ORGANIZATIONAL

CHANGE

HASNIFAH R. GRAR
SHANIAH B. GALMAN
WHAT IS ORGANIZATIONAL CHANGE? 2. Improving Performance and Efficiency - change optimizes processes, resources,
and technologies, leading to enhanced productivity, cost reduction, and faster decision-
making for better overall performance.
- Organizational change means any significant shift or transformation in how a company
operates, particularly regarding its human resources practices. It includes
the organization’s growth and development processes in different forms. 3. Growing Innovation and Development - changing market trends foster innovation
and encourage organizations to explore more horizons. This allows companies to stay
- According to Porras, Silver 1999, organizations usually experience change as a result competitive and hones the way for expansion
of a response due to internal or external factors. It is more like a cause-and-effect
phenomenon within an organization dependent on factors such as time, processes, 4. Employees Become More Engaged - individuals (especially the millennial and GenZ
environment, and other contexts. crowds) want to be a part of something that continuously evolving and is “trending” up
to the market standards. Involving them in the change process leads to higher morale
INTERNAL FACTORS and job satisfaction.

1. Market Shifts CAUSES OF ORGANIZATIONAL CHANGE

2. Competition
3. Technological Advancements 1. Technological Advancements - new technologies can disrupt traditional business
4. Changes in leadership models and require organizations to adapt to remain competitive.
2. Changes in the Market - changes in customer preferences, the introduction of new
EXTERNAL FACTORS products or services, or changes in the competitive landscape can all drive the need
for change.
3. Changes in Leadership - changes in leadership can lead to shifts in strategy or a
1. Low employee engagement
different approach to organizational management.
2. High turnover rates 4. Legal or Regulatory Changes - changes in laws or regulations can impact the way
3. Management of employees organizations operate and require them to adapt their practices.
4. Change in policies and procedures 5. Internal Challenges - low employee engagement, high turnover rates, or a need to
streamline processes and improve efficiency can also drive the need for change.
IMPORTANCE OF ORGANIZATIONAL CHANGE 6. Mergers and Acquisitions - mergers or acquisitions can bring together different
organizational cultures, and processes, requiring changes to align with the new
- The importance of organizational change has a business perspective. Without change, organizational structure.
businesses cannot flourish. They will fail to keep up with the competitive world and 7. Globalization - increased globalization can require organizations to adapt to different
update themselves to growing consumer demands. cultural norms, market conditions, and regulatory environments in different countries.

FOUR MAIN KEY POINTS OF THE IMPORTANCE OF ORGANIZATIONAL CHANGE Types of Change

1. Adapting to Change Environment - as the business landscape changes to external 1. Strategic Change - when an organization changes its overall goals or mission to stay
shifts and various other factors, it is important for organizations to adapt to these competitive, it’s called strategic change. To manage this change, it’s important to involve all
changes. This enables them to remain relevant and sustainable. the stakeholders to discuss how the changes should be executed further.
2. Structural Change - structural change involves changing the structure of the organization Step 4: Communicating Mitigation Strategies
with a merger or changing reporting lines. To manage such a change, employees need to be
involved extensively in the process, be communicated with the change clearly, and provided This is the final step which means sharing the actions that the organization is taking to address
support and training as needed. the concerns of the employees.

3. Technological Change - when an organization introduces a new technology or changes its APPROACHES TO MANAGING ORGANIZATIONAL CHANGE
existing technology, it’s called technological change. To manage this change, employees need
to be introduced to the new technology during its early phases. Proper training related to the
technology is required along with communicating the benefits of the new technology. 1. Kurt Lewin’s 3-Step Change Model

4. Cultural Change - cultural change is also referred to as people-oriented change. Since Kurt Lewin’s 3-Step Change Model is a widely used framework for understanding and
people are the main elements of the company, changes in how the company deals with its implementing organizational change. This model emphasizes the importance of involving and
employees hold great value. Hence, cultural change demands transparency, efficient engaging employees in the change process to ensure its success. Here is a better
communication, and productive leadership. understanding of the model:

5. Fundamental Change - combines all the changes mentioned above and transforms the way A. Unfreeze: Prepare the organization for change by recognizing the need for change and
an organization operates complement. There are changes from procedures, such as workflow creating an environment where change is accepted. This involves identifying the areas where
or project management practices to culture, such as diversity policies. Since, there’s a lot of re- change is needed, communicating the need for change, and creating a sense of urgency.
shaping going on, such a change needs efficient leadership and management.
B. Change: In this step, the actual change is implemented. This involves developing and
implementing a plan for change, communicating the plan to employees, and providing them
Organizational Change Process with the necessary resources and support to implement the change.

Step 1: Develop a Vision C. Refreeze: The final step involves stabilizing the change and making it a part of the
organization’s culture. This can involve reinforcing the new behaviors and processes through
When a change is introduced in an organization, a vision must be stated so that employees
training, creating policies to support the change, and monitoring the change to ensure its
buy and accept the change. The vision must be communicated competently for individuals to
success.
understand the ‘what and why’ of the change.

Step 2: Recognize and Understand the Resistance

2. Prosci ADKAR Model
People have a natural defense mechanism that resists change. This resistance can appear
either positively or negatively. Regardless, it is the duty of the organization to acknowledge and The Prosci ADKAR model is a change management framework that focuses on five stages of
perceive resilience. individual change. It provides a structured approach to help individuals and organizations
successfully navigate change. The five stages are as follows.
Step 3: Mitigate the Resistance
Awareness – Why do we need to change?
The third step is mitigate the resistance or reduce the negative responses and help the Desire – What will you gain from it?
employees adapt the change implemented. Knowledge – Forces of organizational change: How to go about it?
Ability – Implementing and achieving the desired change. BENEFITS OF ORGANIZATIONAL CHANGE
Reinforcement – Rewarding and appreciating sustainable change.
1. Continuous Progress - organizational development creates a continuous cycle of
progress. This cycle involves strategies being planned, implemented, evaluated,
3. McKinsey 7-S Model improved, and monitored. This approach embraces change (internal and external) and
leverages it for renewal.
The McKinsey 7-S Model is a popular tool for assessing and optimizing organizational
performance. This model identifies seven interconnected elements that must be aligned and 2. Improved Communication – improving communication is a goal of change to align all
integrated to achieve a cohesive and effective organizational strategy. The seven S’s are as employees with shared company goals and values leads. Candid communication leads
follows. to an increased understanding of the need for change within the organization. When
communication is open across all levels, relevant feedback is received leading to
• Strategy: The organization’s plan for achieving its goals. recurrent improvement.
• Structure: The organization’s formal hierarchy and reporting relationships.
• Systems: The organization’s processes and procedures for getting work done. 3. Employee Growth and Development - the need for employee growth and
• Shared Values: The organization’s core values and culture. development stems from constant industry and market changes. Changing
• Style: The leadership style and management approach. organizational culture with evolving market requirements can be successful in
• Staff: The organization’s employees and their skills. developing their employees’ competencies too. This is achieved through a program of
• Skills: The organization’s capabilities and competencies. learning, training, skills/competency enhancement, and work process improvements.

4. Product & Service Enhancement- change is a harbor for innovation. Both employee
4. Bridges’ Transition Model and organizational development lead to product and service enhancement through
innovation. Changes encourage a rewarding and appreciating culture while boosting
Bridges suggests that in typical changing efforts, 90% of the time leaders focus on promoting motivation and morale. The forces of organizational change also increase product
the solution, while 10% of the attention is given to selling the problem. He proposes that this innovation by using competitive analysis, market research, and consumer expectations
ratio should be reversed. Here’s a brief of his model: and preferences.

• Ending, Losing, and Letting Go: Acknowledging the need to let go of the old ways 5. Better Profit - through increased innovation and productivity, efficiency, and profits
and behaviors. are increased. Costs are also reduced by minimizing employee turnover and
• The Neutral Zone: A period of confusion and uncertainty between the old and new absenteeism. The culture shift to continuous improvement gives the company a distinct
ways. advantage in the competitive marketplace.
• The New Beginning: Embracing the new way and making it a permanent part of the
organization’s culture.