Change management

Every enterprise, in connection with all internal or external circumstances, being at a certain stage of development, begins to feel the need for changes. External reasons that may contribute to such a need include:

• The market situation.
• Technological progress.
• State and legislative regulation.
• General economic factors.

The internationalization of the global market and the increase in the dynamics of business processes are among the most powerful incentives for change, which are sometimes impossible without the implementation of various technological solutions. For example, more affordable hardware and software have created tremendous competition in the IT services market.

State and legislative regulation also exerts a significant influence on the activities of various companies, because entrepreneurs cannot ignore such prescriptions. For example, higher excise taxes and laws requiring consumers to be informed about the dangers of smoking have significantly increased the pressure on tobacco manufacturers. They had to rethink their strategy to ensure economic viability.

Finally, general economic changes can have significant consequences for both the domestic and the global market as a whole. This phenomenon is well observed on the example of the last financial crisis: first it affected the USA, then it reached Europe and Japan, and then all other countries were hit. As a result, companies around the world had to reduce production volumes and reduce staff.

In addition to external, there are also internal reasons that lead to changes. They include:

• Corporate strategy.
• Workforce.
• Technology and equipment.
• Attitude of employees to work.

A change in strategy is not unusual for a company. This, in turn, can lead to further changes if, for example, the company implements a new method of distribution and logistics of goods. Also, entering new markets (for example, Internet trade) changes the behavior of the organization.

The emergence of new technologies and equipment is another external force that affects the activity of every enterprise, because the introduction of technical innovations leads to the renewal of processes and organizational structure. Also, in connection with new technologies, there is a need to train personnel or create new services and positions.

The composition of the company’s workforce in terms of age and personnel formation is always a variable. Some employees retire or quit, and new ones take their place. In connection with such changes, managers have to periodically review the status of projects and the composition of work groups to ensure that skills match the tasks.

The attitude of employees to work, which can be manifested through the level of satisfaction, is the cause of both positive and negative changes in the company’s work. Dissatisfaction of employees can lead to systematic absenteeism, which indicates unsatisfactory work of the HR department.

Depending on the type of business, its organization, entrepreneurial experience and the average age of employees, there are several different approaches to implementing change.

Direct orders

This method highlights the manager’s right to lead change and use his authority to implement it with little or no involvement of other employees. The advantage of such a strategy is the speed of introducing changes, but, on the other hand, the wishes and suggestions of employees who will be directly affected by these innovations are not taken into account. Thus, valuable information or ideas may not be implemented, and direct instructions, without discussion with the personnel involved in the process, often cause resentment.

Expert approach

In this case, change management is considered as a process of solving problems by “experts”. This approach is most often applied to technical issues, such as management structure changes, and is usually handled by the project team or a senior manager, with minimal involvement of the employees involved in the change. The main advantage of using this strategy is the speed of its implementation, because a small number of people participate in the development. But, again, without considering the opinions of employees, such changes can cause dissatisfaction.

Discussion and agreement

This option emphasizes the willingness and willingness of senior management to interact with staff in creating a change project. Management should be aware that in the process of negotiations, they will have to agree on decisions with employees, and sometimes make concessions. It also takes into account the possibility that people whose activities are subject to change can influence their type and implementation procedure, and therefore the result. Although employee involvement generates a great deal of support for future changes, the design and outcome may ultimately fall short of management’s expectations.

Learning and persuasion

“Winning hearts” and thus changing values and attitudes to work, while ensuring general and, most importantly, voluntary support — this is the idea of educational strategies. For this, various types of activities are used: persuasion, education, training, selection and training of specialists, which are carried out by internal or engaged professional consultants. Using this method takes quite a lot of time, but it provides support for innovations from the staff.

All of the above methods are not mutually exclusive, as each of them has its own advantages and disadvantages. One of the key points in change management is the successful choice of strategy, as well as its timely application.