Organisational changes can be caused by internal or external factors. Examples of internal causes for organisational change include restructuring, expansion, contraction, management structure, and improvement in financial performance. External causes that require a business to change include government regulations, competitor intentions, technology, economic conditions, market conditions and consumer trends or attitudes. The changes in the organisation can be incremental, by step or disruptive.
Changes within organisations are constant. They can be subtle or disruptive and occur at individual or team levels. These changes fit into three categories:
- DEVELOPMENTAL CHANGE occurs when an organisation recognises that there needs to be a change to improve an existing situation. This type of change is typically small, or the change can be in incremental improvements or corrections in the way an organisation conducts business.
- TRANSITIONAL CHANGE occurs when an organisation needs to take a new direction because the existing direction is not working
- TRANSFORMATIONAL CHANGE occurs when a new process creates itself due to the failure of another process. This type of change is considered to be an overhaul and will include developmental and transitional changes.
Regardless of the type of change your organisation undergoes, the behavioural pattern of your employees will change. Some employees will accept change; others will reject and resist.
The impact of not managing change
The organisational change serves to improve the operational and financial performance of the organisation. Examples might include increasing revenue, reducing costs, improving cash flows or improving customer experience. The changes typically require amendments to the procedures or processes, and these changes can affect employee behaviour. Individuals or groups of employees may be reluctant to implement the changes, disrupting the organisation.
Disruption to organisational change needs to be avoided; therefore, it is crucial that the company leaders actively communicate with their employees. They must involve them in the organisational change and demonstrate how the changes will benefit the employees and the organisation. Failure to manage change through a lack of communication and involvement with employees will impact the organisation in many ways:
- loss of improved operational and financial performance due to the change not being implemented efficiently by management and employees
- loss of the organisation’s competitive advantage in the marketplace if the change is not implemented satisfactorily
- loss of key employees due to loss of morale or conflict within the organisation
- loss of employee morale due to the changes not suiting their ambitions
- employees may become resistant (actively or passively) to the organisation’s change
- reduced employee productivity can occur at an individual or group level
- the workplace becomes disruptive
- small scale grievances can potentially escalate to large scale grievances.
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