Causes of change: Social, economic, Technological and Organizational

Every organization goes through periods of transformation that can cause stress and uncertainty. To be successful, organizations must embrace many types of change. Businesses must develop improved production technologies, create new products desired in the marketplace, implement new administrative systems, and upgrade employees’ skills. Organizations that adapt successfully are both profitable and admired.

Managers must contend with all factors that affect their organizations. The following lists internal and external environmental factors that can encourage organizational changes:

• The external environment is affected by political, social, technological, and economic stimuli outside of the organization that cause changes.
• The internal environment is affected by the organization’s management policies and styles, systems, and procedures, as well as employee attitudes.

(A) External Pressures:

• Change in Technology and Equipment:

Advancements in technology is the major cause (i.e., external pressure) of change. Each technological alternative results in new forms of organization to meet and match the needs.

Market Situation:

Changes in market situation include rapidly changing goals, needs and desires of consumers, suppliers, unions etc. If an organization has to survive, it has to cope with changes in market situations.

• Social and Political Changes:

Organisational units literally have no control over social and political changes in the country. Relations between government and business or drive for social equality are some factors which may compel for organisational change.

(B) Internal Pressures (Pressures for Change from Within the Organisation):

• Changes in the Managerial Personnel:

One of the most frequent reasons for major changes in the organisation is the change of executives at the top. No two managers have the same style, skills or managerial philosophies.

• Deficiencies in the Existing Organization:

Many deficiencies are noticed in the organisations with the passage of time. A change is necessary to remove such deficiencies as lack of uniformity in the policies, obstacles in communication, any ambiguity etc.

• Other Factors:

Certain other factors such as listed below also demand a change in the organisation.

• Employee’s desire to share in decision-making
• Employee’s desire for higher wage rate
• Improvement in working conditions, etc.

External causes of change

These causes of change are linked to changes in the external environment facing all businesses or businesses in specific markets and/or locations. Examples include:

Social trends / attitudes: For example, the growing resistance by consumers to businesses using single-use plastic in products and packaging

Economic conditions: for example, the economic uncertainty created by Brexit or the growth of protectionism in developed economies

Laws / regulations: For example, changes to minimum pay requirements (National Living Wage), data protection (GDPR) and restrictions on advertising & selling.

Technological advances: A significant source of external change, particularly through the creation of new business models (e.g., streaming) to challenge existing, established business models.