P2.4 Management and Change

Definition and Challenges:

Change is mandatory for all business organisations. External business conditions change and internal conditions change continually. A business that does not change will quickly go out of business (business life cycle, product life cycle). 

Change is difficult because human beings typically like predictability, familiarity and certainty. The processes and organisational structure can provide this; but when changed, it can create resistance and difficulties for management.

Reasons for Resistance to Change:

• Fear of job loss: Changes may threaten a job position, status, or security, resulting in resistance in defense of employee interests.

• Fear of the unknown: Change brings uncertainty and anxiety. Employees may defend the existing processes in resistance to the unknown new approaches.

• Disruption of routine: Changes threaten the well-practiced methods of producing work within a firm. Employees resist change on the basis of their perceived inability to adapt to new routines. 

• Cost: Change is very expensive to implement. It is easier and cheaper to not change, but it will end in failure. Costs include new processes, technologies, training. The psychological costs are high too, as is the level of exertion from management to implement change.

• Time: The amount of time provided to undertake changes impacts the level of resistance to change; transformational change leads to higher levels of resistance.

• Management: The management of a firm may not wish to risk their reputation by implementing change strategies. Change is risky; and it is safer for management to conduct business as usual rather than risk firm assets and performance in pursuit of new initiatives.

• Inertia: This is the weight of the current way of doing things. It takes incredible force to overcome inertia; and without the widespread support of a change initiative, inertia will not be overcome.