Types of organisational change
Many internal and external factors can give rise to organisational change. For example, competition, new technologies, market instability, reorganisation, staff initiatives and many others.
Types of change
Depending on what causes it, business change can be:
Planned change is often implemented with the aim of improving the ways a business operates or to achieve pre-defined goals. This could be, for example, introduction of new products and services or organisational restructure.
Reactive change takes place in response to an event that is not anticipated and is outside of the organisation's control. For example, a fall in demand for a business' product or service, or a crisis such as the COVID-19 global pandemic. A business' response to such an unpredictable event can be profound and can lead to a complete transformation, altering the way people work, innovate, collaborate and integrate different functions to enable business operations. See importance of change management for business continuity.
As well as planned and reactive, change can also be categorised as developmental, transitional, transformational or remedial. Each type of change has a different degree of complexity and uncertainty, and may require different implementation methods and commitment of resources.
Levels of change
There are three main levels where change can occur in a business:
- individual - eg change in job assignment, transfer, change in job maturity level, etc
- team or group - eg changes due to inefficiencies, lack of communication, etc
- organisational - eg changes due to relocation, restructuring, mergers, acquisitions, etc
Each level has its own considerations, although change can affect one or more levels at the same time. It's important to understand the impact of change across all levels, so that you can develop appropriate measures and interventions.
Categories of organisational change
Organisational change typically falls into four distinct categories:
- technological or process-oriented
Strategic organisational change is concerned with the overall goals and purpose of the business, and any changes in the vision and mission of the organisation. Process-oriented change focuses on new technologies, new skills and operating processes, while people-oriented change relates to employee performance, skills, attitudes, behaviours and relationships.
Change in organisational structure
Structural change in an organisation occurs when the business changes its:
- organisational hierarchy
- chain of command
- management systems
- job structure
- administrative procedures
A structural change may involve, for example:
- relocation or adaptation of business premises to accommodate extra staff
- relocation to a cheaper location or one nearer to customers, labour or transport links
- mergers and acquisitions to allow you to enter new markets, seize new opportunities or increase efficiencies
- flattening of your management structure
Read more about reasons for changing your organisational structure.
Risks associated with change
Any type of major organisational change can be stressful and risky. Potential challenges may arise in relation to staff retention, redundancies, relocation incentives, staff communication, merging of organisational cultures and processes, or altering your business structure.
Before you initiate change, make sure that the benefits justify the upheaval. Following a change management process can help you to minimise potential disruption and risks.