Changes Assessing Types of Organizational

¶ … Changes

Assessing Types of Organizational Change Strategies

The intent of this analysis is to evaluate the organizational change strategies of turning, adaption, reorientation and re-creation. As the last decade has been one of the most turbulent from an economic and market forces perspective, the need for organizational change strategies that are agile and capable of responding quickly to risks and opportunities are critical (Levin, Gottlieb, 2009). Determining which of these organizational change strategies are the most successful and why and also determining if one category is more successful than another is also assessment. Finally the implications from this analysis are evaluated in terms of lessons learned for organizations that compete in industries noted for rapid and turbulent change.

Analysis of Organizational Change Strategies

Tuning strategies or those that seek to anticipate major shifts in the market and make incremental shifts in strategy over time, represent the least risk and the lowest level of potential impact to an existing company culture. Examples of organizations that rely on tuning strategies including General Electric and their decision to pursue medical products and healthcare as a result of favorable demographic trends globally (Sackmann, Eggenhofer-Rehart, Friesl, 2009). Another example of a company pursuing this strategy is Toyota and the continual commitment to improvement of their state-of-the-art supply chain system, the Toyota Production System (TPS) (Shook, 2009). Organizations with tuning strategies also over time transform knowledge and insight into a competitive advantage. Studies of the Toyota Production System and its transformation into a knowledge sharing network (Dyer, Nobeoka, 2000) illustrate how effective turning strategies can be over the long-term for transforming the competitive basis of companies.

Organizations that are reactive or incremental in their approach to adapting to competitive and market threats are considered risk averse as those who rely on tuning strategies. Unlike those organizations who rely on tuning strategies, organizations who use adaptation strategies are those that seek out potential opportunities while alleviating risks through better strategic planning and execution. Toyota with their Toyota Production System (TPS) is traditionally focused on consensus and risk reduction by thoroughly evaluating alternatives. In the case of sticking accelerator pedals and quality concerns over models produced in the 2007 to 2010 timeframe, the use of knowledge sharing ecosystems (Dyer, Nobeoka, 2000) is used for defining adaptive strategies for increasing enterprise compliance and quality management (ECQM). An example of an organization who has taken this approach with their mergers and acquisition strategy is Oracle. Their acquisition of over 40 different software companies in the last three years is a case in point. The acquisition of PeopleSoft to build out the Oracle Enterprise Resource Planning (ERP) platform also illustrates an adaptive, incremental approach to managing risk and capitalizing on opportunities.

Reorientation is an organizational change strategy that concentrates on making anticipatory changes that are often strategic in scope, and as a result this type of organizational change strategy is called "frame bending." Examples of companies using reorientation are PC and computer system manufacturers who successfully transition from being hardware-centric with their product and revenue strategies to being service-based. One of the most pervasive anticipatory changes has been the shift at IBM from being purely driven by hardware product sales to their IBM Global Services organization which has helped to rejuvenate the company significantly. By making autonomy, mastery and purpose a critical part of their culture, IBM has aligned with a critical lesson learned of working in high performance cultures, and that is to create ownership of tasks and roles (Levin, Gottlieb, 2009).

The most difficult and riskiest organizational change strategy is r-creation. This involves moving into new markets with new products, significantly changing the culture of an organization in the process. It is often done amidst significant stress and the threat of major loss to an organization, rarely taken on as part of a strategy of growth, more taken on as a strategy for survival. Most critical for re-creation strategies to succeed is the ability to create autonomy, mastery and purpose (Levin, Gottlieb, 2009) yet this is exceptionally difficult given how large the changes are that organizations face when going to this type of organizational strategy. Typically this strategy is relied on when a company faces exceptional threats. Microsoft being nearly rendered obsolete by the Internet is a case in point, as is the challenges they face with open source operating systems as well.

Conclusion

Of the four approaches to managing organizational change the most successful is adaptation as organizations can move into new, adjacent market areas without risking their entire organizational structure. Using adaptation as a strategy there is also the ability to set up customer listening systems and better understand the dynamics behind how markets are changing over time as well. In short, adaptation opens up the opportunity to grow in new markets without the risks associated with reorientation or re-creation. The Adaptation-based strategies are also the most effective in that they leverage existing skill sets within an organization and help to create entirely new market models as a result.