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Why Organizations Change ?

Organizations change for two broad reasons ( perspectives) :


1- The economic reason ( perspective) : the organization wants to satisfy its shareholders
and keep their investments to ensure its survival.
2- The organizational learning reason ( perspective) : the management builds capabilities of
the organization to enable its members to deal with change.
The different pressures for change :
1- Environment
2- New desires and visions for the future
3- The basic nature of the organization itself.
Images of Pressures for Change :
Image of Managing Change Pressures for Change
Director Change results from strategic pressures and is controlled by
managers.
Navigator Change results from internal and external pressures
Caretaker Managers have little control on change pressures
Coach Pressures for change are constant and encourage development
of the organization.
Interpreter Change results from internal and external pressures and
managers should give meaning to them.
Nurturer The managers role is to improve the adaptive ability of the
organization.

Environmental Pressures for Change :


1- Fashion pressures : an organization imitates companies that are successful ( for
example Boeing Co.).
2- Mandated pressures : an organization changes by mandated requirements ( for
example Chevron Texaco).
3- Geopolitical Pressures : an organization changes due to global changes ( for example
3 M).
4- Market Decline Pressures : an organization changes due to decline in the market (
for example AOL Time Warner).
5- Hyper-Competition Pressures : an organization changes due to competition in the
market ( for example, Gateway).
6- Reputation and Credibility : and organization changes to keep its reputation from
scandals.
The Four Debates on the role of external environment on change :
1- Organizational learning VS. threat rigidity : organizational learning theory sees that
external changes lead to adaptive change, but threat rigidity see them as inhibitors to
change.
2- Environment as an objective entity VS environment as a cognitive construction: The first
sees the environment as an objective entity where managers should respond, but the latter
focus on managers understanding of environmental conditions.
3- Forces of Change VS forces of stability : external forces might differ, and they might
promote change or stability.
4- Bridging ( adapting) VS buffering ( shielding) : Either adapting the organization to
change or buffering change.

Internal Organizational Pressures for Change :


1- Growth Pressures : when organization size increases ( for example Microsoft).
2- Integration : when integrating parts of the organization to create economies of scale ( for
example Forte Hotel).
3- New Broom Pressures : when new managers come to the organization ( for example
Sears).
4- Power and Political Pressures : when power relationships and politics change internal
processes.