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Types of Changes Found In Organizations
By Sherry Patterson and Sheila Sorrells
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.
St-Amour, Denis. Entrepreneur.com. 21 09 2008 <http://www.entrepreneur.com/tradejournals/article/77036410.html>.
Changes Related to People
Personnel Change
Sometimes people changes are a direct result of other organizational changes. At other times, companies simply seek to change worker’s 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 people’s 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.
Managing Organizational Change. 13 09 2008 <http://findarticles.com/p/articles/mi_gx5201/is_2002/ai_n19121369/>.
Culture Change
Culture change within an organization aims at changing the behavior patterns of the organization’s 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.
Smith, Martin E. Success Rates for Different Types of Organizational Change. Jan 2002. 12 09 2008 <www.ispi.org>.
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.
Types of Organizational Change. 14 09 2008 <http://www.cliffsnotes.com/WileyCDA/CliffsReviewTopic/topicArticleId-8944,articleId-8885.html>.
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 includes an empowered workforce, collaborative work arrangements, and matching personal fulfillment to organizational needs.”
Waldersee, Robert. Predicting Organizational Change Success: Matching Organization Type, Change Type and Capabilities. 2003. 13 09 2008 <http://findarticles.com/p/articles/mi_qa5383/is_200301/ai_n21324617/>.
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.
Wikstrom, Carl-Erik. Organizational Change and Customer Relationship Management. 11 09 2008 <http://www.cs.uta.fi/is/julkaisut/2003/2003_wikstrom_1.pdf>.
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 Lewin’s 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.” (Page 10-11)
Gilmore, Thomas N. Making a Leadership Change. 12 09 2008 <http://books.google.com/books?id=JySh8tChIh4C&pg=PA48&lpg=PA48&dq=%22change+of+leadership%22+and+%22organizational+change%22&source=web&ots=3o9hnQxVht&sig=wzt3y4aIbshdxvZzrzwWIPePuEA&hl=en&sa=X&oi=book_result&resnum=5&ct=result#PPA11,M1>.
Structural Change
Changes within an organization’s 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.
Types of Organizational Change. 14 09 2008 <http://www.cliffsnotes.com/WileyCDA/CliffsReviewTopic/topicArticleId-8944,articleId-8885.html>.
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.
Chaudron, David, PhD. Begin at the beginning in organization change. 14 09 2008 <http://www.organizedchange.com/decide.htm>.
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.
Thompson, Ian. Supply Management: All change. 28 Apr 2005. 13 09 2008 <http://findarticles.com/p/mi_qa5291/is_200504/ai_n24300102/>.
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.
Thompson, Ian. Supply Management: All change. 28 Apr 2005. 13 09 2008 <http://findarticles.com/p/mi_qa5291/is_200504/ai_n24300102/>.
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.
Decker, Carolin and Thomas Mellewigt. The Drivers and Implications of Business Divestiture - An Application and Extension of Prior Findings. 12 09 2008 <http://edoc.hu-berlin.de/series/sfb-649-papers/2007-54/PDF/54.pdf>.
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.”
Resnick, Harold S. What To Do When the Rules of Business Change. 18 09 2008 <http://worksystems.com/freeResources/organizationalChange/rules_change.html>.
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.
Funding Post. 23 09 2008 <http://www.fundingpost.com/glossary/acquisition.asp>.
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.
Investor Words.Com. 23 09 2008 <http://investorwords.com/3045/merger.html>.
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 of business. This leaves only a few dominant players in the market.
InvestorWords.Com. 23 09 2008 <http://www.investorwords.com/1047/consolidation.html>.
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 may occur when adjusting the firm’s 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 organization’s approach to doing business, targeted markets, partnerships, or the types of products sold may be included in the strategic change approach.
Types of Organizational Change. 14 09 2008 <http://www.cliffsnotes.com/WileyCDA/CliffsReviewTopic/topicArticleId-8944,articleId-8885.html>.
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, the need for process-oriented change increases.
Types of Organizational Change. 14 09 2008 <http://www.cliffsnotes.com/WileyCDA/CliffsReviewTopic/topicArticleId-8944,articleId-8885.html>.
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.
Smith, Martin E. Success Rates for Different Types of Organizational Change. Jan 2002. 12 09 2008 <www.ispi.org>.
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.
Tranfield, David and Ashley Braganza. Business Leadership of Technological Change. Mar 2008. 12 09 2008 <http://www.bcs.org/upload/pdf/bltcreport.pdf>.
Software Development and Installation
The development and installation of software may include more change categories than this change 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.
Smith, Martin E. Success Rates for Different Types of Organizational Change. Jan 2002. 12 09 2008 <www.ispi.org>.
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.”
FundingPost. 23 09 2008 <http://www.fundingpost.com/glossary/acquisition.asp>.
Hanninen, Gail E. Creating Systems Change. 12 09 2008 <http://www.newhorizons.org/trans/hanninen.htm>.
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.
Aruleswaran, Arul. The Continuous Improvement Culture. 11 09 2008 <http://www.lss-academy.com/html/Integrating_Lean_Six_Sigma.pdf>.
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 most important thing to consumers is that there are no defects in products or services.
Continuous Improvement: The Secret to Sustaining Growth. 11 02 2004. 10 09 2008 <http://knowledge.emory.edu/article.cfm?articleid=747>.
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 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.”
Workflow IQ - Smart Workflow & Business Process Improvements. 05 09 2008. 10 09 2008 <http://workflowiq.wordpress.com/category/leadership/>.
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.”
Mackenzie, Maureen L. Senior Leadership's Role in the Change Process. 11 09 2008 <http://www.dowling.edu/faculty/Mackenzie/docs/change.pdf>.
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 company’s organizational climate, which encompasses the perceptions and attitudes of people about the organization. Included in transactional change are structure, management practices, and systems.
Pellettiere, Vincent. Organization Self Assessment to Determine the Readiness and Risk for a Planned Change. 2006. 13 09 2008 <http://findarticles.com/p/articles/mi_qa5427/is_200601/ai_n21402839/>.
TQM Driven Change
“TQM efforts are aimed at the continuous improvement of the organization’s 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.”
Smith, Martin E. Success Rates for Different Types of Organizational Change. Jan 2002. 12 09 2008 <www.ispi.org>.
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 organization’s current capability.”
Smith, Martin E. Success Rates for Different Types of Organizational Change. Jan 2002. 12 09 2008 <www.ispi.org>.
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.”
Smith, Martin E. Success Rates for Different Types of Organizational Change. Jan 2002. 12 09 2008 <www.ispi.org>.
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.
Kovel-Jarboe, Patricia. Quality Improvement: A Strategy for Planned Organizational Change. 11 09 2008 <http://www.ideals.uiuc.edu/bitstream/2142/8037/1/librarytrendsv44i3j_opt.pdf>.
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.”
BPR Online Learning Center. 18 09 2008 <http://www.prosci.cm/benchmark.htm>.
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.
BPR Online Learning Center. 18 09 2008 <http://www.prosci.com/reengineering.htm>.
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 company’s 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.”
Adaptive Leadership. 11 12 2007. 12 09 2008 <http://northwoodsconsulting.blogspot.com/2007/12/managing-growing-pains-of.html>.
Unplanned Change
“Unplanned change usually occurs because of a major, sudden surprise to the organization. This causes its members to respond in a highly reactive and disorganized fashion.”
Major Types of Organizational Change. 10 09 2008 <http://www.managementhelp.org/misc/types-of-orgl-change.pdf>.
“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.”
Changing Organizations. 24 12 2007. 12 09 2008 <http://itowers24.wordpress.com/category/unplanned-change/>.
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.”
Major Types of Organizational Change. 10 09 2008 <http://www.managementhelp.org/misc/types-of-orgl-change.pdf>.
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 firm’s resources and capabilities; its competitive environment; and its leadership. Radical change is divergent, meant to fundamentally change the firm’s processes, systems, structures, strategies, and core values.”
Newman, Karen L. Radial organizational chnage: The role of starting conditions, competition, and leaders. 1999. 14 09 2008 <http://findarticles.com/p/articles/mi_qa5427/is_199901/ai_n21446396/>.
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.
Mackenzie, Maureen L. Senior Leadership's Role in the Change Process. 11 09 2008 <http://www.dowling.edu/faculty/Mackenzie/docs/change.pdf>.
Developmental
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.
Change. 19 09 2008 <http://64.85.16.230/educate/content/elements/Lexicon/change.html>.
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.
Tucker, Jan. Suite101.com. 29 09 2008 <http://businessmanagement.suite101.com/article.cfm/types_of_change>.
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.
Change. 19 09 2008 <http://64.85.16.230/educate/content/elements/Lexicon/change.html>.
“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.”
Pellettiere, Vincent. Organization Self Assessment to Determine the Readiness and Risk for a Planned Change. 2006. 13 09 2008 <http://findarticles.com/p/articles/mi_qa5427/is_200601/ai_n21402839/>.
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.
Tucker, Jan. Suite101.com. 29 09 2008 <http://businessmanagement.suite101.com/article.cfm/types_of_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.
Change. 19 09 2008 <http://64.85.16.230/educate/content/elements/Lexicon/change.html>.
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.”
Smith, Martin E. Success Rates for Different Types of Organizational Change. Jan 2002. 12 09 2008 <www.ispi.org>.
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 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.”
Smith, Martin E. Success Rates for Different Types of Organizational Change. Jan 2002. 12 09 2008 <www.ispi.org>.
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.
Major Types of Organizational Change. 10 09 2008 <http://www.managementhelp.org/misc/types-of-orgl-change.pdf>.
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.”
Change Management. 12 09 2008 <http://www.1000ventures.com/business_guide/crosscuttings/change_management.html>.
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.”
Change Management. 12 09 2008 <http://www.1000ventures.com/business_guide/crosscuttings/change_management.html>.
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 vs. Proactive Change. 19 09 2008 <http://www.referenceforbusiness.com/management/Pr-Sa/Reactive-vs-Proactive-Change.html>.
Reactive change
“Reactive change occurs when an organization makes changes in its practices after some threat or opportunity has already occurred.”
Reactive vs. Proactive Change. 19 09 2008 <http://www.referenceforbusiness.com/management/Pr-Sa/Reactive-vs-Proactive-Change.html>.
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 organization’s vision, mission, and values. Although change is a way of life in today’s organizational structure, change, if managed appropriately, can be a positive and successful experience.
Mackenzie, Maureen L. Senior Leadership's Role in the Change Process. 11 09 2008 <http://www.dowling.edu/faculty/Mackenzie/docs/change.pdf>.
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Aruleswaran, Arul. The Continuous Improvement Culture. 11 09 2008 <http://www.lss-academy.com/html/Integrating_Lean_Six_Sigma.pdf>.
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Chaudron, David, PhD. Begin at the beginning in organization change. 14 09 2008 <http://www.organizedchange.com/decide.htm>.
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Continuous Improvement: The Secret to Sustaining Growth. 11 02 2004. 10 09 2008 <http://knowledge.emory.edu/article.cfm?articleid=747>.
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Decker, Carolin and Thomas Mellewigt. The Drivers and Implications of Business Divestiture - An Application and Extension of Prior Findings. 12 09 2008 <http://edoc.hu-berlin.de/series/sfb-649-papers/2007-54/PDF/54.pdf>.
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Managing Organizational Change. 13 09 2008 <http://findarticles.com/p/articles/mi_gx5201/is_2002/ai_n19121369/>.
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Thompson, Ian. Supply Management: All change. 28 Apr 2005. 13 09 2008 <http://findarticles.com/p/mi_qa5291/is_200504/ai_n24300102/>.
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Tranfield, David and Ashley Braganza. Business Leadership of Technological Change. Mar 2008. 12 09 2008 <http://www.bcs.org/upload/pdf/bltcreport.pdf>.
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Types of Organizational Change. 14 09 2008 <http://www.cliffsnotes.com/WileyCDA/CliffsReviewTopic/topicArticleId-8944,articleId-8885.html>.
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