Understanding Organizational Change: A Comprehensive Analysis
Organizational Change
What is Change?
- It is the transition from one personal or social situation to another.
- It constitutes a shift in values, attitudes, and behaviors.
- Change is enacted by individuals, groups, organizations, etc., within a specific time and space.
- All change involves unlearning old knowledge, behaviors, patterns, and models, and learning, exercising, and internalizing new ones.
Types of Change
- Reactive changes are made in response to a given internal or external environment.
- Anticipatory changes look ahead to contextual situations in the environment or within the organization. They seek to align the organization with future scenarios, opportunities, and challenges, overcoming external and internal weaknesses or leveraging strengths to better exploit environmental challenges.
When is There a Need for Organizational Change?
There are many possible reasons, including:
- Incorporation of new technologies, creation of new business units, or the implementation of new processes.
- Individual relationships need to be changed.
- Changes are needed in the numbers and equipment of the organization.
- Should the organizational learning strategy be changed?
- Changes are needed in innovation and knowledge management strategies.
- Should processes be changed? Is reengineering needed?
- Should the organizational structure be amended?
- Is there a desire to change the prevailing organizational culture, ideology, and values?
- Must power relations and ways of conducting the organization be transformed?
- Are there conflicts in the organization that require intervention to resolve?
Transition
This is the psychological process that people must undergo to be in tune with the new situation. Change does not happen without this process. It is the intermediate time between the current and desired situation in which, on the one hand, we hear the benefits that working according to the desired situation will generate. But on the other hand, we have no choice but to continue operating in the “old-fashioned” way because we do not yet have the means, processes, people, strategies, information, or technology necessary to operate according to the new situation.
Costs of Inadequate Provision of Change
While it is difficult to measure the costs of inefficient management of the transition, and these losses are not recorded on the balance sheet, we know the risks incurred by poor management of the transition are very high and remain for a long time in the collective memory of the organization:
- Final results worse than those existing before the change.
- Duplicated efforts and high costs.
- Setting more complex objectives but with fewer people to achieve them.
- Return to old practices after trying something new, which means loss of credibility and trust in the organization when addressing future change processes.
- Adverse effects on the organizational climate.
- Loss of legitimacy in the chain of command, “unclear” layoffs, privileges, “troubled” promotions, etc.
Results of Change
In 1998, Arthur Andersen Consulting conducted a survey among companies that went through significant and enduring processes of change, which served to reveal their own perception of their success rates.
- 33% = Not sure how the change was
- 27% = Not very successful
- 27% = Too early to tell
- 9% = Very successful
- 4% = Moderately successful
In view of the results, only 13% showed acceptable levels of compliance; the rest were ambiguous. Additionally, the survey revealed that most companies that said they were satisfied with the results of change (13%) spent a lot of resources (time and money) to deal with the problems of transition. When indicating the causes of failures in the processes of change, the results of a survey designed and processed by the same consultant converge on certain aspects:
Note that most of the causes listed are related to the human aspects of change, and among these, only the “limitations of the systems in use” appear to be related to technical aspects.
In Brief
For a change to be effective, it is not enough to have good ideas and appropriate technology, although these are the components on which companies invest 87 percent of their resources to implement change.