Types of Changes Found in Organizations

7/30/2019 Types of Changes Found in Organizations

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Types of Changes Found In Organizations

Introduction

Kurt Lewis states, If you want to truly understand something, try to change it. This statement

is especially true when making changes within or related to an organization or its culture.

During periods of organizational change, most attention focuses on the organization in terms of

structure, processes, tools, measurements, policies, and procedures. However, for the transition

to be successful, people need to buy in and be committed. Their individual interests, values,

and competencies must be effectively aligned with the organization's vision, culture, and

capabilities (St-Amour). Organizational leaders must determine the type of change necessary in

order to adapt to the needs of its internal or external environment. Consequently, organizational

change can affect people, systems, processes, culture, business units, or the entire organization.

Changes Related to PeoplePersonnel Change

Sometimes people changes are a direct result of other organizational changes. At other times,companies simply seek to change workers attitudes and behaviors in order to increase their

effectiveness. Bateman and Zeithaml suggest that attempting a strategic change, introducing a

new technology, and other changes in the work environment may affect peoples attitudes

(sometimes in a negative way). Frequently, management initiates programs with a conscious goal

of directly and positively changing the people themselves. The science of organization

development deals with changing people. This may be through on the job through techniques

such as education and training, team building, and career planning.

Culture Change

Culture change within an organization aims at changing the behavior patterns of the

organizations employees. Some examples of culture change include reward-and-recognition

programs, employee empowerment, and training. These programs attempt to improve

motivation, improve decision-making skills, and increase sensitivity to diversity issues.

People-centered Change

People-centered process changes attempt to alter the attitudes, behaviors, skills, or performance

of employees within an organization. Communication, employee motivation, leadership, and

group interaction are some primary focuses of people-centered change. This type of change may

affect the employees and their behaviors in many areas. Some examples are improved problem-

solving skills, the way employees learn new skills, and how employees perceive themselves, their

jobs, and the organization.

Social Change

Social change refers to the modification of established relationships in the organization. Social

change encompasses the large set of goals that organizations establish around people. This


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includes an empowered workforce, collaborative work arrangements, and matching personal

fulfillment to organizational needs.

Customer Relationship Management

Customer relationship management intends to create processes that will build customer loyalty

to the organization, which increases profits. Customer relationships can be increased through

marketing, employee professional development, or and improved customer service.

Changes Related to Organizations

Leadership Change

Leadership transitions are critical moments. Transitions in leadership offer an opportunity to

make changes in many areas of the organization. The situation is fluid or, in Lewins framework

of organizational change, unfrozen. The transition is an occasion to rethink the commitment to

the present agenda, to reflect on roads not taken in the past, and to review future choices. Many

significant changes in policy, people, organizational structure, procedures are more easily

introduced simultaneously with a leadership change.

Structural Change

Changes within an organizations structure can occur due to external influences. Structural

changes may involve structural characteristics, administrative procedures, or management

systems. They may involve simple policy changes or be as complex as a complete restructuring of

the management hierarchy.

Reengineering

Change centered on reengineering focuses on making major structural change to the

organization. Implementations of these changes typically focus on everyday tasks or procedures.

The goal is to substantially improve productivity, efficiency, quality, or customer satisfaction.

Incremental Organizational Change

Incremental change is a step-by-step approach to re-designing an organization. Each small

increment that is changed produces changes in other parts of the organization. By changing

specific processes or details in portions, the entire organization changes over time.

Fundamental Organizational Change

When major organizational changes are necessary and time constraints are a significant factor, a

more radical transformation becomes essential. Fundamental organizational change focuses on

changing major characteristics of the entire organization rather than specific parts.

Divestiture

Business divestiture means that a firm disposes a significant part of its assets. This may result in

the sell-off or dissolution of whole business units, or divisions. Tactical divestors and distress

divestors appear to focus directly on the short-term. In contrast, the strategic divestors appear

to take a broader view triggering a reevaluation of the organizational strategy.


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Rules Change

We live in a world of ever-increasing change. Instant communications, global web connectivity,

email, cell phones, and other tools have increased the pace of our lives dramatically. Despite

these changes, we typically adjust to new circumstances without changing the basic way we

conduct our business. We assume that the rules of our business have not fundamentally changed

- we just have to "work smarter" to keep up.

That may not always be the case. Sometimes the basic rules of the game shift. No one

announces the shift. Some people and companies simply start to work with it and begin

to achieve new levels of success. This phenomenon is known as a "paradigm shift.Many people use the term loosely - but very few actually understand it until it becomes

the brick wall that stands in the way of progress.

Not all rule changes are based on technology. A current economic paradigm shift is the

movement of production to off-shore providers.

Acquisition

Acquisition is the process through which one company takes over the controlling interest of

another company. Acquisition includes obtaining supplies or services by contract or purchase

order with appropriated or non-appropriated funds.

Merger

Merger is the combining of two or more entities into one. This may occur through a purchase

acquisition or a pooling of interests. Merger differs from a consolidation in that no new entity is

created from a merger.

Consolidation

Consolidation is the combining of separate companies, functional areas, or product lines, into a

single organization. Consolidation differs from a merger in that a new entity is created in the

consolidation.

Another form of consolidation results from the process of maturation in some markets. The

consequences of this process are that larger companies acquire smaller companies or run them

out ofbusiness. This leaves only a few dominant players in the market.

Strategic Change

Strategic changes involve long-term planning while incorporating a strong external orientation.

These changes may cover major functional areas of an organization. This type of change mayoccur when adjusting the firms strategy to achieve the goals of the company. This type of

change may also result from a change to the mission statement of the organization. An

organizations approach to doing business, targeted markets, partnerships, or the types of

products sold may be included in the strategic change approach.
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Changes Related to Systems

Process-oriented Change

The goal of process-oriented change is to improve productivity. Process-oriented change

affects the way in which an organization delivers services, produces products, or handles

current business practices. As the environmental factors of an organization change, theneed for process-oriented change increases.

Technological Change

This type of approach concerns the implementation or integration of technology into the

processes of an organization. Primarily, technology includes large hardware or software systems.

Information technology is as much a part of the fabric or organizations as strategy, people, and

finance. This area usually comprises a significant percentage of an organizations budget.

Software Development and Installation

The development and installation of software may include more change categories than thischange effort would indicate. Other change types affected by development and installation of

software may include systems, processes, technology, etc. Success is generally assessed in terms

of project management criteria: on time, on budget, with the promised features and

functionalities.

Systems Change

Systems change means making change that endures and changes at the heart of the

organization. Such change is systematic, takes time, planning and patience. Such change is not

done by just tweaking parts of the system in isolation. But, it means ultimately impacting change

across all elements of the system.

Continuous Improvement

Continuous improvement entails finding the best practices, adapting them, and continually

improving them. When using these ideas to encourage constant improvement, new product and

service ideas, new processes, and opportunities for growth can become the norm.

The process of continuous improvement occurs by developing a series of measureable processes.

The next step is to acknowledge and correct defects. Schulze acknowledges that the mostimportant thing to consumers is that there are no defects in products or services.

Continuous Process Improvement

Process management, analysis, and improvement are never-ending approaches to running an

organization. Business Process Management is not an initiative, a project, or a workshop to


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attend. It is an evolutionary mind-set and encoded behavioral model that maintains constant

variability, testing, and selection will always lead to survival and success.

Continual Change

Continual change, similar to continuous process improvement, is a more broad definition of this

type of change. This builds on the philosophy that when change stops, companies cease to exist.

Continual change to optimize technological breakthroughs is required for an organization to

systemically evolve. This change continues until it has exhausted the improvement that can be

drawn from what is known.

Transactional Change

Transactional change occurs in a situation in which the organization experiences some feature of

change but the fundamental nature of the organization remains the same. This may include a

companys organizational climate, which encompasses the perceptions and attitudes of people

about the organization. Included in transactional change are structure, management practices,

and systems.

TQM Driven Change

TQM efforts are aimed at the continuous improvement of the organizations operations. These

efforts include the use of employee teams to generate and implement ideas for improving

organizational performance. The theme is the gradual improvement of the organization, not

radical or sudden range.

Re-engineering or process design

This term designates the design of a new business process or the radical redesign of an existing

process. The goal here is to achieve levels of performance beyond the organizations current

capability.

Business Expansion

This category includes approaches to expanding a business. This change may come through

product development, new lines of business, or selling to new markets.

Structured Quality Improvement

A structured approach to quality improvement includes a management philosophy, a decision-

making structure, and a strategy for planned change. Another name for this type of change is

Total Quality Management. It is associated with empowerment, problem solving, customer

service, and other worthy, but often abstract, concepts.

Benchmarking

Benchmarking is the search for best practices. Benchmarking allows your organization to see

what others are doing, what is working for them and what to avoid. The American Productivity &

Quality Center defines benchmarking as: the process of identifying, understanding, and adapting

outstanding practices and processes from organizations anywhere in the world to help your

organization improve its performance.


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Business Process Reengineering

Business process reengineering is the redesign of business processes and the associated systems

and organizational structures. The goal of this type of change is to achieve a dramatic

improvement in business performance.

Major Types of Change in General

Growth

Organizational growth, while considered a positive change, can have a negative effect on the

environment and employee attitude. The companys culture, current leadership styles, and

business systems may no longer accommodate the organization in its new form.

Growth needs to be managed on multiple levels: having the right leaders leading the right

people to do the right things at the right time.

Unplanned Change

Unplanned change usually occurs because ofa major, sudden surprise to the organization. This

causes its members to respond in a highly reactive and disorganized fashion.

At times, organizational change happens when it becomes necessary to react to a sudden

development. All kinds of emergency can force organizations to introduce new ways of doing

things, or of structuring themselves.

Planned Change

Planned change occurs when leaders in the organization recognize the need for a major change

and proactively organize a plan to accomplish the change. Planned change occurs with successful

implementation of a Strategic Plan, plan for reorganization, or other implementation of a change

of this magnitude.

Radical Change

We view radical organizational change as a process by which firms regain competitive

advantage after it has been lost or threatened significantly. We find that the type and extent of

change undertaken depends upon the firms resources and capabilities; its competitive

environment; and its leadership. Radical change is divergent, meant to fundamentally change the

firms processes, systems, structures, strategies, and core values.

Radically Innovative Change

Radically innovative change, the most intimidating type of change, consists of replacing an

existing process, product, or technology with one that is new to the industry. Radically innovative

change may produce a high degree of uncertainty. There is also a high potential for resistance to

the change within the organization.

Developmental


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Developmental change concentrates on improving an already successful environment. Development

occurs through improving aspects of an organization such as increasing customer base or introducing

a product expansion.

Transformational Change

Transformational change occurs when organizations incur drastic changes and must essentially

transform themselves. This can occur when an organization faces different technologies, significant

changes in supply and demand, unexpected competition, lack of revenue or other major shifts in

how they do business.

Transformational change involves implementation of an evolutionary new state. This requires major

and often ongoing shifts in organizational strategy. Examples of this include reengineering, major

restructuring, downsizing, consolidation, and major shifts in business focus.

Transformational change is where the organization is fundamentally and substantially altered.

Organizational culture is part of transformational change and is harder to change versus

organizational climate because of its deep-seated beliefs, and values. Included in transformational

change are mission and strategy, leadership, and organizational culture.

Transitional

Transitional change involves the replacement of a current process with a process that new to the

company. Mergers, acquisitions, new product creation, and the implementation of new

technologies are examples of transitional change.

Transitional change requires the introduction of new processes that modify the way the company

operates in the event that current methods of operation are no longer applicable. Examples of

transitional change include reorganization, minor restructuring, utilization of new operational

techniques/methods/procedures, or the introduction of new services or products.

Strategy Deployment

These projects were defined as building or changing the capabilities of the organization. Some

efforts involve trying to improve what the organization already does; other efforts involve

creating radically new strengths.

Restructuring/Downsizing

These projects involve rearranging organizational units and/or the workforce. Downsizing

primarily refers to reducing the number of employees but also includes divestiture of company


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assets, that is, selling off a piece of the business. Restructuring /downsizing has been widely

studied. Quantitative measure of operational and financial performance is typically used.

Remedial Change

Remedial change addresses a particular situation, which needs immediate attention. Some

examples may include a deficiency in a product line or employee burnout. The

determination of success is whether there is a solution to the problem.

Evolutionary Change

Evolutionary change involves setting direction, allocating responsibilities, and establishing

reasonable timelines for achieving objectives. It is rarely fast enough or comprehensive enough

to move ahead of the curve in an evolving world where stakes are high, and the response time is

short.

Revolutionary Change

When faced with market-driven urgency, abrupt and sometimes disruptive change, such as

dramatic downsizing or reengineering, may be required to keep the company competitive. In

situations when timing is critical to success, and companies must get more efficient and

productive rapidly, revolutionary change is demanded.

Proactive change

Proactive change involves actively attempting to make alterations to the work place and its

practices. Companies that take a proactive approach to change are often trying to avoid a

potential future threat or to capitalize on a potential future opportunity.

Reactive change

Reactive change occurs when an organization makes changes in its practices after some threat or

opportunity has already occurred.

Conclusion

According to Maureen Mackenzie, Every behavior is motivated by need. Change any change

may be perceived as disruptive and potentially dangerous as the status quo becomes unstable.

(http://www.dowling.edu/faculty/Mackenzie/docs/change.pdf) The role of leaders and

managers in a changing environment is critical to the overall success of the implemented change.

It is also important that the change consider the impact on employees and culture while aligning

with the organizations vision, mission, and values. Although change is a way of life in todays

organizational structure, change, if managed appropriately, can be a positive and successful

experience.
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Documents

Types of Changes Found in Organizations