Implications of Organizational Change

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A static environment can quickly antiquate an organization. Therefore, change is a constant and necessary requirement for organizations to stay competitive and survive in this volatile global economy. Organizational change can help streamline business processes and eliminate redundant systems or groups. However, it can also have negative consequences. To minimize the negative impacts, strategic change in an organization should always seek to achieve advancement in both business and employee performance. The overall change process should reflect a “win-win” situation for both the organization and its employees.

Change is inevitable but manageable when employees are involved.
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To implement sustainable organizational change, companies employ a three-prong phased approach. The most important and difficult phase of the process is unfreezing, which involves identifying and unlearning wrong past behavior that are sometimes ingrained in an organization’s culture. The most significant indicator of success at this phase is employee acceptance. If an organization manages employee resistance promptly and effectively at this stage, it will ensure the success of the next two phases. The second phase, changing, involves replacing past behavior with new behavior through significant redevelopment and training. Refreezing, the final phase of the process, reinforces and sustains the new behavior through continued visibility and measurement of success. One reinforcement technique is the employment of a praise and reward system. Praise and reward systems elicit high performance and motivate employees to embrace change.

A changing organization should not ignore the human element. It is important to change business activities within a company. If employees are not involved or are not willing to accept change, the process is likely to fail. Employees resist change because they are afraid that to lose a job or have to take on additional responsibilities that an employee is either unqualified or unequipped to handle. Using encouraging and inspiring techniques to implement change demonstrates to an employee that she is not being forced to accept change, but is an integral part of the process. An employee feels like a significant contributor in the work place environment when he is part of a successful revolution.

After a major reorganization, businesses typically undergo some employee turnover. An employee may feel that the environment is too unstable and might seek employment elsewhere where she feels more secure. High employee turnover can severely affect an organization’s productivity due to loss of skilled workers and the need to recruit and train new people. Sometimes the loss of resources can also result in loss of business revenue as an employee may take key accounts with him. To abate employee resistance and turnover, an organization should initiate a deliberated change management process that explains the significance and implications of the change and guides employees afterward.

Organizational changes that lead to ambiguity and job uncertainty create a declining work environment, which can negatively affect the economic health of an organization. The most detrimental impact is mortality, which is a clear sign that a business transformation has gone horribly wrong. An organization can die when change occurs too quickly or erratically. In a deteriorating environment, employees become self-preserving, less productive, unmotivated and fearful. Avoiding ineffective changes and implementing positive ones will promote a productive corporate culture and prevent organizational death.

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