A company can implement different forms and types of organizational change, depending mainly on the source (cause) of the change.

Here, I will try to describe all types of changes briefly and cover the main characteristics of types of organizational change.

Introduction to Organizational Change Management

What is Organizational Change?

Organizational change refers to the steps an organization takes to change major components of its functioning, such as its culture, infrastructure, internal processes, or technologies. Organizational change helps an organization move from its current operations to a new vision for the future.

Every organizational change requires strong support from all internal and external key stakeholders.

Why Change Management Matters

Change management is crucial for implementation and smooth transition to enable business sustainability and growth.

Effective organizational change management will largely depend on a change management strategy that covers the types of organizational changes that will be implemented.

Such a change management strategy will help your company stay competitive in the market and avoid financial or emotional turbulence. So, change management is vital for ensuring successful organizational change and minimizing disruption.

There are different change management frameworks, such as a diagnostic model of organizational change, Kotter’s 8-step change management model, Lewin’s change management model, and Burke-Litwin change model.

Reactionary Change VS Proactive Change

The most common classification of changes is:

1. Reactional (reactive, remedial change), and
2. Proactive change.

Remedial Change

Remedial change is reactionary. It occurs when a problem is identified, and a solution needs to be implemented. It is designed to address an issue and is often immediate.

Remedial change (or reactive) occurs when change management reacts to a problem that is identified or when certain circumstances in the organization’s environment require a solution.

This type of change results from strong pressure from internal and external factors, and therefore, organizations must change. So, this change is necessary if the organization wants to survive. The forces that cause these changes happen, so change management does not have much space to think and plan the change, which is why it is often called an unplanned change.

Unplanned change is necessary following unexpected events inside the company or the company’s environment. Effective change management is crucial for unplanned change, and companies must be prepared to minimize risks and emerge more adaptable and resilient.

For example, when the competition introduces a new product, managers have two solutions available:

1. To take no action and reduce market share and
2. To take some action (react) by introducing a new product to maintain or increase market share.

The second solution is clearly better, so we emphasized that the organization must change its operations.

Proactive Change

Proactive change, sometimes called planned change, is a type of change that is planned by the change management team. That is, the organization has decided to change its operations. Management develops a clear vision to predict the future, and based on this vision, they start the change process, which, in any case, will be some type of strategic change.

The proactive approach can include developing new technology for the production process, conducting cultural change, changing the company’s direction, etc.

The difference between proactive and reactive change is that proactive change is desired, not necessary. They are better because they are planned, but it does not necessarily mean that everything planned will be executed correctly.

Types of Organizational Change According to the Impact on Company’s Operations

Another classification of changes found in the literature is according to the impact of the change on the operation of the enterprise. This classification mainly refers to external sources of change. According to this, there can be four types of changes:

1. Irrelevant changes (changes that do not affect the operation of the organization)
2. Changes as needed (changes that may affect the organization if it wants to participate in them).
3. Changes that can be stopped (changes that will affect the operation of the organization if it does not take some action)
4. Unstoppable changes (changes that the company cannot avoid)

Figure 4-1 presents these types of changes according to the degree of impact on the organization’s operations.

Tactic VS Strategic Change

Apart from these two classifications of changes, we can also divide them according to the level of changes:

1. Strategic change
2. Tactical change

Strategic change requires a change in a company’s strategy to activate major transformations in the organization’s overall goals, direction, and structure, starting from management hierarchy to operational job structure. These changes often involve significant resources and affect the company’s long-term strategy. Strategic changes include mergers, acquisitions, new product launches, or entering a new market.

On the other hand, tactical change is more process-oriented and covers smaller adjustments made within specific departments or processes to improve efficiency and productivity. These changes are usually more focused and have a shorter timeframe than strategic change. Examples of tactical changes include implementing new software systems, reorganizing teams, or modifying existing processes or work procedures.

Regarding the application of these two types of changes, there are major controversies about which type of changes should be applied, that is, whether the changes should be tactical or should be such that they will refer to the entire organization and overall operations of the organization.

Proponents of the first view argue that a program with a high level of change is too much and too fast for people. Still, others think that such tactical programs open up too many fronts for fighting battles, thereby reducing the likelihood that change will succeed.

However, in most cases, the best approach is to use a combination of both types of changes.

Types of organizational change according to what will be the focus of the change management

Another classification of changes is based on what will change in the organization:

1. Technological change
2. Structural change
3. People-centric change

Technological change

When we talked about external sources of change, we saw that the scientific development of new technology is the cause of this kind of change. These are some of the most visible and dramatic changes that have been made in organizations in recent years.

New technologies come on an everyday basis. For example, automation and robotics in the production process are increasingly present, and information technology, especially digital transformation, artificial intelligence (AI), augmented (AR) and virtual reality (VR), and the Internet of Things (IoT), opens totally new perspectives on how business operates and how organizations work. They are simply changing long-time status quo situations in companies. Simply put, when it comes to new technology, it is a change-or-die situation.

Whether we like it or not, the speed of technological and especially digital transformation in organizations is not easily followed.

Technological change, for example, can involve introducing new software or systems to improve business processes. Effectively managing technological change is crucial for organizations to adapt and succeed in today’s business world. Here, digital adoption platforms can play a key role in providing comprehensive training, personalized support, and resources to help employees understand and effectively use new technologies.

Structural change.

Structural change has become quite popular among organizational experts because organizations want to establish an organizational design and company structure that is as efficient and effective as possible regarding better communication, coordination, standardization, and specialization of activities.

This change also refers to issues of centralization and decentralization in decision-making and the size of work units. An example of this type of change is to change the current organizational structure (e.g., functional) to some other structure (e.g., matrix structure).

However, changes in structure will require changes in job functions to match the new organization’s structure. Also, new policies and procedures must be used, duplicate departments eliminated, and employees’ positions reassigned or relieved. As a manager, you may also need to acquire new employees and create new positions in a totally new department.

People-Centric Organizational Change.

People (employees) are the most important component of organizations because their success depends on them. We can implement structural or technological changes, but if they are not accepted by the organization’s members, who will have to apply the new standards, all the work can be thrown into the water.

You probably already know that most change initiatives fail, and the main reason for this failure is people factors. So, managing change means never forgetting about the people, regardless of the type of change you are implementing.

People-centric change relates to the motivation, skills, behavior, values, attitudes, norms, perceptions, job descriptions, and hiring new employees of the organization’s members. This is the essence of any change process, and if you want to ensure successful organizational change, you can not only focus on technology and structure but also on the people in the organization.

This change will also occur when the company undergoes mass hiring or layoffs, requiring another organizational and cultural change initiative regarding internal operations and processes (structural change).

Remember that effective leadership and communication from business leaders are crucial for this change.

I want to point out that you can consider these changes separately, as in the theory. Still, in reality, they are intertwined and appear as a combination of each other or, more often, all together. So, from the basic three types of changes, we will get four new ones:

• Techno-structural change (changes in technology and structure);
• Sociotechnological change (changes in people and technology)
• Sociostructural change (changes in people and structure)
• Socio-techno-structural change (changes in people, technology, and structure)

Organizational Change According to the Time to Change

Managers have to do two things at the same time: to manage and to change.

Winford Holland describes this process in four possible situations or states of change, ranging from D (uninterrupted changes over a long period) to A (a long period without changes, then changes, and again a long period without changes).

A is already past and would not lead to the successful operation of today’s organizations. B and C are modes of change from the last decade, while D represents a state of change that is needed for today’s organizations.

Incremental VS Radical Changes

Incremental change

The word incremental comes from the Latin word “incrementum”, which means growth, rise, increase, and advancement. So incremental changes lead to a constant increase in organizational effectiveness and efficiency, leading to constant improvements in short periods.

Incremental change is a process-oriented change that focuses on existing processes, structures, and technologies. This process-oriented change is the basis for other characteristics of this type of organizational change.

The second characteristic of incremental changes is their very low risk of failure because people at the bottom line initiate them and aim to improve processes, structures, administrative procedures, and technology.

The third characteristic of incremental change is low uncertainty, and therefore, this type of change will have fewer people who will resist change. Since it is about improving the existing elements of the organization that are known, the problem that is being solved is also known.

Radical or Transformational Change

The word radical comes from the Neo-Latin word “radicale,” which means root, complete, from the base, thoroughly. Hence, it can be concluded that this change represents fundamental changes from the foundation.

For example, transformational change focuses on an organization’s fundamental elements, including corporate culture, values, and operations. Digital transformation and innovation are rapidly changing organizations, and organizations are finding new ways to improve their business processes by leveraging new digital technology.

Transformational change is sudden, dramatic change with noticeable results in terms of organizational performance.

A characteristic of transformational change is that it targets new processes, structures, and technologies and does not focus on current processes, structures, and technologies.

The second characteristic of radical changes is their very high risk of failure. This is because these organizational change initiatives require an entirely new way of working, which can easily cause resistance among organizational members.

The third characteristic of transformational change is the high level of uncertainty, which is why this type of change is more resistant. Because it is about improvement by introducing completely unknown organizational elements and aims to establish specific stability over a relatively longer period, the vision for the future situation is not completely clear in the initial stages. Also, the fact that the initiative originates from top management increases the likelihood of resistance to those changes.