Every enterprise, due to all kinds of internal or external circumstances, being at a certain stage of development, begins to feel the need for changes. External reasons that may cause such a need include:
- The situation in the market.
- Technological progress.
- Government and legislative regulation.
- General economic factors.
Internationalization of the global market and increasing dynamics of business processes are some of the most powerful incentives for change, which sometimes are impossible without the introduction of a wide variety of technological solutions. For example, more affordable equipment and software created colossal competition in the IT services market.
Governmental and legislative regulations also have a major impact on the activities of different companies, since entrepreneurs cannot ignore such regulations. For example, increasing excise taxes and adopting laws requiring manufacturers to inform consumers about the dangers of smoking have put considerable pressure on tobacco business. They had to reconsider their strategy in order to ensure economic viability.
Finally, general economic changes can have far-reaching consequences for both the domestic and the global market as a whole. This phenomenon can be well traced in the example of the last financial crisis: first, he touched the US, then he reached Europe and Japan, and then all other countries got hit. As a result, businesses around the world had to reduce production and cut staff.
In addition to external factors, there are also internal reasons that pushing for change. These include:
- Corporate strategy.
- Technologies and equipment.
- Attitudes to work.
For a company, changing its strategy is not unusual. This, in turn, can lead to further changes if, for example, the company introduces a new method of distribution and logistics of goods. Also, accessing the new markets (for example, Internet commerce) changes the behaviour of the organization.
The emergence of new technologies and equipment is another external force affecting the activities of every enterprise, as the introduction of technical innovations leads to the renewal of processes and organizational structure. Also, in due to innovations, there is a need for personnel training of creation of new services and positions.
The composition of the workforce of an enterprise in terms of age and education level of personnel is always variable value. Some employees retire or are dismissed, new ones come to take their place. According to such changes, managers have to conduct reviews from time to time to control the status of projects and the composition of working groups in order to ensure that the skills correspond to the tasks assigned.
The attitude to work, which can manifest itself through a level of satisfaction, is the cause of both positive and negative changes in the work of the company. Dissatisfaction among employees can lead to systematic absenteeism, which indicates the unsatisfactory work of the HR department.
Depending on the type of business, its organization, experience of entrepreneurial activity and the average age of employees, there are several different approaches to implementing changes.
This method highlights the right of the manager to make changes and use his power to implement them with the involvement of a small number of other employees or without their participation. The advantage of this strategy is the rapidity of introducing changes, but, on the other hand, the wishes and suggestions of employees who are directly affected by these innovations are not taken into account. Thus, valuable information or ideas may not be embodied, and direct instructions, without discussion with the staff involved in the process, often provoke resentment.
In this case, change management is seen as a process of solving problems by “experts”. This approach is most often applied to technical problems, such as changing the management structure, and usually, it is the responsibility of the project team or senior manager, with a little involvement of employees involved in the changes. The main advantage of using this strategy is the speed of its implementation since a small number of people participate in the development. But, again, without considering the opinions of employees, such changes can cause discontent.
Discussion and agreement
This option emphasizes the willingness and readiness of senior management to interact with staff when creating a draft change. Managers should be aware that in the negotiation process it will be necessary to coordinate decisions with employees, and sometimes make concessions. It also takes into account the possibility that people, whose work undergoes transformations, can influence the type and procedure of implementation of changes, and therefore the result. Despite the fact that involvement of employees will cause greater support for future changes, the development and results may not meet the expectations of management.
“To win hearts and minds” and thus change the values and attitude to work, while providing almost absolute voluntary support — this is the meaning of educative strategies. For this, different types of activities are used: persuasion, training, training, selection and training of specialists, conducted by internal or engaged professional consultants. Using this method takes a lot of time, but it provides a predisposition to innovations from the staff.
All of the above methods are not mutually exclusive, so everyone has advantages and disadvantages. One of the key moments in change management is a successful choice of strategy, as well as its timely application.