What is meant by "Organizational Change"?
These are the companies that are undergoing or that have undergone a transformation. Typically, the concept of organizational change is in regard to organization-wide change, as opposed to smaller changes such as adding a new person, modifying a program, etc. Examples of organization-wide change might include a change in mission,restructuring operations (e.g., restructuring to self-managed teams, layoffs, etc.), new technologies, mergers, major collaborations, "rightsizing", new programs such as Total Quality Management, re-engineering, etc. Some experts refer to organizational transformation. Often this term designates a fundamental and radical reorientation in the way the organization operates.
What Provokes "Organizational Change"?
Change should not be done for the sake of change -- it's a strategy to accomplish some overall goal.Usually organizational change is provoked by some major outside driving force, e.g., substantial cuts in funding, address major new markets/clients, need for dramatic increases in productivity/services, etc. Typically, organizations must undertake organization-wide change to evolve to a different level in their life cycle, e.g., going from a highly reactive, entreprenueral organization to more stable and planned development. Transition to a new chief executive can provoke organization-wide change when his or her new and unique personality pervades the entire organization.
Spectrum of change
1. automation
2. rationalization of procedures
3. business reengineering
4. paradigm shift
Automation refers to computerizing processes to speed up the existing tasks or using the computer to speed up the performance of existing tasks. It improves efficiency and effectiveness. It also involves assisting employees perform their tasks more efficiently and effectively.
Rationalization of procedures refers to streamlining of standard operating procedures, eliminating obvious bottlenecks, so that automation makes operating procedures more efficient.It improves efficiency and effectiveness.This follows quickly from early automation.
Business reengineering refers to radical redesign of business processes.Aims at eliminating repetitive, paper-intensive, bureaucratic tasks,reducing costs significantly and improving product/service quality.Involves radical rethinking.Can change the way an organization conducts its business. Strikes fear, its expensive, its very risky and its extremely difficult to carry out and manage.Develop the business vision and process objective. Identify the processes to be redesigned (core and highest payback).Understand and measure the performance of existing processes.Identify the opportunities for applying information technology. And it build a prototype of the new process. Business reengineering includes BPR or the business process reengineering. Reengineering is the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance such as cost, quality, service, and speed. And Business Process is a collection of activities that takes one or more kinds of inputs and creates an output that is of value to a customer.
Paradigm shift refers to a more radical form of change where the nature of business and the nature of the organization is questioned. It improves strategic standing of the organization. It is the radical reconceptualization of the nature of the business and the nature of the organization. Here, deciding which business process to get right is half the challenge for which 70% of time programmatic reengineering efforts fail.
One of the most important things to know about building a new information system is that this process is one kind of planned organizational change. Frequently, new systems mean new ways of doing business and working together. The nature of tasks, the speed with which they must be completed, the nature of supervision (its frequency and intensity), and who has what information about whom will all be decided in the process of building an information system. This is especially true in contemporary systems, which deeply affect many parts of the organization. System builders must understand how a system will affect the organization as a whole, focusing particularly on organizational conflict and changes in the locus of decision-making. Builders must also consider how the nature of work groups will change under the impact of the new system. Builders determine how much change is needed.New information systems can be powerful instruments for organizational change.
The most common form of IT-enabled organizational change is automation. The first applications of information technology involved assisting employees perform their tasks more efficiently and effectively. Calculating paychecks and payroll registers, giving bank teller’s instant access to customer deposit records, and developing a nationwide network of airline reservation terminals for airline reservation agents are all examples of early automation. Automation is akin to putting a larger motor in an existing automobile.
A deeper form of organizational change – one that follows quickly from early automation – is rationalization procedure. Automation frequently reveals new
bottlenecks in production, and makes the existing arrangement of procedures and structures painfully cumbersome. Rationalization of procedures is the streamlining of standard operating procedures, eliminating obvious bottlenecks, so that automation can make operating procedures more efficient.
A more powerful type of organization change is business re-engineering, in which business processes are analyzed, simplified, and redesigned. Re-engineering involves radically rethinking the flow of work; the business procedures used to produce products and services with a mind of radically reduce the costs of business. A business process is a set of logically related tasks performed to achieve a defined business outcome. Some examples of business processes are developing a new product, ordering goods from a supplier, or processing and paying an insurance claim. Using information technology, organizations can rethink and streamline their business processes to improve speed, service and quality. Business re-engineering reorganizes workflows, combining steps to cut waste and eliminating repetitive, paper-intensive tasks (sometimes the new design eliminates jobs as well). It is much more ambitious than rationalization of procedures, requiring a new vision of how the process is to be organized. Rationalizing procedures and redesigning business processes are limited to specific parts of a business. New information systems can ultimately affect the design of the entire organization by actually transforming how the organization carries out its business or even the nature of the business itself.
The still more radical form of business change is called a paradigm shift. A paradigm shift involves rethinking the nature of the business and the nature of the organization itself. Banks, for instance, may decide not to automate, rationalize, or reengineering the jobs of tellers. Instead they may decide to eliminate branch banking altogether and seek less expensive source of funds, like international borrowing. Retail customers may be forced to use the Internet to conduct all their business, or a proprietary network. A paradigm shift is akin to rethinking not just the automobile, but transportation itself.
Paradigm shifts and re-engineering often fail because extensive organization change is so difficult to orchestrate. Some experts believe that 70% of the time they fail. Why then do so many corporation entertain such radical change, because the rewards are equally high. In many instances firms seeking paradigm shifts and pursuing re-engineering strategies achieve stunning, order-of magnitude increases in their returns on investment (or productivity).
ref: http://alexandra.di.uoa.gr/courses/mis/docs/lecture6.ppt., http://faculty.kfupm.edu.sa/cem/bushait/cem515/term-papers/Business-Process-Reengineering.ppt. , http://www.ignou.ac.in/edusat/mba/ms-07/ms7b4.pdf
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