In this modern rapidly developing world, business organizations and their aspects are changing at a very high rate. For instance, constant change of technology, transport systems and globalization automatically deems any organization a potential subject of change.
Organizational change is a process in which a big organization or company changes its working methodology and aims for instance, in-order to come up with new markets or deal with the trending market circumstances . Reasons for organizational change can be actual or just perceived out of fear of getting beaten by other organizations (Hannan and Freeman, 1984).
Several causes that push for a need of change in an organization have been cited by scholars as environmental, technological, educational, change of market taste, fashion and political, among others. Obviously, some causes of change are stronger than others (Weick and Quinn, 1984). These environments that cause change can be grouped into two broad categories; external environment and internal environment.
External environment is affected by political, social, technological, and economic stimuli outside of the organization that cause changes while the internal environment is affected by the organization’s management policies and styles, systems, and procedures, as well as employee attitudes.
Change as a result of change in technology has occurred in most organizations. For instance, computers revolutionized the way information and data was stored and presented. Today, firms or companies that do not have computers are considered outdated. Their numbers of customer or clients have gone down because of the low quality output they receive from the firms. This ultimately means risk making huge losses.Obsoleteness of faxes, typing machines, telegrams and pagers has also contributed to organizational restructuring. Mobile phones have replaced most of them and opened doors for placement of customer care personnel in their organizations.
Competition is another big reason for restructuring of a company or a firm. It automatically calls for a change in marketing strategies when, say, a big electronics firm sets up in a town that had only a single middle level one. The smaller business may opt to increase its advertisement funding or create a marketing and supplies department to reach more potential customers (Amagoh, 2008).
Growth is another cause for organizational change. A business’ desire for growth might force it to review its mode of operations. For example, a business may start as a small enterprise selling cheap affordable goods. Then it realizes it needs to grow. It may change its name and the franchise it sells altogether to start selling non-consumer luxury goods.
Change in government policies and regulations are another external cause of organizational change. New legislation on employees’ security may force a production plant to recreate its process of production to create a safer, conducive work environment (Hannan and Freeman 1984). Other companies that sell consumer goods might have to increase quality of their merchandise to enhance consumer safety, in line with an act of parliament. For instance, in 2009, Food and Drugs Administration code disqualified the choice of serving rare hamburger that is ordered by request off a children’s menu and improved requirements for allergen consciousness by food workers.
A need to improve efficiency of processes of production in-order to eliminate waste and save time might be implemented by a business. This calls for restructuring of the floor-space and the positions and roles of the employees. For example, in 2003, Cigna Healthcare executed a leaner process of production referred to as ‘Six Sigma’ to advance service and cut costs of operation. The company was acknowledged by the J.D. Power independent rating body for its extraordinary level of quality and service in 2006.
An internal factor that can be cause of organizational structure is human resource or personnel. Employees influence organizational structure through their beliefs, culture, attitudes and values. An organization may lay off the technologically incompetent or demote the less skilled to realize maximum profit from the input of the correct personnel (Cirikovic 2008).
Location as an internal factor of organization determines the economy of the enterprise, its success, and living standards of its employees and costs of production. If the location does not favor these, it is better to avoid setting up the organization in that region altogether.
Other internal factors that cause organizational restructuring may include, the goals of the company, objectives and strategy.
In conclusion, organizational change does not stop. Changes are always there. Some have to be done fast, others have to be unfrozen first. Some things appear not to change, others do. The challenge is to make these changes have an agreement.