Factors affecting organizational change

Change Factors

Throughput factors that can prompt change include leadership and money.

Leadership is a form of human capital, but focused on the top leaders since they have the most influence in the organization. At Wal-Mart, the loss of Sam Walton marked the company's first significant leadership change, with new CEO David Glass taking over. This input resulted in an acceleration of the company's expansion plans as market saturation became the core strategy.

Another key throughput that prompts change is the operating systems. These systems, a product of the company's body of knowledge, can be a major driver of change. At Wal-Mart, one such change was the shift towards overseas outsourcing. The operating system that drove this change was the purchasing system, which demanded constant improvement from the company's suppliers. The result was a shift away from domestic suppliers. This shift ultimately led Wal-Mart to forge its strong relationship, a major strategic shift that has even seen the company take a leadership role amongst Western firms in that country.

Throughputs that facilitate or resist change include the corporate culture. Because of the degree of entrenchment, cultural change is often a slow process but it can also make the change process easier if the culture and the desired change are aligned. At Wal-Mart, the culture is strong, and supports the company's change initiatives. This makes it easy for Wal-Mart to implement new strategies that improve its business.