Environmental

Change
 TYPES OF ENVIRONMENTAL CHANGE

1. Individual Level Change

• Organizational change typically means that individual employees

have to change too. Individuals may be required to change what
they do or how they do it. It may be required of them to change
their attitudes towards their work or some particular aspect of it.
• An organizational change if not well managed, may result in
individuals feeling demotivated and alienated and exhibiting
defensive behavior.
• As organizational change involves individual and personal
change, attention to the individual in the context of the wider
systemic change is critical for the success of the change process.
 TYPES OF ENVIRONMENTAL CHANGE

• Individual level change may take place due to:

– changes in job assignment
– transfer of an employee to a different location
– changes in the maturity level of the person which occurs over a
passage of time

• As PINOY matures, he changes his personal outlook that will have

a significant impact on the organization.
• PINOY values and perception will affect group behavior that will
influence the whole organization.
• Managers of the organization must not treat PINOY in isolation but
he must understand that the working PINOY’S level of change has
repercussions beyond his individuality.
 TYPES OF ENVIRONMENTAL CHANGE

2. Group Level Change

•In implementing any change, management must consider the group of
people in the organization as the group influences the organizational
climate.
•The group in the organization can be formal or informal.
-Formal group like labor unions can always resist change that
will affect the work performance of the organization.
-Informal groups like regional associations of ILOCANO,
VISAYA, TAGALOGS, PAMPANGOS and all others can pose a major
barrier to change because of their inherent strength.
•Changes in the group level can affect workflow, job design, influence
and social and communication system.
 TYPES OF ENVIRONMENTAL CHANGE

3. Organizational Level Change

•The organizational level is the level whereby the

organization as a unified corporate identity competes in a
competitive socioeconomic environment to provide a
service and be profitable.
•Finally, the most complex of all is the unified effort of all
participants in an organization towards the goal of
making that organization profitable, growth-oriented and
functional in its external socioeconomic environment.
 TYPES OF ENVIRONMENTAL CHANGE

• These levels of change are made by top

management that affect both PINOY and
his groups.
• These are major programmed changes
that occur over a long period of time and
require considerable time for planning for
implementation.
 TYPES OF ENVIRONMENTAL CHANGE

The different types of organizational change are:

a. Strategic Change

•Strategic change involves making changes to the overall goals,

purpose, strategy or mission of an organization. It is a major
upheaval to how the organization conducts business. Changes to
things such as what products or services it offers, the target
customer segments or markets it tries to reach, how the company
distributes its products or services, its position in the global
economy and who it will partner with for manufacturers,
distributors and other logistical needs are just some examples of
strategic changes.
 TYPES OF ENVIRONMENTAL CHANGE

• As the business condition and environmental change brought

about by advancement in technology and the economy,
organization changes its basic objective to multiple objectives.
• Strategic change could lead the organization to vertical or
horizontal expansion or changes in business direction.
• Expansion in the market or global marketing could be an
option for strategic change.
 TYPES OF ENVIRONMENTAL CHANGE

b. Structural Change

•Organizations often find it necessary to redesign the

structure of the company due to influences from the
external environment. It is concerned with the overall goals
and purpose of the business, and any changes in the vision
and mission of the organization. Structural changes involve
the hierarchy of authority, chain of command, job structure,
goals, structural characteristics, administrative procedures,
and management systems.
 TYPES OF ENVIRONMENTAL CHANGE

• Organizational structure is the pattern of

relationship among various position holders.
• Structural Change involves changing the internal
structure of the organization.
• The changes could be seen in authority
structure, work assignments or inter-
departmental relationships.
• It is usually brought about by expansion or
contraction of operation.
 TYPES OF ENVIRONMENTAL CHANGE

c. Process Oriented Change

•Organizations may need to reengineer processes to

achieve optimum workflow and productivity. Process-
oriented change focuses on new technologies, new skills
and operating processes. It is often related to an
organization's production process or how the organization
assembles products or delivers services. The adoption of
robotics in a manufacturing plant or of laser‐scanning
checkout systems at supermarkets are examples of
process‐oriented changes.
 TYPES OF ENVIRONMENTAL CHANGE

• The changes are brought about by technological

advancement in automation, information processing with
the use of advance computer system, advancement in
communication that allows organization to hold
conferences right at their respective offices and use of
robotics in the manufacturing operations.
• This means replacing or retraining personnel, heavy
capital equipment investment and operational changes.
• This would affect the organizational culture and hence
changes in the behavior patterns of members.
 TYPES OF ENVIRONMENTAL CHANGE

d. People Oriented Change

•People-oriented change relates to employee performance,

skills, attitudes, behaviors and relationships.
•This type of change alters the attitudes, behaviors, skills, or
performance of employees in the company. Changing people‐
centered processes involves communicating, motivating,
leading, and interacting within groups. This focus may entail
changing how problems are solved, the way employees learn
new skills, and even the very nature of how employees
perceive themselves, their jobs, and the organization.
 TYPES OF ENVIRONMENTAL CHANGE

• People oriented change could be the most difficult

change needed by the organization.
• These changes are directed towards better work
performance, group coordination, work values,
dedication and loyalty to the organization.
• It requires training and organizational interventions.
• It involves team building activities and behavior
medications that will change people perception about
their organization and the work in general.
 TYPES OF ENVIRONMENTAL CHANGE

“Change in the organization is necessary as it

must move along with the business environment.
The first three types could easily be made by the
organization but the most crucial is the change in
people’s behavior. People have different sense of
values, attitudes and perception.”
FACTORS AFFECTING ENVIRONMENTAL
CHANGE

• There are number of factors both internal and

external which affect organizational functioning
in its business environment.
• The major forces which make change not only
desirable but also inevitable are: technological,
economic, political, social, legal, international
and the labor market.
FACTORS AFFECTING ENVIRONMENTAL
CHANGE

• The more important factors are:

1. External Factors
• External forces for change originate outside the organization.
• No organization is an island as it must interact with others the
total environment.
• Each organization has its goals and responsibilities related to
each other.
• The present day environment is dynamic of change and
organization has to adapt to these changing conditions. Such
changes may result in major functions of production process,
labour-management relations, nature of competition, economic
constraints, and many others.
FACTORS AFFECTING ENVIRONMENTAL
CHANGE

The change necessary may be seen in the following context:

a. Technology
•Changes in technology required the modification of the techniques and
equipment, which are used in the process of evaluating the firm.
Especially, the alterations of the technology occur in one area of the
organizations, where the number of improvements is incorporated into
technological devices in order to support better quality operations.
•Changes in technology by introducing computers and industrial robots
that allow rapid resolution of complex problems in production and
management, helping to reduce costs and improve quality.
•Changes in technology makes work easier and increases production.
It changes work structure that needs new balance and equilibrium in
the work environment.
FACTORS AFFECTING ENVIRONMENTAL
CHANGE

b. Marketing conditions

•Since every organization exports its outputs to the environment,

an organization has to face competition in the market. There may
be two types of forces which may affect the competitive position of
an organization –other organizations supplying the same products
and, buyers who are not buying the product. Any changes in these
forces may require suitable changes in the in the organization
•Technology improves products and services and customer wants
and needs vary as to quality and cost. Organizations exports its
products to all sectors of the environment and therefore
competition in market conditions exist.
FACTORS AFFECTING ENVIRONMENTAL
CHANGE

c. Social Change

• Social changes reflect in terms of people’s aspirations,

the needs and wants, and their ways of working. These
changes occur due to several forces like level of
education, urbanization, feeling of autonomy, and
international impact due to internet, social network and
other information sources. These social changes affect
the behavior of people in the organization. There, it is
required to make adjustment in its working so that it
matches with people.
FACTORS AFFECTING ENVIRONMENTAL
CHANGE

d. Political and Legal Changes

•Political and legal factors broadly define the activities which

an organization can undertake and the methods which will be
followed by it in accomplishing those activities. Any changes
in these political and legal factors may affect the organization
operation.
•New laws and regulations are made by the government in
terms of environmental changes, taxes, and other mandated
regulations on wages and working conditions. Any change in
political and legal factors may affect organizational operation.
FACTORS AFFECTING ENVIRONMENTAL
CHANGE

2. Internal Forces
 
•It is not only the changes in external
factors, which may necessitate
organizational changes; any change in
organization’s internal factors may also
necessitate changes.
FACTORS AFFECTING ENVIRONMENTAL
CHANGE

a. Change in Managerial Personnel

•Besides environmental changes there is a change in managerial

personnel. Old managers are replaced by new mangers, which
necessitated because of retirement, promotion, termination,
resignation, transfer or dismissal. Each new manager brings his
own ideas and way of working in the organization. These need
adjustment in human relationship among workers. The
relationships, more particularly informal ones, changes because
of changes in managerial personnel. Moreover, attitude of the
personnel change even though there is no changes in them. The
result in that an organization has to change accordingly.
FACTORS AFFECTING ENVIRONMENTAL
CHANGE

b. Deficiency in Existing Organizational System

• Sometimes, changes are necessary because of deficiency in

the present organizational arrangement and process. These
deficiencies may be in the form of unmanageable span of
management, large number of managerial levels, lack in co-
ordination between various departments, obstacles in
communication, multiplicity of committees, lack of uniform
policy implementation, changes due to managerial re-
engineering and re-organization, lack of cooperation between
the line and staff, and so on. Beside these internal factors,
there are two more internal factors that give rise to
organizational changes.
FACTORS AFFECTING ENVIRONMENTAL
CHANGE

c. Nature of Work Force

• The nature of work force has changed over a passage of time.
Different work values have been expressed by different
generations. Workers who are in the age group of 50 plus value
loyalty to their employers. Workers in their mid thirties to forties
are loyal to themselves only. The youngest generation of
workers is loyal to their career. The profile of the workforce is
also changing fast. The new generation of workers has better
educational; they place greater emphasis on human values and
questions authority of managers. Their behavior has also
become very complex and leading them towards organizational
goals is a challenge for the managers. The employee turnover
is also very high which again put strain on the management.
FACTORS AFFECTING ENVIRONMENTAL
CHANGE

d. Organization Avoids Developing Inertia

•In many cases, organizational changes take place just to

avoid developing inertia or inflexibility. Conscious manager
take into account this view of organization that organization
should be dynamic because no single method is effective at
any single time. Thus, changes are made so that the
personnel, with proper planning and consultation, develop
liking for change and there is no unnecessary resistance
when major change in the organization are brought about.