion and success.

What is organizational change?

Harvard Business School states that there are two main categories of organizational change:

  • Adjustments and modifications that managers make on a daily, weekly, or monthly basis are referred to as adaptive change. Changing the operating systems to a more recent version is one example.
  • Transformational change entails the simultaneous occurrence of increasingly significant changes. These can include changing the organizational structure of the company, the corporate culture, the business procedures, and other elements.

Causes of organizational change

1) An alteration of governmental policies

Government influences all organizations, whether they are public or private, however, the degree of that influence varies. Government regulations determine how an organization operates and what it is permitted to create. For instance, the government of India recently forbade the use of some plastics, and as a result.

Causes of organizational change

Numerous firms’ internal processes have evolved as a result of the requirement to modify plastic. Similar to this, there are numerous rules, such as employment hire policies, salary policies, and policies governing the rights of employees and workers. These policies are governed by the organization, and organizations are expected to adhere to them to operate freely.

For instance, it is required that at least 30% of all employees in an organization by women in India. This makes hiring female employees mandatory for businesses.

2) Modification of market demand

The shifting demands of the market are a significant additional component that affects how an organization changes. The days when individuals had to become used to the items that businesses offered them because there weren’t many options available to them are long gone.

People today have more freedom to choose from any goods available on the market and are less brand loyal because there are multiple possibilities for a single product. They purchase goods from a company that offers them high-quality goods at reasonable costs.

Therefore, to accommodate the shifting needs of their clients, businesses must always be adapting and evolving. As an illustration, in the age of the internet, individuals like shopping online over in person. Therefore, to meet shifting client demand, enterprises must move their operations online. 

Another illustration of how market demand has changed is the growing awareness of environmental issues among individuals nowadays. As a result, they seek things that are either environmentally friendly or beneficial to the environment. As a result, they seek things that are either environmentally friendly or beneficial to the environment. Numerous businesses have been compelled to alter their production methods and goods as a result. They market environmentally friendly items to win over customers’ trust and respect.

Modification of market demand

3) Technological changes

Technology is one of the most significant forces driving change within organizations, and to remain competitive, businesses must adapt to these new technologies.

For instance, in the past, all tasks like record keeping, order placement, etc. required physical labor, but in the present, thanks to computers, these tasks may be completed without the use of manual labor.

Similar to this, numerous jobs needed to be completed manually during the production process; but, thanks to automation, all of these tasks are now completed by machines, which not only reduces human error but also speeds up the production process.

Customers now have a platform to contact businesses, and thanks to the presence of cutting-edge technology, businesses can reply to customer inquiries swiftly.

4) Lessening of staff opposition

Resistance from employees is typical. This becomes the main focus of change management, which can have a significant effect on project outcomes.

Employee resistance, after all, has the potential to significantly raise project costs, have a bad impact on the employee experience, or even completely derail a project.

5) Higher job satisfaction

Employee satisfaction is increased by successful organizational improvements. Employee performance, productivity, engagement, and other crucial employee indicators all improve as a result.

6) Simplified business procedures

Change projects frequently focus on business processes. For instance, implementing new software frequently makes corporate functions or processes more effective.

7) Higher margins of profit

The other factors listed here all result in bottom-line gains. Not every benefit of change management can be directly tied to profit, at least directly. So it is important to keep a wide field of view and examine every benefit not just immediately visible ROI.

8) Cost Cutting

Another element that leads to transformation in an organization is cost-cutting. Companies are compelled to drop the price of their products when a rival company releases a product with comparable features but at a cheaper cost.

Price is a factor that affects customers’ purchasing decisions. Either you have excessive confidence in your products, like Apple, or you must reduce costs to compete in the market.

9) Mergers and purchases

A shift in an organization can also be brought about by mergers and acquisitions. When two businesses combine to work, that is referred to as a merger. Companies that merge must alter their organizational structures to accommodate one another’s working environments.

Similarly to this, when a firm buys another business, it must reduce some of its operating expenses to fund the development of the newly acquired business or the purchase of additional goods and services.

This is an internal change that an organization makes on its own and is not compelled to make, as we have previously mentioned in the text, by any external changes.

To operate both businesses effectively, the organization may cut staff to retain individuals hired from a new organization or change the nature of some employees’ jobs.

Benefits of organizational change

1. Draws in Innovation

According to the American businessman Jim Rohn, “Life does not become better by chance, it gets better by CHANGE.” We think that businesses can successfully use the same idea. When we adapt, we innovate.

Draws in Innovation

2. Inspires Motion

Running at least twice as fast is necessary to keep up with the opposition. And organizational transformation does that. Altering your habits, attitudes, and other necessary mechanisms enables you to go to the next level.

3. Enhances Creativity

People constantly improvise and respond to what is happening, which is when they are at their most creative. The human brain is designed to be problem-solving. Giving them a purpose or a problem to solve will therefore encourage them to discover a solution.

Enhances Creativity

4. Aids in the Acquisition of New Skills

Organizational change typically entails extensive training and new responsibilities. Both include learning new material, which leads to the expansion of already-held knowledge, the acquisition of priceless skills, and even the emergence of new behavioral patterns.

5. Boosts Your Income

The financial results of your business operations can significantly vary if you expose them to significant adjustments. Consider developing a new workplace culture that values inclusion and diversity. It will help you draw in top talent and create a sense of community among your current staff. This kind of culture will inevitably produce superior outcomes, which will subsequently be shown in your income report.

6. Helps You Understand Your Employees Better

As we’ve already mentioned, changing an organization can be challenging. In the long run, nevertheless, it will provide a greater grasp of their processes, skills, thought processes, and problem-solving techniques.

Helps You Understand Your Employees Better

In other words, you’ll gain insightful knowledge about your workforce and be able to assess your current situation, your strengths and shortcomings, and the best way to approach the organizational change process.

7. Enhances Trust in Company Culture

Belief is a strong force. As long as a person has a goal and something to believe in, they may recover, grow, and achieve a healthy state of mind.

A more proactive and efficient workflow will unavoidably result from giving your employees something to aim for.

8. Supports a Single Identity

Change in the workplace can, in general, create a feeling of shared identity and motivate employees to work together to further the company’s success.

9. Facilitates Better Internal Communication

Modern technology, particularly communication tools, is one of the advantages of organizational change. These make it possible for your staff to communicate more effectively. Additionally, it can encourage more intimate dialogue between them, which improves comprehension and conviction.

10. Helps you remain competitive

You make better decisions and have more possibilities to choose from as you grow technologically, acquire new viewpoints, and pick up new abilities. Your company evolves as a result of these ongoing changes, placing it ahead of your rivals.

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