Why do Organizations Change?

Organization and Change

 

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Organization and Change > Best Practices > Why do Organizations Change?

Why do Organizations Change?
dineshbabu, Student (MBA), Member
We all know that organizations change. They have to. But exactly why do organizations change? In other words, what are the causes or reasons for change to occur in organizations? How can these reasons be categorized in a logical way? Is there some kind of model of causes for organizational change? (...) Read more? Sign up for free

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  Why do Organizations Change? Causes
Jaap de Jonge, Editor, Netherlands
  Thanks for your excellent question... A first breakdown of such reasons or causes for companies or public organizations to change could be:

WHY DO ORGANIZATIONS CHANGE?
A. Factors in the external environment
Factors outside the firm, generally beyond its control
B. Internal factors in the organization
Factors inside the firm, generally under its control
A1. Political B1. Leadership
A2. Economic B2. Vision
A3. Social B3. Mission (statement), purpose
A4. Technological B4. Strategy
A5. Competition B5. Culture, values
A6. Customer demands B6. Policies, procedures, systems
A7. Environment, climate, pollution B7. Merger

A useful model for external factors: PEST Analysis.
A useful model of internal factors: McKinsey's 7S Framework.

Any of the 14 main causes could be further split up into a large number of sub-factors. For example A2. Economic could be further split up into: economic growth, recession, interst rates, government spending, unemployment rates, taxation, infaltion, consumer confidence, globalization, etc.

Note that some of these main causes can be viewed as external or internal. And also that certain sub-factors can be viewed as being part of multiple main causes. As usual, the reality is always more complex than the management model. But how could we manage :-) without them?

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Organization and Change

 

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