Internal and External Factors of Change Management
An organisation’s ability to compete and respond successfully to changes in the external environment ultimately determines the organisation’s success or failure. Every organisation has its own culture and everything that affects its ability to respond to changes in the external environment is an aspect of that culture. The internal factors determine how the organisation moves forward, both as a self-contained organisational entity and in response to its external environment.
The internal factors that affect an organisation include the following:
- Mission – a successful organisation has a clear sense of why it exists, what its ultimate purpose is, and how it intends to fulfil that purpose
- Leadership – successful organisations have great leaders who inspire and direct and they do that most persuasively by example
- Communication – successful organisations thrive on robust communication practices, where teams and team leaders communicate freely and often to improve results. This two-way communication up and down the hierarchical structure extends from top to bottom. Organisations with rigid leadership structures often have deficiencies in communication
- Organisational Structure – most organisations have highly hierarchical structures, with many layers of leadership and management defining the organisation from top to bottom. There is now a growing understanding and appreciation that organisations with flat structures, i.e. few hierarchical layers from top to bottom, perform better than those with hierarchical structures
- Learning – learning is one of the most fundamental human activities and accounts directly or indirectly for the success of any organisation. As technological advances lead to faster rates of change, successful organisations need to find a way to respond that encourages innovation and builds into every employee’s experience the opportunity to learn and explore. Some of today’s most successful organisations, such as Google, Apple and Amazon, are essentially learning organisations.
External factors that affect an organisation may be political, economic, social or technological. The same internal factors that affect and lead to an organisation’s success inevitably characterise the organisation’s relationship with the external environment in these broad areas. For example, an organisation with a clear sense of mission can explain itself better to the world and can align itself with the positive elements in each area. Leaders who learn and communicate what they have learned within their organisations can also learn from the organisation’s external environment and communicate successfully with it, resulting in an ongoing exchange of ideas to the benefit of both the organisation and its environment.