Types of Business Change

Change is a complex phenomenon. There are different types of changes that are going on around us. Listed in this article are twelve areas in which change arises and bring some classification to it. However one may classify the change, the various heading is always interrelated. The change could be triggered by market changes, technological changes, or organizational changes.

There are several models of organizational change. A model is an integrated way of explaining why and how change takes place, based on a known and acceptable basic explanation (theory) of relationships of several aspects involved. It would be obvious that there can be different ways of explaining the change, depending on what theory we follow or use.

1. Trickle-Down Model

Two contrasting models of change are the "trickle-down" model vs. "identity search" model. In the trickle-down models of change, the change is driven by the elite group. The organizational change occurs because the top management takes a decision and adopts some new ways (technology, systems, structure, etc.) and others follow it.

2. Identity Search Model

According to the Identify Search Model, the urge to develop one's own uniqueness and identity will make the group or individuals accept change.

3. Internal Change

Another way is to look at change is to look for the external or internal forces as determinants of changes. Change can be a result of internal factors like changes in the direction and objectives and ideology of a company or a workforce.

4. External Change

The changes, which occur within the business, can result from external environments such as the development of technology, globalization of markets, or new competitors on the market.

5. Adaptation Model

Business models change as managers engage in more mundane adaptation in response to external changes. The adaptation model emphasizes the role of external factors (for example a new government policy, or competitive environment) in producing a change in organizations (more emphasis on quality, restructuring, etc.). To respond positively to environmental changes, the person must adapt.

6. Proactive Model of Change

According to the proactive model, the explanation comes from within the organization (the decision of the organization to set an example, to be a leader, to anticipate the future) and act and change itself in response to such an internal urge. Companies that take a proactive approach to change are often trying to avoid a potential future threat or to capitalize on a potential future opportunity. Corrective action was being taken before a market decline or before technology became obsolete. Positive action was being taken to seize competitive advantage before someone else did.

7. Structural Model of Change

Yet another explanation of organizational change may lie in the emphasis on the structure or the process. Structural change refers to a dramatic shift in the way a country, industry, or market operates. Successful change, according to the structure model, would require preparing the necessary structural details (technology, design of the organization, systems), and introduce them systematically.

8. Process Model of Change

The process of change entails creating the perception that a change is needed, then moving toward the new, desired level of behavior and, finally, solidifying that new behavior as the norm. People will also change, according to the process model, successful change can be planned by helping people to develop process competencies (ways of planning, decision-making, problem-solving, collaborating, communicating, etc.), and then people will find new ways of organizing, etc.

9. Adaptive Change

Adaptive change requires new learning for problem definition and solution implementation. Adaptive change requires auditing of existing systems, roles, and responsibilities. This process can often result in essentially rebuilding the entire company by redefining job descriptions, consolidation, elimination of overlap, and creating greater efficiencies. This involves the reimplementation of a change in the same organizational unit. Adaptive change is not considered threatening.

10. Innovative Change

An organization needs to constantly innovate to succeed. Innovation is about making things better, faster, or cheaper. Dynamically continuous innovation affects the way in which the company adapts to changing market conditions. This involves changes that are generally new and unfamiliar. The innovative changes create a kind of uncertainty and fear in organizations.

11. Radically Innovative Change

Radical innovation is an invention that destroys or supplants an existing business model. Radical innovation is the long-term growth strategy for revolutionary business transformation. The concept of radical innovation is about leveraging core competencies for the future and this is the most intimidating type of change. This type of change is most resisted in organizations. Radical innovation creates such a dramatic change in processes, products, or services that they transform existing markets or industries, or create new ones. Implementation of a radical change in an organization requires a long-term strategy.

12. Reactive Change

This is a change brought about by a sudden or unplanned event. Whereas the planned change is a systematic, deliberate change in the way part or all of an organization functions. In planned change the focus is on processes, people, or technology; and one person, a project team, a department, or the entire firm can be involved in the change process.