An organisation can only perform effectively through interactions with the broader external environment of which it is a part. Hence, its structure and functioning must reflect the nature of the environment in which it operates. To a large extent, the environment in which an organisation operates tends to exert a need for organisational change.
The following below are causes of organisational change that Nigerian SMEs should be on the lookout for:
• Change in technology: Technological change continues to accelerate, so that the speed with which obsolescence occurs is also increasing. Organisations cannot ignore developments which could give advantages to their competitors, and it is only very rarely that a new development can be substituted for an old one without causing changes to skills, jobs, organisational structure and often culture.
• Intense competition: competition is intensifying and becoming more global. More organisations are compelled to attain certain standards of quality and cost achieved by the pacemakers in the industries. More industries are operating on a global basis, and under this condition, it is no longer sensible to think on a single-country basis.
• Change in customer demand: customers are becoming more demanding and will no longer accept poor service or low quality goods and services. To be competitive, organisations, including SMEs, have to respond more rapidly to customers' needs which will change all the time.
• Changing demographic profile: the democratic profile of many countries is changing. In many European countries and the United States of America (USA), the proportion of old people is rising and that of young people is depleting while in developing countries like Nigeria, Ghana and the likes, armies of youths make up their populations meaning education, capacity building and human development investments are high priority areas of government and this situation also determines what services businesses offer. This situation generally brings continuing pressures on organisations the uniqueness of each market.
• Privatisation of public enterprises: privatisation of publicly-owned businesses continues and their hitherto monopoly status has disappeared. This is a global trend and even where ownership does not change, new systems are being established to promote competition and market forces as we see in the Nigerian Telecommunications (NITEL), PHCN, financial institutions and suchlike.
• Shareholders' demand: shareholders demand more value. The influence of the money markets on demands for corporate performance, with a high proportion of shares belonging to institutional investors, creates pressures for continued improvement in share earnings.
Other forces of change include those that originate within the organisation itself like the deterioration of buildings, equipment and machinery and obsolescence of skills and abilities of workers. However, changes within the organisation can be managed through careful planning such as regular repairs and maintenance, and effective manpower planning to prevent a large number of staff retiring at the same time. On the contrary, uncertain economic conditions like the global financial and economic meltdown that started in 2007, fierce global competition, government policy and intervention in industry, scarcity of natural resources, etc, create an increasingly volatile environment. Thus the main pressure of change facing modern organisations today is from external forces and organisations must be ready to brave the demands of a changing environment.
Tichy and Hoernstein have subsumed change agents that bring about change within organisations into the following.
1. Outside pressures. These are pressures from the external environment and are directed towards change in the entire organisation. Government interventions in the area of health or safety defects, government policies banning certain importation of products in the country, etc, are examples in this line. Governments may also be involved if there are labour strikes lasting for a long time or mass demonstrations which might affect public utilities and peace.
2. Internal organisational development. This can come slowly through and within an organisation itself and includes redefinition of goals as well as participative goal setting. Instances are development fostered through management by objectives (MBO), work redesign, team development, etc.
3. Individual change. This involves modifying or improving the behaviour of workers whereby personal goals may be better served with a changed environment of the organisation. For example, with the coming in of the Fashola administration in Lagos state, Lagos state civil servants no longer go to work late neither do they leave early for their homes before the closure of work.
4. Change from central management. Change may come from the top management convinced about its necessity and thereby direct the structural, strategic or technological changes that could benefit the organisation and its members.
There have been a few people that, acting as change agents, have been responsible for organisations changing their processes and structures. In the US, for example, Ralph Nader, a consumer advocate has been responsible for many changes regarding the quality and safety of many products and especially automobiles. In addition, such forces as women's liberation movements, strong labour unions and specific federal and state laws and regulations have brought about numerous changes that have affected the work ethics of organisations and the roles of their members. Similarly, in India, where the bureaucratic structure is deeply embedded in the organisational system, changes are being brought about by government regulations and by social pressures to give more freedom to workers, to bring about equal employment opportunity for all, irrespective of religion or gender, and to keep pace with the changing technological development and processes.
The change agent may even be in the form of a consultant who helps clients find solutions to organisational problems or a trainer who trains a client's workforce to achieve a set of skills that could be used in bringing about the change needed for optimal outcomes.
Bridget Olotu is the CEO/Lead Consultant, DeAim Innovative Resources Ltd.