Business organizations are not protected from external environment threats, neither have they been able to successfully create an infallible system to guard against internal organizational pressures when the need for unintended Organizational Change arises.
Change managers, who are either the CEOs of a company or Project Managers are often part of the organizational process to help an organization do things differently or achieve a specific goal, and when external environment is the reason for change within an organization, they are on ground to identify these potential problems.
Here are a few Potential Threats from External Environment Influence that can force an organization to change its structure
- Economic or political factors that influences External environment cause for organization change are often the most complex issues to address, as it affects the entire socio-environment in which the organization exist.
The 2015 Nigerian economic collapse into a ‘forced recession’ as a result of the transition from One political party to another, is a strong indication why organization must be adaptable, as consumers tighten their belt during such crisis, causing a demand-supply flow issue. Companies that were ill-prepared have since closed-shop
- Competition with other business organizations are a common threat which any Change Manager can easily identify and should, somewhat, always be prepared for; For example, if the competition releases a range of new product; this can threaten market share and may result to hiring and firing
- Other external environment factors include Technology, which is a constant evolving threat and often shapes how an organization is restructured, in terms of using technology to deliver quality service or its effect on organization staffing – employee lay-offs, recruitment or job description change.
- And Globalization, which is a new entrant. This often related to business organization aspiration for global expansion and the need to capture new market.
In contrast, Organizations do often assume they have complete control over most internal environment factors that may effect change, because organization owns its people, culture, process and structure. However, one of its biggest pressure for change is Growth.
Organizations are expected to grow over the years as a sign of success (Dylan 2004). However, growth or lack of growth can both create some sort of complexity that pressures for change in an organization. And this change could lead to Organizational Restructuring (either employee down-sizing where growth is stalled or new recruitments, where its growing).
Introduction of a new CEO or a functional manager and internal power grabs and politics between stakeholder interests and decision makers are also internal environment pressures, that can call for change in organization
For instance, the introduction of a New CEO “can significantly impact business strategy and corporate culture”
In my opinion, since both external and internal environment factors are both influential to any organizational change process, the external factors are most impactful.
Most organizations are started out of the vision and goals of its sponsors and stakeholders, which often comes with a change process as contained in the organizational internal process, to address most expected threats that may arise.
However, the effect of external environment factors is highly unpredictable to an organization. For example, the political transition to President Mohammed Buhari in 2015, and his subsequent economic fumble have triggered a lot of instability across most business organizations in all sectors in Nigeria, forcing many businesses to close, downsize or restructure
Class Presentation by Adebola Oyinloye, Jan 2016
Organizational Development and Change Class