Organizational Change Dynamics: Resistance, Profitability, and Crisis Response
1. Organizational Change: Amending the Status Quo
The role of management is to amend the status quo (the quiescent state) of the organization. Management must increase the driving forces and limit or reduce the restraining forces to combine these two forces to change the status quo of the people.
In the organization, the change process must follow three essential steps:
- The unfreezing of the status quo.
- The shift towards a new target (movement).
- The refreezing of the new change.
2. Variables Causing Resistance to Change
Resistance to change manifests through different variables at the individual and organizational levels.
Individual Variables Affecting Change Resistance
Individual variables directly affecting resistance include:
- Habits
- Safety and security concerns
- Economic factors
- Fear of the unknown
- Selective processing of information
Organizational Variables Affecting Change Resistance
Organizational variables that affect resistance include:
- Structural inertia
- Narrow focus of change
- Threat to established skill sets
- Inertia of the threat to the skill
- Established resource allocations
3. Impact of Global Crises on Service Organizations
A global crisis, such as the one experienced in Dubai, affects organizations by raising the level of uncertainty, causing panic in the stock exchanges and securities markets.
The resulting effect is that service organizations, reacting to a possible crisis, tend to:
- Decrease their production.
- Cut staff.
- Avoid debt.
4. Determining Profitability for Radical Organizational Change
For an organization to transition from Level 1 to Level 2, significant investment is required. Profitability is determined by the results of this change, since the change to Level 2 is often quite radical.
For example, when Boeing dramatically reinvented its company, the result of this change was achieving lower costs by about 30%.
5. Benefits of Organizational Resistance to Change
The benefits resulting from resistance to change are crucial for organizational health:
- They provide stability and predictability.
- They help detect different sources of resistance in the behavior of individuals or organizations.
- They can stimulate healthy debate necessary for change.
- They help in making decisions regarding different sources of problems.
For instance, economic factors causing resistance can be solved by providing economic incentives for the departments of an organization.
6. Applying Unfreezing and Refreezing in System Implementation
These processes respond to the implementation of a new system for updating an earlier one (the unfreezing stage).
People who interact with the old system must learn to use the new system through training (the movement stage).
Once people using the system are familiar with the new system, the refreezing process occurs. This state holds until they have to upgrade the new system again, starting the unfreeze/refreeze cycle anew.