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 by both internal and external factors.
a) Reasons for innovation and change
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.
Change can be introduced by 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.
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.
No firm operates in a vacuum. It is hence greatly affected by 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.
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 by 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 by ‘research and development’, change becomes inevitable.