What is a Paradigm Shift in Business? - Definition & Examples

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  • 0:01 Defining Paradigm and…
  • 1:42 Personal Paradigm Shifts
  • 2:52 Internally-Driven…
  • 3:42 Customer-Driven…
  • 4:15 Cultural Paradigm Shift
  • 5:37 Lesson Summary
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Lesson Transcript
Instructor: Natalie Purcell

Natalie teaches high school English and French and has a master's degree in teaching.

In this lesson, we'll explore the definitions of the terms 'paradigm' and 'paradigm shift.' We'll also look at real-world examples of different types of paradigm shifts as the concept relates to individuals, corporations, and cultural groups.

Defining Paradigm and Paradigm Shift

Think of your favorite fruit. Imagine that for as long as you could remember, your favorite fruit was an apple. Not just any type of apple - it had to be a Granny Smith apple! You loved the bright green color, the scent of the apples in the fruit market, the crisp juicy crunch, and the mixture of sweetness and tartness that was just the right balance. You were sure that Granny Smith apples were simply the most perfect fruit ever created.

Then, you visited a tropical island, and in the village where you stayed, there was a whole new and wonderful rainbow of fruits available for you to taste. There were fruits that you had heard of before, but had never tasted, like plantains, papayas, and mangoes. Then there were others still that you had never even heard of before, like kumquats, rambutans, lychees, and dragon fruit. You tried them all, and guess what? You found out that you loved mangoes even more than Granny Smith apples! You have just experienced what is known as a paradigm shift.

A paradigm is a perception or a group of ideas about how things should be done, made, or thought about. In other words, it's your perspective on the world, your point of view, or your beliefs about what's true. A paradigm shift occurs whenever there's a significant change in the way an individual or a group perceives something, and the old paradigm is replaced by a new way of thinking, or a new belief.

Individuals have their own personal paradigms, or lenses through which they view the world. Corporations and other organizations have corporate paradigms regarding the methods by which they believe their goals will best be accomplished. Likewise, cultural communities have cultural paradigms that include their sets of beliefs about themselves, about others, and about the world.

Personal Paradigm Shifts

The narrative in the beginning of the lesson about your favorite fruit is a simple example of a personal paradigm shift. When you are exposed to new information or experiences, you may realize that your belief or your perspective was previously incomplete - or maybe even incorrect!

A more complex example of a personal paradigm shift could be adjusting your lifestyle in order to accommodate a relationship with someone who is important to you. Most relationships require some amount of compromise, but what if one person is very close to his or her family and the other is not, or one of you is very punctual and likes a schedule while the other is more casual regarding time and dislikes routines? Maybe you practice different religions or have different ideas about raising children or different attitudes regarding how to handle money.

In order for this relationship to have a chance to succeed, one or both of the people involved will undoubtedly experience a paradigm shift. One partner may choose to make spending time with family more of a priority, while the other partner may agree to living on a budget. In each case, an individual gains a new perspective regarding how something ought to be done and experiences a personal paradigm shift.

Internally-Driven Corporate Paradigm Shifts

Corporations and other organizations also have paradigms that drive their policies and procedures. For example, corporations are sometimes acquired by another company, and when this happens, a paradigm shift is likely to occur. Maybe the acquired corporation previously allowed employees to work on a flex-time schedule and dress casually because management believed this stimulated creativity and allowed people to work when they were most efficient. However, the company that acquired the corporation may have a policy of everyone starting at 8 a.m. and wearing business attire because this new management believes these practices form the most professional impression with customers. When organizations merge, one or both undergo an internally-driven corporate paradigm shift. New policies blending each corporation's philosophies can also form, allowing everyone to develop a new paradigm together.

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