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Why is Organizational Change Important

Today’s business world is driving organizational change at an unprecedented level. The pace of technological advancement, in particular, is accelerating, requiring businesses to oversee transitions to new processes and procedures regularly.

Organizational change management involves overseeing and facilitating change at any level where it is needed. For example, it could be at a team or project level or to a work process or system. When the change desired requires adjustments at the structural as opposed to the project level, businesses implement organizational change management.

So, it’s natural to frown at organizational change. Change can be scary; it can be daunting; it removes you from your comfort zone. And that is, because you know the familiar zone you want to remain in forever and keep doing things the way you have been doing forever.

But organizational change is a good thing. In this post, we will explore why organizational change has positive outcomes. We will also explain the kinds of changes you’re likely to come across and why these changes can be good for your company.

Within the scope of what you consider organizational change and development, some may happen more frequently, and others come from organic growth. However, both are just as important to building your customer base in these competitive times.

So why is organizational change important? First and foremost, organizational change has a positive impact on the overall running of the company. Organizational change management encourages innovation, develops skills, develops staff, leads to better business opportunities, and improves morale.

Adapting to Organizational Change

Organizational change can make us uncomfortable as we step out of what we normally do and attempt new ways of operation. Adapting to organizational change is often difficult because it’s too easy to stay accustomed to our habits, norms, values. However, change is important to many aspects of business and our working life.

Those companies that don’t embrace organizational change can stagnate and not develop. Our current world is constantly evolving in technology, as well as  in many other challenging but innovative ways. Having the ability to face these new challenges head-on will develop the company as a whole and its employees.

What Happens when Businesses Don’t change?

While organizational change may be difficult, it can be tremendously beneficial to both the company and the employees at the business.

Organizations that are stuck or are unbending in the way they approach the business are opting for a stale working environment.

This environment can’t adapt to new possibilities, including creative ideas (ideas that may lead to an overall improved operation or a new product or service).

Creativity & innovation and the ability to change your business area come with the possibility of great new business opportunities, while ignoring the need to change can come at great peril.

Reasons for Organizational Change and Development?

Organizational change and development happen for different reasons. Here are some reasons for organizational change management.

Financial Crisis

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Obviously, the 2008 financial crisis left an indelible mark across different sectors, especially the airline and travel sector. This financial crisis created an avenue for organizational change and development as many organizations made tough financial decisions to remain in business. Therefore, financial crisis is one of the main reasons that cause organizational change management and organizational change and development.

Performance Gaps

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This mostly occurs when organizational goals and objectives are not met, or other organizational needs are not fully satisfied. Organizational change is required to close these gaps, which occurs by changing organizational culture.

New Technology

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The emergence of new technology in a particular industry can lead to organizational change. This usually leads to more efficient and economical ways of performing tasks.

Identification of opportunities

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Opportunities are identified in the marketplace that the organization needs to pursue to increase its competitiveness.

Reaction to internal and external pressure

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Management and management, particularly those in more organized settings, often exert pressure for changing organizational culture; external pressures come from many areas, including customers, changing government regulations, competition, shareholders, and financial markets in the organization’s external environment.

Mergers and acquisitions

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Mergers and acquisitions create organizational change in many areas, often negatively impacting employees when two organizations are merged, and employees in dual functions are made redundant. It could be that your organization is looking to cut down expenses or maybe pass on some funding or resources to something new. This could be in the form of mergers and acquisitions at this point. On the other hand, perhaps it’s essential to reduce the workforce or alter how staff work.

Change for the sake of change

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Often, an organization will appoint a new CEO or head of a unit. Then, to prove to the board of directors they are doing something, they will come up with organizational change and development.

Planned organizational change and development

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Organizational change is a result of abandoning products, markets, or subsidiaries and allocating resources to innovation and new opportunities.

Structural Change

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Remember going to work back in 2019? You woke up early, heading to the office 8 or 9 and coming back 5 or 6, and in some cases, you come back late. Today that narrative seems outdated; COVID 19 changed everything. Most people work from home now without necessarily visiting the four walls of an office. Many companies are proposing an innovation strategy where employees rotate in and out. This business model gives employees the flexibility they crave. Big changes are changing organizational culture, engagement, and how work gets done.

Changing Demographics

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For the first time in history, there are five different generations in the workplace. Diverse perspectives have changed the dynamics in the workplace. Understanding this multigenerational workplace and its implications will be essential for driving innovation, creating united and productive teams, and adapting to the future workplace.

Product and Service Changes

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Something as simple as a product or service your company offers becoming end-of-life, or if market demand drops off for a particular product, you may have to act quickly. At this point, you may need to transfer your efforts to another product or service, which may require new creative thinking or simply just the transfer of labor to the new product focus.

Areas Organization Change Can Occur in an Organization

Organizational change and development can occur in the following areas:

  • Mission, vision, and strategy: organizations should constantly ask themselves: “where is our business heading and where are we currently.” Answers to these questions can lead to organizational change management in its mission (the purpose of its business), its vision for the future, and its digital business strategy.
  • Technology: organizations can change their technology, such as how they produce whatever they sell, to increase efficiency and lower costs.
  • Human-behavioral changes: on-the-job training can be provided to managers and employees to provide new knowledge skills, or people can be replaced or downsized. A typical example is the 2008 financial crisis, where many organizations downsized, creating massive unemployment that continues to this day.
  • Task-job design: the way work is performed in an organization can be changed with new procedures and methods.
  • Organizational culture: changing organizational culture includes changing management and leadership styles, values, and beliefs. To a larger extent, this has a great impact on the organization’s overall performance.

These are the main elements that organizations can change. However, it is important to note that changes in one of these areas will usually impact the other areas; for instance, changing organizational culture or technology may require changes in the human-behavioral areas where new know; edge and kills on how to use technology will be required.

Why is Organizational Change Important?

The companies that can more easily adapt to naturally occurring changes will likely be the ones to see the benefits of adopting a “positive change strategy” to see tremendous results.

Below are some positive benefits of organizational change:

Encourages innovation

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Without organizational change, companies may soon find themselves falling behind the curve and losing ground compared to their competitors. They need to change and adapt to keep up with the ever-increasing technological and developing times. Businesses should ideally move and adapt fluidly. Rigid work environments can shut off creativity which helps new ideas grow. Organizations must realize a practice, policy, product, or service relevant today and have market value tomorrow.

Promotes Skills Growth

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An organization’s ability to nurture new skills and specialties will help the whole business, including employees become much more well-rounded and talented team members. Employees who perform the same jobs constantly will never get the chance to show their skills or learn anything new to bring to the company. If people do the same thing day in day out, they will never develop new skills. With organizational change and changing organizational culture comes skill growth and development. Employees will be forced to learn new skills to make them relevant in the changing times.

People Development

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Although it can sometimes be difficult to persuade staff to embrace change, those who can embrace it with a positive attitude will gain much more in personal development by working with new strategies. The employees who can see the benefits of change are often the most valuable to your company; not only will they develop personally, but they will also create situations where the business will automatically grow alongside them.

New Opportunities

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The ability to embrace change will continually help businesses find and nurture new business ideas and opportunities. Having stellar change strategies will help any business move forward into new areas brought about by the new ways of working. This could either be by getting involved with other companies to expand or simply new contacts, which lead to sales growth.

Conclusion

Organizational change is necessary for companies to succeed and grow. Change management drives the successful adoption and usage of change within the organization. It allows employees to understand and commit to the shift and work effectively.

Without effective organizational change management, company transitions can be rocky and expensive in both time and resources. They can also result in lower employee morale and competent skill development. Ultimately a lack of effective change management can lead the organization to fail.

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