Organizations may undergo changes for a multitude of reasons. Those reasons may be either external or internal in nature. External sources are those in which a company has no direct control over and originate outside of the organization including political, socio-cultural, International, technology and economic (Sutevski, 2011). Management can predict and plan for some of these factors; however, some may be unexpected or so powerful that they force a company to reevaluate the way they view their products and/or services and may cause them to make fundamental changes in the way they operate (Shilingi,2008).
Firms have one of two options when such factors create such dire need for adjustment. Those options include making the necessary changes to adapt to the changing business environment or to die off and cease existence. Only those organizations that are willing and committed to cope with change and embrace it will be successful enough to continue with operations, those that cannot commit or those that resist change will inevitably fail and no longer be relevant.
One type of external force are political-legal and may include pressures arising from the public and/or shareholders, and governmental forces such as deregulation, new laws, strikes, the political stability of their own government and those of neighboring countries, and taxation (Suevski2011). For example, the public consisting of the outside community and special interest groups may not agree with the effects the production of a product has on the environment or the use of overseas factories employing underage or low waged workers.
Governmental factors such as economic or political instability or taxation may force firms to relocate operations causing the firm to restructure their manufacturing procedures. Pressure to change may also come from the owners of a corporation, say, if profits have been declining, causing the price of stocks to fall, in turn, creating pressure from investors to make a changes within the organization to create shareholder wealth.
The external forces driving the restructuring of General Motors were not political in nature, but the government was involved in the restructuring itself due to the billions of dollars that were required to get the restructuring underway to in turn not further damage the American economy. According to Charles Darwin, ‘It’s not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change. ’
This is also true for organizations, which by definition are a group of “species” who work together to achieve some common purpose. In other words, in order for an organization to compete successfully, they must be able to respond and adapt parallel to the ever changing business environment around them. Over time, this likely means an organization may face making a very large-scale change. There are many different theories of change available to assist firms during their transition, some more effective than others.
These theories are designed to explain why changes need to take place, how the change will take place and what the outcome of the changes will be. Lewin’s model and Kotter’s model are two effective models that relate and in a sense overlap one another in terms of steps. Another model is that of John M. Fisher which is based on the earlier workings of Elisabeth Kubler-Ross. His ‘Process of Transition’ model identifies in chronological order, the eight stages of emotion people process during a change.
These are anxiety and denial, happiness, fear, threat, guilt and disillusionment, depression and hostility, gradual acceptance, and finally, moving forward. A determinant in being a successful manager is how effective these responses are handled. John Kotter’s change model has been another huge contributor to change theory. His model identifies eight steps that need to be followed in order to successfully manage change.