ORGANIZATIONAL CHANGE (4 TH ED.

Barbara Senior & Stephen Swailes

Chapter 1: Organizations and their changing

environments
LEARNING OBJECTIVES

By the end of the this chapter you will be able to

 Describe the general characteristics of organizations

 Identify triggers for change in a range of

organizations
 Discuss the concept of organizations as systems
operating in multidimensional environments and the
implications for understanding the causes of
organizational change
 Analyze the level of turbulence in organizational
environments
KEY ELEMENTS OF AN ORGANIZATION

 Whatare the key defining

characteristics of an organization?
WHAT IS AN “ORGANIZATION”?

A social entity that has a purpose, has a

boundary, so that some participants are
considered inside while others are
considered outside, and patterns the
activities of participants into a recognizable
structure (Daft, 1989).
WHAT IS AN “ORGANIZATION”?

1) A social entity that

2) has a purpose,
3) has a boundary, so that some participants
are considered inside while others are
considered outside, and
4) patterns the activities of participants into a
recognizable structure (Daft, 1989).
WHAT IS AN “ORGANIZATION”?

1) Nadler (1988) saw the organization as

interlinked systems.

2) What does Stacey (2003) mean by the

phrase “shadow system”?

3) Silverman (1970) challenges the idea of

organizations as systems and says “social
action” defines the organization.
ORGANIZATION AS A FLOWCHART

Is it possible to have an organization without a physical

structure to house it?
ORGANIZATION AS A SYSTEM
HISTORICAL CONTEXT FOR CHANGE

 The agricultural age which prevailed until the early

1700s in Europe was affected by the markets and
weather.
 The industrial age emerged in the late 1700s in
Europe and later in America, and was the
predominate factor until well into the 20th century.
Inventions and innovations drove change.
Scientific management affected the workplace and
production methods.
 Currently, we are in the information age and
knowledge is the key resource. Traditional
organizations are trying to reinvent themselves.
HISTORICAL CONTEXT FOR CHANGE
ACTIVITY 1.1
Consider how you would describe BHU. For instance:
 Which business sector does it operate in?

 Does the organization operate at a local, regional,

national or international level?
 Does it supply domestic or international markets – or
both?
 In what ways does the organization need creativity and
innovation to survive?
 What is the mix of employees – unskilled, skilled,
professional?
 Can it attract and keep high-performing employees?

 Do employees have autonomy or do decisions come

primarily from the top-down?
UNCERTAIN FUTURE

 Read the “Organizations as symphony orchestras”

metaphor on page 10 and discuss implications of the
metaphor as it relates to organizations.

 Can there be a conductorless orchestra?

 Can there be more than one conductor at the same

time?

 What does Drucker say will become of middle

management? Has his prophesy proven true?
ENVIRONMENTAL TRIGGERS FOR CHANGE

 What are “environmental triggers” for change?

 List the changes in America since Obama has
become president.
 Does it take a major event to incite change, or can
small and imperceptible events result in significant
change?
 Name an organization that you are familiar with that
has recently made significant changes.
 What precipitated those changes?
PEST FACTORS
POLITICAL TRIGGERS

 “Perhaps the most important role for governments is

the bringing of economic prosperity to their
countries.” How do governments do this?
ECONOMIC TRIGGERS

 What economic factors does the organization have

to consider?

 What four key economic factors do governments in

developed countries work to keep in balance?
SOCIO-CULTURAL TRIGGERS

 What socio-cultural triggers do organizations have

to consider?

 Standard of living
 Demographic changes: age, nationality, gender
 Family structures
 Equality and intolerance of unfair unethical
practices
 Sensitivity to cultural and religious differences
TECHNOLOGICAL TRIGGERS

 Discuss the technological changes you have seen

within your lifetime and how they have affected the
organizations you have worked in.

 Identify some now defunct organizations that failed

to respond to technological changes. Why do you
think they failed to respond and change with the
technology?

 What are some of the benefits and potential pitfalls

of new technology?
INTERNAL TRIGGERS AND BIG IDEAS
 Activity 1.7

What do you think are the five most powerful ideas to

occur to the human mind?
How did they change society?
Can you identify a particularly big idea that has led to
change?
Have there been any “big ideas” that have substantially
changed the church in the last decade?
INTERNAL TRIGGERS AND BIG IDEAS
 Examples of internal triggers for change:
 To recognize unions or not to recognize unions

 A new CEO or other senior manager

 Facing the brutal facts of poor performance

 Redesign of jobs and working relationships

 Redesign of factory or office layout

 Adoption of new technology

 New marketing strategy

 Decision to sell or acquire a business unit

 A cut in overtime working

 Labor shortages or surpluses

ORGANIZATIONAL RESPONSE TO CHANGE

What are the “three types of environment,” which together

make up the total “operating environment”?
First Type: Temporal Environment

Second Type: PEST Framework

Third Type: Internal Environment

ORGANIZATIONAL RESPONSE TO CHANGE
Ansoff and McDonnell (1990) state that a firm’s
performance is optimized when its aggressiveness and
responsiveness match its environment. They propose 5
levels of environmental turbulence (p. 24):

 Level 1: Predictable
 Level 2: Forecastable by Extrapolation
 Level 3: Predictable by Threats and Opportunities
 Level 4: Partially Predictable Opportunities
 Level 5: Unpredictable Surprises

What level of environmental turbulence is BHU facing?

TYPES OF CHANGE
 Closed change: We can say what happened, why it
happened and what the consequences are.
 Contained change: Can only say what probably
happened, why it probably happened and what the
probable consequences were.
 Open-ended change: Explanations do not
command anything like widespread acceptance by
those involved. They cannot explain why the
change occurred or predict what will occur next.

Stacey, R. D. (1996). Strategic management and organizational

dynamics (2nd ed.). London: Pitman.
CONCLUSIONS
 Organization operate in multiple environments
(temporal, external, and internal)
 Organizations have to continually achieve “external
adaptation and internal integration” (Schein, 1988,
p. 94).
 Must be responsive, adaptable, and flexible.

 A continuous process of identifying, collecting, and

translating progressive information about external
influences will benefit strategic decision making
toward establishing a preparatory stance to
environmental factors.
 Ultimately the winds of change are variable and
unpredictable, but they are inevitable.
QUIZ NEXT WEEK
 What are PEST factors?
 Give 5 examples of each.

 Define “Organization”

 What are the three types of environment, which

together make up the total “operating environment”
 Explain the major factors driving organizational
change in 2014.