Organizational Transformation Meaning, Importance, Types & Process

Published by MBA Skool Team, Last Updated: October 10, 2021

What is Organizational Transformation?

Organizational transformation is a gradual and systematic change which companies undertake in their corporate culture and organization structure to adopt to changing competitive landscape and customer needs. Organizational transformation takes place when there is a change in the way the business is done or in the event of a reengineering or restructuring activity. Some key elements which undergo a change are the company values, mission, vision and the overall culture of the organization.


Importance of Organizational Transformation

In order to gain competitive advantage, it is essential that companies keep on evolving. While product & service innovation are critical, it is important to ensure that the organization, employees and business processes are also up to speed. Organizational transformation focuses on changing the way the employees of a company operate in. Along with the structural changes, the attitude of the employees, their perspectives as well as the culture of the organization undergoes a significant change. It’s about re-modelling an organization in its entirety. Organizational transformation can ensure enhanced employee performance, positive work culture, competitive advantage and in the end a higher business. 

Types of Organizational Transformation

The three main areas which need to be addressed which planning a strategic transformation are people, process and technology.

People

The culture and value change in an organization are critical when we look at organizational change. Employee feedback, good work benefits, regular feedback, well defined organizational structure etc. are ways ensuring that employees have a high motivation.

Process

Improving existing processes and adopting agile processes is another important aspect of organizational transformation. Better processes can increase efficiency, productivity and overall performance of a company.

Technology

Innovation, technical expertise and automation are essential elements which can boost a business. A business having less technological advancements can stagnate and end up losing any competitive advantage they might have.

Organizational transformation is a continuous process and companies must consciously strategize and prioritize these changes to remain relevant in a competitive market.

Hence, this concludes the definition of Organizational Transformation along with its overview.

This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

Browse the definition and meaning of more similar terms. The Management Dictionary covers over 2000 business concepts from 5 categories.

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