Organizational Adaptation Theory

by Ana Purna; Updated September 26, 2017

Organizational adaptation theory posits that organizations, in whole or just in part, will transform
their structures or procedures to cope with a changing environment, such as a shifting economic
landscape, new legislation impacting their field or the introduction of a new parent organization.

Purpose

Organizational adaptation is necessary to correct imbalances and improve inefficient processes

within an organization, and in how that organization works in the world at large. The adaptation
can be reactive and come after a change in the external environment, or it can be preemptive.
Managers may implement changes in an organization's procedures and culture in anticipation of
a change in the market or legal landscape the organization operates in. Organizational adaptation
theory generally refers to how a change in the environment dictates changes in groups of
organizations, rather than how a specific organization changes to adapt.

The Theory at Work

One example of organizational adaptation at play is how banks adjust to new laws that affect the
way they manage accounts and deal with customers. Some of the organization's processes must
change in order to comply with the new laws. They will have to innovate new means of
generating the revenue lost in the changes. Other aspects must remain constant. Customer
service, for example, might be a core value that the bank has to uphold in order to retain their
client base and reputation.

Adaptation and Control

Organizational adaptations stands in contrast to the concept of organizational control.

Organizational adaptation theory holds that in changing times, organizations fare better if they
adjust their practices. Organizational control would have managers and members of an
organization hold firm in their procedures, shielding themselves from the changing environment.
In reality, both concepts play into organizational management. Some procedures must remain
constant in order for work to be done efficiently. Other aspects of an organization must evolve in
order to stay relevant.

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