Question

Organizations change is the norm today. When designing a new or improved information system for an organization, it has been said that the best success for the systems requires the redesign of some or all of the organization, procedures, and responsibilities of departments, managers, and individual employees. Thinking about an organization you are familiar with, what are the ramifications of this statement? Share your real life example with the class.

Answer 1

A statement focused upon design of the different functions, process and the hierarchical structure in the organization, has different consequences or ramifications. The first consequence is the emergence of ambiguity in the organizational environment where the negative rumor is very strong. It negatively affects the motivation of the employees and productivity suffers. The second consequence is anxiety among the employees regarding their job securities, uncertainties due to the loss of power and lack of clarity regarding the change, lead to high employee turnover rate. It negative affects the organization. An example can be taken of the FMCG Company that is going to change from a functional organization to divisional organization. At present, the company is organized on the basis of different functions such as marketing, finance or operations. Now, the company is being reorganized on the basis of different product divisions. It will have following ramifications.

1.    Individuals sitting at the power center of the function, will lose the power and work with the lower level employees now in a product division. The loss of power, made them unfriendly to the change & contributed to the negativity in the organization.

2.    Employees were unsure of their roles that were not yet defined. It caused panic among them and they thought of being laid off by the organization. They stopped working and chaos was created in the organization.

3.    Change in roles due to the organizational change, caused the readjustment in the access to the technological applications and it created an imbalance. It also hampered the productivity.

Above consequences somehow offset the benefits of change if it is not properly planned. It is very important to counsel the employees, negotiate with the employees who lose power and bring training to the employees who get a different role. It will create favorable atmosphere for the change and organizational change process will succeed.