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Managing Organizational Change

Nature of organizational change

Like it or not, every major organization needs to maintain a constant focus on change. The days when organizations could count on stability are gone. In an era of market transparency, labor mobility, and globalization, change is inevitable — and almost the only thing that organizations can be sure of.

Organizational change is the process of transformation that an organization undergoes when adapting to something new. This could be due to a change in strategy, management, goals, or objectives — which could come about as a result of a merger, an acquisition, or general restructuring. During this process of transformation, management must address several challenges by adopting best practice standards.

When the organization’s units are closely integrated, these challenges are especially difficult. This is because a change in one unit can have a profound ripple effect throughout the entire organization.

Although there are a wide range of potential causes of organizational change, there’s one constant — its impact on employees. The main challenge this poses for management is in dealing with the uncertainty that’s inevitably caused. It can affect employees psychologically, emotionally, and physically.

Many people function within a comfort zone, and they often put up barriers to protect these zones. Some are deeply attached to the way they work, and tend to want to keep things as they are. Change can threaten this comfort zone. It can challenge a person’s values and central core beliefs, causing stress.

Not knowing what’s coming down the line may create confusion, anxiety, and uncertainty. Generally, change may be resisted if it requires people to step outside their comfort zones. When confused and anxious, people may withdraw, become skeptical and distrustful, and prioritize self-protection and survival over everything else.

One reason for resistance to change is that people often personalize the need for change. When they’re told that the current way of doing something is going to change, what they hear is “you’re not valued.” A negative response to change almost always stems from leadership’s failure to communicate what lies ahead.

People wouldn’t be as resistant to change if they understood the meaning and relevance of the change. This is why it’s so important to manage and lead change. Doing this effectively requires an understanding of the human factors involved.

Benefits of managing change

Poorly managed organizational change can affect employees on psychological, emotional, and physical levels. This can lead to workdays missed through illness as worried employees work longer hours to protect their positions, which causes stress and damage to their health.

Employees are also less productive due to the deterioration in working relationships as competition intensifies. And valued employees — those with confidence, skill, and experience — may leave in response to the level of uncertainty surrounding them.

However, effective management of the change can help eliminate the negative effects, reduce the level of uncertainty within the organization, and accelerate the change process, with goals achieved more quickly. Poor management has the opposite effect.