Nowadays, many commercial and governmental institutions are being often required to undergo the process of restructuring, in order to be able to address the variety of socio-political and business challenges. As practice shows, such restructuring often comes at the price of organizations facing the prospect of losing employees, closing down organizational branches and redesigning operational strategies. In his article “Organizational Change and Development”, Carter McNamara provides us with insight on what causes managers to embark upon organizational change: “Significant organizational change occurs, for example, when an organization changes its overall strategy for success, adds or removes a major section or practice, and/or wants to change the very nature by which it operates” (McNamara 2006). Therefore, the purpose of organizational change can be best defined as adjusting the principles of an organization’s functioning to correspond to objectively existing socio-economic challenges and opportunities, in order for such functioning to remain fully efficient.
Forces of change
In order for us to be able to come up with recommendations as to what would represent the best way of proceeding with a structural transition within the organization, we will need to outline forces of organizational change:
- Economic – in a Globalized World, many classical principles of economics have become outdated. This results in the creation of a situation when many companies are now being pressed to sell/relocate their production lines – nowadays; it makes so much more sense for industrial manufacturers to assemble the final product in Third World countries, for example. When a company decides to relocate its production lines, this inevitably results in such a company’s restructuring. The economic source of change can also be related to the process of certain products or services becoming superfluous. When this occurs, the organization will need to shift its production accents, so that it would meet the popular demand. In its turn, this often involves the elimination of the organization’s whole subdivisions. Public institutions are also being periodically required to reconsider the principles of their functioning. Thus, we can say that the main task of economic restructuring is to reduce an organization’s size, without negatively affecting the operational effectiveness of such an organization.
- Technological – the rapid pace of technological progress in recent years had rendered many industries obsolete. For example, there are good reasons to believe that by the year 2050, the newspaper industry will cease to exist as we know it, due to the exponential rise of informational technologies. The same thing will happen to a variety of jobs concerned with physical labor. For example, in 1997 FedEx had introduced a new computerized system of parcel tracking. It resulted in the reorganization of FedEx tracking department by downsizing it to include only five workers; whereas, prior to 1997 this department consisted of twenty-five employees. This example shows us that technology plays an ever-increasing role in the domain of the economy. It is managers’ foremost task to make sure that their organizations’ functioning keeps up with the pace of technological progress.
- Environmental – this force of organizational change is becoming just as important as the previous two. In her article “Between a Rock and a Hard Place: Organizational Change and Performance under Conditions of Fundamental Environmental Transformation” Heather Haveman suggests that the restructuring, prompted by the fluctuation of environmental variables, is a subject of interrelation between inertia and information: “Ecological theorists argue that when an organization changes its core, it sets back the liability-of-newness clock… When an organization undertakes nontrivial change, it must learn new patterns of communication to facilitate the flow of different information, it must integrate new members and learn new work routines in order to fill new job functions and manage the altered flow of work, and it must forge new relations with suppliers and clients” (Haveman 1992). The environmental force of change is the most complex of all because while influencing organizational functioning, it also affects its own dynamics. The organization is an open thermodynamic system, which transforms the incoming information into goods and services while producing entropy as the side-effect of its activities. During the course of the process, the elements of a system become affected by environmental variables, which influence the organization’s efficiency. Therefore, we cannot think of the environmental force of change as a single factor, as in the case of economical or technological forces. Nevertheless, it does not mean that the effects of this force can be neglected.
Methods of change
The most important reason why people resist change is of psychological nature. In his article “Managing Organizational Change”, Michael W. Durant makes a good point while stating: “During the change process, there are common predictable stressors, but how we react to those stressors will differ for each person since we are all unique individuals. The anxiety and confusion that result from not knowing what lies ahead can create stress” (Durant 2000). It is important is to understand that the fear of changes sits deep in peoples’ subconsciousness. Many people justify this fear by suggesting that change increases the levels of their professional uncertainty. In her article “Managing Organizational Change”, Arlyne Diamond states: “We all react to change with a certain amount of anxiety. If the possibility exists that our job will be lost, that anxiety grows to full-fledged fear, which, if left untreated causes personal and professional damage, not only to the person experiencing the fear but often to all those around him or her” (Diamond 2006). In other words – employees often associate the process of organizational change with the prospect of losing their jobs.
Also, a considerable number of employees have low tolerance towards new ideas, which prevents them from opening their minds to change. Usually, such people are not being overburdened with intelligence and their unwillingness to adapt to new circumstances is the most difficult to deal with. At the same time, such people are also the ones that can be easily replaced with new employees, without the organization losing much of its operational efficiency. The following is the list of methodological approaches to managing organizational change, which I have utilized in the past while trying to reduce employees’ resistance to change:
- Participation. Employees need to feel that they actively participate in the process of change. This will empower them in their own eyes and bring the element of psychological comfort into the ordeal. It is important to understand that term “employees’ participation” cannot be taken literally. What is needed is a formation of an illusion, on the part of employees, that their opinions really do affect the process of change.
- Facilitation and Support. Facilitation and support, as a method of overcoming employees’ fear of change, is based on peoples’ ability to accept unavoidable, once they get to realize that there are no alternatives. In order for employees to accept change, they need to be emotionally comforted, throughout the process’ entirety.
- Negotiation and Agreement. Negotiation and agreement, as the method of helping people to adapt to a change, is best applied in organizations with a high degree of individual freedom, on part of employees. We talk about organizations where the high degree of workers’ creativity is a crucial factor that ensures an organization’s competitiveness. The best example of such organizations is software-designing companies, within which employees are being encouraged to attend corporate meetings, in order for them to be able to affect the process of the company’s operational strategy being designed. However, in organizations that practice an authoritarian style of management, the application of “negotiation and agreement” can hardly be thought of as appropriate. This is because people that are used to obey managers’ commands without question, will never be able to believe in their own ability to affect things, even though that they might choose to play along with managers, by pretending that the organizational restructuring is being welcomed, on their part.
In theory, managers should be capable to improve an organization’s efficiency by altering social dynamics within its body. For example, married employees will react differently to the same set of circumstances, associated with organizational change, as compared to single ones. If we want to make such employees act in a certain way, we will need to find appropriate incentives, to be used in this particular case. However, in order to make other categories of employees act in a similar way, we would have to use different sets of incentives. During the process of restructuring, it is crucial for managers to keep the social dynamics, within the organization, under their firm control. This can only be accomplished if managers exercise strong executive authority. In the same article from which we have already quoted, Arlyne Diamond suggests: “Occasionally someone who is actively fighting the change and offering destructive input to fellow workers will have to be separated from the process. If left alone, some resisters could significantly hamper the acceptance of change by others” (Diamond 2006). As practice shows, the process of organizational transition needs to be constantly corrected by managerial interventions to maintain order, during the period of tribulation.
As practice shows, implementing organizational change is always a challenge, because managers need to consider every possible consequence of their actions. The organization is a system, which is being defined not just by the number of structural components within its body, but also by the quality of connections that link these components together. The best way to ensure that the implementation of organizational change is going to be successful is to provide necessary preconditions for the elements of the system to act in a predictable way after such change takes place. Evaluation of a change is done by comparing the operational effectiveness of an organization before and after organizational restructuring takes place.
Therefore, the guidelines to effective management of organizational change can be defined as follows: a) Organizational change can only serve one purpose – enhancing an organization’s effectiveness. Considerations related to ensuring employees’ well-being, during the course of the process, can only have a supplemental significance. 2) The process of restructuring must be as short as possible, especially if the subtleties of such restructuring appear as being rather drastic. 3) The process of organizational change must be complex – that is, while supervising an organizational change, managers must possess a three-dimensional understanding of how such change will affect different aspects of the organization’s functioning.
Diamond, A. (2006). Managing organizational change. InfoBayArea.Com. 2009. Web.
Durant, M. (2000). Managing organizational change. Credit Research Foundation Online. 2009. Web.
Haveman, H. (1992). Between a rock and a hard place: Organizational change and performance under conditions of fundamental environmental transformation. Find Articles.Com. 2009. Web.
McNamara, C. (2006). Organizational change and development. Free Management Library. 2009. Web.
Shook, D. (2002). FedEx keeps delivering. Business Week Online. 2009. Web.