There is not much point in ‘change for change’s sake’, and most people a need to be persuaded of the need to change. Some people fear it. Resistance to change in an organization usually happens because of lack of clear understanding of the effects of change.
a) Reasons for employee resistance to change
• Uncertainty – people are not sure of what might happen, whether they will be able to perform in the new setting. This is insecurity.
• Self interest – people fear change because it threatens their self-interest
• They fear to lose control over others
• They fear to lose position of expertise
• They fear that the information they control may become accessible to others.
• Loss – people fear loss and therefore resist change e.g. fear to lose an income. This is economic loss.
• Social loss – change may lead to loss of status symbols e.g. title, large office etc
• Inconvenience – new procedures and techniques may have to be learned. There could also be physical relocation.
• Union opposition – labour union representatives usually oppose any changes proposed by management.
• Destiny – even though change may be for the better, resentment arises when employees realize they have no control over their destiny.
Other sources of resistance to change include:
• Obsolescence of skills
• Ego defensiveness
• Peer pressure
• Plain desire to maintain the status quo.
b) How to overcome resistance to change
• Provide information in advance: i.e. the reason for change, its nature, timing and impact on both the organization and the individual.
• Encourage participation: If subordinate participation is encouraged in establishing the change, they will support change.
• Guarantees against loss: Give truthful guarantees that there will be no lay offs or pay reductions as a result of the changes.
• Make only necessary changes: Don’t make changes for the sake of change; every change introduced must be justified.
• Build trust: If a manager is trusted by employees’ resistance is likely to be less.
• Counseling: This will not only prevent rebellion but have some chance of stimulating voluntary adaptation.
• Allow for negotiation: Allow employees and managers to give their views and come to a consensus.
• Maintain useful customs and informal relationships: when possible changes could be made to coincide with the culture and personnel within the organization.
Managerial decisions are affected by the external environment. Organizational performance depends on the successful management of the opportunities, challenges and risks presented by the external environment.
A host of external factors influence a firm’s choice of direction and action and ultimately organizational structure and internal processes.
Every firm is surrounded by 3 subcategories of environments:
a) The operating environment comprising labour, creditors, suppliers, customers and competitors.
b) The industry environment which comprise forces driving industry competition.
c) The remote external environment which comprise economic, social, political, technological and ecological factors.
One popular technique of analyzing the external environment is the SLEPT analysis which divides the environment into five related but separate systems – social, legal, economic, political and technical.
The social and cultural environment
The firm is influenced by changes in beliefs, values, habits and attitudes of society e.g.
• With the shift away from 9 – 5 working days to more flexible forms in some companies, supermarkets open until late and also IT now allows people to bank throughout the night.
• The number of women employees have also steadily increased and new policies have to be designed to cater for their ‘speed needs’
• Demographic changes affect demand e.g. emigration or falling birth rates. Changes in tastes and fashions also affect manufacturers especially in the fashion industry.
The legal environment is concerned with how a firm does its business and covers law of contract, treatment of workers, laws about the environment and legislation on competitive labour.
• The law can affect the firm in several ways: strict health and safety regulations increase costs. Premises failing to meet higher standards could be closed down or have their products banned. Tobacco companies are at present faced with the prospect of a ban on advertising.
• Management must also bear in mind other legal and regulatory parameters e.g. tax regulations and minimum wage allowed.
• The government sometimes can become an unbeatable competitor by allowing itself sole rights over certain businesses e.g. communications or by fully owning certain natural resources. Organizations must make strategic forecasts in such cases.