Organisational Change

IB BUSINESS AND MANAGEMENT

ORGANIZATIONAL CHANGE

Change is any alteration to the organizational or work environment of a business

Forces promoting and restraining change in organizations

Force field analysis is a management technique developed by Kurt Lewin. Lewin

assumes that in any situation there are both driving and restraining forces that influence
any change that may occur.

Driving Forces are those forces that are pushing in a particular direction; they tend to
initiate a change and keep it going.

External forces for change come from outside the business.

 Changing nature of markets (more competition, access to new markets etc)

 Changes in the economy

 Social changes (affect demand for certain products, expectations of firms and
employers etc)

 Changes in Legislation/Laws

 Political factors

 Changes in Technology

Internal forces for change develop from a desire within the business to develop new and
improved ways of doing things. Internal sources of change may include management who

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are seeking to change some aspects of the business to raise productivity, or workers who
are seeking improved working conditions.

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Restraining Forces

Restraining forces are forces acting to restrain or decrease the driving forces.

Reasons for resistance to change

Financial costs(make change very expensive)

 Purchasing new equipment

 Redundancy payments

 Retraining costs

 Reorganizing layout of the plant/factory

 Conducting market research

 Developing a promotional campaign

Inertia(make change extremely difficult)

 Lack of interest from stakeholders

 Fear of the consequences of change

 Refusal to cooperate (workers refusing to cooperate with management, or owners

refusing to cooperate with management)

 Staffing considerations

 Conservative organizational culture

Staff may resist the change because:

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 Many may lose their jobs

 It may limit their career prospects

 They may need to acquire new skills

 They may no longer need to use their skills (and thus be worried that they will
‘lose’ their skills and/or have a less interesting job)

Equilibrium

Lewin argued that the current position of the firm (the status quo) is the result of these
two forces pushing in opposite directions.

In this example, equilibrium represents the present level of productivity, as shown below.

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What should a manager do?

An effective manager needs to analyze the driving and restraining forces in his or her
business. The manager needs to use the driving forces to generate momentum for change.
This may involve explaining to staff the reasons why economic or legal or political
factors are forcing change on the business. At the same time, the manager needs to
identify the restraining forces and develop strategies to minimize their impact.

Change is very dangerous. An ineffective manager could increase the driving forces by
emphasizing the need for change and initiating the process. However, the manager may
fail to consider the restraining forces for change, such as staff or customer fear of change.
As a result, there may be a large drop in staff and customer loyalty leading to lower
productivity and sales levels.