Organizational change occurs when a business or group decides to change any or all of its functional elements such as infrastructure, processes, culture, personnel, products, services or technology. Multiple factors cause and determine the types of organizational change that companies undergo.
Organizations embark on remedial change for many reasons. Social trends may be rendering parts of the business redundant, a weakened economy is probably forcing a transformational change, or regulatory forces are compelling process changes. A change in ownership after a takeover or buyout could catalyze wholesale changes in an organization.
The Different Types Of Organizational Change
To keep pace with a dynamic business environment, one must keep evolving and effecting different types of organizational change. There are many types of organizational change. Here are a few broad categories:
This is an organization-wide change that affects the overall structure of the company. Among the types of organizational change, this is perhaps the most disruptive and therefore requires careful thinking and planning. It is a step towards changing the very nature of the company.
Great companies are always conscious of the strategic synergies with the environment around them. By implementing various types of organizational change, they keep in touch with cultural trends, social climates, and are cued into technological advances.
In the past decade or so, traditional old-world brands have shifted their emphasis to digital technology, riding on demand from millennials. Netflix is a good example of transformational change. It started by mailing physical DVDs to customer’s homes and only then pivoted to become the internet streaming giant it is today.
Established digital businesses are continuing on their path of transformational change by focussing on integrating advanced technologies such as Artificial Intelligence and Blockchain.
Personnel change is when a company undertakes large-scale hiring or layoffs. This entails a huge shift in company culture and processes. Across the types of organizational change, a personnel change means the organization will have to be fully prepared to onboard new employees. There are frequent examples of new-age BPOs recruiting thousands at a go. This transition, if badly managed, can cause chaos and a crippling drop in productivity. Similarly, large-scale layoffs, which can result from several reasons, can negatively affect the employees who continue. It is essential to be efficient and fair in dispersing the workload.
There is no better example than the ongoing pandemic that has forced millions of organizations across the globe to face unplanned change. No amount of planning can ever prepare an organization for sudden eventualities. A stock market crash, a political coup or civil war, large-scale changes in fiscal policy and a freak weather disruption are classic examples that force unplanned change upon organizations. These are moments that can test the resilience of some of the most well-prepared organizations, big or small. Among all the different types of organizational change, this one is likely to cause most chaos and prove to be most expensive to manage.
Remedial change is reactionary. This type of change is usually a result of a sharp drop in performance levels or a period of financial distress. For instance, a marketing approach has proved counterproductive. Or a product that the company produces has been made redundant by the advent of new technology. These developments usually involve a review of strategies. They may also cause management to rejig the product portfolio and revisit their personnel deployment strategy.
Among the types of organizational change, an adaptive change is normally related to fine-tuning existing processes, products, and company culture, without fundamentally changing the organization as a whole. An adaptive change could be caused by adding a new payment option for customers, adding a new feature to an existing product, upgrading software or equipment, changing an accounting process or even shifting to new premises closer to a business district.
Implementing Change Initiatives
The different types of organizational change can be challenging. But each of them offers managers the opportunity to demonstrate their abilities. To effectively manage organizational change, managers need several skills. While experience and on-the-job training can be useful teachers, they often need to be supplemented by comprehensive training courses.
For example, Harappa Education’s Embracing Change is an online course that sharpens your ability to respond to change. The takeaways from it will enhance your capacity to take risks and deal with stress and uncertainty. A section on the 3Ps of Resilience focuses on common responses to avoid setbacks and teaches you to be resilient through the different types of organizational change. Effective managers ensure organizations remain competitive in a global economy where evolution is the cornerstone for success.
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