Organizational change and firm growth
Table of contents: The Kazakh-American Free University Academic Journal №6 - 2014
Author: Kossenkova Darya, Kazakh-American Free University, Kazakhstan
In the modern literature on change
management, there are different approaches to the definition of "organizational
change". Some authors have focused on the process component of organizational
change (Barnett, Carroll, 1995), others - focus on the content component (Van
de Ven, Poole, 1995; 2005). The terms "organizational change",
"change" and "transformation of the company" refers to
those institutional reforms, during which achieved a change in values, aspirations
and behavior while changing processes, methods, strategies and systems.
Organizational change accompanies the learning process, because modern organizations
are both extremely important processes of change and learning. Change
strategies, structures and systems are not enough if they are not accompanied
by a change in the thinking of generating these strategies, structures and
systems. According to some authors, organizational change can not be separated
from the organization's strategy, and vice versa (Burnes, 2004; Rieley and
Clarkson, 2001; Todnem, 2005).
In this study, under the "organizational
change" means any "development of new ideas or the introduction of
new patterns of behavior in the company» (Daft, 2001). In our view, this
definition described as Process and substantive aspects of the process of
organizational change and covers almost all types of changes that can occur in
Analysis of studies on change management
shows that scientists have for quite a long period of time studying the
typology of organizational changes and characteristics that underlie the
differences in types of changes. Most of them, anyway, based on the distinction
between incremental and radical (evolutionary and revolutionary, cumulative and
discrete) changes. For the first time such a division was made in the early
1970's. When Vattslavik, Uikland and Firsh (Watzlawick, Weakland, Firsh, 1974)
introduced the concept of change of the first and second order. Under the
change of the first order were understood Changes- "variation around the
main theme", and under the second-order change - crucial breakthrough that
has no connection with the past. In our view, this classification is fairly
general, allowing to interpret it as the content and the process of change, and
both characteristics together. On the one hand, this is its advantage (high
degree of generalization), and on the other, has brought some confusion in the
work on changes since in each case, you need to understand what the author has
in mind, using this classification.
Currently, most of the research literature
on change management is a critique of the proposed approaches to the
classification of organizational change and attempts to highlight an original
approach to the classification of types of changes. As a rule, the proposed
approaches are diametrically opposed continuum of types of changes, which are
based on certain classification features, such as the duration of the changes,
the rate of change, a strategic approach to change, and others. For example,
the incremental (incremental) changes contrasted transformational
(transformative) changes (Dunphy, Stace, 1993), episodic (episodic) changes -
permanent (continuous) change (Huy, 2001), scheduled (planned) changes - sudden
(Bamford, Forrester, 2003), evolution (evolutionary) change - revolutionary
(revolutionary) (Pettigrew, 1985), changes the first order (first order change)
- change of the second order (second order change) (Bartunek, Moch, 1987);
Convergence (convergent) change - radical (radical) (Greenwood, Hinings, 1988,
1996; Miller, Friesen, 1982), etc.
The above described approach to the
dichotomy of distinguishing different types of organizational changes, of
course, has a certain research purposes, but at the same time does not provide
a general understanding of this complex phenomenon. Moreover, the traditional
use of the term "change", as a rule, is ambiguous and imprecise
(Marshak, 2002). Overall, this is due to the fact that the basis for the classification
of types of change is only one classification feature. For example, the main
characteristic of the planned changes is the degree to which the change is subject
to control by the management. However, another equally important characteristic
of the planned changes may be planning style changes - a directive or participative
(Maes, 2008). Some authors have attempted to overcome the limitations of using
only one feature to highlight changes typologies. They use two or more
classification feature, creating a matrix by which to distinguish between
different types of change.
One of the most successful attempts to
summarize the various typologies of organizational change is the work (Maes,
2008), which presents a systematic approach to organizational change, which is
based on the seven attributes of the system. Generally, the attributes of the
system are presented in Table 1.
Table 1. Types of organizational change
Source: (Maes, 2008, p. 36).
It should be noted that in addition to the
above classifications, organizational change, another, no less popular, is the
classification of types of strategic organizational changes proposed R. Daftom:
changes in the products and services, changes in strategy and structure,
cultural change and changes in technology (Daft , 2001). Furthermore, according
to RM Kanter, changes in the Company may occur at different levels and have
different effects on the results of its operations. According to RM Kanter,
change management takes place on three levels: the draft changes, program
changes and changes in the organization-conductors (Kanter, 1999, p.20). It
should be noted that in a recent study (Self et al., 2007) proposed a classification
of organizational change, depending on the impact of these changes - whether
they lead to the dismissal of the employee or not. The authors believe that
such a classification allows to predict the reaction of the staff for the
upcoming changes and, consequently, to develop a program to overcome resistance
Thus, the organization can be implemented
different types of organizational changes at different organizational levels.
It appears that the different types will have different impacts on the operations
of the company, in particular the growth of the firm. At the same time, such an
effect may be either short-term or long-term exposure. We propose to consider
the types of organizational change in terms of their impact on the performance
of the company in the short-medium and long term. To do this we will use a
two-dimensional matrix (see pic. 1).
It seems that all types of organizational
change can be divided into two different approaches to change: adaptation /
improvement and transformation. At the same time, the proposed approach can
have different length (duration) of the time. Thus, we get four different
cluster of organizational change depending on the scale and duration of these
changes. Consider in more detail the clusters.
1. Clusters of organizational change
Adaptation / improvement. This approach to change focused on the individual components of the
organization in order to adapt or improve to better match the other components
of the organization. Adaptation / improvement occur within the existing
organizational strategy and structure (Nadler, Tushman, 1989). This approach to
change is the so-called incremental or minor changes, and is aimed at small
improvements without radical changes in the organizational structure and
hierarchical culture (Hope Hailey, Balogun, 2002). Unlike most types of organizational
changes that are considered to be the responsibility of top management, adaptation
/ improvement is often associated with a key role performers (Choi, 1995).
Depending on the duration of this change, we will allocate two clusters
changes: rapid improvement and long-term improvement.
Rapid improvement occurs in a short time and usually has a local character, as
executed in the form of draft amendments. According to R.M. Kanter, these
actions can be successful in the short term, especially if they are focused,
results-oriented and do not violate the traditions of the company.
Long-term improvements are known in the theory and practice of business a long time, and
the cluster changes can be attributed to the third level of organizational
change on the classification of R.M. Kanter - organization of change. This is
the name of the company who are able continuously to innovate, improve and do
it before it will require external circumstances. This organization, mobilizing
many people to carry out the changes. Success depends on whether there are
conditions necessary for the transformation of the organization capable of such
changes that occur continuously and are perceived as natural.
Transformation / update. The term "transformation" is often used in the literature
on change management interchangeably with the term "reorganization",
"transformation", "update", "radical changes" and
others. The total in these terms is that they are all aimed at changing the
organization as a whole, rather than its individual parts. In this paper, this
word refers to a radical organizational changes, i.e changes that are relevant
to the strategy and structure of the organization, i.e, changes "second
order» (Bartunek, Moch, 1987). Transformation / update affects not only the
changes in strategy and structure, but also a change in organizational culture
(Hope Hailey, Balogun, 2002). According to some authors during the
transformation / update requires a paradigm shift of thinking, mental models
and organizational values.
Rapid transformation refers to the second level of organizational change - "change
programs" classification R.M. Kanter. As a rule, - related projects designed
to provide a set of organizational impact. Rapid transformation means that
changes occur in a short time, and focused on changes in key elements of the
organization. Examples of rapid transformation may be some changes in the
program, as the development of outsourcing operations or launching of a series
of operations that were previously outsourced, the company itself, the
introduction / removal of the product line, etc.
Long-term transformation, as well as rapid transformation is a program of organizational
change. However, in this case we are dealing with the duration of the program,
which can be done within a few months, or even years, depending on the size of
the company. Examples of long-term transformation of these programs are
large-scale organizational changes, mergers and acquisitions, joint ventures,
changes in strategy and structure of the company and others. All of these programs
require not only a significant financial investment for their implementation,
but also quite a serious investment of time. According to (Hannan, Freeman,
1984), large-scale changes reduce the reliability of results, due to the fact
that fluctuations in the quality and timeliness of collective action are
reduced in a period of fundamental change. Strategic changes rarely occur in a
short time. Most often company spends some time for such changes in the
program, and for a certain period of time burst existing communication with the
external environment and to establish new, leading to slower growth firms.
When implementing change programs success often
depends not so much on the quality of the program or the methods of its
implementation, but on how each element of the program is linked with other
activities of the company. According to R.M. Kanter, program changes often fail
because they are isolated from continuing operations, contain too many states,
cannot be combined with one another, or run an elite group that expects that
everyone should drop everything and join the cult preached it.
The practice of the majority of large-scale
transformations shows that such changes being made by top management in the
first place in order to achieve an immediate effect that usually happens. If we
consider the long-term impact on the growth of the transformation of the company,
then, in our opinion, this effect will depend on the type of organizational
transformation. We can assume that over time the impact of rapid transformation
will decrease until it disappears completely as a result of organizational
inertia. At the same time, in the case of long-term transformation, long-term
impact on the operations of the company can be very significant, because the
top management of the company will pay special attention to these programs for
a long period of time.
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Table of contents: The Kazakh-American Free University Academic Journal №6 - 2014