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Unit 12: Organisational Change

Why is organisational change so important? From outside and inside the organisation, a variety Notes
of forces press for change. "We live in the midst of constant change" has become a well-worn but
relevant cliché. Pressures for change are created both inside and outside the organisation.
Organisations must forge ahead on these forces to survive. Some of these are external, arising
from outside the company, whereas others are internal arising from sources within the
organisation.
1. External Forces: When the organisation's general or task environment changes, the
organisation's success often rides on its ability and willingness to change as well. The
modern manager is change-conscious and operating in the constantly changing
environment. Many external changes bombard the modern organisations and make change
inevitable. The general environment has social, economic, legal, political and technological
dimensions. Any of these can introduce the need for change. In recent years, far-reaching
forces for change have included developments in information technology, the globalization
of competition, and demands that organisations take greater responsibility for their impact
on the environment. These forces are discussed below:

(a) Technological Change: Rapid technological innovation is a major force for change in
organisations, and those who fail to keep pace can quickly fall behind. It is perhaps
the greatest factor that organisations reckon with. According to C. Handy, "the rate
of technological changes is greater today than any time in the past and technological
changes are responsible for changing the nature of jobs performed at all levels in the
organisation". For example, the substitution of computer control for direct
supervision is resulting in wider spans of control for managers and flatter
organisations.
(b) Globalization: The global economy means competitors are likely to come from across
the ocean. The power players in the global market are the multinational and trans-
national organisations. This has led companies to think globally. There are no longer
any mental distinctions between domestic and foreign operations. Globalization of
an organisation means rethinking the most efficient ways to use resources,
disseminate and gather information and develop people. It requires not only
structural changes but also changes in the minds of employees. Successful
organisations will be the ones that can change in response to the competition. They
will be fast on their feet, capable of developing new products rapidly and getting
them to market quickly.
(c) Social and Political Changes: A firm's fate is also influenced by such environmental
pressures as social and political changes. Many new legal provisions in the corporate
sector get introduced every time that affects organisations.
(d) Workforce Diversity: Related to globalization is the challenge of workforce diversity.
Workforce diversity is a powerful force for change in organisations. The demographic
trends contributing to workforce diversity are

(i) The workforce will see increased participation from females, as the majority
of new workers will be female.
(ii) The workforce will be more culturally diverse than ever (part of this is
attributable to globalization).
(iii) The workforce is aging. There will be fewer young workers and more middle
aged workers.
(e) Managing Ethical Behaviour: Employees face ethical dilemmas in their daily work
lives. The need to manage ethical behaviour has brought about several changes in

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