Organizational change is always a difficult and uphill task. Change leaders are very often confronted with this question that how to make this execution of change an easy and smooth process. The answer lies in knowing what type of organizational change is required. With clarity on the type of change, strategies are made and adopted which will ultimately lead to meeting the desired goal of change. When proper change strategies are in place, preparation will be easy and there will be least disruption in operations of organizations. Organizational change is generally categorized into five types on the basis of extent and scope of change.
Let’s explore what are these five types of organizational change.
Developmental change is gradual improvement in existing situation of an organization. Organizations generally grow and expand after having experiences and enhanced skills.
Developmental change is a predictable change; it may either be planned or emergent. For development change, organizations often rely on existing process and procedures. Nothing new is tried, nor big risks are taken.
Developmental change is of frequent type of change and usually occur on small scale. This change is easy to manage because minimum resistance is faced from employees of organizations. It is also very important because if developmental change does not happen it can cost loss of business and new opportunities.
There are countless business entities which expanded from one branch to hundreds and thousands. For instance, DHL was founded in late 60s in the US. Through making small but gradual and incremental changes, DHL grew its operations and captured market outside the US. Now it is present in almost every part of the world and regarded as the global leader in courier and parcel business.
Personnel change is when an organization makes massive changes in employees. It could be hiring of new staff, putting staff on lay offs, or changing the entire human resource structure of organization. The need of personnel change is caused by external and internal factors. For instance, change in technology demands hiring new staff with new skills sets. Sometimes lay off of staff is happened due to decline in business or profits.
Personnel change is very tricky and challenging because it can negatively affect the morale of staff. It creates anger, frustration, and demotivation among the staff. Therefore, it needs to be handle carefully.
On the positive side, when new employees are joining in, it will boost confidence of staff and also enhance productivity of organization.
In 1980s British Airways was not performing well at all and it brought on board a new chairperson. He made drastic changes in the human resource structures and managed the losses by making entire structure more efficient. Within a few years, British Airways established itself as one of finest and profitable airlines of the world.
Remedial change is adopted to rectify a bad situation or performance. Organizations do not afford bad performance because it has horrible consequences for its future. Remedial changes are in-fact corrective actions taken by management of organizations.
The purpose of this type of change is to increase productivity by avoiding the pitfalls which were being made in the past. Remedial changes are more targeted and urgent because these focus on problems which are identified. The scope of this type of change is limited and time-bound and it is easy to assess the success or failure of the change strategy.
In 1986 world’s renowned medicine company Johnson & Johnson (J&J) faced a crisis like situation when poisonous material was found on packing of its famous product Tylenol. Instead of going into blame game and looking into details, the management of J&J immediately took all Tylenol bottles from the market costing million of dollars loss. This immediate step followed by remedial actions of replacing tamper-proof packing of Tylenol proved successful. And soon J&J earned back its lost reputation.
It is about replacing existing system, process and strategy with new ones. Traditional change is more challenging to implement because it creates discomfort of employees.
It is risky as well as no one can be certain about the final outcome of the transition. Therefore, a well-thought-out change management strategy should be in place to execute this kind of change.
As compared to developmental change, it is less frequent but it is larger in its extent and scope. If transitional change is successfully implemented, then it gives competitive edge to an organization to capture market and expand to the next level.
Another important feature of transitional change is that leadership and management prepares a plan based on change strategy for making this change in specific time period.
Apple achieved its transitional change by altering its product line is Apple Computer. In mid 90s, Apple’s market share was declining. It changed its strategy and purchased former owner Steve Jobs’ software company. Later Steve Jobs became CEO of Apple and he made transition from replacing others’ designer system by company’s own system. This transition was a huge success and soon Apple was the third most valuable company in the US.
Transformational change is about complete change in identity of an organization. It is about emergence of completely new structure, culture and reputation. It is a kind of a new life for an organization.
Transformational change is highly unpredictable as leaders have less control over managing it. It has its own path, time and shape. Therefore, it is the most difficult type of change to manage.
Transformational change is very rare because it requires drastic and radical changes. It involves a lot of risk too. This kind of change is the scariest for both employees and leadership.
Nokia is a classic example of transformational change by making radical changes in manufacturing of different technological products. Nokia was founded as Pulp Mill in 1865 and later got into telegraph and telephone business as cable manufacturer.
In 1980s Nokia was recognized as television manufacturer. Then, Nokia transformed itself into a manufacturer of cell phones in recession period of 1990s. In 2011, Nokia was one of world’s leading maker of cellular phones.
Take Home Points
- Change comes in different forms and operates at different levels.
- Developmental Change is all about routine and gradual improvement happens in process and systems. It scope is small and it is very much in control of organization.
- Personnel change is about change in human resource of an organization.
- Remedial change means taking corrective actions to rectify problems.
- Next is Transitional Change which alters the existing system and replace it with new one.
- And the last and most challenging is Transformational Change which gives a radical shift in identity of organization.