Types Of

Organizational change
Lesson 3
 (Sim, 2006) Types of change
Developmental change:

• change improves on previously established processes and procedures.

• does not necessarily have to be of a large-scale.

• incremental improvements in response to a desire to improve efficiencies

• Because developmental changes are typically incremental and non-

disruptive, they have a lower level of resistance within an organization
Developmental change For instance,
 increasing sales or quality.
 Communication training
 develop a team for a task
Transitional Change
• Businesses today needs to be transitioned to a new way.

• Transitional changes are larger than developmental changes and may

be disruptive.

• They frequently may impact relationships, job functions and culture.

• E.g These changes may include mergers and acquisitions

• E.g replacing and introducing major new systems.
Transitional Change
 Transformational Change
• Organizations do not frequently undergo transformational change.

• These types of changes are dramatic and fundamentally alter the

organization.

• This kind of changes brought about when businesses:

pursue entirely different products or markets,
experience radical changes in technology.

• or new leadership ushers in overhauls to the structure and company culture.

Transformational Change
• The company may embark on a new mission, vision, or introduction of
new values utilizing a transformational change process.

• Being this change is a substantial/intense disruption to the business

• it will require significant skill and expertise on behalf of the

management team.

• When the change process is complete, the prior organization is no

longer recognizable.
Grundy, 1993 Types of change
• Gundy states that many managers perceive change as a
homogeneous concept, while others describe it as the enemy of
stability.

• Today's public sector organization would be wise to utilize

Grundy’s “three varieties of change”
• Smooth incremental

• Smooth incremental change can be summarized as, change which

evolves slowly in a systematic and predictable way.
• It is important to note that, in correlated form the vertical (x)
axis must represent rate of change, not amount of change, smooth
incremental change happens at a constant rate.
• While the horizontal axis (y) signifies the constant; time.
• Bumpy incremental
• Bumpy incremental change is characterized by periods of relative
tranquility punctuated by acceleration in the pace of change. This
type of change could be caused by the periodic reorganizations that
public sector organizations go through, especially on change of
government.
• Discontinuous
• The third variety of change is discontinuous change.
• This can be caused by rapid shifts in strategy, structure or culture, or
in all three.
• In the public sector, privatization would be a likely cause of this
change, whereas in the private sector, the opportunities offered by
the development of the internet/technology are most likely to cause
discontinuous change.
Nadler and Tushman, Types of changes
• According to Nadler and Tushman, 1989 the four classes of change are the
result of the:

1. Accordion. This is a growing change pending in anticipation of future

events. It seeks ways to increase efficiency but does not occur in
response to any immediate problem.

2. Adaptation. This is the growing change that has been made in response
to external events. The actions of a competitor, changes in market needs,
new technologies, and so on, require answers from the organization.
3. Reorientation. This is a strategic change made in the luxury of time
envisioned by external events that may require change. These changes
include basic organizational redirection which emphasize continuity
with the past (especially past values).

4. Re-creation. This is a strategic shift needed by external events,

usually those that threaten the very existence of the organization
(Nadier & Tushman, 1989).
Statement 1
• Change is the only constant in the contemporary society.
Statement 2
• In Academic institutes, readiness for change influences its policies and
strategies.
Change management process
Lewin change management model
Unfreezing
Transition
Refreeze
McKinsey 7-S Model
• The McKinsey 7-S Model is a change framework based on a company’s organizational
design.

• It aims to depict how change leaders can effectively manage organizational change by
strategizing around the interactions of seven key elements:
structure
strategy
system
 shared values
 skill
style
staff.
• The model highlights that there exists a domino effect when any one
element is transformed to restore effective balance.

• The central placement of shared values emphasizes that a strong change

culture impacts all the other elements to drive change.

• The McKinsey 7-S Framework then categorizes these seven elements into
two categories: hard elements and soft elements.

Hard elements that are easily identifiable and influenced by leadership and
management.
Soft elements are those that are intangible and culture-driven.
Class activity
• Think about the key things that need to be in place and considered in
order to ensure change is managed successfully.
Class activity
• How would you handle it if your manager asked you to implement a
different way of working but didn’t explain why?
Miles and Snow's Organizational Strategies
• Raymond Miles and Charles Snow studied the relationship between
structure and strategy.

• In 1978, they published "Organizational Strategy, Structure, and

Process," which identified four types of organizations – defenders,
prospectors, analyzers, and reactors.

• Collectively, these types show us how companies compete.

 1. Defenders
• These organizations seek stability by producing a limited set of products,
directed at a narrow segment of the total potential market.

• These companies tend to ignore developments and trends outside their

defined area, and they choose to grow through market penetration.

• Within this niche or narrow area, defender organizations aggressively

try to prevent other companies from entering their territory.
•
• They don't spend time examining the environment or planning for
changes. Instead, they use long-term planning to improve efficiencies
and reduce costs.
• Tactics include competitive pricing, integrating vertically to control costs,
and producing superior products.
• Organizational elements that support this strategy include the following:
Centralized control of strategic decisions.
Formal hierarchy.
Horizontal differentiation (lots of specialists).
• Defenders function best in stable business environments where change
isn't necessary for success.
• For Example:
• Producers of high-priced goods – like carmaker Rolls-Royce, or luxury
watch brand Rolex – are examples of companies that defend their
current niches, and aren't particularly interested in serving a different
market.
 2. Prospectors
• prospectors respond well to change.

• Their strength is in finding and taking advantage of new product and market
opportunities.

• For many of these companies, innovation is just as important as profitability.

•
• For Example of a highly successful prospector is telecom companies.

• The success of prospector organizations depends on developing and

maintaining the ability to monitor a wide range of environmental conditions,
trends, and events.
• They end up with a broad range of products and services,

• They continually try to keep up with consumer demand.

• Prospectors need a lot of flexibility.

• Their organizational structure typically uses the following elements:

Decentralized control of strategic decisions.
Low formalization (lots of generalists).
Flat structure (few layers of management).
 3. Analyzers
• This type of organization tries to capitalize on the strengths of both
defenders and prospectors.
• Analyzers look for ways to maximize their opportunities while minimizing
their risks.
• They won't be the first to move into a new market – they wait until a
prospector has proven that the market can be profitable.
• Analyzers live by imitating and copying – using the successful ideas of
prospectors.
• For Example:
• Clothing manufacturers that copy designer fashions are a great example.
• Because analyzers are slower to change, they have time to build
efficiencies in their stable product and market areas.

• To support, the analyzer organization needs these elements:

High standardization and routinization to control costs.
Moderate centralized control of strategic decisions.
A structure that allows collaboration across departments.

• If the external environment changes dramatically, demanding a switch to

one side or the other, the analyzer cannot switch quickly.
 4. Reactors
• This type of organization doesn't have a set strategy, design, or structure.
• Reactors respond poorly to environmental change, their performance
suffers.
• they aren't able to commit to long-term plans.
• Because these companies can't decide how they want to position
themselves, they simply react to what's happening.
• This inadequate response to a changing environment causes them either
to
formally adopt one of the other strategies, or
go out of business.
• They avoid change, despite overwhelming changes in the market.
Dealing with the change
Class Discussion
• Who leads change better Manager Or Leader ?