While much change is directed at improving organizational profitability, some stems from the disruptive turmoil of unexpected events such as the Sept. 11, 2001, terrorist attacks, the SARS outbreak, and the Northeast power-grid failure of 2003. Looming external drivers of change might include soaring fuel prices and the threat of avian flu. In this example story, Sept. 11 led to company downsizing:
Early in my tenure in the training and development department of a large hospitality company, 9-11 temporarily killed the tourism industry, and we had to go through some downsizing. My role was to work with other members of the leadership team to make some tough decisions and to think through some criteria about how we would make those decisions “ to make sure that we were being fair and open with everyone. People in training and development are almost always the first to go. We tried to think about the human factor and to be creative in considering the individuals, evaluating the situations, and coming up with criteria.
Organizational change today manifests itself in numerous forms, including:
- New or redefined strategy
- Design and deployment of new organizational structures
- Profound changes in culture/operating environments
- Major innovations in products, processes, or distribution
- Cycle-time reduction
- Strategic combinations and consolidations such as mergers and acquisitions joint ventures, breakups, spinoffs, and divestitures
- Expansion into new regions, emerging markets, technologies, and offerings
- New senior managers who broaden and intensify jobs
In addition, outsourcing and off-shoring, with their accompanying downsizing, have become accepted management tools. Even the nonprofit sector is not immune to change as it is subject to funding cuts, new clients, and the need to dramatically increase services.
The pace of change, greater than at any time in history, has compounded the challenge for organizations, with leaders noting a striking increase in the frequency and velocity of change. Where new ideas in the form of products or services took six years to enter the marketplace in 1966 and 18 months in 1996, they now take five months (Moran & Mead, 2001).
Change is thus inevitable and constant in organizations, and the ability of organizations and their members to respond successfully to change is viewed as an imperative for future organizational and career survival. In an environment in which two of three transformation initiatives fail, scholars predict that the most successful organizations of the future will be those that respond effectively to change, while those that fail to mount a timely response to change won’t last.