What Is Organizational Change? - Theory & Example

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  • 0:01 Defining Organizational Change
  • 0:23 General Concepts
  • 0:49 The Carnegie School…
  • 2:39 Example
  • 3:32 Lesson Summary
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Lesson Transcript
Instructor: Shawn Grimsley
Organizational change is an essential concept to understand in our complex world. In this lesson, you'll learn one of the theories of organizational change. You'll also have a chance to take a short quiz following the lesson.

Defining Organizational Change

Organizational change is both the process in which an organization changes its structure, strategies, operational methods, technologies, or organizational culture to affect change within the organization and the effects of these changes on the organization. Organizational change can be continuous or occur for distinct periods of time.

General Concepts

The study of organizational change is interdisciplinary in nature and draws from the fields of psychology, sociology, political science, economics, and management. You will not find a grand, unified theory of organizational change. Instead, you will find distinct theories that have not really been integrated to date. In this lesson, we'll focus on the Carnegie School of thought on organizational change.

The Carnegie School Theory of Organizational Change

The Carnegie view of organizational change was developed in the late 1950s and early 1960s. It focused on studying sources of stabilization and change in an organization. The Carnegie School made three important contributions to organizational change:

Failure-induced change: The theory of failure-induced change is rather simple. An organization will change its strategies, technology, culture, and other features of the organization in response to failure in an attempt to reach its goals. For example, if your company's old computer systems are wreaking havoc on your company's productivity, you may upgrade the systems to reach productivity goals.

Routinization of organizational activity: According to the Carnegie School, standard procedures, programs, and routines provide stability to an organization. Organizational change occurs when these standards are changed. Standard routines and processes can also help with organizational change, according to the dynamic capabilities approach to management. Under this approach, processes and routines are used to help an organization facilitate and adapt to change. A classic example is a company's research and development department, which aids the company in keeping up in a competitive market.

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