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Essay: Drivers for change in an organisation

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  • Published: 25 April 2023*
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According to Chester Barnard, Management Consultant, “An organization is a system of consciously coordinated activities or efforts of two or more persons”. This definition implies formal planning, division of labor and leadership. Change, innovation, quality, expertise and creativity are familiar concepts when it comes to organizational change. During the past decade’s numerous theories and concepts have been developed to face the challenges of complex societies and to fundamentally improve organizational structures.

This paper will attempt to examine what are the external drivers for change and whit it is more beneficial for an organization? It also talks about the factors of external driving forces of an organization that need to be considered before such a choice is made which includes economy, political Influence, new competitors, technology and customer satisfaction. An evaluation of different argument, understandings, theories and practices are also included in the essay.

In the current climate of economic pressure and evolving political priorities, organizational change within public bodies is becoming an increasing priority. However, change is a complex process that can have negative as well as positive outcomes and as such it is worth looking at the available evidence so that the process is conducted as efficiently and effectively as possible. (Barnard & Stoll, 2010). When there is a change within the organization it may affect their behavior, shared beliefs, the way they do their jobs or the rules that shape mental models (Njuguna & S.M.A, Jan. 2016).

Change typically results as a reaction to specific problems or opportunities the organization is facing based on internal or external stimuli. While the notion of ‘becoming more competitive’ or ‘becoming closer to the customer’ or ‘becoming more efficient’ can be the motivation to change, at some point these goals must be transformed into the specific impacts on processes, systems, organization structures or job roles (Creasey, 2007).

While with the globalisation happening in the world, it is an important aspect to have clear concept about business management of an organization. whereby business environment is the totality of all factors which influence the working and decision making of a business organization. In an organization there are driving forces or environmental factors. These driving forces are called as Internal driving forces and external driving forces. An Internal driving forces are those which are the things, situations or events that are occurred inside the business and these generally under the control of the company. Whereas External driving forces are those kinds of things, situations or events that occurred from outside of the company or organization.

One of the factors of an external driving forces of an organization is political influence. It is the foremost factors. It is directly bearing on the functioning of the business of an organization. In an organization there will be political influences like ideology of parties, plan and policies, political decisions, political stability, tax policy and so on. So, in reality it can bring positive affect to the business environment of an organization.

Another factor is the entrance of a new competitors, it can also give competition and make challenges to the business world. New competitors will make more changes and give competition to other companies, because they introduce new technology, ideas, innovations and customer satisfied goods and services with reasonable price. But old companies cannot give competition to them. That is why entrance of a new competitor is also one of the biggest factors that can effect an organization.

Technology is also another external factor that benefit to the organization, this is possible because the world is moving very rapidly towards advanced technology and many people felt it a necessity to move towards latest technologies for good governance. In the case of new technology, a number of strategic objectives have been identified as influencing management’s decision to embark on a program of change (Dawson, 1994). Technology includes inventions and discoveries, new and better techniques of converting the resources in to final product. Technology helps in performing the operations of an organization in much better, easier and cheaper ways. So the customer’s expectation is higher in specifications. Therefore, it can maintain only through new technologies. Customer satisfaction is another factor of an external forces and it is a business term, where it measures how products and services supplied by a company meet or surpass customer expectation.

The other external factor that motivates an organization is the economy. The economy and the business firms share a directly proportionate relationship. So basically, the economic environment affects performance of a business. Thus, business organizations should always be prepared to face any unwelcomed events and survive through it with minimal losses. The financial crisis of 2007–2008, also known as the global financial crisis and the 2008
financial crisis, is considered by many economists to have been the worst financial crisis since the Great Depression of the 1930s. It is one of the best examples to highlight the effect of economic environment on business entities. This financial or the economic crisis put many financial institutions and banks at stake whereby the businesses, stock markets, the currency dropped and could have killed businesses and organizations. All markets suffered huge losses resulting closures and periods of unemployment. Such crisis takes up a significant role and is beyond the control of the organization. This is the time where the adaptability of the organization comes to use. To make through this threatening crisis, the organization should come up with ideas and measures to stabilize itself and others. As customers’ demands drops, the supply drops correspondingly but the business should also be smart enough to come up with ideas of new products with lower prices, lower volume and efficient measures. This external factor is beneficial to the organization because it further strengthens it and invites a lot of changes.

Take an example of an external change factors to an Ownership structure of a big companies and financial institutions, where it controlled stakes in one another, offering mutual protection from hostile takeovers and outside pressures. This stability helped many countries to rebuild shattered industries. Likewise, in a management of a labor relations too, a center-right government is likely to assume power and try to curtail unions, weakening ties between labor and management. So supervisory boards are giving Chief Executive Officers more decision-making power where it led to organizational change. In an outside Capital also, there is some foreign investors who have little or no say in running companies or forcing management changes. So the cross-border mergers were rare and after putting pressure on companies to restructure, everything put-off or shutdowns can accelerate.

It is seen as a key performance indicator within business. In the business organization, customers are the king. In order to provide customer satisfaction, every company must introduce new products, attractive packing, adopting new technology, attractive schemes, provide special offers etc. when a customer is looking for a new technology and high quality products, company can update their technology. In these reasons customer satisfaction has a powerful external driving force of an organization.

Among the external forces of an organization, resources are a failure when resources are no longer accessible from the current environment and this could drive the organization to expand the way in which resources are found. Resources are commonly used as raw materials to produce the results of the services of an organization. Therefore, if a service is called, and it has a precondition that specifies that a resource is needed to execute a service, but the resource cannot be obtained using the current organizational structure, it is necessary to look for a solution. A possible solution to the finding resources force is to admit an external agent coming from the environment to join the organization. This agent must be able to get the requested resource and to bring it to the organization.

This essay also argue that external drivers are more beneficial to the organization than internal organization. This is because external drivers impact the organization in such a way that if there were no research and development team, the organization would not be running well and the organization would eventually shut down due to external environment. So globalisation is one of the biggest factors that can effect an organization.

Organization fairness is a psychological mechanism that can mediate employee resistance to change. Focusses on resentment-based resistance as a subset of all possible remittance behaviors. Uses referent cognitions theory to explain why organizational change not only increases employees’ sensitivity to fairness, but also why change is frequently perceived as a loss (Floger & Skarlicki, 1999). Roberts (2007) pointed out that “Business firms around the world are experimenting with new organizational designs, changing their formal architectures, their routines and processes, and their growth prospects”.
Folger & Skarlicki (1999) claim that “organizational change can generate skepticism and resistance in employees, making it sometimes difficult or impossible to implement organizational improvements”. In order to understand the concept of employee resistance, it is critical to define what is meant by the term resistance. In reality, change is a common occurrence within organizations, and resistance to change is just as common. There are several types of resistance to change. After understanding these different types of resistance, it is a duty of a company to reduce resistance and encourage compliance with change meaningfully.

John F Kennedy pointed out that “Change is inevitable but must be approached carefully through consultation and regular communication to become successful while external support should be sought when necessary”. “Change is the law of life. And those who look only to the past or present are certain to miss the future”. Above all Change is a simple process and it occurs whenever there was a replacement of old with the new. Change is also a journey from the old one to the new. But it is very difficult to implement change.

Olaghere (2010) stated that “The opening-up of mainland China to the outside world, for instance, and its subsequent membership on the World Trade Organization created a new environment and brought about dramatic changes for businesses around the world. Companies, both large and small, had to adjust their boundaries and realign themselves to take advantage of the deregulation, the vast market, the cheap but efficient Chinese labor, and mass produced goods”. The above is a real fact and a very good example of how globalization can affect the organizations. With time and changes coming all along, the organizations should always be aware of the things happening outside of the organization. Globalization makes the organizations undergo a change, a development and competitiveness. Since this factor is out of the reach of the company’s control, the company must take measures to be prepared for any changes that will follow. Having a company which is aware of the surroundings and upgrading itself to be better in the global market will be a great advantage for the organization. This change could bring many other changes that are beneficial for the organization.

A useful tool to examine the external drivers of change involves the Political, Economic, Social, Technological, Legal and Environmental (PESTLE) taxonomy. The earliest known reference to a framework for describing the external business environment is by Aguilar (1967) who presents ‘ETPS’ as a mnemonic to represent the four sectors: Economic, Technical, Political, and Social. Variations of this include ‘PEST’ and ‘PESTLE’, which adds the Legal and Environmental
dimensions (Rees & Hall, 2010). Kurt Lewin (1951) points out that increasing one set of forces without decreasing the other set of forces will increase tension and conflict in the organization. Reducing the other set of forces may reduce the amount of tension. Although increasing driving forces is sometimes effective, it is usually better to reduce the resisting forces because increasing driving forces often tends to be offset by increased resistance.
In order to maintain contact with the external environment, companies have to create external development groups. The latter have the task to establish meetings with individuals, groups, research labs, collaborators, even market competitors. Anyone can suggest new technologies, prototypes or connections with the consumer base (Doina & Sebastian, 2012).To manage change and the consequent uncertainty effectively, practitioners and managers need to understand the external world, how this impacts on organizations and how this then impacts on their teams and on them as individuals (Johnson & Williams, 2007).

According to Meaney and Pung (2008), the driving force for the change is of internal in nature but they don`t know which tools were used to give the greenlight for initializing the changes. Their general purpose is consequently to enhance profitability, so that the target variables are small sco tool
concordant with the primary reasons for companies to change. Likewise, Gimmon and Benjamin (2014) argued that internal factors were considered more likely than external factors to drive radical strategic changes, but only with marginal significance. They also opined further research is required to validate these findings.

Pressures for change may be external or internal to the organization. When organization performance is unsatisfactory, for example, pressures may come from stakeholders (groups with a stake in the success of the organization) at once. These pressures are often conflicting. For instance, stock holders may demand improved earnings and dividends at the same time that environmental protection groups want the firm to focus more on costly antipollution activities (Alkaya & Hepaktan, 2003). Only there is a one-way path for change momentum between ‘forward’ and ‘backward’ in modern business environment. An Organization change is occurring as a result of an ever-changing environment or as a response to a modern scenario (Pryor, et al., 2008).
In a 2007 research involving 28 organizations, J.S. Oakland and S.J. Tanner found that “successful change focuses on both strategic and operational issues”. The research identified external drivers to be customer requirement, demand from other stakeholders, governments’ regulatory demands, market competition, and shareholders.

The systems perspective of change is an approach that views organizations as a collection of interrelated and interdependent units or entities that work together, implying that change must be holistic, dealing with the range of organizational sub-systems with awareness that change in one will affect the others (Graetz, et al., 2011).

Without challenges in every field, there is no change. And most importantly changes can make many challenges in the world. Similarly, organizational change occurs, when an organization changes it differently for the betterment. For an organization to develop, it must undergo significant change at various points in the development. Some managers are very good at putting their effort, while others continually struggle and fail.

There are many models that can be used for successful organizational change. Winners respond to the pace and complexity of change. They adapt, learn and act quickly. Losers try to control and master change in the environment. It is important for organizational leaders to identify and use a model for transformation that will help their organizations survive and flourish in the next century and beyond. Therefore, change will absolutely be the unique opportunity to step forward, and it seems not the matter of choice for a company any longer considering the fast changing business environment.


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