Levels of Organizational Change

eHow may earn compensation through affiliate links in this story.

Organizational change is a term used to describe actions taken by a company in order to improve efficiency or the quality of products or services. There are several levels of change from which organizational change can be implemented depending on whether a business wants to take minimum or maximum risks, according to Organized Change Consultancy.


Shaping the Future

The first level of organizational change involves management creating scenarios for the future of the business. Then the strengths and weaknesses of the organization are considered with respect to how well or poorly prepared the business is for implementation of the proposed changes. In order for the first level of organizational change to be successful, management must have a clear sense of what the business is good at; this helps to set the stage for the second level.


Video of the Day

Selecting Core Competencies

In the second level of organizational change, management should further identify a businesses' strengths and weaknesses. An analysis of opportunities and threats should also be completed in preparation for defining the organization's goals and strategies. Management will sometimes attempt to begin the organizational change process at level two and this occurs for several reasons. Some business leaders may assume that the future will mirror the past. Others may have been tasked with working in the framework of the organization's existing mission statement and not given the freedom to refine or revise that mission.


Making Structural Changes

Structural change, which is the third level of organizational change, typically takes the form of transformational change. Transformational change is radical in nature and involves "big picture" changes, such as switching from a top-down management structure to a more self-directed, team-based structure. Level three of organizational change can be seen as a reengineering of organizational processes with the aim of improving productivity and customer satisfaction; it is usually pursued by companies that are not afraid of risk or change.


Changing Work Processes

The fourth and final level of organizational change involves incremental changes. Organized Change Consultancy observes that companies who prefer implementing incremental changes tend to be risk-averse and tend to underestimate how much organizational change is actually required. Level four changes can be unsuccessful in the long term if the small changes are not supported throughout the organization.