# Causes and Types of Change

## Overview

Many things can cause change. You can have a sudden change (if you win Lotto, for example). You can also have change that comes more slowly, like what happens to us as we age.

In organisations, there are a number of different types of change. Sometimes, change can be caused by something outside the control of the organisation. An example of this might be the impact of the exchange rate on an exporter - they might find it harder to compete in their overseas market if the New Zealand dollar is too high. They would still be producing goods as effectively and efficiently as ever, but the environment for selling these goods would have changed.

Let's find out more about the causes and types of change.

### Types of change

Causes lead to a range of types, or classifications, of change. Thus, there may be:

- structural change
- technological change
- economic change
- cultural change.

### Causes of change

Organisational change is seldom a random event. It doesn't just happen. Instead, people, events, and situations cause change. Often, there are multiple and interlinked causes.

Causes, or triggers, can be external or internal. External causes include the economic situation, the competitive situation, politics, legislation, regulation and deregulation, social and demographic change, culture, changes in the international situation, and globalisation. Internal causes might include the appointment or departure of people, new ownership, a change in structure, new technology, and new operating methods.

### One change leads to another

It is very difficult to make one type of change in isolation.

For example, new technology can result in structural change. It can also cause changes in people, operating methods, and organisational culture. In the banking industry, technological change has had a massive impact on just about everything.

Cultural change is also likely to bring other changes. For example, if a government department implemented the extravagance of parts of the private sector, there would inevitably be an impact on values, attitudes, and behaviour. Similarly, if a car sales firm tried to install the job security of the public sector, there would be knock-on effects that could make it difficult to survive in that industry's highly competitive environment.

There are four main components of organisational change. Change in any one component affects the other components. You could think of the components as being connected by rubber bands.

### Crises

Performance deficiencies, or gaps between actual and desired performance, can be powerful initiators of change. Sudden and unexpected information about poor performance can lead to rapid change. Organisations usually stay with a winning course of action. They change in response to failure. Indeed, a performance gap can provide the impetus for considerable organisational innovation. Have you seen any examples of this?

A crisis or threat can create a sense of urgency and help people understand the need for change. In fact, some people suggest that a sense of crisis is an essential requirement for successful change.

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