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Home » Business And Finance Articles » 2 Pieces To The Puzzle Of Organizational Change

2 Pieces To The Puzzle Of Organizational Change

Kurt Lewin, the consummate applied social scientist, is responsible for giving us three of the ten concepts that support effective OC practice: Forcefield Analysis, The Three-Stage Model of Change, and the Action Research Model. I will cover the first two concepts in this article

Lewin's first concept, and practice tool, is called Forcefield Analysis. Lewin believed every organizational situation, no matter how dysfunctional, benefits someone. I have found this concept and tool to be very effective in Organizational Change practice.

Lewin believed the status quo is a result of driving forces and resisting forces. Driving forces are pushing or "driving" for change. Resisting forces exist because some parties benefit from the current situation, or status quo. Thus, the status quo is the result of the strengths of the two opposing forces.

In practice, Lewin recommended working to reduce the resisting forces, instead of increasing the driving forces. He believed simply increasing the driving forces would result in an escalation in the resisting forces against the change. The parties resisting change (supporting the status quo) are usually highly motivated.

Another concept closely associated with Forcefield Analysis is what Lewin called the Three-Step Model of Change. He believed change required three steps: unfreezing the current situation, moving, and then refreezing the new situation (a new status quo). At first glance, this may appear to be obvious and simplistic. But the steps are very important.

The OC consultant must first help the organization to see the dysfunctionality (ineffectiveness) of the current situation. Remember, we are dealing with some organizational members who benefit from the current status quo.

To move the organization or the unit (to change behavior) requires a planned intervention. This will be a time of insecurity and fear for many organizational members. Fortunately, there are many structured interventions available to OC consultants. I cover interventions in Part II of my book, "Strategic Organizational Change."

In step three, Lewin said we must "refreeze" the situation. In practice, I have found this step to be essential. In order to get the change to hold, there must be a supportive environment for the change. This means management must commit resources and reward desired behaviors; otherwise, the organizational members will slip back into their old, comfortable ways of doing things.

Anthony Buono has correctly added, "There is a significant difference between dealing with the type of episodic, discontinuous change that Lewin referred to in 1947, when he created this model (dealing, in essence, with organizational inertia), and the type of ongoing, overlapping, continuous change that is happening today." I expound on Professor Buono's comments in my chapter on Leading Change.

And here is another random article you might be interested in...

Forex Trading: Calculating Profit And Loss In Foreign Currency Trading

The foreign exchange market, or Forex market, is an around-the-clock cash market where the currencies of nations are bought and sold. Forex trading is always done in currency pairs. For example, you buy Euros, paying with U.S. Dollars, or you sell Canadian Dollars for Japanese Yen. The value of your Forex investment increases or decreases because of changes in the currency exchange rate or Forex rate. These changes can occur at any time, and often result from economic and political events. Using a hypothetical Forex investment, this article shows you how to calculate profit and loss in Forex trading.

To understand how the exchange rate can affect the value of your Forex investment, you need to learn how to read a Forex quote. Forex quotes are always expressed in pairs. In the following example, your pair of currencies are the U.S. Dollar (USD) and the Canadian Dollar (CAD). The Forex quote, USD/CAD = 170.50, means that one U.S. Dollar is equal to 170.50 Canadian Dollars. The currency to the left of the "/" (USD in this example) is referred to as base currency and its value is always 1. The currency to the right of the "/" (CAD in this example) is referred to as the counter currency. In this example, one USD can buy 170.50 CAD, because it is the stronger of the two currencies. The U.S. Dollar is regarded as the central currency of the Forex market, and it is always treated as the base currency in any Forex quote where it is one of the pairs.

Let's go now to our hypothetical Forex investment to show how you can profit or come up short in Forex trading. In this example, your pair of currencies are the U.S. Dollar and the Euro. The Forex rate of EUR/USD on August 26, 2003 was 1.0857, which means that one U.S. Dollar was equal to 1.0857 Euros, and was the weaker of the two currencies. If you had bought 1,000 Euros on that date, you would have paid $1,085.70.

One year later, the Forex rate of EUR/USD was 1.2083, which means that the value of the Euro increased in relation to the USD. If you had sold the 1,000 Euros one year later, you would have received $1,208.30, which is $122.60 more than what you had started with one year earlier.

Conversely, if the Forex rate one year later had been EUR/USD = 1.0576, the value of the Euro would have weakened in relation to the U.S. Dollar. If you had sold the 1,000 Euros at this Forex rate, you would have received $1,057.60, which is $28.10 less than what you had started out with one year earlier.

As with stocks and mutual funds, there is risk in Forex trading. The risk results from fluctuations in the currency exchange market. Investments with a low level of risk (for example, long-term government bonds) often have a low return. Investments with a higher level of risk (for example, Forex trading) can have a higher return. To achieve your short-term and long-term financial goals, you need to balance security and risk to the comfort level that works best for you.