The external and internal forces that may trigger change in an organisation
Change refers to any fundamental adjustment or reorganization of one or all of the aspects of an organization e.g. redesigning the overall structure or changed mode of production or even replacing employees with technology or changing from one level of technology to another.
All organizations at one point or the other undergo changes. Some organizations change mainly in response to external circumstances (reactive change): others change principally because they have decided to change (proactive change). However, it is good to note that change does not always imply innovation i.e. introducing something new. Change can be triggered both internal and external factors.
i. Technology: Technological innovations are a powerful force causing organizational change. Today firms have to adapt to very dramatic changes in communication and information technology, for example the internet. Technological developments: This is
especially so in information technology. Most departments are computerized and the service industry uses IT to improve what it offers to customers.
ii. Competition: Change can be introduced competitors and their actions. When a competitor introduces a new product or aggressively cuts down prices, a company may need to follow suit to hold its position in the market place.
iii. People: When the demographic profile of the population shifts e.g. to younger workers. Organizations may need to change and satisfy their wants of higher salaries, flashy perks and less loyalty.
iv. Environment: No firm operates in a vacuum. It is hence greatly affected changes in the external environment as well as those within its own internal environment. Such changes may include political forces, economic forces and socio-cultural factors. Inflation or political instability for example, will force a firm to adjust its operations in certain areas.
v. Communications: Unlike the traditional paper based communication, most companies have adopted electronic mail systems, mobile telephones and video conferencing, as these are innovations available to them today.
vi. Research and Development: A lot of money is invested in these areas companies so as to better their products and be able to satisfy customers and keep up with market trends. In order to respond to the development of potential new products and services devised ‘research and development’, change becomes inevitable.
vii. Globalization: There is now a realization that people can set up trade bases in other countries unlike in the past when trade was restricted to purely domestic markets. Companies are now operating on a global basis, a lot of multinational businesses have come up with several productive subsidiaries abroad. Size has now become a critical factor for success alongside entry into foreign markets.
viii. Threatening tactics of competitors: There has been a lot of competition due to liberalization. Tactics such as drastically cutting prices and ‘dangerous’ advertising have been used.
ix. Entry of many newcomers with competing products or services: For a long time monopoly has been rife with particular firms being sole producers of a certain product. Now there are many entrants offering competing products. Survival now depends on the strategies one uses to market their product or service.
x. Customer needs: The essence of business is the customer. Unlike the traditional customer who bought what was on sale, today’s customer has needs and preferences, which must be satisfied. Firms are also aware of the existence of a middle class group of customers who have different needs from the low income-earning customer. Customers’ focus is now a major starting point for many firms’ actions.
xi. A new perspective of the Human Resource: Unlike the previous years, the human resource is now considered as the firm’s most valuable resource. The Human Resource department is now instrumental in most firms and a lot is being done to keep the firms most valuable asset happy and productive.
xii. Political stability: Stability is a major consideration for investors who are eager to be assured that their investment is safe within the country. In Kenya, a relative amount of stability has attracted several investors. At the same time, a few disruptions and speculations about the stability has led several investors to close up and relocate their business.
xiii. Lobgroups: especially those furthering the cause of women and ‘minority’ ethnic groups. They demand equal employment opportunities and a respect for the rights and dignity of women at work. They look into issues of discrimination employers There are also groups that are pushing firms to be environmentally conscious such as Green Belt Movement. Firms have had to incur extra costs so as to comply with their demands.
xiv. Demographic pattern: there are still a lot of unskilled people seeking employment thus making casual employment a continued possibility. A lot of changes have also taken place in the provision of degree, masters and doctoral programmes. There are now a lot of qualified personnel seeking employment at managerial levels and whose needs firms must cater for. Changes in the demographic pattern also imply a change in customer demands and needs.
xv. The AIDS scourge: this affects all employers, as productive citizens are the most affected. Laws regarding issues such as medical cover and insurance are a major consideration for all employers. The Federation of Kenya Employers has in the recent past protected the rights of affected citizens to ensure that they are not discriminated against.