Change is a fact of organizational life, just as it is in human life. An organization that does not change cannot survive long much less thrive in an unpredictable world.
Let us define first what Organizational Change is-
Organizational Change:
· Is any action or set of actions resulting in a shift in direction or process that affects the way an organization works. Change can be deliberate and planned by leaders within the organization (i.e., shift from inpatient hospital focus to outpatient primary care model), or change can originate outside the organization (i.e., budget cut by Congress) and be beyond its control. Change may affect the strategies an organization uses to carry out its mission, the processes for implementing those strategies, the tasks and functions performed by the people in the organization, and the relationships between those people.
· This phrase refers to the overall nature of activities, for example, their extent and rate, that occurs during a project that aims to enhance the overall performance of the organization. The activities are often led by a change agent, or person currently responsible to guide the overall change effort. The activities are often project-oriented (a one-time project) and geared to address a current overall problem or goal in the organization. (A relatively new phrase, capacity building, refers to these types of activities, as well.)
Several factors may make organizational change necessary, including new competition in the marketplace or new demands by customers. These types of external forces may create expectations of improved efficiency, better service, or innovative products. When organizational change is well planned and implemented, it helps assure the organizations continued survival. It can produce many tangible benefits, including improved competitiveness, better financial performance, and higher levels of customer and employee satisfaction. These benefits may take some time to achieve; however, and the transition period that accompanies major organizational change usually is a time of upheaval and uncertainty. Not every individual in the organization will benefit personally from change; some will be casualties of change, especially if jobs are cut or realigned. But change should make the organization as a whole stronger and better equipped for the future.
Organizational change occurs when a company makes a transition from its current state to some desired future state. Managing organizational change is the process of planning and implementing change in organizations in such a way as to minimize employee resistance and cost to the organization, while also maximizing the effectiveness of the change effort.
There are 4 types of changes in organizational change. These are:
- Automation
- Rationalization of Procedure
- Business Reengineering
- Paradigm Shift
Automation is the use of control systems (such as numerical control, programmable logic control, and other industrial control systems), in concert with other applications of information technology (such as computer-aided technologies [CAD, CAM, CAx]), to control industrial machinery and processes, reducing the need for human intervention. In the scope of industrialization, automation is a step beyond mechanization. Whereas mechanization provided human operators with machinery to assist them with the muscular requirements of work, automation greatly reduces the need for human sensory and mental requirements as well. Processes and systems can also be automated.
Automation plays an increasingly important role in the global economy and in daily experience. Engineers strive to combine automated devices with mathematical and organizational tools to create complex systems for a rapidly expanding range of applications and human activities.
Many roles for humans in industrial processes presently lie beyond the scope of automation. Human-level pattern recognition, language recognition, and language production ability are well beyond the capabilities of modern mechanical and computer systems. Tasks requiring subjective assessment or synthesis of complex sensory data, such as scents and sounds, as well as high-level tasks such as strategic planning, currently require human expertise. In many cases, the use of humans is more cost-effective than mechanical approaches even where automation of industrial tasks is possible.
Specialized hardened computers, referred to as programmable logic controllers (PLCs), are frequently used to synchronize the flow of inputs from (physical)sensors and events with the flow of outputs to actuators and events. This leads to precisely controlled actions that permit a tight control of almost any industrial process.
Human-machine interfaces (HMI) or computer human interfaces (CHI), formerly known as man-machine interfaces, are usually employed to communicate with PLCs and other computers, such as entering and monitoring temperatures or pressures for further automated control or emergency response. Service personnel who monitor and control these interfaces are often referred to as stationary engineers
The main advantages of automation are:
§ Replacing human operators in tedious tasks.
§ Replacing humans in tasks that should be done in dangerous environments (i.e. fire, space, volcanoes, nuclear facilities, under the water, etc)
§ Making tasks that are beyond the human capabilities such as handling too heavy loads, too large objects, too hot or too cold substances or the requirement to make things too fast or too slow.
§ Economy improvement. Sometimes and some kinds of automation implies improves in economy of enterprises, society or most of humankind. For example, when an enterprise that has invested in automation technology recovers its investment; when a state or country increases its income due to automation like Germany or Japan in the 20th Century or when the humankind can use the internet which in turn use satellites and other automated engines.
The main disadvantages of automation are:
§ Technology limits. Current technology is unable to automate all the desired tasks.
§ Unpredictable development costs. The research and development cost of automating a process is difficult to predict accurately beforehand. Since this cost can have a large impact on profitability, it's possible to finish automating a process only to discover that there's no economic advantage in doing so.
§ Initial costs are relatively high. The automation of a new product required a huge initial investment in comparison with the unit cost of the product, although the cost of automation is spread in many product batches. The automation of a plant required a great initial investment too, although this cost is spread in the products to be produced.
Automation is one of the most popular and easiest change because in automation, you will just automate the manual system so that the tasks and jobs will become easy.
Rationalization of Procedures
· refers to streamlining of standard operating procedures, eliminating obvious bottlenecks, so that automation makes operating procedures more efficient.
· improves efficiency and effectiveness.
Rationalization of procedures causes the organization to examine its standard operating procedures, eliminate those no longer needed, and make the organization more efficient.
Business Process Reengineering is, in computer science and management, an approach aiming at improvements by means of elevating efficiency and effectiveness of the business process that exist within and across organizations. The key to BPR is for organizations to look at their business processes from a "clean slate" perspective and determine how they can best construct these processes to improve how they conduct business.
Business process reengineering is also known as BPR, Business Process Redesign, Business Transformation, or Business Process Change Management. Reengineering is a fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in cost, quality, speed, and service. BPR combines a strategy of promoting business innovation with a strategy of making major improvements to business processes so that a company can become a much stronger and more successful competitor in the marketplace.
Re-engineering is the basis for many recent developments in management. The cross-functional team, for example, has become popular because of the desire to re-engineer separate functional tasks into complete cross-functional processes. Also, many recent management information systems developments aim to integrate a wide number of business functions. Enterprise resource planning, supply chain management, knowledge management systems, groupware and collaborative systems, Human Resource Management Systems and customer relationship management systems all owe a debt to re-engineering theory.
Business process reengineering (BPR) began as a private sector technique to help organizations fundamentally rethink how they do their work in order to dramatically improve customer service, cut operational costs, and become world-class competitors. A key stimulus for reengineering has been the continuing development and deployment of sophisticated information systems and networks. Leading organizations are becoming bolder in using this technology to support innovative business processes, rather than refining current ways of doing work.
Business process reengineering is one approach for redesigning the way work is done to better support the organization's mission and reduce costs. Reengineering starts with a high-level assessment of the organization's mission, strategic goals, and customer needs. Basic questions are asked, such as "Does our mission need to be redefined? Are our strategic goals aligned with our mission? Who are our customers?" An organization may find that it is operating on questionable assumptions, particularly in terms of the wants and needs of its customers. Only after the organization rethinks what it should be doing, does it go on to decide how best to do it.
Within the framework of this basic assessment of mission and goals, reengineering focuses on the organization's business processes--the steps and procedures that govern how resources are used to create products and services that meet the needs of particular customers or markets. As a structured ordering of work steps across time and place, a business process can be decomposed into specific activities, measured, modeled, and improved. It can also be completely redesigned or eliminated altogether. Reengineering identifies, analyzes, and redesigns an organization's core business processes with the aim of achieving dramatic improvements in critical performance measures, such as cost, quality, service, and speed.
Reengineering recognizes that an organization's business processes are usually fragmented into subprocesses and tasks that are carried out by several specialized functional areas within the organization. Often, no one is responsible for the overall performance of the entire process. Reengineering maintains that optimizing the performance of subprocesses can result in some benefits, but cannot yield dramatic improvements if the process itself is fundamentally inefficient and outmoded. For that reason, reengineering focuses on redesigning the process as a whole in order to achieve the greatest possible benefits to the organization and their customers. This drive for realizing dramatic improvements by fundamentally rethinking how the organization's work should be done distinguishes reengineering from process improvement efforts that focus on functional or incremental improvement.
PARADIGM: a Complete Mental Model of how a Complex System Functions
A Paradigm Shift Involves:
– Rethinking the Nature of the Business,
– Overhaul of the Organization;
– A Complete Reconception of How The System Should Function
• refers to a more radical form of change where the nature of business and the nature of the organization is questioned.
• improves strategic standing of the organization.
• Radical reconceptualization of the nature of the business and the nature of the organization
– akin to rethinking not only the automobile, but transportation itself
– e-business is a paradigm shift
– Deciding which business process to get right is half the challenge
– 70% of time programmatic reengineering efforts fail
The most common forms of organizational change are automation and rationalization. These relatively slow-moving and slow-changing strategies present modest returns but little risk. Faster and more comprehensive change—such as reengineering and paradigm shifts—carries high rewards but offers substantial chances of failure. The most common form of IT-enabled organizational change is automation. The first applications of information technology involved assisting employees with performing their tasks more efficiently and effectively. Calculating paychecks and payroll registers, giving bank tellers 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. A deeper form of organizational change—one that follows quickly from early automation—is rationalization of procedures. 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. For example, the Victoria Country Fire Authority’s new emergency management system is effective not only because it uses computer technology but also because its design enables the organization to operate more efficiently. The procedures of the Victoria Country Fire Authority (CFA), or any organization, must be rationally structured to achieve this result. CFA had to have standard identification codes for emergency equipment, fire brigades, and localities and standard rules for routing brigades and equipment to the appropriate emergency location. Without a certain amount of rationalization in the CFA’s organization, its computer technology would have been useless.
A more powerful type of organizational change is business process reengineering, in which business processes are analyzed, simplified, and redesigned. Using information technology, organizations can rethink and streamline their business processes to improve speed, service, and quality. Business reengineering reorganizes work flows, 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. A widely cited example of business reengineering is Ford Motor Company’s invoiceless processing, which reduced headcount in Ford’s North American Accounts Payable organization of 500 people by 75 percent. Accounts payable clerks used to spend most of their time resolving discrepancies between purchase orders, receiving documents, and invoices. Ford reengineered its accounts payable process so that the purchasing department enters a purchase order into an online database that can be checked by the receiving department when the ordered items arrive. If the received goods match the purchase order, the system automatically generates a check for accounts payable to send to the vendor. There is no need for vendors to send invoices
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 transforming how the organization carries out its business or even the nature of the business. For instance, the long-haul trucking and transportation firm Schneider National used new information systems to change its business model. Schneider created a new business managing the logistics for other companies. Baxter International’s stockless inventory system transformed Baxter into a working partner with hospitals and into a manager of its customers’ supplies. This 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. Paradigm shifts and reengineering often fail because extensive organizational change is so difficult to orchestrate. Why, then, do so many corporations contemplate such radical change? Because the rewards are equally high. In many instances firms seeking paradigm shifts and pursuing reengineering strategies achieve stunning, order-of-magnitude increases in their returns on investment (or productivity). Some of these success stories, and some failure stories, are included throughout this book.
For me, the most radical type of change would be paradigm shift. It would be paradigm shift because in paradigm shift, the very nature of the business and the structure of the organization itself changes. In other words, extreme changes happen in the company. This type of change will be very risky in a company.
http://en.wikipedia.org/wiki/Automation
http://en.wikipedia.org/wiki/Business_process_reengineering
http://www.zturk.com/edu/zagreb/podiplomski/slides/02-1-short-IT-strategies.pdf
http://www.ignou.ac.in/edusat/mba/ms-07/ms7b4.pdf
http://www.santarosa.edu/~ssarkar/cs66fl06/ch14notes.htm
http://managementhelp.org/org_chng/keyt-terms.htm
http://marketing-automation-software.net/
Bertin, C., 2004. Government Business Process Transformation: From Automation to Paradigm Shift; From Localized Exploitation to Business Scope Redefinition. Castries, Saint Lucia
Al-Bekhit, H. Business Process Reengineering.
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