Organizational change is the improvement of entity structure which requires to make over time, it is the major change of business component. At any point in time, the change requires the company while it is growing. New CEO, New Department, Acquisition, Merger is a common form of organizational change which we can see in the new business world.
Not all changes are easy to accept by the current management, staff, and others. It is challenging for the current structure as they fear something new. People fear something they unknown. As the management, we have to ensure that everybody understands the importance and accepts the change.
Cause of Organizational Change
- New Leader: When the new CEO or Board of director, there will be a change in the company leadership style. Different people will have different styles. So more or less there will be a new change within the company when new leaders come.
- Change in major organizational structure: Company will face organizational change when there are acquisitions or mergers.
- New technology: The technology will always update to catch up with the world, so the company must update their system if they want to compete in the market. When we update a new system such as a machine or production process, the internal structure must comply with the system otherwise it will not work together.
- New Business Model: The company will update its business model and strategy to compete in the market. New business models require a huge change as the people and process need change as well.
Type of Organizational Change
- Adaptive Change: it is a small change that happens as a normal cause of business. All companies require a minor change to catch up with market development and competition. We may see some change in the new year sale strategy to increase sales target. Management change internal policy to reduce the cost to increase the profit.
- Transformational Change: It is such a significant change that happens due to restructuring such as acquisition, merger, and so on.