Change is often said to be the only constant in one’s life. This statement holds true for business organizations as well. External and internal factors almost always lead to changes in the way things happen. One of the most important tasks of managers is to implement these changes smoothly. We refer to this process as change management.
Changes in its external and internal environment constantly affect every business’s activities. These changes can happen either at individual levels or at the organizational level. Furthermore, it affects employees as well as managers. It is also basic human nature to resist changes, especially drastic ones.
Since an organization’s success depends on how well it adapts to change, management of these situations is crucial. This is where change management comes into play.
Preventing changes is not always possible as they are inevitable sometimes. However, it is possible to plan for changes and overcome them. The management must always strive to ensure changes happen smoothly. The organization and its members must not find changes too drastic.
Browse more Topics under Recent Trends In Management
- Total Quality Management
- Risk Management
- Crisis Management
- Resistance to Change
- Change Through Management Hierarchy
- Global Practices/International Business
- Role of an International Manager
Meaning of Change
Change is basically a variation in the common way of doing things. Whenever people perform a task in a certain way, they get accustomed to them. They develop methods which they can implement routinely to achieve these tasks. Any variation in these methods is nothing but change.
Changes may be either natural or reactive. Natural changes generally occur routinely in the ordinary course of business. For example, the effects of the growth of an organization lead to changes in management styles.
On the contrary, reactive changes happen as a reaction to the organization’s policies or its environment. For example, whenever a firm adopts new technologies in production, its workers will have to adapt to them.
Management of Change
Every good manager must be able to anticipate predictable changes. Apart from that, he should also be able to smoothly incorporate these changes into the organization. This is basically the entire aim of change management.
Change is always inevitable; one can never completely prevent it. Managers can either wait for changes to occur or they can anticipate them and act in advance. A good manager will always do the latter.
This process generally requires a thorough understanding of factors that affect changes. This is because external and internal factors are solely responsible for effecting changes.
Causes of Change
Changes affecting an organization are basically the result of its environment. Both, external as well as internal factors play a huge role here. Hence, managers need to understand all types of changes possible under these two classifications.
These factors always lie outside an organization. Neither the organization itself nor its members are responsible for them. However, they always feel the effect of these factors. Some of these factors include:
- Economic factors: Access to resources, market demand, competition, inflation, interest rates, etc.
- Technology: The growth of technology always forces an organization to adapt. For example, the discovery of new production methods.
- Politics: Policies of a government change routinely. Even the government itself changes every term. These factors play a large role in the external environment.
- Other factors: Factors like urbanization, education, cultural changes, change in social mindset, etc. also affect every business organization.
Sometimes changes can also occur internally. An organization and its own members are responsible for these changes. For example, the top management of a company might decide to diversify its business. This decision will lead to several changes in which the company functions.
Similarly, other internal factors include:
- Changes in personnel due to hiring, termination of employment, retirement, promotion, etc.
- Change of functional policy decisions like holidays, work hours, paid leaves, etc.
- Changes affecting physical facilities like usage of alternative raw materials or adaptation to new machinery.
Solved Questions on Change Management
Question: State the missing word in these following sentences.
(1) Both __________ as well as __________ factors are responsible for changes.
(2) Managers cannot completely prevent changes but they can always __________ them.
(3) Technology is an __________ factor affecting a business organization.
(4) __________ kinds of changes occur routinely in the course of business.
Answers: (1) external, internal (2) anticipate (3) external (4) natural