Forces of Change

“We live in an age of discontinuity”. - Steven Robbins

There are numerous causes or forces of change. We can distinguish between external forces (originating outside the organisation) and internal forces (originating inside the organisation).

External Forces

Every organisation operates within an external environment that includes the immediate market environment as well as the so-called macro-environment. The four key external forces for change are:

Technological advancements: We live in an age referred to as the “knowledge-age” and, since World War 2, every organisation is influenced by new technology. Companies are increasingly using new technology to improve levels of productivity and market competitiveness. Examples include automation, high-speed computers and advanced telecommunications such as the use of the Internet and e-mail. The introduction of advanced technology brings about change in the way organisations are structured and staffed, respond to market conditions and operate in general.

Economic forces: The prevailing economic conditions in a country and the rest of the world can have a direct or indirect impact on an organisation. Changes in the interest rate can have far-reaching implications on the buying behaviour of consumers and concurrently the sales volumes of organisations. Similarly an increase in oil prices will impact on market prices and the demand for certain consumables. Fluctuations in foreign exchange rates and rising inflation are other examples of changing economic conditions that may necessitate organisations to introduce more or less drastic changes.

Market conditions: Heightened competition forces organisations to continuously observe and respond to competitor actions. Competitors typically introduce new and improved versions of products and services, new approaches in doing business, innovative marketing campaigns and creative cost-cutting measures. To remain competitive, we need to anticipate and respond to all these events. Customers also change. Attitudes and opinions, tastes and preferences, as well as income are all customer characteristics that can change drastically, forcing an organisation to change in order to remain successful.

Socio-political trends: Demographic changes in both the market and workplace necessitate managers to adapt. Social trends such as more single parent households, a higher divorce rate, more young people delaying marriage and more people retiring at an earlier age, result in new markets opening up requiring different marketing approaches and innovative products and services. Cultural diversity is another issue that need to be managed effectively. Political events also create pressures to change. Examples of political pressures include new legislation, growing free trade amongst nations, unionism and others. In recent years, South African companies had to adapt to new labour legislation, such as the Skills Development Act, the Employment Equity Act, and others.

Internal Forces

Internal forces for change come from inside the organisation. Internal forces arise from the challenge of creating an organisational structure capable of facilitating the attainment of organisational goals. A change in the goals or objectives will result in organisational change.

Kreitner et al. note that internal forces for change come from human resource problems or prospects as well as managerial behaviour/decisions. Human resource problems/prospects such as unmet needs, job dissatisfaction, absenteeism and turnover, productivity and participation/suggestions suggest that changes are necessary.

Managerial behaviour or decisions can also result in the need for change. Examples include conflict between managers and subordinates, inappropriate leadership, inequitable reward systems and structural reorganisation. Gibson et al add process problems such as breakdowns in communication and decision-making as other internal forces for change. Balogun & Hailey refer to culture and politics in an organisation that can also require or influence change.

Click here to view an explanation of the forces of change.