Organizational Change Management: Definition & Importance

Last Updated April 19, 2023

Today’s business environment is driving change at an unprecedented level. The pace of technological change, in particular, is accelerating, requiring businesses to oversee transitions to new processes and procedures on a regular basis.

Change management is the process of overseeing and facilitating change at any level where it is needed. It could be change at a project or team level or to a work process or system. When the change desired requires adjustments at the structural as opposed to project level, businesses implement organizational change management.

What is Organizational Change Management?

Dr. Russell E. Johnson, MSU Foundation Professor of Management in the Eli Broad College of Business at Michigan State University, defines organizational change management as “the planned organizational-wide effort to increase individual and organizational effectiveness via behavioral science knowledge.”

The process can be incremental or discontinuous. Incremental change is more of an evolutionary form of change and usually internally driven. Discontinuous change is a revolutionary form of change, often unplanned and externally driven.

Organizational change management is designed to reduce potential negative fallout of any general, structural changes in a business. Specifically, organizational change management focuses on both the micro and the macro levels. Whether requiring workers to learn new skills, reallocating responsibilities and priorities or investing in new tools or software, organizational change management process involves a top-down approach to managing change.

The Importance of Organizational Change Management

While change at the project level is important, it ultimately does not tend to extend beyond the boundaries of the project itself. That is to say, project-level change can be somewhat isolated, or specific, in impact. Change at the organizational level, however, affects all employees in a particular company, including the individuals and teams working on various projects. One might say that organizational change encompasses project-level change. For this reason, organizational change tends to be felt at a deeper level and for a longer period of time.

It is, therefore, important for companies to manage any organizational change as effectively as possible. Managing a successful organizational change can increase morale among workers and drive positive teamwork and job enrichment. These factors can directly and positively affect productivity and quality of work while shortening production cycles and reducing costs. Effective organizational change management allows the company to maintain a constant state of evolution and facilitate periods of general business change, allowing workers to remain motivated and productive during the introduction of new technologies or procedures.

Principles of Organizational Change Management 

As with change management in general, a successful organizational change management strategy will require effective communication between management and workers. However, it’s important to stress that this communication must happen across all levels of a company. Organizational change management is, by nature, intended to facilitate structural change, so attention must be paid to each constituent part of the whole.

Organizational change management also requires an emphasis on planning and training. Many of the disruptors and drivers of change that businesses encounter today involve new technologies or communication systems. If a business wishes to remain current with new industry practices, managers need to ensure that employees are continually trained in any new technologies that they will be required to use. Beyond the functional application knowledge of new technologies, managers and organizational leaders need to create a culture of innovation, one in which employees meet change with an open and creative mindset focused on the opportunity change provides.

Change at the structural level may lead to the creation of new departments or teams that focus on new business priorities. On the other hand, change may require the consolidation or elimination of existing departments. In either case, workers face the prospect of significant disruption of their work responsibilities. In such cases, organizational change managers must focus on creating buy-in for organizational change. To do this, it is important to actively communicate with employees at every level to address any concerns, highlight how these changes align with new company goals and underscore how they as individuals can help to drive the change.

Overcoming Resistance to Organizational Change

Any type of change in the workplace can intimidate and frustrate workers who are used to a particular routine which may result in a resistance to change. In order to execute smooth organizational change, it is important to recognize the reasons for resistance and eliminate them before starting the change process. This is achieved by increasing the forces for the change and decreasing the forces for stability. Structural changes are the ones with the highest potential to disrupt a large number of workers and therefore should be faced with detailed planning to reduce resistance to change.

Organizational change management is a process that requires detailed planning, clear goals, open communication and constant attention paid to feedback from workers. Furthermore, if change can be incentivized, managers may find workers more willing to alter their existing routines. Communication may work in many cases, but in others, it may perhaps benefit managers to design a system of rewards for workers who undergo change. If change can be seen as a desired process rather than a disruption in routine, the entire transition period may proceed more smoothly than it would otherwise.

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