Organizational change and firm growth
Table of contents: The Kazakh-American Free University Academic Journal №7 - 2015
Author: Kossenkova Darya, Kazakh-American Free University, Kazakhstan
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 is both extremely important processes of
change and learning. Change strategies, structures and systems is 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).
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 an organization.
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
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.
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.
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 R.M. 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 to
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).
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.
Pic. 1. Clusters of organizational change
/ 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 occurs 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.
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.
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.
/ 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.
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.
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.
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.
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 №7 - 2015