Solved! Define disruptive change and how it differs from incremental change. How does disruptive change affect an organization? Provide an example of disruptive change

Define disruptive change and how it differs from incremental change. How does disruptive change affect an organization?

Define disruptive change and how it differs from incremental change. How does disruptive change affect an organization? Provide an example of disruptive change, how an organization responded, and an analysis of that response. Did the organization successfully navigate the challenges inherent to the disruptive change?

Sample Expert Answer

Change in organizations can come in various forms, depending on the cause or forces behind the change. One of the forms of change is disruptive change. This is a sudden and often unpredictable shift that significantly alters an industry, market, or organization (Li & Huang, 2019). It is commonly driven by technological breakthroughs, innovative business models, or shifts in consumer behavior.

Another form of change is incremental change, which is a systematic and gradual shift, through small and continuous adjustments to an existing system, product, or process over time (Li & Huang, 2019). This incremental approach seeks to improve or enhance the current state by implementing small, manageable changes, step by step, resulting in overall improvements and refinements while preserving the organization’s core structure.

One of the ways disruptive change affects an organization is by forcing organizations to adapt quickly, which can lead to initial resistance due to the stress involved, but ultimately drives innovation, requiring leadership to foster a culture of flexibility and resilience (Khaw et al., 2022). Another way disruptive change can affect the organization is by creating a significant shift in market dynamics as new competitors or technologies emerge, requiring organizations to rethink their strategies.

One great impact is on organizational culture, where employees may be required to embrace new ways of working or a behavioral shift across the entire organization. While this can create uncertainty, it also opens opportunities for growth and development through continuous learning.

An example of disruptive change is digital banking, where the rise of FinTech companies like Stripe and Square revolutionized payment processing, offering simpler, faster, and more affordable alternatives to traditional banking services (Bhattacharjee et al., 2024). The traditional financial institutions, like the Bank of America, responded by developing their own digital payment platforms and investing in mobile banking technologies. This response enabled them to stay competitive in an increasingly tech-driven financial landscape. However, the challenge remained in updating legacy systems and addressing regulatory concerns, which took time and significant investment.

References

Bhattacharjee, I., Srivastava, N., Mishra, A., Adhav, S., & Singh, M. N. (2024). The rise of FinTech: Disrupting traditional financial services. Educational Administration: Theory and Practice, 30(4), 89–97.

Khaw, K. W., Alnoor, A., AL-Abrrow, H., Tiberius, V., Ganesan, Y., & Atshan, N. A. (2022). Reactions towards organizational change: A systematic literature review. Current Psychology, 1. https://doi.org/10.1007/s12144-022-03070-6

Li, B., & Huang, L. (2019). The effect of incremental innovation and disruptive innovation on the sustainable development of manufacturing in China. SAGE Open. https://doi.org/10.1177/2158244019832700