Research in Organizational Change and Development. Volume 14

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Author: W.A. Pasmore | R.W. Woodman

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LIST OF CONTRIBUTORS José DelaCerda

Department of Economics, Administration, & Finance, ITESO University, Mexico

Mike Geppert

European Business Management School, University of Wales, Swansea, U.K.

Judith R. Gordon

Organization Studies Department, Boston College, USA

C. R. Hinings

Faculty of Business, University of Alberta, Canada

Lynda M. Kilbourne

Department of Management & Entreprenuership, Xavier University, USA

Chung-Ming Lau

Department of Management, The Chinese University of Hong Kong

Michael R. Manning

Department of Management, New Mexico State University, USA

Susan L. Manring

Department of Business Administration, Elon University, USA

Paul C. Nutt

Fisher College of Business, The Ohio State University, USA

Arnon E. Reichers


Christina J. Struckman

San Jose State University, USA vii

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LIST OF CONTRIBUTORS

John P. Wanous


Karen S. Whelan-Berry

School of Business, Texas Wesleyan University, USA

Richard W. Woodman

Department of Management, Texas A&M University, USA

Francis J. Yammarino

School of Management & Center for Leadership Studies, State University of New York at Binghamton, USA

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PREFACE For the past several years, we’ve noticed that authors in the field of organizational change and development have been pushing toward new horizons and returning to the roots of the discipline with about equal frequency. For some time, nearly every article or book has begun with the statement that we have never witnessed a period of change quite like the current one. The factors causing perceptions of the rate of change to increase vary from year to year, but there always seem to be plenty to consider. Current candidates include the more complete globalization of products and services, the death and rebirth of the technology sector, unethical behavior at the top of some companies leading to destabilization of the stock market, more complex inter-organizational arrangements, consolidation in key industries, and the continued evolution of the European Union and other international trade agreements. In the background for the time being, but still lurking as drivers of change that can step to the forefront at any moment, are such factors as technology advances, changes in consumer preferences, experiments in new organizational designs, new types of interventions aimed at improving organizational effectiveness, scarce resources, political upheavals and new regulations. As thinkers in our field have puzzled over what more they can bring to the table to help with all this, some have taken the stance that the challenge hasn’t really changed even though it is dressed in different clothing. In the view of these thinkers, change itself is what has remained constant. With each new challenge, what is required is a return to the foundations of the field, not a reinvention of it. A second group of thinkers would protest that our traditional approaches to change are not up to current demands. These thinkers might point to the increasing pace of change, greater geographical dispersion of organizations, lower levels of loyalty and commitment, the need to align a greater number of stakeholders with varied interests, or the sheer scale of modern organizations as reasons to obsolete our existing approaches and develop new ones. Executives, on the other hand, are more occupied with change than ever. They are less concerned with whether an approach to change is traditional or new than they are with whether or not it works. For most executives facing challenges to the future of their organizations (and to their own employment), efficacy is more important than efficiency in change. “Just solve the problem so that I can move on to the next opportunity” might be an expression of their preference. ix

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Organizational change and development consultants, who span the academic and applied worlds, are caught between tried and true approaches to intervention and the increasingly complex and seemingly heretofore never-encountered challenges they must help their clients resolve. Traditional approaches may be too slow, too limited, too ineffectual during implementation, or simply inadequate to deal with the pace and scope of change their clients are facing. What all of this means, we think, is that now more than ever a better blending of the best from the past and the most radical of the new is needed in the field of organization change and development. As much as we would like to say that the papers in this volume of Research in Organizational Change and Development present the needed synthesis, the best we dare to claim is that collectively, they offer stimulation to those interested in taking up the challenge. A brief synopsis of the papers follows, after which we will return to some questions regarding where we stand and the work left to be done. In “Organizational Change: A Categorization Scheme and Response Model with Readiness Factors,” Christina Struckman and Francis Yammarino offer a new way to organize the field of organizational change. Responding to the calls of many authors for a better theoretical framework to guide inquiry in the field, Struckman and Yammarino offer an “organization change response model” that synthesizes current change research into four types and suggests a set of management responses for each type of change. The authors arrive at their framework after an interesting search for common themes in a comparison of organizational change with change theories in the fields of biology, physics, environmental science, and social psychology. The four dimensions of change that emerge are type, readiness, process and inertia. With the help of these dimensions, change events can be characterized and linked to the types of responses or interventions required of executives. The authors then add time to the equation as a fifth dimension that influences the choice of processes used to execute change. Readers will find Struckman and Yammarino’s framework to a thoughtprovoking guide to both theory development and practice. They will also find the authors’ sweeping review of the literature and their integration of it using the model as a guide very impressive. If one is looking for a framework to use in thinking about where further advances in the field are needed, the organization change response model would be a good place to begin. In a paper that reflects the increasing globalization of our field, Mike Manning and José DelaCerda detail the spread of whole systems change interventions in Mexico. The paper, “Building Organizational Change in an Emerging Economy: Whole Systems Change Using Large Group Interventions in Mexico,” does a wonderful job of reviewing the history and context of organizational change interventions in Mexico. Readers will find themselves educated equally about

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the evolving socio-political-economic climate of Mexico as a country and the specific adaptations made to achieve success with large group interventions there. The authors conclude that while the context in Mexico is indeed different from that in the U.S. and other countries within which the field of organization change and development evolved, interventions using democratic principles of involvement are both appropriate and successful. In using a number of specific cases to illustrate this point, the authors help us understand that the challenges facing consultants intervening in Mexican organizations are more similar than different compared to what we would see in other settings. Karen Whelan-Berry, Judith Gordon and Bob Hinings then treat us to an empirical study of four important drivers of organizational change, including participation, training, communication and leadership. In “The Relative Effect of Change Drivers in Large-Scale Organizational Change: An Empirical Study,” the authors use a multi-method research approach to tease out the impact of these different drivers of change during an intervention in a large bank. While we don’t want to give away the findings here, we were surprised to learn which drivers seemed to have the greatest impact in this instance. We were also excited by the potential to apply this approach to studying a larger range of interventions in different settings, from which could emerge a much better understanding than we have today of when to use which drivers to optimize the outcomes of a change effort. Shifting the lens from drivers of change to change methodologies, Paul Nutt examines “Implications for Organizational Change in the Structure Process Duality.” The schism between structure and process in our field is nearly as old as the field itself. In some of our universities, separate courses are taught in micro and macro organizational behavior, sometimes by different faculty members who have a bit of difficulty understanding one another’s interests. Nutt tackles the issues inherent in the relationship between structure and process by assuming the two are a duality rather than independent from one another. By examining theories that reveal how processes beget structures and structures in turn beget processes, Nutt reminds us that what we need are syntheses rather than debates. With this paper, Nutt asks us in a sense not worry so much about whether the chicken or egg came first but instead to focus on the process by which eggs are created, become chickens, and create more eggs. By understanding how these processes work, we can intervene in them in order to produce very different structures and more desirable results. While Whelan-Berry et al. and Nutt make use of the fields of biology and physics to bolster their analyses, Susan Manring chooses instead to draw inspiration for her writing from great literature. In “How Do You Create Lasting Organizational Change ? You Must First Slay Grendel’s Mother,” Manring uses xi

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the classic story from the poem Beowulf to remind us that seemingly successful short-term change efforts can be defeated in the longer run by the animosity they sometimes engender. As we mentioned earlier, some executives take the short-term, solve this problem and move on to the next approach to change. As scientists and concerned change agents, we lament stories from the field that illustrate how well-intended, abundantly-resourced and competently led change efforts are undone over time. Using several case examples, Manring explains how behavior that might appear irrational to the observer makes sense to those confronted with the political process of change. The answer to the question of how to make change last, according to Manring, is not to try to control it from a position of power but rather to understand it as a process of learning and evolution that is inherently egalitarian and generative. Chung-Ming Lau, Lynda Kilbourne and Richard Woodman return to a theme of an earlier volume in this series, namely organizational culture, with their piece, “A Shared Schema Approach to Understanding Organizational Culture Change.” Drawing on a cognitive approach to culture, the author’s define cultural change as a change in the shared schemas of organizational members. Using data from an interesting case of naturally occurring change, the authors are able to demonstrate that those who identify closely with an organization hold different schemas about change than those who identify less closely. They also discovered that people who left the organization under study held different schemas than those who remained behind. In the end, what this paper provides is a very interesting and potentially robust methodology to examine organizational culture from the perspective of individual schemas. Once a culture can be measured in this way, the door is open to interesting research that explores how culture changes as a result of significant organizational events or planned interventions. Along the same lines as Paul Nutt’s paper and the paper by Lau et al., Mike Geppert explores how the approaches used by organizations to learn are affected by an organization’s internal and external context. In “Critical Revision of Some Core Ideas Within the Discourse About the Learning Organization: Experiences from Field Research in East German Companies,” Geppert uses cases from three very different East German companies to demonstrate that one approach to learning does not and should not fit all. While all kinds of organizations need to learn, they don’t all learn in the same way. For example, Geppert is able to demonstrate that planned learning by recipe is more suitable in established firms in stable environments than in firms that are new or undergoing profound transformation. An ongoing quality program might produce important insights for General Motors but be of little help to a firm like Napster that is still trying to figure out how to position itself in the market. Following this

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reasoning, Geppert reaches an interesting conclusion, which is that the emergence of innovations is less likely to result from organizational arrangements that produce self-reflexive, intentional learning than from more pragmatic approaches. In other words, some firms innovate because they must, not because they have innovation programs in place. As the title of this paper suggests, some critical revisions in our thinking about learning may be required based on Geppert’s assertions. Finally, in a paper that offers a breakthrough in the measurement of change, John Wanous and Arnon Reichers explore the viability of using the amount of change recalled by intervention participants as a substitute for difficult to attain and interpret before-after data. In, “Is Remembered Change Useful?” Wanous and Reichers compare data collected through pre-post measures with a single remembered change measure in an actual intervention. Rather than being flawed and therefore useless, memories of change provide a different lens through which to view the outcomes of change efforts. The authors conclude that the most powerful approach to understanding change is to use both longitudinal and remembered measures in combination, but in cases where pre-intervention data are not available, remembered measures can often (not necessarily always) be used with confidence in exploring relationships among variables. Fortified with these eight papers as the grist for our mill, we can now return to explore the question of whether the field of organizational change and development is moving forward or stuck in place. On the side of moving ahead, what we see here are thoughtful papers that poke and prod at the dark corners of our understanding. Some of them provide new schemes for thinking which when applied promise additional breakthroughs in theory. Others offer new tools for inquiry, which we find welcome and much needed to advance the state of the art. On the side of being stuck, we find no answers to how organizations should approach change in entirely new ways given the demand for faster change in more complex situations. Instead, we learn that a single approach to change is not likely to fit any given organization very well. Executives would be wise to deal with consultants who customized their approach instead of relying too heavily on a preferred method. On balance, we are forced to join our friends in pharmaceutical research who tell us that the process of developing a new drug has become more challenging because the easy cures to simple diseases have been found. Solutions to more complex diseases necessitate further breakthroughs in our understanding of how diseases function and how different compounds or genetic solutions interact with them inside the body. It may well be that the simple approaches to making straightforward changes in organizations have been discovered. It may also be that finding ways to bring xiii

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about more profound and lasting change of a more systemic nature in the hypercomplex organizations of today and tomorrow will require breakthroughs we cannot yet conceive. If we are left without complete answers, we should not despair. As the papers in this most recent volume of Research in Organizational Change and Development attest, there is some very good work going on to take us in the right direction. William A. Pasmore Richard W. Woodman Editors

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ORGANIZATIONAL CHANGE: A CATEGORIZATION SCHEME AND RESPONSE MODEL WITH READINESS FACTORS Christina K. Struckman and Francis J. Yammarino

ABSTRACT A new categorization scheme for the organizational change literature is proposed to foster theory development in the field. The scheme classifies the field into four main areas of organizational change research – type, readiness, process and inertia – and elevates time to the forefront of research. Building off the categorization scheme, the Organizational Change Response Model is presented, which links the type and readiness literatures. To provide grounding to the assertions made and to develop a new working definition of organizational change, the study of change in the fields of biology, social psychology, environmental science and physics are briefly reviewed. Learnings from the other disciplines are incorporated in the model, and implications for future theory building and research in organizational development and change are presented.

Research in Organizational Change and Development, Volume 14, pages 1–50. Copyright © 2003 by Elsevier Science Ltd. All rights of reproduction in any form reserved. ISBN: 0-7623-0994-6

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CHRISTINA K. STRUCKMAN AND FRANCIS J. YAMMARINO

INTRODUCTION The study of organizational change mirrors the phenomenon of organizational change. In organizations today, change is prevalent (Kotter, 1998; Nadler & Heilpern, 1998), occurring at a rapid pace (Deloitte & Touche, 1998; Schein, 1993), and complex (Leifer et al., 2001; Lichtenstein, 2000). The study of organizational change is also prevalent (see Barnett & Carroll, 1995; Dirks et al., 1996; Pasmore & Fagans, 1992; Tushman & Romanelli, 1985), occurring at a rapid pace (Armenakis et al., 1999; Gersick, 1994), and complex (Brown & Eisenhardt, 1997; Denis et al., 2001). Researchers need to wade through the myriad of theories of organizational change, just as practitioners need to wade through the muddy waters of change. Despite the volume of organizational change articles, a general call has been made to the field regarding theory development. Porras and Silvers (1991) suggested that the organizational development area “is so underdeveloped, it is our hope that an increasing amount of vigorous theory development and research will appear in the near future” (p. 74). Beer and Nohria (2000) were more critical: “An integrated theory or framework for understanding change does not exist. Academics and consultants often give very different and contradictory advice” (p. 1). Lundberg (1999) similarly agreed: “It seems safe to say that neither the essence nor the nuances of change have as yet been fully explicated. While a plethora of cases, definitions, and normative and descriptive models of change and development exist, each seems to capture only a part of the reality of change” (p. 42). As suggested by Sashkin and Burke (1990), “we find no real coherence among the theoretical contributions . . . that would lead us to think that the field of organizational development is approaching a theoretical synthesis” (p. 324). Academics agree that the theory development of organizational change lags the implementation of organization development practices (Bass, 1983; Porras & Patterson, 1979; Porras & Robertson, 1987). This paper attempts to respond to the calls made for improved theory development by making two contributions. The first is to propose a new categorization scheme for the field of organizational change. The value to the field of a different categorization scheme is in that the current categorization scheme has dominated the field for the past 35 years. The new scheme proposed provides a different way to view the field. The second contribution is a model that not only synthesizes the literature, but also starts to link the elements of change together in a cohesive, practical manner. To achieve the contributions described, this paper will build the case for the Organizational Change Response Model in the following manner. First, a working definition of organizational change will be offered, building off the

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analysis of other social and physical science studies. Second, a new categorization scheme for the field of organizational change will be justified. The categorization scheme builds from the definition developed. Third, the discussion of typology within the categorization scheme serves as a framework for integrating the readiness factors. Finally, the readiness factors will be integrated into the change type framework. Figure 1 serves as a graphical representation of the theory development process for the Organizational Change Response Model. The study of organizational change has traditionally been a dichotomous field where content (Armenakis, 1988; Greenwood & Hinings, 1996; Legatiski, 1998) and process (Antonioni, 1994; Denis et al., 2001; Kotter, 1995; Weick, 2000) changes have dominated the classification scheme (Bennis, 1966; Kilduff & Dougherty, 2000; Porras & Robertson, 1987). A new categorization scheme is offered in the form of a theoretical expression breaking the field into four theoretical areas – type, readiness, process and inertia – and bringing the construct of time to the forefront of the study of change. A theoretical expression is arguably more complex than a dichotomous categorization. The potential convolution is warranted given the complexity of the field of organizational change. The benefit outweighs the complexity concern – the field can be more accurately described and therefore, researched, with a more descriptive categorization scheme. The categorization scheme serves as a springboard for the second thrust of the paper – the connection made between types of organizational change and the differentiated responses to those types by the organization’s management team. The change type literature is tied to the readiness factor literature, serving as a starting point for the integration of the organizational change literature. The integration is depicted in the Organizational Change Response Model and represented by Fig. 2. The model synthesizes current change type research into

Fig. 1.

Building Blocks of Organizational Change Response Model Theory Development. 3

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Fig. 2.

Organizational Change Response Model.

four types of change and suggests a set of management responses for each type. The response comprises different combinations of leadership, management, and performance management behaviors as well as a new conceptualization of communication intention about a change event. The Organizational Change Response Model provides management with a descriptive as well as prescriptive roadmap for addressing the current and future onslaught of inevitable change. The benefit to business is clear – with rapid technological advancements (Klein & Ralls, 1995; Lai & Guynes, 1997), an expansive, global market (Ghoshal, 1987; Organization for Economic Co-operation and Development [OECD], 1997), a constantly fluctuating economy (Hoskisson et al., 2000; Simon, 1991), and an ever-increasing diversity of both customers and employees (Dwyer et al., 1998; Richard, 2000), organizations deal with some form of change on an almost daily basis. The success rate for change efforts is not ideal (Beer et al., 1990b; Hall et al., 1993; Spector & Beer, 1994). Kotter (1998) summarized his experience with over 100 companies in the following manner, “A few of these corporate change efforts have been very successful. A few have been utter failures. Most fall somewhere in between, with a distinct tilt toward the lower end of the scale” (p. 2). Academics need to provide more guidance to organizations that can only come from better theory development.

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DEFINING CHANGE Many events in organizations are given the label of “change”. These events include, among others, technology improvements (Anderson & Tushman, 1990; Symon, 1998), mergers and acquisitions (Ashkenas, 1995; Rowlinson, 1995), structural changes (Greenwood & Hinings, 1988; Hannan & Freeman, 1984), top management changes (Allen & Panian, 1982; Denis et al., 1997; Helmich, 1974) and cultural changes (Connor & Lake, 1988; Hirschhorn, 2000). Change seems to apply to just about anything. Even the very nature of scientific research is based on the methodology of studying how a focal variable is changed by other variables (Kerlinger, 1986). While many authors have provided definitions of change (e.g. Argyris, 1976; Miller & Friesen, 1980a, b; Mintzberg, 1979; Mintzberg & Westley, 1992), a definition that clearly describes the scope of change is lacking. In organizational theory, organizational change is defined as “the adoption of a new idea or behavior by an organization” (Daft, 1998, p. 291). In organizational behavior, change is defined as “the act of varying or altering conventional ways of thinking or behaving” (Wagner & Hollenbeck, 1998, p. 345). The description, causes, reactions to, management strategies, and methods for dealing with change, are discussed without actually defining the term (e.g. Gibson et al., 1997). Change is sometimes perceived as an opportunity for growth for a business (Cohen, 1998; Greve, 1998; Hickens, 1998), and sometimes as a necessary evil to be survived (Cameron, 1994; Dopson & Neumann, 1998; Reichers et al., 1997). These descriptions and definitions do not provide a clear conceptualization of what is organizational change. And given the types of research completed within the scope of organizational change (type, readiness, process, and inertia), the definitions above do not adequately address that scope. To return to the basics and ensure that the construct of interest, organizational change, has a thorough and descriptive definition, the topic of change was researched in more established disciplines in the sciences. The fields of biology, social psychology, environmental science and physics were reviewed to understand how the construct of change has been developed in those disciplines. These disciplines were chosen due to their obvious tie with the concept of change. Most of the studies of science assume that the natural state of an organism, object, or environmental item is a state of equilibrium (Salthe, 1993). The theory of natural selection, for example, is an equilibrium process that does not produce change unless the environment changes, and then the population changes with the objective to achieve a new equilibrium (Depew, 1986). Natural selection 5

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“maintains the status quo unless perturbed by changes in external selection processes” (Salthe, 1993, p. 199). Natural selection states that due to a change in the external environment, an organism’s developmental process changes course to adapt to that environment. Not all of the adaptations result in survival, suggesting that while the reason for change has a direct link to the environmental change, the resultant change is more or less random. Salthe defines developmental emergence (the term for change) as “the sudden shift of a system from a condition that is understandable . . .. To another condition that is not fully explicable” (1993, p. 243). He further defines two classes of change: Two classes of this kind of change are known: extensional emergence, where a higherscalar-level system coheres around entities that then appear to be its parts, and intensional emergence, in which the change overtly involves a shift in the observer’s attention to categories relevant to a higher integrative level (Salthe, 1993, p. 244).

Extensional emergence would then apply to changes in the system that are generated from the system as a whole to its constitutive parts, while intensional emergence depicts those changes that generate from a part of the system and extend outward to the system in general. Intensional emergence implies that regardless of the source of the change, the entire system is affected. Salthe’s sources of change are very similar to the sources of changes for an organization that are frequently separated into internal and external factors (Barnett & Carroll, 1995; Drucker, 1998; Reed et al., 1997). An important divergence to note though is the pervasive effect of intensional emergence throughout the system. In contrast peripheral (vs. core) changes in an organization are not considered to be pervasive. Core system changes are defined as those that affect the organization’s mission, authority structure, technology or marketing, and thus, result in changes in structure and routines throughout the rest of the organization (Hannan & Freeman, 1984). Peripheral system changes do not extend into the rest of the organization. Thus, in organizational behavior one does not typically assume that changes will always affect the entire organization, while in biology, any change is posited to change the entire system. In social psychology, there are many topics that focus on changes in a person’s life. The study of aging and adult development is especially well documented (Knox, 1977; Birren, 1996; Hareven & Adams, 1982; Young, 1997). According to Knox, “change events . . . alter significantly the individual’s relationships with other people and disturb the routine of social participation” (1977, p. 513). The key focus of adult development is on the gains and/or losses of an individual’s experiences, and how those affect that individual’s participation with the social environment. Change events that represent a gain include

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landing one’s first job, getting married, having a child, or accepting a new community leadership responsibility. Examples of changes that represent a loss include retirement, divorce, a child leaving home, or the death of family members. Some changes, like switching jobs, changing churches, or moving to a new neighborhood represent changes that involve both losses and gains (Knox, 1977). The dimension that delineates the type of change in this field of study is the effect on the focal individual’s social participation. “All major role change events, by definition, entail modification of the structure of participation” (Knox, 1977 p. 519). Because of the effect of either a gain or loss with whom the individual interacts, one can relatively accurately predict the response behavior. For example, the effect of death on an individual and the responses to death is well understood (Butler, 1975; Kastenbaum & Aisenberg, 1972), and five general stages are identified – denial, anger, depression, bargaining, and acceptance (Ross, 1969). In general, change events in organizational behavior are classified by how radical the change is to the status quo (Hinings & Greenwood, 1988; Sastry, 1997; Tushman & Romanelli, 1985). The study of adult development in social psychology has classified the change events by a gain or loss in an individual’s life (Kastenbaum & Aisenberg, 1972; Knox, 1977). A classification system is consistent between these two fields, though the criteria are not the same. One assumption of change response in social psychology is the prevalence of predicting the response behavior given the classification (see the above five predictable stages given a loss). The study of readiness factors in organizational behavior suggests that the responses are more controlled and the field tends to offer prescriptive behaviors (Daniels & Mathers, 1989; Hall et al., 1993) rather than reactive behaviors. The study of resistances to change (Jaffe & Scott, 1998) and organizational cynicism (Andersson & Bateman, 1997; Reichers et al., 1997) do address reactive behaviors. Research on environmental changes, like the atmosphere, has some interesting insights on the concept of change (Bowman, 1976; MacDonald, 1990; Turekian, 1996). This field has clear-cut cause and effect relationships for environmental changes. Scientists study the atmospheric compositional levels of carbon dioxide, methane, halocarbons, and nitrous oxide and link those to tangible climate changes. For example, the changes in atmospheric composition have been linked to changes in the temperature (a warming trend), precipitation, sea levels, soil moisture, and river flow (MacDonald, 1990). Environmental science highlights the cyclical effects of change. A change in human activity causes changes in the atmospheric composition levels. These atmospheric composition changes cause changes in the climate like temperature 7

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and precipitation. These climatic changes affect the ice glaciers and their rate of melting. As a result of higher temperatures, the ice glaciers melt at an escalated rate, releasing more carbon dioxide into the atmosphere – this changes the atmospheric composition, and the cycle continues. The study of environmental science does not seem to correlate to currently-held studies in the organizational change literature. The organizational behavior literature would not typically support an across the board assertion that there is always a direct cause-and-effect relationship. Instead, most studies would suggest that contextual as well as moderator factors would make cause-and-effect relationships complex (Damanpour, 1991). Cyclical effects of change have also not been prevalent in the organizational behavior literature. Continuous improvement studies (Miller & Friesen, 1982; Sastry, 1997) hint at the potential for cyclical effects, but a definitive study has not been presented. Adaptive Structuration Theory (DeSanctis & Poole, 1994) is an emergent process theory of change that suggests there can be a cyclical effect between structures and the behavior that is guided by the structures. Physics has a body of research dedicated to understanding the phenomena of state changes (Nagle, 1975; Stanley, 1987; Visintin, 1996). Water, for example, is known to have three distinct states – liquid, solid, and gas. The changing from one state to another, liquid to a solid for example, occurs at a distinct temperature, 32oF. In this example, the change occurs when the physical properties of the focal object, water, changes. In a discussion of solid-state phase transformations, two categories are used for classification – homogeneous and heterogeneous. Homogeneous describes when a change in the state occurs more or less simultaneously in all parts of the assembly, while heterogeneous describes when a part of the assembly changes, causing resultant changes throughout the rest of the assembly (Raghaven & Cohen, 1975). Applying this classification system to an organizational setting, an example of a homogeneous transformation would be the introduction of a new product to market. The organization would need to modify the production, distribution, marketing, and customer systems simultaneously to provide a seamless introduction. An example of a heterogeneous transformation would be the incorporation of a new culture for the organization. The new culture behaviors could start in one place of the organization and then proliferate throughout the company. Note the strong parallel between homogenous solid-state transformations and extensional emergence in system development; and the similar parallel between heterogeneous solid-state transformations and intensional emergence in system development. Three key insights can be extracted from the analysis of other social and physical science’s concepts of change. The first is that most of the fields

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classified the change events. Biology noted that changes originate either external or internal to the system, and physics noted that some changes are homogeneous while others are heterogeneous. The classification of these change events adds value to the field because the responses are then understood given the classification. The necessary connection between classification and response is congruent with the tying of a typological model with organizational responses in the Organizational Change Response Model presented later in this paper. The typology adds value in that a framework to understand appropriate behavioral responses to those change events is provided. The second insight gained from this analysis is that one appropriate way to understand change is to focus on the responses that are made to the change event. Physics defines change based on the tangible response of the object as measured by the physical property. Atmospheric changes are important because of the resultant climatic changes. Gains and losses in adult development are measured by the resultant response of social participation. The research on change from these other disciplines is a combination of the change event that triggers and the response – both are interwoven and necessary to understand the phenomenon. Thus, understanding and dealing with change in an organizational setting seems to require both an understanding of the change event as well as an understanding of how to respond – these are similarly interwoven. Therefore, a change model must include not only how to classify the change event (the typology) but also how to respond to that change event (the behaviors). The third insight is the importance of time in understanding change. In the summary discussions of the social and physical science disciplines, the variable of time was not discussed explicitly. Yet, time was implicit in all the disciplines reviewed. Time is necessary to understand patterns, as the patterns are what highlight when a change may have occurred. The study of state changes in physics was the only discipline reviewed that dealt with time in the short-term. The other disciplines viewed time as relatively long term (evolution, for example, is a long-term process). The implicit usage of time in the other disciplines seems consistent with the way time has been viewed in organizational behavior (Antonioni, 1994; Weber & Manning, 1998). But time should be explicit in a change response model (Pettigrew et al., 2001) given that the management team of an organization can choose how fast or slow to respond to a change event. Barnett and Carroll (1995) were even more explicit: “Organizational change involves, by definition, a transformation of an organization between two points in time” (p. 219). If an organization decides to redirect the focus of their key products or services (the event), then they additionally need to decide how fast or slow they want to make that change to 9

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their organization. The management team chooses when the response will start to occur. Because of the ability to make a choice about when to implement the change, time is reflected in the Organizational Change Response Model. Organizational behavior studies can benefit from the incorporation of these insights of other disciplines to understanding and studying organizational change. With the insights in mind, the following definition of organizational change is offered: Organizational change is a managed system, process, and/or behavioral response over time to a trigger event. This definition acknowledges the learnings from the other disciplines and describes the scope of the study of organizational change. The scope includes an understanding that the change activity needs to be managed, that the response can be system, process and/or behavioral related, that there is an element of time to the activity, and that the change response is related to some trigger event.

CATEGORIZATIONS OF ORGANIZATIONAL CHANGE LITERATURE Current categorizations of organizational change break the field into two areas. Bennis (1966) divided the field into the theory of change and the theory of changing, while Porras and Robertson (1987) used a similar categorization called change process theories and implementation theories. In general the theories of changing (from Bennis) and the implementation theories (from Porras & Robertson) are the theories that describe how to go about getting a change completed in an organization. The theories of change (from Bennis) and the change process theories (from Porras & Robertson) are about the underlying dynamics by which change occurs in an organization. This dichotomous view of the field oversimplifies the various topics in organizational change. The cost of oversimplifying the various topics is stymied theory development. Theory development in the general field of organizational change is considered to be lacking sufficient rigor (Bass, 1983; Porras & Patterson, 1979; Porras & Robertson, 1987). Woodman (1989) suggested that more comprehensive categorization schemes or models that make sense of current theory and knowledge are needed. More recently, Pettigrew et al. (2001) have called for organizational change theorists to pay more attention to a myriad of analytical issues. Of the six issues identified, this paper provides insight into two of those areas, namely the inclusion of time and the study of customization, episodic vs. continuous change processes. The field would be better served by viewing the research in four categories of type, readiness, process and inertia rather than the previous two. These four categories provide a more robust view of the distinct veins of research. The

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new breakdown of organizational change research into four categories called type, readiness, process, and inertia, could propel the field into fine-tuning the theory development of each category. The following theoretical expression is suggested as a tool for understanding the various topics relevant in organizational change. Organizational Change = ƒ (Type + Readiness + Process + Inertia) Time The various theories and models regarding organizational change consists of: • Type, which is the classifications of the change activity (for examples, see Miller & Friesen, 1982; Tushman & Romanelli, 1985); • Readiness, which is the things that the organization can do behaviorally to prepare for the upcoming change activities (for examples, see Daniels & Mathers, 1989; Hall et al., 1993); • Process, which is the way an organization can go about the change – the implementation strategy (for examples, see Huy, 2001; Leifer et al., 2001); • Inertia, which is the barriers at an organizational, group, dyadic and individual level to change (for examples, see Jaffe & Scott, 1998; Piderit, 2000), and • Time, which is all the relevant dimensions of time (both theoretically and methodologically) in the study of change (for examples, see Chan, 1998; Arthur & Aiman-Smith, 2001). The equation is not intended to represent a mathematical equation per se, but more of a theoretical expression of all the constructs that are necessary and sufficient to describe organizational change. This theoretical expression suggests that there are four distinct streams of research in the field of organizational change (type, readiness, process and inertia) with the construct of time being an element of all of those. In each stream of research time needs to be defined and described both theoretically and methodologically (Greenwood & Hinings, 1996; Orlikowski, 1996; Van De Ven et al., 1989). The expression also offers insight into the potential for connections across the streams of research. The plus signs suggest relationships should be explored across the streams. And last, the ordering of the streams of research is intentional. An organization needs to know what they are dealing with (the type) to start behaving appropriately (the readiness factors) so that the implementation of the change (the process) goes as smoothly as possible, actively resolving the natural forces for inertia (the resistances). 11

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Organizational Change Response Model With the new classification scheme, the connections between these streams of research can be explored. The Organizational Change Response Model proposed here is the first step in linking the streams of research of type with readiness factors. The linkage is not a new concept, as several authors have called for the linkages (Greenwood & Hinings, 1996; Pettigrew et al., 2001). Before the connection can be made though, the stream of type literature will be reviewed and a quadrant model of change types will be proposed. Next, the readiness factors literature will be reviewed to identify a few key factors. Then, the Organizational Change Response Model will be presented that ties the quadrant model with the readiness factors.

CHANGE TYPE Many change typology models have been proposed (for details see Dunphy & Stace, 1988; Miller & Friesen, 1982; Singh et al., 1986; Tushman et al., 1986; Tushman & Romanelli, 1985). Most change models posit the importance to distinguish between two basic types of change. The distinction is between one type of change that has a greater effect on the organization and those that have a lesser effect on the organization. A list of change typology models that dominate the field is summarized in Table 1. The criterion of greater or lesser effect on the organization prevails among most change typology models. Other authors have provided more concise criteria for their distinctions. For example, Weber and Manning (1998) defined key components for a large-scale change effort as depth, pervasiveness and design. Depth refers to a shift in the individual’s values and beliefs as well as a change in the way the organization is interpreted and understood by its members. Pervasiveness is the extent to which a change permeates the organization, and design is the focus, size, degree of structure, facilitation required and time frame of the change. These criteria can be used to distinguish a major from a relatively minor type of change. Miller and Friesen (1982) discussed a dichotomous model for comprehending structural changes. They distinguished quantum change from piecemeal change. Quantum change was comprised of concerted and dramatic changes, while piecemeal change was comprised of continuous improvement changes. Miller and Friesen suggested that quantum change would be significantly associated with high organizational performance. Other dichotomous distinctions in the nature of change include first-order and second-order (Watzlawick, 1978) and continuous and discontinuous (Hinings & Greenwood, 1988; Tushman & Romanelli, 1985).

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Table 1. Lesser effect on organization

Change Typology Models.

Greater effect on organization

Piecemeal, incremental First order

Quantum Second order

Continuous

Discontinuous (Punctuated)

Incremental

Upheaval

Incremental

Transformative

Evolutionary

Transformational

Evolutionary

Revolutionary

Peripheral

Core

Downscaling Alpha, Beta

Downscoping Gamma

Convergent

Radical

Author Miller & Friesen, 1982 Watzlawick, 1978; Levy, 1986 Hinings & Greenwood; Tushman & Romanelli, 1985; Sastry, 1997 Tushman & Romanelli, 1985 Dunphy & Stace, 1988; Foil & Lyles, 1985 Tushman, Newman & Romanelli, 1986 Dunphy & Stace, 1988; Pettigrew, 1985; Miller, 1982; Greiner, 1972 Singh, House & Tucker, 1986 Legatski II, 1998 Golembiewski, Billingsley & Yeager, 1976; Singh, House & Tucker, 1986; Armenakis, 1988 Powell & DiMaggio, 1991

Golembiewski et al. (1976) discussed three change types, namely alpha, beta and gamma changes. While they developed three distinct categories, the difference is again the level of effect on the organization as a whole. Alpha changes, with the least effect on the organization, are “variations in the level of some existential state, given a constantly calibrated measuring instrument related to a constant conceptual domain” (p. 134). Beta changes, with a greater effect than alpha changes, are “variations in some existential state, complicated by the fact that some intervals of the measurement continuum associated with a constant conceptual domain have been recalibrated” (p. 134). Gamma changes, with the greatest effect on the organization, are “redefinitions or reconceptualizations of some domain, a major change in the perspective or frame of reference within which phenomena are perceived and classified, in what is taken to be relevant in some slice of reality” (p. 135). So, again the dimension of interest is the greater or lesser effect on the organization. 13

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Dunphy and Stace (1988) have provided one of the few quadrant change models. Their model, though, appears to be a management style plus type of change model. They distinguish between two styles of management, namely collaborative and coercive. They recognize change as either being incremental or transformative. The result is four types of change strategies – participative evolution, charismatic transformation, forced evolution, and dictatorial transformation. Because management style, which is a readiness factor, is mixed into this model, upon further analysis, the Dunphy and Stace model can be reduced to a dichotomous model of change with incremental and transformative change being the two types. Nadler and Tushman (1986) also provided a Change Response model. They suggested that there were fundamentally two types of changes – product changes are changes in what the organization offers, and process changes are changes in the way the product is made or service offered. The product or process changes could occur at different degrees of innovation – the incremental degree adds features or extensions to the standard product line, the synthetic degree is a combination of existing ideas or technologies applied in creative ways to create significantly new products, and the discontinuous degree is the development or application of significant new technologies or ideas. The Nadler and Tushman model has as one dimension the type of change (product or process) and the other dimension the degree of innovation present in the change, resulting in a 2 3 matrix of change types. The dimension of innovation is the variable that describes a greater (discontinuous) degree to a lesser (incremental) degree on the organization. The review of the more popular change models in organizational behavior has shown that a dichotomous classification system has dominated the field. The two categories are either a type of change that has a greater effect on the organization (i.e. transformative, punctuated, second-order) or a type of change that has a lesser effect on the organization (i.e. incremental, continuous, first-order). One of the important learnings from the review of the social and physical sciences was the importance of time in understanding change. Yet, there is a clear difference between these other sciences and organizational science. Organizations can control when they respond to an event. The assumption of control over when to respond to an event is not applicable in the studies of natural selection, environmental science or physics. The difference of control over when to respond (control over time) is an important distinction. The typology model that serves as the basis of the Organizational Change Response Model highlights this distinction and adds the variable of time as a major dimension in classifying change events. The inclusion and prominence of time is consistent with recent calls for the

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explicit operationalization of time in studies of change (Greenwood & Hinings, 1996; Orlikowski, 1996). Before continuing, a distinction is needed between real vs. perceived time. Real time would be the actual time needed to complete the response to the change event, while perceived time is the best estimate by the management team of how long the change response will occur. Because perceived time is the initial estimate that is used to determine the classification of the change and thus the appropriate set of management behaviors in response to the trigger event, perceived time is the construct utilized in the Organizational Change Response Model. The concept of actual time belongs in the change process literature, as the length of time to complete tasks is a key part of implementation models. Given the review of the change type literature and the assertion that time is relevant to classification of change types, the Organizational Change Response Model uses a quadrant typology as the basic framework. One dimension is the greater labeled as core (for examples see Cummings, 1999; Tushman et al., 1989), effect on the organization, vs. the lesser labeled as peripheral (for examples, see Brown & Eisenhardt, 1997; Burgelman, 1991), effect on the organization. The other dimension is the perceived timing of the change depicted as being either in the short-term or long-term. Combining these dimensions, the result is four change types: short term continuous improvement, short-term radical, long-term continuous improvement change and long-term radical change. Figure 3 depicts the change event categorization scheme.

Fig. 3.

Change Event Categorization Scheme. 15

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Within the quadrant model, short-term radical changes are changes to the charter, systems, processes, or behaviors of the organization to be completed in the short-term. Long-term radical changes are changes to the charter, systems, processes, or behaviors to be completed in the long-term. Long-term continuous improvement changes are modifications to existing systems or processes to be completed in the long-term. Short-term continuous improvement changes are modifications to existing systems or processes to be completed in the shortterm. Short-term continuous improvement changes are labeled as such to maintain consistency with the model, but changes that fit into this category can also be referred to as incremental changes (Dunphy & Stace, 1988; Foil & Lyles, 1985; Tushman & Romanelli, 1985). The challenge to any typological model is in the practical ability of a management team to effectively place a change event into the appropriate quadrant. Assuming that the management team has recognized the need for change (Nadler & Heilpern, 1998), the understanding of the magnitude of the change is also necessary. To place a change event into one quadrant vs. another, the practitioner needs to answer two basic questions: Is a major process, system or behavior of the organization affected? And what is longterm vs. short-term in the business? The difficulty in answering these two questions is acknowledged, and therefore yet another reason an organizational change activity should be under the direction of a top management team (Conger, 2000). The challenge of how to accurately place change events into the quadrant model highlights a conundrum in the field. Does a change event belong in a certain quadrant by definition or does the management team determine the quadrant given a particular situation? For example, if a manufacturing organization kicks off a re-engineering activity to significantly improve the efficiency of their manufacturing processes, which quadrant would this change fall into? According to the definitions provided for each of the quadrant, the re-engineering activity is targeting an existing process, so the change would be in the continuous improvement category. The length of time to complete the re-engineering activity would determine the time frame, short-term or long-term. Yet, most reengineering activities tend to drive fundamental changes in organizations (Hammer & Stanton, 1995), so has the quadrant model failed? This conundrum highlights an underlying principle of the Organizational Change Response Model. The model assumes that the management team (or change agent) is determining which quadrant is appropriate for each change event. This deterministic approach empowers the management team to give direction to their employees regarding the management team’s perception of the relative impact and time frame for each activity.

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Some typology models, like the punctuated equilibrium model (Tushman & Romanelli, 1985) provide a model for trending a pattern and then identifying a significant divergence from that pattern. Thus, a significant divergence would suggest that a major change has occurred in the organization. Not all change events provide an opportunity to identify trends, especially if the organization is being anticipatory or proactive in responding to a change event, so classification is truly a challenge. Subject matter expertise (for examples, see Landy & Vasey, 1991; Maurer & Alexander, 1991) in classifying the change events seems to be the most effective technique at the present time.

LINKING CHANGE TYPES TO READINESS FACTORS The change event categorization scheme serves as the framework for the Change Response Model. The rest of the model depicts the appropriate management behaviors, labeled readiness factors, for transitioning the organization to the change activity. The readiness factors are a distinct category from the change process theories in the categorization scheme proposed. The rationale is practical and follows the intentional ordering of the categorization scheme. An organization needs to know what they are dealing with (the type) in order to start behaving appropriately (the readiness factors) so that the implementation of the change (the process) goes as smoothly as possible, actively resolving the natural forces for inertia (the resistances). The readiness factors are the bridge between the identification of what needs to happen and the activity of implementing the change. The readiness factors are those management behaviors that give the organization the indication that the change activity is not a “passing fad or quick-fix attempt” (Armenakis, Harris & Field, 1999, p. 98). Leana and Barry (2000) suggest that every organization has forces of change at the same time there are forces for stability. These dual forces need to be reconciled within the organization. The readiness factors can serve as the reconciliation of the dual forces in that management starts to demonstrate the appropriate management behaviors for the change activity. The readiness factors are delineated in the change event categorization scheme highlighting the need for management to be situational in their responses to different change activities. Dunphy and Stace (1993) state, “turbulent times demand different responses in varied circumstances. So managers and consultants need a model of change that is essentially a ‘situational’ or ‘contingency model’, that is, one that indicates how to vary change strategies to achieve ‘optimal fit’ with the changing environment” (p. 905). The Organizational Change Response Model provides a situational model for organizational change 17

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in that the readiness factors are mapped to change types. So there is a different set of appropriate management behaviors for each type of change. Change Readiness Factors According to Porras and Patterson (1979) the selection of variables in change studies has been arbitrary, and one criticism of organizational change theory is the use of too many manipulative variables (Porras & Robertson, 1987). Responding to these criticisms is imperative to any proposed set of variables for a change response model. Similarly, researchers need to identify the factors that are within a company’s control that prepare the organization to handle the changes. The answer seems to be in the identification of a minimum set of variables that provide the greatest positive effect on the change initiative. These variables have been called change readiness factors (Stewart, 1994), change management best practices (ProSci, 1998), management practices (Daniels & Mathers, 1989), or depth levers (Hall et al., 1993). The term readiness factor most closely describes the current view of the variables. Because the organizational focus is on the response to change, readiness factors suggest variables that can be manipulated to prepare for the appropriate type of change activity. Galpin (1996) identified what he called four “organization-wide change management imperatives”; namely, teams, communications, culture and leadership. Stewart (1994) provided a list of seventeen readiness factors – sponsorship, leadership, motivation, direction, measurements, organizational context, processes/functions, competitor benchmarking, customer focus, rewards, organizational structure, communication, organizational hierarchy, prior experience with change, morale, innovation, and decision-making. Daniels and Mathers (1989) discussed five key management practices in organizations that adapt to change successfully – structure, planning, performance feedback, decision-making and management of individual contributors. Hall et al. (1993) describe six crucial depth levers to support re-engineering efforts – roles and responsibilities, measurements and incentives, organizational structure, information technology, shared values and skills. Table 2 summarizes 28 readiness factors described in the organizational literature. What becomes clear from Table 2 is that there is very little agreement across researchers about what readiness factors assist the organization in dealing with the change efforts. In an effort to respond to the criticism by Porras and Robertson (1987) that there are too many manipulative variables, the following method of reducing the number of variables included as readiness factors was followed. The readiness factors that are common across at least two of the six research activities are communication, culture, information and technology,

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Table 2. Readiness Factors Communication Competitor Benchmarking Culture Customer focus Decision making Direction Information & technology Innovation Leadership Management Measurements Mission Morale Motivation Organizational context Organizational hierarchy Organizational structure Performance Feedback Planning Prior exp. with change Process/functions Roles & Responsibilities Shared values Skills Sponsorship Strategy Systems Teams

19

Summary of Readiness Factors.

Burke-Litwin Daniels and Galpin Hall, Rosenthal Stewart Vollman (1992) Mathers (1989) (1996) and Wade (1993) (1994) (1996) X

X

X X

X

X X X X X

X X

X X X

X X X

X

X X X X X X

X

X

X

X

X

X

X

X X X X

X

X

X X

X X

X X X

leadership, management, measurements, organizational structure, performance feedback, roles and responsibilities, and skills. The readiness factors that are incorporated in the Organizational Change Response Model here relate only to explicit management behaviors. Weeding out the readiness factors that do not 19

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relate to explicit management behaviors reduces the above list to include only leadership, management, performance feedback, and communication. Justifications for the exclusion of the other readiness factors are discussed below. Organizational culture is defined as “the shared attitudes and perceptions in an organization that are based on a set of fundamental norms and values and that help members understand the organization” (Wagner & Hollenbeck, 1998, p. 423). While the organizational leaders can modify their behaviors to communicate a new or different set of norms and values, the culture is only changed when the attitudes and perceptions of the members change. Thus, culture is not directly controlled by the management team and is not included in the set of management behaviors. Measurements, as described by Hall et al. (1993) and Stewart (1994), are the existence of metrics that are necessary to describe the economics of the business. Metrics are a necessary element of the performance management system in that they need to be reinforced through the reward and recognition system. In the Organizational Change Response Model, the measurements are not explicit management behaviors and thus, are not included in the set of readiness factors. Structure is “the relatively stable network of interconnections or interdependencies among the people and tasks that make up the organization” (Wagner & Hollenbeck, 1998, p. 429). Again, because structure is not a specific behavior, this readiness factor is not included in the Organizational Change Response Model. Modifying the organizational structure might be part of the change process (Hirschhorn, 2000), but a change to the structure is not always relevant to the response and so would not be an appropriate readiness factor. Roles and responsibilities, as described by Burke and Litwin (1992) and Hall et al. (1993), are the expected behaviors of the individual participants in their respective positions. While these are behaviors, they are not included in the model because they are not the behaviors of the management team. And last, skills are not included again because this readiness factor refers to the skills of the individual participants and not the management team. The exclusion of these variables from the Organizational Change Response Model is not intended to suggest that they are not integrally important in the effective response to change events. The intention is to merely provide a relatively manageable list of readiness factors that are limited to management behaviors. The readiness factors that have shown some commonality across different studies and refer specifically to the behaviors of the management team are leadership, management, performance management, and communication intention. Each of these will be discussed in turn in the next section. An important note to the subsequent discussion of the readiness factors is related to a finding from a meta-analysis done by Damanpour (1991). His

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principal finding was that a successful change effort might depend more on the congruency or fit between content, contextual and process considerations than the nature of the intended change. Thus, a management team would be better served by being as consistent as possible in their messages and behaviors around a change. The need for congruency around behaviors of the management team serves as an underlying principle in the readiness factors of the Organizational Change Response Model. The readiness factors and their alignment with the organizational change response categorization scheme are operationalized and intended to provide the congruency that Damanpour (1991) found was essential for successful change efforts.

LEADERSHIP Several authors have written extensively about the differences between management and leadership (Kotter, 1990; Welte, 1978; Zaleznik, 1977). As Welte summarized, management “relates to coordination of work performed by the manager; leadership relates to the effectiveness of interpersonal relations between leader and follower(s). The essence of managership is coordination, while the essence of leadership is followership. It is the willingness of people to follow that determines the degree of leadership effectiveness” (1978, p. 630). Kotter (1990) described the management behaviors as planning and budgeting, organizing and staffing, and controlling and problem solving; and leadership behaviors as establishing direction, aligning people, and motivating and inspiring. These behaviors are consistent with the operationalization of the behaviors for leadership and management utilized in the Organizational Change Response Model. The behaviors of leadership and management are treated as separate yet complimentary constructs in the model. Leadership is defined as “the degree to which the behavior of a group member is perceived as an acceptable attempt to influence the perceiver regarding his or her activity as a member of a particular group or the activity of other group members” (House & Baetz, 1979, p. 345). The two key qualifiers are that the actions are perceived as an influence attempt and that the recipient accepts the influence attempt. This suggests that leadership can be inherently ambiguous. What one individual perceives as an influence attempt may not be the same as another individual. Even if two individuals perceive an action as an influence attempt, they may not agree on its acceptableness. So just saying that leadership needs to be present in change initiatives is similarly too ambiguous. What is needed is more specific criteria regarding what leadership behaviors will be more consistently perceived as acceptable influence attempts and what leadership behaviors are appropriate given the different change events. 21

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Having different leadership behaviors for different change events is consistent with the literature that shows that leadership styles/behaviors should be situational (Fiedler, 1967; House, 1971; Tannenbaum & Schmidt, 1973). The Organizational Change Response Model posits that the dimension of time is the dimension of interest when determining what leadership behaviors will be most effective. The rationale is due to the nature of influence. To influence means, “to modify or affect in some way” (Webster, 1983, p. 940) and is applied in situations in which the individual doing the influencing does not have the necessary authority or power. From a practical standpoint, a change that could take a relatively long period of time to complete requires more than simple influencing of the individual. The individual needs to take personal ownership of the change. Personal ownership of change is similar to Shamir and colleagues’ (House & Shamir, 1993; Shamir, 1991; Shamir et al., 1993) description of identification as a main component of the explanation of charismatic leadership. Personal ownership serves at least two purposes: (1) allows the change to continue past the life of the original leader; and (2) instills in the influenced individual the desire to continue the change initiative despite the lack of any sort of extrinsic motivation. Depending on the change event being responded to by the organization, the response could take many years to complete. Given the rapid transition of management teams (Gilson, 1989; Worrell et al., 1993), a change response needs to outlive the person originating the effort. If the employees implementing the change have a personal desire to see the end result of the change activity, then this is possible. Motivation theory clearly shows that driving a long-term change in behavior requires a predominance of intrinsic motivation since extrinsic motivators can be relatively fleeting in their effectiveness (Herzberg et al., 1959; Locke, 1968; McClelland et al., 1953). Intrinsic motivation is achieved when the influenced party takes personal ownership of the activity and gets satisfaction from the job itself. So the complementary leadership behaviors need to instill intrinsic motivation in the employees. Different types of change will be effective with the appropriate leadership style. The leadership behaviors that will support a change initiative in the longer term are those that inspire, stimulate, or instill a sense of purpose with the employees (Cummings, 1999). In the Organizational Change Response Model, the set of behaviors that instill a sense of purpose with the employees are labeled as inspirational. Leadership behaviors that inspire, stimulate or instill a sense of purpose are posited to not be necessary in a change that needs to occur over a shorter period of time. The leadership set of behaviors still need to provide the sense of direction and vision in the organization but the need to stimulate or inspire is not necessary in a shorter term change initiative. Because of the urgency or need to act quickly, the leadership does not need to focus on the intrinsic motivation of the employees,

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but can be just as successful focusing on a more contractual style with the employees. The set of behaviors that are appropriate for a change initiative that needs to occur in the short-term are labeled as contractual. The literature has many leadership behavior models that would nest neatly in the Organizational Change Response Model (Bass, 1985; Conger & Kanungo, 1987; Sashkin, 1988; Shamir et al., 1993; Wilson, 1989). As an example, transformational leadership (Bass, 1985; Bass & Avolio, 1994) would be a set of leadership behaviors that could sustain a longer-term change activity. Because the transformational style focuses more on visions, missions, inspiration and intellectual stimulation, the employees will be more inspired to accept a change that may take a long period of time. Similarly, the transactional style will be most appropriate when the change must occur relatively quickly. The contingent reward and active management-by-exception behaviors will support a change that must happen very quickly when management doesn’t have the time or maybe even the foresight to develop a long-term vision. Whatever leadership model an organization subscribes to can be inserted into this model as long as there is a difference in the leadership behaviors that would fall into the categories of inspirational and contractual, as described above.

MANAGEMENT There are numerous dichotomous categorizations for various management styles or managerial philosophies. Some of the more widely used styles include Theory X and Theory Y (McGregor, 1960) and Consideration and Initiating Structure (Stogdill & Coons, 1957). These management styles have been synthesized resulting in behaviors that are labeled supportive and directive. The Organizational Change Response Model suggests that the directive management style is most effective in facilitating changes that are core to the organization (see Nadler & Heilpern, 1998). Tushman et al. (1986) similarly suggest that for a core change, labeled a frame-breaking change in their model, management should be directly involved in all aspects of the change. “Given the enormity of the change and inherent internal forces for stability, executive leadership must be involved in the specification of the strategy, structure, people, and organizational processes, and in the development of implementation plans” (p. 40). By being directive in their management style, the leaders of the organization can direct the behaviors of the employees to ensure that the change is carried out appropriately. The supportive management behaviors could be used in the changes that are not to the core elements of the organization – the peripheral changes in this model. “Because strategy, structure, processes, and systems are fundamentally sound, the myriad of incremental substantive decisions can be delegated” (Tushman et al., 23

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1986, p. 40). A peripheral type of change provides an opportunity for management to exercise empowerment and push decision making down in the organization. Supportive management should not be confused with employee involvement. Employee involvement is clearly necessary for any successful change effort (Bennis, 2000; Conger, 2000; Dunphy, 2000) independent of the type. Duck (1998) described supportive management as “setting the context for change . . . [by] preparing the players, understanding what they do and don’t know, working with them, watching their performance, giving them feedback, [and] creating an ongoing dialogue with them” (p. 64). Supportive management, though, can come in many forms. For example, issue selling (Dutton et al., 2001) is a process by which individuals independent of their level in the organization affect other’s attention to events. When looking at management styles, styles should not be considered “good or bad,” but appropriate or inappropriate given the situation. Given that organizations are comprised of many systems and subsystems, organizations typically experience a variety of changes at the same time. For example, an organization may have two long-term continuous improvement changes and another five short-term radical changes happening at the same time. Due to the variations in employee readiness, the organization must manage each situation. To effectively manage a situation, the organization must understand the different behaviors that are supportive and directive in nature. The leadership and management behaviors are tied to the organizational change event categorization scheme as depicted in Fig. 4.

Fig. 4.

Leadership and Management Readiness Factors.

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PERFORMANCE MANAGEMENT Performance management as a readiness factor might appear to be out of place. The reward structure is usually a part of the process of change (Agarwal & Singh, 1998; Chen & DiTomaso, 1999). But as a readiness factor, performance management describes two conditions of the system – who owns distribution of the rewards, and what motivation factor (intrinsic or extrinsic) will be targeted. The rest of the process around performance management belongs as a variable in the process studies of organizational change. Adding the decision about these two conditions serves a key benefit. A pay system can serve as a lead or lag system in a change effort (Lawler, 1981). Making the decision about whether to start a change effort with an appropriate change to the reward structure can show seriousness about the change activity (Lawler, 1981), and be an effective initial communication strategy about the change activity. Performance management is very prevalent in organizations (Bretz et al., 1992; Milkovich & Wigdor, 1991) and employed in organizations for two basic reasons – evaluation and development (McGregor, 1972; Rheem, 1995). Evaluative concerns are compensation and staffing decisions, while developmental concerns are performance feedback, direction for future performance, and identifying training and developmental needs for the employees. Specifically, the functions of appraisal systems include merit increases, performance results/feedback/job counseling, promotion, termination or layoff, performance potential, succession planning, career planning, manpower planning, bonuses, and development and evaluation of training programs (McGregor, 1972). The Organizational Change Response Model posits that in the context of a change environment, management should have a greater or lesser role in the developmental concerns of the performance management system, labeled management ownership. Management should have a greater role in the developmental areas of the performance management system when the change is to a core part of the business (Tushman et al., 1986). The reason is because the definition of a core change is that it is different to the organization and, therefore, the members will not know from past experience what are the appropriate behaviors with this new change. Management needs to be very specific and clear about what those successful behaviors are, and the best way to be consistent with that message is to control the performance management system explicitly. Management can be directive about what successful behaviors support the new change initiative, and alternatively what behaviors are not effective. For a change that is related to a peripheral part of the organization, management can take a lesser role in the performance management system. By definition a peripheral change is not a fundamental shift to the organization. Thus, 25

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management can empower the employee base of the organization more than they should with a core change – empowerment should include the distribution of rewards in the performance management system, as this is consistent with the management style described and justified in the previous readiness factor. Empowering the employee base is consistent with the other readiness factors. The reinforcement system is also dependent on whether the organization is looking for short-term or long-term employee development results. Intrinsic and extrinsic reinforcement are tools to facilitate employee motivation (Skaggs et al., 1992). Extrinsic reinforcement includes motivators like good pay, status, job security, company procedures, quality supervision, good supervisor, peer, or subordinate relations, and working conditions, and tends to be most effective achieving results immediately. Intrinsic reinforcement includes motivators like achievement, the work itself, advancement, responsibility, recognition, potential for growth, and competence. Intrinsic rewards tend to be motivators for longer time periods than extrinsic rewards (Kuratko et al., 1997; Skaggs et al., 1992). Based on the type of change required, management can determine the need for an empowerment or directive management style and tie it to their use of intrinsic or extrinsic rewards. The performance management behaviors are tied to the organizational change event categorization scheme as depicted in Fig. 5.

Fig. 5.

Performance Management Readiness Factors.

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COMMUNICATION INTENTION Most researchers recommend that the implementers of change in an organization communicate with the employees (Anderson, 1996; Fisher, 1995; Kotter, 1990; Sokol, 1997). The roles of communication in change efforts include announcing and explaining change (Jick, 1993), increasing others’ understanding of and commitment to change (Bennis & Nanus, 1985; Morgan, 1988), reducing confusion about and resistance to change (Kotter & Schlesinger, 1979; Sutton, 1987), creating dissatisfaction with the status quo to inspire people to change (Armenakis et al., 1999; Spector, 1989), sustaining change over time (Kirkpatrick, 1985), receiving feedback on what a change means to people (Kanter et al., 1992; Kotter, 1990), enabling people to change their attitudes and behaviors (Beer et al., 1990a; Heracleous & Barrett, 2001), and showing management support for the change (Armenakis et al., 1999). The theories of strategic leadership (Hambrick, 1989; Hickman, 1998; Ireland & Hitt, 1999; Zaccarro, 1996) have emphasized the importance of creating and communicating a vision of the future. Hambrick (1989) argues that since strategic leadership occurs “in an environment embedded in ambiguity, complexity, and information overload” (Boal & Hooijberg, 2001, p. 516), communication is a key activity. Nutt and Backoff (1997) have suggested four design criteria for creating a vision, namely, possibility, desirability, action ability, and articulation. These criteria provide direction of the content of the communication – the vision. The value of communication is clear: “People abhor information vacuums; when there is no ongoing conversation . . . gossip fills the vacuum. Usually the rumors are much worse and more negative than anything that is actually going on” (Duck, 1998, p. 59). Because “management is the message” (Duck, 1998, p. 61), communication is included as a readiness factor that describes management behaviors. But the inclusion of communication is with a twist. The construct is labeled ‘communication intention’ instead of communication for a specific reason. The construct of communication intention is defined as the objective of the speaker in initiating a response from the recipients. Communication intention is a variable at the organizational level of analysis. The field of marketing provides a rich portfolio of the intention behind communications and the motivating effects of rich communications. A mnemonic, AIDA, is taken from the marketing field and applied to organizational communication in the context of change. AIDA stands for Attention, Interest, Desire and Action, and is still commonly promoted in the marketing literature (Redman & Mathews, 1992; Smith & Swinyard, 1982). There are a multitude of other advertising response theories (e.g. Colley, 1961; Haskins, 27

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1964; Lavidge & Steiner, 1961), but they were not used. The AIDA mnemonic is better known, and the languages of the other response models are more advertising in nature (for example, “action” is replaced with “purchase” in the Lavidge and Steiner model). In the AIDA mnemonic, attention refers to the act of getting the audience engaged in the activity of being aware of whatever you want them to notice. So, for example, at an opera, the lights are dimmed to get the attention of the crowd and let them know they should return to their seats. Interest refers to getting the audience personally engaged in the activity. Interest is aroused in the opera crowd by providing them the information about the opera, the players, the composer, the opera house, etc. Desire refers to shifting the focus of the motivation from the giver of information to the receiver of information. The opera organizers want the opera audience to have an enjoyable experience at the opera, so the audience members are inspired to donate money, shifting the desire for continuing the activity to the audience. Action is the activity that the giver of the message wishes the receiver of the message to do. The communication with the opera audience is complete when the donations are made. Depending on the desire of the communication giver and the time allowed, they might utilize all or some of the AIDA components to reach a desired state. For example, the candy aisle located at the register of the grocery store is employing only Attention and Action of the mnemonic. The grocery store wants you to see the candy as you are just about done, and hopefully without too much thought about the calories and sugar content, to purchase some candy. On the other hand, the extended commercials that describe the latest and greatest exercise machine utilize the full AIDA mnemonic. They try to get your attention by showing you a very trim individual on the screen. Then they have case studies presented where more in shape individuals discuss how easy and nontime consuming the machine is, thus gaining your interest for an easy exercise machine that you, the consumer can use. Then, they include some data about lower heart attack rates and blood pressure when one uses the machine, attempting to reach your desire for a healthier life, free of hospitals. Finally, they make the machine relatively easy to pay for (e.g. by installments) and will ship the machine to the privacy of your home. Once the viewer calls the phone number and purchases the equipment, the intent of the communication from the producer of the exercise machine is complete. The AIDA mnemonic seems highly appropriate in the context of prescribing intention and content to the communications given by senior management in the support of change initiatives. Because a change initiative is by definition different than the current experience of the employees, management will have to provide some level of communication regarding the initiative. The AIDA

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mnemonic and its incorporation in the Organizational Change Response Model (depicted in Fig. 6) provide a mechanism for management to focus the content and intent of their message. The model posits that if a change is occurring in the long-term, then the Desire element is essential to the success of the change effort. Because the change is occurring over a relatively long period of time, one of the key challenges will be for the initiative to not lose focus. Depending on how long the change takes to implement, the management team might transition and the effort needs to last beyond the initial implementers. The best way to ensure that the effort continues is to have the employees take personal ownership over the initiative. A second proposition is that if the change initiative belongs in the core classification (short-term radical change or long-term radical change) then the Attention element of the mnemonic is essential to the success of the change effort. A core change is by definition a major change to the mission, system, processes, or behaviors of the organization and so is different than the previous experiences of the employees. Behavior change has been found to be most effective when the individuals that need to change understand how the change affects them. A third proposition is that if the change is not to a core part of the business, classified as peripheral in the model, then the element of interest is the element of the mnemonic that is essential to the success of the change effort. Interest

Fig. 6.

Communication Intention Readiness Factors. 29

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is the element that gets the employee personally engaged in the change effort. The reason interest is posited to be essential for a peripheral type of change is because of the concern that if the change is not considered core to the business, then the motivation to spend time on an activity that might not be highly valued is relatively low. To compensate for the low motivation, management needs to get employees to be personally engaged in the activity and therefore, have their own personal motivation to stay focused on the initiative. The elements of AIDA that are recommended for each change type are presented in a minimalist form. Meaning that the model suggests what parts of the AIDA mnemonic are needed at a minimum to be congruent in the communication system with the other readiness factors. In an ideal state, the entire formula would be utilized for all change events, but this is not practical and therefore, the Organizational Change Response Model reflects this practical prescription. To see how the AIDA mnemonic can be helpful in prescribing a communication strategy, let’s see how it might be utilized for a company that is adding a new product line to its portfolio. A new product would be considered a radical change and depending on the implementation timeline, might be either long-term or short-term. We will assume that the implementation will be in the long-term given its complexity and newness to the organization. The Organizational Change Response Model would suggest that the intention and content of the communication system should include the Attention, Desire and Action elements. Attention is the intention of getting the employees to notice, so a strategy to get their attention might be a “splash campaign” that introduces the new product line. This would probably be done in a classic marketing style – splashy and instilling in the audience the brand image. Another strategy that could be effective to getting the attention of the employees is to have an internal contest to name the product. At Intel Corporation in 1995 a splash campaign was done when the company was preparing to introduce the Pentium(r) series of microprocessors. The marketing department held an internal naming contest with a prize for the name that was selected. The contest was certainly effective in getting the employees’ attention about the new product line. Desire is the intention of getting the employees to take personal ownership over the change initiative. Tapping into the employees desire can be done in many ways. For example, the management team could share the projections of sales and revenue of the new product line to show how profitable the proposed change could be for the company. Employees are motivated to realize those profits. Action is the intention of getting the employees to do whatever is deemed necessary in the implementation of the change initiative. Action is embedded

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in all change types because the purpose of the communication is to get to some Action. The difference in the various quadrants is how to get the employees to the Action in the most effective and efficient way and thus, the AIDA mnemonic is presented in a minimalist way. The prescription is for what needs to be done at a minimum to get the employees to Action (that is congruent with the other readiness factors). This usage of communication intention is an extension to the organizational behavior literature, but a necessary one since the literature has been lacking with regard to suggestions about how to ensure the intent and the content of the communications regarding change are as effective as possible. The operationalization of the readiness factor of the communication intention just described is the start of a new way to view communication in the context of organizational change. Organizational Change Response Model The Organizational Change Response Model is both descriptive and prescriptive. The descriptive element of the model is in the categorization of the change events. The model combines the prevalence of the dimension of greater or lesser effect on the organization with the dimension of perceived time to create a quadrant model of change. The change types are short-term radical, long-term radical, long-term continuous improvement and short-term continuous improvement. The prescriptive element of the Organizational Change Response Model maps a set of readiness factors – leadership, management, performance management and communication intention – to each of the change types. The set of readiness factors are used given their commonality across readiness studies as well as their direct link to a set of management behaviors. The mapping of the readiness factors of leadership, management and performance management are well grounded in the organizational behavior literature. The mapping of communication intention using a marketing response theory (AIDA) is a unique contribution of the model. Based on all the above work, the propositions of the Organizational Change Response Model are summarized below. P1: For a short-term continuous improvement change, the most effective organizational response includes the following combination of readiness factors: P1a: A contractual leadership style P1b: A supportive management style P1c: An empowered performance management system 31

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P1d: An extrinsically focused performance management system P1e: Communication intention that strives to get the Interest and Action of their employees P2: For a short-term radical change, the most effective organizational response includes the following combination of readiness factors: P2a: A contractual leadership style P2b: A directive management style P2c: A directive performance management system P2d: An extrinsically focused performance management system P2e: Communication intention that strives to get the Attention and Action of their employees P3: For a long-term continuous improvement change, the most effective organizational response includes the following combination of readiness factors: P3a: An inspirational leadership style P3b: A supportive management style P3c: An empowered performance management system P3d: An intrinsically focused performance management system P4e: Communication intention that strives to get the Interest, Desire, and Action of their employees P4: For a long-term radical change, the most effective organizational response includes the following combination of readiness factors: P4a: An inspirational leadership style P4b: A directive management style P4c: A directive performance management system P4d: An intrinsically focused performance management system P4e: Communication intention that strives to get the Attention, Desire, and Action of their employees A summary of the rationale for each readiness factor given a different change event type is described below. Short-term continuous improvement change: Given that short-term continuous improvement changes do not have a high degree of impact on the change and the timeliness of the change needs to happen in a relatively short amount of time; management should use a contractual leadership and a supportive management style. A supportive management style does not mean completely leaving the employees alone, but rather stepping aside and allowing them to control the change. In a negative connotation, the supportive management style can be labeled laissez-faire. In a positive connotation, the supportive management style

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can be empowering to the employee base and can enable significant employee management development (Duck, 1998). The leadership should be more contractual as a way to keep the employees focused and on a defined track. The management team can also practice empowerment within the organization. Again, because the change is by definition not a significant impact to the organization, the employee base can own tying the reward system to the newly defined set of appropriate behaviors. Management is not disengaged from the performance management system. The difference though is that management uses reinforcement tied to good pay, status, job security, company procedures, quality supervision, good supervisor, peer, or subordinate relations, and working conditions as the key motivators. Because the change needs to happen in the short-term, management needs to ensure that the employee base is highly motivated to change their behaviors as fast as possible. Because the change is occurring in the short-term, the management team does not need to activate the Desire element of communication intention. But they do need to activate the Interest element because the change is to a peripheral part of the business. Thus, the most effective combination would be the Interest and Action (aIdA) elements. Short-term radical change: In a short-term radical change, the management team should exhibit a contractual leadership style and a directive management style. The contractual leadership style addresses the short-term nature of the change by focusing on contracting with the employees to get the work done in the short time frame allowed. The directive management style keeps management involved so they can reorient their organization to the core changes. Management will need to be more directive in setting the expectations of how employees are to perform. A radical change is by definition something different than the employees have been experiencing. So, the leader should be directive by telling employees who, what, where, when, and how to be successful with the change. Management will need to tie the extrinsic reinforcements of good pay, job security, company procedures, quality supervision, good supervisor, peer, or subordinate relations, and working conditions to what is expected of them during the change. These extrinsic motivators will provide the needed motivation to support this type of change initiative. The AIDA formula suggests that the key is to grab people’s attention and quickly call them to action (AidA). The communication intention for a short-term radical change is equivalent to “shocking the system”. One would want to grab employees’ attention by letting them know that this mission, system, process, or behavioral change has to be done or there could be severe consequences. Therefore, taking action is a must. Given the amount of time the organization has to implement the change, there 33

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is insufficient time to generate a lot of interest and desire. Shocking of the system should create enough interest and desire to get employees to take action. A benefit to the shocking of the system is that organizations tend to respond well to crisis situations. If shocking of the system is done in such a way that the change is viewed as a crisis to be dealt with, getting the employees to action will be that much easier. An important note here is that too many crises at any given time can have the reverse effect, so this strategy should be used sparingly. Long-term radical change: Long-term radical change is mission critical, but has a longer length of time for employees to learn and perform as desired. To effectively manage, the top management team should demonstrate an inspirational leadership and directive management style. Management will become more open to listening to the concerns of the employees, but will also realize they still don’t have the necessary skills or knowledge to effectively manage the change. Therefore, managers will continue to direct the workflow and assign resources as needed. The longer time frame empowers management to solicit feedback and suggestions from the employees, involving the employee base in the decision-making processes. Management will need to be directive about what is expected of employees because radical changes are different than the current status quo. The difference between short-term radical change and a long-term radical change is that management will have the time to develop desire within the employees. In developing the desire within the employees, management can consult with the employees and consider their suggestions when making relevant decisions. The model posits that intrinsic reinforcements that are tied to achievement, the work itself, advancement, responsibility, recognition, potential for growth, and competence will be most effective in this type of change activity. To continually reinforce the need for change, management should concentrate on capturing the employees Attention, creating a Desire for the change and continually calling the employees to take Action (AiDA). Because the change is core to the organization, the model suggests that Attention is critical since that is what starts the involvement process. Management needs to provide the information to assist the employees in dealing with their own resistance to change. Desire is also essential because the change will occur over a longer period of time and the key to keeping the focus is the personal ownership the employees take for the activity. It is that personal ownership that will sustain the effort independent of what might occur in top management personnel. Long-term continuous improvement: Based on the change not being dramatic to the way employees are currently performing and the time frame for this stage is longer, an inspirational leadership and supportive management style are

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suggested as being most effective. In continuous improvement models employees are usually included in the decision making process. The philosophy of long-term continuous improvement change is that employees are typically closest to the problems and have the skills or knowledge to solve them. By providing a supportive management environment, management fosters an environment of empowerment and trust with the staff employees. Management should use a supportive type style to encourage the employees to solve the problems for themselves. The leadership style can tap into intrinsic motivation to encourage the employees to sustain the effort over a relatively long period of time. The management team has an opportunity to practice empowerment within the organization. This is because the change is by definition not as significant an impact to the organization as the radical type changes. Empowerment can be explored in the performance management system by having the employees determine the appropriate behaviors for the change activity. Additionally, the employees should ensure that the reward system matches the behavior expectations. But management is not disengaged from the performance management system, and in their role can drive the use of intrinsic reinforcement tied to achievement, the work itself, advancement, responsibility, recognition, potential for growth, and competence to spark the new behaviors. The model posits that because the change occurs over a long period of time, the element of Desire is essential in communication intention. The rationale is similar to the reason for Desire in the long-term radical change. Additionally, because the change is to a peripheral part of the business, the element of Interest is also essential. Interest is the activity of getting the employee personally engaged in the activity. Interest is necessary to counteract the impression that the change is peripheral and therefore possibly perceived as not an important part of the business (aIDA).

UNDERLYING PRINCIPLES There are three underlying principles of the model. The first is that congruence of the readiness factors is necessary for the change initiative to be effective. For example, in a short-term radical change, the readiness factors are a contractual leadership style, a directive management style, a performance management system that is driven by the management team, an extrinsically focused reward system and a communication system that focuses on the intentions of Attention to Action. The congruence is evident in the mapping of the contractual leadership style which focuses on being more contractual with the employee and a reward system that similarly focuses on 35

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an extrinsic contract (if the employee does the work, they get an extra bonus). Similarly the directive management style is consistent with the directive style for the performance management system. Additionally, the communication system that focuses on Attention only (not Interest or Desire) is also consistent with the more directive management style and contractual leadership style. If the communication system focused on generating interest or desire within the employee base this would be in harmony with the inspirational style or supportive management style. This consistency between the readiness factors is necessary to avoid confusion to the employee base. Additionally, the “readiness for change may act to pre-empt the likelihood of resistance to change, increasing the potential for change efforts to be more effective” (Armenakis et al., 1993, p. 682). The second underlying principle of the Organizational Change Response Model is that the management team determines which quadrant a change activity should reside. An alternative principle would be that the change activity is placed in quadrant merely given the definition (scope and time frame) of the activity and management has no discretion in that placement. The model assumes that management is deterministic in their assessment of the change activity and uses the placement of the activity in the quadrant model as a tool for communicating the behavioral expectations of their management team and employees for the life of the change activity. As an example, if two organizations are merging, the time frame to complete the merger might take two years to complete fully. Given that particular company’s industry, two years might normally fall into the long-term category. But because management team wants their organization to give a high priority to the merger activities, the management team might categorize the change activity as a short-term radical change. The assumption that the management team determines the quadrant is an empowering feature of the Organizational Change Response Model, since the model suggests that the placement of the change activity in a quadrant determines the appropriate set of management behaviors to ensure the success of the change activity. The third underlying principle is that the perception of the change initiative is drawn from the observation and perceived actions of the management team related to the change initiative. This principle is drawn from the social information processing (Salancik & Pfeffer, 1978) and other social information theories (e.g. Ibarra & Andrews, 1993) that show that individuals get their information about activities from others. Given this, the management team needs to ensure that their behaviors are representative of what their employees need to know about the change. So, again for a short-term radical change, management wants the employees to understand the urgency and importance

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of the activity so their management style and performance management style need to communicate that the activity is important and requires the explicit involvement of management in the actions around the change initiative. The consistency of management behaviors significantly improves the chance that employees will be able to accurately interpret the activities around the change initiative and modify their behaviors accordingly. Any theoretical model needs to be conceptualized with respect to its level of analysis so that the data and analytic techniques can be completed at the same level of analysis (Dansereau et al., 1984; Klein et al., 1994). The scope of the change being managed by the organization determines the appropriate level of analysis. To aid in determining the level of analysis of the change, various authors have suggested different definitional tools. As an example, Ledford et al. (1989) suggested that the definition of a large-scale organizational change should include the depth, size and pervasiveness of the change. Weber and Manning (1998) provided a framework that included 12 key components of large-scale change (type of change, collective dialogue, future image, learning environment, levels of change, whole system representation, environmental assessment, focus, size, degree of structure, facilitation, and time frame). The Organizational Change Response Model is conceptualized to include changes that occur at the group and/or organizational level of analysis. This model does not cover changes that occur at the individual and/or dyadic level of analysis. The reader can use any definitional tool provided in the literature (e.g. Ledford et al., 1989 or Weber & Manning, 1998) to assist in determining which level of analysis (group or organizational) is appropriate for a particular change. Discussion Limitations The Organizational Change Response Model does not include any discussion of the potential moderators or mediators that might be at play in the organizational change process. A thorough discussion of moderators and/or mediators is beyond the scope of this initial discussion. Examples of potential moderators are the organization’s prior history with change and the organizational context around the change events. If an organization has a past history of successful change endeavors vs. a past history of unsuccessful change endeavors that could very well moderate this model (Gersick, 1994; Pettigrew, 1987). Similarly, the organizational context around the change events could also moderate the model (Carroll & Hatakinaka, 2001; Michailova, 2000). If an organization is facing serious competition and the viability of the business is at risk that could propel 37

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the success of a radical change despite the set of management behaviors posited in the Organizational Change Response Model. A rigorous review of potential moderators and mediators needs to be explored, validated in the literature and hypothesized for testing. The theoretical expression provided at the beginning of this paper and repeated below offers another interesting point with respect to time. Time is truly a complex variable as evidenced by the dedication of an Academy of Management conference to the topic (the theme of the 2000 AOM conference held in Toronto, Canada was time). Time has thus far been discussed in terms of the perceived length of time to complete the change. An additional discussion of time for the Organizational Change Response Model is the usage of this model over time. The question becomes, does this model apply to the beginning of a change effort, over the duration of the change effort, at the end of the change effort, or some combination of the above. Organizational Change = f (Type + Readiness + Process + Resistance) Time As conceptualized, the Organizational Change Response Model applies to the beginning stages of an organizational change event. The categorization scheme provides a description of how to classify the change event as determined by the subject matter experts in the beginning of the activity. The readiness factors are the prescription of how management should behave in response to those change triggers. What is not provided is a statement of how long those behaviors should be in place for the duration of the change process. So for example, if a management team is responding to a long-term radical change event and they follow the prescription of the Organizational Change Response Model, then they will be exhibiting a directive management style and an inspirational leadership style. By definition, the change process will take a long period of time, and so the question becomes should the management team exhibit the directive management style and inspirational leadership style for the entire duration of the change process? Or should their behaviors change at natural steps in the change process? A thorough investigation of the question of the model over time needs to be further explored. The Organizational Change Response Model should be extended to include the process literature (that was not included in this original discussion) that would naturally drive a discussion of the response model over time. Another limitation of the model is the lack of an operationalization of the communication intention readiness factor. The theoretical discussion of communication intention is a divergence from the organizational behavior discussion

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of communication. The construct was borrowed from the marketing literature. As such, the construct needs to be more fully explored. Possibly the technique of content analysis (Krippendorff, 1980; Weber, 1985) could be used as a tool for measuring communication intention.

CONTRIBUTIONS The intention of this paper is to further the theory development of organizational change by making three key contributions. Responding to criticisms that the field lacks theoretical rigor (Beer & Nohria, 2000; Lundberg, 1999; Pettigrew et al., 2001; Porras & Silvers, 1991; Sashkin & Burke, 1990), a new categorization scheme is presented. The theoretical expression describes the elements of the field of organizational change – type, readiness, process, inertia and time. The significance of a new categorization scheme is in the fresh lens with which to view the vast amounts of literature. The dichotomous categorization scheme (content vs. process) has dominated the field for over 35 years. At the same time, the best theorists chastise the field about the lack of theory development. Hopefully, with a shake-up in the basic assumption of categories of studies within organizational change, theory development can propel forward. This paper has focused solely on the change type and readiness literatures as part of this initial discussion. Although the areas of process, inertia and time were not explored in this paper, a brief discussion of each follows. The study of organizational change processes is a vital area. Porras and Robertson (1987) delineated the key elements of a change process theory as descriptions of: (1) variables that are manipulated; (2) intended outcomes of change events; (3) causal relationships between maniputables, mediators and outcome; and (4) relevant moderator variables. The development of change process theories has gone in many directions (e.g. Armenakis et al., 1999; Denis et al., 2001; Huy, 2001; Kotter, 1998; Leifer et al., 2001; Lewin, 1951; Van de Ven & Poole, 1995). There have been two meta-analysis of the change process literature (Damanpour, 1991; Porras & Robertson, 1987) that could serve as starting points for drawing connections from the process literature to the change type or readiness literature or both. The connection between change type and process seems intuitive. A change activity that fits into the category of a long-term radical change should be done differently than a short-term continuous improvement activity. The study of organizational inertia includes those topics of both active and passive resistance to change. Inertia is “a tendency to remain in a fixed condition without change; disinclination to move or act” (Webster, 1983, p. 936). The 39

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area was labeled inertia to expand the topic beyond resistance to change. This area of study includes organizational resistance to change (Eby et al., 2000; Jellison, 1993; Miller & Friesen, 1980b), passive resistances to change (Morrison & Milliken, 2000; Piderit, 2000), individual level resistance to change (Ashford, 1988; Jaffe & Scott, 1998) and factors that contribute to commitment to change – the opposite of resistance (Armenakis et al., 1999; Strebel, 1998), among others. The study of inertia should also be explored for connections with the other areas of organizational change (type, readiness, and process). Certainly the area of communication and communication intention has obvious links to the areas of overcoming resistance and encouraging commitment. Last, the study of time in the context of organizational change needs to be fully explored. Some theoretical areas of time include: (1) how to definitively delineate short-term from long-term for an industry (assuming short-term and long-term are industry specific); (2) specify how long an organization can sustain a change activity; (3) understand if there is an effective or ineffective timing for change; and (4) how time effects resistance or barriers to change. Chan (1998) described how to measure a focal variable over time methodologically, and Dansereau et al. (1999) address the issue of levels of analysis changes over time. Any operationalization of time needs to include the accompanying mechanism for measurement and assessment of variables and levels of analysis. The second contribution of this paper is the connections made across areas of research. The Organizational Change Response Model is the first of those connections, linking the type literature with the readiness factors literature. An analysis of more connections with the other elements is a logical by-product of the categorization scheme. The connections serves as a mechanism to attain “an integrated theory or framework for understanding change” (Beer & Nohria, 2000, p. 1). An integrated theory or framework is essential to close the gap between theory and practice in the field of organizational change. The third main contribution is the set of propositions that describe the connection between type and readiness literatures. The propositions are written so as to enable translation into hypotheses that are either all-inclusive for a specific type of change (and therefore includes all of the readiness factors), or can be built progressively (adding a readiness factor at a time). The Organizational Change Response Model is based on the underlying principles that congruency among the readiness factors is imperative, but that does not impact the testing of the model. The previous discussion is intended to propel the field of organizational change in the area of theory development. The categorization scheme attempts to describe the scope of studies in organizational change more thoroughly, hopefully facilitating improved theory development. The Organizational Change

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Response Model is the first step in linking the streams of research and serves as a framework to continue the linkages. As was stated in the beginning, the study of organizational change mirrors the phenomenon of organizational change. But just as academics are pursuing solutions for practitioners to navigate through change, the new categorization scheme serves as a tool for academics to navigate through the organizational change literature.

ACKNOWLEDGMENTS The authors would like to express their gratitude for the thoughtful comments provided by the editors, Richard Woodman and William Pasmore, as well as Bruce Avolio, Richard Reeves-Ellington and David Gonsiorowski.

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BUILDING ORGANIZATIONAL CHANGE IN AN EMERGING ECONOMY: WHOLE SYSTEMS CHANGE USING LARGE GROUP INTERVENTIONS IN MEXICO Michael R. Manning and José DelaCerda

ABSTRACT Recent democratic trends in Mexico as well as the opening of new economic markets and free trade relationships have made the management of change a major issue in Mexico. Most Mexican organizations need to transform their structures and processes, and to develop management and human resources in order to compete in the global marketplace. In addition, the need for change in Mexico includes such basic issues as uplifting whole classes of people out of poverty so that they can become productive members of society. We argue that change can be produced and facilitated through highly participative, egalitarian, and intensive large-group interventions. Even though existing cultural research might suggest that these approaches are inconsistent with the cultural orientation assumed to be predominant in most Mexican organizations, we offer two case studies employing whole-systems change approaches that provide evidence suggesting quite the opposite: large-scale and highly participative change


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MICHAEL R. MANNING AND JOSÉ DELACERDA

interventions are very appropriate to facilitate change in Mexican society today.

INTRODUCTION Change in any society is challenging and essential. Managing change in emerging economies, like Mexico, take on an even more significant role in that the potential for change in these societies goes to the very depths of uplifting classes of people away from poverty to productive societal resources. In this paper we will address issues of the management of change in Mexico today. We start by characterizing the emerging Mexican society as it exists. Next, we review the development of organizational change in Mexico in order to create a historical context for this paper. We then offer two case studies employing whole systems change (WSC) methodologies that provide evidence of effective ways to manage and facilitate organizational change in the emerging Mexican economy. We conclude the paper with thoughts and suggestions about organizational change in Mexico’s emerging society.

CURRENT MEXICAN SOCIETY: CHANGE IN AN EMERGING ECONOMY1 Most dimensions of national life in Mexico are experiencing major change as the Mexican economy emerges to an international level. Some of these changes are well known. Without a doubt, the most conspicuous has been the definitive breakthrough of democracy in the 2000 presidential election, which dealt a defeat to the Revolutionary Institutional Party (PRI) that had dominated practically all government positions in Mexico for 75 years. The winning political party, PAN (National Action Party), led by Vincente Fox campaigned on a platform of deep social and economic changes as well as personal well being (Krauze, 2000). Today, Mexico is a predominantly urban country; almost three-quarters of the 100 million Mexicans live in cities. Although country life is still important, migration to cities has reduced the size of rural communities. Almost forty percent of Mexicans are younger than fifteen years of age, and in the first two decades of the 21st century, most of the population will be in their working years.2 The population’s average educational level is close to eight years of formal education, and this average increases by almost two years every decade. Illiteracy is below 10% and half of this is concentrated in the elderly. Educated youth represents a major social force for change. Politically oriented public

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university education is losing its traditional pre-eminence as several private universities are taking the lead in certain fields such as management, economics, and engineering (most notably ITESM also known as Tec de Monterrey, ITAM, and UIA-ITESO universities). Once pervasive restrictions on trade and foreign investment are being dismantled rapidly and the Mexican economy is now considered one of the most open in the world. Mexico has signed free trade agreements with countries in North America, Central and South America, and Europe, and some agreements with Asian countries are being negotiated. No other country in the world has been more active in opening channels for international commerce. Although this trade liberalism has its benefits, it is also bringing about strong competitive pressures on most Mexican businesses. Organizational productivity, efficiency, and innovation are now common language for most Mexican managers and economists, and common goals for most large and medium-size business firms and even public organizations. All of them need transformation in order to compete in a free trade economy. As the Mexican economy emerges the labor force is now concentrated primarily in the service and manufacturing industries. While unemployment is very low (about 3.5%), underemployment is still a very pernicious problem (about 40%). The role of women has changed dramatically. More than onethird of working age women are employed and this trend is rapidly increasing. The average educational level for women is close to that of men, and women are assuming leadership positions in politics and business. The Catholic religion is still predominant in Mexico, but changes in religious preference are increasingly common. Hinduism, Buddhism, Judaism and several Christian religious practices, different from Catholicism, are no longer unusual. This is one of the most significant indicators of social change because Mexicans have always had a strong religious attitude. The Catholic Church has been pervasively influential in Mexican politics, government and society for hundreds of years. Nevertheless, some sectors of society are choosing to change their religion because they consider themselves free to choose their spiritual destiny. This change exemplifies the deep transformations occurring in Mexican society. Politics is in turmoil throughout Mexico, but the fight for political change has yet to find more civilized ways to solve disputes. Corruption persists and society is demanding ethical behavior from all branches of government. The structure of the public sector is changing rapidly. The organization in charge of federal elections, for example, is now completely independent of the federal executive. The National Congress is no longer dominated by the PRI and no political party has a majority in either chamber of congress. Politicians from all three primary political parties: National Action Party (PAN), Democratic 53

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Revolution Party (PRD), and Revolutionary Institutional Party (PRI) now govern the cities and states. These politicians come from all sectors of society rather than the social elite, and the political transformation is raising the level of social awareness. Unionism is still very conservative and some branches are still loyal to the traditional wing of the PRI party. Official unions are still very powerful and paternalistic, but new labor movements are slowly emerging. Business and entrepreneurial organizations have been supporters of traditional unionism. They have enjoyed labor stability for decades while strikes and wage demands have been kept under control. Even though entrepreneurs see labor laws as too paternalistic, they accept their protective orientation in exchange for stability and control. But entrepreneurs are no longer a monolithic group, and political loyalty is not mandatory any more. Entrepreneurial and professional organizations now primarily operate independently of political or government affiliation. Other social groups are also organizing themselves and fighting for their rights. Ethnic groups like the Zapatistas in the state of Chiapas, religious groups, women’s groups, homosexuals and many civic organizations are examples of the growing participation and diversification of Mexican society. The social entity of the family is also changing. As families become urbanized, extended familial identities are losing their influence. Nuclear families are more common now. This does not mean that ties between two or three generations are necessarily breaking apart, but it does indicate that families are not as demanding of members’ loyalty as they once were. The disintegration of the traditional family is one of the main problems confronting Mexican society. The Mexican economy for its part has managed to put together seven straight years of stability, plus significant growth rates in production and exports. Average productivity rate per worker in the industrial sector rose by almost five percent a year between 1988 and 2000 (Mural, 2002). Inflation and interest rates are becoming comparable to those in highly developed economies. Economic integration with the United States and Canada and the progress made on trade agreements with other countries have attracted unprecedented investment and financial advantages. The banks, once insolvent, have regained financial stability. The public debt is now a manageable problem, although it still represents a significant drag on the country’s economic development. Nevertheless, while the changes may point to solid democratic institutions, legal objectivity, plurality in citizen participation, and an increase in opportunities for Mexicans, the most alarming socio-economic conditions have not changed at all: poverty and inequality in Mexico are as glaring and oppressive as ever. Corruption has stubbornly resisted reform campaigns, and attempts to curb insecurity, drug trafficking, and drug abuses have met with little success.

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Environmental deterioration and the loss of natural resources, particularly water, forests, and fossil fuels, continue unabated. At this rate, Mexico will face grave shortages of these resources in the near future, and the situation will cause conflict on a nation-wide scale. It is not surprising, therefore, that these issues have been assigned to presidential commissions. One of these issues, forests, is one of the scenarios for intervention and innovation presented in the case studies that we examine. In summary, Mexico is an emerging society because most of its components are being transformed. Recent changes have brought opportunities to many, but the majority of the population has yet to receive the benefits of change. Opportunities should continue to develop for all segments of society, but it is essential for institutions, corporations and social structures in general to accelerate the pace of their transformations. Mexico is clearly at a crossroads as to how it will carry out the structural reforms that are still pending. Profound changes are required in the fields of energy, agriculture and land ownership, water and forest resources, the tax system, labor legislation, and law enforcement. In addition, significant changes must be implemented in most public institutions and private organizations, especially small and medium-sized businesses must be brought into the movement toward greater competitiveness. Without these reforms and changes, Mexico will not overcome its competitive disadvantage, neither its inequality nor the destruction of its environment. The methods analyzed in this paper can help Mexican institutions to achieve their transitions not only with a greater degree of equality and fairness, but also faster and more effectively, which is an enormously important factor in a country so full of needs and expectations for improvement.

CHANGE AND DEVELOPMENT OF ORGANIZATIONS IN MEXICO The management of change and organization development in Mexico does not constitute a visible and well-identified professional field, as it is in the United States and other developed countries. And although Mexican organizations face urgent needs for change in order to adapt to the context of international competition, these changes rarely follow a professionally planned and directed strategy. Some studies and cases, however, show that the field of organizational change in Mexico is alive (Alvarado & Martínez, 1984; DelaCerda & Núñez, 1998; Kras, 1990; Fundameca, 1988; Ogliastri, 1988; Peón Escalante, 1986; Robles, 1989; Serralde, 1985). 55

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Change in the 60s/70s: Humanizing Work The earliest known cases of planned change and organizational development go back to the late sixties and continued during the seventies (Robles, 1989; Serralde, 1985). Remarkable in this regard were the processes of social-technical organization and autonomous groups in the CYDSA-DASA plant in San Luis Potosí, which represented the most developed case among Mexican companies at the time. Other pioneering cases are worth mentioning: the ALFA industrial group; TELMEX, the Mexican telephone company; BANAMEX, the National Bank of Mexico; and BIMBO, the largest bread manufacturer (Serralde, 1985). Then, of course, there are the pioneering cases within multinational corporations operating in this country, such as General Motors, Union Carbide, AmericanBritish Tobacco, and Procter & Gamble (Robles, 1989; Serralde, 1985) to name but a few. Most of these early cases approached OD through management development, participative leadership, team formation, productivity improvement, and work humanization programs (Serralde, 1985; Robles, 1989); as well as some cases of quality circles (Ogliastri, 1988; García & Santos, 1988; Galván, 1986). During the late 1960s and early 1970s the first university programs specializing in organizational development emerged, such as the University of Monterrey (UDEM) OD master program, along with the first consulting agencies and the Professional Organizational Development Association (PRO-DO). This was also the time when the first programs aimed at productivity enhancement and business quality control were created, for example: The National Center for Productivity (CENAPRO), the Institute for Labor Training (ARMO), and the Mexican Institute for Quality Control (IMECCA). However, change approaches and methods utilized by these three institutions were grounded in economic, technical training and engineering principles more than in principles of organization development. As a matter of fact, economists support the notion that productivity growth in Mexican firms is due more to technological and external factors such as market demand rather than organizational change (Hernández Laos, 1985). Change in the 80s: Focus on Quality and Competitiveness The 1980s witnessed new cases of planned change and organization development in Mexico based mainly on a total quality management perspectives (DelaCerda & Núñez, 1998; Fundameca, 1988; Najera, 1991; Serralde, 1985). These were more numerous and better focused than before, but still uncommon within the universe of businesses operating in the country. In these years,

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Mexico began to open up its markets by adhering to GATT. As a result, the focus of OD programs shifted from the humanistic approaches that characterized the earlier years, to methods aimed at improving businesses’ quality, productivity and competitiveness. The consulting group Cambio Organizacional (Peón Escalante, 1986), the Mexican Foundation for Total Quality (Fundameca, 1988), and the editorial board of the magazine Management Today (Serralde, 1985) analyzed the strategies for planned change and organization development in large-scale Mexican businesses during the eighties. Most interventions were aimed at implanting quality systems based on the models proposed by the world’s leading quality experts, such as E. Deming, J. M. Juran, K. Ishikawa and P. Crosby, among others. Findings of this research indicated structural changes to enhance the quality function, quality-related corporate missions, continuous improvement programs, market research to determine customer satisfaction, defect prevention programs, quality cost accounting, and implementation of quality circles. The data gathered in the studies show that over half of the organizations sampled were in the midst of changing the traditional concept of quality control and replacing it with the concept of total quality management. The TQM movement meant progress in management philosophy and knowledge in Mexico, but limited applications were also perceived: “There are commendable cases of businesses with overall plans comprising deep change of various technological and social systems. Unfortunately, even within this ‘optimistic’ sampling of Mexican companies, we see that most make rather rudimentary efforts that barely scratch the surface” (Peón Escalante, 1986, p. 6). Alvarado & Martinez (1984) chose a group of outstanding Mexican businesses and analyzed for common traits. Many of these common traits were related to the new quality approaches: commitment to customer service, effective response to market needs, a firm interest in exporting, a solid organizational structure built around quality and productivity, and a decisive commitment to technological research and development. Serralde (1985) concluded that in the 1980s, organization development knowledge and practices in Mexico increased and actually improved business efficiency: “. . . OD (organizational development) begins to show signs of becoming a formal movement . . . seeking improvement . . . with a special emphasis on quality and productivity” (p. 21). The cases analyzed, however, demonstrate that the movement was concentrated mainly in multinational corporations, and depended greatly on expertise imported from the United States, with few indications of methodological adaptation to Mexican culture, and even fewer of innovation or creation of new knowledge. 57

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Another study (Robles, 1989) found, however, that only half of the large corporations operating in Mexico had formal programs or departments of organization development. The study revealed that 68% of the existing OD programs aimed at improving the corporation as an overall organization. Interestingly, 88% of the results were evaluated as excellent or good. It was also seen that methods applied came from countries like the United States, Japan and England. The most common methods applied in the eighties, according to this study, were total quality management, organizational culture and climate, management by objectives, team development, and structural redesign. Other studies (Garcia & Santos, 1988; Galván, 1986; and Alatorre, Hernández & Medrano, 1988) confirm that total quality management programs were implemented mainly by large industrial corporations, while they were noticeably lacking in smaller businesses, particularly in commerce and service sectors. Research conducted with small Mexican businesses showed that quality control was still being carried out by traditional means such as spot checks, improvised inspections and end-of-line verification. It was also found that although quality circles constituted one of the most frequently applied methods in total quality programs, successful application was limited to mature and financially strong organizations. Firms that did not have these attributes, regardless of their size, failed in their attempts at improvement (Garcia & Santos, 1988; Galván, 1986; Ogliastri, 1988). In summary, the progress made in organization development in Mexico in the eighties focused primarily on total quality management, and concentrated in just a few organizations. A small elite of businesses, many of them multinational subsidiaries, managed to change core processes using TQM principles and became highly competitive. These corporations exported a large share of their products, applied the latest technologies, had highly qualified management, a specialized work force, and world-class systems and processes. Naturally these firms served widely as case studies at conferences and research reports. Outstanding examples include: in manufacturing, the GM automotive plant in Toluca, and the Ford plant in Hermosillo; the electronic firms IBM, HP and Motorola (all of them in Guadalajara); the strongest and most advanced Mexican industrial groups settled in Monterrey and Mexico City such as Hylsa, Cydsa, Vitro, Gamesa, Condumex, Celloprint, Derivados Acrílicos Cuauhtémoc and Modelo Breweries, and several others (Serralde, 1985). In addition, Kras (1990) reported on the experiences of several Mexican businesses that had managed to shift to modernized management, among them Bimbo, Seguros Comercial, Gamesa, Petrocel and Pigmentos y Óxidos. Outstanding cases in commerce and general services include banks such as Banamex and Serfín, hotels like Camino

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Real, and airways such as Aeroméxico (González, 1990; Peón Escalante, 1990) And finally, TQM successful practices reported in state institutions and stateowned enterprises include PEMEX and the Federal Electricity Commission. The eighties also brought new academic OD programs in many Mexican universities, for example: ITAM (México city), and UNIVA (Guadalajara). In addition, some American groups, particularly Pepperdine University, began making valuable contributions in Mexico. Change in the 1990s: Free Trade and the Culture of Competitiveness In the 1990s, Mexican government consolidated its commitment to economic liberalization by signing free trade agreements, most notably NAFTA. Advanced Mexican firms and, of course, most subsidiaries of multinational corporations set their sights squarely on global competition. Change and improvement programs concentrated on methods with a decidedly technological and standardized bent: ISO 9000, total quality management, process re-engineering and downsizing, just-in-time management, automation and computer-integrated systems, mergers and strategic alliances (Arjona & Unger, 1996; Corona, 1997; DelaCerda, 1999; DelaCerda & Morales, 2001; DelaCerda, Palomeque & Oviedo, 2002; Dillanes, 1997; Duffy, 1999; Galindo, 1995; García, Hernández & Wilde, 1994; Garza, 1994; Gutiérrez, 1994; Jasso, 1998; Jasso & Torres 1998; Lavielle, 1995; McDemort, 1994; Mertens, 1997; Mexican Investment Board, 1993; Nájera, 1991; Programa de Modernización Tecnológica, 1999; Ramirez, 1998; Ramirez &Unger, 1997; Zapata, 1998). Laveille (1995) analyzed the processes of change undertaken by Mexican corporations before and after NAFTA: TQM systems head the list with 75% of the study sample, followed by re-engineering approaches and organizational redesign. There are also changes based on technological strategies and innovations, mainly through information technologies. It is very interesting to note that almost half of the corporations studied formed alliances or joint investments, and some built new plants.The latest research shows that since NAFTA took effect, most large and medium-sized businesses in Mexico, looking for productivity and quality improvement, have invested in modernizing facilities, renewing equipment, improving production systems, technical training, cost rationalization, and increasing production scale (DelaCerda 1995, 1999; Vera, 1993; Corona, 1997). However, research also shows that only a small percentage really managed to improve their financial indicators as a result of these efforts. It is interesting to note that the new cases of improvement offer quite a varied sample of industrial, commercial and service organizations. And in a break with the past, the sizes of these firms also vary considerably, with numerous reports 59

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of mid-sized firms and even some small businesses. However, small businesses as a whole have still not engaged in competitive modernization at a significant rate, and most remain on the margin of technological and organization development. Serious attempts at organizational improvement also took place at different levels of government during the nineties (Prado, 1995; Arellano, Cabrero & del Castillo, 2000; DelaCerda & Morales, 2001). Administrative modernization and process improvement of public services were undertaken through information technology systems, process re-engineering, regulatory simplification, structural redesign, and ISO 9000 quality systems, among others. Outstanding successes were achieved in federally-run enterprises such as PEMEX (the petroleum conglomerate) and CFE (Federal Electricity Commission), as well as in the Secretariat of Commerce (SECOFI), and in some state and city governments. Particularly, four research projects show the advances made in organizational change in Mexico in the last decade of the twentieth century. This research was funded by the National Science and Technology Council (CONACYT) and the National Labor Competences Board (CONOCER), which reflects the newfound government interest in the field of organizational change, improvement and development in Mexico. Leonard Mertens (1997a, b) analyzed the processes of organizational change in several samples of Mexican firms. A study of firms associated within the Committee of Businesses in Favor of Quality (Mertens, 1997b) documents the programs of eleven large industrial corporations that undertook intensive and far-reaching processes of change. These eleven companies used different approaches to change, such as: management and leadership development, organizational restructuring, cultural change, training in workforce competencies, and implementation of ISO 9000 quality systems. Similar to experiences in the United States, these change approaches are in stark contrast to the methods used by Mexican companies in the 1970s and 1980s. Two other studies of organizational change in the nineties were directed by José DelaCerda and a group of researchers from the Universidad del Valle de Atemajac/UNIVA ((DelaCerda, 1999; DelaCerda & Morales, 2001; DelaCerda, Garmendia Palomeque & Oviedo, 2002). The first study (DelaCerda, 1999) conducted a five-year analysis of the change processes in a sample of 125 different-sized industrial firms in Mexico’s western region. Study results show that although most of the firms sampled were making improvement efforts in order to meet the challenges of economic liberalization, only a small proportion of the firms studied (5%) showed marked changes: strategically planned change, continuous improvement methodologies with a certain degree of professional

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rigor, personnel technical training, and positive results based on reliable statistical indicators. It was also clear that in the Mexican firms studied, organization development practices with a humanistic and participative approach were practically nonexistent. In fact, the processes considered “the best and most profitable” focused on technological change, while the change processes aimed at organizational and human resources development were evaluated as having results quite inferior to the former. Other results of change processes focused on new strategies to improve finance and marketing areas were also rated poorly. One of the most significant findings of the research is that even though companies face the need and pressure to change, most have not been able to apply adequate and controlled methodologies to bring it about. The second study by DelaCerda and the UNIVA group (DelaCerda, Garmendia & Oviedo, 2002; DelaCerda & Morales, 2001) analyzed the changes achieved by the implementation of quality systems based on the ISO 9000 international standard, the predominant organizational change and improvement strategy in Mexico during the nineties. The study looked at both public and private sector organizations. It is estimated that by the year 2000, there were roughly 700 public sector institutions and 3,500 private sector companies with quality systems based on ISO 9000. These 4,200 cases undoubtedly surpassed any other approach to change in the country. The results found in two samples of both public and private sectors were consistent: over 90% of the organizations applying ISO 9000 indicated improved functioning; ISO 9000 methodology does not conflict with the culture of Mexican organizations since it is reasonably well assimilated by management and the labor force. Organizations using ISO 9000 tend to have a higher level of performance than similar organizations that do not have a quality system, or that have systems based on other methods. Also, organizations with ISO 9000 have better planning, a more structured organization, a better managed quality function, better controlled production or operational system, better follow-through, and more hours and better methods of technical training than organizations applying other methods of quality management. In addition, ISO 9000 organizations are slightly more willing to employ personnel participation than Mexican organizations that do not have ISO 9000. However, worker motivation and satisfaction as well as leadership styles do not differ significantly among these two types of organizations. The research project Organizational Change and the Flexible Company in Mexico, coordinated by Chávez Ruiz and a group of researchers from ITAM (Chávez, Mota & Navarro, 1999), reported the results of a study of 1,132 companies from all over Mexico. The most significant finding, according to the authors, 61

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is that 44% of the companies studied are carrying out, or have already completed, processes of organizational change. This rate of firms having improvement processes is very consistent with research done by Vera (1993) and DelaCerda (1999). The manufacturing sector is the most active, followed by the commercial and communication sectors, and to a lesser degree, the construction industry. Like the studies mentioned earlier, this research shows that organizational change is closely related to the company’s capacity to innovate, and those largeand medium-sized companies have a greater innovative dynamism than small businesses. The results also show that the most innovative Mexican companies are embracing international standards of competitiveness. And at the same time, these innovative companies monitor technological advances of their competition and incorporate the most promising developments. The report explains that organizational change is complex, and that it cannot happen in parts, or one change at a time. Each change implies many other changes. However, integrated change is rare. For example, while 54% of the companies evolved favorably in terms of new technology, only 29% combined these changes with personnel grading and a reorganization of responsibilities (functions, processes, and tasks). Another element that comes with organizational change is structure downsizing. Most of the companies notably reduced the size of their organizational structure. The study concludes that only 25% of the companies can be considered flexible, meaning the company meets two basic requirements: It has a program for developing workers’ skills and capacities, and the decentralization of activities or tasks to those people who actually do the work (responsibility index). According to the study’s conclusions, 70% of the companies that called themselves flexible showed a high level of innovative capacity. In the same way, the statistical regressions performed on the data demonstrated that the flexible companies achieved increases of over 80% in work productivity, and a 15% overall reduction in absenteeism. This indicates that companies that choose organizational change in order to become flexible achieve better overall functioning which enhances the firms’ competitiveness. There is also important research findings on programs aimed at reforming or changing public administration in Mexico (Arellano & Cabrero, 1995; Arellano, Cabrero & del Castillo, 2000; Arellano & Guerrero, 2000; Bose, Chaison & de la Garza, 2000; Castillo & Cabrero, 1998; CONTACTO, 1998; Gómez, 2000; Leemans, 1976; Muñoz, 2001; Oria Razo, 1998; Penzo, 2000; Prado, 1995; Roel, 1996). Numerous organizational and administrative reforms of the public sector have happened over the last fifty years in Mexico. These reforms have gone through three generic orientations: rationalization, modernization and innovation.

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The rationalization programs are identified by changes in structure, regulations and procedures, for the purpose of improving both organizational order and operations efficiency. The modernization programs incorporate new administrative methods and technologies, with the aim of attaining not only greater efficiency, but also a greater capacity for implementing government policy. Finally, the innovation programs seek to combine administrative, technological, social and legal strategies in order to bring about a profound transformation in core processes, modus operandi and culture of public administration. The Governmental Innovation program of Vicente Fox’s administration is already underway, with horizons as wide as the problems and challenges it faces. It remains to be seen whether this new generation of public managers will be able to change the form and the content that has traditionally characterized government operations in Mexico. Many of the reform processes for the public sector have been carried out with organization development approaches, or at least some of them have been based on methodologies taken from OD. Nevertheless, most of these programs have had a structural orientation rather than a process orientation, and although they have generally been well planned and formulated by experts at high levels of government, they have lacked adequate deployment methodologies, systematic follow-through, and enough resources to ensure even a part of their goals. It is plain to see that most of these programs are only so much paper, or halfway measures, unable to overcome the tremendous inertia of corruption, centralization, inefficiency and poor quality in public service. To summarize this section, the intensity and depth of the organizational change processes in the nineties stand out in comparison to the preceding decades. It is clear that Mexico’s economic and commercial liberalization, which began in the eighties and gathered strength in the nineties, has had a stronger impact on changing large Mexican firms, especially in the industrial sector, and in certain public federal institutions, related to the oil and electricity sector. It is also clear that organizational change and improvement processes in these advanced firms are mainly based on methods created in developed countries (U.S., England, Sweden, Japan). Yet, most cases have required adapting and adjusting the methods of change to the cultural conditions of Mexican organizations. Nevertheless, there is growing evidence that most advanced Mexican companies, and of course the Mexican subsidiaries of most multinational corporations, are assimilating a culture of competitiveness based on world-class standards. It is also clear that the extent of these processes of change and improvement is not yet far-reaching, not even in terms of the number of companies involved, because most small businesses, many medium-sized firms and even some 63

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large-scale Mexican corporations have been out of the main stream of change for competitiveness. In addition, the processes of change, even in the most advanced corporations, have not included all, or even most, of the organizations’ employees. These limitations make it clear that the movement toward profound organizational change in Mexico has been concentrated in a few advanced corporations and certain privileged social groups. It is essential therefore to broaden the coverage, scope and participation of these processes. In addition, the methods for managing change in Mexican organizations have primarily followed a traditional OD perspective. This means that interventions focus on small groups, or single organizational units, or processes in isolation that then must be integrated later on. Newer to Mexico are the more systemic whole change approaches, which are highly participative, egalitarian, and selfmanaging. These approaches can be applied to large groups in limited time periods, and are designed expressly to accelerate change (Bunker & Alban, 1997).

ORGANIZATIONAL CULTURE RESEARCH IN MEXICO Foreign researchers have conducted most research on Mexican organizational culture. There are of course Mexican scholars, some of them internationally eminent intellectuals such as Octavio Paz and Carlos Fuentes, who have studied Mexican culture and personality. These studies offer deep analysis and rich explorations into Mexicans’ national identity and character. However, these studies rarely focus on organizations or Mexicans at work. Cross-cultural organizational and management studies have been performed primarily using questionnaires and sometimes interviews. A few have applied anthropological and ethnographical techniques. The first studies related to organizational and management culture in Mexico were completed in the late fifties and the sixties by American researchers such as Whyte & Holmberg (1956), Fayerweather (1959), Lauterbach (1964, 1966) and Davis (1968). Since then, Mexico has been a favorite country for management comparative studies conducted by U.S. researchers. DelaCerda and Núñez (1998) analyzed a sample of 40 cross-cultural studies that included Mexican management as a research focus. All of these studies were carried out between 1960 and 1990. The authors critically analyzed the cultural orientations, methodologies, contents and findings of the studies. Their main conclusions were: • Research samples were primarily U.S. multinational corporations operating in Mexico. These studies emphasized the analysis of management behavior,

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•

•

•

•

•

65

sometimes the behavior of Mexican workers, and to a much lesser extent the corporations’ administrative practices and performance. The studies tend to compare Mexican management with other countries, many times the United States. Hence the analysis of the studies’ variables reveals differences and gaps between Mexican management behavior and performance and those related to the other countries studied. United States is usually considered the model country or culture. As a result, the studies’ conclusions tend to claim, or at least to suggest, that in order to make progress in Mexican management, organizational culture and business practices, changes must be made so as to bring them closer to the model of developed countries. The studies are usually sensitive to Mexican cultural traditions, in the sense that they recognize that these traditions neither should nor can be abruptly confronted or changed, since that would cause cultural shock to individuals and might damage the organization climate. At the same time, many of the studies recognize certain cultural advantages prevailing in Mexico over developed countries, such as openness to learn and social interaction. Nevertheless, the bottom line, always tacit or implicit, considers Mexican management, organizational practices and work culture behind the demands of industrial development, productivity, quality, and international competitiveness. Cross-cultural studies tend to agree on certain disadvantageous cultural traits attributed to Mexican management and organizations. It is evident that most studies work with similar historic interpretative baggage. Some of these traits are, for example, excessive loyalty to family, “compadres” and friends within organizations; career and advancement over dependent on influences and contacts; management preference to emotional commitments over technical standards; imposition of a person’s hierarchy or authority over knowledge or performance. According to cross-cultural studies, personalism, individualism, centralism and authoritarianism are part of the heritage of Mexican managers and bosses. Emphasis is placed on the existence of a vicious cycle in the exercise of power in Mexico. This cultural trait is usually associated with certain psychological needs or motivations in which Mexicans tend to score high: High need for power, power distance orientation, and controlling as a means of performing right. The studies also tend to coincide in pointing out a series of administrative practices in Mexican corporations that are outdated and run counter to world class management. These practices include the absence of planning, the lack of follow-though on decisions and work programs, insufficient teamwork, lack of training, lack of standardized and technology-based systems, the absence of measures and monitoring, the lack of objective 65

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performance evaluation, and some others common to underdeveloped companies. G. Hofstede’s (1980) research was a watershed in cross-cultural studies. His findings are usually included in most recent studies. In this analysis, high power distance, high-risk avoidance, high collectivism, and moderate-high masculinity characterize Mexican culture. These traits are usually posited as the basis for explaining cultural influences on corporate behavior, leadership, and performance. The analysis also suggests that these Mexican cultural traits are considered more similar to Japanese culture than to North American. Over the last decade, Mexico’s importance in the worldwide commercial scene has grown remarkably, as a result of both the dynamic opening of its commercial borders and its internal transformations. The country has thus become a focus of attention on various fronts, management and corporate studies included. The multinational Globe Project, headed by Robert House of the University of Pennsylvania (House, Hanges, Ruiz-Quintanilla, Dorfman, Javidan, Dickson, Gupta and Associates, 1999), is conducting research in Mexico and 61 other countries on how culture influences leadership and organizations. The Globe Project’s initial results present country-by-country anthologies that place a country’s predominant culture within a nine-dimensional array of factors. The definitions and scores for Mexico, on a seven-point scale, and its ranks among 61 countries, are presented in Table 1. Interestingly enough, several of these cultural characteristics are consistent with the main findings of previous studies. For instance, the scores related to uncertainty avoidance and family collectivism are completely confirmatory of Hofstede’s studies. The power distance dimension score for “As is” also confirms those findings, but the “Should be” score shows an important change in orientation. According to Globe researchers of the Mexican case (Howell, DelaCerda, Martinez, Bautista, Ortiz, Prieto & Dorfman, 2002) several leadership attributes or behavioral orientations found in Mexican leaders are: supportive/relationshiporiented behavior, directive leadership behavior, charismatic leader behaviors, and leaders’ contingent reward behavior. Additionally, the Globe Project incorporates second order leadership factors called Global Leadership Dimensions (House, Hanges, Ruiz-Quintanilla, Dorfman, Javidan, Dickson, Gupta and Associates, 1999). For instance, charismatic/value-based and team-oriented leadership found strong support as elements for outstanding leadership in Mexico. Humane and participative leadership were rated slightly above the midpoint of importance for outstanding

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Table 1.

1.

2.

3.

4.

5.

6.

7.

8.

9.

67

Mexican Culture Compared with 61 Other Countries (Howell et al., 2002).

Performance orientation is the degree to which a society encourages and rewards group members for performance improvement and excellence. Mexico’s “As is” score is a medium 4.10, and ranks 47th/61; the “Should be” score is a high 6.16, and ranks 14th/61. Future orientation is the degree to which a society engages in future-oriented behaviors such as planning, investing in the future and delaying gratification. Mexico’s “As is” score is a medium 3.87, and ranks 45th/61; the “Should be” score is a high 5.86, and ranks 13th/61. Assertiveness is the degree to which individuals in a society are assertive, aggressive and confrontational in social relationships. Mexico’s “As is” score is a medium 3.55, and ranks 47th/61; the “Should be” score is also medium, 3.79, and ranks 27th/61. Social collectivism indicates the extent to which a society’s organizational and institutional norms and practices encourage and reward collective action and collective distribution of resources. Mexico’s “As is” score is a medium 4.06, and ranks 50th/61; the “Should be” score is a medium high 4.92, and ranks 23rd/61. Gender egalitarianism indicates the extent to which a society minimizes gender role differences. Mexico’s “As is” score is a medium 3.64, and ranks 36th/61; the “Should be” score is a medium high 4.73, and ranks 24th/61. Humane orientation reflects the degree to which a society encourages and rewards individuals for being fair, altruistic, friendly, generous, caring and kind to others. Mexico’s “As is” score is a medium 3.98, and ranks 29th/61; the “Should be” score is a medium high 5.10, and ranks 55th/61. Power distance is the degree to which members of a society accept unequal distributions of power in their institutions and society. Mexico’s “As is” score is a fairly high 5.22, and ranks 22nd/61; the “Should be” score is considerably lower, 2.85, and ranks 22nd/61. Family collectivism is the extent to which individuals express pride, loyalty, and cohesiveness in their organizations and families. Mexico’s “As is” score is a high 5.71, and ranks 19th/61; the “Should be” score is a high 5.95, and ranks 14th/61. Uncertainty avoidance is the extent to which individuals in a society seek to alleviate the unpredictability of future events by relying on social norms, rituals and bureaucratic procedures. Mexico’s “As is” score is a medium 4.18, and ranks 27th/61; the “Should be” score is a high 5.26, and ranks 10th/61.

leadership. In contrast, self-protective and autonomous leadership factors resulted in scores below midpoints. Preliminary Globe Project conclusions on Mexico confirm the persistence of several traditional traits of outstanding leadership: highly directive, charismatic, rewarding and frequently autocratic, autonomous and self-protective. According to (Howell et. al., 2002), “These leaders are often patriarchal, paternalistic, and 67

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supportive of followers and they emphasize maintaining pleasant interpersonal relations . . . they often seek to attain objectives through social influences and personal networks. Evolving cultural changes point to increases in participative and team-oriented leadership styles. . . stronger focus on performance and future orientation . . . and creating more humane and gender-egalitarian organizations” (p. 49). Generally speaking, most findings of studies on organizational culture in Mexican organizations seem to support Hofstede´s statement that participative leadership behaviors are neither frequent nor effective in cultures such as Mexico´s, with high scores on risk avoidance, collectivism and power distance. This type of conclusion might suggest that basic assumptions of whole systems change approaches could find cultural resistance. However, our experiences implementing WSC in Mexico and the two cases presented here provide evidence that participative approaches for organization and leadership are suitable for application in Mexico. Some of the main points that sustain this argument are: • WSC methods can work in very different cultural orientations because, even though perceived power distance due to hierarchy might exist, appropriate structures can be created where cooperative discussions among hierarchically different people can be productive. These structures can create conditions where the discussion and creation of knowledge can coexist within hierarchically different groups. Given these appropriate structures and conditions, knowledge and ideas can be discussed in equal and participative ways even within small groups with extreme power difference. • Cultural research that interprets power distance findings to imply that this means that people of hierarchical differences cannot work cooperatively and equally together might be in error. An alternative interpretation of the power distance findings might suggest a strong manifestation of respect for authority rather than an inability to engage in cooperative dialogue and relationship. Certainly a discussion with high respect for authority might look different from one based on a lower respect for authority, but nevertheless a cooperative dialogue is possible. • Cultural research suggests that strong uncertainty avoidance in Mexico might create opposition or resistance to organizational change, but WSC methods rely heavily on finding common ground and workable solutions rather than discussing differences or dealing with conflict resolution. Resistance to change is accepted and neither punished nor pressured in any sense. In addition, acceptance of change is created through these methods in a totally spontaneous process managed by the group; no attempt what-

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soever is made to accelerate or deepen the natural change orientation of the group as a whole. • Finally, cultural research suggests that strong family collectivism in Mexico might create opposition or resistance in individuals to working within large groups, where most people are unknown, or at least not familiar, to each other. However, WSC practice in Mexico shows that Mexicans are commonly not only willing but also spontaneous and eager to participate in large groups when principles and methods assure equal participation.

THE PRACTICE OF WSC IN MEXICO Mexican organizations cannot escape from seeing change as a natural and sometimes painful adaptation process to what is currently taking place in modern Mexico. Therefore, the need for more capable, all-engaging and egalitarian organizational change methods is now more evident than ever. But change in a complex, forward-moving society cannot be seen as a simple linear process, or as a magic jump from one state to another, but as a very dynamic process of social re-construction of reality (Berger & Luckmann, 1967). The urgent need that complex organizations have for new approaches to both understanding and managing change moved a group of Mexican consultants to explore large-group interventions with a whole-systems perspective. Actual applications of these methods in Mexican organizations started in December 1999. The first WSC intervention in Mexico employed a Future Search Conference (Weisbord & Janoff, 1995) design to find a common vision of the future and strategic planning for the supply chain of pork production in the state of Jalisco. Several large-group interventions, with a whole-system change perspective, have taken place in Mexican organizations between the years of 1999 and 2002. The results of twenty large-group interventions in which the authors have participated as facilitators are listed in Table 2. Twelve of these conferences were performed for profit-oriented organizations and the remaining eight for non-profit organizations. Interestingly enough, only one of the non-profit organizations is a single-unit company; the rest are groups or clusters of several companies and interested parties with common business interests. Non-profit organizations are city or county governments, community groups, large public organizations, and the city branch of a national political party. Most interventions were intended to create a common future vision and strategic planning, while the rest were intended for designing business processes, redesigning work processes, integrating business supply chains, and looking for new ways to create value for customers. 69

Hog Breeding

Livestock

Fruit growers

Software design

Government

Government

Community

2. Asociación Ganadera

3. Asociación fructicultores

4. PARNET

5. Arandas County

6. Colotlan County

7. El Salado

Sector

1. Asociación de Porcicultores

Organization

Future Search (Adapted)



Future Search and Whole Scale Design

+ 120

+ 40

+ 60

+ 75

+ 100

+ 150

+ 150

Attendance

Multiple social groups, most varied

Employees, Management & Council members

Employees, Management & Council members

Employees, management & investors

Multiple, supply chain, very varied



Stakeholders

Two days

Two days

Two days

Two days with one previous day prep.

Two days

Three days

Three days

Duration

Puerto Vallarta/ Regional

Colotlan/ County/ Regional

Arandas/ County/ Regional

GDL/ organization unit

Regional

GDL/State of Jalisco

GDL/State of Jalisco

Place/Scope

Non-profit

Non-profit

Non-profit

Profit

Profit

Profit

Profit

Profit or Non-profit

2001

2001

2000

2000

2000

1999

1999

Date

70

Future Search

Future Search

Future Search

Type of intervention

Large-Group Interventions in Mexico.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Table 2.

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Community

10. Zapopan Educational Council

71

20. Obras Públicas

12–19. Empresas Forestales





Zapopan county

Process redesign

Forest industry Future supply Search plus chain Whole Scale Design

Political party

Forest industry supply chain

9. CONAFOR

11. PAN City Committee

Public health

8. SSJ

+ 40

60 to 120

+ 70

+ 40

+ 60

+ 140

Employees, management & customers


All internal members

Multiple social groups, very varied


Employees, Management & Union

Two days

One and Two days

One day

One day

One day

Zapopan

Morelia, Zitacuaro, Oaxaca, Quintana Roo, Durango, Tepic Regional

GDL/ City

Zapopan/ County

Mexico City/ National

Two days with La Primavera/ one day State of follow-up Jalisco

Continued.

Non-profit

Profit

Non-profit

Non-profit

Non-profit

Non-profit

2002

2001–2002

2001

2001

2001

2001

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Table 2.

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Building Organizational Change in an Emerging Economy 71

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Future planning interventions were based on the Future Search methodology designed by Weisbord and Janoff (1995), while participative design conferences took their main elements from the Emery’s (Emery & Devane, 1999), and to some extent from Dannemiller and Tolchinsky’s (Dannemiller, James & Tolchinsky, 1999; Dannemiller Tyson Associates, 2000) methodologies. We next offer two specific applications of WSC in a small privately held software development company in Guadalajara and a large change intervention process to enhance the national forest products industry held in various locations throughout Mexico and supported by the federal government of Mexico. Both cases provide further evidence of the applicability of utilizing WSC interventions to develop the Mexican economy.

WSC CASES: PARNET AND CONAFOR The Parnet Case Parnet is a small entrepreneurial software development company. It was started by three brothers. Two of these brothers had prior executive and entrepreneurial experience and they envisioned creating a competitive company within the fully integrated IT business software market in Mexico (called Enterprise Resource Planning – ERP), and later on extending their operations to the southern border of the United States. They were also considering enabling their business software through the internet, an operation that would get the company into the e-business market. Parnet´s marketing strategy focused on small and mediumsized companies. Most of the personnel, about 75, were young engineers in their twenties and thirties. One of the company’s most serious problems was the delay in delivering projects, and the high costs due to elongated engagements that did not match proposed deadlines, or that did not fully cover all financial costs. Average throughput time was taking as long as eight to twelve months. Also, key investors, who were not seeing the financial results they expected, were pressuring the ownership. Thus, the company was not showing positive results, either operationally or financially. There were also many customer complaints, and some software engineers were showing signs of frustration and work dissatisfaction. One of the authors had known this family and consulted with them before, primarily using small group techniques. The owners, having learned of WSC approaches and recognizing the critical stage their business was going through, accepted the author’s suggestion that a strategic future and redesign conference would be helpful.

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Preparation started six weeks before the main conference. Meetings were held with the top managers to analyze possible implications, both human and technical, of a large-scale conference where everybody would be in one room. Initially the senior manager was skeptical about having all employees talk about management, finances and other issues that he felt were not traditionally the employees’ concern. The consultants insisted however on the importance of delivering financial information, and letting employees talk collectively about management issues. As preparation for the large-scale participative design conference, a half-day strategic meeting was held. There, top management and investors presented their views of the company, in a diagnostic sense, to all company members. The meeting also helped to present the possible scenarios of competition for the near future. A document describing scenarios and the company’s possible strategic directions was handed out to everyone. After the presentations, an open session of questions and answers took place. The top management fielded over 40 questions from organization members. At the end of the meeting, the consultants explained the general purpose and structure of the upcoming largescale design conference. The two-day main conference was designed collaboratively with the client (drawing heavily from the pioneering work of Paul Tolchinsky on whole-scale organization design). The purpose was to align core business processes with the firm’s main competitive strategy, and consequently to redesign work flows and reorganize work distribution for greater efficiency. Process analysis was completed by specialists with the aid of key organizational members, before the participative design conference. The general purpose of the conference, as stated in writing to all conference attendees was: To redesign the work processes for our main lines of business so as to ensure: • the quality of our services as per specifications; • project cost-efficiency as per budget; • delivery effectiveness as per deadlines. Outcomes and expectations for the conference were stated as follows: The new business processes must respond to Parnet´s strategies for rapid progress toward our vision of becoming one of Mexico’s leading companies in the ERP software development and e-business market, to grow at an annual rate of close to 100% (2000–2003), to sell stock within five years, and to achieve alliances or joint ventures with other companies or investors who can increase our business potential. 73

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The work method for the conference was explained to participants as follows: The work method we will apply is known as Whole Systems Change, which means that a company’s entire internal and external system meets in one place, with no other agenda, with no departmental interfaces or job hierarchies, to work together full-time as long as necessary on designing the change that the company needs in order to be competitive in its markets. Whole Systems Change (WSC) is based on three fundamentals: • • • • • • • •

Participation that is open to all elements of the system Simultaneous dialogue among all elements of the system Confidence in the capacity of large groups to make use of collective knowledge: (a) To understand the need for change (b) To analyze the current reality and decide what needs to change (c) To generate ideas about how to change current processes (d) To implement and support change and to make sure it works

The conference involved all organization members plus stakeholder representation from investors (who were also part of the board of directors), clients, and competitors (approximately 85 individuals in all). The conference was facilitated by a group of four consultants; one of the lead consultants spoke only English so simultaneous translation was available. The logistics group was made up of seven individuals, some of whom had experience from other largescale conferences. The first day of the conference focused on ending the day with the generation of eight redesign proposals. The group met from 8:30 am to 8:30 pm with an hour and a half break for lunch. The following were completed on the first day of the conference. • Revising the business vision. • Getting feedback from key customers, outsourcers, and competitors regarding their perceptions of Parnet. • Parnet executive team shared business strategies and desires. • Current work process analysis was shared (assessed by task force and developed prior to the conference). • Identification of work processes that needed to be kept and those that needed to be changed. • Development of Parnet’s work assumptions, principles, and guidelines • Generation of eight work redesign proposals

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The second day of the conference also went from 8:30 am to 8:30 pm. Various alignments of the group were used to go from the eight work redesign proposals that were presented at the start of the day, then reduced to four, then to two, and finally to one new work design supported by the entire conference. Results The two-day participative work design conference ended with a new work design for Parnet. This design involved the creation of multidisciplinary teams formed around clients and product lines, and a new organizational structure for performing core work processes. Some follow-up was assigned to specific individuals and small groups in order to finalize the new business process design. But it was the operations manager (one of the owners of the business), who worked extensively over the subsequent months to complete the redesign in detail. He assumed the real commitment for this follow-up. He worked intensely with different groups to complete the task. The consultant group had some contact with the company and helped the managers think through various design options, but company personnel primarily completed the follow-up. One main outcome of the business redesign process that resulted from the conference was that the company found ways to cut costs by eliminating unnecessary processes, and getting consulting, engineering, training and installation jobs done faster. Throughput process time for client projects was cut from an average of eight months to at most three or four months. Cost savings were a natural consequence of the achieved efficiencies. Estimates by managers of these achieved efficiencies go as far as 40% to 50% of former process costs – truly significant savings. The company divided its human resources and reorganized around projects related to two products lines: The design of specific systems for large newspaper companies (40% of Parnet’s business), and ERP systems for small and mediumsized industrial businesses named Parnet 5 (60% of Parnet’s business). Two relatively autonomous work teams were structured around these two product lines. The former operations manager was named to head the ERP division, and the former general manager was named to head the special projects division. Individual interviews with Parnet owners, managers, chief software engineers, and other stakeholders two years after the design conference, indicate several relevant results of the change process initiated by the large scale redesign conference. Here are some points of view from different company stakeholders: The current manager of the ERP division (Parnet 5), the operations manager at the time of the conference, had this to say: 75

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MICHAEL R. MANNING AND JOSÉ DELACERDA We were in deep trouble before the conference. We badly needed to change. Our main problem was the speed and accuracy to deliver our products. We were not able to compete with our process time and the quality of our services. The conference was a turning point that allowed us to continue – to stay in business. We learned how to work as a team. We learned how to strategically refocus the company. We not only built interdisciplinary teams, but also organized around projects and clients. This is by far the most important outcome of the conference. We realized that our business processes were multidisciplinary in nature, so that the company’s organization design changed completely. We also adapted the methodology of participative design to work with our clients. We now assess our clients’ needs, and define software requirements, using participative methods similar to those applied during the conference. We convene the client organization members responsible for the critical work processes to define software requirements. We all sit together – clients and consultants – in the same room at the same time. This has added greatly to the quality and effectiveness of our work. Hence the work design conference also taught us some new ways that we could work better and more participatively with our own clients. I believe that because of the work design changes we are now a better company in terms of working processes and methods, and most organizational members are engaged in and committed to continuing to sharpen and change our procedures. I see a more profitable future.

The former general manager, now in charge of the newspaper operations, said that the conference awoke the potential for change and improvement within the company. Specifically, we needed to redesign completely the way we built software, this process remained untouched, and we had to do it months after the conference. Nevertheless, if one single outcome can indicate the dimensions of the transformation, it is this: We used to deliver products in months, sometimes eight or even twelve months; now we are doing most projects in weeks, never more than four months.

However, he also perceived a different perspective of results, some neglected areas of change, and ideas about future potential for improvement. We improved process efficiency and we achieved better personnel and project integration. We also improved teamwork, shared internal goals, and the company’s sense of belonging among most of our personnel. I bet most members of the company enjoyed the experience and learned how to add value and integrate processes that were quite split before the conference. We were working with the wrong methods and the wrong organization; this part was undoubtedly improved. But we did not improve some critical processes as important, or even more important, than the ones we redesigned in the conference: the marketing and financing processes were very critical indeed, but we did not approach them during the conference. We did not even touch those neither during the conference nor later. And we have not yet gone deep enough. The change process therefore, did not include everything that badly needed transformation. We are a better company now after the change process initiated by the conference, but we are not truly a competitive company, yet. We have learned to eliminate defects in our products and have substantially improved time process and delivering, but our potential to compete was not improved, why is this so? Why did we not realize this in the conference? It was almost obvious that this very relevant matter had to be addressed deeply, but we did

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not. Our weaknesses in marketing and financing avoid us getting competitive advantage from improvements in operations, service and delivering. In other words, we improved many things, very important indeed, but we did not improve our market and financial position. For me this is not a success change story yet.

Investors were more pessimistic than managers. Two of the three main investors did not see a better perspective after the conference. As a matter of fact, these two individuals decided to decrease their participation in the stock of the company. However one investor increased his investment and bought part of the selling shares. Thus, the company went on with one very important private stockholder and a few investors with marginal shares. The company urgently needed increased investment in order to improve its market position, but the new president of the board provided just enough investment funds to maintain the company’s operation at break even. The new board president also named an external group of financial experts to control the main income and expenses of the company. They operate as outside financial advisors and bring information to the board in order to make financial decisions. Managers in charge of projects have little to say about the finances. “This decision restrained management,” reported the manager of the special projects division, “and instead of helping the company, it has stifled our growth. But, the investors argue that this is a time for being conservative while the economy recovers: It is better to maintain a position than no position at all, our investors say.” The new management split the team responsible for the implementation of ERP systems to become a consulting firm named Procesos de Negocios, S. C. The new company started operations as an independent firm in January 2002, and also assumed the maintenance and development tasks for Parnet 5. The external accountants previously mentioned have no influence in the management of this new company. The firm has consistently reported small but growing profits since the beginning of its operations. Consulting and software engineers had a different perspective on Parnet´s changes after the large group intervention. They expected more than what they perceived happened after the conference: “The conference was promising but many things still have not gotten done.” said one software engineer. “The company did not totally change as it was expected, it was only a short term effect,” said another. We asked them about the several changes and improvements seen by managers. The engineers agreed that work methods and procedures got better, but felt that this was due to the work done by a very small group, specially selected by one of the company managers, “but this was not a collective or participative change”. The engineers also admitted that the company’s software products are now significantly more robust, dependable, and stable. They also recognized improvements in consulting strategies during 77

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the software requirements definition processes of their consultations. But the engineers perceived these changes as a technical improvement rather than organizational improvement. They were hoping for and expecting deeper changes in the ways people behave, in the ways managers make decisions and in the ways people grow within the company. The engineers did not see this level of change at Parnet. “The conference was very important to understand problems and to project solutions,” said one engineer, “but follow up did not take place, therefore, changes were only of technical nature.” “We do not have a better company, one that satisfies their employees and clients,” reported another individual.

When asked about the improved indicators in clients’ satisfaction and delivery time these were acknowledged by the engineers interviewed. However, they perceived these improvements as just enough to maintain the company in business, but not to make it more competitive. It is clear that the company is not losing money anymore, but this is not what the conference promised, we were expecting a real change that could project us as a world class company. We are still small, and our future likewise.

Similarly, a consulting engineer declared: We did not notice great changes in the company’s strategic orientation . . . Changes were made indeed in the way we used to work, instead of working as a line of production with individual tasks, as done before, we started working in teams organized around projects. With time, these new process designs produced better results . . . we were able to finish projects in one third of the time we used to do them before the conference. But this was not only due to better work processing but also the increasing strength of the product. Parnet 5 is now solid and robust software, which applies the strongest technologies available. In addition, we started bringing 5 or 6 people, from different areas, to work together with clients to design, plan and implement projects. All of us led by a project leader. This has proven to be a very profitable solution since projects costs a lot less, and we deliver much faster . . . but the company is still missing a stronger market and financial strategy.

Everyone interviewed agreed that clients are clearly better off with the company’s improvements. And as mentioned before, delivery time decreased from months to weeks, and average “bugs” per system were down to almost zero. Consulting and supporting services are done faster and more efficiently. Client satisfaction indexes went up, and complaints down. When asked about the different perceptions between management and the engineers the manager of the ERP division (Parnet 5) had this to say: The engineers are right: Deeper cultural and organizational changes were expected. Top management just didn’t finish the job. The conference alone was very helpful, but it is just asking too much . . . On the other hand, the engineer’s frustration (which, by the way, I

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share with them) does not contradict the fact that our operations improved substantially. I expected ERP engineers and consultants to have a more positive view of the change process.

The Conafor Case Conafor is the National Forest Commission in Mexico. Appointed by President Fox in 2001, the Commission is charged with improving the critical economic condition, degradation and low productivity of national forests; and contributing, in coordination with other federal and state institutions to lessen problems of low education, poverty and social fragmentation in communities related to forestry. Forest and jungle cover almost 30% of national land in Mexico. This proportion is larger than most countries of the world, including for instance the USA, Canada, or Chile. Mexican forest plantations represent 3% of the world’s total forest surface. Plantations produce six to nine million cubic meters of wood annually. This amount is quite below the production of other countries with significantly less forest surface. Chile, for instance, produces three or four times more wood with almost three times less forest surface than that of Mexico (Conafor, 2001a, b). Yet, the potential harvest/utilization area of the Mexican forest plantations is a staggering 50% of the current forest and jungle surface (approximately 137 million acres). Products with growth potential are rolled lumber, recycled paper, short wood fibers, and non-wood products such as medicinal herbs, oils, nuts and honey. Ecological tourism is also considered as a main potential (Conafor, 2001a, b). Mexican forest products however are commonly neither cost nor quality competitive. Several factors run against the Mexican forest competitive position: old and obsolete production technology, high transportation costs, high interest rate of investment capital, high energy costs, lack of research and development, inappropriate land tenure legislation, and very long commercial channels. In addition, the forest production sector registers one of the lowest labor educations in the country. Populations living in forest areas total 12 million, most living in extreme poverty. Almost 80% of the forest surface belong to rural communities (ejidos). These communities are formed by more than 40 different etnias, which are Indian groups having language, historical background and culture of their own. Most forest communities (etnias and ejidos) are extremely poor and unorganized so that they have to sell lumber or rent the land, at very low prices, for a living. A brief overview of the production supply chain for forest products in Mexico can be characterized as follows. Some production actually starts in tree nurseries. But only a few communities are lucky enough to have plants from nurseries. 79

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Most forests grow unattended and haphazard, seldom to be replaced with seedlings. Harvested trees are usually sold by the board foot and purchased by owners of small aserraderos (sawmills: tree cutting and wood drying business) which prepare lumber for industrial production. Lumber transportation is usually performed by small trucking businesses, sometimes single individuals, owners of one or two trucks. They bring the lumber to cities and towns. Most lumber is bought and distributed by large commercial companies to industrial units and other smaller warehouses. Industrial units are usually very small. They manufacture furniture, home-related goods, and prepare lumber for construction purposes. Large industrial companies are less than 5% of all firms. Most large firms are concentrated in cellulose and paper production, and some in the furniture industry. One of Conafor’s main projects is the development of production supply chains in an attempt to enhance the competitive stance of the Mexican forestry industry. Conafor’s 2025 vision is to develop several competitive clusters in the forest industry. This project seeks to activate the productive capabilities of the forest economy in Mexico by incorporating new production technologies, financial support, research and development of new products, technical and management training, market analysis, internet enabled information systems, and organizational consulting. Conafor’s supply chains project begins by bringing together business people, technicians, related government agencies, forest owners, and other stakeholders, to jointly search for a better future for the industry and their communities. It is hoped that these groups will organize and constitute production supply chains that will gradually spread and develop and eventually creating production clusters in specific regions. Conafor´s top management is well aware of the project’s complexity. Mexico’s forest economy is so fragmented and impoverished these will be major obstacles to the formation of production supply chains. But, at the same time it is also clear that if these production supply chains are not created and reinforced to become competitive, Mexican forest industry development will not advance. Early in 2001, Conafor put out a call for consultants to staff the initiation of the program. The WSC Group3 was chosen to facilitate one first session in Mexico City. This initial conference took place in June 2001, and brought together about 50 top national managers (corporation CEO´s) and top professionals of forestry related business, banking, education and government agencies, to future search the perspectives of production supply chains in Mexico. The results strongly reinforced Conafor’s 2025 perspectives. Mexico City’s future search conference set the general common ground for the supply chain development program. After this conference a pilot program

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was initiated to assess the viability of large group interventions to facilitate the identification and development of “good supply chain projects”. Planning of the pilot program was carried out in collaboration with the WSC consulting group and the managing office of the specific supply chain project. Three largescale conferences – future search, participative design, and a business and management negotiation conference – formed the backbone of the program for each region. The conferences were designed in a two-day intensive program format, with ten hours of work each day. The pilot interventions were conducted in five selected regions out of the Conafor’s 13 regions: Central Pacific (State of Nayarit), Northern Center (State of Durango), Southern Pacific (State of Oaxaca), Balsas (State of Michoacán) and Península (State of Quintana Roo). These regions were chosen because they were spread over a large area of the country, and they had the resources to organize and convene stakeholders’ representatives. The program started in August 2001 and continued for eight months. Results were analyzed in May 2002. Results of the Pilot Program Conafor’s top managers met with consultants to evaluate both the progress and results of the pilot program. Meetings took place almost a year after the initial opening conference in Mexico City during the summer of 2001. The evaluation indicated that program content and the process of intervention had changed gradually over time, as the WSC consulting group gained experience working with this client group. For example, time in preliminary fieldwork, initial site visits, and other planning activities increased considerably as each region became involved. Also, greater involvement and responsibility were asked of Conafor’s regional staff in all aspects of the intervention as time passed. These regional staffs had the responsibility to bring the complete system to the conference, help to assure logistics requirements and perform several of the initial and follow-up activities. In addition, important changes were made in the content of conferences. This is true particularly for the participative design conference. Initially, two participative design conferences were planned for each region; one focusing on the supply chain process design, and the other focusing on business negotiation and organization of basic management structure. But due to the difficulty of conducting two separate interventions, these were merged into one conference followed by a number of short workshops where business negotiations and management structure would be set. The expected outcome of the participative design conference for each region was to establish at least one complete supply 81

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chain project design in which the stakeholder group would reach agreement. At the time the pilot program was put on hold to evaluate results (April 2002), all five regions had carried out the future search conference. But only two regions – based in Michoacán and Quintana Roo States – reached the participative design conference stage. Nevertheless, no region was able to proceed to actual negotiations whereby stakeholders would define basic business relationships in order to start working collaboratively. Three factors appeared to work against reaching the business negotiations stage: (1) In one particular case, critical stakeholders refused to negotiate in the conference setting, expressing the need for more time to think about the terms of the negotiations; (2) In another, key decision makers were absent; (3) In addition to the foregoing, stakeholders assumed that Conafor would financially support projects with federal and state resources. This caused the following psychological reasoning/questions to be posed in most stakeholder’s minds: “What is the government going to do to help us? When we know the answer to this we will then be in a position to negotiate and commit our own resources.” Since the answer to this question was not clear at the time, no supply chain project had fully reached the final stage of consultation. Despite this fact, several supply chain projects looked feasible to stakeholders, consultants, and Conafor´s managers. Participants in large scale conferences averaged 70 people, and from six to ten different stakeholder affiliations. The pilot program numbered five future search conferences, two participative design conferences, and numerous organizing meetings and short follow up workshops. More than 750 participants were involved in these activities. Participant ages, education and activities vary widely: from teenagers to elderly, from illiterates to doctorates, but mostly men (90%). Conference Evaluations Participants of large scale conferences – both future search and participative design conferences – were asked to complete a very simple evaluation with the following four questions: (1) (2) (3) (4)

Were the conference goals achieved? Were the supply chain stakeholders represented in the conference? How do you evaluate facilitation and methods applied in the conference? What is your overall evaluation of the large scale conference?

The results are listed in Table 3. Over 80% rated the four questions in the top two levels. Highest ratings are for facilitation and other methods applied in the

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conferences, 53% of about 750 respondents thought they were very good, and 41% good. Participants scored achievement of objectives as completely (32%), considerably (55%) and moderately (13%). Stakeholder representation was considered complete by 39% of participants, and considerable by 40% of stakeholders. Finally, overall evaluation of conferences averaged 31% as excellent, 53% as high, and 16% medium. No one rated any of the conferences as low or very low on the overall evaluation. In addition to the quantitative evaluations, conference participants also provided written comments about their workshop experience. Here are some examples of common concerns and feelings after the large scale conferences: • Timely follow-up should be given to the commitments in each of the proposed projects. • Missing follow-up on these projects will harm motivation of our community. • There is still a long way to go in order to create conditions for supply chains in forestry, but this a good beginning. • The topic (supply chains) is very interesting and relevant at this time. More workshops (large scale conferences) are needed in other regions (of the state). • We must have these workshops more often and invite more forest producers. • More financial support and training are needed for forest growers and wood producers. • The sector needs to change its ways of producing to avoid damaging and eventually destroying the forest. • Forest producers need to be brought into the participative process, they do not want to give up old ideas. • New ideas are needed to start up the next stage of production supply chains. • I enjoyed the experience. Mexico needs to change to develop more participative ways of doing business. • Participation is all right, but commitment is what we need. • These methods are demanding and tiring, but very good for goals pursued. • I am exhausted but full of hope. In-depth follow-up interviews were conducted with prominent conference participants; those who stood out during the conference to either motivate or support other participants or who were critical about the process at times. The interviews began by asking the interviewee to recall certain important moments in the workshops, then a series of questions were asked, such as: “. . . So many months have gone by since we took part in the future search or participative design workshop (as the case may be). What do you think now about what was achieved in the conference? How did the conference help your group or your 83

23 65 10 02 41 45 14 00 48 48 02 00 16 66 18 00 00

30 65 05 00 41 49 06 04 54 46 00 00 32 60 08 00 00

FS/ Morelia, Michoacán (n = 56)

18 48 32 00 00

30 55 15 00

42 35 19 04

14 47 39 00

FS/ Oaxaca City (n = 45)

40 45 15 00 00

60 30 10 00

40 45 15 00

30 50 20 00

PD/ Zitacuaro, Michoacán (n = 40)

45 44 11 00 00

56 44 00 00

22 39 39 00

28 66 06 00

PD/ Chetumal, Quintana Roo (n = 25)

45 40 15 00 00

60 30 10 00

25 40 35 00

66 30 10 00

FS/ Tepic, Nayarit (n = 45)

22 66 12 00 00

60 34 06 00

60 30 10 00

33 63 04 00

FS/ Durango, Durango (n = 45)

31 53 16 00 00

53 41 06 00

39 40 20 01

32 55 13 00

Average

84

1. Proposed objectives Totally Considerably Moderately Barely 2. Stakeholders representation Totally Considerably Moderately Barely 3. Methods and facilitation Very good Good Regular Bad 4. Overall Evaluation Excellent High Medium Low Very low

FS Future Search PD Participative design

FS/ Mexico city (n = 37)

Overall Large Scale Conferences (Percentages).

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Table 3.

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business? What impressions did this experience leave you with? What has changed, improved, gone forward in your group or project as a result of the conferences and the processes undertaken with Conafor? The following section presents the results of personal interviews with a selected sample of seven critical agents. The large scale conferences generated great expectations among the participants regarding what they could achieve by working together. Almost all the groups having projects ended up bringing in more critical agents and/or stakeholders to reinforce the projects. In this regard, one of the interviewees commented: “After the workshop I realized that the only way to save my business was by associating with others.” At the same time, all interviewees perceived the need to be more thorough when doing the conference preliminary work. As one of the interviewees stated: “Before we start forming a business association, it is important to define very clearly what we are going to sell to whom. There is no sense in fooling us and building castles in the sky. I don’t think we’re asking the government to finance outright a series of projects that have no uses whatsoever or that are going to degenerate into conflicts and in-fighting. After the workshop I came to realize how enormously important it is for everyone to make a contribution, to set their best price for each ones product (within the supply chain), (and the need) . . . to find a market for our products.” The person who made this statement started up a cooperative for purchasing supplies after attending the conference. Even though it is still too early to expect firm results from the establishment of projects linked to the workshops, this community (in the State of Michoacán) is organizing on its own to purchase legal wood, because in the region where they operate, lumber supplies are exhausted due to the past high levels of illegal cutting. This person concludes by saying: “If we all buy dry wood at a good price and manage to make a piece of furniture that someone will buy in Electra (a Mexican warehouse) or in Los Angeles (California), or that can be sold to any other serious customer, then the forest will have fewer problems.” In another region (in the State of Nayarit) several carpenters formed a group after the conference for the purpose of making purchases jointly. They invited other stakeholders and are interested in continuing with the participative process that will help them to institutionalize the supply chain in their region. Carpenters feel that the future search conference helped them consolidate an idea that had already been forming before the conference. One of the groups that took part in the Nayarit future search workshop brought in new critical agents and other stakeholders to complete the list of missing participants in the Mexican style furniture project. Presently they have made an application with Conafor to continue with the process in order to finish 85

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defining the production supply chain model that they need in their region. They were the only group that did a written project that included a very deep analysis of the state forest economy, the furniture industry, and market possibilities for their products. Now, they are asking Conafor to back up the project with financing, technical training, and outsourcing programs. It is clear to interviewees that large-scale interventions accelerated the ideas and actions of individuals within the communities to organize projects collectively. But as another interviewee (from the State of Oaxaca) pointed out, before bringing more resources into the project it is important to pinpoint the market’s demand for the supply chain products: “There is no reason to make any kind of commitment until we identify what might happen. I saw that very clearly after the workshop. We have already gotten training to make new kinds of furniture, with designs that reflect current market trends. We’re going to need more changes in our furniture designs because now we have to ship our products unassembled and at a lower price. That’s what our buyers have told us, and to succeed, we have to join together and form a production supply chain.” Another result agreed by interviewees is the increased trust resulting from collective action. “The suspicion we used to have among ourselves has decreased. Our ways of interacting and exchanging used to be very individualistic, whereas now there is a manifest willingness to work together, to get things done so that we all come out ahead.” One general perception shared by most interviewees was the lack of critical business participants during conferences. For example, one of the interviewees from Quintana Roo said that “. . . although I think the workshop was well organized, what was missing were system components (or participants). In other words, too few individuals who are forest producers or forest-related business owners attended the conference.” We found this same perception in the comments made in the overall evaluation of the Quintana Roo regional future search conference. Those comments suggested that in order to establish a strong production supply chain, it is important that participants have “a real business profile.” Likewise, the interviewee suggested that more emphasis should be placed on recruiting “genuine” forest-related business owners to the conferences.4 When expressly asked what they did not like about the conferences, aside from the lack in the stakeholders representation, two of the interviewees suggested that the conferences should have a broader participative planning event: “It would be useful to negotiate purpose, scope and participants invited to the conference.” On the other hand, what they liked the most, was the exchanging of ideas that took place in the conferences: “I never thought we

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would be able to think so clearly about how to solve our problems, and to turn the solutions into projects.” And this interviewee adds: “We ended up with the idea of bringing more people into the project, opening up to everyone and not just those of us who participated in the workshop, including others that couldn’t attend, or didn’t want to, but that could form part of our project.” The in-depth interviews confirmed several conference results: (1) WSC methods produced a strong incentive and attitude for the combining of resources in order to create greater opportunities for everyone. Solely competing for limited resources was recognized as a limiting action. (2) Participative methods to solve common problems and limitations were completely endorsed by participants. Some individuals expressed a true interest in applying these methods to other issues in their own communities (for instance: environmental degradation of fishing resources in the State of Campeche). (3) Participants in the WSC conferences endorsed the assumption that building on agreements and developing common ground is more important than focusing on solving conflicts and differences. (4) Collective business projects, like developing production supply chains, need the participation of critical business agents. These are individuals, groups, or companies that can bring needed resources into the project. (5) Even though project members assumed the responsibility to follow up on the agreements after the conferences, they require the support of third party institutions, such as Conafor and consulting agencies, to consolidate the participative process. All project groups are expecting support from Conafor to follow up. Next Stages for the Conafor Project The pilot program using WSC methods achieved some of its goals. It was expected to have at least a feasible documented project in each of five regions, and although there are potential feasible projects in all pilot regions, and certainly more than one in each, only the Nayarit region and to some extent the Michoacan region fully accomplished this goal. The participative process however is on its way in all five pilot regions, and this is the most important outcome valued by Conafor´s top management. After the pilot program, this top management group readily perceived the important possibilities of large scale participative methods to create productive supply chains in the Mexican forest industry. 87

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The pilot program was conducted to assess whether the WSC approach should continue and be expanded to the development of a national supply chain program carried out throughout the nation of Mexico. At present the decision has not been made whether these methods will continue to be applied in other regions beyond the five pilot regions or if another consulting approach might be deemed more appropriate. The decision in this matter rests with Conafor’s top management group and consensus on this issue has not yet been reached. But whatever the decision, our work and evaluation suggests that WSC methods have reached important stages in the development of regional forest products supply chains. Communities feel comfortable with these methods, and individuals from the pilot regions are asking Conafor´s authorities to support the continuation of the participative process in order to obtain the goal of enhanced production in their forest products industries.

THE VIABILITY OF WSC IN AN EMERGING ECONOMY LIKE MEXICO Our efforts in attempting to apply WSC approaches in Mexico have been rich with personal learning. These experiences have created contexts in which we have encouraged ourselves to explore what it is we are doing and why we are devoting our efforts to these endeavors. We have pondered much the question of “What we want” from this work. Do we want participants in these interventions to learn to behave democratically, to learn to work in teams, to lead people in participative ways because we think this is right or because it is the ethical way to do things? Or, do we want participants to realize that thinking, planning, and acting collectively brings about societal improvement/energy that otherwise could not be achieved? Are we simply trying to be “good guys” and support the view that collective action is morally superior to individual action? Or, are we trying to help people realize that collective action is a powerful way to improve organizations that can also benefit individuals? Do we want to transform autocratic leadership because we see it as old-fashioned and likely oppressive? Or, do we want to help individuals realize that collective action and self-management is a powerful way to increase the bottom line in organizations as well as improve their performance? In many ways these unanswered questions have been in our minds while doing our work in a society that is building a future with no precedent. But, specifically, we are committed to help Mexican organizations, and particularly Mexican managers and workers, realize that human systems require collective action to achieve their goals, and to achieve collective action we must create

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contexts in which there is collective thinking, designing, and planning. Although we assume that a collective approach is necessary, this should never mean (or be interpreted to suggest) that the “individual” is ignored or put on hold. Collective action can only be achieved via multiple individual acts based on a common ground or a framework that allows these individual acts to work in concert. An eminent Mexican scholar, Alfonso Reyes, used to quote the words of a peasant: “Todo lo que sabemos lo sabemos entre todos” (All we know, we know among all). Likewise, we sustain that it is through the knowledge of all stakeholders working at one time in one place that these methods provide new help for organizations. Our interventions in the two cases presented in this paper cannot be considered complete processes. Parnet’s case became a success story not only because the intervention awoke the improvement potential of the organization and helped participants collaboratively find better ways to redesign core processes, but also because they had the managerial leadership needed to carry the project forward. In Conafor’s case however, communities have not been so successful in building the organizational structures and managerial leadership that is required to implement conference agreements and projects. And, external resources have not yet been provided in order to assist and stimulate these communities to reach the next level of self-management. Nevertheless, we are sure that WSC interventions proved very effective in creating basic conditions to start the change process for forest communities. With these cases we learned, however, that goals should be set according to the complexity of each regional economy and the characteristics of each community, instead of having common goals for all regions. In addition, we learned that intervention processes cannot be standardized even though, at the beginning, all community situations seemed very similar in nature. Community characteristics are essential attributes in planning a WSC intervention. In contrast, our planning for Parnet was done in detail and extensively involved the company ownership. We revisited our planning several times; and, in addition, we did a lot of up-front orientation and preparation with all stakeholders in the project. Planning for Conafor proceeded very carefully for the first couple of interventions, but relied too heavily on this initial design for later interventions. It took us some time to realize that although these communities had many common similarities they were actually in very different stages of economic and societal development. Therefore, it became necessary to design every intervention as if it were unique. Our initial consideration of national culture and how it might influence the WSC process was later dismissed and replaced with the realization that every community and organization had its own unique characteristics and abilities and readiness to learn via participative processes. 89

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Although we are seeing valuable changes in the communities and companies involved in our two case studies, it is more important for us to report our finding that the WSC methods apply cross-culturally. Mexicans have dealt naturally with the participative and collaborative methods utilized in the WSC conferences (approaches), and indeed appear to embrace them fully. In our studies, there has never been more than the usual beginning hesitation to engage with others in these participative settings. Working with groups far beyond normal sizes (up to 200) has never been problematic. And the self-managed nature of these groups has always been seen as a key to the success of our efforts. Following-up is a serious cultural problem in Mexican organizations (DelaCerda & Núñez, 1998; Kras, 1990). With our work we assume that common ground and shared vision creates a personal structure in which individuals will think and act accordingly. But we know much more structure and even instruction is often needed after large group events and we are still struggling with how best to provide this, especially within communities where resources are so lacking. Within the Parnet case, we had to caution participants that much work beyond the conferences would be necessary to fully accomplish their aspirations. Yet, we are happy to report that the WSC conferences have provided a committed framework that, with further hard work and determination, individuals have been able to create an organization more responsive to its goals, both individual and collectively. Facilitation of conferences in Mexican organizations has been based on principles consistent with whole systems change and large group interventions (Bunker & Alban, 1997; Dannemiller Tyson Associates, 2000; Manning & Binzagr, 1996; Weisbord & Janoff, 1995). We believe that this work can continue to provide a beginning basis for effective interventions in the Mexican society.

THE INFLUENCE OF MEXICAN CULTURE AND THE USE OF WSC IN MEXICO Although we are very positive about the continuing use of WSC interventions in Mexico we are still unclear about the specific role that “culture” plays, if any, in the effectiveness of these approaches. Did the “culture” influence the eventual outcomes of the interventions? Was it possible that the conferences created “cultural islands” in which dialogue and participation thrived only to return to status quo upon their completion? Did the imported methodology from a democratic culture into a less democratic one, only “work” as long as the consultants exerted their authority as experts to create a different context for behavior, and once that authority was removed, behavior returned to normal?

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We might also question the WSC approaches that were used: Could a different intervention process be designed that better fits the Mexican culture? Or, can we assume that active participation in large group interventions transcend some traditional cultural influences? Might one need to design a more appropriate intervention process specifically to remedy problems of follow through? Or, are these problems simply issues that also transcend culture and are problems everywhere? One might also ask, could it be that interventions that focus on dialogue and the development of common ground (as opposed to problem solving and conflict resolution) resonate with a basic human value/desire not attached to any particular culture – and hence be a reason for their partial success? Certainly, we still have more questions than answers to these issues. Yet, at the same time we are encouraged that WSC approaches can continue to be improved to more readily address organizational and societal needs especially in emerging and changing economies. Most of the problems we have reported here are common issues encountered wherever LGIs have been performed – in North America, Europe, Africa, Asia, and now Latin America. The large group sessions always seem to go well, but we still need to question how we might intervene differently to avoid some of the obstacles to implementation and follow through.

CONCLUSION Mexican organizations are becoming increasingly willing to plan and work in more participative and collaborative environments. Individuals and groups in Mexico not only understand that participation and collaboration can bring newer and richer development perspectives for organizations, business firms, and the country as a whole; but also they are learning new ways of behaving, working, and managing based on this new collaborative understanding. In summary, our work with WSC interventions in Mexico (reported in Table 2), have taught us some general important lessons: (a) Budgeting: Latin America is a poor region compared to highly developed countries where many of our WSC interventions were originally designed. Cost of interventions is a big issue. Often, we have been forced to adapt the length and depth of interventions to fit the budget. We have experienced how this can be harmful to achieving project success. We are now more able, armed with case experiences in Mexico, to share with project sponsors how financial as well as structural trade-offs might influence project success. 91

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(b) Orientation: It is impossible to align everybody’s expectations fully to conference goals, but it is very important to ensure that the main stakeholders clearly expect the responsibility they will need to assume for outcomes desired. Most complaints we have received are related to false expectations with respect to time and individual changes that can be expected from one intensive conference. (c) Planning: Interventions must be planned ahead very carefully, seeing each case/client as unique. It is a mistake to assume general assumptions about culture. (d) Implementation: WSC approaches work quite well in Mexican organizations and communities. But, convening all the critical stakeholders, especially within communities, has been a major issue. Consultants must be flexible to adapt to the realities of what is taking place within the client environment. Future search conferences seem to be more natural to Mexicans than participative design conferences. Mexicans are very creative and eager to cooperate for a better future, but participative design conferences require more discipline, data gathering, and deep analysis from participants. These are traits not as easily found in Mexican organizations, but when they are there and the conditions are right, we can expect good results from these approaches. (e) Follow-up: The change process should never have been considered finished after conferences. It is better to assume that companies and communities in Mexico do not have the resources needed to follow up agreements. Traditional structure and organizational inertia will likely take their place after conferences. Resources are rarely assigned to new projects and consultants in Mexico will struggle with this fact repeatedly. (f) Level of change: We have many times wondered if cultural and organizational change took place as a result of our intervention. Real deep changes occurred in the Parnet case, and even though the young ambitious engineers expected more, the company changed its core production processes almost completely. In addition, they learned to work in self-managed teams, and involved clients in their own project development. This is indeed the level of change that we aspire to with our work. Conafor cases are still incomplete and we cannot conclude if the changes taking place in those communities will be lasting. What we do know is that the more active individuals and communities in these projects now realize that their future is better off in their own hands than reliance on traditional structures and old leadership (i.e. state and federal government, the economic elite, multinational and national corporations, etc.)

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A new society is emerging in Mexico. Conflicts, disputes, and differences brought about by political, social and economic changes, need new ways of finding common ground and collective action. Our consulting practice and research suggests that large scale participative interventions using WSC methods work effectively to establish common ground for future planning, organizational change, and business process redesign. In addition, these interventions have been able to produce creative collective thinking for new projects and basic improvement agreements. The Parnet case presents evidence of important and quick improvements that allowed the company to maintain and improve its operations in the very competitive software market. In the Conafor case, it is still too soon to claim that change processes initiated by these methods have produced the results expected. But it is evident that common ground has been found in all cases, and innovative projects have been established in some of them. A reasonable hope for further developments is encouraging when we contemplate the enormous requirements for change in Mexico’s emerging economy.

NOTES 1. This section draws substantially from Howell, J. P, DelaCerda, J., Martinez, S. M., Bautista, A., Ortiz, J., Prieto, L., and Dorfman, P. Societal culture and leadership in México. Working paper for the GLOBE Anthology, New Mexico State University, 2002. 2. Population, education and employment data were taken from official census: INEGI, Censo de Población y Vivivenda (1979, 1980, 1990); INEGI, Conteo de Población y Vivienda (1995). INEGI, Encuesta Nacional de la Dinámica Demográfica (1997). 3. The WSC group was composed of three consultants having experience with these methods in other industries in Mexico. The consulting group was headed by J. DelaCerda co-author of this article. 4. Probably the weakest component of the pilot program, in retrospect, was the inability to get more relevant business stakeholders to attend the conferences. Sometimes important busines stakeholders were unwilling to attend. Nevertheless, for those projects that appear feasible there is enough committed business stakeholders to carry the project forward.

ACKNOWLEDGMENTS We greatly appreciate the help and support of Luis A. González, Rodolfo Partida, and Salvador Moreno. Their guidance, hard work, and expertise has made it possible to conduct the research reported in this paper. We would also like to thank the editors of this series, Dick Woodman and Bill Pasmore, for their very helpful comments and expert advice during the preparation of this paper. 93

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THE RELATIVE EFFECT OF CHANGE DRIVERS IN LARGE-SCALE ORGANIZATIONAL CHANGE: AN EMPIRICAL STUDY Karen S. Whelan-Berry, Judith R. Gordon and C. R. Hinings

ABSTRACT Existing research has identified a number of drivers of organizational change, such as leadership, participation, communication, and training. It has typically explored the impact of a single change driver, such as leadership, in a given organizational change, but has not sufficiently explored the relative effect of multiple drivers or their relationship to individual adoption of change initiatives within large-scale organizational change. In this paper we look at the relative impact of four change drivers in a planned organizational change in a large U.S. bank. We used a multimethod research approach, involving survey, interview, and case data, to examine the relative effect of leadership, participation, training, and communication as change drivers and to understand their relationship to individuals’ adoption of the change initiatives. Our results show statistically significant differences in the perceived average significance of

Research in Organizational Change and Development, Volume 14, pages 99–146. © 2003 Published by Elsevier Science Ltd. ISBN: 0-7623-0994-6

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K. S. WHELAN-BERRY, J. R. GORDON AND C. R. HININGS

change drivers to individual adoption of change initiatives and statistically significant differences in their association with individual adoption of change. We discuss our results in terms of contextual vs. individual change drivers, the relationship between change drivers and the stages of change, and the characteristics of change drivers. We conclude with a discussion of directions for future research and change practice.

INTRODUCTION Change leaders allocate an array of resources – time, money, knowledge, and materials – to drive organizational change in large-scale organizational change efforts. They may expend such resources on organization-wide or departmentwide meetings, training events, special communications related to the change, or survey and feedback activities. In addition, change leaders typically allocate leaders’ and other organizational members’ time to change projects, for example, calling an organization-wide meeting announcing and explaining a change project or holding a training session for new technology and associated work processes. Resources allocated to change implementation can result in change drivers. Change drivers are events, activities, or behaviors that facilitate the implementation of change by providing an understanding of the need for change, describing the change vision and initiatives, fostering or training employees on new work routines, processes, models, and or values, or embedding changes in the culture. Prior research on organizational change has indicated that leadership, participation, training, and communication can be change drivers and so contribute to the implementation of change. Existing research has examined many of the specific effects of these change drivers on the implementation of change (Dunphy & Stace, 1993; Ford & Ford, 1995; Wellins & Murphy, 1995; Bartunek, Davidson, Greenberg & Humphries, 1996; Porras & Robertson, 1987; Whelan, 1997). For example, we know that leadership’s establishing a vision, supporting change efforts, and articulating desired change outcomes is important in building and maintaining support for change efforts (Dunphy & Stace, 1993; Torbert, 1989). Participation in change design and implementation affects commitment to change efforts and understanding of change initiatives (Bartunek, Greenberg & Davidson, 1999). Training is key in providing new skills, work routines, and understandings (Harrison, 1995; Wellins & Murphy, 1995; Goldstein, 1993). We also know that organizational change requires extensive communication, and some even argue it is a communication-based phenomenon (Ford & Ford, 1995). The prescriptive literature on change has widely cited leadership, participation, training, and communication as important aspects of

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successful change (Katzenbach, 1997; Miles, 1997; Kotter, 1996, 1995; Nadler & Tushman, 1990). A key question remains unanswered for those executives responsible for change initiatives in their organizations: “What is the optimal allocation of resources to these and other change drivers?” Related questions, such as “How does each change driver contribute to the change process?” and “Which change drivers are sufficient, individually or collectively, for organizational change to occur?” also require answers. Previous research has not fully explained the relative effect of various change drivers during an organizational change effort. We believe that better understanding the impact of change drivers provides a means for more fully exploring the individual change inherent in organizational change, examining the links between individual, group, and organizational change, and understanding the nature of the organizational change process. This study then explores the nature and relative impact of four change drivers – leadership, participation, communication, and training – in a large-scale organizational change. The organizational change involved four individual yet intertwined change initiatives in the Corporate Audit department of one of the twenty largest banks in the United States, known here as FBC, a pseudonym for the bank’s true identity. The study uses quantitative and qualitative data collection and analysis methodologies to answer two questions: (1) What is the relative effect of leadership, participation, training, and communication as change drivers?; and (2) What is the relationship between these change drivers and individual adoption of change? In part our approach reflects an interpretavist perspective (Marsden & Townley, 1996). Understanding change drivers or interventions, such as leadership or participation, as constructs in and of themselves and as part of the organizational change process is important to understanding that process. At the same time, the perception of and response to change drivers or interventions by organizational members is equally important to fully understanding the organizational change process. While clarifying the nature, qualities, and characteristics of leadership that would be most effective as a change driver in all situations would be valuable, such analysis is not possible since leadership practiced in a given organizational change is more variable and unique. What is of interest to us, and is the focal point of this research, is individuals’ perception of and response to change drivers that do occur and the relationship between those intended change drivers and individuals’ adoption of change initiatives. We are emphasizing that there is reflexivity in organizational change (Ranson, Hinings & Greenwood, 1980). In the rest of this paper we first review the research related to our research questions. Next we outline our methodology. Then we present a summary version of the FBC case that highlights the use of change drivers by Corporate 101

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Audit. We next present our results, followed by discussion and analysis of our data and findings. We conclude with implications for future research and implementation of change in organizations.

REVIEW OF RELATED RESEARCH Prior research has not fully explained the organizational change process, which is dynamic, iterative, and non-linear, nor has it fully explained the use and relative effectiveness of change drivers during change (Armenakis & Bedeian, 1999; Burke, 1995; Van de Van & Poole, 1995, Marshak, 1993; Porras & Robertson, 1987). Organizational change leaders continue to ask why cultural and radical change takes three to five years (Burke, 1995), and we ask, as do other researchers and practitioners, why so many organizational change efforts are viewed as failures. Exploring the allocation of change drivers during organizational change implementation may provide a partial answer to both questions. Change Drivers Researchers have typically studied one change driver, most frequently leadership, participation, training, or communication, and its relationship to organizational change. While other change drivers have been studied, these four have been examined in greatest detail. Leadership Some authors view change and change management as leaders’ crucial work (Salama & Easterby-Smith, 1994; Marwaha, 1994; Ezzamel, Lilly & Willmot, 1994). Leadership is important to organizational change from several perspectives: establishing a change vision; demonstrating leaders’ commitment to the goals of change; being involved and visible in change activities; modeling of desired behavior; communicating clear goals; and using formal authority and power to achieve change (Quinn, Spreitzer & Brown, 2000; Wanous, Reichers & Austin, 2000; Sims, 2000; Miles, 1997; Pawar & Eastman, 1997; Katzenbach, 1997; Kotter, 1996; Shani & Stjernberg, 1995; Stephens, D’Intino & Victor, 1995; Fisher & Torbert, 1995; Nonaka, 1994; Dunphy & Stace, 1993; Torbert, 1989; Beer & Walton, 1987; Tushman & Romanelli, 1985). Leadership’s commitment and approach to change efforts is crucial for effective change (Katzenbach, 1997; Miles, 1997; Kotter, 1996; Dunphy & Stace, 1993; Torbert, 1989; Tushman & Romanelli, 1985). Such commitment to and participation in change activities also appears to strongly influence organizational members’ experience of change

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(Shani & Stjernberg, 1995; Stephens, et al., 1995; Tushman & Romanelli, 1985). In their review of thirteen change efforts in Australian service organizations, for example, Dunphy and Stace (1993) explore the relationship between the scale or magnitude of a change effort, e.g. incremental vs. transformation, and the leadership styles in managing change, e.g. collaborative vs. coercive. Leaders’ support of, involvement in, and personal adoption of organizational change initiatives can mobilize the commitment of individuals to change and facilitate the organizational change process. Participation Participation has been widely and consistently cited as a major factor affecting processes of change (Bartunek, Greenberg & Davidson, 1999; Bolman & Deal, 1999; Freeman, 1999; Jaffe & Scott, 1998; Pascale, Millemann & Gioja, 1997; Lendry, 1996; Howe & Johnson, 1995; Neumann, 1989; Bartunek & Louis, 1988; Porras & Robertson, 1987; Bartunek, 1984; Miller & Friesen, 1980; Kotter & Schlesinger, 1979; Nadler, 1977). For example, participation plays a major role in goal setting and the achievement of goals in the context of change (Gransbury, 1995; Covey, 1994; Neumann, 1989; Latham, Erez & Locke, 1988; Miles et al., 1969). Participation can also build individual ownership of change, altering both frameworks and mental models and behaviors and increasing understanding and commitment to change initiatives (Bartunek, Greenberg & Davidson, 1999, Bolman & Deal, 1999; Bartunek, Davidson, Greenberg & Humphries, 1996). Participation of employees can occur through holding meetings to discuss change initiatives, by soliciting input and feedback, and by using pilot teams or groups in the implementation process (Whelan, 1997; Pascale, Milleman & Goija, 1997; Howe & Johnson, 1995; Kennedy, 1994). Such participation of employees in designing, implementing, and evaluating change initiatives facilitates the organizational change implementation process, and fosters individual understanding, commitment, and adoption. Training Insufficient training is often seen as a major contributor to the failure of change initiatives and as essential for successful change efforts (Bennett, Lehman & Forst, 1999; Stuart, 1995; Roberts & McDonald, 1995; Wellins & Murphy, 1995, Whalen & Rahim, 1994; McKnight & Thompson, 1990; Stewart, 1989). Research has clearly linked training and outcomes typically associated with surface change, but not as frequently with deeper, more revolutionary change (Harrison, 1995; Goldstein, 1993; Carnevale, Gainer & Villet, 1990; Bramley, 1989). Training is usually more related to the technical aspects of change, ensuring that employees have acquired the necessary skills to carry out a new 103

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task, although it can also convey new values, frameworks, and approaches (Bennett, Lehman & Forst, 1999; Harrison, 1995; Wellins & Murphy, 1995; Stewart, 1989). Communication In their review of OD process models, Porras and Robertson (1987) identified information as the variable that can most frequently be directly influenced and lead to change in the target variable. The means and people involved in information dissemination, as well as its content and nature, are important. Ford and Ford (1995) argue that change is a communication-based phenomenon; that is, change occurs in the context of communication, rather than communication occurring in the context of change. Ongoing communication about the status and progress of change initiatives has been identified as critical to organizational change (Bolman & Deal, 1999; Ford & Ford, 1995; Porras & Robertson, 1987). Research has emphasized the importance of the dialogue, the dialectic process, and double-loop processes in causing change (Nielsen & Bartunek, 1996; Nielsen, 1993; Argyris, 1990). Existing research also emphasizes the importance of an opportunity for feedback, a type of communication, in the change process (Kotter, 1996; Howe & Johnson, 1995; Kennedy, 1994; Porras & Robertson, 1987; Huse, 1980; Kotter & Schlesinger, 1979). Further, communication is frequently associated with lowering resistance to change (Jick, 1995; Howe & Johnson, 1995, Huse, 1980). Through increasing understanding of initiatives and providing opportunities for input and feedback, resistance can be lowered and commitment increased (Bartunek, Davidison, Greenberg & Humphries, 1996). Communication acts as a change driver by not only providing the means for understanding a change initiative, but shaping the initiative as it moves forward by keeping organizational members informed of the status of the change implementation and dealing with resistance as it arises. Individual Adoption of Change Numerous change process models exist in prior research (for examples, see Kotter, 1999, 1996; Conger, Spreitzer & Lawler, 1999; Miles, 1997; Jick, 1993; Cummings & Worley, 1993). Still researchers have argued that we do not fully understand or have comprehensive models of the organizational change process (Armenakis & Bedeian, 1999). One key step or process in organizational change is the point at which individuals adopt the change initiatives, that is, the moment when employees actually accept the values, models, and frameworks underlying the work, and begin to use new routines, processes, or technology. Many organizational change models implicitly include this step in the implementation

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part of the process; for example, Kotter (1996) refers to this phase as empowering broad-based action, and Miles (1997) discusses how change initiatives need to cascade to individuals and teams. We argue that the individual adoption of change is a necessary step in the organizational change process. Individual adoption of change is also a major target of change drivers because organizational change requires individuals to adopt the change. While a wide array of influential change drivers likely exists, we focus specifically on leadership, participation, training, and communication as change drivers and examine their impact on the individual adoption of change initiatives. Research Questions While prior research has identified leadership, participation, training, and communication as change drivers and linked them to the change process and outcomes, previous research has not examined their relative impact in a given organizational change effort nor, more specifically, on the individual adoption of change. Thus, our research attempts to answer two questions: (1) What is the relative effect of leadership, participation, training, and communication as change drivers?; and (2) What is the relationship between these change drivers and the individual adoption of change? We explore the impact of leadership, participation, training, and communication as change drivers in the FBC case, as perceived by individual Corporate Audit employees adopting the change initiatives.

METHODOLOGY This paper is part of a larger research project that studied four separate but intertwined change initiatives in the Corporate Audit department of FBC, one of the twenty largest banks in the United States. These four initiatives resulted in both incremental (first-order) and radical (second-order) changes in Corporate Audit’s structure, work organization and processes, and performance development and appraisal system. The larger project was designed to answer a number of questions about the change process, including questions related to the optimal allocation of resources during change. It involved three primary data sources: (1) the FBC case tracked the change initiatives over two years; (2) we gathered survey data from all FBC Corporate Audit employees at four times during those two years; (3) we conducted qualitative interviews with a sample of Corporate Audit employees at the time of the first three surveys. In this paper we first use the FBC case to provide an understanding of the initiatives and the change drivers. We then use survey data from the last three surveys, which were 105

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completed during the primary time of change implementation and adoption and focused on the change drivers. Finally we use the interview data to understand employees’ perception of the change drivers in more detail and to complement and explain the quantitative data. Woodman (1989) argues for combined quantitative and qualitative methods in change research, since neither method alone can effectively fully capture organizational change processes, and particularly the nuances in the magnitude and significance of a change. Huber and Van de Ven (1995) discuss the need for longitudinal data in organizational change research. Our approach to data collection avoided analyzing change processes at a single time, which may or may not be representative. In addition, the first author’s ten years of experience in managing and conducting audit and consulting projects for a Big Eight public accounting firm and in managing an internal audit department allowed a more complete understanding of the department’s culture and work processes and the change initiatives. We now describe our data sources, related methodology, and rational for use in this paper. The FBC Case The case describes the FBC change effort from the initial planning and design through full implementation, including a discussion of the differences between the designed and implemented initiatives. We based the case on interviews, surveys, observations, and information from written documents, and followed standard case methodology (Denzin & Lincoln, 1994). We initially used the case instrumentally (Stake, 1995) to understand the change process and change drivers. We felt that the study of a single, major organizational change, over time, would allow better and more detailed understanding of the change process. The case provided the means to identify to what extent and in what way leadership, participation, training, and communication were used as change drivers, to identify other change drivers, and to consider them within the broader picture of the change process. The case also provided a way to look at any single measure within the complexity of this change implementation. In this paper, we focus on aspects of the case that describe the use of change drivers and the allocation of resources to various drivers during the change effort. Surveys Corporate Audit employees completed questionnaires approximately every four months, and response rates averaged 80%. In this analysis we use the results of three surveys. (A survey administered in April 1996 focused on pre-change

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data and is not used in this analysis). Two surveys, which focused on individual adoption and the change drivers, were administered in September 1996 and January 1997, during the primary implementation time: 80% of 133 surveys in September and 85% of 114 surveys in January were returned. The last survey, distributed in June 1997, measured the degree to which the initiatives had been adopted, but focused more on the outcomes for the teams and the department; 84% of 107 surveys were returned. We explored the impact of change drivers by asking individual Corporate Audit employees about their perception of the degree to which they had personally adopted each initiative and their perception of the significance of each change driver to this adoption. For each of the four initiatives we asked two questions. The first question measured the perceived degree of individual adoption of the change initiative by asking the respondents to answer “Where are you personally in adopting a Line-of-Business focus?” on a sevenpoint Likert scale from 1 = have not started, to 7 = fully adopted. The second question asked respondents to rate the significance of various change drivers to their individual adoption of each initiative by answering the question “How significant has each of the following been in helping you understand and adopt a Line-of-Business focus?” on a seven-point Likert scale from 1 = not significant at all, to 7 = highly significant. We use the Wilcoxon two-related samples statistical analysis to test for differences in the perceived significance of various change drivers to individual adoption and the Kendall’s Tau-b to test the relationship between the change drivers and individual adoption of the initiative. Both are appropriate for the ordinal data used to operationalize these variables (Zikmund, 1997; Anderson, Sweeney & Williams, 1996). Interviews Interviews were conducted with a smaller sample of employees a few weeks after each of the first three surveys, at approximately four-month intervals from spring 1996 through early 1997. The first author conducted the interviews using a structured format. Interviews lasted from thirty to ninety minutes and were either conducted in person or over the phone. All interviews were tape recorded and transcribed. We selected a sample of employees that proportionally represented office size, and as much as possible, the size of the product teams and the gender and years of experience of Corporate Audit employees. The original sample included 28 people; as a result of turnover the final sample included 13 people who participated in all three interviews. Portions of the protocol, such as asking the 107

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employees to describe each initiative’s progress and its impact, remained the same during interviews conducted at the three times. Other questions, such as Corporate Audit members’ perceptions of planned events related to specific change initiatives, occurred in the interview that followed the event. The interview data are presented in this paper to more completely reflect the Corporate Audit members’ perception and experience of the change drivers and their perception of the change drivers’ relationship to individual change. The majority of our interview data related to leadership, participation, training, and communication as change drivers for the overall change effort, rather than for specific initiatives. In this paper we focus on answers to two questions from the first set of interviews: What events and experiences have contributed to your understanding and adopting the change initiative? And: How do you believe organizational change occurs and what are the major steps or events in the process? We report responses to one question asked in the third interview: What two or three events and experiences have been most significant to your adoption of the change initiatives? In addition, each transcript was reviewed for reference to change drivers and their impact on the individual’s adoption of the change initiatives. We report the number of individuals who named each change driver and use the details of their responses to better understand the change drivers. As noted by Miles and Huberman (1994), such counts and their content allowed us to see the overall trend and unexpected differences, while minimizing coding and perceptual bias. Limitations of Our Approach While we discuss the limitations of our approach in the Discussion and Directions for Future Research, we want to acknowledge three issues and related limitations of our research here. The FBC site and change initiatives provide a rich case and even richer data to explore the organizational change process. At the same time, this research is based upon a single organizational change effort, thus limiting some of our ability to generalize from it to other organizational change efforts. Further, to the degree possible we comment on history and context. However, we were unable to study prior FBC Corporate Audit organizational change efforts, and thus some aspects of history and context and their impact on this case are not known. In addition, while the four intertwined changed initiatives and our focus on leadership, participation, training, and communication allow for a unique comparison of these initiatives and the relationship between the change drivers and individual adoption of the change initiatives in the FBC Corporate Audit change effort, our approach and model do not include exploring interaction effects. We feel our approach offers a

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model for examining and understanding the organizational change process through ongoing research on a live, real-time organizational change.

CHANGE AT FBC CORPORATE AUDIT: THE CASE STUDY FBC has more than $80 billion in assets and more than 1,000 locations and 30,000 employees. Immediately prior to the beginning of the FBC Corporate Audit change process, change initiatives at the corporate level of FBC and in its various department and locations focused on positioning FBC for implementing the corporate strategy of becoming a nationwide U.S. bank. More specifically, FBC introduced change initiatives to organize the bank around nationalized lines of business, for example retail or trust products, and to build the structure, systems, and processes to support a national, as opposed to a super-regional or regional bank. This was a major shift for a bank that had accepted and even encouraged differences between various locations in the past. Pre-change FBC Corporate Audit The mission of FBC Corporate Audit, like most corporate audit departments, is to protect corporate assets and shareholder value and minimize risk (or loss of assets or value). Prior to beginning the change initiatives, FBC Corporate Audit had 15 offices and approximately 200 employees. At that time, the department had a very hierarchical structure, which included nine staff levels and dozens of salary grades, as well as very strongly held and very narrowly defined criteria for success. The majority of the chief auditor’s direct reports managed a geographic area, for example Nebraska, and all audit work in that area. Corporate Audit members worked within a given region, auditing all bank products within that region. A few product specialists provided any needed depth on the more complicated or unique products of the bank. Reflecting the generally conservative culture of banking, FBC Corporate Audit had remained more formal than internal audit departments in other industries, as reflected in its office layout, decor, dress codes, and other cultural artifacts. While a “team” of people did audits, audit had not traditionally occurred in a team-based environment. Audit work was completed in an extremely scalar and hierarchical fashion, with multiple levels of review. FBC Corporate Audit traditionally rewarded individual success, especially on those projects that had major audit findings. 109

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Summary of the Change Initiatives Corporate Audit began to design major change initiatives in early 1995, with implementation continuing throughout 1996 and 1997. Top leadership provided the impetus for the change initiatives. Although FBC Corporate Audit had been viewed as very successful and as making significant contributions to the bank, Corporate Audit’s executive leadership believed that they could make significant improvements in both effectiveness and efficiency. They felt that duplication of effort existed because of the geographic structure. For example, because all locations provided retail services, retail deposits were audited in each major geographic location, usually a state. This approach resulted in duplication of audit processes, lack of identification of risk across locations, and failure to realize potential gains in efficiency and or effectiveness at a corporate-wide level, as opposed to specific bank or location. In addition, a newly-hired member of the executive leadership team had significant product expertise, which resulted in audit findings that led to questions about why Corporate Audit was organized in a way that did not encourage and develop such product expertise. The change did not result from a crisis or environmental jolt, but emerged as planned change based on Corporate Audit’s executive leadership’s belief that the department could be even stronger and more effective and efficient. The Corporate Audit department introduced four change initiatives: Line-of-Business Focus To align with FBC’s overall strategy, improve product expertise, and provide enhanced services to clients, Corporate Audit decided to adopt a national Line-of-Business based approach to work. Rather than focusing on a geographic region, subsidiary, or affiliate, auditors would focus on one or two products or lines-of-business, for example retail banking vs. trust services. Movement between lines of business would be possible over time, but auditors would generally remain with a single Line-of-Business for many years. Team-based Work Environment Corporate Audit planned to organize into a team environment as a way of ensuring high quality client service and better using the available resources, talents, and experience of the department. As a result of the Line-of-Business and team-based work structure, Corporate Audit initially implemented ten teams that each worked exclusively on a given product. This structure meant a team-based allocation of resources, decision-making, audit-client relationship management, and participation in reporting – a significant change from the traditional individualistic, hierarchical, scalar approach to audit.

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Reengineered Audit Process A shift to an iterative audit approach driven primarily by risk and client collaboration, was comprised of the following components: Line-of-Business strategy, business risk assessment methodology, risk and control matrices, workpapers/issues/reporting, monitoring and evaluation, corporate/product strategy. Major changes in technology, specifically an in-house enhanced software product designed to fully automate the new approach, supported the new audit approach. A committee of department members that included individuals from across hierarchical levels, not just top management, designed the re-engineering of the department’s work processes. Performance Development Corporate Audit decided to implement a new performance development system that incorporated individual personal and professional goals. Individuals discussed goals and related performance with a performance development partner, typically someone with more experience in the department. The system included individual, project, and team evaluation and appraisal. The initial design included an individual’s abilities as an effective team member as one criterion for financial reward, but did not create truly team-based compensation. Each of the initiatives had a slightly different implementation schedule. The Lineof-Business and Team-based Work Environment initiatives appear to be tightly linked since the teams in the new team-based Corporate Audit work environment were based on FBC products or lines-of-business. Although these teams began auditing their specific Line-of-Business immediately, team development efforts and the pace and extent to which teams intentionally developed varied across the teams. The Performance Development initiative had the most structured implementation plan and timetable, which was created by FBC Corporate Audit Human Resources personnel. The Re-engineered Audit Process also had a fairly structured and well-documented timetable, but its implementation was last because the necessary software had to be developed, tested, and piloted. Nevertheless, teams were asked to adopt the philosophy of the risk-based audit approach immediately and to submit annual audit plans based on such an approach. Change Drivers in the FBC Case Table 1 provides a summary of how each of these change drivers – leadership, participation, training, and communication – was used in the implementation 111

Participation

Initial participation of all Corporate Audit members through their identifying their preferred team. At a team and individual level the degree to which

Initially, widespread participation occurred because each team followed a team chartering process outlined by FBC

Executive leadership presented the initiative, and consistently used the phrase, “flat, participative teams” to describe the objective of this initiative. Responsibility at a team level rested with the team leader as to how the team developed its “team-ness.” Some team leaders chose to have their team work on team skills and development beyond the team chartering process, while others did not. To test the design and actual use of the software and its functionality, the Re-engineered Audit Process used pilot teams to complete assessments and

Executive leadership formed the Re-engineering team, which completed the initial design of the Re-engineered Audit Process. When design and implementation began, a Corporate Audit manager was assigned to lead the Re-engineered Audit Process effort, remaining the initiative leader through development and to the point of full implementation.

Pilots were used to assess the design of the various pieces of he Performance Development process. Participation was individually based.

Executive leadership presented the initiative and indicated that the Human Resources member of the executive leadership team and his staff person were the initiative leaders. One Corporate Audit executive team member in early 1996 referred to the Performance Development initiative as “fluff,” which negatively impacted the momentum of the initiative.

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Executive leadership presented the change and monitored progress of teams in adopting the Line-of-Business approach. Executives expressed strong support for the change. After the regional meetings, responsibility at the team level rested with the team leader, each of whom was also a member of the Corporate Audit executive team.

The initial impetus for change was Corporate Audit’s executive leadership. A member of the executive team presented each initiative at the “Roll-Out” of the change initiatives at the Fall 1995 regional and leadership meetings.

Performance Development

Leadership

Reengineered Audit Process

Line-of-Business

Change Driver

Team-based Work Environment

Summary of the Use of Change Drivers by Change Initiative.

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Table 1.

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Line-of-Business

the development of the team’s Line-of-Business approach involved all team members varied slightly, but all Corporate Audit members participated in the Team Chartering Process and in establishing their Line-of-Business/ product approach in some fashion.

No specific training was provided regarding the Line-of-Business approach. Teams and individuals learned on-the-job, but forms that had not been used consistently by the Corporate Audit department existed and provided a framework. In addition, Corporate Audit executive leadership agreed on a format for the reporting of the team’s audit approach and annual plan.

Change Driver

Participation (Continued)

Training

No specific training was provided to the various teams on what “flat, participative teams” meant or on basic team skills.

Corporate Audit Human Resources, which involved all team members. After the completion of the chartering process, participation in terms of how the team intentionally developed as a team. varied significantly


Training occurred by team on the Re-engineered Audit Process software. All team members were required to attend as a team.

offer feedback. Participation in these pilots was individual. Eventually two teams with appropriate projects acted as pilots when the complete software was available.

Reengineered Audit Process

Continued.

Training occurred on an office basis and occurred in two phases in the fall of 1995 and early 1996. When the process was redesigned in late 1996, training documentation was provided for self-training, but team-based or directed training did not occur.


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Table 1.

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The Relative Effect of Change Drivers in Large-Scale Organizational Change

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113

Team-based Work Environment Reengineered Audit Process


Informal/grapevine communication of team successes created momentum for this initiative.

The grapevine created peer pressure for those teams that were more hierarchical and less flat and participative.

The leader of the Re-engineered Audit Process initiative communicated frequently by email to keep Corporate Audit members aware of progress and pilot results.

The grapevine most significantly impacted this initiative as the “fluff” comment was discussed.

Communication The Corporate Audit Department published a newsletter approximately every six months. During the change initiatives, information was included about their status, but it was generally old at the time of publication. Although executive leadership asked for and received feedback to be gathered on the perception and progress of the initiatives, they did not share such information in a timely fashion or sometimes at all and did not directly respond to concerns or questions raised. Routine communication about the status of the initiatives did not occur. The status of the initiatives and the change effort was discussed at the semi-annual leadership meetings.

Line-of-Business

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Change Driver

Continued.

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Table 1.

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of the change initiatives in FBC Corporate Audit. We discuss each driver in more detail in the following sections. Leadership The change initiatives started from the executive level in FBC Corporate Audit. However, a number of Corporate Audit employees from all levels of the hierarchy quickly became members of the initial “Re-engineering Team,” working from late 1994 to mid-1995. This team had responsibility for creating a summary design for the audit work process and related reporting. It also added new ideas and energy to Corporate Audit executive leadership’s desire for change. The four change initiatives were announced in late 1995 at regional meetings. At that time, only the Performance Development initiative had a documented, detailed implementation plan. Leadership of the change initiatives shifted at this point. For the Line-of-Business and Team-based Work Environment initiatives, primary responsibility rested with the product team leader, each of whom was also a member of the executive leadership team for Corporate Audit. The Re-engineered Audit Process and the Performance Development initiatives had initiative-specific change leadership. The Re-engineered Audit Process initiative leader was responsible for developing the actual software and related work processes for the new audit system. Corporate Audit Human Resources personnel were responsible for the Performance Development initiative and provided training on the new Performance Development system. Corporate Audit’s executive leadership, comprised of the chief auditor and the product team leaders, clearly supported the initiatives. Each product team had to develop its product audit approach and its team’s approach in late 1995 and early 1996. The product team leader had responsibility for his or her team. One key variation in leadership’s support of the initiatives occurred. Early in the training process for the new Performance Development system, one executive leader referred to the system as “fluff” and “just a bunch of paperwork.” This view quickly became known among all the product teams and appeared to have a significant impact on people’s willingness to adopt the new Performance Development System. The Performance Development System was redesigned in late 1996, and participation was mandatory for all employees at the end of that year. Participation Participation in the design and implementation of the change initiatives varied significantly by initiative. For the Line-of-Business and the Team-Based Work Environment initiatives, each team was responsible for developing its product 115

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audit approach and its approach to being a team. All teams had at least one meeting with all team members present to start the team-building process and to complete the team chartering process provided by Corporate Audit Human Resources. The majority of teams continued to have periodic team meetings with all team members present. One team, however, had a leadership sub-team so members rarely met as a whole team after its initial meetings and thus had a much less participative process. The Re-engineered Audit Process and the Performance Development Process had pilot efforts, and the majority of Corporate Audit members participated in at least one pilot effort for each initiative. Even though all Corporate Audit members did not participate, the pilots created a lot of discussion about these initiatives. As a result, Corporate Audit members perceived that the department members had a great deal of input on these two initiatives. Training No formal training was provided for the Line-of-Business and Team-based Work Environment initiatives. Each team developed its Line-of-Business/Product approach, received feedback on the approach from Corporate Audit executive leadership, and then implemented the approach. This is not unusual in the audit profession, since audits follow standards that apply regardless of what is being audited. However, each Corporate Audit member had significant learning to do regarding the assigned product and Line-of-Business, and the Line-of-Business approach meant a shift toward specialist from generalist. Training was also not provided for general team dynamics or process. Some teams intentionally developed their team meeting, communication, processes, and decision-making skills, while others did not. Teams that intentionally worked on team dynamics primarily had various team members lead development or team-building exercises; two teams used an outside person for one or two meetings early in the process. In contrast, training was provided for the Re-engineered Audit Process and for the Performance Development initiatives. A product team could not begin to use the new audit process software until its members attended the training as a team. Training was held at headquarters, and the software development and training team, as well as software that tracked system usage and utilization, provided follow-up. The Performance Development team was trained on an office-by-office basis, so in most cases more than one Line-of-Business team participated in a particular training session. Training was done by Corporate Audit Human Resources in three phases, the first in late 1995 and the second in early 1996. The third training session occurred after the redesign of the Performance Development process, in late 1996.

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Communication At a department level, the regional meetings were one source of communication along with a department newsletter. In addition, the team working on the re-engineered audit process software development communicated periodically on its progress and the ongoing system development. Surveys were used to gather feedback from all department members, and survey results were shared, although there were significant time lags in the sharing of the data. At a group level, each team had a schedule of ongoing team meetings, and the product team leader provided the link from Corporate Audit executive leadership to each product team. Corporate Audit members were clear that Corporate Audit executive leadership wanted the changes to work, were open to feedback, and would alter the planned changes. This sense was heightened by the visible impact the pilots had on the Re-engineered Audit Process and on the Performance Development process. Department members also knew that they wanted to be kept up-to-date by executive leadership. Informal communication also flowed freely. The grapevine always had extensive information about the change initiatives. Corporate Audit members tapped into the grapevine, but also recognized its unreliability. At the same time, the grapevine contained information about the teams that were the most “team,” and created pressure on other teams to conform. While there were multiple forms of communication and the environment was relatively open, Corporate Audit members always wanted more communication and felt that communication occurred too infrequently and was already outdated. Corporate Audit members indicated in feedback that they wanted more frequent, detailed, and timely communication. Post-change FBC Corporate Audit Following the change initiatives, FBC Corporate Audit had seven locations, and a targeted full-time employee headcount of 175. Figure 1 provides a timeline of the FBC Corporate Audit change effort. As previously noted, design of the change initiatives began in mid-1995, with implementation beginning in late 1995 and early 1996. Implementation continued throughout 1996, and adjustments and improvements were still being made in late 1997. Survey data indicated that Corporate Audit employees felt that the change initiatives were adopted. In September 1996 and January 1997, all initiatives were in the process of being adopted, as shown in Table 2, with some moving toward full adoption. The relatively low perceived adoption of the Performance Development initiative in September 1996 is not surprising, since the main performance appraisal and 117

1997 Re-engineered Audit Process is fully implemented.

Re-engineered Audit Process training on team basis continues.

Fig. 1.

After asking for preferences, line-of-business assignments are made for all FBC Corporate Audit members.

Commitment is made to redesign Performance Development Process.

Re-engineered Audit Process pilots continue and training on team basis begins.

Redesign of Performance Development process occurs and Performance Development 3 training occurs.

Re-engineered Audit Process training on team basis continues.

Performance Development pilots and initial training are completed.

Re-engineered Audit Process software development begins. Teams complete team chartering process.

Change initiatives are rolled-out at fall regional meetings.

QUARTER 4

Chronological Summary of FBC Corporate Audit Organizational Change Effort.

Performance Development process is completed for all members.

Team dynamics is identified as major issue for fall meetings.

Re-engineered Audit Process pilots begin.

Performance Development 2 training occurs.

Annual line-of-business plans are completed by each team.

Performance Development process is completed for some Corporate Audit members; adherence to and completion of new process is scattered at best.

Re-engineered Audit Process software development continues.

On a team-by-team basis, teams identify and begin to implement line-of-business approach and team processes.

Executive leadership finalizes design and plans for change implementation, and approves change initiatives.

Feedback is sought from FBC Corporate Audit.

Corporate Audit Reorganizational Task Force redesigns audit processes and identifies core aspects of change initiatives.

QUARTER 3

118

1996

1995

QUARTER 2

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

QUARTER 1

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Table 2.

119

Perceived Degree of Individual Adoption of the Change Initiatives.*

Change Initiative

Mean Ratings in September 1996 N = 103

Mean Ratings in January 1997 N = 93

5.87 5.37 4.04 3.66

6.05 5.67 4.53 4.12

Line-of-Business Initiative Team-based Work Environment Re-engineered Audit Process Performance Development

* Respondents rated the perceived degree of individual adoption of the change initiatives on a seven-point Likert scale, from 1 = had not started to adopt, to 7 = fully adopted.

development process occurred on December 31st. Performance Development training had occurred in mid-1996, and employees were working on individual performance and career assessment, planning, and goals. However, as previously noted, the Performance Development initiative was redesigned in late 1996. Similarly, Corporate Audit was adopting the Re-engineered Audit Process framework and models beginning in the spring of 1996, but the technology for the Re-engineered Audit Process initiative was in its various pilot phases through early summer, with initial adoption of technology occurring during the summer and continuing in the fall. Corporate Audit members described a number of changes in the department and in their individual work, including changes in department structure, daily work processes, leadership of teams and specific projects, audit-client interaction, career paths, and the FBC’s and audit clients’ view of Corporate Audit. For example, several teams operated in a very flattened, participative fashion, with rotation of project leadership among all team members. Performance appraisal criteria changed to include competencies, skills, and behaviors not previously included and now required by the change initiatives. Individual Corporate Audit members completed self-assessment and development planning as part of the process. Observation and interviews with department members provided evidence from inside Corporate Audit about organizational-level changes, such as in the organizational reporting structure. Corporate Audit members also described major changes in their relationships with clients (other areas of the bank), including more proactive involvement with the other departments and participation in new types of projects. Data from audit clients provided similar information regarding the change. Clients recognized Corporate Audit’s greater breadth and depth of knowledge of their line 119

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of business and products. They also acknowledged the shift from an intermittent to a more continuous relationship with audit. The role of audit changed; for example, Corporate Audit now participated extensively in such client change initiatives as the introduction of a new computer system. Audit clients also appreciated the significant improvement in the “value added” by audit, acknowledging more focused work, better identification of risks, and more timely reporting of results.

RESULTS We report our data here and discuss leadership, participation, training and communication as change drivers in the FBC Case. Since the Re-engineered Audit Process and the Performance Development initiatives had leadership specific to those two initiatives, both department leadership and initiativespecific leadership were assessed as separate change drivers on the survey. Participation refers to participation in developing a given team’s line-of-business/product audit approach, its team approach, and the Re-engineered Audit Process and Performance Development pilots respectively for the four change initiatives, and was noted as such on the survey questions. Communication and feedback were assessed and reported separately. Training was assessed for the Reengineered Audit Process and Performance Development initiatives only. Because the focus in this paper is the difference between leadership, participation, training, and communication as change drivers, we do not test the differences between department leadership and initiative-specific leadership nor between communication and feedback. We answer our first research question, “What is the relative impact of leadership, participation, communication, and training as change drivers?,” by looking at Corporate Audit employees’ perception of these change drivers. As noted earlier, our data from both surveys and interviews are based on individual perceptions of the significance of change drivers to the Corporate Audit member adopting the related change initiative. Our interview data and related analyses focus on the overall change effort, the change drivers, and the progress of the change initiatives. The qualitative data reported here on the change drivers are based on the overall change effort, not on each specific initiative. Table 3 shows the percentage of individuals describing a given change driver as significant to their individual adoption of the change initiatives and offers a summary of the comments and sample quotes to capture perceptions of the change drivers. As shown in Table 3, those interviewed mention leadership most frequently, followed by participation; the same percentage of respondents mentioned training and communication.

61%

46%

Training

77%

Percentage of Respondents

Participation

Leadership

Change Driver

121


“The initiative was really made clear when I attended the training. I knew a little bit about it here and there, but that really put it in more perspective and what the approach was.”

“Actually having our one-hour training courses to go over how the process should work [was key].”

“I thought the training was fine. It did help me understand how to complete the first phase of Performance Development.”

Corporate Audit members saw training as key to understanding the Re-engineered Audit and Performance Development processes.

“It is an exercise we actually went through and discussed what our expectations were of each other [as a team]. It takes work to be a team, so it is something we talked about and we’ve worked on.”

“I don’t think I really understood it until we sat in Jane’s office as a group/team and walked through the whole thing [line-of-business risked-based audit approach] in those every other day, two-hour meetings.”

Corporate Audit members viewed participation as key to developing individual understanding of the change initiatives and to their commitment to the change initiatives.

“It’s pretty motivating to see some people [Corporate Audit leadership] who I thought of as pretty conservative and pretty hard to change, seeing those people moving [to adopt the initiatives].

“Well, first I think you have to have someone who has the vision and knows what they want it to look like, and I think we have that.”

“Top management needs to fully understand the change and believe in it and implement it fully. Then pass it down.”

Corporate Audit members saw leadership as key to providing the vision of the change initiatives, clarifying the meaning and their individual understanding of the initiatives, providing a level of comfort with the changes, and maintaining momentum through leadership support.

Sample Comments

Percentage of Interview Respondents Identifying Change Driver as Related to Individual Adoption of Change Initiatives.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Table 3.

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121

Percentage of Respondents 46%

Change Driver

Communication

“I would say the biggest thing [to my individual adoption] is communication. . . With communication would come a comfort level that you know what decisions are being made straight from the top rather than hearing it at the back of the room.”

“I think communication is the biggest key [to individual change]. I think what is not spoken might be misunderstood. And, to constantly get feedback [from department members] was important.”

“Communication, communication, communication [is key to adoption of the change initiatives].”

Corporate Audit members felt communication was key, along with the opportunity to offer feedback about the change initiatives. Corporate Audit members consistently asked for more feedback from top management about the change.

Sample Comments

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Continued.

122

Table 3.

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123 4.83

3.30

2.75

N/A

Participation

Communication

Feedback

Training

Participation –1.19

Communication –7.61 **

–6.30 **

Feedback –6.30 **

–7.61 **

N/A

2.83

3.52

5.02

N/A

4.91

MEAN

–0.82

Feedback

–5.37 –6.90 ** **

–6.39 –7.46 ** **


* p = < 0.05, ** p = < 0.01.

N/A

4.62

Initiative-Specific Leadership

Department Leadership

Line-of-Business

CHANGE INITIATIVES AND CHANGE DRIVERS MEAN

Participation

Initiative-specific Leadership



January 1997 (N = 93) Communication

September 1996 (N = 103)

Training


Training

Mean, Z-Scores and Significance of the Perceived Significance of Change Drivers To Individual Adoption of the Four Change Initiatives.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Table 4.

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123

N/A

5.00

3.08

2.75

N/A


Participation

Communication

Feedback

Training

* p = < 0.05, ** p = < 0.01.

4.48




Participation –3.30 *

–7.14 **

–6.52 **

Communication



Feedback –8.20 **

–7.64 **

N/A

2.84

3.18

5.18

N/A

4.76

MEAN

January 1997 (N = 93) Initiative-specific Leadership


–2.51 *

Participation

Feedback

–7.22 –7.58 ** **

–6.96 –7.28 ** **

124

Communication

Continued.

Training


1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Training

Table 4.

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3.51

2.72

2.21

3.55

Participation

Communication

Feedback

Training

Participation –2.59 *

–1.72

Communication

125 –2.99 **

–1.52

–2.63 **

Feedback –3.30 **

–1.72

Training –6.43 **

–4.35 **

–5.12 –0.520 **

–4.58 **

–6.00 **

4.95

2.64

3.11

4.15

3.85

3.96

MEAN

–1.31

–1.21

Feedback –486 **

–5.34 **

–7.31 **

–6.83 **

–6.50 –4.90 –3.70 ** ** **

–3.57 **

–4.58 –5.69 –4.86 ** ** **


* p = < 0.05, ** p = < 0.01.

3.04

3.17



Re-engineered Audit Process





January 1997 (N = 93) Participation

September 1996 (N = 103) Communication

Continued.

Training


1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Table 4.

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125

3.63

2.68

2.95

2.44

4.09


Participation

Communication

Feedback

Training

* p = < 0.05, ** p = < 0.01.

Mean Significance of Change Driver Across All Initiatives

3.53




Department Leadership 3.95

Initiative-specific Leadership 3.53

Participation 4.00

–4.19 **

–4.21 **

Feedback –5.54 **

–6.40 ** –2.92 **

–3.65 **

Training

3.01

2.53

3.82

–7.51 **

–6.50 **

–2.08 –0.785 –5.84 ** **

–3.69 **

–3.53 **

Communication

5.02

2.77

3.49

3.07

3.95

4.03

MEAN

Department Leadership 4.41

January 1997 (N = 93)

3.90



4.35

–3.22 **

–3.85 **

Participation

Feedback

3.32

2.77

4.98

–7.35 **

–6.61 **

–1.37 –2.18 –5.93 * **

–2.43 –5.43 –4.77 ** ** **

–2.84 –5.26 –5.12 ** ** **

126

Communication

Continued.

Training

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Table 4.

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127

Table 4 provides the means of the survey responses for each change driver for each of the change initiatives. We used a Wilcoxon two-related samples test to compare the significance of the drivers to the adoption of change and report the Z-scores (often negative in such an analysis) with their statistical significance. The last row of Table 4 provides the average score for each change driver for the two surveys. We can look at the average score for each change driver and the related qualitative data reported in Table 3 to assess the change drivers with the greatest overall impact. We answer the second research question, “What is the relationship between leadership, participation, communication, and training and the individual adoption of change?,” by testing the relationship between the “perceived significance of the change driver to individual adoption of the change initiative” and “the perceived degree of individual adoption of the change initiative.” We use Kendall’s Tau-b, and test data from September 1996 and January 1997. Table 5 presents the T-scores and their significance. Neither department nor initiative-specific leadership was the most highly rated change driver on the surveys, although leadership was the most frequently mentioned change driver in the interviews. For example, in the Line-of-Business change initiative, identified by Corporate Audit members as the most significant change, leadership was seen as less important than other change drivers, such as being able to visually see the impact of the change on client assignments. Further, department leadership did not have a significant relationship with individual adoption of the change initiative except for the Re-engineered Audit Process, although initiative-specific leadership had a significant relationship at one or both times for both initiatives for which it occurred. Participation was the most highly rated change driver for the Line-of-Business and Team-based Work Environment initiatives, and second only to training for the Re-engineered Audit Process initiative. Helping to develop the line-ofbusiness approach or participating in the pilot program, for example, may bring the change initiative to a personal and individual level. In addition, participation as a change driver had the most consistent relationship with individual adoption of change initiatives during the FBC Corporate Audit change effort. Training was the most highly rated change driver for the Re-engineered Audit Process and the Performance Development initiatives, the two initiatives for which it occurred, and it had a significant relationship with the individual adoption of the Re-engineering Audit Process. This result raises the question of the impact training could have had for the Line-of-Business and Team-based Work Environment initiatives if it had been provided for these initiatives. As noted in the FBC case, the communication that occurred was highly limited, as reflected in the data related to communication and feedback. Its only 127

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 N/A

Training

N/A

0.525

0.352

1.13

N/A

0.144

9.26 **

3.57 *

4.04 **

8.38 **

5.36 **

4.36 **


1.81

1.98 *

1.01

2.52 *

–0.451

1.50


N/A

–0.470

–1.45

4.34 **

N/A

1.76

Line-ofBusiness

N/A

–2.47 *

–2.02 *

3.72 **

N/A

0.961

Team-Based Work Environment

2.98 **

1.71

0.961

3.50 **

3.67 **

3.04 *


0.614

2.20 *

1.46

1.50

3.50 **

1.80


* p = < 0.05, ** p = < 0.01; note that mean scores for Perceived Degree of Individual Adoption of Change Initiatives are reported in Table 2, and mean scores for Perceived Significance of Change Drivers to Individual Adoption of Change Initiatives are reported in Table 4.

–1.47

Feedback

2.63 *

Participation

–2.40 *

N/A


Communication

1.08


Change Driver

Team-Based Work Environment

T-Scores – January 1997 (N=97)

128

Line-ofBusiness

T- Scores – September 1996 (N=103)

Table 5. Significance of Relationship between the Perceived Significance of Change Driver to Individual Adoption and the Perceived Degree of Individual Adoption of the Change Initiatives Using Kendall’s Tau-b.

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129

positive relationships was with the adoption of the Re-engineered Audit Process. Also, Corporate Audit members’ ongoing requests for greater communication support the potential strength of communication as a change driver.

DISCUSSION What can the FBC data add to our understanding of change drivers and the organizational change process? The results suggest that differences exist in the relative effect of leadership, participation, training, and communication as change drivers and in their relationship with individual adoption of change initiatives. In this section we first discuss our results about the nature of the four change drivers and their relationship to individual adoption of change initiatives. Next we suggest that the change drivers might fulfill different functions in the change process. Then we consider the relationship between change drivers and the steps in the change process. Finally, we comment on the characteristics of change drivers. Leadership, Participation, Training, and Communication as Change Drivers The four change drivers differed significantly in their relationship to the individual adoption of change. Leadership Leadership is critical to the change process (Quinn, Spreitzer & Brown, 2000; Miles, 1997; Kotter, 1996; Dunphy & Stace, 1993) because leaders often establish the vision and desired outcomes for the change initiative. In addition, ongoing support by the leadership for the change initiatives helped maintain momentum of the change implementation. Leading change often gets added to a manager’s existing to-do list. In the FBC case, the initiative-specific leaders of the Re-engineered Audit Process and the Performance Development initiatives were dedicated to those tasks for several months. Their being in the trenches of the change process, responding to questions and issues, and modifying the change as the change process emerged, may have increased the impact of initiative-specific leadership as a change driver. Executive or top leadership may not be the most significant driver of individual adoption of change initiatives. Although the executive leadership was strong in the FBC Corporate Audit initiative, it was not sufficient in moving the change, as suggested in the following comment, I think each person has to have a sense of ownership. That has to be genuine ownership and not dictated ownership . . . my understanding was driven by management, . . . but where I think we really got the gist of it was when we had [line-of-business] meetings.

129

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130 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40


Such individual adoption requires specification of the change vision and objectives to a department or group and individual level, and our data show other change drivers may be more effective in achieving this. Personal characteristics of executive leadership may also affect the impact of this driver, making it more or less powerful. Participation As a change driver, participation was strong across the four initiatives and had the most consistent relationship with the individual adoption of them. Participation, as in the FBC case, can take many forms, from pilots to implementation discussions at group level. As several FBC members noted, participation in pilot efforts or in their specific team’s implementation plans increased their enthusiasm and led to personal commitment to the initiatives. In this way the meaning of the change initiatives for a specific group or team or individual may become clearer. Participation in change initiatives can also increase individual buy-in, as well as the complexity of an individual’s understanding of a change initiative (Bartunek, Greenberg & Davidson, 1999). Our data indicate that creating opportunities for people to participate in the design, ongoing improvement, and assessment of the implementation of a change initiative may be a key source of individual adoption of change initiatives. Giving employees the opportunity to work collaboratively in designing and implementing change may make an important contribution to the group-level change process inherent in organizational change, and ultimately to the individual adoption of change by members of the group. Training Training was strong as a change driver or intervention for both initiatives in which it occurred. In both cases training provided understanding of and helped operationalize the initiative. Training also clarified the designed outcomes for the initiatives. As noted by one CA member, It [Re-engineered Audit Process and the Line-of-Business approach] became much clearer . . . we could see how they actually functioned.

Insufficient training is a key reason that changes fail (Bennett, Lehman & Forst, 1999; Stuart, 1995; Roberts & McDonald, 1995; Wellins & Murphy, 1995, Whalen & Rahim, 1994; McKnight & Thompson, 1990; Stewart, 1989), and our data confirm the value of training as a change driver. Our observations suggested that training in FBC Corporate Audit’s change implementation was creative, participative, and effective. Certainly the nature and quality of the training will influence its significance as a change driver, as seen by the

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131

comment of this CA member who found the initial training for Performance Development insufficient. “Again, listening to the Ivory Tower and then looking for practical implementation are two different things.”

One difference in the Re-engineered Audit Process and the Performance Development training is that the former occurred on a team-by-team basis. This seemed to be more effective than random groupings of individuals attending the Performance Development training. Training seems to provide a way of clarifying employees’ understanding of change initiatives at both the group and individual level. Training had a statistically significant relationship with individual adoption of the Re-engineered Audit Process. This training ensured the consistent adoption of the technology and surrounding processes of the new audit approach. In contrast, training was not provided in the Line-of-Business and Team-based Work Environment initiatives, both of which were seen as more significant changes by Corporate Audit members. In these initiatives, great variation occurred in the implementation of the new team structure, which might have been avoided through common training on the meaning of “flat, participative teams” and related team skills. Communication FBC Corporate Audit leadership’s approach to communicating significantly affected the availability of data on communication and feedback: they carefully limited and controlled the sharing of information with department members during the change. Corporate Audit members were aware of the limited communication that occurred and frequently commented that better communication would improve the progress of the initiatives. Still, communication was a statistically significant change driver for the individual adoption of the Reengineered Audit Process at the time of the September 1996 survey, when more consistent communication occurred. The qualitative data in this study provide two other insights regarding communication as a change driver. First, the lack of communication was viewed negatively and created rumors and distorted perceptions, which then had to be addressed. Responding to rumors, perceptual distortions, and concerns takes time and other resources, which could be used more productively if sufficient, effective communication occurred during change efforts. Second, Corporate Audit leadership expressed concern about the impression that might be created for audiences outside the Corporate Audit department by certain types of communication during the change process. For example, a communication that 131

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indicated the Re-engineered Audit Approach was at the initial adoption stage might create concern among external stakeholders because they would not understand the nature or pacing of the change. While a concern about external stakeholders’ views makes sense in publicly-held and regulated industries with very sensitive market positions, such a concern also constrains the change process when communication is affected and promotes a need for change to be instantaneous. The market and commentary by the business press can exert dysfunctional pressure on organizations as they attempt major change by expressing concern over the speed and progress of changes. Table 6 summarizes the relative strength of leadership, participation, training, and communication as change drivers for the overall FBC Corporate Audit change effort and then proposes how each may vary in its impact as a change driver at the organizational, group, and individual levels. Contextual versus Individual Change Drivers Leadership, participation, and training were the most highly rated change drivers of individual change, but they did not consistently have a statistically significant relationship with the perceived degree of individual adoption of the change initiatives. These results appear to somewhat contradict prior research, which emphasizes the role of leadership in change efforts, states that participation increases understanding and commitment, and cites lack of training as a reason for poor change implementation. One possible explanation for such results might be that some change drivers, such as the involvement or support of executive leaders or participation in planning activities, represent a necessary condition for the adoption of change, but are not seen as directly affecting the adoption. Hence, some change drivers, such as leadership or participation, may function at a more contextual level, akin to the way Herzberg’s (Herzberg, Mausner & Snyderman, 1959) hygiene factors work, whereas others may have a more direct impact on the individual’s actions, similar to Herzberg’s motivators. Contextual change drivers may create a climate for change and minimize resistance, while individual change drivers more directly result in individual adoption of change initiatives. Interview comments such as “Yes, but . . .” and “Sure, the executive leadership support of the initiative is important to me, but when I really [emphasis added] bought into the change initiative was when I saw the initial results for our clients and the bank,” support this interpretation. This distinction may explain why numerous change efforts continue to fail, despite following existing best practices. In the cases of failures, more resources may be given to organizational-level change steps that provide the context for change, such as establishing the vision,

Leadership: Initiative-Specific

Leadership: Executive

133 Initiative-specific leadership must specify the vision and objectives and its impact may depend on the leader’s personal characteristics.

Strong for Reengineered Audit Process and moderate for Performance Development.

Executive leadership strongly supported the change initiatives. This driver targeted primarily the organizational and group levels. Executive leadership can strengthen or weaken initiativespecific leadership.

Moderately strong overall as a change driver.

Overall Impact in FBC Change Effort

Initiative-specific leadership can provide the ongoing face of a change initiative at an organizational level.

Executive leadership can provide the vision for change, clarify reasons for change, and respond to concerns. It can act as contextual change driver by lowering resistance through creating comfort with changes.

Organizational Level

Initiative-specific leadership can respond to issues related to variation in the adoption of across groups.

Working with groups, executive leadership can “walk the talk” of change, as seen in the Re-engineered Audit Process.

Group Level

Proposed Impact

Initiative-specific leadership can be a strong change driver for individual change by being open to feedback.

Executive leadership experiences difficulty in acting as a change driver at the individual level because of their limited contact with individuals. Executive leadership can provide the initial understanding of change and can use its authority to emphasize the importance of the change.

Individual Level

Summary of Leadership, Participation, Training, and Communication as Change Drivers.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Table 6.

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The Relative Effect of Change Drivers in Large-Scale Organizational Change 133

Training

Lack of training for line-of-business and team-based work environment initiatives limited the assessment.

Strong for Re-engineered Audit Process and Performance Development initiatives.

Participation varied across initiatives and had relatively consistent positive impact on adoption, although primarily targeted the individual level.

Strong overall as a change driver.

At an organizational level, training is the sum of the training of groups and individuals.

It is difficult to obtain total participation at an organizational level, even when using technologybased mechanisms.


Participation by individuals stimulates their commitment to and acceptance of change.

Individual Level

Depending upon the Training is a key driver of nature of a change individual adoption of change initiative, meaningful initiatives. group-based training may be a key change driver at the group level.

Groups can provide a means for participation.

Group Level

Proposed Impact

134

Participation


Continued.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Table 6.

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Communication

135 The leaders exhibited extensive concern about the potential impact of increased communication and so limited it. Lack of communication was viewed negatively.

Weak overall as a change driver.


Communication can have a significant effect at the organizational level, ensuring that all constituencies are well informed.


Continued.

Communication is key to working through group-level issues associated with change adoption, and cementing change in the group.

Group Level

Proposed Impact

Communication is essential to providing individual level understanding of the initial change vision, the status of change implementation, and a response to concerns.

Individual Level

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Table 6.

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The Relative Effect of Change Drivers in Large-Scale Organizational Change 135

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than to change drivers that more directly target the individual-level change process. The findings related to participation in the Line-of-Business initiative support this view. A statistically significant relationship exists between individual involvement in the change initiative through participation – in pilots and team-specific approaches for the Line-of-Business/product audit plans and team process – and subsequent adoption of change initiatives but not between leadership and individual adoption of the change initiatives. Existing research may overemphasize the contextual-level change drivers, necessitating future research to further explore this distinction. Relationship between Change Drivers and the Steps of the Change Process Our results also suggest further insights into the steps of the change process. Change drivers may vary at different phases and levels of the change process. We can use the steps in Kotter’s (1996) model – establish a sense of urgency, create a guiding coalition, develop a vision and strategy, communicate the change vision, empower broad-based action, generate short term wins, consolidate gains and produce more change, and anchor new approaches in the culture – as a basis for considering the possible value of specific change drivers for different steps. Leadership may be the most effective change driver in terms of creating a vision of change and establishing the need for change. Widespread participation may be the best change driver for increasing commitment to the change effort and empowering workers. Training may work immediately in encouraging individual employees to actually change their behavior. Communication may be critical to all stages. These distinctions may explain the different impact of change drivers at the time of the first interview and the September 1996 and January 1997 surveys. For example, participation was more significant for the perceived change later in the change (at the time of the second survey but not the first), suggesting perhaps that participation is less important for establishing a vision and more important for empowering broad-based action and creating short-term wins. Many organizational change models primarily focus on the organizational level change steps. However, inherent in organizational change is a group and individual level change process (Whelan-Berry & Gordon, 2000; Miles, 1997; Kotter, 1996; Marshak, 1993; Torbert, 1989; Porras & Robertson, 1987). When Corporate Audit members discussed department-wide Corporate Audit meetings, they emphasized that such meetings provided conceptual understanding of the change effort, but did not necessarily lead to individual adoption. Understanding of the desired change outcomes can be created and measured at the individual, group, or organizational level, but adoption of change initiatives fundamentally

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remains an individual level phenomenon. This raises the question of whether the impact or effect of change drivers remains steady across levels of analysis, that is, as change initiatives move from the organizational level to group or team level and then to the individual levels. When a leader communicates a vision and strategy, he or she begins to set the stage for change; however, the leader must ensure that each department and its members understand what the change means for them specifically. This lack of localized and or specific understanding, which can result in limited or no implementation, has been noted as a reason for change failure (Hinings, Brown & Greenwood, 1991). This cascading of the change throughout the organization suggests the importance of creating opportunities for education and involvement (Miles, 1997). Our data suggest, as an example, that drivers may vary in their ability to foster or create an understanding of the vision and reasons for a change initiative as compared to their ability to develop a job-specific or person-specific understanding and subsequent individual adoption of the initiative. Characteristics of Change Drivers Our change driver data and analyses provide a first step in identifying common characteristics of change drivers. In analyzing the events that Corporate Audit members indicated were important to their adoption of initiatives, all had one common characteristic: they used a concrete, hands-on experience to demonstrate what the change meant, not just saying what it was. Individuals noted, for example, that a physical reorganization of regional meeting attendees into their new Line-of-Business based teams, a diagram showing former and new responsibilities, or a role-play to demonstrate the new performance development process helped them understand the change in more detail and showed them specifically how they had to change. All of the employees interviewed cited the concreteness of these experiences as essential; such specificity moves a given change initiative from an abstract concept, such as “product vs. geography,” to a specific outcome, such as “I will no longer be responsible for clients A, B, & C, nor will I have Projects 1, 3, & 5; now I will work with client C, and have Projects 7, 8, 9 and related assignments.” Other data support this idea. For example, participation made the meaning of the change initiative clear in part through a precise specification of the details of the initiatives. Change drivers that most effectively drive individual adoption of change initiatives likely have other characteristics in common, and identifying these characteristics is a fruitful area for future research. 137

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IMPLICATIONS FOR FUTURE RESEARCH Researchers agree that the process of change is not completely understood (Armenakis & Bedeian, 1999; Van de Ven & Poole, 1995; Marshak, 1993; Porras & Roberston, 1987). We believe that our research about change drivers provides additional insight into the change process. In this section we discuss three directions for future research: a more complete understanding of change drivers; a fuller examination of the relationship between change drivers, the change process, and types of change; and a further study of “live” organizational changes. More Complete Understanding of Change Drivers First, researchers need to obtain a clear understanding of change drivers. Our research represents only a first step in investigating the nature and impact of change drivers. Although previous research showed that leadership, participation, training, and communication were critical to the change process, our data show their relative effectiveness in the FBC change effort, and so begin to answer our original question about the optimal allocation of resources during organizational change efforts. Because change drivers reflect significant allocations of time, money, and other resources for change implementation, future research needs to further validate the findings of this study, as well as determine whether and what other change drivers exist. For example, Kotter (1996) speaks of creating “short term wins.” Several Corporate Audit employees commented how positive outcomes for their clients acted as a change driver of their individual adoption of the change initiatives. Showing whether such positive outcomes, as well as communication about and promotion of them, are change drivers could be part of future research in specifying a more complete set of change drivers. The present research identified one specific characteristic of change drivers and needs to identify others. This likely will involve the collection of both interview and survey data in other change efforts. We could extend this research to examine whether the characteristics of change drivers that serve as contextual rather than individual change drivers differ. For example, do individual drivers require more hands-on activity than contextual ones? Do individual drivers differ from contextual drivers in the length of time during which they should be used? Furthermore, we need more research about the content of specific change drivers. For example, we might study the differences between the various types of leadership and their impact on change. Similarly, we might determine whether various types of communication, for example feedback through written memoranda or department meetings, have a greater impact.

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While the present research focused on the relative impact of four change drivers, future research should further examine their interactions. In particular, it should explore what combinations of change drivers are most powerful. For example, can communication alone create the desired change or does it have a greater impact when paired with repeated training or with initiative-specific leadership? The study presented here begins to integrate diverse streams of research, specifically those related to the four change drivers, but additional research that details the interaction of multiple constructs would be useful. The present research project was based on individuals’ perception of the impact of change drivers. Future research can explore the actual impact of change drivers. Does a change driver have an actual impact equal to its perceived impact? For example, although individuals might perceive that the absence of communication is critical, actually increasing communication might have limited impact. Similarly, there may exist a threshold of participation that changes the perception of its impact but does not alter its actual impact. Adding an objective assessment to the subjective assessment would allow richer understanding of the links between change drivers and change adoption. Similarly, we could extend the present research to examine the details of this relationship, rather than relying on differences between means. Such an examination would provide additional insight into the way change drivers actually impact the individual adoption of change. The Relationship between Change Drivers, the Change Process, and Types of Change Researchers can develop stronger models for the relationships between change drivers and the organizational change process, including the inherent group and individual change processes. For example, the impact of change drivers likely varies for the steps of the change process. In addition, the impact of change drivers also likely varies by level of analysis. For example, in terms of establishing a vision, a CEO’s presence and communication may be the most effective change driver. To then move the vision to a team implementation level, a process involving widespread participation may be the more effective change driver. This paper does not examine how change drivers vary over the course of change, which change drivers are most effective for specific steps in the change process, or which are most effective for moving the change from the organizational to the team and eventually to the individual adoption of the change initiative. We know that change is not simple, and each of these areas provides directions for future research that should help us better understand the complexity of the change process. 139

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A further variation may be with the type of change. We have seen that drivers, e.g. training, were used in different ways across the four changes. While researchers tend to write of changes as though they are ‘all of a piece’, there is a potential difference between a change which has an organization-wide focus on cultural change and one that has a group focus on new work processes. So, it is necessary to understand change drivers in relation to the scope and focus of a change attempt. Research Using “Live” Organizational Change Efforts We firmly believe that to fully understand the organizational change process, researchers should continue to study organizational change as it occurs in an organization. Understanding a major change like that of FBC Corporate Audit requires longitudinal, multi-method research. If this paper were based on any single data collection and analysis method, such as only case, surveys, or interviews, the results would be dramatically different. Our favored research approach asks much of the organization undergoing the change. Further research needs to continue and even extend such longitudinal change efforts. Of course, such research requires a commitment by organizations to better understand their own processes, as well as time and resources. The design of such longitudinal research should consider the timing of data gathering in additional detail. Friedlander and Brown (1974) found periodic survey feedback to be associated with positive change in organizations. In studying live organizational changes we need to fully understand the impact the data gathering has – both as a feedback mechanism in the organizational change process and as data for subsequent research analysis. Our intervals were based on the original proposed timetable for implementation. However, data gathering could have occurred more or less frequently, and such data might yield additional insight into the nature of the change process and change drivers. Using “live” organizational change, in real time, should also allow researchers to study other factors that affect the impact of change drivers. We know that they do not operate in isolation. For example, characteristics of leaders, followers, and the situation itself likely affect their impact on the adoption of organizational change. Studying “live” organizational changes, while posing problems for controlling the specific nature and characteristics of change drivers, also offers the opportunity to trace their impact qualitatively and then set the stage for future quantitative studies about the interaction of change drivers with other characteristics of the change scenario. “Live” organizational change efforts are messy, and do not lend themselves to experimental design. For example, in this paper, we wanted to study leadership,

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participation, training, communication, and change. One could question the validity of our results because communication was inadequate and training did not occur for the Line-of-Business or Team-based Work Environment initiatives. Yet, the FBC Corporate Audit’s change effort represented a fairly typical corporate experience. Top corporate leadership and Corporate Audit department employees showed their strengths and weaknesses as they navigated the challenges, problems, and outcomes associated with the four change initiatives. We need to continue to study live organizational change even though it may not follow the best practices or current theoretical models. After all, the aim of our management disciplines is to understand what actually happens in organizations, not just what is amenable to our chosen theories and methodologies. Studying multiple organizations would increase the ability to generalize our findings. Extending the present study to other organizations is a critical direction for future research.

IMPLICATIONS FOR ORGANIZATIONAL CHANGE PRACTICE This research has a number of implications for change management. Change does not happen while the organization stops its ongoing life and flow of product or service. Organizational change often feels as if executives and employees are trying to change a river’s course without the benefit of a temporary dam. The implementation of change often competes with the present organizational situation for resources, such as employees’ time and focus. Organizations need to find ways to maximize the impact of change drivers during change implementation by allocating resources appropriately. Understanding the relative impact of change drivers is a first step in this process. Our research suggests that some change drivers may create a readiness for change whereas others have a direct impact on the individual adoption of change. Understanding such differences is important for allocating resources. Research that gives organizations an understanding of how the impact of change drivers varies over the course of change is also important for understanding how best to allocate resources. Our research also reasserts the importance of training for change. Not only was this the most highly rated driver when it was conducted – for the Reengineered Audit Process and Performance Development initiatives – but it had a significantly higher perceived significance than any other change driver. The research also suggests the value of a particular type of training, one that emphasizes concrete, hands-on experience for the employees. Members of the Corporate Audit department, for example, commented repeatedly about the 141

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value of such concreteness in showing them the explicit meaning and content of all of the change efforts, not just training. Our data also affirm the value of communication in a change process. In their interviews, employees in the audit department repeatedly noted the absence of ongoing, effective communication. In fact, the impact of existing communication likely was compromised because of its scarcity. Such a deficiency may also weaken the value of executive leadership, and perhaps other change drivers, because organizational members do not sense top management’s commitment to the change. Finally, our research focuses on the individual adoption of change initiatives. Often organizational change is personified, for example, “Ford became quality oriented.” But change is an individual-level phenomenon. Organizational change occurs when the majority of individuals in an organization change their work routine and processes, behavior, or attitudes or frameworks. Our research shows a link between some change drivers and individual adoption of change. Thus, change drivers provide further insight into what drives the individual adoption of change in large-scale change initiatives.

CONCLUSION Environmental demands and pressures, rapidly changing technology, and continued globalization continually demand that organizations change, and organizations, in turn, ask organizational members to change. The research described here can assist organizational leaders in successfully leading organizational change efforts by increasing their understanding of the change process. If a given change driver or combination of change drivers can be identified as significant to individual change, then organizations can better focus their resources and efforts during change initiatives. Because organizational change is stressful to many organization members, and the results of this research could potentially expedite change, it could reduce individual stress, ease the dysfunctional emotions associated with change, and facilitate constructive behaviors required for a more effective organization. Organizational change processes are not understood in enough detail, particularly the processes related to individual change in organizational settings. Change drivers provide one means of moving our understanding forward.

ACKNOWLEDGMENTS The first author wants to thank Judy Gordon and Bob Hinings for their work on this article and their feedback on the dissertation research that led to

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this article. Also, thank you to Bill Torbert and Bill Stevenson for their encouragement, support, and feedback on the dissertation research that led to this article. Thank you to my B. C. colleagues who read many, much earlier versions of this work, and were always encouraging. Finally, this research would not have been possible without the curiosity and commitment of FBC Corporate Audit leadership and members, and heartfelt thanks to FBC CA for providing such a rich and multi-faceted change effort.

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IMPLICATIONS FOR ORGANIZATIONAL CHANGE IN THE STRUCTURE PROCESS DUALITY Paul C. Nutt

ABSTRACT An emphasis on structure that overlooks process can be found in many research efforts directed toward managers and management. Overlooked process questions include what produced a structure, how to use a structure, and how to evolve or transform a structure to meet new circumstances and conditions. One way to introduce these questions is to focus research on the “structure-process duality”. Exploring the duality allows the enfolded order in process to emerge and associates outcomes with the processes used in various aspects of the management of organizations. Such an approach also connects with emergent ideas in various fields that have been drawn to structure-process dualities. Modes of study for process are proposed and distinguished from the standards applied to process research. These arguments are used to show how research into the structure-process duality can point to a new action theory that captures issues of crucial interest to management, such as transformational leadership.


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INTRODUCTION1 Studies of organizational change have dominated the landscape for decades. Empirical studies examine what changed – the before and after status of people, work groups, or alliances – and place less interest in empirically investigating how the change was realized. Organizational change research has been largely descriptive, characterizing what changed. Prescriptive efforts typically offer propositions that capture consulting engagements, coupled with idiosyncratic observations, laying out steps to follow. A process of organizational change with empirical grounding is needed that goes beyond single cases of what is required to realize success (Van de Ven, 1992; Weick & Quinn, 1999; Mackenzie, 2000). Such research faces formidable challenges. There is a longstanding tradition in the social sciences to ignore time and thus process (Pettigrew et al., 2001). Time is treated as slices of a cross section that ignore how and why leaders delay action or push action ahead, and how a leader reads situations to determine which is best. An even more difficult hurdle is the very real complexities of doing the longitudinal research demanded for process work to capture the unfolding of time or historical investigations to reconstruct events (Van de Ven et al., 2000). The paper takes up this challenge, showing how organizational change and other related management topics could benefit from a careful look at process and how to frame such studies to bridge the prescriptive-descriptive gap. A call is made to consider both structure and process in change research efforts. Structural research is descriptive, pointing out the features of organizational change such as strategy, leadership, reward and incentive systems, appraisal approaches, or environmental analysis. Process suggests how to design the organizational change to fashion a strategy, engage in leadership, carry out organizational regeneration, apply rewards, conduct appraisals, and do environmental quick scanning. Structure and process are complementary. Process depicts how to take action and structure the nature of the action, suggesting that structure and process should be treated as duality in organizational change research. Research that considers both would attempt to capture flux and the phenomena as a duality. Structure and process form a duality because they offer two complementary ways to frame a topic for study. One is implicate in the other. There is structure in process and process in structure. Ignoring one renders the other incomplete and possibly misleading as an explanation. And, an emphasis on structure runs considerable risk of dealing with the transitory aspects of phenomena under study because structures are being altered relentlessly by process. In some instances, structure evolves slowly giving the appearance of a stable state. In

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others, a structure reconfigures with such speed that measures of it capture little more than one frame of a movie. In both situations, structure can be the illusion and process the reality. In fields of study such as Biology and Physics, evolutionary (process) explanations have led to dramatic breakthroughs. DNA and gene splicing in Biology and fission and atomic power in Physics offer two of many possible examples. This suggests that the underlying dynamic of process has considerable prescriptive potential in building a theory of organizational change. The structure-process duality also provides a metaphor to suggest causal explanations for many change-related topics including strategy, transformational leadership, de-development, and learning. Dualities abound. They include: chaos-order, objective-subjective, construalappraisal, long-short (time frame), divergent-convergent, behavior-intention, transient-steady state, subject-object, observer-observed, mental-physical, contemporary-retrospective, prospective-retrospective sense-making, and still others. To make them dualities, each can be expressed as patterns enfolded in the other, such as “there is chaos in order and order in chaos”; “subjectivity in objectivity and objectivity in subjectivity; or prospective sense-making in retrospective viewing and retrospective sense-making in prospective viewing as forecasting”. Unpacking the pattern in these dualities provides a process explanation that offers new insights for organizational change theory. The structure-process duality is offered as a core distinction to build such a theory. First, the notion of “unpacking” suggests that process is implicit in all change-related structures. Process is the key ingredient in developing an understanding of why a change takes on a particular structure. Second, to appreciate a change the duality can be observed as action is being taken to produce the underlying configuration found in the change. This notion of taking action is also suggestive of process. These notions of unpacking and unfolding configuration are both suggestive of process, leading to the selection of the structure-process duality to build a change theory. The paper considers several topics that support merging of process with structure in change research. First, some of the consequences of leaving process implicit are illustrated. Process is a plausible explanation in all structures. Overlooking process, or treating it as an afterthought, leaves important questions about process unattended. Some of these questions are discussed and some ways to find answers are suggested. Either a longitudinal view or a historical perspective is required to reveal process. Modes of study for process and structure are offered to show how standards for structural studies differ from those required to study process. The primary interest here is organizational change – suggesting how to merge the study of process and structure, creating a duality, 149

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for change-related topics such as transformational leadership, strategy, and organizational regeneration.

THE COMPLEMENTARY NATURE OF STRUCTURE AND PROCESS RESEARCH The double hourglass in Fig. 1 provides a way to visualize two streams of change research. In the figure, “Mode of explanation” identifies descriptive and prescriptive as the purposes of research and “level” shows how effort can be directed toward micro and/or macro phenomena. The vertical hourglass in Fig. 1 illustrates the emphasis found in structural change research. The horizontal one points to opportunities in process questions. When both are captured, the research can represent the whole of the phenomena under study and a structureprocess duality becomes the focus of the research. Figure 1 highlights that the mode of explanation in change research can be descriptive and prescriptive. Descriptive research depicts how a topic of interest is practiced, leading to research areas such as behavioral decision theory and strategy (as a noun). Prescriptive research suggests a means to act, such as Level of the Effort

Macro

Micro

Structure Description

Mode of Explanation

Process

Process

Prescription Structure

Fig. 1.

Classifying Management Research.

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laying out guidelines or steps to make decisions or to create strategy. The examination can be macro or micro, to distinguish between organizational and individual behavior. At the micro level human behavior is considered as managers act as a change agent, considering topics such as perception, cognition, decision style, and the like. At the macro level collectives are considered, dealing with topics such as the collective’s leadership, its structure, and its intent, such as innovation (Van de Ven et al., 1999) and downsizing (Cameron, 1995). Units of analysis such as work groups, organizations, and power elites are used. The Structural Tradition Micro-descriptive structural research efforts identify what a change agent produces. The descriptive tradition has dominated decades of studies under the rubric “organizational behavior” – more precisely individual behavior. Examples include studies of the kinds of information a change agent acquires (Taversky & Kahneman, 1979), measures of risk (Slovic et al., 1977), escalations of commitments (Staw et al., 1981), responses to ambiguity (Nutt, 2002), and the rewards offered (Kouzes & Posner, 1987, 1993). Studies of attitude change, employee voice and retention, personnel selection, cognitive complexity and cue recognition, risk taking and decision-making, job evaluation effects, administrative succession, whistle blowing, and parting ceremonies typically have a structural orientation that describes what was done, overlooking process, how the what came into being. Only recently has consideration been given to how factors change with time as change agents act purposely (Pettigrew et al., 2001). Studies of small groups are conducted in much the same way (Hackman, 1990), skipping over how the group evolves and how this evolution transforms the group’s actions. The steps called for to take action rarely get journal space. Studies of personnel selection typically describe who was selected and the characteristics of people on a short list but say little about how the selection process worked. Schon’s (1983) landmark studies of practitioners illustrate micro-descriptive process research. This type of study, however, is rare. Most micro-descriptive efforts are structural. As a result, we know comparatively little about how change agents go about their interactions with subordinates as they design interventions, carry out performance appraisals, select team members, and the many other activities that are essential in the day to day management of change. This void makes it difficult to assess the practices of change agents to find those meriting wider use and those that should be discouraged. Schon’s (1987) efforts in practitioner education illustrate one type of goal for micro-level process research. 151

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A structural orientation dominates macro-descriptive research as well. The approach is like that used in micro-descriptive efforts: variables are postulated, measures proposed, and experiments conducted to relate the variables or date cross sections drawn at a particular point in time. Lawrence and Lorsch (1967), for example, explored differentiation and integration by measuring the magnitude of change in variables, saying little about the processes that produced these changes. The typical study with an organizational perspective represents the change with descriptions (e.g. Burns & Stalker, 1961) or by the analysis of factors (Lawrence & Lorsch, 1967). This approach fails to show how or why change occurred. Strategic management studies often take great care to describe strategy (as a noun), depicting what an organization is doing: its market and customers, products, means of manufacture, stakeholders, and sources of support (e.g. Mintzberg & Waters, 1982; Hamel & Prahalad, 1994). Thompson (1967) labels these decisions as domain choice defining a structure. Domain navigation would suggest process. Many who characterize strategy overlook domain navigation (e.g. Thompson & Strickland, 1996; Digman, 1997; Hitt et al., 2001) and thereby skip over how the strategy came into existence. An emphasis on process would study how the strategy came into being and what may alter it in the future. As Weick (1979) noted long ago: “stamp out nouns, stamp in verbs.” Prescription Attempts Prescription is closely aligned with process, but the prescriptions offered typically take on a structure. Scott and Cummings (1973), for example, building on the work of Skinner (1969), extend the notions of contingency reinforcement to behavioral change in subordinates. A random contingency schedule is applied to administer aversive stimuli, designed to extinguish undesirable behavior, and rewards to reinforce desirable behavior. The classic SOR (stimulus-organismresponse) model is assumed. The random reinforcement pattern (R) is applied when particular behaviors are observed (S). In this model, the subordinate (O) doesn’t exist suggesting that creativity and other potentials of people have no bearing on the outcome. The individual emerges when the process of applying or responding to reinforcements is considered. The way subordinates react, both cognitively and emotionally, to rewards and punishments reveal process considerations, or how they respond to R. As this process is revealed, a change agent may find new opportunities to coax desirable behavior from subordinates using interventions. Expectancy theory (e.g. Vroom, 1964) also has prescriptive goals with a structural orientation. Performance is treated as a product of motivation and

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ability, where motivation stems from the product of reward availability and its valiance (importance) to the performer. Using products in the relationship stresses the importance of ability-reward availability, and perceived reward importance. Performance declines if any of the three factors is missing. This formulation treats the human organism (the performer) as an intervening variable. This overlooks matters of considerable importance in inter-personnel dealings, such as goal formation in the performer and the way communication is delivered. Expectancy theory is silent about the formation of an individual’s needs, attitudes, dispositions; memory of past dealings and information processing limitations in the accurate recall of these incidents; and the development of norms about equity. Some models have considerable complexity in the number of factors and factor relationships, such as Porter and Lawler (1968). Here both intrinsic and extrinsic rewards are used and the linkage among these, and other factors is specified – showing how factors linked to performances can be manipulated by a change agent. Still a closed loop is produced. The Porter-Lawler model is not open to learning, by either the change agent or the subordinate, in which both move to higher (or lower) levels of understanding. However, learning and other changes are always present as a change agent attempts to influence others. These considerations could be revealed by process. Processes describe how subordinates and change agents learn and how they co-evolve toward understanding or toward conflict. The process of learning would reveal opportunities to intervene to enhance movement toward a desirable state. Contingency models for all their virtues also skip over process. For instance, Vroom (Vroom, 1973; Vroom & Yetton, 1973) offers a diagnostic procedure to select among group decision-making approaches that also adhere to the SOR model. The stimulus (a problem) is assessed by 0, the change agent, using preset rules to produce R, the consequences found at the end of a decision tree. All contingency models use this type of cascaded if-then conditions to provide the structuration of a process, but do not offer steps to carry out the recommendations. Other examples include the contingency leadership models (e.g. Feidler, 1967), selection of group process (Strumpf et al., 1979), matching implementation tactics to climates (Nutt, 1992), and Daft’s (1995) decision rules derived from Thompson (1967) and Perrow (1967). Process as an Emergent Factor Structural macro-descriptive efforts that treat the organization as a unit of analysis reveal process inadvertently. The broader view makes evolutionary considerations harder to ignore. Responses tend to fall into two categories. In 153

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the first, process is assumed away. Examples include Hall’s (1963) studies of organizations that concentrate on size. Consider Woodward’s (1964) implicit treatment of technology, and Hage’s (1965) axiomatic theory of organizations. Each failed to see how process was buried in the factors they were studying, such as how process must be embedded in technology. A second response is to stumble over process. In searching for an explanation, process crops up as an afterthought. In these studies, process is articulated because the factors included in the study could not account for what was observed. For example, Hage and Aiken’s (1967) study of change in social work agencies attempted to use structural factors, such as formalization and centralization, to explain changes. Process was added when the structural factors could not explain all of what was observed. Research into innovation (Eveland et al., 1977) and organizational regeneration (Cameron, 1996; Sorensen & Zand, 1974) has discovered process in this manner. In many of these studies, longitudinal treatments uncovered process by inadvertently extending viewing time. Cyert and March (1963) tracked decision processes and found that conspicuous alternatives, supported by key power figures, tend to be adopted. The Ingram et al. (2002) study of governments found that leadership was present in highly rated governmental agencies at the city, state, and federal levels, and absent in low-rated ones, after looking at the data over a period of several years. Still, process continues to be ignored in many discussions of factors that influence outcome (Pettigrew et al., 2001). Macro-prescriptive efforts also stumble over process as illustrated by the classic work of March and Simon (1958) and Thompson (1967). Rationality in the March and Simon book has a structural orientation until nonprogrammed decisions are considered in the last chapter. Again, the structural treatment seems to have been incapable of dealing with considerations found to be important by walking through the logic used to construct this famous and often quoted book. It is interesting to note that “non-programmed decisions” is the least quoted part of this book. Co-alignment and adaptation crops up at the end of Thompson’s (1967) seminal work, again suggesting that process considerations may have been an afterthought, articulated to explain what structure failed to reveal. Thompson’s (1967) notions of coalignment and moving targets implicitly call for process, but do not indicate what should make up the process. What steps are needed to produce coaligned streams of organized action? Macro-level contingency tables (e.g. Lawrence & Dyer, 1983; Miles & Snow, 1978; Weick & Daft, 1985; Daft, 1995: Butler, 1998) share this problem. Process is implicit in finding cases of fit and misfit. Many contemporary research efforts into change either overlook process or treat it as an afterthought.

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The Consequences of Ignoring Process Research with a structural orientation risks measuring transient phenomena. Process runs through structure, continuously altering it. Measuring structure may capture an unstable state and fail to see the underlying causality at play. Structure measured at one point in time is apt to re-configure or even dissipate upon a second viewing. Systems advocates (e.g. Ravn, 1986) use a river metaphor to illustrate this point. By measuring, structure, the researcher codifies the river’s whirlpools, eddies, and other surface manifestations. A single viewing of the river sees these surface features as important properties. A longer view reveals surface features as transient and suggests the underlying dynamic of flow (the river’s current) as a cause of the whirlpools and eddies. This realization dates at least to the Greek philosopher Heraclitus who observed that one cannot step twice into the same river because its waters are constantly flowing by. This underlying dynamic of process appears to have powerful prescriptive insights. For example, a structural study deals with macro or micro phenomena, such as a strategy or a reward system, but not their evolution and demise due to changing conditions or problems in application. Change agents use process to create the strategy or reward system, and by using each gradually transform them. A static view using a structural representation imposes the categories and distinctions of an observer. Dynamic viewing shows the evolution.

THE NEED FOR PROCESS RESEARCH Failing to consider process forces an investigator to reinvent it. As a result, the change literature has produced a highly selective, cluttered, and contradictory view of process. Over and over again process labels are invented, stages named, and stage sequences proposed to deal with the same phenomena. To illustrate this point, Table 1 summarizes some change-related processes drawn from a variety of disciplines and schools of thought. Comparison of the processes in Table 1 offers insights. First, process differences within a school of thought, such as problem solving and systems, are as sizeable as differences among the schools. This suggests that different phenomena may have been observed under special conditions to identify the process stages. By sorting out the conditions a coherent pattern may emerge. At present, there is little coherency on which to build a process theory, without interpolation among study topics. Process studies would allow findings to cumulate both within and across schools of thought. Such an accumulation can answer questions about the uniqueness or generality of process among areas of 155

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inquiry, such as leadership and strategic management, suggesting unattended issues and routines for specialized application. Second, management-related processes are labeled differently but seem to generalize to action taking. For instance, leadership, implementation, socialchange, organizational development, decision-making, and the like are all part of taking action in an organization. By framing process around the needs of a study or a narrow conception of a change agent’s role, such as planning or decision-making, process becomes idiosyncratic to that set of assumptions and uses. Literature searches often overlook relevant studies because of their labeling. Even the clear-cut link between planning and decision-making has been overlooked, rendering inferences drawn from literature searches suspect. For instance, Armstrong (1982) limited his search for studies dealing with planning effectiveness to “strategic planning,” failing to find those shown in Table 1. Mintzberg (1995) made a similar assumption in his review. As a result, these conclusions about planning are overly limited. Third, none of the processes in Table 1 have fully overlapping stages, suggesting that each process may overlook key questions. Systems processes stress development and ignore implementation, and social change processes do just the opposite. This leads researchers to either construct a new process, and engage in a new round of stage naming, or build a composite without sufficient knowledge of the scope of relevant processes. These repeated attempts at process construction violate one of the canons of science: sequentially building on the best work of others. Descriptive studies that reveal limited aspects of an underlying process offer feeble prescriptions. For example, Hall (1984) in his study of the demise of the Saturday Evening Post concluded that ignoring feedback loops caused the failure. The larger question concerns what one learns from a process description that can help to provide a prescription – how does one avoid failure? Such research rarely appears in the literature. An illustration is Greiner’s (1970) comparisons of successful and failed change implementation attempts, which were used to identify seemingly good steps for a manager to take and bad ones to avoid. This approach identifies phases or steps that act as inhibitors that should be avoided and steps with useful results that can be embraced. Finally, there are striking similarities among process stages that have emerged from very different perspectives. The regeneration and change of an organization by managerial action taking appears to occur in stages that are similar to scientific revolutions, evolutionary change in biology, human growth and development, and changes in a culture (Table 1). Does this signify a “deep structure” to process? This question may be fundamental to understanding the nature of change, in any context. For example, to understand change agent actions with

157 Corporate Planning (e.g. Ackoff, 1981)

Process Formulating the Mess Summary – Systems analysis Obstruction analysis – Reference projections (Threats & opportunities considered) Ends Planning (desirable future specified)

Label

Sensing unsatisfied need Search for response invent or search for alternatives Evaluation of alternatives Decision to adopt Initiation of action within the system Implementation of changes Institutionalization of changes

Process Summary

– – – – – – – – –

Implementation (e.g. Beyer & Trice, 1978)

Label

Justification Plan System I/O Components Identification of the Decision Maker – Criteria – Rules of Thumb

Systems Engineering (e.g. Churchman, 1968)

Fine tune plan

Events: – Evaluation Study & assess need for a new program – Initiation Try off-the-shelf idea. – Implementation Deal with problems – Routinization

Social Change (e.g. Hage & Aiken, 1967) Awareness Interest Evaluation Trial Adoption

Mission Statement – Problem recognition – Initiation of planning – Approval Concept – Basic: goals, criteria – Feasible: constraint – components, system – description

Systems Analysis (e.g. USAF Systems command manuals)

– – – – –

Social Change (e.g. Rogers, 1962)

A Comparison of Processes.

Process Steps: – Function determination – (establish hierachy of – objectives) – Definition of ideal system – (use system matrix to define – system & iterate through – process elaborating the – matrix as necessary)

Ideals (e.g. Nadler, 1970 & 1981)

Phases: – Unfreeze – Change – Refreeze Steps for each Phase: – Objectives from general to– specific – Break old social ties &– establish new ones – Heighten self esteem – Move from external to – internal motives

Organizational Development (e.g. Lewin, 1951)

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Table 1.

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Label

Means Planning (inventing ways to approximate the desired future) Resources Planning (identification of ways to obtain resources) Design of Implementation and Control (control of plans and planning)

Corporate Planning (e.g. Ackoff, 1981)

Organizational Design Group Planning – 1st stage goal – 2nd stage goal – Ultimate objective – criterion – Estimate optimum Test – Stimulate – Control


Continued.

Information Alternatives Select workable from ultimate Formulae details Review Test Install Performance (generate norms & controls for management strategy)


– Preliminary – – developmental plan – – Feasible system – – (gross requirement, – – resources, plan – – management approval) – Definition Phase – (each subsystem) – – Analyze alternative – – solutions – – Operation requirement, – – interfaces – Measure of effectiveness – Select objectives – Integrate Specify system Integrate subsystems – Test Acquisition Phase – Procure – Detail design – Monitor, test, start, – train – Procedures – Installation plan – Operational plan


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Table 1.

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Problem Exploration – Nominal group (NGT) – Competent clients – Identify critical problems Knowledge Exploration – NGT – Diverse experts – Identify solution – requirements & – resources (new, old) Priority Development – Presentation – Identify acceptable – solutions & – needed compromises

Program Planning (e.g. Delbecq & Van de Ven, 1971)

Label

Process Summary

Corporate Planning (e.g. Ackoff, 1981)

Label

Phases & Routines: Identification – Recognition – Diagnosis Development – Search and screen – Design Selection – Judgement: – evaluation and – choice – Analysis evaluation – Bargaining Authorization Supporting Routines – Control

Decision Making (Mintzberg et al., 1976)


Continued.

Stages: Initiation – Knowledge awareness – Formation of attitude – toward innovation – Decision Implementation – Initial – Continued – Sustained

Innovation (Zaltman, et al., 1973)

Operation – Aid in operation – User evaluation (modifications be site management)


Problem Milieu – Environment (fixed – variable goals & arena) – Sanctions Search – Search resources – Partition solution space – into acceptable states – Aspiration criteria – Stopping rules Problem Representation – Factoring & decomposition – rules* – “Laws of hierarchies” – Design of components

Artificial Science (Simon, 1969)


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Table 1.

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Strategic Management (e.g. Ansoff, 1984) Subprocesses: Planning – Establish Purposes, – guidelines & strategy Implementation – Cause of organization – to behave according to – purpose, guidelines & – strategy Control – Evaluate performance

Given objectives and resources, design process: Analytic Phase – Programming – Data collection – Observation – Measurement – Inductive – reasoning Creative Phase – Analysis & – synthesis

Program Development – (Delegated) Control & Evaluation – Recheck solution validity – Test acceptability with – clients

Program Planning (e.g. Delbecq & Van de Ven, 1971)

Creative Design (e.g. Archer, 1969)

Label

– – – – – – – – –

Need Development of relationships Diagnosis Intentions Translations Generalization & stabilization Termination

Problem Solving (Lippitt et al., 1958)

– Communication – Politics Dynamic Factors – Interrupts – Delays – (scheduling, FB, – timing, comprehension, – failure)

Decision Making (Mintzberg et al., 1976)

Continued.

– – – – – – – – – – – –

Promotion & awareness Informatio & interest Demonstration & evaluation Training & trial Assisting & installing Serving & adoption Neuturing & institutionalizing

Problem Solving (Havelock, 1973)

Innovation (Zaltman, et al., 1973)

– – – – – – –

Problem definition Objective setting Synthesis Analysis Optimization Selection Implementation

Engineering Design (Hall, 1962)

Evaluation – Satisfying, optimizing, level – of aspiration – Utility & criteria – Resolution of conflict – procedures Implementation (no discussion) *Partition where interdependences expected to be minimal

Artificial Science (Simon, 1969)

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Table 1.

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161

– – – – – –

Steady state Cultural distortion Revitalization– and reformulation Transformation Routinization

Cultural Revitalization (Wallace, 1956) – – – – – – –

– Identify – performance laws, – i.e. ways performance laws affect goals -Identify constraints on design variables -Establish prevailing environmental states -Postulate states for each design variable -Determine solutions satisfactory with client -Calculate index of merit -Select best alternative

Creative Design (e.g. Archer, 1969)

Normal Science Growth of abnormalities Crisis Revolution New Science within new paradigm

Scientific Revolution (Kuhn, 1704) – – – – – – – –

Fluctuations within defined boundaries Fluctuations that exceed threshold Crisis Jump to higher order

– – – – – –

Steady state Growing dissatisfaction Conflict Revolution New order

Historical Determinism (Marx)

Problem Solving (Lippitt et al., 1958)

Dissipating Structures (Prigogine, 1984)

Strategic Management (e.g. Ansoff, 1984)

Continued.

– – – – – – – –

Invention – finding what works Translation – reaching the limits of growth Re-invention – moving from doing things differently to doing different things

Transformation (Land & Jarman, 1992)

Problem Solving (Havelock, 1973)

– – – – –

Recognize the need for revitalization Create a new vision Institutionalize the change

Second Order Change (Levy, 1972)

Engineering Design (Hall, 1962)

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Table 1.

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the potential to create a transformation we may need to understand and draw parallels to many kinds of transformations (Nutt, 2001), such as those found in cultures or scientific communities as their world-view shifts. These analogies offer powerful metaphors to build and test theories of transformational leadership, strategic management, and the like. As one consequence of all this, the core nature of “process” is far from clear. There are several topics meriting study. First is the diversity question. Do the processes in Table 1, and others, describe various aspects of the same phenomena? A second potential area of inquiry concerns whether process should be treated as special or general purpose. Are there process groupings around themes that should be maintained?. Can change agents transport a general process to specific applications? For example, can a decision-making process be used to carry out implementation? Similarly, the interchangeability of general processes, such as social change and implementation, or special process designed to do more specific managerial activities, such as morale building, merit study. Prescriptions for change are often made by generalizing one from one use to another. For instance, the stages of a decision model have been used to suggest steps for performance appraisal – identify the problem, suggest alternatives, obtain compliance. These generalizations seem reasonable but have such importance that the translation should be done with care. Being aware of other stages from other processes, such as those shown in Table 1, pose potentially useful questions for each new process application. Finally, there are several ways to address process that have yet to be considered, such as surface compared to deep structure or its points of resilience and flux. Each offers new and exciting forms in which to conduct process research.

THE BASIS FOR A STRUCTURE-PROCESS DUALITY Connections that create patterns of unity and change provide many of the explanations found in science (Morgan, 1986). The notion of a process-structure duality is derived from observing that many things seemed to be in a constant state of flux. Temperature and moisture change and with these changes the state of an object is altered by weathering and erosion. At any point in time there is an enfolded order that explain state changes that have occurred and will occur again. By focusing attention on structure (was is), one loses sight of process (what produced the structure and maintains its existence). The reverse is also true. Process and structure represents two sides of the same coin. One does not exist without the other. By viewing structure and process each can be seen. This need for simultaneous viewing occurs because there is structure in process and process in structure in strategy, organizational structuring,

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environmental attributions, and other aspects of change. For example, Iacocca’s “56 for 56” financing program (a strategy) rescued the 1956 Fords that were not selling (Iacocca & Novak, 1984). An internal attribution based on reading the environment – our cars are not liked but may sell if we make them financially attractive – led to the creation of a new organizational unit, a financing division. The “56 for 56” program can be viewed as structure (elements of the program, such as financing terms) or as process (the steps Iacocca took to develop and install the program). There must have been structure in this process and process to create the observed structure. A structure-process duality can be found in the work of Simon (1977). The structure of decision-making was called intelligence, design, and choice in this work. The process in this structure as well as the structure of this process provides an additional insight. Considering intelligence, design, and choice as a structure-process duality, which is shown by the intersection of structure and process questions in Fig. 2, offers still more. For instance, cell one in Fig. 2 captures the intelligence derived from an intelligence seeking process, identifying both the structure (what was the intelligence) and the process (how was intelligence obtained). The duality questions how the intelligence influences The Process in Order (steps to take action)

Intelligence

The Order in Process (structures)

Design

Choice

Intelligence

CELL 1

CELL 4

CELL 5

Design

CELL 4

CELL 2

CELL 6

Choice

CELL 5

CELL 6

CELL 3

Fig. 2.

Implicit and Explicit Process. 163

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intelligence seeking as well as how obtaining intelligence influences the intelligence acquired. In cell two, designs can be described as structure (a new product) as well as process (the ideation and developmental steps used to create a prototype). The duality asks how the prototype influences the design process as well as how the process influenced the prototype. In cell 3, choices can be depicted as products to be manufactured (structure) or as steps taken by organizations to reach a decision about a product. The duality calls for study of how choices are influences by designs and how designs influence a choice. The off diagonal cells in Fig. 2 reveal some additional research questions. Cell 4 captures the intelligence-design duality in which treats them as structure and process. Bits of intelligence (e.g. information) used in a design process and a design (a prototype or a competitor’s product) used in a process of intelligence seeking can be studied. Cell 5 depicts the choice-intelligence duality. Research could examine how a choice process was carried out to create intelligence and how the process of intelligence seeking was used in particular decisions (choices). Cell 6 connects choice and design. The impact of designs on the choice process and the impact of choices on the design process would be the focus of a research effort. Each cell in Fig. 2 poses a question – asking how structure and process presuppose one another. A change agent must ponder each to take action. Process can be represented in these actions as either a temporal ordering of events or explicit procedure that is followed. A duality is also inherent in co-production and in producer-product relationships (Ackoff & Emery, 1972). Co-production depicts state transformations as a system moves from time 1 to time 2. We see a structure (product) by the actions we engage in that reproduce that structure. This is a radical departure from the static views that characterize decision-making research, as summarized by Eisenhardt and Zbaracki (1992). For instance, using process theory as the producer in a producer-product relationship one can question how to carry out a process to produce a result, such as innovation (Van de Ven et al., 1999). A static view would describe the structure (product) by viewing the innovation and measuring various aspects of it, but find its production (process) obscure. A way to reproduce the innovative result is missing from the findings. The duality recognizes that there is tension between change in an organization and its traditions that causes resilience. A change agent adopts a transformational role (process) and deals with structural properties at the same time. For instance, a change calls for the interpretation of conventions, rules, and codes as well as available resources. Both material and sanctions must be mobilized. As change agents explore and exploit their degrees of freedom to make a change, the structure-process duality becomes apparent.

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An oscillation occurs when one becomes a transformational agent. The organization can be rooted in stability and trapped by its traditions, supported by vested interests and psychological commitments to a “way” of doing things (Mintzberg, 1982: Pauchant & Mitroff, 1992). Thus, structure is both facilitative and constraining. But, constraints contain their own limitations and the potential to change them. For example, if the budget for a meritorious project exceeds a change agent’s prerogative to allocate funds it offers an opportunity to sell the project at higher levels of the organization. Such an act can cause power relations to shift and make some rules moot. New procedures may result from a change agent who successfully sweeps rules or codes aside to insure that such an event does not happen again or to restrict the circumstances under which it can occur. Note the duality. Structure and change occur simultaneously and from the same action. Some rules change quickly and others are less malleable. When non-malleable rules do change, massive instability may result making it difficult for the organization to cope. The structure-process duality has several uses. First, one can theorize about the extent to which change agents in certain situations are free to act. What are the true and perceived constraints and what is the separation? Imagine where flux and resilience will occur. The notion of a change agent takes on new meaning by studying the duality of process and structure. Second, all structure evolves. Structure at time 1 is different from that at time 2. One understands this shift by identifying the processes behind the shift. Thus producer-product relations rather than cause and effect relations should be studied (Ackoff & Emery, 1972). The reverse may also be true. Structure can explain process shifts, using the producer-product formulation. Third, the change agent influences structure but the structure also influences the change agent. Change agents react to conditions of their own making and in doing so begin to change the conditions. How this change is made has its roots in the structure process duality. To understand the changes these roots must be understood.

ENFOLDED ORDER AS PROCESS Notions similar to a structure process duality are creating considerable ferment in several fields of study. Particle physics has long tussled with this type of dilemma. Viewing an electron as a wave produces wave or wave properties. But viewing the electron as a particle produces attributes associated with particles. Today waves and particles are viewed as complementary, parts of the same phenomenon: a duality. The notion of enfolded order has offered a number of insights. Physicists offer an “implicit” or unseen order that can explain the observed structure. In 165

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cosmology, “string theory” contends as many as seven additional dimensions are enfolded in the four space-time dimensions of which we are familiar. These “hidden” dimensions are helping cosmologists explain the physical appearance of the universe and its evolution (Hawking, 2000). The notion of an enfolded order is also being used to explain human memory (Pribram, 1983). A holographic metaphor seems to capture the encoding of skilled action and its purposeful use. The coding stores a pattern that is unfolded when needed. The holographic representation of memory captures whole-part relationships. When memory is activated there is an unfolding of order, the way that a movie of ripples in a lake, run in reverse, can identify a pebble as the cause of the ripple pattern. The structure, the surface features of the lake, offers little to explain the cause of the observed configuration. Causality of the structure becomes manifest by linking structural description with process, the enfolded order. Ignoring process or structure leaves the explanation incomplete and misleading. Looking only at a structure makes process implicate and the implicit order in process can be lost. Bohm (1980) offers an example to illustrate this point by creating an implicate process and showing how a structural study cannot reveal its properties. Oil is dropped into a round container of glucose. The container is then rotated one-quarter turn, repeating until oil has been placed at each of the four compass points. Viewing the container at any point in time shows one droplet, two smudges, and one clear compass point in the container. By rotating the container (process) the nature of the structure (location) of the oil droplets becomes understandable. Rotation reveals the oil droplets changing into smudges, disappearing, and emerging again as a smudge, before reappearing. Merely viewing the structure reveals little about its origin or functioning. Process is implicate until time-based change is used to explain the order. An explicate or unfolded order has objects and events that occupy specific locations in space and time. The naive realist sees this order but misses the deeper level of reality where order is a potential to be realized, which is often hard to recognize and describe. To ground the reality being obscured, the researcher needs a description of the movement between implicate and explicate order. Using a river analogy, this is the link between the explicate (ripples and other surface conditions) and the implicate unseen order that gives rise to past, present, and future conditions of the river (the current). Reality is the unfolded process that describes flux and change inherent in all situations (Bohm, 1978, 1980). The enfolded order (the river’s current) realizes and expresses the potentiality that can exist in structure (the surface manifestations of the river). Flow becomes the generating mechanism that gives rise to the explicate structure. Explicate phenomena appearing in the foreground may be disappearing in the background. To identify the underlying nature of a process (such as cosmology) chronos time must be studied to capture the inherent processes of

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transformation. Note that viewing with a microscope and a macroscopic is needed to avoid missing the implicate order that may be inherent in many phenomena. If implicate order exists in natural systems it is apt to be found in a social system as well. The study of change, like social science, has stressed relations within the explicate order – its structure (Pettigrew et al., 2001). A deeper understanding can be gained by exploring the generative process that links the implicate order with the explicate: that is, structure with process. Such an approach contends that structure is nothing more than an idiosyncratic instance. By measuring this instance, the explanation that shows how the structure we observe got that way and how it will change is lost. Including process in the study of strategic management, organizational decline, regeneration, and the like may allow key ideas in the change literature to take on a new meaning. Instead of viewing each as a noun (e.g. strategy) they are viewed as both a noun and a verb, because both process and substance make up action. Implicate and explicate orders interact to create crests that spit out structures, such as self-rule or autocratic rule. An example can be found in the selection of leaders, such as deans of colleges of medicine or superintendents of a school system, that alternate back and forth, from styles of pacification to “standing and shaking”. What underlying dynamic or implicate order produces these shifts? Wouldn’t the leadership selection literature benefit more from knowing the implicate order than the explicate? If structure evolves from the generative mechanisms then a search for the producing structure would seemingly have priority in the understanding of organizations and how they change. Beneath surface reality (structure) hidden processes are at work that explains what we see at any point in time (Morgan, 1986). This process of change is the hidden reality because it produces what we see. By viewing the world in structural terms, a researcher is dismissing an important causal factor: process. Research must seek “laws of the whole” by exploring the implicate order that must be imbedded in the explicate order. To understand an organization, for example, one must decode the processes of transformation that change the organization. This evolution is manifested as strategy, etc., but occurs through processes of regeneration and change that represent the fundamental dynamic to be understood. To understand action taking calls for a recognition of the structure-process duality and its inclusion in change research.

THEORIES THAT SUPPORT A STRUCTURE PROCESS DUALITY Theoretical developments have grasped the importance of a structure-process duality. Theory in sociology, biology, and systems call for dealing with dualities 167

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to offer a more complete understanding of phenomenon. In each of these theories process is the reality and structure the illusion. Table 2 summarizes several theories related to change, their field of origin, and some key premises. Structuration Gidden’s (1979) theory of structuration differentiates structure from structuring. At the moment of action, a structure is produced or reproduced by activities of structuring (called process here). Giddens distinguishes between structures such as formal authority and the use of formal authority by a change agent. Structuration describes how change agents take action by applying process. By Table 2.

Theories that Call for a Structure Process Duality.

Theory

Field

Premise

Structuration (Gliddens, 1985)

Sociology

Structuration (process) occurs whenever action is taken (or not taken) which continuously alters a structure Instructions for change are encoded in an organism that produce favorable or unfavorable adaptations

Morphogenesis (Buckley, 1968)

Biology

Autopoiesis (Varela, 1979)

Biology

Organisms are self-referencing and produce change by interacting with the environment

Cybernetics two (Maruyama, 1963)

Systems

Negative feedback as well as positive feedback (difference enhancing processes) create transformations

Dialectics (Mason & Mitroff, 1981).

Planning

Change stems from a tension between opposites

Change Logistics (Morgan, 1986; 1998; 1993)

Organization theory

Flux in action taking causes a network of reactions and contradictions

Trialectics (Ichazo, 1982)

Logic

Transformations follow mutation, circulation, and attraction loops embodied as tensions between contradictions or opposites.

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acting, change agents may recognize their authority limits and thus reproduce or validate these authority limits. As they are followed, the authority limits become both reified and more variegated or complex, evolving to legal codes at the extreme. If authority limits are ignored the authority structure decays. Gidden’s theory gives new meaning to the notion of acting. Action creates events that shape future action. Even failing to act creates change: the decay of structure. This implies that all structure, such as formal authority, is dynamic and evolving and that nothing can be done to stop the evolution. To measure structure without some notion of this movement is foolhardy, under the rules of structuration. As it is currently formulated, structuration has two drawbacks to serve as a vehicle to explain the structure-process duality. First, time is ignored in the theory when kairos (peak experience) time seems to be crucially important, documenting key events that made a difference. The temporal ordering of relationships is ignored in structuration and attempts are made to capture the moment of action. This capturing seems time dependent. Action is, by its very nature, sequential and not instantaneous. Second, describing the acts of production and reproduction is ambiguous. How does one describe action using these terms? It seems essential to show how to capture action taking if process is to be described and evaluated to allow a prescription about what works and what doesn’t. Morphogenesis Biologists explain the developmental nature of organisms as morphogenesis (Buckley, 1968). According to this theory, instructions encoded in the organism can be altered through random processes that yield better or poorer adapted species, giving rise to evolution through the survival of the better-adapted organisms. This view overcomes a key limitation in structuration by using time to articulate coherent relationships among activities (process) and structure. By devoting the different times in which each is active, a change in form can be traced, such as the shifts in formal authority. Three stages are implied: a preexisting structure, activities that create alternative arrangements, and structural elaboration leading to institutionalization. Like structuration, ways to combine causal and interpretive analysis are not spelled out. For example, what is the relationship between original conditions, cycles or patterns of change, end stage goal emergence, and factors that regulate and continue development? Action, practice, and time are key elements in these stages. Action considers how change agents cope with limits in their degrees of freedom to act. To deal with action taking, change theory must consider constraint management: recognizing and 169

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dealing with limits in role, resources, precedent, etc. Practice captures heuristics used by change agents that specifies sets of activities carried out to make a purposeful change (Schon, 1987). Both prescribing and carrying out the prescribed action using a process is required. Time is crucial to see this ordering. Time captures history, emergent issues and themes, and considers the future (Schwartz, 1991). Autopoiesis Autopoiesis treats systems as autonomous and closed (Varela, 1976, 1979). Attempts to introduce external factors are thought to stem from researchers who explain what they observe from an external perspective and not from the viewpoint of the observed. Systems are “self referencing.” An image of self is their dominant frame of reference. For example, change agents can be viewed as autonomous and closed, striving to maintain their identify in the face of challenges encountered. The behavior and acts of change agents are the result of interactions with the environment in which attempts are made to maintain sets of relations important to their person. A continuous pattern results. Breaking it at an artificial boundary (the environment) makes it impossible to see how the maintenance of self is bound up in the maintenance of others and how each co-evolves. The “environment” is not merely a factor, but a part of this process of interaction. Self-referential change agents continually engage processes. Change agents, using autopoetic reasoning, identify points of references and categories that correspond (more or less) to what others see and modify them as they reflect on their experience. The environment exists idiosyncratically and is self referencing, existing only as a projection of the change agent’s self-image. Environments are internally determined through long and complex chains of interaction. According to autopoiesis, to understand these processes is to understand change. If change agents seek to maintain an identity by interpreting relations with their environment, then change is bound up in changing this identity. But if change agents ignore anything that produces change, how do organizations change states caused by activities such as developing new products? Answers can be found in the notions behind double loop learning (Argyris & Schon, 1978) and purposeful systems (Ackoff & Emery, 1972). Change agents modify their norms to account for new circumstances. But the potential for change resides inside the system (change agent) not outside. Interpretations of forces, coherent or random, become the basis for new forms of strategy, etc. Change agents observe what competitors have done, attribute

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causality to these actions and incorporate these notions into their plans, much the way termites build arches and tunnels with random deposits of dirt (Morgan, 1986). As these random behaviors can become reified as essential ingredients of corporate life. Random variations can also become the seed of possibility and may lead to waves of change that shake the foundation of the organization. The result depends on whether a change agent dampens these effects by various compensations or amplifies them, allowing a new configuration to emerge. Firms may fail to take into account changes in technology or style that will render their current products obsolete. For instance, Volkswagen sought to maintain their bug in the face of a declining market because their corporate image was bound up in producing a “people car” and the bug was a powerful symbol of this commitment (Mintzberg, 1978). Alternately, some organizations attempt to act on their environment by changing their identity. Some identities are enduring, others not. To understand how transformations occur, autopoetic-reasoning calls upon researchers to focus on these internal processes. Self-referential change agents evolve as they develop awareness during activities, such as decision-making, in which they maintain an identity. This awareness can serve to open up to new experiences or ideas and by this opening up create a new transformed identity. The transformation is organism specific. Understanding the formation and change of this identity call for an understanding of a change agent’s cognition, such as using the Jungian archetypes (Jung, 1923), to capture the implications of how managers draw inferences (Nutt, 1989). The challenge is to understand how organizations develop ways to maintain openness to identity evolution and how these evolutionary processes can be maintained. Cybernetics Two Positive as well as negative feedback shape change in cybernetics two (Maruyama, 1963). Both difference reducing and difference enhancing activities are needed to explain why organizations change. Process captures these transformations at the resolution of cross currents, producing elaborations and extinctions through time. These notions have been prominent in limits to growth arguments, showing how processes of destabilization were swamping corrective actions, leading to pollution, resource depletion, food shortages, and the like. Differentiation stems from the difference amplification process inherent in the impact of inflation on wages and prices, causing systems to spin out of control. Morgan (1986) deftly illustrates how process captures systems within systems of positive and negative feedback loops that can explain power use, employment, political action, and other complex phenomena. This logic of mutual causality 171

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offers a way to specify how process acts to produce beneficial or destructive transformations of an organization. Hall’s (1984) study of the failure of the Saturday Evening Post provides an example of a destructive transformation, called devolution (Nutt, 2001). When the Post’s top managers failed to recognize warning signs and take corrective action, difficulties mounted. As the lost opportunities piled up, one loss lead to another, with the number and magnitude of the needed corrections increasing with each missed opportunity to turn the situation around. Near the end, the demands for action arrived at an unmanageable pace. A rapid decline resulted that quickly led to company failure, much like a star as it reaches the end of its supply of hydrogen. Dialectics The notion that all things imply or create their opposite dates from Socrates. Opposites define and may even give rise to each other. Control gives innovation meaning and innovation gives meaning to control. The duality enriches both definitions. Both Hegel and Marx applied these notions to change, contending that the tension between opposites lies at the root of all change. In dialectics, change is self-generating and inherent in the tension. Mason and Mitroff (1981) and Nutt and Backoff (1992) use dialectical ideas in proposing their strategic management processes. For instance, managers impose control to preserve a structure, such as a compensation system, until that control becomes untenable and the structure (the system) gives way, being replaced by another based in part on the old arrangements. The act of control, attempting to maintain a structure, provokes forces opposing control (union activism), giving rise to negation that attempts to reject the structure. Perot’s challenge of GM’s policy of granting executive bonuses as GM’s plants were being closed contained the seeds of change as well as elements of a new approach that GM ultimately adopted. Process continues as one structure gives way to another. In the long term, successive stages of tensions, challenges, and transformations repeat endlessly in an organization. This cycle gives rise to processes, such as control and resistance, in organizations that create change. Managers and policies enter and exit, slowly altering the social arrangements that provide the underpinnings of an organization. According to dialectics, a tension between opposites can be found at the root of all change. To understand how organizations change, this dynamic of tensions, such as equity and efficiency, must be understood as a self-generating and mutually causal (Nutt & Backoff, 1993), and not with what Mohr (1982) calls a simple push causality. A structure describing a policy has in it the seeds

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of its own modification. The stronger or more forceful the policy, the stronger the opposing forces it evokes. The resolution of these forces creates a new structure, producing new forms of opposition. Analysis of this process reveals the forces at work altering an organization. Morgan (1986) suggests that the analysis of tensions (historic and present) offers a way to capture these forces and understand how and under what conditions organizations change for the better or for the worse. The way skillful change agents reframe these tensions to pose win-win structures that manage the contradictions inherent in the tension may be the key ingredient in transformational leadership (Nutt et al., 2000). Unmanaged tensions may lead to entropy, expressed as dissolution of effort and loss of focus, resulting in organizational decline. According to dialectical theory, tension and conflict in various forms are inherent and serve as impetus for change when they reach a certain level. There are several contemporary examples of flux management in high performing organizations (Hampden-Turner, 1990; Johnson, 1992; Nutt et al., 2000). Peters and Waterman (1982) identify the paradox of simultaneous delegation and centralization in well-run companies. The tension between loose and tight control can be managed by delegating job execution deep into the ranks, insisting that core values (e.g. service or quality) are present in all the acts of management. For example, General Electric runs a highly decentralized company in which division leaders have considerable autonomy. GE’s goal is to be first or second in every business. To insure that this goal is maintained, divisional corporate auditors can subject leaders to comprehensive questioning about every aspect of their business without notice. Johnson and Johnson’s CEO who heads a very decentralized company, skillfully managed the Tylenol crises in which the company’s products were sabotaged on two separate occasions. The core value of quality was preserved in situation that called for centralization of action, in a decentralized organization. Change Logics Morgan (1986) offers a contemporary logic of change drawing from autopoiesis, cybernetics two, and dialectical ideas to get at the “inner logic” of change. A “flux metaphor” is used to get at the enfolded processes of change in a structure. Morgan calls for a search for the underlying dynamic and not classifications and descriptions of events and direction that are merely the manifestation of this dynamic (structure). The dynamic is depicted as flux caused by, for example, a change agent’s actions (autopoiesis), a network of positive and negative feedback loops (cybernetics two), and contradiction management (dialectics). Each offers a different way to capture and understand how organizations evolve. 173

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To understand a process one must understand how transformational leaders replace egocentric interpretations of what they see in the environment with visions of paths to achieve new ends. This ability to image an opportunity, rather than threat, may be a hallmark of the transformational leader. Successful leaders may be able to see networks of relations, at key nodes that must be altered if a transformation is to occur. Finally, to make a transformation, the leader may be able to conceptualize win-win solutions that manage inherent contradictions expressed as tensions between opposing camps or points of view (Nutt et al., 2000). To see these tensions is to go beyond ends arguments to deeper issues leading to appreciation (Vickers, 1965). Stripping away end clashes also disposes of the notion of win-lose mentality and poses win-win as a way to engage tension management. Such a study of leadership raises questions not addressed by a structural focus. Trialectics Trialectics (Ichazo, 1982) offers still another view in which mutation, circulation, and attraction act to alter the state of a system. A mutation (transition or transformation) occurs when a system moves from one state to another. Circulation holds that opposing forces contain the seeds of their apparent opposite. Attraction describes how states change from higher to lower levels. In trialectics, all things – a change agent or a rock – are in a constant state of transformation. States are labels of abstractions that capture our attention, similar to describing a structure. Mutations depict the history of a process of transformation. This process must be inferred from past states of a system, such as a change agent that is learning or an organization that is evolving. To capture this process, end states are described. For example, in problem solving relevant states could be puzzlement and knowing. The attractive and active elements of the process give insight into flow. In the problem-solving example, the attractive element is the need to know or understand and the active element in the human mind. Mutation (or transformation) occurs when the mind jumps from not knowing to knowing, as in discovering a eureka solution. Circulation processes capture tensions as opposing forces, views, or explanations that contain seeds of the other, but exist independently. The “tension” is a perception. The observer of process is urged to look for these balancing forces that create equilibrium. For example, Bohr’s principle of complementary, in which subatomic particles have both wave and particle aspects, creates such an equilibrium. Searches are mounted for cycles that connect apparent opposites. In trialectics, effective problem solving is the systematic examination of tensions

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to produce win-win solutions, responses that manage the tension (Nutt & Backoff, 1993). This view is similar to the work of Argyris and Schon (1978) who call for organizations to “learn to learn.” The tension is produced by results of an assessment that can be used to learn and to reflect on how insights were obtained that leads to new ways to learn. Note the role of process in both simple learning and learning to learn. Churchman (1984) calls for a “conversation” between thought and wisdom, hoping that the tension will produce ethics to balance against traditional legitimacy – economics. Kolb (1983) also calls on leaders to engage in a form of paradox or tension management as a precursor to transformation. The vitality and success of organizations, in Kolb’s view, depends on “doing the right thing”, problem finding, as well as doing things right or problem solving. Problem finding is characterized as a dialectic and emergent process in which both rational and intuitive modes are used in reflection as well as action. This dialectic concerns wavelike expansions and contractions that integrate opposing views. Other examples include Osborn’s (1953) “green light-red light” in brainstorming, the divergence-convergence steps of Guilford (Guilford & Hoepfner, 1971), separating ideation and evaluation (Delbecq & Van de Ven, 1971), and first and second order planned change (Levy, 1982). These opposing processes attempt to grasp reality by noting concrete experiences that provide ‘useful symbolic and iconic representations, and then transform this reality by extending them to new circumstances. This dialectic in the rational and intuitive ways of knowing is consistent with the work of many recognized philosophers (e.g. Dewey, 1910). According to Kolb, there is a rhythm in seeing a structure and then manipulating it to understand.

MODES OF STUDY FOR PROCESS AND STRUCTURE Process and structure represent distinct modes of explanation that are, at the same time, related. This paradox lies at the heart of understanding the structure process duality. To explore this duality and address its paradox, both structure and process must be characterized. In this characterization differences in theory development, modes of study, and the role of time are considered. Table 3 summarizes some key distinctions. Structure deals with the nature of things describing the strategy, reward system, or job. Process is concerned with how strategy can be produced, reward systems operated, or jobs changed. The paradox stems from the submergence of one means of viewing in the other. To view the structure of 175

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Table 3. Key Features Components Theory Development

Modes of Study Treatment of Time

Nature of phenomena

Standards

Interpretation

Distinctions in the Study of Structure and Process. Structure The nature of an object Precepts: 1. Efficient causation 2. Push causality 3. Understanding the past 4. Cause and effect Statistical cross sections Time invariant

Hiearchical Mechanical Linearly causal Assembly Internal validity External validity Reliability Objectivity Nomothetic

Process Means of producing the object Precepts: 1. probabilistic outcome 2. pull causality 3. Prediction of future 4. Producer and product Longitudinal case study Time dependent (use chronos time to discover kairos time) Heterarchical Holographic Mutually causal Evolutionary Credibility Transferability Dependability Confirmability Ideographic

a strategy its creation (process) remains implicate. Similarly, to study the process of decision-making can leave features of the decisions examined implicate. Yet both the strategy and the decision are related to the process used to arrive at each. One should not examine one and leave the other implicate in the examination. The nature of theory development and mode of study that have evolved to deal with structure and process are explored to deal with these problems. Theory Development Structural theory development amasses a set of variables to describe the structure, ideally linking the structure to outcomes and their consequences. The mode of study for structure finds cross sections that are subjected to statistical analysis to identify and then generalize how factors are related. “Efficient causation” and push type logic is used in this type of study (Mohr, 1982). Theory is based on creating networks of factors, measuring relationships. The

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factors must pass a conduit, such as a change agent, but the conduit (change agent) is treated as an intervening variable or overlooked. For instance, studies of small groups consider how member status, size, and the like influence the quality of results. The organizational setting in these studies is carefully controlled, treating it as a conduit. A push type of logic is applied. One increases the size of a group to determine what happens to the number of ideas the group produces. “Efficient Causation” tests are applied to insure that neither spurious nor coincidental events can be plausible explanations for the observed linkage. The variables are then arrayed as a structure. The Hackman and Porter (1968) reward contingency network depicts factors (e.g. intrinsic and extrinsic rewards) that were subsequently linked to outcomes (Lawler, 1968). Mintzberg and Waters (1982) lay out various components that make up the strategy of Steinberg’s, one of Canada’s largest grocery store chains. Theory development in process is based on eliciting a procedure that specifies steps and conditions under which a particular outcome occurred. Longitudinal studies or reconstructions are essential to capture this arraying of steps and how particular steps are dropped under various conditions. For instance, Eisenhardt and Zbaracki (1992) described research into decisionmaking in which sets of steps that were classified as particular process types. Mohr (1982) contends that a process study must go beyond step naming to match lines of action with probable outcomes. These lines of action convey a sense of explanation, but not causality. The outcome is probable, identifying what is likely to happen under each set of steps. For instance, Nutt (1999) linked adoption rates to various step combinations in a decision process. The linking of steps to outcomes does not produce “efficient causes.” Instead, pull type causation is implied that links steps or step sequences to the likelihood of a certain result. The notion of pull causation stems from the way process is reconstructed. Outcomes, such as success or failure in a decision process, are used to mark an end point from which one works back to reconstruct prior steps to find where the steps began. Or a process is followed from its origin to a conclusion. In either approach, a rearrangement of steps may produce a different outcome. Process theories are used to predict outcomes, such as failure or innovation, resulting in a likelihood statement about the outcome. They are future oriented but draw on the past. Processes of innovation that occurred in the past suggest what may be used in the future when an organization seeks innovation (Collins & Porras, 1995; Van de Ven et al., 1999). A process study describes steps and step relations, but does not imply that more steps or an increase in step intensity will create better outcomes. 177

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Time Time is treated differently in process studies. In studies about structure, time is often unimportant; in process it is all-important. Studies of structure use cross section whereas process studies must trace events. Time is assumed away in a cross section but becomes the central issue in a study of process if one is to demark events. In structural studies, neither the conduit (organization or change agent) nor how it changes need to be specified. The temporal treatment can illuminate or obscure a process. The resolution used can bring process into focus or fuzz it. Either pulling time out, through macroscoping, or condensing it, by microscoping, is often needed to reveal process. A chemical reaction can be studied under a microscope, depicting states and the process of state changes. Time-lapse photography can be used to capture processes such as evaporation or oxidation. By viewing at one point in time, these subtitles are less apparent. It’s easy to miss the process when watching a pan of water evaporate under room temperature. A change in resolution is needed to make process observations. A change in resolution is also required to study organizational decline, regeneration, and transformational leadership to make the implicate order of process explicit. The implicate order emerges by viewing with a macroscopic or a microscopic approach, with an emphasis on kairos time to capture periods of peak experience. Modes of Study Investigators attempting to publish studies of process are confronted with assumptions and standards drawn from the conduct of structural research. Adoption of these assumptions and standards holds back process research and squeezes the life out of process research findings. Assumptions – The nature of the structure and process phenomena call for different modes of inquiry. Table 3 lists some attributes of structure and process to illustrate how structure and process differ (Lincoln & Guba, 1985). The first distinction stems from the concepts of order that are imposed. Structure assumes a hierarchy such as a chemical table of elements, in which there is an inherent order to be discovered. Structural studies can concentrate on one element and place the effects discovered within the hierarchy. In process, heterarchy or several orders can occur and may exist side by side. Process describes a system of co-production that has constraints and influences that are reciprocally causal. The steps of a process may be contingent on structural factors or other processes that are unfolding at the same time. Process cannot be studied one step at a time without a view of the heterarchy (system) of influences in which it functions.

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The images used to describe structure and process also convey different ways of grasping the nature of the phenomena to be studied. Structure often employs a mechanical metaphor in which Newtonian mechanics is used to capture causality among components. The metaphor of a holograph is more useful in thinking about process. The notion of a network of interference patterns created by some unknown force, in which steps are enfolded, creates an accurate image of process not conveyed by mechanical analogies. Process, in the holographic view, stems from dynamic interactions that create and then recreate steps taken to accomplish some end. Studies of structure typically assume what Mohr (1982) describes as push causality. Process has mutual causality. Relationships are probabilistic because steps are engaged with certain frequencies and because both feedback and feedforward can occur in a process. The effects of a process can be negative feedback, in which a dampening or difference reducing activity is undertaken. Positive feedback can also occur creating difference enhancing or growth effects. These effects are complicated by step skipping or feed-forward, which may occur in process but not in structure. Separation of cause from effect can be impossible in a process. What seems causal may evolve and change by an interaction with an outcome. Also process steps can have a reciprocal or a mutually causal relationship. The study of the workings of a process from a push causality point of view yields little understanding of process. The effects of a process must be described in probabilistic terms, such as failure rates for particular types of processes. The notion of change is expressed differently in a structure as compared to process. In a structure, separate components are assembled in accordance with objectives or other types of intentions. This static view of change is an inappropriate way to treat process. Entropy can act on a process to create a gradual dissolution with fewer steps or a less complex sequence of steps. Change can also produce movement to a higher order. A process can evolve to become more complex. By sweeping in ways to deal with new contingencies, contexts, and situations a process becomes more complex, variegated, and diverse. Because process must be open to external inputs of all kinds evolutionary change seem not only likely, but an essential ingredient. Entropy can be used to describe processes that atrophy due to lack of use. Standards – Structural investigators have evolved a specialized version of logical positivism, based on contradiction and falsification. Standards to judge the results of this type of inquiry, articulated by Campbell and Stanley (1966) among others, have become widely accepted (Table 4). These standards are often forced on process studies, with unfortunate results. The richness of process findings is sacrificed to discuss validity and reliability. 179

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Also, imposing the standards of reliability and validity is inappropriate in process studies. Other ways to determine the trustworthiness of findings must be used. Internal validity is used in studies of structure to rule out alternative plausible explanations of the findings (Cook & Campbell, 1979). According to falsification notions, by rendering alternate explanations implausible, the posited structural relationship becomes more defensible. Data is collected in an attempt to rule out these rival explanations. Campbell & Stanley (1966) classic approach, which identifies eight generic threats to serve as criteria that guides the construction of data collection designs and tests findings, continues to sustain much of this thinking. Internal validity has little value when mutual causality is an expected outcome, as in process studies. Credibility (Lincoln & Guba, 1985) is substituted for internal validity in process research. To demonstrate credibility, data ‘are collected in field settings where the process of interest can be expected to unfold. Observers must be positioned so they can observe how a process operates and take steps to check what they think they have observed. This calls for contact with natural settings and testing by reviewing what has been observed with managers and others who carried out the process under study. Triangulation is the key criterion to demonstrate credibility. To triangulate, coherence in the representations of multiple observers and multiple respondents using multiple modes of measurement is sought. Unobtrusive or trace measures (Webb et al., 1966; Webb et al., 1981) can be used in conjunction with interviews, questionnaires, and documents. Convergence among multiple views, sources, critiques, and measures improves the prospect that a process has been adequately described (Woodman, 1989). Multiple theories and multiple methods of data collection are not used in triangulation. Multiple theories are avoided because facts that support different theories merely suggest that the theories are alike (Morgan, 1983). Data collection designs (e.g. Campbell & Stanley, 1966) apply to a structure but do not apply to process. Using more than one design is helpful to study structure. Either longitudinal case-like data or historical reconstructions of events are required to study process. External validity determines the generalizability of findings (Campbell & Stanley, 1966). Falsification dictums are used here as well. Attempts are made to rule out plausible limits in applying the findings due to selection, setting, and the other threats to external validity. Internal validity and external validity are reciprocal. As one increases, the other declines. For example, laboratory investigators are often viewed as internally valid, due to extensive controls that are applied, but contexts can be so limited by these controls that the application of the findings tend to apply only in the laboratories and not to other situations.

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External validity is replaced by transferability in process research. Instead of setting out confidence limits to describe a structural parameter, as in external validity, transferability denotes the time and context in which the results hold. These notes are augmented by a detailed description of the process for a user to read to determine if the context of application is sufficiently similar to export the findings. Sufficiently entails a judgment. Transferability is used in the same way as external validity tests are used for structural research. Both rely on judgment to determine if findings apply to new contexts. Reliability is based on tests of stability, consistency, and predictability of measures that are used to describe structural parameters. Reliability is demonstrated by replication. If measures taken by different observers, at various points in time, using various respondents, produce the same result reliability is claimed. Reliability tests are also applied to determine the precision of measures of contextual factors that surround a process. But to test process construction another approach is used, called dependability. The dictum that validity follows reliability is paralleled by dependability leading to credibility. To establish dependability case splitting and audits are used. Case splitting divides cases into two groups. One set is analyzed to develop a process description and the other fit to that description to uncover misfits and missing features. The process description is modified until it can account for the discrepancies in the second set of cases. Audits examine how the process description was created, attempting to uncover the equivalent of “creative accounting” in the description. The audit determines if the process fairly represents the data and whether the description can be supported by collaborating evidence. The audit verifies the dependability of the steps taken to describe a process and the product. Data and interpretation of the data links dependability to confirmability and is discussed below. A single audit can be used for both dependability and confirmability (Lincoln & Guba, 1985). Objectivity stems from collecting data in such a way that the system understudy is undisturbed by the observations, that the data is not colored by the observers values or beliefs, and that the system of interest has, in fact, been observed. These steps are carried out to deal with epistemological, axiological, and ontological dictums in science, respectively. Inter-judge agreement is used to test objectivity, assuming that similar experiences will produce similar observations. The prospect of producing a defensible level of objectivity by this approach is often ignored (Morgan, 1983) but, nevertheless, is a norm widely advocated for structural research. Process studies focus on the quality of observations and testimony instead of quantitative indices. A standard of confirmability is applied. Perspective rather than objectivity is sought. To produce perspective viewing, it must take place at 181

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a distance, with a particular focus, and use multiple means, such as several disciplinary foci. Converging of these perspectives provides a powerful statement about confirmability. Confirmability is based on reproducing observations and inferences. Audits and triangulation can be used. The audit (Halgren, 1983) examines the veracity of the process description, following the same data trail used by the investigator. The trace begins with raw data, such as notes, moves to data reduction (qualitative summaries of stages and steps), then to salient categories, and finally to a process description (the inference). Triangulation applies multiple sources of information and interpretation (independent observers) in an attempt to reproduce the process description. Triangulation is strengthened when these observations stem from various disciplines or points of view known to exist about process. The audit verifies the confirmability of the data and triangulation the confirmability of the results. The interpretation of process research tends to be ideographic (case particular), unless a substantial number of cases can be collected, with the attendant cost and time demands. The inference is drawn from the particulars of the case or cases from which a process description is drawn. A process inference demonstrates connections among components to specify a complete pattern. Structural interpretations, in contrast, attempt to be nomothetic. Interpretations take the form of law-like generalizations. The generalizations are used to make deductions about unknown parts or consequences in the predictions of an outcome. Thus, assertions about the outcome of a process adhere to structural standards. These tests can be woefully difficult to apply in process research, suggesting the need to sharpen, refine, and simplify them. However, a reversion to the dictums of reliability and validity is not the answer. If we are to get at important issues in how organizations change, the marriage of structure and process seems essential, calling for renewed efforts to improve ways to do process studies that can be merged with the methods for structure. Ignoring process because it is hard to capture using traditional standards of doing structural research leads to findings that add up to nothing (Mohr, 1982).

MERGING THE STUDY OF STRUCTURE AND PROCESS Studies of process and structure should be kept distinct because each has an important role that, when blurred, becomes an obstacle to understanding (Mohr, 1982). Complexity and confusion in inferring causation are cited as rationales.

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Complexity stems from the blizzard of factors that can be associated with a process. To study a strategic management process, factors that measure the change agent (cognitive make up, leadership style, etc.), the context (environmental hostility or stability), the history of the firm (profitability), and many other influences are relevant. One can acknowledge this complexity and not dismiss it. Merging process with structure has the advantage of qualifying an outcome by situational factors that convey the likelihood that a certain type of process tends to occur. Both the qualification and the outcome take on stochastic properties. For instance, the most likely circumstances that led to using a certain process can be linked to likely results. This permits an exploration of how the context can be changed, the process modified, or both altered together (an interaction) if results are not favorable. Some process studies confuse events with outcomes. The study by Eveland et al. (1977) is cited in which the notion of “reinvention”, in a process of innovation, was used to describe both an event (an end state) and a variant (the degree it occurred). Also, Zand and Sorenson (1975) treat stages of a process as both an event and a variable. These problems seem too idiosyncratic to cite as a reason not to merge the study of process and structure. Correct interpretation can solve this problem. If stages (unfreeze, move, refreeze in the Zand and Sorenson study) can be mapped to an outcome the problem is solvent. Caution in process construction is needed. Process stages must be viewed as states that occur in various sequences under certain conditions. To ignore factors that depict context ignores conditions that may explain much of what is interesting about the process, such as when and why it occurs. The desirability of the occurrence can be examined to determine whether process can serve as a prescription to follow or to avoid. Analysis of the duality overcomes Mohr’s (1982) concerns about variance models and process models by recognizing that one is implicate in the other. Recognizing and dealing with this duality can reconcile seemingly contradictory findings by uncovering complementariness. For instance, the Cohen et al. (1976) garbage can model does not account for the unfolding of process. Solutions are described without an appreciation for how these solutions would change had a different process been applied. Nutt (2001) qualified these findings by showing how the unfolding of a process accounts for some of this behavior, but not others. This latter study was done with a macroscope and the Cohen et al. study with a microscope. Together they offer a better prescription than either can individually. In the Cohen study, process is implicate and structure (the solution) explicate. In the other study, the reverse is true. Each provides a complementary part of the bigger picture. Note how time is meaningless in variance explaining studies but central to process. Mohr’s meta analysis will accomplish little more than Collins and Guetzkow’s (1964) sorts unless this distinction is considered. 183

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NEW RESEARCH DIRECTIONS According to James (1998) the best way to study religious experience is to observe a pious man during a religious moment. This suggests that the study of management should focus on skilled change agents during periods of peak performance. Such an imperative requires the study of structure and process noting what is the change agent doing (structure) and how is “the what” being carried out (process). The focus on peak experience calls for an emphasis on kairos time to capture the experience. Such a focus may do much to reveal distinctions in action taking that differentiate the effective from the ineffective change agent. Quinn’s (1996) “cycle of excellence” points to the recursive nature of process and structure: how managers go about realizing their intentions intertwines process and structure. The skilled change agent can visualize the what and series of actions needed to secure compliance or endorsement, much like a master chess player who views a series of moves as options. The ability to see many strings of complex interconnections as “if-then’s” that lead to consequences may be the hallmark of the successful change agent. The sequential acts of a change agent make up the process. Note how studying the policy (what the change agent ultimately chooses to do) says little about what counts to make a change. The change agent, like a storyteller, constructs two landscapes: action and cognition. Therefore, researchers need to explore both landscapes. The action specifies agents, intentionality, situation, and instrument. Knowing or thinking about an action occurs through cognition. This link between the narrative (process) and rationale (structure) is enfolded in the story. Bruner (1986) points out that the master storyteller unfolds state disturbances, crises, and redress to produce a new steady state open to possibilities. A great tale has closure and engages the reader or listener to pursue “what if” speculations about the next series of events. The analogy to storytelling also calls for a merging of process and structure to understand the activities of an effective change agent. The telescoping of time suggests an emphasis on kairos time to uncover salient events. The plot is the ordering of events from which we become aware of what has happened. The reader is transformed by the presentation – the way the change agent unfolds events to transform (motivate) subordinates to take action. The order is captured by meaning-producing sequences. Reading a book is similar to conducting a longitudinal study. Both capture initial conditions or background, showing how a situation is rendered, and use multiple viewing. There are triggering events that define a prepositional background and motives for action. These events set the stage and identify

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stimuli. Examples include perceived errors and the extent that actual errors are recognized, failed attempts to resolve or remove a problem, and conclusions about these acts. For example, a change agent may perceive an inequity in a bonus system, high performers seem to be rewarded much like low performers. This discrepancy may not be widely recognized, calling for factual presentations. Failed attempts to change the bonus system are evaluated to determine what seems feasible. The skilled change agent, like the master storyteller, uses subjectification to engage an engine of action. The change agent imagines and thereby creates an alternative, plausible future of what might be. This future attends to value obligations, how to achieve desired ends, depicting when one must act or demur, time markings that specify the pace of change, and circumstances under which claims hold. The skillful rendering of these factors creates a story, if the story is gripping and believable it offers the listener a way to fill in knowledge gaps to infer consequences and intentions. This construction may mark the transformational leader from others. The story or process seems to be the key to recognizing the plight, unequal distribution, and how plight and distribution interact to produce new policies for social change, such as legislation for tax reform or welfare changes. Finally, a change agent must take in multiple views of the world the way great stories illuminate events from several perspectives. A transformational leader needs a multifaceted prism to refract various interpretations. Supportive views are reinforced and opposing views are dampened by the story, which makes certain conclusions obvious, but not too obvious, from the context. The transformational leader, when confronted with an issue, tells a parable which implicitly defines what is good, valued, acceptable, and desirable. To do all this, researchers may require the tactics of a historian. To construct the intentions of key actors and speculate on their worldviews historians use the barest of facts. This construction can be flawed by omissions in facts or mistaken motivations, much the way reconstructive studies must rely on memory traces and recall. The study of change may have to embrace an historian’s mode of study to uncover process, with all of the attendant problems of reliability (dependability). The alternative is to describe an eddy in a river with no hope of uncovering process, the generative mechanism.

CONCLUSIONS The simultaneous viewing of process and structure, treating them as a duality, is offered as a way to conduct research into change. Knowing “what is” (structure) is no more important than knowing how it got that way (the process 185

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from which the structure emerged). The study of process moves change research from a descriptive (what is) to a prescriptive posture, offering interventions and steps to carry them out that seem desirable. A host of new questions emerge. For instance, do various change processes (Table 1) differ in terms of the outcome produced by each process? Linkages, such as rates of innovation with successes or failures, can be drawn to form the basis of the prescription. This type of study attempts to move change theory to a prescriptive science, aligning it with engineering and medicine. As in these fields, a repertoire of procedure would be provided for the change agent to pick and choose, given circumstances and needs. Considering the structure process duality in research opens up a new way to approach change, with the potential to build a new kind of change theory. Actions are traced from the focal level (specific situations) to the meta level (principals used to evoke change) and finally to the transformation level where a new order emerges. Such an approach goes far beyond the manipulation of behavioral factors to grope for how leaders transform organizations. Two kinds of transformations can result. In the first, an organization evolves or grows to meet challenges. In the second, an organization decays to a simpler form, refining a control mentality to ensure that tradition is maintained, using downsizing (Nutt, 2001). In a transformation, the organization becomes more flexible and open, during decay the organization becomes more rigid and procedure oriented (Cameron, 1996). Investigators are called upon to determine how change agents act (use process) to create new structures (transformations), and how they stabilize these structures and maintain them. Answers to these questions go to the very heart of understanding change. For instance, Quinn (1996) describes a transformational moment with an interesting anecdote. An airline president confronting a group of his burned out executives in an executive committee meeting, ends with the executives enthusiastically accepting new assignments. How was this transformation accomplished? Answers to this type of question go to the heart of understanding management and involve noting kairos time. A transformational action can be visualized as exploiting a web of relationships that form alliances based on deference and dominance. Change agents live and work in a constant state of distracted tension, as if they were caught in an elastic web of attractions and repulsions. This network of relations is constantly in motion, reacting to disturbances by dampening or expanding them. A transformational leader may be able to visualize this web, and where it can be stretched, better than others. A holographic metaphor may describe this skill. If this metaphor has merit, transformation occurs through a series of negotiations.

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As change researchers, we can no longer dismiss transformational leadership as “charisma.” The transformational leaders followed some acting-taking steps. We need to find out what these steps were, if they vary with each successful transformational leader, and how to link them with probabilistic outcomes. For example, what does it mean to say that decisions accrete over time (Weick, 1979)? Do events unfold by accident, habit, personal preference, or expediency as Cohen et al. (1976) contends? Or is there an enfolded order in the actions of skillful change agents? Researchers must study skillful change agents at points of peak performance, translating chronos time to kairos time. An action theory can be built on these observations, and not from the analysis of factors that make up the structure of the ex-post facto acts of change agents. Researching process may be the key to discovering the enfolded order in a skillful change agent’s mind. How does a skillful change agent create scenarios of possibilities? How do they trace the pathways to pick one to pursue? Are highly successful change agents continuously modifying what they do, with several theories-in-action (Argyris & Schon, 1978)? Or do they adjust their vision by its apparent acceptance to stakeholders (Lindblom, 1965)? Or do they use multiple routines in a flexible manner gaming situations, like a chess master (Simon & Newell, 1970)? All these explanations may hold to one degree or another, calling for a synthesis that captures the transformational processes that produce favorable outcomes. We may find that the paths of skilled change agents are idiosyncratic or that they will work for anyone once codified. Each change agent may have to evolve a path to fit his/her particular skills, beliefs, and needs or change agents may be able to learn from others. These and many related questions may be answered by specifying the structure-process duality inherent in each.

NOTE 1. Robert W. Backoff suggested several of the ideas developed here. All the best in your retirement Bob.

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ABSTRACT The study and successful application of organizational change strategies is assuming an increasingly timely relevance in this era of rapid change and increased pressures for competitiveness. Organizational change, whether focused on people, structure, processes, or technology, is inextricably linked with culture change. Much of the practitioner-oriented literature on organizational change treats culture as a tool that can be controlled, manipulated, and integrated by a senior management team and consultants. This paper draws upon lessons learned from cultural anthropology and organizational theory and offers a more complex view that takes into account the strength of organizational subcultures. A framework is presented for creating lasting organizational change that incorporates an appreciation for chaos theory. Secondly, the underlying organizational dynamics that defeat planned change efforts are examined through the unique perspective of Grendel’s mother (from the Old English prose poem, “Beowulf”). Grendel’s mother provides a provocative image to heighten awareness of the dynamics of organizational life that defeat change efforts.

Research in Organizational Change and Development, Volume 14, pages 195–224. © 2003 Published by Elsevier Science Ltd. ISBN: 0-7623-0994-6

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The role of the change agent is explored as Beowulf with a ‘realpolitik’ perspective. Two examples from organization development fieldwork (a failed effort and a successful change program) illustrate the power of chaos theory, the force of Grendel’s mother, and the role of Beowulf in planned change programs. By combining theory and practice, this paper seeks to facilitate the dialogue between academics and practitioners about creating lasting organizational change.

INTRODUCTION Given the twin pressures of rapid technological change and the need for organizations to “turn on a dime” to best position themselves for regional, national, and global competitiveness, the study and successful application of organizational change strategies is assuming an increasingly timely relevance. There is an ongoing need for dialogue between academics and practitioners to better understand the paradigms and strategies that produce lasting organizational change. It is also important to understand organizational dynamics-in-action, including the individual and collective manifestations of resistance to change that often defeat planned change efforts. By combining theory and practice, this paper seeks to facilitate a dialogue between academics and practitioners to explore ways of creating lasting change that enhance organizational effectiveness and competitiveness in the marketplace. In the process of looking at organizational change, this paper challenges some accepted notions in the management/leadership literature about organizational culture. Organizational change, whether focused on people, structure, processes, or technology, is inextricably linked with culture change. Much of the practitioner-oriented literature on organizational change treats culture as a tool that can be controlled, manipulated, and integrated by a senior management team and consultants. Given the rich scholarly knowledge about organizational change, the advice about creating lasting change by using the handle of corporate culture is simplistic and misleading. This paper offers a more complex view, supported by organizational theorists and cultural anthropologists, that acknowledges the strength of organizational subcultures and resistance to change. A framework is offered for creating lasting organizational change that incorporates an appreciation for chaos theory. While it is a powerful framework, it does not guarantee success. The underlying organizational dynamics that can defeat planned change efforts are examined through the perspective of Grendel’s mother (from the Old English prose poem, “Beowulf”). Grendel’s mother provides a provocative image to heighten awareness: she is the mother of all

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negative attitudes and behaviors toward change that are manifested as fear and resistance. Next, the role of the change agent is explored as Beowulf with a ‘realpolitik’ perspective, while taking into account the importance of appreciating chaos theory in planned change programs. Two examples from organization development fieldwork1 (a failed effort and a successful change program) are used to illustrate the importance of working with the power of chaos theory rather than forcing an integrated culture perspective, while reckoning with the force of Grendel’s mother, and assuming the role of Beowulf in planned change efforts.

LEADERS, SEERS, AND SNAKE OIL PEDDLERS OF ORGANIZATIONAL CULTURE: CAUTIONS FROM CULTURAL ANTHROPOLOGISTS In the 1980s, the high level of interest in organizational culture was precipitated in part by the growing awareness of Japan, Inc. and its perceived culture of productivity. Ever since, American business has regarded the intentional development of organizational culture as a powerful weapon in the struggle for competitive advantage. This need to consciously develop organizational culture has proved to be fertile ground for management theorists and consultants (for a recent example, see Ashkanasy et al., 2000, who provide a 100-page bibliography). While the explanatory power of organizational culture is very useful in understanding the evolution, successes and failures of planned change efforts, serious flaws have been identified in the basic assumptions that pervade the management literature about how organizational cultures can be created or altered. Martin defined three theoretical views of cultures in organizations: integration, differentiation, and fragmentation; however, “most empirical studies of cultures in organizations adopt one (or, rarely, two) of these three theoretical perspectives” (2002, p. 95; see also Martin, 1992, for extensive literature reviews). The management/practitioner literature has seized primarily on the integration perspective which focuses on those manifestations of a culture that have mutually consistent interpretations; i.e. a strong culture is like a “solid monolith that is seen the same way by most people, no matter from which angle they view it” (Martin, 2002, p. 94). In a culture integration study, deviations from consistency, organization-wide consensus, and clarity are seen as problems and portrayed as “regrettable shortfalls from an integrated ideal” for which remedies are sometimes proposed (Martin, 2002, p. 99). Martin (2002, p. 100) cites a number of predominantly integration-oriented reviews of the organizational culture literature, including: 197

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Denison (1990), Ebers (1995), Kotter and Heskett (1992), Ouchi and Wilkins (1985), Schein (1999), and Schultz and Hatch (1996). Many companies that invested in the development of a “strong” integrated culture to pursue productivity and profitability have been disappointed. Despite these failings, the promise of a leader-centered, unified culture as a key to financial performance has kept its allure, particularly but not exclusively in the United States (Martin, 2002, p. 8).

The conventional wisdom of this approach to organizational change holds that to effectively create a new culture, the senior management team must become a powerful, guiding coalition in order to develop a picture of the future, which is then communicated throughout the organization (Cameron & Quinn, 1999; Ulrich et al., 1999). Once this new vision is in place, employees are emboldened and empowered, as long as their actions fit within the given parameters of the new culture. Martin calls this a “Lazarus of an idea”: the new presentation of this idea purports that with the “right corporate vision, mission statement, or leader, an organization can build a highly committed, unified culture that fosters productivity and profitability” (Martin, 2002, p. 9). However, as Martin then points out, the evidence on balance does not support these contentions. Furthermore, she states: . . . the purpose of a social science theory is not to comfort managers with promises of relatively easy solutions but to capture and perhaps even construct organizational experiences, in all their discomforting complexity, conflict, ambiguity, and flux (Martin, 2002, p. 9).

Cultural anthropologists have similarly cautioned us that seeking to create and then maintain some sort of “correct culture homeostasis” is an illusory goal and that ‘how to’ primers on managing corporate culture are so much snake oil. Cultural anthropologists also fundamentally disagree with the implication that organizational cultures can be planned, manipulated and controlled. This is a form of ethnocentrism that Baba (1989) describes as “managementcentric.” She suggests that it is appropriate to view much of the organizational change literature as reflecting only the voice of the occupational subculture of managers, a voice that seems to imply that management efforts to create and control organizational ideology equal the very creation of organizational culture. The differentiation perspective “focuses on cultural manifestations that have inconsistent interpretations” (Martin, 2002, p. 94). The organizational consensus that does exist is found at the level of subcultures, which may exist in harmony, independently, or in conflict with each other. The fragmentation perspective regards cultural manifestations as inherently ambiguous, hence, “placing ambiguity, rather than clarity, at the core of culture” (Martin, 2002, p. 94). The

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differentiation and fragmentation perspectives, which are value-neutral, are the views most compatible with those of cultural anthropologists since they turned their attention to the anthropology of work (Sachs, 1989). Cultural anthropologists remind us to consider organizations as ‘complex societies writ small’ (Baba, 1989) because it sharpens recognition that managementcentric efforts do not equate with a holistic, integrated organizational culture and probably never will. Modern formal organizations have evolved as turbulent, multicultural, and heterogeneous, and in the extreme, as a patchwork battleground of competing and conflicting management cliques, occupational subgroups and class interests all imported to the organization from the external, highly diverse social environment (Baba, 1989). Viewed from this perspective, organizations are far too complex for rational socio-technical models of maintenance and manipulation, and it is a daunting task to integrate ideas, attitudes, and behaviors across all of an organization’s many diverse subgroups. Schein acknowledged the difficulty of this task when he said: Creating a climate of teamwork and openness is a common goal nowadays, but it is the rare company that figures out how cultural assumptions about individualism, about managerial prerogatives, and about respect for authority based on past success may make teamwork and openness virtually impossible (2000, pp. xxiii–xxiv).

A PARADIGM SHIFT Is it possible for formal organizations to create demonstrable, measurable, holistic cultures that overarch and modulate the centrifugal forces of their multiple subcultures? While the impetus for creating a single “monistic” organization culture will most likely come from senior management, this holistic culture cannot be shaped and directed solely or even primarily by management. Here is where the paradigm shift must take place. According to Pascale: Rapid rates of change, an explosion of new insights from the life sciences, and the insufficiency of the old-machine model to explain how business today really works have created a critical mass for a revolution in management thinking . . . If I had to generalize, I’d say that the old rules of the game rested on a management method that I call “social engineering,” which operates according to three premises. First, intelligence is located at the top; Leadership is the head, organization is the body. Second, change is predictable. That is, when you design a change effort, there’s a reasonable degree of predictability and control. Third, there is the assumption of cascading intention: Once a course of action is determined, initiative flows from the top down, and the only trick is to communicate it and roll it out through the ranks (Webber, 2001, p. 132).

As an alternative to the old game rules, Pascale (Webber, 2001, p. 134) offers four principles of life – and business that explain how living organisms, including organizations, change and adapt: 199

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• Equilibrium is a precursor to death. When a living system is in a state of equilibrium, it is less responsive to the changes that are occurring around it. It is most at risk when it feels most secure. • When threatened or when galvanized by a compelling opportunity, living things move toward the edge of chaos. This condition evokes higher levels of mutation and experimentation and is more likely to result in fresh new solutions. • As living things move closer to the edge of chaos, they have a tendency to self-organize, and new forms emerge from the turmoil. This property of life, called “self-organization and emergence,” is a major source of innovation, creativity, and evolution. • Living systems cannot be directed along a linear path. Unforeseen consequences are inevitable. The challenge is to learn how to disturb them in a manner that approximates the desired outcome and then to correct the course as the outcome unfolds. The urgency with which organizations today undertake significant organizational change programs reflects the implicit recognition that “equilibrium is a precursor to death.” During a planned change program, it is the role of leadership and professional management to clearly articulate an organization’s position relative to its competition and trends in the market, to provide a vision of the organization’s future, and to move the organization toward the edge of chaos. Pascale sees the edge of chaos, “a condition of relentless discomfort,” not as the abyss, but “as the sweet spot for productive change” (Webber, 2001, p. 135). The role of organizational leadership here is to allow – without managerial control – for the emergence of new sources of innovation and creativity, to accept that the path of change will not be linear because unforeseen consequences are inevitable, and to incorporate the diversity of the organization toward constructive organizational change. This is a significant redefinition of the roles of organizational leadership, management, and consultants, who too often have assumed that their job was to design the change program (in the back room) and then sell the program to ‘the rest of’ the organization. During implementation of a change program, an organization most effectively discovers and affirms its core values and guiding principles through dialogues with its multiple subcultures. As the various subcultures articulate their values and guiding principles through dialogues, they expose, and therefore can explore, their cultural assumptions. The optimal conditions for creating and sustaining this dialogue include: • Open access to all pertinent information, both internal and external to the organization.

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• Empowerment and autonomy, balanced with responsibility for the total system. • A spirit of collaboration and trust. • Full use of the organization’s diversity during implementation of the planned change program. When the subcultures successfully address and negotiate their differing cultural assumptions, values and guiding principles, they are laying the foundation of an overarching, holistic organizational culture. Hence, the paradigm that creates lasting organizational change is a process of fostering the conditions for ongoing continuous change within a well-ordered, clearly articulated framework of core values and guiding principles that is nurtured and sustained by dialogues with all organizational subcultures. This process acknowledges pluralism. In fact, much can be learned by considering the governments of the U.S. and the newly emerging E.U. entity as useful models for the governance and management of today’s pluralistic organizations. While in both unions, there is agreement, in principle, about the necessity of an overarching, holistic culture that subdues the centrifugal nature of the multiple subcultural forces, the democratic governments of these nations do not seek to eliminate or integrate the differentiation and fragmentation forces that are always at play in the cultures of both the U.S. and the E.U. The processes that create an overarching culture and honor pluralism in an organization are very complex and cannot be trivialized by the assumptions of the integrated culture perspective. It becomes essential to bear in mind both the differentiation and fragmentation culture perspectives. According to quantum physics (Wheatley, 1999), and cultural anthropologists would agree, reality is different for each of us, and so, to describe an organization is like trying to describe a cloud in the sky. The description depends on our place and angle of vision, and whether we are above or below, inside or outside of it. These multiple perspectives are at the heart of organizational diversity, and this diversity creates the complexity and opportunities that must be reckoned with in organizational change efforts. Several axioms (Hamada, 1989) emerge from an awareness of the multiple perspectives that comprise organizational diversity: • An organization is a complex and heterogeneous entity, having different stakeholders who hold multiple values and attitudes. • Organizational goals are never accepted or appreciated uniformly by organizational members. • The degree of information sharing differs widely among members and across groups. 201

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The content and interpretation of organizational goals differ according to individual and group interests. • Values, motivations and ideologies are often in competition or conflict among members of the organization. The overarching culture is more of a holographic image (Senge, 1990). If a hologram (a three-dimensional image created by interacting light sources) is divided, each part, however small, shows the whole image intact. Likewise, when groups of people share a vision for a corporate culture, each individual and subculture sees a particular picture of the whole. But the component pieces of the hologram are not identical. Each represents the whole image from a different point of view. And when the pieces of a hologram are combined, the image becomes more intense, more lifelike. The holographic image of corporate culture exists within a pluralistic, diverse organization and serves to unite (not integrate), without destroying the differentiation or fragmentation cultural forces. While leadership theory states that the duty of the organizational leader is to bridge the gap between the new vision and the organization’s history and experience, in implementation, however, this is not a one-person job. Successes and failures in consulting experiences have revealed the value of proceeding very carefully through organizational change efforts while accepting the premise of chaos theory: order without predictability (Morgan, 1998; Wheatley, 1999; Pascale et al., 2000). According to Wheatley (1999), complexity can be generated out of very simple patterns. The function of organizational leadership is to make sure that patterns which form the holographic image are in place, in the forms of established principles, values, and guiding assumptions. The fundamental distinction here is that order is different from control. For decades, traditional change strategies, ranging on a continuum from forcecoercion to rational persuasion to shared power have demonstrated the corresponding rate of change from fast to slow, with the likely results ranging from temporary compliance to longer term internalization. So, for example, the force-coercion strategy toward an integrated culture perspective will produce rapid but short-lived change, while shared power, which takes a longer time, will tend to result in longer-term internalization. The application of chaos theory in organizational life is an extension of the shared power strategy. Acceptance of chaos theory during planned change means that all organizational stakeholders representing various subcultures, including management and consultants, make room for organizational order to evolve without being able to exactly predict or control it. When the leadership of an organization accepts the possibility of order without predictability and control, this communicates to organizational members that the ‘playing field is level.’ It says that the

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organization will honor its unique diversity; it will recognize that no single subculture has all the answers; and it will appreciate that the best ideas for organizational effectiveness, change and innovation will emerge from multiple sources. The preceding discussion has presented a paradigm that suggests an overarching corporate culture is like a hologram, where the whole can be regarded – intact – from different points of view. This paradigm acknowledges the importance of accepting both the differentiation and fragmentation cultural forces while utilizing the power of chaos theory (order without control) to create longer lasting organizational change in pluralistic organizations. This perspective offers a way to significantly reduce resistance to change; however, there is no magic that will cause the reality of resistance to change to disappear.

HOW DO YOU CREATE LASTING ORGANIZATIONAL CHANGE? YOU MUST FIRST SLAY GRENDEL’S MOTHER As stated at the outset, organizational change, whether focused on people, structure, processes, or technology, is inextricably linked with culture change. Cultural anthropologists remind us that rather than fixating on this “culture thing” as a lever for increasing organizational effectiveness, we should remember that the conservative, protective, reactive elements of culture probably bury more planned change programs than they advance (Baba, 1989). David Whyte (1994), author of The Heart Aroused: Poetry and the Preservation of the Soul in Corporate America, says that those conservative, protective, and reactive elements of culture that bury change programs are embedded in the fears of people, both individually and collectively. He asks how many managers or consultants have resolved a perceived difficulty or brought about a successful change effort on the first try. The reason, he explains, it is so difficult to implement lasting change, i.e. confront and successfully eliminate dysfunctional elements in organizational structure and processes at the first stroke, is because one must deal with the elements of consciousness and unconsciousness that continue to feed the established dynamics of an organization. Whyte uses the Old English story of Beowulf, as retold below, to illustrate his point. Fifteen hundred years ago the anonymous author of the Old English story, Beowulf, entreated his listeners to risk looking below the surface of their daily existence, into the waters of the unconscious. Whyte describes Beowulf as a sixth century consultant who presents himself to Hrothgar, the King of Denmark, because the King has been having great difficulty with Grendel, a diabolical 203

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swamp creature. In short order, Beowulf mortally wounds Grendel who then staggers back to die in the swamp. That night there is tremendous feasting and gift giving, but as Beowulf and his men sleep, something else comes from the swamp, fights off the best warriors and kills the closest friend and confidant of King Hrothgar: Grendel’s mother. As Whyte says, the message in Beowulf’s story is unsparing: It is not the thing you fear that you must deal with, it is the mother of the thing you fear. The very thing that has given birth to the nightmare (p. 38).

Grendel, who did not like King Hrothgar’s increased effectiveness, competitiveness, and prosperity, remains to this day as the expression of negative attitudes and behaviors toward change. Grendel is the force, expressed as fear and resistance, which desires to prevent planned change. This force is expressed by varied forms of resistance to change, some subtle, some overtly hostile. When Grendel is slain (i.e. when planned organizational change is implemented in spite of the forces of resistance), Grendel’s mother then feels the loss of her offspring and she reacts by attacking those responsible. Grendel’s mother is vengeance, aroused by the dynamic of loss. After the managers or consultants think they have resolved the perceived difficulty, . . . late one night the phone rings and the plant manager tells them that something else just arose from the depths of managerial discontent and is destroying the production and purpose they thought they had (Whyte, 1994, p. 38). Grendel’s mother.

While Joseph Campbell (1988) was speaking of the individual when he said that if one does not come to know the deeper mythic resonances that make up one’s life, the mythic resonances will simply rise up and take over one’s life, one could argue that the same holds true for organizational behavior: if the deeper mythic resonances that resound below the surface of the organization are not listened to, acknowledged, and dealt with, they will simply rise up and take over any planned change effort. One intent of this paper is to delve more deeply into the ‘mythic resonances’ that manifest as fear and resistance, and to show by example how they can impact planned change efforts. Eliminating dysfunctional structures and processes will not be successfully accomplished if these mythic resonances, including the dynamics of loss that arouse Grendel’s mother, are not addressed. First, however, it is important to remember that mythic resonances, for example those that motivate political maneuverings, are always alive in organizations on any given day, even when an organization is not engaged in a planned change effort.

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A BRIEF REVIEW OF ‘NORMAL,’ EVERYDAY ORGANIZATIONAL POLITICAL DYNAMICS A non-political perspective can lead one to believe that employees will always behave in ways consistent with the interests of the organization. In contrast, however, a political view can explain much of what may seem to be irrational behavior in organizations. This is why it becomes so important to understand the anthropologists’ perspective that organizations are complex societies writ small; they are heterogeneous entities, comprised of different subcultures that hold multiple values and attitudes (Baba, 1989). Anthropologists would advise us to regard organizational culture in terms of the political processes of social relationships from the viewpoints of individuals and subgroups. While this is a major departure from the culture integration perspective of an organization most often created by and for management, it is consistent with the organizational theory literature that provides multiple frames or images with which to regard organizations, for example, see Bolman and Deal (1984) and Morgan (1998). A political framework can help to explain, for instance why, even on a normal day and not in reaction to imminent organizational change, employees might choose to withhold information, restrict output, attempt to “build empires,” publicize their successes, hide their failures, distort performance figures, and engage in activities that appear to be at odds with organizational goals for effectiveness and efficiency. Certain organizational structural and process factors (Ferris et al., 1989) not only contribute to the political behaviors of individuals and groups, but actually increase their natural political proclivities, including: • • • • • • •

Climate of low trust; Role ambiguity; Unclear performance evaluation systems; Zero-sum reward allocation practices; High pressures for performance; The structure of rewards and punishments; Organizational tolerance for risk vs. uncertainty avoidance.

Two other factors that may be less intuitively obvious than the above include acceptance of conflict and democratic decision-making. If an organization accepts conflict as inevitable and even necessary, it is more apt to formally or informally provide and support the necessary skills to make conflict a functional, as opposed to dysfunctional, organizational process. If democratic decisionmaking is becoming the cultural norm of an organization but is not fully 205

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embraced by all managers and supervisors, the perceived loss of power and influence will politicize the behavior of those who feel threatened. Remembering that many of the above dynamics are generally at work in the daily life of an organization increases appreciation for what can happen to these dynamics when an organization introduces a planned change program.

ORGANIZATIONAL CHANGE AND THE DYNAMICS OF LOSS When a planned change intervention is introduced, the senior management team responsible for the change program is focused on implementation; however, the rest of the organization is more or less focused on “me” issues. Here is when Grendel’s mother emerges: she is the mother of all negative attitudes and behaviors toward change that are manifested as fear and resistance. For Grendel’s mother, it is all about “me” issues. She comes out of the swamp to seek revenge, energized by the dynamics of loss. A number of “me” issues, fed by the dynamics of loss (Grendel’s mother) are manifested during implementation of planned change, for example: • • • • • •

Perceived violation of deeply held values. Disconfirmation of the familiar self as known to oneself and to others. Loss of or threat to self-esteem and self-efficacy. Loss of confidence in one’s inner locus of control. Loss of certainty about job security and income. Loss of confidence in the stability/predictability of one’s external loci of control. • Fear of the unknown, including increased ambiguity, uncertainty, loss of familiar and predictable sources and patterns of causality (how things are done) in organizational structures and processes. Just as individuals can react negatively to planned change efforts and focus obsessively on “me” issues, so can groups or subcultures of the organization. All change means loss, and many sources of individual and group power and resources are inevitably threatened, changed, or lost through planned change efforts (Morgan, 1998, p. 163). Organizational change can be a frontal assault on established sources of reward, legitimate, or expert power, and directly affect who gets what, when, and how. Hence, planned change exacerbates normal manifestations of political behaviors because sources of power and resources are always altered through planned change efforts. What activates Grendel and Grendel’s mother is the disruption of established political behaviors and the attendant dynamics of loss.

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GRENDEL’S MOTHER AND THE DENIAL OF DEATH Morgan suggests that we should regard the role of the unconscious in organizational life as a kind of “black hole,” that can swallow and trap the energies of people (1998, p. 205). Certainly, organizational change impacts this black hole phenomenon by introducing feelings similar in construct to mourning a death. The “black hole” of unconsciousness created by organizational change can be further understood by examining the quest for symbolic immortality. Herein lies the most important clue for understanding Grendel’s mother. In a seminal work, The Denial of Death, for which he won the Pulitzer Prize, Ernest Becker (1973) reinterpreted the Freudian theory of repressed sexuality and linked fears to inadequacies, vulnerability, and mortality. Becker’s work, interpreted through the organizational perspective of Morgan, enables us to understand organizations and much of organizational behavior in terms of a quest for symbolic immortality: • In creating organizations, we create structures of activity that are larger than life and that often survive for generations. • In becoming identified with such organizations, we ourselves find meaning and permanence. • As we invest ourselves in our work, our roles become our realities, and as we objectify ourselves in the goods we produce or the money we make, we make ourselves visible and real to ourselves (Morgan, 1998, pp. 194–195). In creating a world that can be perceived as objective and real, we affirm the concrete and real nature of our own existence. Thus, in joining with others in the creation of an organization of shared norms, beliefs, ideas, and practices, individuals and groups attempt to locate themselves in something larger and more enduring – in a quest for immortality. (Being a little less reverent, Becker actually refers to all symbolic monument building as “immortality schemes.”) The senior management team and any others who have committed to the planned change effort may now perceive that they have created a new and even better immortality scheme, but many others in the organization will now focus on the “me” issues and mourn the loss of the familiar. While these “me” issues will certainly include immediate concerns about job security, income, and established performance routines, these issues are fed by the underground stream of fear about losing one’s established sense of confidence, competence, and identity (i.e. one’s “immortality scheme”). The fear and resistance to change (Grendel) that is expressed by individuals and groups during times of organizational change is heightened by the more or 207

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less unconsciously perceived threat of destruction or death of an established quest for meaningful, purposeful life. This perspective provides a fuller appreciation of the dynamic force of Grendel’s mother when she appears to wreak havoc and revenge during planned change efforts. Nothing less than the quest for symbolic immortality is truly at the heart of the mythic resonances that Campbell, Whyte, Becker, and Morgan, each in his own way, has written about.

THE ROLE OF THE CHANGE AGENT IN CREATING LASTING ORGANIZATIONAL CHANGE Grendel and Grendel’s mother – resistance to change and vengeance aroused by the dynamic of loss – are always lying in wait midst the sources of tension that exist when a complex, heterogeneous organization undergoes change. While dealing with Grendel, the force of Grendel’s mother – lying below the surface – cannot be underestimated. There are additional lessons to be learned from the story of Beowulf about confronting Grendel’s mother. What sorts of insights and courage does it take for change agents (whether managers or consultants) to dive below the surface of the presenting problems facing an organizational change effort and confront the mythic resonances, including the depths of fears and resistance of individuals, groups and subcultures in the organization? Whyte wonders what enabled Beowulf to go down into the lake – “surely Beowulf possessed no immunity from insecurity” (Whyte, 1994, p. 46). Beowulf was certainly armed with courage and wisdom, but so were all the great warriors who accompanied Beowulf to Denmark, and none of them was able to descend into the depths of that water to wrestle with Grendel’s mother. To arm himself, Beowulf is given the helmet of the king, and a great and famous sword, Hrunting, but as the story makes clear, these do not help him except to bolster his courage in entering. At this point Beowulf’s power seems to have more to do with a process of disarming (Whyte, 1994, p. 46).

Beowulf finds that both the helmet of the king and the great sword are useless. Whyte suggests that the “glamorous but useless sword” may represent the attempt to rely inappropriately on technology at a crucial moment (p. 55). One could also see the helmet and sword as the “managementcentric” perspective on what organizational changes are needed and how to best implement them down through the organization. Once Beowulf is alone at the bottom of the lake, he is forced to throw away what he brought with him and wrestle barehanded with Grendel’s mother. Locked together in a death-like embrace, they tumble into her den, where Beowulf sees, glowing on the wall, an unknown but marvelous sword. He breaks the chain on its hilt, and with a sudden blow, kills Grendel’s mother with the glowing blade (Whyte, 1994, p. 54).

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Meanwhile Beowulf’s friends wait at the water’s edge for a very long time and finally give him up for dead. Similarly, when an organization goes through radical restructuring, those involved may wonder if it will ever end. The temptation is to not follow-through, to give up and revert to old ways, or to stand on management prerogative and cancel the change program out of impatience and frustration. The important point of the Beowulf story which Whyte brings out is that “Whatever is needed for the moment of truth in those dire, deep places seems brought to view only on our arrival at the very bottom“ (p. 56). Beowulf’s final struggle and grasping of the luminous sword {which he finds in the lair of Grendel’s mother at the bottom of the lake} must be seen as the vital and necessary ability to shift shapes at the crucial moment and grasp the opportunity offered. Traditionally rehearsed speeches fail to win agreements during difficult negotiations. The prepared speeches, talismanically, like Hrunting, may take you down, into the thick of it, to the monster that lies between you and the other side, but once there, you must rely on the gritty truth you pluck from the very walls of the meeting room to bring the wrestling to a conclusion (Whyte, 1994, p. 56).

How can we relate the lessons learned from Beowulf’s experience to disarming the mythic resonances that manifest as resistance, in the service of creating lasting organizational change? Whyte tells us that, like Beowulf, change agents today must have the courage to dive open-mindedly into the depths of the mythic resonances of the organization to find and listen to the gritty truths harbored by individuals and the diverse and fragmented organizational subcultures, and while there to shift shapes and grasp the opportunities offered. Sometimes in working with these gritty truths – in the spirit of seeking order without control – the shifting shapes and opportunities come together in ways that facilitate progress toward implementing the change program. However, while in the depths of the mythic resonances of the organization, the change agent also needs the courage to realistically appraise the power of the restraining forces that oppose change and the “vengeance” that will be unleashed. Here we can learn from former Secretary of State, Henry Kissinger, who articulated and practiced realism in politics during the cold war era (Fukuyama, 1992, p. 246). (For earlier formulations of realism in politics, see Niebuhr, 1932; Morgenthau, 1985.) Kissinger advocated a dispassionate balancing of power (the gritty truth) that was free of considerations of ideology (imported from the surface), or revenge. His model of power politics (realpolitik) sought first of all to maintain a balance of power; secondly the model posited that friends and enemies ought to be chosen primarily on the basis of their power, rather than on the basis of ideology; and third, that it was more important to look at capabilities (for war) rather than intentions (of peace) (Kissinger, 209

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1982). His strategy for creating international stability directly relates to creating lasting organizational change, which also requires paying attention to the balance and politics of power. A realpolitik perspective on organizational dynamics provides an unflinching assessment of the strength of Grendel. As a general rule, the larger Grendel (resistance), the larger Grendel’s mother (vengeance). Ideology (lip service in support of change) should not be accepted at face value without an analysis of real capabilities to successfully prevent change. Following this assessment, there needs to be a realpolitik strategy that will marshal the energy and resources of the organization towards the creation of organizational change. The intent is first to maintain a balance of power that enables the different and fragmented subcultures to co-exist, and yet to create change. Sometimes it is possible to introduce a planned change program, that may alter but not fundamentally disrupt the balance of power of individuals and subcultures in the organization. However, if the weight of the individuals, subcultures, and mythic resonances of the organization that would resist the change process exceed the forces for change, then “war” is a more likely outcome than the relatively smooth implementation of a change program. When it becomes apparent that in order to implement the change program, a shift in organizational power dynamics is inevitable, then power bases, as opposed to ideology, and the capabilities for war (opposition to the change efforts), i.e. the strength of Grendel and Grendel’s mother, must be realistically appraised. In actual planned organizational change programs, of course, sometimes Beowulf wins and sometimes Beowulf loses. Sometimes the gritty truths which lie submerged in established organizational dynamics reveal personal agendas, alliances, and mentalities that are simply too longstanding and entrenched to be changed. Period. The following examples from organizational development fieldwork illustrate a failed change effort and a successful change program. Each example will be considered in light of the consultants’ subsequent learnings about chaos theory, resistance to change, and the role of the change agent.

LESSONS LEARNED FROM AN R&D LAB In the mid-1990s, the consultants were invited to work with the newly appointed vice president of a 125-person R&D lab in a division of a major corporation in the chemical coatings industry. Prior to the hiring of the new vice president, a combination of events had created considerable tension and low morale in the lab, including: (a) a long traumatic period of indecision about whether or not to relocate the lab to another state, closer to corporate headquarters; (b) the recent dismantling of the central research function and the co-location of

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research within the existing development facility; and (c) the deterioration of the physical plant, resulting from a lack of investment in the facility during the period of indecision about the lab location. At the same time, there was growing dissatisfaction in this division with the ability of the R&D lab to respond to competitive challenges. Just a few years previously, the central research function of this division moved into the facility that had been fully occupied by the development group. In a very real sense, development had to make room for research. The directors of research and development did not like each other personally or respect each other professionally. There were no dialogues between the two groups, no joint problem analysis or problem solving. Development was focused on the customer and did not refer fundamental technical problems to research. Research operated more as an academic research lab and paid little attention to problems in the field. Eventually, the continued poor performance of products in the field got the serious attention of the president of the division, and there were also corporate concerns about the slowdown in rate of growth and profits. As a result of these concerns, a new vice president of R&D was recruited from a competitor because of his proven capabilities to effectively manage the research and development functions. He was charged with the task of solving problems with existing products and accelerating the development of new products. The new vice president faced several major challenges within the R&D lab: • Overcoming the denial of some of his directors and managers and convincing them (with the ample, available data which had been ignored) that there were, in fact, severe problems with existing products and that competitors were moving ahead more rapidly in the development of new products. • Creating support for a flatter, empowered organization and a radical structural change involving the effective integration of research and development professionals and technicians in product-focused teams. • Introducing a more rigorous scientific discipline (root cause analysis and structure/property relationships) into the product development process. • Increasing the lab’s capability to resolve longstanding problems with products in the marketplace and reduce new product development cycles by half. Shortly after the new vice president was hired, the division level human resource director acquainted him with the consultants’ earlier survey of the lab. The vice president saw the survey as an opportunity to become data-driven in approaching this organizational change program and he then invited the consultants to participate in the design and implementation of the change process. The need for major strategic and structural changes in the lab was fully recognized and 211

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supported by the division president (who had been directly responsible for bringing in this vice president). All conditions seemed right for an accelerated change process. The program had sanction from the top, and with the new VP, the lab had an enthusiastic, charismatic on-site leader, as well as some very capable directors, a bright, experienced and energetic workforce, and highly visible technical challenges to stimulate a sense of urgency and focus for the organization. Given the lack of integration between research and development, the vice president’s approach was to create cross-functional teams comprised of research scientists, development professionals, and technicians. Much of the literature tends to suggest that creating effective teams is both a rational and linear process (Gladstein, 1984; Hackman, 1987; Campion et al., 1993; Dyer, 1995; Mohrman et al., 1995; Guzzo & Dickson, 1996). In this situation, however, while there was an overlay of rationality, the reality of organizational change had to do more with power, competition, personal agendas, and complexities driven by individual and subcultural values. The following discussion explores some of the complex human dynamics of this project, which was ongoing over a period of eighteen months. As the planned change effort got underway, the Ph.D. research scientists resisted the shift toward the creation of teams of research and development personnel. At the outset, members of this subculture valued their autonomy and special status within the lab over the new vision of a flatter, team-based organization. Their resistance was reinforced by the director of research, who publicly supported the change toward cross-functional teams, but privately counseled his scientists to continue to work independently on unapproved projects. The attitude of the director of research offers a figurative illustration of Grendel’s mother: the team-based planned change effort was put in place on top of this director’s fears and resistance, on the assumption that his resistance would disappear in the face of a rational socio-technical intervention. However, the ‘mother’ of the director’s fears, the dynamic of loss, was not effectively dealt with. Or maybe it could not be dealt with; a harsh reality and consequence of many organizational change efforts is a certain “cadaver rate,” i.e. the elimination of those people whose values, attitudes, and behaviors are deemed not in the best interest of the change effort. In this case the director was asked to leave, and he returned to college teaching with a generous severance package. With the loss of their research director, issues among some of the Ph.D. scientists continued to fester. The consultants were invited to meet with them and facilitate their discussion, which led to a formal set of recommendations for the vice president. The director of development and his managers, who constituted another group resisting organizational change, were vocally critical

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of the consultants’ “legitimating” this group by agreeing to listen to them. Other organizational members, however, recognized and appreciated the message that there would be forums for dissenting opinions. The consultants’ intent was to model processes for creating order without control. In this instance, the direct invitation to communicate concerns and recommendations to the vice president enabled the scientists to surface and examine their fears, professional values, and status needs. A series of ongoing structured dialogues gave the scientists the degrees of freedom to explore the potential of their role in these teams. The scientists soon discovered that by giving up some autonomy there was more to be gained in terms of increased depth and breadth of technical experience by applying their skills through the cross-functional teams. They discovered new ways of increasing the value and recognition of their contributions to improved product performance, and they helped to further articulate the lab’s new guiding principles. The slaying of Grendel’s mother in this situation came about by listening to and, in a sense, disarming the scientists’ objections that were based on their perceived loss of status. The ‘glowing sword’ was discovered through the consultants’ discussions with the scientists about their status issue; this status issue (the sword) was then turned toward Grendel’s mother by enabling the scientists to appreciate that their value-added contributions to the crossfunctional teams would actually enhance their status considerably. Working with the development technicians offered a refreshing change. These people had long chafed under the command style of their managers, and they were more than ready for empowerment and change. When they were given the opportunity to help identify new parameters for product performance, they stepped forward in many proactive ways. They redefined their role and took several initiatives to enhance the effectiveness and accuracy of their work in order to meet the new standards and to increase their overall contributions to the lab’s goals. One of the biggest issues in this change process was centered around the director of development and a few of the middle managers on the development side. From the beginning of this change process, these few development middle managers communicated their dissatisfaction and lack of support in both direct and indirect ways. They found sympathy for their position with the director of development, who later revealed his disappointment about not having been offered the vice president position. At first there were open discussions of the managers’ issues and concerns, but when it became apparent that the vice president was not going to change direction, this small group of managers became less vocal. One of the most serious mistakes in perception and judgment made in this planned change project happened here. When the middle managers became less vocal, the mistaken assumption was made that they had been 213

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mollified or even convinced of the need for change. In fact, their fears, anger, and resistance had gone underground, and the vengeance of Grendel’s mother lay in wait. There were some real successes in this project, especially with the integration of development professionals and technicians and the Ph.D. scientists in crossfunctional teams. Most of the technical difficulties that had plagued the division’s main product line since product introduction were resolved. Improved results were beginning to show in the marketplace and there was every reason to believe that the financial picture would positively reflect the changes. While many elements of organizational structure and process were successfully changed, the project was aborted before the politics of the development manager and middle manager subcultures could be effectively dealt with. The power bases of the development director and his managers were directly threatened by the movement to the cross-functional teams. Not only did they experience loss of power through a dismantling of their established political modes of operating, they also saw a disintegration of the foundations of their wellestablished jobs – their very careers (symbolic immortality quests). Because the fears and concerns of the development director and his managers were not adequately dealt with, Grendel’s mother was unleashed to wreak havoc in the organization. Around this time in the project, the director of development grew very busy behind the vice president’s back. The division president who had hired the vice president of the R&D lab and been very supportive of his change plan left the organization. The new division president had a different agenda and did not like teams or consultants. On many occasions the development director spoke privately with the new president of the division and even called for the vice president’s resignation by saying, “Either he goes or I go.” This statement, in effect, brought all the issues to a head. While the development director and middle managers were unable to engage directly in a constructive exploration of issues, they now went so far as to institute a “mutiny” by calling for the vice president’s resignation. Interestingly, this was an organization that did not support, encourage, or accept conflict. Lacking the skills to engage effectively in functional conflict, a mutiny would seem to be the only way to go. The directors and managers of the lab were uncomfortable with conflict and did not have good confrontational skills, and during a ‘nightmare’ of a retreat, they successfully resisted the consultants’ efforts to bring this issue into the open. As noted earlier, the absence of an acceptance of conflict increases political behavior. It was quite evident in this situation that the development director and his managers used avoidance and political power to undermine and cancel the consultants’

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initiatives to open constructive dialogues. There was a related learning as the change effort sought to introduce democratic decision making in the team context. While this meant empowerment for the lab technicians and was embraced as long needed and overdue change, it directly threatened the power base of the managers and development director. Their reaction was a predictable increase in political behaviors, including more gamesmanship in all meetings. What happened after the development director called for the vice president’s resignation demonstrated a real paradox in organizational life. Those involved could sense the vengeful anger of Grendel’s mother and then the gloating after the mutiny. The development manager assumed that he had clearly succeeded in bringing down the vice president (Grendel’s mother took a victim). While the new division president’s style, which had encouraged case building against the vice president, created the opportunity for an open mutiny, what the mutineers did not recognize is that they had violated the code of traditional, conservative, hierarchical organizations, which holds that one cannot challenge the authority of a superior. There were consequences after the development director called for the vice president’s resignation: the organization took deliberate and careful actions that resulted in the transfer of the development director and one development manager, and the planned retirement of another development manager. A third and fourth development manager voluntarily left the company. No one will know how this situation might have evolved if the change process had been allowed to proceed. Within about six months of the “mutiny,” the new division president called for the vice president’s resignation. The generally understood reason was that the two men were incompatible philosophically and stylistically. An even less charitable interpretation is that the president, who was related by marriage to the CEO, had a self-serving agenda and the power to bend the organization to his will. Most of the other directors left shortly after the vice president departed. While a few of the teams were left intact, they were more directly supervised by management. Some three years later, the consultants were told that “the footprint” of this change effort remained; however, as fewer and fewer of the original employees remain, there is less collective memory of the experience. Through a post hoc analysis of this consulting experience, several examples have been identified that illustrate key dimensions of the paradigm presented in this paper. The Use of Chaos Theory: Creating Order as Opposed to Control From the beginning, the vice president openly shared his desire to create crossfunctional teams to resolve product performance problems, but there were no 215

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efforts to establish an integrated culture. In fact, he chose to take the lab “to the edge of chaos” in order to create new opportunities for innovation. He was quite open about valuing the different strengths of the research and development groups, and he looked for and invited ways to empower the lab “associates,” as he called the employees. With the involvement of his directors, the steering committee, and consultants, he sought to create a guided but nonlinear approach to planned change. Ironically, his efforts to create unity around a new mandate without controlling the implementation process flew in the face of the established culture and dynamics of the lab, which was extremely command and control oriented. The two examples discussed earlier, with the Ph.D.s and the development technicians, illustrate how the change program successfully used the order without control approach. Diving Below the Surface to Learn Gritty Truths and Reckon with Grendel’s Mother The consultants conducted experiential team-building sessions with each team of research scientists and development technicians. This gave the consultants an opportunity to directly observe the command-and-control style of the middle managers, who were now assigned the job of team facilitators. In a follow-up activity, the consultants met with each team without their team facilitator and during these meetings, several teams identified serious problems with their team facilitators. These conversations touched directly on the mythic resonances of power and control held by the development director and his managers that underlay the strong established culture of this lab. Team members spoke quite openly and frankly with the consultants about their frustrations and in a couple of instances said they had been advised by the managers about what they should and should not say to the consultants. While the consultants were successful in getting at the gritty truth with the teams, there was a price to pay. Once the consultants encroached on the managers’ territory and talked directly with their team members, the battle with Grendel’s mother began in earnest. As a pet project he could call his own, the lab HR manager decided to organize the secretaries into a team with the added responsibility of sharing the job of receptionist. Previously they worked independently and each was secretary to one of the directors. The secretaries mouthed the ideology of change but their passive-aggressive behavior showed they were dead-set against it. Hostilities on both sides (management and the secretaries) were growing, so one of the consultants was asked to ‘get to the bottom of the problem.’ The gritty truths that emerged had to do with the loss of status and the complete role ambiguity brought about by the creation of a team of interchangeable

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secretaries. The secretaries wanted to return to their former arrangement of one secretary per director and to be allowed to figure out the scheduling of the receptionist’s duties. Interestingly, when the rest of the lab learned that the secretaries had disbanded as a team, the secretaries were given a lot of grief about not being able to be team players; they then decided to create a team and named themselves the “Desk Jockeys.” Assuming the Role of Beowulf – or Not In the case of the secretaries, it was relatively easy to explore the nature of the resistance that lay below the surface. However, this was not at all the situation with the director of development. During a team building session with the vice president and his directors, one moment the group task was well underway. The next moment the director of development grabbed all the materials the group was working with, moved alone to another table and began to complete the project himself. While it was utterly astounding to the group that he chose to take over and subvert the group process, it was even more unbelievable that not a single one of his colleagues, including the vice president and directors, said anything to him. As it turned out, his solution failed, which heightened the tension in the situation. The consultants momentarily considered confronting the issue and really going the full distance to probe this man’s resentment and resistance; however, they lacked the requisite courage in that very public forum to risk the hostility and embarrassment of the only African-American in the group. The moment passed as though nothing unusual had happened. Sometimes one chooses in the moment to stay on the surface because the risks of doing otherwise seem unbearably high. In fact, this incident was an early warning signal that major divisive resonances were rumbling below the surface. Over time it grew very clear that the R&D lab was embedded in an organization that would not deal openly with conflict and power politics. Under these circumstances, compounded by the arrival of the new president, it became inevitable that events played out as they did. With the change in presidents, a realpolitik appraisal of the situation would have re-evaluated the enhanced power base of those who resisted the change, weighed their real capabilities to continue the resistance, explored if, in fact, there was a possible course of action to proactively deal with the power dynamics . . . and then concluded that there was no stopping Grendel’s mother. Here it was quite clear that if Grendel’s mother could not be slain, there would be no lasting organizational change. 217

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LESSONS LEARNED FROM THE UNIONIZED FOOD SERVICE DEPARTMENT OF A HOSPITAL A successful experience involved a collaborative union-managementemployee project within a 140-person food service department of a hospital. In the mid-1990s the AFSCME Union threatened to refuse to sign the labor contract unless a third party consultant was brought in to bring about needed changes in the line management and supervision of the food service group. The consultants were then brought on board to work with the food service group, including managers, employees, and union representatives (Manring & Brailsford 2001). An initial survey of the food service employees revealed major communication problems with managers and supervisors, along with high levels of stress and low employee morale. From the hospital’s senior management perspective, there were two additional needs within the food service group: (1) To re-establish a mission and vision, focusing on patient care, cost effectiveness, and quality of services; and (2) To overcome resistance to change relating to quality and productivity improvements. The primary objective of the project focused on empowerment of the workforce to participate fully with management in the creation and maintenance of a work environment that was conducive to healthy relationships and continuous improvement. The stated goal was increased service excellence. To further clarify, the point was stressed that this intervention was a collaborative partnership involving the union, management, and employees. It was not a “management-driven, efficiency-focused re-engineering project.” At the outset, the nature of this intervention was very critical to its acceptance by the food service employees. Attitudes toward management were so sour that when the director of facilities tried to shape the project as a re-engineering effort, the employees said, in effect, “Hell no, we won’t go.” The message could not have been clearer: in this collaborative planned change effort, the pace (incremental vs. radical change) had to be adapted to fit the readiness of individuals and groups to move forward into uncharted territory. As shown in the R & D illustration, if organizational change is perceived as too threatening, the dynamics of loss and vengeance (Grendel’s mother) are activated to cause great disruptions and destruction. A steering committee was created to work with the consultants. The committee included four food service employees, the acting director of the food

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service group, the hospital union president, the regional AFSCME Union director, and a hospital human resources representative. The steering committee reported regularly to the administrative director of facilities services in the hospital. The steering committee mission was “to guide, supervise, and review the process of quality improvement through continued employee, union, and management collaborations and team-based problem solving.” The task teams, which were built around natural work groups comprised of food service employees, became the primary vehicles for organizational change. The employee task teams included groups of cooks, bakers, cafeteria cashiers, dish room staff, porters, and the patient tray line employees. While the food service department as a whole represented a distinct subculture in the hospital, within the department, each of the above teams was a very distinctive subculture, and there were many intergroup conflicts. The managers of the food service group comprised another team and there was ongoing developmental work with this group. Supervisory skills training was tailored for the needs of the managers and several were moved into other areas of the operation where they did not directly supervise people. One manager, who was absolutely unable to adapt to the changes, was offered early retirement and a good benefits package. Over five years after the departure of the consultants and the departures and replacements of the food service director and director of facilities, this union, management, and employee partnership maintains its commitment to continuous improvement and service excellence. Union grievances filed against the food service group had peaked at 42% of the total number filed by all unionized service areas of the hospital before this planned change effort was undertaken. That percentage of food service grievances has steadily dropped every year since then to 11% in 2000. Another positive indicator was that in July 1999 the union ratified the new contract with a vote of 70%. This was notable for two reasons: (1) many parts of the contract were actual “takeaways” which the hospital needed due to the healthcare economic situation; and (2) the previous (1995) contract did not pass the first time and barely passed the second time. Employee involvement to this degree in a planned change effort may be unusual in a union setting, and this hospital was fortunate to have the full support of the AFSCME Union. Two primary elements contributed to the success of this project: (1) The need for change was clearly felt by all parties (the union, management, and employees). (2) From the outset, the nature of this collaborative project ensured that the approach would be realistic. Often employee involvement planned change programs simply overlay an existing organizational structure with new 219

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cooperative responsibilities and dogma. Here, the employees made it clear that a re-engineering effort with the attendant cultural changes would not be acceptable, i.e. the planned change effort was never allowed to become “managementcentric.” By virtue of its comprehensive nature, this unionmanagement-employee strategic planning partnership was able to create a plan for a realistic jointly designed, jointly supported project that over time did, in fact, significantly reconstruct the food service group. Reflections on a Successful Project This project provides a successful illustration of the use of chaos theory (order without control) in a planned change program. The task teams were given the freedom to go “to the edge of chaos” in this guided yet nonlinear change process. Unlike the R&D lab, the food service group was able to create a holistic culture that overarched and modulated the multiple subcultural forces. The new hologram of cultural values and guiding principles was created through structured dialogue processes with the steering committee, management, and the work teams. There was no ‘managementcentric’ control. From a realpolitik perspective, those who had the power potentially to subvert the change process were among the most positive participants. The dynamics of loss were successfully managed, and the benefits of change were clearly understood. The steering committee provided a well-paced, guided process (symbolic immortality quest) that was accepted by management, the union, and the work teams. Years beyond the time when either the consultants or the directors could take credit, this department remains committed to ongoing continuous change.

FINAL THOUGHTS Almost fifteen years ago, Ray Stata of Analog Devices said the rate at which organizations learn may become the only sustainable source of competitive advantage (1989). In the years since, his statement has grown prophetic. The importance of organizational learning is not just for stable times: it becomes even more critical during implementation of planned change programs, when change and learning may be happening at warp speed. Establishing order without control as the underlying vehicle for creating lasting organizational change allows for the evolution of innovation and builds on the premise of the learning organization that stresses the importance of a non-hierarchical approach to shared leadership and involvement (Goh, 1998). Furthermore, establishing order without control is an essential way of facilitating organizational learning that allows for

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self-organizing (Pascale et al., 2000) toward new organizational structures and processes. Human beings are designed for learning (Senge, 1990), and organizational change that incorporates the wisdom and learning capabilities of employees is compatible with the nature and expectations of both the more highly educated and the more street-wise constituencies of today’s workforce. People at all levels of organizations have acquired attitudes of disenchantment, skepticism, or cynicism about the intentions and even the effectiveness of organizational leaders. In this climate, there is less and less chance of change that is driven top-down being successful, in part, because there is so much less mythology around exceptional leaders who have the capability and credibility to marshal the loyal troops and successfully implement planned change. In fact, corporate responses to global competition and increased economic pressures have taught the U.S. workforce – at all organizational levels – that it is naïve to offer loyalty to an organization in exchange for security. While an organization may no longer be able to ask employees for loyalty, since it can no longer guarantee security, an organization does need the commitment of its workforce toward the principles, values, and vision of the organization. Approaches to organizational change that work creatively with the intellectual capital of organizational members offer an effective way to increase organizational commitment (Senge, 1990). On the surface, this does not sound much different from what Argyris wrote in 1970: that valid information, free choice, and internal commitment are the cornerstones of successful change. However, the diverse and skeptical nature of today’s pluralistic workforce and the fragile contexts of both the U.S. and global economies have made the implementation of planned change considerably more problematic. What remains truer today than ever is that organizational flexibility and adaptability is critical to organizational survival and competitiveness (see Argyris & Schon, 1996). While the paradigm discussed here offers an approach to organizational change that is compatible with the diverse and pluralistic nature of today’s organizations and is in tune with the level of awareness of today’s workforce, it does not necessarily guarantee lasting organizational change, which depends on the nature and forces of resistance. It is also essential to slay Grendel’s mother in order to create lasting change. This will mean casualties. Implementing planned change is not for the faint-hearted: it requires courage without illusions, and it may be a waste of time if the new vision cannot be calibrated against existing assumptions, values, and power balances. Change agents can play a valuable third party, ‘realpolitik’ role in helping organizational leadership assess the mythic resonances of the organization as well as the consequences of de-stabilizing existing balances of power and creating a new 221

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power balance. The new balance of power would account for actual capabilities to resist and defeat planned change, rather than just relying on stated intentions to support the change effort. For further research, it would be invaluable to learn from the experiences of change agents who undertake planned change programs within the paradigm described here. The essential elements would include: • Creating a holographic image of the essential values and vision of the organization to provide unity. • Utilizing the power of chaos theory to establish order rather than control “at the edge of chaos” around implementation of the planned change program. • Engaging with the differentiated, fragmented subcultures of the organization in the spirit of pluralism without seeking to create an integrated culture. • Diving below the surface ideologies and assumptions to explore the gritty truths of the organization and its members and to disarm the mythic resonances. • Enacting the role of Beowulf with courage as well as a realpolitik awareness of the power politics of the organization. • Being willing to address resistance to change and slay Grendel’s mother by confronting and effectively eliminating the manifestations and sources of vengeance aroused by the dynamics of loss during the change process. And lastly, accepting that there will be casualties, and asking one’s heart if the values and objectives of the planned change are worthy of the career price that some organizational members will pay.

NOTE 1. The author was one of the two consultants who worked on these two OD projects. The other consultant, Walter H. Griggs, Ph.D., is deceased.

REFERENCES Argyris, C., & Schon, D. A. (1996). Organizational Learning II: A theory of action perspective. Mass.: Addison-Wesley. Askhanasy, N. M., Wilderom, C. P. M., & Peterson, M. F. (Eds) (2000). Handbook of organizational culture & climate. California: Sage Publications. Baba, M. L. (1989). Organizational Culture: Revisiting the Small-Society Metaphor. Anthropology of Work Review, 10, 7–10. Becker, E. (1973). The Denial of death. New York: The Free Press. Bolman, L. G., & Deal, T. E. (1984). Modern approaches to understanding and managing organizations. San Francisco: Jossey-Bass.

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Campbell, J. (1988). The Power of myth. New York: Doubleday. Campion, M. A., Medsker, G. J., & Higgs, C. A. (1993). Relations Between Work Group Characteristics and Effectiveness: Implications For Designing Effective Work Groups. Personnel Psychology, 46, 823–850. Ebers, M. (1995). The Framing of Organizational Cultures. Research in the Sociology of Organizations, 13, 129–170. Ferris, G. R., Russ, G. S., & Fandt, P. M. (1989). Politics in Organizations. In: R. A. Giacalone & P. Rosenfield (Eds) Impression Management in the Organization. New Jersey: Lawrence Erlbaum. Fukuyama, F. (1992). The End of history and the last man. New York: The Free Press. Gladstein, D. L. (1984). Groups in Context: A Model of Task Group Effectiveness. Administrative Science Quarterly, 29, 499–517. Goh, S. C. (1998). Toward a learning organization: The strategic building blocks. SAM Advanced Management Journal, 63, 15–22. Guzzo, R. A., & Dickson, M. W. (1996). Teams in Organizations: Recent Research on Performance and Effectiveness. In: J. T. Spence, J. M. Darley & D. J. Foss (Eds), Annual Review of Psychology (Vol. 47, pp. 307–338). Hackman, J. R. (1987). The Design of Work Teams. In: J. W. Lorsch (Ed.), Handbook of Organizational Behavior (pp. 315–342). New Jersey: Prentice Hall. Hamada, T. (1989). Perspectives on Organizational Culture. Anthropology of Work Review, 10, 5–7. Kissinger, H. (1982). Years of upheaval. Boston: Little, Brown & Co. Kotter, J., & Heskett, J. (1992). Corporate culture and performance. New York: Free Press. Manring, S. L., & Brailsford, A. (2001). Collaboration Toward Service Excellence: A UnionManagement and Empowered Employee Partnership. Hospital Topics: Research and Perspectives on Healthcare, 79, 25–31. Martin, J. (1992). Cultures in Organizations. New York: Oxford University Press. Martin, J. (2002). Organizational culture: Mapping the terrain. California: Sage Publications. Mohrman, S. A., Cohen, S. G., & Mohrman, A. M., Jr. (1995). Designing team-based organizations. San Francisco: Jossey-Bass. Morgan, G. (1998). Images of organization. California: Berrett-Koehler Publishers and Sage Publications. Morgenthau, H. (1985). The Struggle for power and peace. New York: Knopf. Niebuhr, R. (1932). Moral man in immoral society: A study in ethics and politics. New York: Scribner & Sons. Ouchi, W., & Wilkins, A. (1985). Organizational Culture. Annual Review of Sociology, 11, 457–483. Pascale, R. T., Millermann, M., & Gioja, L. (2000). Surfing the edge of chaos: The laws of nature and the new laws of business. New York: Crown Business. Sachs, P. (Ed.) (1989). Special issue: Anthropological Approaches to Organizational Culture. Anthropology of Work Review, 10. Schein, E. H. (2000). Sense and Nonsense About Culture and Climate. In: N. M. Askhanasy, C. P. M. Wilderom & M. F. Peterson (Eds), Handbook of Organizational Culture & Climate (pp. xxiii–xxx). California: Sage Publications. Schein, E. H. (1999). The corporate culture survival guide: Sense & nonsense about culture change. San Francisco: Jossey-Bass. Schultz, M., & Hatch, M. (1996). Living with Multiple Paradigms: The case of paradigm interplay in organizational culture studies. Academy of Management Review, 21, 529–557. Senge, P. M. (1990). The Fifth discipline: The art and practice of the learning organization. New York: Doubleday/Currency.

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Stata, R. (1989). Organizational learning-The key to management innovation. Sloan Management Review (Spring), 63–74. Ulrich, D., Zenger, J., & Smallwood, W. N. (1999). Results-based leadership. Boston: Harvard Business School Press. Webber, A. M. (2001). How Business is a Lot Like Life. Fast Company, 45, 130–136. Wheatley, M. J. (1999). Leadership and the new science: Learning about organization from an orderly universe. California: Barrett-Koehler Publishers. Whyte, D. (1994). The Heart aroused: Poetry and the preservation of the soul in corporate America. New York: Doubleday.

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A SHARED SCHEMA APPROACH TO UNDERSTANDING ORGANIZATIONAL CULTURE CHANGE Chung-Ming Lau, Lynda M. Kilbourne and Richard W. Woodman

ABSTRACT In this chapter, we propose a shared schema approach to model a change of organizational culture. The connection between shared schemas and organizational culture is first examined, and the development of shared schemas is then explored. Building on previous work utilizing a cognitive approach to organizational culture, we suggest that organizational culture can be understood as organizational members’ shared schemas, so culture change can be understood by examining members’ cognitions about an organizational culture change, with the degree of sharedness being an important descriptor. Data from two samples supported propositions that culture change schemas are: (1) different between organizational members who identify strongly with an organization and those who do not; and (2) different between current organizational members and those who have left the organization. These results support the viability of measuring organizational culture change from a cognitive perspective and suggest implications for managing the process of culture change.


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INTRODUCTION In today’s rapidly changing environment, organizations have to change in order to create and sustain competitiveness (Whittington, Pettigrew, Peck, Fenton & Conyon, 1999). The focus of change is not only on organizational process and structure, but also organizational culture (Armenakis & Bedeian, 1999; Whittington et al., 1999). For example, the Six Sigma concept developed by Motorola led to culture changes in many companies, including banking and services firms (Erwin & Douglas, 2000). By changing organizational culture to one that recognized family values, the productivity of a professional accounting firm was improved (Kahan, 2001). Alberto-Culver, a manufacturer and marketer of personal care, specialty grocery, and household products with 13,000 employees worldwide, started changing their corporate culture in 1991. They initiated a leader development program, restructured their management, and formalized ten culture values over a few years’ time. This resulted in gains from 1994 through 2001 of 83% in sales and 336% in pretax profit (Bernick, 2001). In another case, a deliberate redevelopment of corporate culture resulted in the turnaround of a power generation and transmission company (Schulz, Hauck & Hauck, 2001). By building a competence culture with an emphasis on treating people with respect and dignity, the company changed evolutionally, resulting in higher performance. While these examples illustrate that culture change is possible and can have very positive impact on organization performance, they do not suggest such change is easy – or quick. Some organizational scholars, in fact, present culture as a context variable because, once established, a culture is robust (e.g. Hall, 2002). Others describe such change as requiring from six to fifteen years (e.g. Cummings & Worley, 2001). This begs the questions, when is such change possible, and under what conditions does such change take longer vs. shorter periods of time? We suggest a cognitive approach to examining culture and culture change can contribute to our ability to answer these questions and our understanding of organizational culture change. DiMaggio (1997) suggested that cognition and schemas are the basis of organizational culture. If organizational members have different ideas about and reactions to organizational cultures (Lau & Woodman, 1995), one could expect that different members would also have different perceptions and interpretations of changes related to the organization’s culture (Cooke & Rousseau, 1988; Martin, 1992; Silvester, Anderson & Patterson, 1999). Their perceptions and interpretations about culture change are influenced by their schemas related to the organization’s culture (Fiske & Taylor, 1991). Sometimes, people will not change because they have competing commitments, stemming from the perceptions and assumptions that shaped their

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realities (Kegan & Lahey, 2001). Therefore, we suggest that the nature of the members’ perceptions and assumptions have bearing on the ability of organizations to change their cultures. Because developing a schema-based approach to understanding organizational culture change can provide an important tool for scholars and practitioners, our objective in this chapter is to establish the validity of a shared-schema perspective and demonstrate the importance of the degree of sharedness as a mechanism for measuring perceptions of organizational change. We first examine the organization culture literature and identify key approaches to studying culture. We then discuss the concept of a shared schema and explore how such schemas are developed. Next, we consider the value of the shared schema approach to conceptualize, understand, and measure culture changes. We then describe the development of an instrument for measuring culture change, presenting data from two samples to test its validity and propositions concerning shared schemas about organizational culture change. Finally, we discuss the potential contribution of this approach to managing organizational changes, including determining readiness for change and monitoring the implementation of change interventions.

THE MANY FACES OF ORGANIZATIONAL CULTURE How organizational culture is studied depends on how culture is conceptualized. Martin (1992) identified three different theoretical viewpoints underlying organizational culture research: integration, differentiation, and fragmentation. The integration perspective takes the view that cultural manifestations are shared in an organization-wide consensus. Culture is described as existing in a realm where all is clear and ambiguity excluded. The differentiation perspective cautions that consistency exists only within boundaries of subcultures whose members channel ambiguity outside their subculture, and the various subcultures often conflict with each other. The last perspective, fragmentation, focuses on ambiguity as the essence of organizational culture. From this perspective, culture is under constant change, and there is no stable organization-wide and subcultural consensus. Innovative organizations would likely be studied from this perspective. These three perspectives on organizational culture are rooted in different assumptions about what culture is. Culture can be understood as stable and coherent, as the integration perspective suggests, or stable but dispersed, as in the differentiation view. Alternatively, organizational culture can be considered dynamic and disintegrated, as in the fragmentation view. How we study and measure culture, then, depends on how we conceptualize it. In general, this 227

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literature suggests that organizational culture is not something ‘objective’ and ‘dominant’, easily understood by adopting only one single perspective. Martin (1992, 2002) suggested that organizational culture change would best be understood by combining the three perspectives. Moreover, the substance of organizational culture is subject to different definitions. Culture means different things to different scholars. To many organizational scientists, culture is a pattern of basic beliefs, assumptions, and values shared by organization members (Deal & Kennedy, 1982; Schein, 1992). Other researchers focus more on the behaviors in an organization, such as the organization’s rites, ceremonies, and rituals (see Trice & Beyer, 1993 for a fuller discussion). Depending on whether one approaches culture from a microanalytic or macroanalytic perspective, then, one would draw upon psychological or anthropological roots of culture as the foundation of the investigation, respectively. Culture is studied by examining its hidden level (e.g. values, beliefs, and assumptions) and its expressed level (e.g. artifacts, behaviors, stories, and languages) (e.g. Hofstede, 1998a; Ouchi & Wilkins, 1985). These different levels of culture are not independent; they interact to comprise the organization’s culture, be it integrated, differentiated, or fragmented. The method of studying (and measuring) organizational culture also varies according to the conceptualization of culture and the levels of focus. Several qualitative studies have employed observations, interviews, and content analyses of stories and myths to understand an organization’s culture (Duncan, 1989; Trice & Beyer, 1993). Focusing on organizational stories allowed Martin, Feldman, Hatch and Sitkin (1983) to identify paradoxes of organizational cultures. Through a detailed content analysis of various talks between the researcher and interview participants using a discursive approach, Coupland (2001) was able to examine the relationships between norms, culture, and the construction of identity by graduate trainees. Grubbs and Denhardt (1999) suggested that organizations have failed to consider the cultural and mostly symbolic aspects of shared-change experience; hence, they advocated an ‘allegorical’ approach to study culture and change. In contrast, many researchers rely on quantitative methods to assess an organization’s culture. For example, O’Reilly, Chatman and Caldwell (1991) developed a scale to measure organizational culture profiles. Hofstede (1998a, b) employed questionnaire surveys to discover attitudes, values and organizational cultures and subcultures in a large Dutch insurance company. Van Vianen (2000) assessed newcomers’ and recruiters’ preferences for organizational cultures through scales developed from the competing values framework (Quinn, 1988). The Quinn (1988) framework has been well researched and validated (see the collection of articles in volume 5 of this series, especially Quinn &

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Spreitzer, 1991). This quantitative scale was further validated by other methods, as well as in some international studies of organizational cultures (Kalliath, Bluedorn & Gillespie, 1999; Lau & Ngo, 1996). Using a scale developed psychometrically, Veiga, Lubatkin, Calori and Very (2000) conducted surveys to measure cultural compatibility. In addition, based on an established scale, Douglas, Davidson and Schwartz (2001) were able to tap into the organizational ethical cultures of professional accounting firms, through experimental tasks. Still other scholars have used a combination of techniques. Homburg and Pflesser (2000) developed a scale to measure the market-oriented organizational culture of strategic business units in different industries. The scale was constructed from a detailed qualitative content analysis of cultural change reports published in magazines and described in field interviews with senior managers. Hofstede, Neuijen, Ohayv and Sanders (1990) studied twenty European cases of organizational cultures using both quantitative and qualitative approaches. While there is a blending of qualitative and quantitative methods in studying organizational cultures, there has also been a shift in focus. The application of these techniques also moved from measuring organizational culture per se to exploring various issues related to organizational cultures and subcultures (Douglas et al., 2001; Denison & Mishra, 1995). Nevertheless, the foci of these measures have been mostly on either the hidden level or the expressed level of culture. Yet, when there is a cultural change, these methods may not be able to capture the dynamic and perhaps fragmented culture (Martin, 1992, 2002). Weick and Quinn (1999) suggested that culture is an important part of any organizational change, especially in continuous change rather than episodic change, as in learning organizations (Senge, 1990). Culture provides legitimacy to non-conforming actions that improve adaptation and adaptability and embeds the know-how of adaptation into norms and values. Hence, culture “serves as a scheme of expression that constrains what people do and a scheme of interpretation that constrains how the doing is evaluated” (Weick & Quinn, 1999, p. 378). As a result, change agents have to recognize, make salient, and reframe current behavioral patterns and cultures. In order to achieve this, culture should be examined beyond the hidden and expressed levels. Thus, we argue this examination must take a cognitive approach. Shared Schema and Organizational Culture Many researchers have started to recognize the importance of the cognitive element in organizational culture, in addition to the hidden and expressed levels. Earlier, Bernstein and Burke (1989) emphasized the understanding of belief 229

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systems, and Bartunek and Moch (1987) advocated the schema approach to study cultural changes. Harris (1994) further suggested that individual sensemaking is the core of organizational culture. Recently, Labianca, Gray and Brass (2000) also identified organizational schema as an important element in changing an organization’ empowerment culture. Shared cognition, therefore, has been argued to play an important role in understanding organizational issues (Cannon-Bowers & Salas, 2001). Hence, it seems timely to carefully examine the role of schema in understanding organizational culture. The cognitive psychology literature suggests that people use a basic cognitive framework to analyze the surrounding environment including, in particular, understanding persons and events (Fiske & Taylor, 1991). This basic framework provides knowledge and meaning for affective and behavioral responses. While this basic cognitive framework has been represented by a variety of names, such as scripts, frames, themes, categories, and schemas, we use schema in this work because it is one of the most used in this domain of research (Marcus & Zajonc, 1985; Walsh, 1995; Walsh & Charalambides, 1990). Specifically, an organizational schema is an individual’s cognitive map or mental representation of an organization. If various members define an information domain of an organization in the same way, then these members have shared schemas. The shared schemas, therefore, represent shared meanings or frames of reference for the portion of organizational members that holds those schemas, perhaps the organization as a whole or various subgroups. In an organizational setting, a shared schema helps individuals to make sense of the organization’s people, events, structure, policies, and even underlying assumptions and values, guiding behavioral responses to what is perceived in the environment (Holland, Holyoak, Nisbett & Thagard, 1986). Importantly, a shared organizational schema allows organizational members to have a common orientation toward events (Bartunek & Moch, 1987; DiMaggio, 1997; Weick & Quinn, 1999). Generally, organizational culture is defined as the social glue that holds organizational participants together and expresses the values, social ideals, and beliefs that members share (Denison, 1996; Louis, 1983; Matin, 1992; Smircich, 1983). Wiener (1988) suggests that shared values represent a core element of organizational culture. Wilkins and Dyer (1988) also argued that organizational culture can be defined by focusing on the concept of shared frames of reference. In fact, to interpretive anthropologists and sociologists, culture is “webs of meaning, organized in terms of symbols and representations” (Smircich, 1985, p. 63). This idea of culture as shared frames of reference is consistent with the symbolic and cognitive approaches to understanding organizational processes (Daft & Weick, 1984; Eden & Spender, 1998; Louis, 1983; McKinley, Zhao

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& Rust, 2000; Meindl, Stubbart & Porac, 1994; Moussaui & Evans, 1993; Wofford, 1994). Thus, organizational culture can be studied by examining the perceptions and interpretations of observed cultural manifestations. The appeal of this approach is that it allows an organization’s culture to be modeled from an individual-level perspective, focusing on how members form, utilize, and share their analytical frameworks to perceive and interpret organizational reality (Harris, 1994). Building on this, we suggest that organizational culture can be understood by examining organizational members’ shared values and cognitions about an organization. The degree of sharedness of the perceptions is an important descriptor of the organization’s perceived culture. Different levels of collective sensemaking may be involved across different domains of an organization’s culture. Therefore, organizational members may have shared schemas about different aspects of culture in the organization (Eden & Spender, 1998). For example, a commonly shared idea about turnover could be a major component of the turnover culture of an organization (Abelson, 1993), influencing decisions regarding turnover and providing meaning and guidance to various inter- and intra-organizational movements. A shared perception of necessity for change could also increase the legitimacy of such change (Rousseau & Tijoriwala, 1999). Further, when schemas are not alike across a broad array of organizational domains, no strong or dominant culture exists in that organization. Looking at the sensemaking schemas of the people involved helps us to understand the possible differentiated or fragmented cultures as proposed by Martin (1992, 2002). It is also possible to analyze the cultures involved in multi-level multi-context organizational changes (Pettigrew, Woodman & Cameron, 2001). Several empirical and theoretical studies have used a schema-based approach to analyze organizational culture. Cooke and Rousseau’s (1988) instrument for assessing organizational culture by measuring behavioral norms and expectations is an example of an attempt to surface the shared schemas of organizational members. Bernstein and Burke’s (1989) empirical study of organizational meaning systems also represents an attempt to identify an organization’s culture schematically. However, the theory behind a schematic approach has yet to be fully articulated. Working from yet another angle, Isabella (1990) examined how managers construe key organizational events. She developed a cognitive model to describe how managers’ interpretations evolved during change. While these interpretations followed specific frames of reference that may represent managers’ schemas, Isabella (1990) did not address specifically the construct of a schema-based culture or how such schemas develop. McKinley et al. (2000) developed a schema-based sociocognitive model of downsizing that addresses 231

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the mental operations of managers with regard to downsizing. While the culture aspect is not directly examined, the shared schema they identified can be understood as the culture of downsizing. Moreover, Langan-Fox and Tan (1997) used the language of the participants to identify a culture in transition. Silvester, Anderson and Patterson (1999) suggested that a socio-cognitive approach is appropriate for measuring culture. They argued that a focus on aggregated individual cognition is a viable way to study organizational culture. Further, they implied the viability of measuring the degree to which the understanding of reality is shared across members of an organization. To summarize, these studies suggest that an organization’s culture is related to how members share a common meaning and frame of reference for a specific aspect of an organization. When an organization changes its culture, people will have different perceptions and interpretations of the change. Hence, schemas about this cultural change could be developed among the members (Lau & Woodman, 1995).

DEVELOPMENT OF A SHARED ORGANIZATIONAL SCHEMA The development of a schema is founded in one’s past experiences and beliefs (Cantor, 1990; Poole, Gioia & Gray, 1989; Walsh & Charalambides, 1990). For example, Abelson (1976) suggested that schemas are learned throughout an individual’s lifetime, both by participation in event sequences and by observation of event sequences. In other words, social and organizational experiences influence the development of schemas. When individuals first join an organization, their schemas about the organization’s culture may be very weak in the sense that specific meanings and relationships are loosely organized. Alternatively, they could be very well developed but different from the organization’s actual culture (i.e. they hold beliefs about the organization’s culture that are not consistent with those held by longer-tenured organization members). For example, Carroll and Harrison (1998) found that length of service (tenure) has different impacts on organizational cultures. Furthermore, each new member may initially have a different schema about the organization (Coupland, 2001). The organization has at least two alternatives for dealing with weak, inconsistent and diverse schemas that are initially held by potential new members. First, the organization could avoid diversity through careful recruitment to select new entrants with similar and (presumably) correct attitudes and beliefs about the organization (e.g. Kerr, 1975; O’Reilly et al., 1991). This is a process facilitated by potential employees self-selecting based upon their perceptions

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that their values would fit the organization (Schneider, Goldstein & Smith, 1995; Van Vianen, 2000). Second, the organization may attempt to increase schema similarity via formal and informal socialization after new members join an organization (e.g. Kerr, 1975; Cable, Aiman-Smith, Mulvey & Edwards, 2000). Often regarded as a crucial determinant of a person’s perception and understanding of an organization (Fisher, 1986; Van Maanen, 1976), socialization processes provide new members with necessary knowledge to perform their organizational roles and jobs, as well as imparting organizational values, norms, and expectations. A formal socialization process can include structured training programs (such as orientation, formal mentoring, and training camps) and reinforcement systems that manifest the organization’s culture (such as explicit statements, strategy statements, reward systems, and ceremonies). The objective is not only to increase members’ understanding of the organization, but also to increase members’ identification with the organization (Fogarty, 2000). Evidence has shown that employees have increased commitment and shared values through work group socialization (Hartline, Maxham & McKee, 2000). Some organizations may even use organizational culture as a regulative and control device (Casey, 1999; Ogbonna & Harris, 1998; O’Reilly & Chatman, 1996). Informally, socialization can be accomplished through daily experiences within and exposure to the organization. For example, Walsh and Charalambides (1990) found that repeated exposures to different belief structures induced changes in a person’s existing schemas. In addition, Van Maanen (1975) demonstrated how attitudes established in formal socialization processes could be further developed or altered via informal socialization. Covaleski, Dirsmith, Heian and Samuel (1998) reported that MBO and mentoring techniques could be used in developing a self-disciplining culture in public accounting firms, though it also induced a certain level of resistance from organizational participants. Those whose schemas match the organization’s view of its culture and values are said to fit the organization better (Cable et al., 2000; Schneider et al., 1995) and are said to identify with it (O’Reilly et al., 1991; Van Vianen, 2000). It is suggested that organizational culture has a strong link with an individual’s identity orientation (Brickson, 2000). Coupland’s (2001) study also confirmed this relationship. Tyler (1999) indicated that individuals use organization membership to establish their social identities, or definitions of themselves. One by-product of this identification with an organization is members’ development of internal values congruent with the organization (Tyler, 1999). Whether achieved through selection or socialization, increased identification results in 233

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greater degrees of similarity in organizational schemas held by individual members. If organizational members have substantive agreement about the organization’s values, norms, and expectations, a shared schema can be said to exist. These common expectations and underlying organization experiences are contained in the organizational schema (Poole et al., 1989) and, hence, can be meaningfully considered as schemas of the organization’s culture. To a certain extent, a different culture would be developed due to the changes in schemas as the length of service of organization members increases (Carroll & Harrison, 1998). Figure 1 shows how schemas are shaped during the tenure of individuals in an organization. Initially, individuals joining an organization would have a schema about the organization, which is based on past experiences and knowledge about the organization (Cable et al., 2000). Later, after socialization and other social and organizational experiences, the individuals would have formed new schemas about the organization. If the socialization program is successful, this new schema could be shared by many members; hence, a culture around a certain organizational domain is formed. This is especially true for those who identified strongly with the organization. Therefore, different shared schemas may be found between individuals with different levels of identification, denoting different subcultures. For those who left the organization, a new schema about the new organization will be formed after joining, though the old schema may still have some influences. It is proposed that the homogenized understandings and interpretations are reflected in a shared schema among those organizational members who identify strongly with an organization. The degree of schema sharedness about a particular domain provides a measure of a specific aspect of culture in an organization. For example, organizational members may share similar understandings of relationships between a specific event and some personal and organizational outcomes. These would constitute a knowledge structure concerning the meaning of the event in people’s minds (Walsh, 1989). The greater the overlap on multiple organizational events, the greater the homogenization across members’ schemas, and the more these members can be said to share a similar culture. Those individuals who do not identify highly with the organization will have dissimilar values and perceptions and, thus, will have different schemas. In the case of an organization undergoing changes, organizational members with different identification levels will have different schemas about the specific organizational change concerned. This is especially true when the change is focused on the organization’s culture, a value-laden aspect of the organization. In order to demonstrate the validity of this new perspective, a study was

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A Shared Schema Approach to Understanding Organizational Culture Change

Fig. 1.

Formation and Changes of Organizational Schemas.

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designed to capture the different schemas about an organizational cultural change. As Weick and Quinn (1999) pointed out, cultural change inevitably involves a reframing of schemas. Hence, if the study is focused on a cultural change, it helps to understand the evolution of schemas over time, and in different contexts (Pettigrew et al., 2001).

A VALIDATION STUDY As discussed earlier, much previous research on organizational change and culture has employed qualitative methods, particularly observations, interviews, and ethnography (Schein, 1992). Some researchers have even argued that it is epistemologically unsound to study culture from a quantitative orientation; notable exceptions are the competing values studies (e.g. Denison & Mishra, 1995; Quinn & Spreitzer, 1991). Nevertheless, Zammuto and Krakower (1991) have suggested that a valid and theoretically-based survey instrument of organizational culture can be developed. They argued that quantitative and qualitative research has different foci and provides different vantage points for understanding organizational culture. Denison (1996) also argued that both perspectives are complementary to each other in providing a more complete picture of an organization’s culture. This echoed Martin’s (1992) call for studying organizational cultures from multiple perspectives. Quantitative data provide an overview of general relationships between organizational culture and other organizational characteristics, whereas qualitative data provide a substantive picture of the nature of these relationships. In addition, a special advantage of a quantitative methodology that allows assessment of the shared analytical frameworks of organizational members would be to enable a systematic investigation of organizational subcultures. The following discusses the development of an instrument measuring a cultural change schema. The different levels of identification of organization members are used to demonstrate different degrees of sharedness of the schemas among different groups. Existing organization members and those who left the organization are also included in the study so that their schemas can be compared and contrasted. Several hypotheses are first developed to guide the validation process. Since culture is reflected in a shared schema among those organization members who identify strongly with an organization; therefore, we hypothesize: Hypothesis 1: The shared cultural change schemas of individuals who identify highly with an organization are different from the cultural change schemas of those organizational members who do not identify highly with an organization.

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For people who have left an organization, the identity with the organization will dissipate, the effects of socialization disappearing over time. After exposure to other socialization processes and experiences in other organizations, the original shared schema will change. The new contexts have influences on their interpretation and understanding of the organization’s culture; hence, they may have a knowledge structure different from the past. Specifically, when the organization changes its culture, those people who have left and are now operating in a different environment will have different schemas about the original culture. This gives rise to the second hypothesis: Hypothesis 2: The cultural change schemas of those who have left an organization are different from the shared schemas of remaining organizational members. However, even for those who have left an organization, some may retain a relatively higher level of identification than others. If, for example, these people have not joined other organizations, then their identity with the former organization will dissipate more slowly. Likewise, if they have changed organizations multiple times, staying with each for a brief time, socialization processes in none of the new organizations may have been thorough enough to supplant that of the original organization. The basic cultural attachment to the organization may not be changed too much. Their original schemas about the culture will remain intact. This reasoning leads to the following hypothesis: Hypothesis 3: The shared cultural change schemas of individuals who have left an organization, but still identify highly with an organization, are different from the cultural change schemas of those members who have left but do not identify highly with an organization. Research Site The context for this study is a change of organizational culture traditions. The study provides a methodology to measure of people’s cognitions of a changing culture in terms of the shared ‘reality.’ This study is done in a specific setting that illustrates how context-specific interpretations can be developed to examine particular change in specific organizations. The technique can be replicated at various intervals to track schemas over time, enabling scholars or practitioners to assess the temporal and process issues surrounding perceptions of and receptivity to organizational changes (Pettigrew et al., 2001). Specifically, this study examines the schemas of members of an organization with regard to the organization’s changing a cultural tradition to determine the 237

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degree to which members share similar schemas. Since a schema is domainspecific, separate instruments must be created for each domain. Therefore, only one aspect of the culture of an organization is investigated in this study in order to reduce confounding influences. Hence, the schemas considered in this study are related to a specific cultural context. A major southwestern university in the United States which is reputed to have a strong tradition and culture was selected as the research site. Data were collected from two samples: undergraduate students and former students of the university. A questionnaire was used to survey their perceptions of a potential change in one of the university’s major cultural traditions. As shown in the appendix, the University administration was advocating a change in or possibly even abolishing a long-held cultural tradition during the time of the survey. In an organization that has a very strong culture, an attempt to change a significant domain of that culture should provide an especially fertile ground for measuring schema-sharedness. Those with very similar schemas about the culture domain and high identification with the organization should share schemas – negative ones – about changing this domain. Therefore, we will use such a context to examine how similar the schemas are in this study. The cultural tradition providing the context for this study was a massive bonfire and pep rally held just before the annual football game with a traditional rival university. In recent years, this bonfire event has become quite controversial. Those supporting the continuation of the bonfire tradition view it as a valuable symbol of the school’s spirit and traditions. Those opposed regard it as an anachronism which is both unsafe and a waste of resources (including the time that students spend in building it).1 The debate has evoked strong feelings, and the researchers believed it would provide an ideal context in which to assess differences in schemas. A pretest supported this belief. Through socialization via participation in various activities and programs in the university, new students develop similar values, thinking, and behavior. Students who identify highly with the school will have similar perceptions and interpretations about campus events, such as traditions of the school. Those undergraduate students who identify with the university and share a schema about a given tradition should also share a schema related to changing this aspect of the culture. On the contrary, those who do not identify highly with the school would have different schemas. Likewise, current undergraduates should have different schemas related to the potential change of culture than do former students who are now living and working in a different environment. Thus, by comparing the schemas of undergraduates with high levels of identification to those of undergraduates with low levels of identification, and those of former students with high and low levels of identification, we should be able

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to demonstrate the extent of schema sharedness and speak to the validity of this approach. Procedures and Measures The first sample was the undergraduates studying in the university, who were directly influenced by the change of cultural traditions. They (n = 305) were invited to fill out a questionnaire for extra credit in a junior-level management course. Students were asked to carefully read a scenario (see Appendix A) and then to respond to the measures described below. For the second sample, former students, the same questionnaire with minor modifications in wording was distributed by mail to a sample of individuals who had graduated six to ten years before. This sample (n = 437) was randomly drawn from a directory prepared by the school’s alumni association. Each former student was provided with a self-addressed postage-paid envelope to return the completed questionnaire. A follow-up post-card was sent roughly ten days after the initial mailing to increase response rate. We measured the construct of shared change schema with an instrument that had been used in previous research (Lau & Woodman, 1995). The instrument is a 22-item scale drawn from the organizational change literature. These items describe various types of perceptions, thoughts, and feelings that people may have when organizational change is encountered. They include issues like personal threat and security, likelihood of outcome, change consequences, rationale and meaning of change, personal relevancy and participation, implementation of change, and challenges to values and beliefs. Several schema dimensions are measured by this instrument. Earlier work (Lau & Woodman, 1995) demonstrated the underlying dimensionality of the change schema measure and successfully linked these dimensions to individual-level variables, such as locus of control, organizational commitment, and attitudes toward change. The items corresponding to each dimension of the cultural change schema are listed in Appendix B. General schema dimensions appearing in the literature typically include the following: valence (an evaluation of event significance), causality (a framework for cause-and-effect relationships), inferences (expectations about action-outcome relationships), and affect. These dimensions are effectively captured by the underlying dimensions of the schema measure used in the current study. All items were measured using a seven point Likert-type format that ranged from “strongly agree” to “strongly disagree.” In order to measure the level of organizational identification, an 18-item scale was used. The scale assesses several identification outcomes: sharing of attitudes and behavior, feeling of acceptance, respect for tradition, understanding of and 239

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satisfaction with current position, and commitment to work and organization (see Appendix C). All items were measured using a seven point Likert-type format ranging from “strongly agree” to “strongly disagree.” This scale was pilot tested with another group of students and demonstrated satisfactory reliability (Cronbach alpha of 0.85). The exact wordings for the former students were slightly revised so that they could refer to the university, not their current organization. Statistical Analyses The degree of identification was posited to influence the degree of schema sharedness (how similar or homogenous the schemas are). This “sharedness” will be demonstrated by having: (a) the same schema dimensions; and (b) the same ratings in each dimension. Since, by definition, a shared schema is the homogeneity of schemas of all individuals in a group, an aggregation of individual-level data to assess the similarities and differences within and between groups is appropriate (Law, Wong & Mobley, 1998). The first condition (a, above) can be tested by comparing the factor structures of schemas between the high and low identification groups; i.e. using a twosample confirmatory factor analysis. A high degree of sharedness would be indicated by similar factor structures. Comparison of factor structure is a common analytical method used to cross-validate factor solutions across samples. The structural equations modeling approach has the appeal of being able to model complex equation systems that include underlying constructs and, thus, is used in confirmatory factor analysis applications (Bollen, 1989). Application of this approach is found in both the psychology and management literatures (Bartunek & Franzak, 1988; Bentler, 1990; Breckler, 1990). We employed the EQS method of structural equations modeling to do confirmatory factor analysis. Specifically, a two-sample covariance analysis was used to verify factor similarity between high and low identification groups (Schumacker & Lomax, 1996). In addition, a path model that linked identification to schemas was also used to test the effect of identification on the sharedness of schemas. A significant path coefficient would indicate an effect of identification on change schemas. The second condition (b, above) can be tested by comparing the between-group means in each of the schema dimensions of high and low identification groups and across samples. That is to say, the extent of sharedness can be illustrated by betweensample differences in each of the schema dimensions. MANOVA was used to examine the effects of identification on schema sharedness across the two samples.

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RESULTS A total of 305 undergraduate students participated in the survey. This was the first sample. The level of identification measure had a reliability estimate (Cronbach’s alpha) of 0.89 and a mean of 104.2 (s.d. = 14.18). This mean was used to divide the sample into two groups: high identification (n = 174) and low identification (n = 114). A simple t-test of the mean level of identification of the two groups indicates that the two groups were not the same; that is, their differences are statistically significant. The 22-item schema measure of the high identification group was first factor analyzed using principal components analysis to obtain an initial factor structure. This factor structure was used as the null model for comparison with the factor structure of the low identification group. A six-factor solution was obtained after varimax rotation. The six dimensions, derived from the high identification group, are named as follows: impact of change on current practice (impact); intensity and significance of change process (significance); personal judgement of change (judgement); the meaning of change (meaning); the salience of change (salience); and personal control over change (control). Each of these dimensions was tested by EQS to ensure reliability (Bollen, 1989). The respective statistics of the measurement models are shown in Appendix B. Since these six factors represent the different dimensions of a schema, the schema can be hypothesized as a second-level factor in the model. The 22 items used in the instrument are, therefore, considered indicators of the six first-order factors, which in turn are indicators of the latent construct we call cultural change schema. Next, a larger cultural change schema construct model was established with two levels of factors. This full model was then analyzed using EQS structural equations. Test statistics indicating goodness-of-fit of the model were: chi-square = 816.25 (280 d.f., p < 0.01), Bentler-Bonett’s normed fit index (NFI) = 0.803, Bentler-Bonett’s nonnormed fit index (NNFI) = 0.926, and comparative fit index (CFI) = 0.935. It is commonly accepted that there is no one single index that can truly reflect the goodness-of-fit of a model (Breckler, 1990; Schumacker & Lomax, 1996). Since both NNFI and CFI of the model for the high identification group are above 0.9, good model fit is indicated (Bentler, 1990). The path coefficients between cultural change schema and schema dimensions were also significant. This suggests that a cultural change schema can be measured using the quantitative scale we developed. This model was then compared with the low identification group data by using the two-sample covariance analysis in the EQS program. Equality constraints were imposed on all corresponding factor loadings such that the factor model in the high identification group was hypothesized to be equal to 241

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the model in the low identification group. Goodness-of-fit statistics were as follows: chi-square = 645.14 (427 d.f., p < 0.01); NFI = 0.742; NNFI = 0.884; CFI = 0.893. This suggested that the model fit was not entirely satisfactory. Further analysis using the Lagrange Multiplier test indicated that the equality constraints of the meaning and salience factors could be relaxed to obtain a better fit. Thus, it can be concluded that the original model found in the high identification group was not duplicated in the low identification group (Schumacker & Lomax, 1996). Although some schema dimensions identified in the high identification group were found in the low identification group, the cultural change schemas in general are different. The hypothesis of differences in shared schemas due to different levels of identification is supported. An additional test for the effect of identification on schema sharedness was performed by incorporating the level of identification variable into the full model. A path linking identification to schema was assigned and tested for its significance. Here, all cases from the undergraduate sample were used. Test results from this EQS path model showed that the path is significant (coefficient = 0.404). Goodness-of-fit indices are: chi-square = 419.61 (253 d.f., p < 0.01); NFI = 0.827; NNFI = 0.900; CFI = 0.911, indicating that the model is adequate (all path coefficients are shown in Table 1). The level of identification alone explained 16.3% of the variance. Hence, we can conclude from the above analyses that our results confirm the proposition that schema sharedness is a function of individuals’ levels of identification. For the former student sample, the effective sample size was 437 after deducting undelivered surveys. A total of 119 valid questionnaires were received Table 1.

Effects of Level of Identification on Schema Dimensions in the Undergraduate Sample. Path Coefficientsa

Culture Schema and Schema Dimensions Impact Significance Judgement Meaning Salience Control Culture Schema and Identification a

All parameter estimates are significant at the 0.01 level.

0.615 0.962 0.834 0.470 0.779 0.377 0.404

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for an effective response rate of 27.2%. About three-quarters of the responses were received within the first four weeks of the initial mailing. Since the size of this sample was only 119 which was not sufficient to do subgroup analysis in EQS, the two-sample covariance analysis was not performed. Instead, a MANOVA was used to determine the effect of identification on schema sharedness across the two samples. Table 2 shows the MANOVA results as well as univariate tests on individual schema dimensions across the samples. In the MANOVA analysis, the means of each of the six schema dimensions were compared with a 2 2 design. Both multivariate Fs for the main effects of samples (undergraduate vs. former students) and identification levels (high versus low) are significant. The interaction term of identification level and sample is not significant. This suggests that the schema dimension ratings of undergraduates as a whole are different from those of former students, and those of the high identification group are also generally different from the low identification group. The univariate Fs reveal that the means of significance, judgement, and salience dimensions are different across identification levels and samples. The impact and meaning dimensions are different at different identification levels but not across the two samples. The control dimension is significantly different between the former student sample and undergraduates, but not between identification levels. In sum, the significant multivariate Fs are Table 2.

MANOVA Results of Schema Dimensions of High and Low Identification Groups Across Two Samples. Undergraduate sample

Former student sample

Schema Dimension

Identification low high (114)a (174)

Identification low high (50) (63)

Impact Significance Judgement Meaning Salience Control

8.97 20.49 22.91 15.03 18.60 11.75

11.01 22.83 27.40 15.44 19.91 11.97

multivariate F for sample: multivariate F for identification: a n in parenthesis * p < 0.05 ** p < 0.01

8.06 18.00 17.58 15.00 15.48 9.26 8.07** 13.74**

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11.38 22.37 26.22 16.59 18.95 10.81

Univariate F

sample identification

0.27 9.34** 18.47** 1.61 19.17** 13.30**

26.57** 47.99** 75.20** 5.07* 26.45** 3.14

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sufficient to confirm Hypothesis 2 that schemas are generally different in the two samples. The results also supported Hypotheses 1 and 3 that schemas are different in high and low identification groups.

DISCUSSION AND CONCLUSION This chapter advances the idea that organizational culture can be examined using individual-based schemas. The results of this study support the notion that culture change schemas are shared among organizational members who identify more with the organization; these schemas were significantly different from those of organizational members who do not identify with the organization. For those who are no longer associated with the organization, different schemas are exhibited: former students have schemas about the change of an aspect of the school’s culture that are different from those of current undergraduates. The MANOVA results also suggested that differences exist across identification levels within each sample group. The sharedness of cultural change schema thus reflects the common underlying cognitive framework of different groups of organizational members. Those holding shared culture schemas have similar interpretations of organizational events. These schemas can be thought of as aspects of the organization’s culture that differed across subgroups with respect to the proposed change in tradition. Since sharedness of schemas is demonstrated, this study provides an example of how shared cognitive schemas might be employed to understand organizational cultural change at the individual level. The study of organizational culture can be done rigorously with quantitative data when the focus is on cognitive schemas, rather than rites, stories, or ceremonies. The use of quantitative measurement seems amenable to large scale cultural research inside organizations or across organizations. Using individual-level measures, a representative sample would be enough to diagnose the schemas about organizational culture of a large organization. Further, if such quantitative measures are used in conjunction with qualitative analyses (such as observation, ethnographic studies, and archival analysis), a better understanding of the process of changing organizational culture can be produced (Denison & Mishra, 1995; Denison, 1996; Weick & Quinn, 1999). This “combined paradigm” approach (cf., Woodman, 1989) should provide researchers with a richer, more valid understanding of the organizational culture construct (Martin, 1992). A cognitive schema-based approach to the study of culture makes several contributions. First, using cognitive schemas to reflect culture and culture change is more comprehensive than relying solely on diagnosing cultural manifestations. This is because subjective interpretations are explicitly examined by this

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cognitive approach. By examining the framework people employ to interpret cultural manifestations, organizational culture is studied at a deeper level. Second, this method of analysis enhances the validity of change measures by examining the basic mechanisms underlying human behaviors. Although work values or central values have been proposed as an approach to measure culture (Meglino, Ravlin & Adkins, 1989; O’Reilly et al., 1991), we have demonstrated that measuring the degree to which schema about a change in organizational culture are shared is another alternative. Values are deeply rooted basic assumptions of individuals which could influence people’s attitudes and behaviors (Hofstede, 1998a). However, the influence process could be affected by many intervening variables (such as organizational processes). People with the same basic work values may not necessarily have common behavior or similar expectations. Thus, the cognitive schemas people use to make sense of the environment are closer to shared behavior and shared thinking than are underlying values. Further, some aspects of organizational culture should have been changed during the change process which may not be at the values level. A focus on the cognitive schema level provides a better tool to assess culture change. Third, the methodology used in this study has also been shown to have implications for the study of subcultures in organizations. The degree to which there are demonstrated differences between shared schema in low and high identification groups is indicative that an organization does not have one strong and dominant culture. Cooke and Rousseau (1988) found that different subgroups in an organization have divergent norms and expectations. This is likely to be true regarding shared schema when organizations do not have strong and successful socialization programs. Pettigrew et al. (2001) commented that an examination of multiple contexts and levels when studying organizational change is largely absent from change research. Using culture schema diagnosis done with different subgroups and giving attention to the possible existence of multiple cultures, a quantitative approach to shared schema measurement should be very fruitful. This investigatory approach could also be expanded to international organizational culture research. Veiga et al. (2000) developed a compatibility index for ‘culture clash’ using quantitative surveys, but yet the measures are not specific to organizations. Using a schema-based instrument would help to uncover culture issues at individual and group levels. This approach specifically benefits research by offering quantitative measures of schemas that can be employed in large-scale studies across countries. Further, it provides necessary information for comparison across different change settings. For example, Lau, Tse and Zhou (2002) analyzed the relationships between institutional forces and change schemas among managers and 245

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employees during enterprise reform in China. This again would echo the call from Pettigrew et al. (2001) to have better understanding of change issues at the international and cross-cultural levels. Fourth, our approach to measuring schema has potential as a tool for implementing organizational change. Through the identification of broadly shared schema, change agents could be in a better position to understand the different change attitudes held by organizational participants, to establish the respective levels of readiness for change in various groups in an organization, and to construct change programs that target likely sources of resistance to specific changes (Cable et al., 2000; Covaleski et al., 1998). Results of this research suggest that the development of new socialization programs is one mechanism that would be useful. This approach could also be useful in measuring institutionalization of change, especially knowledge and normative value consensus related to new culture elements after an intervention (e.g. Cummings & Worley, 2001, p. 189). Focusing on schema could help to align the cultural expectations of new recruits and their subsequent adjustment to the organization’s culture (Coupland, 2001; Van Vianen, 2000). It is even possible to align organizational culture with a firm’s strategy by changing shared values and schemas (Hartline et al., 2000). This shared schema approach not only could help to understand employees’ schemas at the time of joining the firm and after socialization, it could also be useful for tracking changes in schemas over time during the employees’ tenure with the organization. Some of the current research in organizational behavior could be enriched by including this schema-based culture change construct. For example, organizational citizenship behavior, procedural and distributive justice, organization development interventions, and inter-team development could be studied by examining the effects of culture change schemas on them, or including culture change schemas as moderators. In some organizational contexts, it can be very helpful to have continued support from members who have separated from the organization, as in universities where alumni are a significant stakeholder group. Anticipating that their schemas will be diluted, universities can implement this methodology to keep apprised of changes in identification and, perhaps, willingness to contribute to their alma maters in various ways. In summary, the present study provides support for the argument that cognitive schemas are one of the several useful ways to measure changes in organizational culture. By focusing on cognitive frameworks, organizational members’ perceptions and interpretations of culture change events can be tapped (Eden & Spender, 1998; Meindl et al., 1994). Receptivity to change and change climate can thus be measured. Through the understanding of cognitive structures underlying attitudes and behaviors, organizational development interventions

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and other change programs could be facilitated. Most specifically, this research methodology could aid the planning and implementation of culture change programs. The study confirms that identification level is important in developing and differentiating shared schemas. Appropriate education and communication, as well as reasoning, may help to raise identification levels and create organizational schemas favorable for the successful implementation of change programs (Rousseau & Tijoriwala, 1999). Several organization development interventions could increase the sharing of schemas, such as collaborative inquiry, action research, and team building exercises. A focus on schemas (knowledge structures) capitalizes on existing evidence pointing to the value of generating valid information to drive the change process and avoids the tricky and potentially unethical focus on changing values or other deeper mental structures (see Gioia, Thomas, Clark & Chittipeddi, 1994). Potential exists for expediting the unfreezing process and reducing resistance to change. The current study focuses on the shared schema of one aspect of culture, specifically the change of a long held tradition. This schema, as predicted, is shared across members with similar identification levels. However, organizational members have different schemas about different organizational culture domains. The structure of this schema may not be the same as that in other domains, especially those not involving organizational changes. Further studies would need to be conducted to discover the key schemas that could capture most of organizational culture. The investigations of culture change have perhaps created more questions than answers; in particular, disagreements exist concerning the methods by which culture should be measured. The current study increases the knowledge base in this area of research. Preliminary support was found for a cognitive model of changing organizational culture. A shared-schema approach to assessing organizational culture change can potentially increase our understanding of how organizational change should be managed.

NOTE 1. Several years after this study was performed, the bonfire event did, in fact, result in a major tragedy when the bonfire collapsed prematurely during construction resulting in the deaths of 12 students and injuries to many others. Notably, even before this tragedy, the bonfire event was becoming increasingly controversial. Needless to say, the controversy continues and, at the time of this writing, the bonfire event remains suspended. It is unclear whether the university will permit the event to take place again. The university, however, decided to construct a memorial honoring the victims of the tragedy. 247

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APPENDIX A Change Scenario Used in the Study: “Will one of [university name]* most revered traditions soon be reduced to its last, dying embers? On Monday, a Faculty Senate committee became the second group in less than a week to suggest, at least informally, that the tradition of bonfire, which represents [university name] ‘burning desire to beat the hell out of [rival university name]’ is not inviolable.” [quote from local newspaper] Bonfire is regarded as one of the major student events that builds school spirit, brings the campus together, and encourages teamwork and unity. However, concerns are raised by the two opposition groups on issues like safety, academic considerations, humanitarian concerns and the environment. Heavy alcohol consumption is also identified by student government leaders as one of the major problems. Recently, a faculty-student joint committee recommended reducing the size of bonfire and establishing minimum academic standards for those who work on bonfire. The committee also recommended eliminating bonfire if no cut site can be found where trees are already scheduled for clearing. * In the scenario read by subjects, the names of the universities were identified, as was the paper from which the introductory quote was taken.

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APPENDIX B Culture Schema Dimensions Measured: Factor 1: Impact of change on current practice (impact) (0.583) This change has important consequences for my future at this school. (0.983) This change alters my way of doing things. (0.605) This change affects the way we (I and my classmates) do things here. chi-square = 13.60 (2 d.f., p = 0.001) NFI = 0.936 NNFI = 0.916 CFI = 0.944 Factor 2: Intensity and significance of change process (significance) (0.631) (0.824) (0.716) (0.751)

I I I I

am concerned with the issues behind this change. am concerned with how the change will be carried out. would like to know how likely the consequences are to occur. am concerned with the risks involved in carrying out this change.

chi-square = 6.33 (3 d.f., p = 0.097) NFI = 0.965 NNFI = 0.961 CFI = 0.981 Factor 3: Personal judgement of change (judgement) (0.604) (0.762) (0.660) (0.855) (0.507)

This change is unacceptable to me. I will lose something if the change is made. The success or failure of this change is relevant to me. The change is threatening. This is a radical change. chi-square = 7.30 (6 d.f., p = 0.294) NFI = 0.975 NNFI = 0.992 CFI = 0.995

Factor 4: The meaning of change (meaning) (0.466) This change is meaningful. (0.701) This change communicates a lot of messages to me. (0.600) This change tells me something about this school. chi-square = 0.59 (1 d.f., p = 0.808) NFI = 0.999 NNFI = 1.049 CFI = 1.000

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Factor 5: The salience of change (salience) (0.595) I have a good understanding of the impact of this change on me. (0.551) I know the relationships between this change and other events on campus. (0.587) The change consequences are predictable. (0.515) I have some expectations about this change. chi-square = 9.12 (3 d.f., p = 0.028) NFI = 0.858 NNFI = 0.790 CFI = 0.895 Factor 6: Personal control over change (control) (0.498) I can be involved in the process of change. (0.829) I have some say in the change. (0.887) I have some control over the change. chi-square = 6.29 (1 d.f., p = 0.012) NFI = 0.957 NNFI = 0.888 CFI = 0.963 (

) denotes standardized parameter estimates, all have p < 0.01

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APPENDIX C Level of Identification Measures: I am a member of this university.a I share similar attitudes with other people in the university. I did not have confidence in my school work. I did not feel adjusted to this university. I knew I would do well in my school work. I buy into the university’s culture. I was very satisfied with my university life. I am proud of being a member of this university. If I had to choose a school to attend again, I would still choose this university. My perceptions are similar to other people of this university. I understand my relationship with this university My behavior is similar to other people in this university. I feel accepted by other people in this school. I respect this university’s traditions. I agree with the directions the university’s administrators are taking. I know a great deal about my current role as a student in this university. I believe that I know the way of doing things at this university. a

The name and nicknames of the university were used in the questionnaire instead of ‘this university.’ Some items were reworded slightly for the former student sample.

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CRITICAL REVISION OF SOME CORE IDEAS WITHIN THE DISCOURSE ABOUT THE LEARNING ORGANIZATION: EXPERIENCES FROM FIELD RESEARCH IN EAST GERMAN COMPANIES Mike Geppert

ABSTRACT This paper is a critique of some basic assumptions in the debate about the learning organization. It develops a practice-oriented approach of learning and discusses how institutional contextual differences influence the direction and the outcome of the learning process. The study presented here builds an understanding of organizational learning through the use of multiple case studies. The analysis is based on field research conducted within East German companies in the context of social and economic transformation. It is assumed that postsocialist societal transformation as an entity does not directly influence how and why certain modes of organizational learning emerged. Consequently, the macro perspective


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MIKE GEPPERT

of institutional change has to be related to the actual practice of organizational learning in a specific social context. The comparative discussion of three distinct case studies shows how actors and groups of actors socially construct the opportunities and constraints that they experience in the process of organizational learning, within a context of macro-level structures previously enacted. Thus, it can be concluded that the institutional embeddedness of organizations influences the selection and development of certain learning goals and recipes; influences whether the learning process is more focused internally or externally; and, related to this latter point, whether more exploitative or explanatory learning approaches emerge.

INTRODUCTION This paper is an attempt to develop a less normative understanding of organizational learning that allows practice-oriented research on the topic. My research can be understood as a process of building an understanding of organizational learning through the use of multiple case studies. This chapter will first outline some of the basic assumptions of scholars of a normative research stream who see the learning organization as a new ‘one best way’ to meet the challenges of a new world order. At the end of this discussion the paper refers to two core ideas in the debate: the search for universal learning recipes and the notion of learning as planning. The third section will critically review these arguments and show that the role of institutions and social context is either underestimated or totally neglected in the mainstream discussion about the creation of the learning organization. Hence, three research questions will be developed which, to some extent, structure the comparison of the company cases, and, what is more, are used as guidelines for theory-building and in conclusion lead to a novel understanding of organizational learning. The research design and methodology is introduced in the fourth section of the paper. On the basis of a comparative research design, an understanding of the dialectic relationship between organizational and institution building is developed. Through the systematic comparison of three company cases I show that the differences in social context do in fact matter, and influence how the actors in a particular organization actually learn. This clearly indicates that core ideas in the traditional organizational learning debate, such as the role of learning recipes and planning, cannot be understood as universal tools, but have been socially constructed in a particular learning situation.

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In the following, discussion section, I refer back to the main objective of this study, which is to develop a closer understanding of the dialectic between organizational learning and institutions. Similarly to Eisenhardt, the aim is to position theory building on the basis of case studies into the larger context of social science research (1989, pp. 532–534). Correspondingly, the discussion reflects on the results of the comparative research project from a more theoretical angle by pointing to two institutional tensions which actors and group of actors face when they learn interactively with each other: (1) the tension between homogenous and heterogeneous knowledge creation (open and closed systems); and (2) the tension between intended and non-intended forms of organizational learning (theory and practice). The chapter concludes with some implications for those who are responsible for and interested in the development of less idealistic, but pragmatic strategies for creation a learning organization.

THE LEARNING ORGANIZATION – A NEW ‘ONE BEST WAY’ In the literature Tsang (1997) distinguishes between prescriptive and descriptive theorizing about organizational learning. The prescriptive research stream, which is quite often based on the researcher’s consulting experience, is concerned with the question of how an organization should learn. However, in Tsang’s view descriptive approaches are more academic and tackle the question of how organizations actually learn. In this sense the mainstream research about learning organizations can be related to the first rather normative research tradition. Even when these researchers recognize both incremental and radical learning modes as valuable to build learning organizations, the latter learning modus is seen as more effective. In this sense, Argyris, as a leading scholar in this debate, has acknowledged “that in some cases single-loop interventions . . . created liberating alternatives. Although they did not create double-loop learning . . .” (quoted from Miner & Mezias, 1996, p. 89). The intervention research perspective argues that only double-loop learning has the potential to free individuals from dysfunctional and self-sealing learning blockages. Both learning forms can lead to a higher degree of effectiveness and competitiveness of business organizations (Edmondson & Moingeon, 1996, pp. 16–37). To put it in the terms of Edmondson and Moingeon: “we thus re-framed our inquiry, to ask whether and how learning organizations can gain competitive advantage . . .” (1996, p. 26). The movement of the learning organization literature from attempts to develop compromises between efficiency requirements and the need to create chances 259

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for liberation in business organizations, to attempts to identify competitive advantages, has led to the emergence of various attempts by managers, practitioners, consultants and management scientists to present the best techniques or recipes for creating a learning organization. Likewise managers have welcomed this idea because it is seen as a new operative tool to overcome the resistance or defensiveness of the members of an organization towards new managerial strategies. The concept is seen as an opportunity to detect previously hidden organizational slack resources, and as a way to get access and change established informal work practices (Geppert, 1996; Neuberger, 1994, pp. 238–269). An increasing number of publications are celebrating the model of the learning organization as a new ‘one best way’ to economic success or a management tool to meet the challenges of globalization (Nonaka, 1990). This particular bias becomes evident by means of examining how the concept of the learning organization is applied in the German management literature. Sommerlatte addresses the question of how managers can increase the capabilities of their firms to learn and how learning organizations can become high performance organizations (Sommerlatte, 1992). In general, organizations are compared with organisms that can only survive by learning and by continuous change. In Sommerlatte’s view, learning organizations are characterized by two features: (1) the creation of a corporate culture that is succinctly summarized by the motto “all for the joint goal”; and (2) transparency of all processes that are relevant for competitiveness and efficiency (Sommerlatte, 1992, p. 118). Wildemann seeks to identify “success factors of fast learning enterprises” (Wildemann, 1996). He suggests the establishment of evaluation criteria for improving the speed, the completeness and the efficiency of internal information-processing and knowledge development in the learning organization. He identifies one feature of learning organizations in the move to establish “continuous improvement processes” (Wildemann, 1996, pp. 77–80). Thus, he conceives of continuous learning as an effective instrument for reducing costs and the waste of (slack) resources. These two examples from the German debates on organizational learning clearly illustrate the tendency to see learning organizations as a new managerial strategy dealing adequately with the challenges of new technologies and global markets. At the center of these debates is the development of management recipes to create more efficient, flexible, economically successful, and competitive business firms. However, not all advocates of the learning organization concept have such a limited ‘one best way’ position as represented by Sommerlatte and Wildemann. The view which celebrates the creation of the learning organization as a new management tool might be seen as an extreme position in the literature.

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To be fair, more moderate approaches of organizational learning cannot be reduced to such a simplistic view. More complex approaches, try to reconcile the idea of the humanization of organizational processes with the economic requirements of the business world. However, the following two sections will clarify that even these more thoughtful approaches share the idea that the creation of the learning organization can be voluntarily manipulated and thoughtfully planned. Making Implicit Learning Recipes Explicit Scholars of organizational learning assume that beyond formal routines and espoused action theories, actors develop tacit and informal modes of dealing with, and avoiding failures. The appearance of reinforcing defensive learning loops is seen as a consequence of tacitly developed knowledge. Internal learning barriers are likely to arise because recipes are not identical with the organization’s “espoused” plans and goals. Learning recipes are understood as interpretation schemes, or as theories-in-use, which only indirectly structure how actors learn (Argyris, 1992a, b). It is assumed whenever actors reveal how implicit recipes limit their current learning processes, they are also able to correct their mistakes or moderate the impact of detected errors. This they consider to be a precondition for organizational growth and organizational success. The aim of higher-level organizational learning consists of making implicit recipe knowledge explicit. Achieving such a goal is facilitated when individuals learn “system thinking” in the terms of Senge (1990, pp. 95–104). Most students in this research tradition believe that changing established learning recipes does generally require the support of an experienced interventionist. However, there are arguments that stress new technologies will indeed enhance the intellectual capabilities of individuals and, thus enable them to develop more reflective learning systems without external consultancy. They suggest facilitating the development of new recipes in learning laboratories by using computer simulation (Isaacs & Senge, 1992). Organizational Learning as a Planning Process There are two underlying basic assumptions which are important: First, intervention researchers believe that higher-level organizational learning must start at the top (Argyris, 1992a, pp. 34–36; Garrat, 1987, p. 122). Second, they assume that, in contrast to traditional forms of planning in the learning organization, the process of planning is directly linked with learning (DeGeus, 1996, pp. 92–99; Senge, 1990, pp. 187–191). They stress that the key criterion 261

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for the successful implementation of double-loop learning processes must begin at “the highest levels of the organization” in order to assure “that individuals have enough power and autonomy” to achieve the intended outcome (Argyris, 1992a, p. 35). In this sense, planning is seen as playing a key role in the creation of higherlevel learning. The planned learning processes are seen as tools to question mental models and change established rules (DeGeus, 1996). The idea of planning is again an attempt to support learning in a technical way and for triggering double-loop learning through computer simulation.

STUDYING THE LEARNING ORGANIZATION: AN INSTITUTIONALIST PERSPECTIVE The afore-going discussion has shown that the mainstream discourse about the learning organization developed an idealized view of the implementation of practicable organizational learning strategies and seems to overestimate the voluntary nature of the learning process. From the institutional perspective taken here, such an approach appears to be problematic. The paper will next undertake a critical examination of three basic assumptions within the discourse and develop three research questions in order to build fresh conceptual insights into the nature of organizational learning from the case study comparisons. Our discussion will show that the neglect of institutional influences explains the bias of learning organization models towards planning, internally focused and exploitative learning modes. Further consideration about how organizational learning processes are intertwined with institutional settings is presented by Geppert (2000, pp. 164–188). The first problem is that in the mainstream discourse organization learning is often understood as a relatively goal-directed and planned process to improve organizational design and effectiveness. Students of organizational learning are interested either in the consequences when actors fail to meet original goals or in what prevents them from recognizing or changing the underlying preferences of current learning tasks, but they tend to ignore to question where those goals come from in the first place, and how those goals are established (Child, 1997). An organization that achieves those goals is considered to be more successful than others. In the center of interest is the planned improvement of learning style and methods of individuals and/or groups, but how these learning strategies and recipes are related to the structural and institutional settings of the particular organization is neglected. Therefore it has to be asked whether individual choices can be properly understood outside an institutional framework. This leads to the first research

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question of how different institutional settings influence content and direction of organizational learning approaches. The second problem is that the discourse about the learning organization assumes that this idea could be applied across institutional and cultural borders to overthrow defensive learning routines of individuals or particular groups. However, from the institutional perspective taken here, organizations are socially embedded in a particular society or societal sectors and it must be in doubt whether concepts developed in another social context can be easily transferred elsewhere. Thus, planned organizational learning approaches focus on the improvement of internal design processes. The interrelationships of the company to other organizations in the same or different societal sectors are neglected (Scott & Meyer, 1991). However, from an institutionalist perspective the focus of learning can be either internally oriented to improve effectiveness of internal learning processes or it could be more externally oriented to develop collaborative networks that support learning processes beyond the focal (learning) organization. Thus, in the second research question I address how the business context and its institutional settings influence whether the organizational learning strategies are internally or externally focused. There seems to be a third problem in terms of the lack of awareness in the learning organization literature about the difficulties of balancing exploitative with explorative learning modes (March, 1996). This leads to confusion. It is assumed that the creation of the learning organization goes hand in hand with the promise that the implementation of certain methods and recipes will lead to improvements such as more humanized, innovative or flexible learning approaches. However, it is neglected that these promised outcomes cannot easily be designed and planned beforehand. Consequently the before-mentioned bias towards developing better and more accurate recipes on how to learn leads to a paradoxical situation. Even when the learning organization discourse explicitly promotes the establishment of more explorative learning approaches, the outcome is more exploitative learning. That leads to the third research question, which is interested in gaining a better understanding of how companies in different institutional settings, such as in certain stages of the organizational life cycle or in certain industrial or societal sectors, balance explorative and exploitative learning forms.

RESEARCH DESIGN AND METHODOLOGY Even though this study does not meet all the criteria of Tsang’s (1997, pp. 79–84) descriptive learning category, my research is closely related to this research tradition. The author of this paper is aware that the methodology is 263

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not as scientifically rigorous as other studies of descriptive research. Nevertheless, the case study approach applied here is strongly orientated on (meta-) theory building and understanding the limits of generalizability of research results. The comparative case study research is conducted on two levels. On the one hand, it compares how the actors in each case study firm transformed social relations and cultural systems. On the other, it applies an analytical strategy involving long-term studies to reflect on the nature of the process of organizational learning. The focus was on the comparison of how interaction practices had been modified. The research interest was to compare when and how in each of the case studies interaction patterns persisted, declined in effectiveness, or changed. Strictly speaking, the analysis focuses on the comparison of how the actors in each firm transformed their ways of thinking and acting, their organizational concepts, their internal relations (such as human resource management strategies, organizational design or modes of participation) and external relationships (such as with customers, suppliers, owners, sponsors, local authority, etc.) over a certain period of time. A more detailed reflection on these issues is given in Geppert (2000). For these interests, East Germany appeared to be an ideal research field, because it was assumed that the specific conditions of social and economic transformation would initiate organizational change. However, the empirically interesting question was to expose the differences in the ways former stateowned firms dealt with the broad variety of “triggers of organizational learning” such as the opening of markets, the dissolution of the collective combines, the privatization of companies, foreign investments, and the introduction and use of new technologies in a company (Merkens et al., 2001). Thus, it is assumed that the social and economic characteristics of the transformation process at the macro-structural level of society should be considered in this study on the microlevel of organizational learning. A detailed discussion about different managerial learning approaches in the context of societal transformation in Central and Eastern Europe is given by Clark and Geppert (2002). The selection of the three case studies, firms A, B and C, is based on two principal assumptions. At first it was decided to select firms with a broad variety in their institutional embeddedness at the macro-structural level. The presumption was that what people learn, how they learn with each other and what this means for their prospects of further learning is influenced by the institutions which constitute and are constituted by a particular social context. In this sense a search was made for organizations which were embedded in quite distinct institutional contexts for the purpose of analyzing and comparing how

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interactive learning processes are represented differently in the local cultural systems. Secondly, I decided to select firms which have implemented reorganization strategies or have announced plans to do so. In such firms organizational learning could be expected to play a critical role. At the same time, local managers of these firms seemed interested in learning more about their own strategies. These included, for example introducing new management ideas such as teamwork as in firm A, profit center structures as in case study B, or job creation projects as in case study C. The first contact to the field was in the Spring of 1993, when I began my case study research in firm B. The last intensive field research was conducted in the Spring of 1996 when some of the key actors of this firm were interviewed after an official presentation about their organizational development and future projects. In the project the following research methods were applied: Participant observation, group discussions, intensive interviews and the analysis of documentation, both published and unpublished. Table 1 highlights some key characteristics of the three selected case studies. Each firm belongs to a quite distinct social context with different resources, social competencies, rules and routines. Firm A represents an established international supplier of car headlights in the automobile market. The East German plant was taken over by a West German multinational company shortly after the Wall came down. Even though the company’s workforce was reduced significantly, the actual process of laying off was a less radical and protracted process than in the other two case studies. However, a major difference between firm A and the other two companies was that the new ownership led to a smooth and quick establishment of a company in the supplier sector of the car industry. Moreover, the work tasks of the majority of the managers and employees remained similar to those pertaining prior to the take over. Reorganization approaches relied on existing skills and capabilities or were moderately refined in the organizational learning process. Firm B represents an established producer of tools and machine tools which was transformed into a profit center organization and is in search of a market niche. The company was created when the established industrial group fell apart because of the collapse of markets in Central and Eastern Europe. The restructuring process led to the establishment of an industrial holding. Firm B was faced with the problem of having to transform itself from a functional department of the former industrial group into a profit center organization. The firm had to ‘start from scratch’ to develop strategy, structure and customer relations. However, its main problem was not just to find customers, but also to establish close customer relations for its considerable amount of highly specific products which rely heavily on skilled 265

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Table 1. Key Characteristics

Key Characteristics of the Case Studies. Case study A

Case study B

Case study C

Key Organizational Tasks

assembly of standard price-competitive products

creation and production of customized quality products

job projects and spin-offs of small businesses

Construction of the Organizational System

highly-structured manufacturing

medium-structured profit center organization

low-structured platform organization

Focus of Organizational Learning

on the implementation of effective organizational design principles

on the development of customer-specific organizational forms

on the development of employment projects

Employment Development

(reduction from) approx. 1100 (1989) to approx. 500 (1996)

(reduction from) approx. 850 (1989) to 90 (1995)

(creation of) approx. 200 jobs in the public and private sectors (1995)

craftwork. Thus, compared to company A the firm’s reorganization required more than simply the creation of a new management function. Moreover, heavy and sudden lay offs and the implementation of new technologies required that managers and employees developed new skills and were prepared to take on multi-skill tasks. Firm C represents a new founded job creation center which had just started new spin-off business activities and was developing projects to establish long-term employment prospects through public sponsorship. Compared to the other two cases, this company was initially a public funded regional project organization, created for political reasons to absorb laid off employees of a large industrial group for a limited period of time. However, local managers went beyond the original concept of employment projects and developed strategies to attract external funding for start-ups and the creation of small regional businesses. The interesting point about this company is that people, mainly ordinary employees, engineers or lower level managers, that joined the organization because they lost their jobs, began to develop entrepreneurial initiatives. In fact, though the project members could partly rely on their established skills and qualifications in early project phases, as the project

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progressed advanced learning strategies had to be developed to actually develop entrepreneurial initiatives and start off their own business. The interesting question is how these quite different starting conditions in each social context, characterized here by key organizational tasks, social construction of the organizational system, focus of organizational learning and employment development, influenced the opportunities and constraints which emerged when actors and groups of actors learned from and together with each other. In line with Gherardi et al., it is assumed that the sets of material, economic, symbolic and social characteristics of each case study structures, illustrated above, as so called “situated curriculum” (1998, pp. 279–281), provide both the content and contingency which actors face in their processes of organizational learning. Each of the afore mentioned characteristics draws attention to three quite distinct organizational domains with specific interaction, work, and organizing patterns, which are the subjects of this analysis.

A SYSTEMATIC COMPARISON OF THE COMPANY CASES In the first part of this paper two core ideas were outlined which are quite common in the debate about organizational learning and learning organizations. It was argued that the model of the learning organization in particular has a one-sided affinity for planning and reflexive learning modes. In this paper organizational learning is not seen as being a context-free, universal concept which can easily be planned and transferred from one organization to another, nor it is understood as being determined by certain characteristics of an economic or technological environment. From the perspective of this study, the question of emerging opportunities and constraints within the process of organizational learning is an empirical one. In this section the two key ideas, introduced in the first more conceptual part of this paper, will be used as a guideline to interpret and compare how the actors in each case study socially construct the interrelated constraints and opportunities for organizational learning. It will be demonstrated that both concepts, the idea of developing accurate recipes about how to learn along with the idea of learning as planning, are not universal constructs and provide quite different evidence for the actual processes of organizational learning in each of the case studies. The introduction of a comparative research design fits within the context of the principal thesis that organizational learning processes cannot be separated from their social context. The differences in how the actors in each case study generate meaning through their particular commitments and justifications are, 267

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therefore, emphasized. It is assumed that the differences between each case study in institutionalization, and in terms of how things are done, consequentially influence the ways in which actors learn (Weick, 1993, pp. 33–34). The Role of Recipes about How to Learn Students of organizational learning stress the importance of making the actors’ implicit recipe knowledge explicit for the purpose of making higher-level learning loops and learning organizations. However, the exaggeration of the intentional nature of organizational learning appears to be misleading. Instead, it is stressed that differences of the institutional embeddedness did not necessarily lead to the emergence of well-structured learning approaches. Thus, it has to be proved: (1) where (meaning at what level); and (2) how the recipes on how to learn were developed in each case study (Table 2). In case study A the firm was reorganized according to the blueprint of another car headlight production firm at the West German base of the multinational. After the takeover, local management began to adjust the organizational and technological processes to the practices prevailing in its West German counterpart. The criteria of the firm’s success were clearly defined from the beginning. The primary aim of management was the efficient manufacturing of car headlights with lower costs than in the West. All organizational functions were checked to see if they belonged to the core business or not. Functions which had previously been integrated were outsourced, such as the maintenance unit and the production of synthetic supplier parts for car headlights. The manufacturing of other products, such as car horns, was given up altogether. According to their previously learned behavior, the people in firm A expected and accepted the knowledge transfer from the West to the East. They were familiar with the fact that someone else outside the firm at the headquarters, or in earlier times, in the central agency of the state-owned firm, developed recipes and programs that defined their ways of organizing. In the same tradition the idea of teamwork was developed and implemented top down. The main Table 2.

The Role of Recipes about How to Learn. Case study A

Development of Learning Recipes

routinized transformation of the established recipes

Case study B recourse to social competencies to modify the established recipes

Case study C retrospective discovering of recipes through learning by doing

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responsibility for the selection of team leaders and members was taken by senior managers and not by the teams themselves. One middle manager explained in the example of Team Orientated Production (TOP) how the introduction of the new management concept was developed and controlled: “The stimulus to implement TOP came from S. (the headquarters). There is a central work group that is responsible for the development of the team concepts in the whole industrial group. I was invited by the multinational’s personnel department to take part in a training course . . . Then I developed our own training programs for our staff. First the management and the white-collar workers were trained. After that we created and trained the first teams . . .”. This argumentation shows a tightly planned introductory process in which the aggregation of the teams was centrally planned, the team leaders were centrally selected and the moment when the team should work under the new label TOP was centrally set. The introduction of the Continuous Improvement Process (CIP) concept was organized in a similar way and mainly concentrated on managing interests to rationalize the manufacturing process and reduce production costs. For this task, other management functions such as purchasing were instructed to check the suppliers and reduce their number for specific parts. On the other hand, the relationship to the customers continued to be centrally organized by a specific sales department, a kind of wholesale shop responsible for selling all products that are made by the multinational. In contrast to firm A, that had developed various and detailed recipes to direct the reorganization process, firm B reconsidered its established organizing recipes after the loss of its supplier function within the state-owned industrial group. The transformation of the former department into a semi-autonomous profit center brought the firm into the unanticipated situation of deciding how to self-define a future business strategy. However, there were no certain recipes on how to succeed and get the necessary resources to guarantee the future development of the firm. There were no new owners with a clear strategy on how to modernize or reorganize the firm as in case study A. Here the people had to develop or rediscover their own recipes to prepare the firm for the future. However, in the past they had learned to react flexibly to the demands of other departments within the industrial group. One manager explained the main difference between the new situation and the past experiences with which the firm had had to deal as follows: “A big challenge for us was the shift of our production from internal to external customers. Before, only 10% of our customers had been external . . . After autumn 1989 it was increasingly necessary to compensate for the decline in internal orders through the acquisition of external customers.” 269

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The established organizational recipes, based on clearly defined work rules and a greater degree of planning functions, had become inflexible. In addition there was a massive reduction in employment in firm B. In dealing with the challenges of the new market environment, all members of the firm, managers, engineers and workers, had to develop more flexible patterns of behavior. Unlike in the past, job security no longer existed. The actors were now responsible for creating their own employment prospects. The actors had to deal more flexibly with permanently emerging discontinuities. Sometimes they had to deal with increasing customer demands, sometimes a drop in orders led to working fewer hours. The workers had to learn to work with various technologies and in multiple work situations. The engineers had to work more closely with the shop floor. The organizing process became more complex. The main function of management shifted from controlling to co-ordination and empowerment. In case study C the employees who lost their job learned from the grassroots what it meant to develop valuable jobs and business activities. Starting with less planned and vague project ideas, they learned by doing which of the various project ideas had to be rejected, which would be advantageous and how one could develop them further. These learning activities were much more interactive than in case study A and in case study B. The actors had to decide which of their projects would have a chance to develop and which would not. However, this could not be decided in advance, but rather emerged through various interactions and negotiations with potential partners, sponsors and suppliers. So, the actors developed experience and action-based recipes, upon which they made their decisions. However, this seemed insufficient to deal with the ambivalent and risky character of a lot of their projects. Often the freshly learned recipes about how to develop a viable project had to be corrected. In an interview with one of the top managers, he explained how a specific project which at first was not accepted by the main sponsor was redefined and developed further several times. However, in the end the firm was able to get support for a modified version of the original project application: “The original idea of our project to build new boats was rejected. However, a part of the project could be realized. In the discussion with our potential sponsor (the Ministry for Social Policy) we got the information that they probably will promote the reconstruction of used boats. So, we decided to change the original idea and we started to search for old boats . . .” The comparison of the development of recipes between the three case studies shows that the degree of experimentation and the extent to which new recipes were learned increased from case study A to case study B to case study C. In the case studies B and C the actors had to discover by themselves a way to develop their organization within a specific social context. In case study B, the

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firm used its experience in applying products and services that improve the technological design of industrial firms. The main problem was to enlarge the specific skills of employees and to integrate centrally controlled management functions such as customer acquisition and marketing. Both management and workers had to take more responsibility. Organizational Learning as a Planning and Pragmatic Process Students of organizational learning seem to overestimate the voluntary quality of learning and acting. However, from the perspective adopted here organizational learning is more an emergent process than a reflexive one, as is often assumed. I, therefore, will not focus the discussion as much on how actors realize well-established management strategies, but will concentrate rather more on how these strategies were formed in the first place. It is assumed that the concentration on planning, designing and analyzing prevents an understanding of the particular quality of organizational learning as a process. From this perspective, the emergence of innovation and adaptation is not purely the outcome of explicit programs and plans, but rather the result of pragmatic or less reflexive learning approaches. There are two leading questions in this section: (1) What was the meaning of planning in the development of each organization? and (2) How were these planning approaches linked to more pragmatic modes of organizing? (Table 3) Planning played a major role in case study A. In contrast to the other two case studies, the attempts to realize and improve the planned organizational outcome was at the center of the whole management process. Even when critical events such as the decline of established markets and change of ownership occurred, local management saw no reason to more actively attempt to understand their task environment. As in the past, local managers preferred conventional interpretations of the environment. In spite of all the changes, local management interpreted the environment largely as stable and predictable. So, quantitative data and formal knowledge appeared to be more essential for the Table 3.

Organizational Learning as a Planning and Pragmatic Process. Case study A

The relation between Planning and Pragmatism within the Process of Learning

Case study B

preference for planning made pragmatism appear subordinated

undefined relationship between planning and pragmatism

271

Case study C preference for pragmatism makes planning secondary

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firm’s performance than the personal experience and tacit knowledge of the employees. In a discussion with one of the leading CEOs about the newly implemented organizational concepts, it became evident that the creation of teams was seen as an instrument to improve the firm’s productivity. He stressed that the growth of the firm’s performance was not so much a question of the implementation of teamwork, but more a question of effective calculation. This opinion was elaborated further as follows: “The question here is not whether or not to alter the design of our assembly lines. When I look at the attempts by other firms to take alternative paths, I am disillusioned. They all failed, because they did not meet the requirements of an increased outcome. All organizational or technological modifications must be measurable. I require serious facts and figures.” This is a clear example of decision-making and planning as process of rational calculation based on quantitative data. This tight focus on formal knowledge led to the underestimation of informal modes of organizing and related social practices which cannot be measured as scientific data. It can be said that management attempts to increase intended outcomes hindered strategic learning. This means, more creative learning approaches in case study A occurred usually whenever technical control, fixed work schemes and tight work routines broke down or lost their meaning. This is well reflected in interviews on the shop floor in particular in the employees’ description of how they were capable of ‘beating the system’. Moreover, the increase of absenteeism on the shop floor can be interpreted as a kind of subversive behavior and reaction to the attempts of local management to tighten the technological control of the manufacturing process. In case study B, planning had a different meaning than in firm A. In contrast to firm A, the actors in both firms B and firm C had to be much more active in order to penetrate the environment; they were unable to establish certain departments and standardized mechanisms to discover the environment or to plan internal operations. In the case of firm B, after the former internal department was transformed into a profit center, the actors could not simply wait for instructions and behave in the same passive way they were used to doing. As newcomers in the market environment they had less experience in marketing themselves. Instead, they sought to test out what could be feasible in the new market environment. The leading manager described this situation as follows: “We were newcomers and could not wait for the customers to come to us and ask for our services and products. We always understood that we must go to them, find out what they want, offer our service and show competence.”

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According to these open and strong customer-oriented strategic arrangements, the operational activities were less formally planned and centralized. However, the steady pressure to act and work closely with their customers made planning difficult and left more space for learning. Moreover, possibilities to routinize and formalize discovering procedures were small because all three sub-units of Firm B produced unique and less standardized products. Each of the sub units was its own cost center and each tried to discover its own task environment and make its own tests of how to introduce themselves to their potential customers. The quality of the products and the variety of customers made it less possible to calculate the outcome. That is why learning occurred not so much in spite of planning, as it had been in the case study A, but more as a requirement that was to compensate for the lack of possibilities in the planning process. In comparison to the other two case studies, planning in case study C played the most subordinated role in organizational development. Moreover, opportunities for long-term strategic planning seldom arose and where they did it was mostly in situations where the actors were responding to external pressures to present accurate explanations about the quality and the future of their projects. Planning became important when the firm decided to spin-off one of its projects. Then local management had to define a basic strategy, to develop work schemes and to decide which employees would be the members of this new organization. Instead of developing elaborated modes of strategic planning, the actors tried out new behavior and tried to make sense of what was happening. For them experimentation often meant ignoring customary and fixed rules and expectations about the outcome of their actions: One manager explained: “To realize new ideas you often have to give up common expectations. Developing projects where you cannot really be sure whether they will succeed, often means you have to try things in which you are very inexperienced. And for this we cannot always check the legal situation. Had we always acted politically and legally correctly, we would not have been able to develop new projects. We would simply not exist anymore.” With such a pragmatic orientation the actors tested which of their projects could be extended in a more systematic way in the future. However, pragmatic and systematic learning approaches were not separated from each other as in the other two case studies, they were instead dialectically linked. In order to secure the pragmatic development of their projects, the firm had to show that they were able to develop into small business firms capable of surviving on their profits alone. The actors had to demonstrate on the basis of hard data and work schemes that they had learned to produce efficient outcomes. 273

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The comparison of the three case studies indicates that the pragmatic learning approaches extended from case study A through case study B to case study C. The affinity to planning blocked pragmatic learning approaches. Those approaches appeared in a rather hidden and subversive manner. The discussion of all case studies shows that overestimation of formal data made tests and experimentation appear to be costly. But in case studies B and C, the actors’ need to introduce themselves in a relatively unknown task environment provided a reason for more pragmatic learning approaches. In both case studies informal and tacit knowledge was the key to organizational learning. However, in case study B, trial and error principles in the learning process were both more directed and more systematic. The development of cost-conscious sub-units made modes of learning that had previously tended to be of a more pragmatic nature appears problematic.

DISCUSSION The systematic comparison of the three studies has shown that the quality and nature of organizational learning processes is quite different in each organization. Contrary to common assumptions of organizational learning approaches, the process cannot be understood simply from the micro-perspective of individuals “learning to learn” within an organizational context. From the institutional perspective introduced here it was shown that the structure and development of internal and external relations between actors and groups of actors were quite different in each case study. The development of organizational capabilities of learning how to learn can be understood in part as “relational learning”. The relational “style” becomes visible to the extent to which the activities are connected and in the way different experiences become involved in the learning process. The relational “strength” is dependent upon the social tightness of the internal and external relations (Weick & Roberts, 1996; Weick & Westley, 1996). An appropriate synopsis of the discussion in the afore-going sections would be that the openness of relational learning processes becomes ever more narrow from case study C through case study B to case study A. According to the argumentation above it can be seen that in case studies C and B the style as well as the strength of relational learning shifted. In these case studies the openness of organizational learning was much broader than in case study A. The argumentation of this section shows that organizational learning cannot be discussed without consideration of the institutional arrangements which were stabilized and/or modified within this process. The sensitivity of organizational learning processes increases when the actors develop more socially coupled

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internal and external relations. When the process of organizational learning was more open, actors had increasing possibilities to make sense of new emerging problems. In the final section this issue will be discussed in more detail as tension between intended and non-intended forms of organizational learning. Relational learning that transformed the traditional forms of organizational learning was not limited to an individual organization, but embedded in various externally oriented action networks. This problem can be described as the tension between homogenous and heterogeneous knowledge creation and will be explored in the next section. The Tension between Homogenous and Heterogeneous Knowledge Creation The thesis of this section is that organizational learning involves both homogeneous and heterogeneous knowledge creation processes. In this sense it must be asked why and how in firm A knowledge creation appeared to be relatively homogenous, whereas in the other two case studies this process appeared to be relatively heterogeneous? Contrary to the other two case studies, one can describe the learning process in case study A as rather exploitative, internally centered and homogenous. Exploitative because the learning process focused upon the refinement and extension of existing competencies, technologies and paradigms (March, 1996, pp. 102–104). The learning process was internally centered because there existed a clear dichotomy between the importance of internal knowledge, closely related to the production process, and the relevance of external knowledge, less related to these traditional tasks. External impulses for learning came primarily from a familiar community of actors including customers of the firm as well as its competitors in the same market segment (Bechtle, 1998). In this sense one can say that organizational learning led mainly to a relatively homogenous improvement of the established knowledge base. This study, like earlier investigations (Powell et al., 1996; Bechtle, 1998; Hustad, 1998), indicates that the potential of an enterprise to be open towards new modes of knowledge creation does not seem to reside exclusively inside one single organization. The locus of innovation should not be looked for in the focal organization of the firm, but in the interorganizational networks of learning (Powell et al., 1996, pp. 116–145). On the basis of these findings one can conclude that the way of learning to learn or deutero-learning in these cases appears not as self-centered designing, but as a process of learning through networking. The development of internal learning capabilities for building and utilizing new knowledge seems to be socially closely linked to the development of external collaboration. 275

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Whereas in firm A the learning community was composed quite homogeneously close to the car industry, in the case studies B and C the networks of learning turned out to be more open to actors with distinct experiences from different social spheres. However, at the same time there emerged the problem of developing a common perception towards an inventive solution for combining the diverse interests of the various actors, so that they could do something together. It can be concluded that heterogeneous knowledge creation that emerged in the process of organizational learning was derived from a greater institutional diversity. That diversity emerged because of the decline of established interrelations. In case study B the former internal department of a large industrial group was transformed into a semi-autonomous profit center. This led to the emergence of more explorative learning activities. However, a crucial problem of heterogeneous knowledge creation is the development of a balance between exploitative learning processes directed to the specialization and utilization of former learning results, and an openness for novel tasks requiring more explorative learning approaches. The problem did not, as the conventional organizational learning debate indicates, simply consist of designing a learning organization that was to free actors from blockages and allow them to learn. The dilemma rather seemed to be how to sustain the institutional diversity within the learning community, enabling actors to continue to learn further and be open for the learning of novel tasks. Similarly to Powell et al.’s study of networks of learning in biotechnological firms it can be argued that: “. . . exploitation and exploration, and calculation and community are intertwined. Organizational learning is both a function of access to knowledge and the capabilities for utilizing and building such knowledge” (1996, p. 118). The question of exploitation which refers to reduction of institutional diversity and exploration which refers to its creation and sustainability can also be discussed from an evolutionary perspective taken by Galar (1996). He distinguishes between hard and soft selection in organizational and regional development. The first produces incremental improvements and provides a better adaptation in an already attained domain as observed in case study A and to some extent also in case study B. The second led to critical innovations and carries adaptation into new domains, observed primarily in case study C. However, the new ideas and innovations which emerge are often interpreted as a disorder that has to be reduced, because actors look for the perfect recipe for how to learn. Soft selections change into hard selections. Exploration loses its consequence in order to exploit the common organizational domain. Furthermore, it can be concluded that the higher the institutional diversity and the more heterogeneous the process of organizational knowledge creation,

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the more important will be the role of actors and leadership for the process of organizational learning. If in case study A, local managers acted reasonably as the designers or dispatchers which direct and control the highly routinized work process, in the other two cases it was observed that local managers acted more like mediators. Here the learning goals were open and learning recipes were developed more pragmatically and it was not always possible to plan, design and control the organizing processes. The competencies of the various members of the learning network were combined in such a way that the fragile balance between exploratory and exploitative learning approaches continues. They started to learn to mediate conflicts, because the absence of clear learning recipes and goals required a constructive settlement of interests between different actors and groups of actors inside as well as outside the organization. The Tension between Intended and Non-intended Forms of Organizational Learning In this section I will discuss the tension between intended and non-intended forms of organizational learning. At the center are the ways in which actors make use of the unforeseen learning possibilities emerging in the ongoing processes of organizing. The central thesis of this section is that in all three case studies the emergence of creative learning modes was not planned, nor was it the result of better designing or decision making. Instead, the openness for novel tasks appeared to be rather a secondary effect of the intended reorganization goals. The dialectical relationship between intentional and non-intentional organizational learning can also be conceived of in terms of the metaphor of a game. Gehlen distinguishes two kinds of such learning games (1986). A first type, so-called polyphone games, lack both an obvious goal as well as a clear intention. People play such “amusing” games just for the purpose of having fun and entertainment. More serious purposes of such games at best develop at a later stage of the organizational development. This second type of games become more structured and serious over time. They are successively played with quite specific goals in mind. Such games take place in the context of stricter rules of the sort that characterize chess games or soccer matches. However, compared with polyphone games the new quality of these more institutionalized games is not just their seriousness, but the increasing regularity and homogeneity of the learning process between the players of the game. Comparing the differences in organizational development, it was found that games were most institutionalized in firm A. Games in firm C, on the other hand, exhibited the lowest degree of institutionalization, with firm B occupying 277

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a position somewhere in between these two extremes. The more institutionalized a game was, the more specified its goals became and the more detailed were its rules. In firm C it was not necessary to develop a perfect solution for a certain problem; what counted more was the realization of a broad variety of distinct projects. In contrast to the conventional debate about organizational learning which is either concentrated on the limitations of institutions on deutero-learning or neglects it altogether, one can argue that those institutional arrangements that are not created for economic reasons are beneficial to the emergence of creative learning modes. However, according to Streeck (1997) it is difficult to institutionalize creative learning modes. Even in case study C, the spinning off of one specific project involved goal specification and the development of more routinized learning modes. Nevertheless the organizational development of firm C showed that it was possible and even necessary for the outgrowth of its projects to protect them from the pressure of economic success which often provides an impetus to standardize, plan and organize. In reference to Streeck (1997) one can argue that emerging side effects which differ from intended learning modes are the prerequisites for creativity and further learning:”. . . even in economic life, it is often the nonfunctional that is the most functional, and indeed that where everything is functional, functions may be less than optimally performed. Protecting the non-functional from rationalist pressures for functionalist streamlining, even though its benefits can, at best, only be guessed, may well be the most difficult challenge today for societies and decision makers, economic and non-economic, private and public” (Streeck, 1997, p. 212). In this sense it can be concluded that polyphone games as described by Gehlen (1986) are always in danger of losing their openness and creative character. Even in case study C, the more playful character of projects changed when goals got more closed and became focused upon more specific outcomes. Organizational arrangements became more functional with, and came to be characterized by, settled rules and work routines. Where this occurs, an explorative search for new solutions is lacking. Organizational learning is perfectly calculated, but less enjoyable. In brief, the perfection of internal designing principles is in contrast to the postulates of the conventional organizational learning debate, not important for the development of more open organizational learning processes. The systematic comparison of the three firms has shown that organizational arrangements that are less reflexive and that have rather biased and shifting goals, provide better conditions for experimentation and creative learning than the ideal of the selfreflexive learning organization. This appears to be a dilemma for the way in which non-organizable learning forms can be organized. Weick and Westley

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(1996, pp. 440–458) call this problem an oxymoron. For them organizing and learning are essentially antithetical processes, because they see learning as disorganizing and increasing variety, and organizing as heedless and reducing variety.

CONCLUSION The discussion has shown that common models of the learning organization which tend to neglect the business context and its institutions could become problematic. Managers who want to transform their company into a learning organization or who are responsible for the development of learning programs have to be aware of the actual situation and stage of evolution of their company. The creation of viable learning strategies cannot rely on adopting best practices or imitation of textbook examples, but rather should adopt pragmatic and context specific approaches. Structured, internally focused and exploitative learning approaches appear only to be viable when organizations are institutionally embedded in established industrial or societal sectors, such as company A in the automobile industry. Open goal learning strategies, the creation of institutionally diverse networks of learning and exploration will not play an important role for such companies as long as managers and employees see themselves as successfully in a particular business context. However, what is successful in the short run, might become problematic in future. The textbook story of IBM is an example that exploitation of successful learning recipes at the expense of exploration can lead to serious problems and inhibit the company’s long term adaptability (see e.g. Daft, 2001, pp. 3–5). It was, furthermore, shown that in companies embedded in lower institutionalized business contexts, such as companies B and C, exploitative, internally focused and rather convergent learning recipes would not work. Nonetheless, later on, when the companies are become more established in a certain sector and have advanced well into mature stages of organizational development, exploitative learning modes might be seen as more appropriate. At this stage management may face the problem of maintaining the reasonable balance between exploration, openness of goals and internal focus and exploitative learning, a factor which is understood to be of primary importance for “survival and prosperity” in March’s thought-provoking essay on this subject (1996, p. 102). Caution should also be exercised in order to guard against the misinterpretation of the empirical findings of this study. Even when in two out of three of the selected cases explorative learning approaches played a significant role it had to be balanced with rather exploitative learning strategies, e.g. to get funding from external stakeholders as in company C or to develop efficient cost 279

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center structures as in company B. What is more, the possibilities to maintain the right balance between exploitative and explanatory learning seems to be limited. Leading scholars in the field of organizational learning have shown that exploitative learning modes appear to be rather the rule than the exception. Accordingly, March has argued that “. . . adaptive processes characteristically improve exploitation more rapidly than exploration” (1996, p. 104). Nevertheless, the empirical findings of this study might be beneficial for further research interested in the fragile balance between explorative and exploitative organizational learning approaches. The study has benefited from the special circumstances of societal transformation which in the case studies B and C devalued established exploitative learning modes. The invention of more explorative learning strategies appeared to be fundamental to secure the survival for both companies. However, further research is required to develop a better understanding of how managers and employees create practicable tradeoffs between opposite learning approaches, e.g. in situations when the business of the company either becomes more established or declines. Future research from an institutional perspective should also concentrate on the question of how certain national and international institutions (e.g. suitable financial, educational and training, and industrial relations systems) support managers and employees in business organizations to overcome the common temptation of realizing the short term benefits of exploitative learning strategies at the cost of comparatively long term innovative and experimental learning approaches.

ACKNOWLEDGMENTS An earlier draft of this paper was presented in an Interactive Paper Session at the 2001 Meeting of the Academy of Management in Washington, D.C. and heavily benefited from the profoundly discussion. The author thanks Jean Boggis, Mark Easterby-Smith and, not at least, the two Editors for their constructive comments on prior versions of this chapter.

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IS REMEMBERED CHANGE USEFUL? John P. Wanous and Arnon E. Reichers

ABSTRACT Measures of change are used for two main purposes in OD: (a) estimating the amount of change that occurred from an OD intervention (e.g. mean differences); and/or (b) assessing relationships between two or more variables as part of hypothesis testing (e.g. correlations). In this study we primarily focus on the hypothesis testing purpose for measuring change, although we will discuss the implications for estimating the amount of change. We focus on two alternative measures of the change in job satisfaction over time: (a) Longitudinal Change; and (b) Remembered Change. These two measures of change are used as predictors of organizational commitment and the number of labor grievances filed by individuals. Our results show that combining both measures of job satisfaction change together explains more variance than either measure alone. We conclude by discussing the meaning of change and the implications of these results for both OD practice and research.

INTRODUCTION This chapter is concerned with two alternative ways to measure change, i.e. Longitudinal versus Remembered Change. This is a critically important topic, because change is at the heart of both research and the practice of OD. For the researcher, change is critical to the testing of hypotheses about change in


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particular, or various types of organizational processes (individual, group, and macro-level variables) that may or may not be related to organizational change. Researchers assess relationships among variables, e.g. how does a decrease in trust affect current and future individual behaviors. On the other hand, practitioners are concerned with change from a different viewpoint. Their main concern is to document the amount and direction of change in the relevant criteria that should have been affected by a particular intervention, e.g. do changes in job design increase employee motivation and decrease errors at work. We will primarily consider the role of change from the researcher’s perspective of testing hypothesized relationships among certain variables. Although of secondary importance, we will also address the concerns of those interested in measuring the amount of change that has occurred. Up to now, research on the topic of Longitudinal vs. Remembered Change has exclusively focused on a direct comparison between them. We think that this is not the best way to assess these two alternative measures of change. One of the factors that motivated us to write this chapter was our involvement in three quasi-experimental field experiments in the past five years (Wanous & Reichers, 1998, 2001, 2002). In all three cases we were unable to obtain a complete set of the relevant before-the-intervention data. This raised the obvious question as to whether “remembered” data might substitute for the absence of the “before” data. In the first of these three studies (Wanous & Reichers, 1998) a union election within a manufacturing plant just happened to result in half of the incumbent officers retaining office. We were able to obtain pre-and post- measures of leader style as one possible predictor of who won and who lost, but this was the only potentially relevant factor that was available on both a pre-and post basis. Although it did seem to account for who won the election (Theory Y style), it is clearly not the only factor that might have accounted for the results. In the second study (Wanous & Reichers, 2001), which was published here in Research in Organizational Change and Development, we reported the results of a three year action-research project. Because of the nature of action-research, we were unable to anticipate the intervention. This is because the choice of intervention topics was made only after an initial employee attitude survey, followed by discussion of the results with employees, and a voting procedure to select the final targets for intervention. As a result we did not have “before” measures that exactly matched the targets of the intervention, although there were other, less relevant, types of before-and-after measures that were available. This would seem to be a natural and typical consequence of the action-research method itself, rather than something that was unique to our study. We believe that anyone using the action-research method of OD will be confronted with this very same problem.

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In the third study (Wanous & Reichers, 2002), we examined the movement of a college of business at a large university from very old to exceptionally nice new buildings. Because the move itself was done in two stages, the result was an unanticipated “switching replications” quasi-experiment. By the time we realized the potential for this to be a topic for scholarly study, it was too late to gather broadbased measures from before the move. Again, there were some data available both before and after the move, e.g. student ratings of teaching effectiveness and U.S. News andWorld Report rankings of business schools, but these were certainly not all of the factors that might have been relevant. Once again, the possibility of using remembered data as a substitute for actual “before” data emerged as a tempting possibility. Despite thinking about using Remembered Change type of data, we did not actually collect it in these three instances. This was primarily because the accumulated research that involved comparisons between them consistently found that they disagree more than they agree. Those who conducted this research consistently concluded that Remembered Change could not be trusted, due to its relatively low level of agreement with Longitudinal Change. During the course of the second quasi-experimental study (Wanous & Reichers, 2001), we obtained both Longitudinal and Remembered Change in overall job satisfaction in order to assess them one more time, despite the lack of encouragement from previous research. After the completion of this project, we developed the approach used here to examining the two measures, i.e. a focus on their relationship to other variables rather than to each other. Our approach is an example of the hypothesis testing purpose for using measures of change. Our hope was that we might be able to show that Remembered Change is as viable a measure of change as is Longitudinal Change. To do so we refocused the research on change from simply comparing them to each other to using both measures of change as predictors of other, theoretically relevant variables. If the results turned out to be encouraging, they would provide the empirical basis for challenging the assumption that Longitudinal Change was the only true measure of change. This would then raise the possibility that Remembered Change might be useful for documenting the amount of change that occurred from an OD intervention when no “before” data were available.

THE BROADER CONTEXT OF RESEARCH ON CHANGE The topic of Longitudinal versus Remembered Change is imbedded in an extensive literature on the topic of time in social science theory and practice. 285

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This vast literature can be categorized as being concerned with: (a) the measurement of change over time; (b) the appropriate statistical analysis of change data; and (c) the incorporation of time into theory development. The latter two of these three are briefly discussed before concentrating on Longitudinal and Remembered Change as two alternative operational measures for the measurement of change over time. There is an extensive literature concerning the statistical analysis of longitudinal data. For example, the two books by Harris (1963) and by Collins and Horn (1991) are a good place for anyone to begin to appreciate how extensive this topic can be (and how technical it has become). The now classic article, “How should we measure change – or should we?” by Cronbach and Furby (1970) is required reading in most doctoral programs. Analytical issues concerning change have been considered quite thoroughly for at least the last two generations of social science scholars. In the last few years there has been increased attention paid to incorporating time into theory-building in the field of organizational studies, e.g. micro organizational behavior (OB), macro organizational behavior/organization theory (OT), and organizational development (OD). Special issues of the Academy of Management Journal (August 2001) and the Academy of Management Review (October, 2001) were devoted to issues of time and change. A year earlier than these two special issues, George and Jones (2000) presented a thorough look at some of the same issues. The AMJ special issue concerned organizational change, a topic in which both theories of change and data gathering both involve issues of time. As the editors (Pettigrew, Woodman & Cameron, 2001) for this special issue pointed out, scholars have three options for incorporating time into studies of organizational change: (a) gather data in “real time” over time (what we call Longitudinal Change here); (b) conduct analyses of existing historical data; (c) gather retrospective data (what we call Remembered Change here). This chapter addresses two of these three options. Perhaps the recent work on incorporating time into theory will spur researchers to do more longitudinal studies. This is because much of past research in the general field of organizational studies is based on one-shot data gathering and/or cross-sectional research designs. This makes it quite difficult to draw causal inferences, because there are no longitudinal data. For example, Sackett and Larson (1990) pointed out that no more than half of the journals they examined (Journal of Applied Psychology, Personnel Psychology, and Organizational Behavior and Human Decision Processes) for three years, each five years apart (1977, 1982, and 1987) had longitudinal data that would allow causal inferences to be drawn. Their finding was replicated 11 years later by

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Mitchell and James (2001) for two different organizational studies journals (Academy of Management Journal and Administrative Science Quarterly). In the field of OD, reviewers have lamented the relative absence of designs that will allow causal inferences to be made. Many reviews of the OD literature have been done over the past thirty years. In chronological order they are: Friedlander and Brown, (1974), Porras and Berg (1978), Nicholas (1982), Guzzo, Jette and Katzell (1985), Woodman and Wayne (1985), Blanck and Turner (1987), Neuman, Edwards and Raju (1989), Woodman (1989), Porras and Robertson (1992), Macy and Izumi (1993), Robertson, Roberts and Porras (1993), and Weick and Quinn (1999). These reviewers have been remarkably consistent in observing that OD is dominated by relatively weak research designs. For some specific topics, the absence of longitudinal designs is considerably worse than the 50% figure cited above. For example, take the long-standing micro-OB research issue about the relationship between job satisfaction and job performance. In a recent meta-analysis, Judge, Thoresen, Bono and Patton (2001, p. 387) reported that only 6.7% of the 312 correlations (and 5.5% of the 54,471 persons studied) involved longitudinal data that is necessary for causal inference. Despite the almost complete absence of longitudinal research, academic scholars have proposed seven alternative theories of the relationship between job satisfaction and performance (Judge et al., 2001, p. 377), all of which imply the passing of time. This is a serious disconnect between theory development and the data used to test the theories that have been proposed. Furthermore, it occurs for one of the most frequently studied topics in micro-OB.

ISSUES IN THE MEASUREMENT OF CHANGE As we said at the outset, measures of change can be used for two purposes: (a) estimating the amount of change that occurred (e.g. mean differences); and/or (b) assessing relationships between two or more variables (e.g. correlations). The former purpose is to measure the results of OD change efforts, whereas the latter purpose is to test hypotheses about the relationships between two or more constructs, and is more closely associated with scholarly research on theories of OD, OB, and so on. Measurement issues concerning the amount of change that occurred can be sub-divided in three ways: (a) the accuracy of key informant memory when compared to data from a previous point in time (e.g. a previous perception by the informant or some form of objective data); (b) respondent bias that leads to “beta” (recalibration of a scale) and/or “gamma” change (re-definition/reconceptualization of the construct); and (c) comparing the amount of change 287

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from surveys at two points in time to the remembered amount of change that occurred over the same time period. Each of these three will be briefly reviewed before focusing on the specific topic of this chapter, using measures of Longitudinal and Remembered Change to test hypotheses about relationships between theoretically related constructs. First, Miller, Cardinal and Glick (1997) addressed the issue of retrospective measures of previous states of affairs that are gathered from surveys. They reanalyzed the data published by Golden (1992) and came to a different conclusion. In the original piece, Golden concluded that retrospective reports by CEOs about their own company’s business strategy disagreed 60% of the time with reports that had been gathered just two years prior to the retrospective question. In questioning Golden’s data and conclusions, Miller et al. (1997) distinguished between the fallibility of key informants vs. the fallibility of the operational measures of business strategy. They further distinguished between the reliability of a measure taken at one point in time vs. the reliability of a measure taken at two points in time. They concluded that the lack of agreement reported by Golden was due to the inherent unreliability of the survey measure of business strategy, rather than the fallibility of CEO memories. According to their reanalyzes, asking informants to provide retrospective data is not necessarily a flawed methodology. Rather, they strongly suggest that the survey questions themselves need to be carefully examined. If the measures are fundamentally unreliable, then the data will be unreliable even if obtained at just one point in time, and more so if obtained at two points in time. Second, Golembiewski, Billingsley and Yeager (1976) are credited with first articulating the distinctions among “alpha – beta – gamma” change. Since then, others have endeavored to come up with solutions to the respondent bias associated with the latter two types of change. (Alpha change is considered to be “true change”.) A very thorough review of methods to handle beta and gamma change was written by Armenakis (1988) earlier in this annual series. His review is noteworthy because of the distinction he draws between “statistical” vs. “design” approaches. Armenakis (1988) identified three statistical approaches to coping with beta and gamma change. First, the Transformation method (Ahmavaara, 1954) was used in the original work by Golembiewski, et al. (1976). Second, the Coefficient of Congruence method (Burt, 1948; Tucker, 1951; Wrigley & Neuhaus 1955) was used by Armenakis and Smith (1978). Third, the Covariance Analysis method (Joreskog & Sorbom, 1981) was used by Schmitt (1982). More recently Schaubroeck and Green (1989) suggested the use of factor analysis. Discussion of these various approaches is beyond the scope of this chapter. Readers

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interested in these alternative solutions should first read the Armenakis (1988) chapter and then the original works that he cites there. Armenakis (1988) also described three design approaches to coping with beta and gamma change. First, the Ideal Scale approach used by Likert (1967) was applied later by Zmud &Armenakis (1978). Second, the Retrospective t-test was originally suggested by Howard, Ralph, Gulanick, Maxwell, Nance and Gerber (1979). Third, van de Vliert, Huismans, and Stok (1985) advocated the Criterion approach. An additional approach to the three mentioned by Armenakis (1988) is the use of “profile analysis”, developed by Terborg, Howard, and Maxwell (1980). Because the problems associated with beta and gamma change are peripheral issues here, readers are encouraged to consult the sources cited above for further guidance. Third, several researchers have compared Longitudinal Change for a variable to the amount of Remembered Change for the same time period (Fink, 1960; Hardin, 1965; Hardin & Hershey, 1960; Herold & Thomas, 1981; Lyons & Dickinson, 1973; Palmore & Freedman, 1969). This type of research focused on the possible substitutability of Remembered Change for Longitudinal Change by assessing the degree of agreement between them. Based on these studies, Remembered Change has been discouraged as a substitute, because previous research shows the two measures of change agree only moderately when directly compared. For example, Fink (1960) studied the strength of students’ religious beliefs over a two-year period. When Remembered and Longitudinal Change were compared, the level of agreement was 41%. Hardin (1965) found similar results for a sample of office workers (37% agreement) when job satisfaction was measured six months apart and compared to the Remembered Change in job satisfaction. Lyons and Dickinson (1973) reported 40% agreement between these two measures of change in job satisfaction over a three-year period. In our own data (which are reported later), the overall level of agreement between Longitudinal and Remembered Change in job satisfaction over a 21 months period was 49%. The only study to report a higher level of agreement (about 70% over six months) is that by Hardin and Hershey (1960) who compared a perceived change in salary to the actual change in salary. This last study is an outlier in the previous research because it is the only study with an objective criterion (actual pay changes). All of the others concerned changes in attitudes, primarily job satisfaction. In this chapter, however, the desirability of gathering both types of change data is considered, rather than one vs. the other, despite this history of research. We believe that past research failed to consider other alternative analyses concerning Remembered vs. Longitudinal Change, as we discuss next. 289

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THE PRESENT STUDY The approach taken in this chapter differs from and extends previous research in three ways. First, previous research either explicitly or implicitly considered the degree of Longitudinal Change as “the” criterion against which Remembered Change was compared and evaluated. As a result, the primary analysis of data was a comparison of the two measures of change. When the level of agreement was found to be low, the typical conclusion was that the Remembered Change measure was suspect. An alternative perspective is taken in the present study. There is no presumption that Longitudinal Change is inherently superior. Instead, the possibility that both measures of change may be complementary is considered. The approach used here focuses on the hypothesis testing purpose for obtaining measures of change, and this requires a different type of analysis. In the present case we will use both Longitudinal and Remembered Change in job satisfaction as predictors of both organizational commitment and the filing of labor grievances. This will be a test of two hypotheses: H1: changes in job satisfaction are positively related to changes in organizational commitment, and H2: changes in job satisfaction are negatively related to the filing of labor grievances. The rationales for selecting these two variables are described below. First of all, it seems reasonable to expect that as job satisfaction increases over a period of time it will be associated with higher organizational commitment at the end of the time period, or that falling satisfaction will be associated with lower commitment. This is because individuals are likely to infer a trend in conditions that might continue. If someone experiences falling satisfaction, that person is likely to be less committed than someone else whose level of satisfaction is the same at the end of the time period, but has not fallen. Furthermore, previous theory suggests job satisfaction and organizational commitment are positively related (e.g. Wanous, 1992), and previous research has supported it. For example, Farkas and Tetrick (1989), Vandenberg and Scarpello (1990), and Williams and Hazer (1986) all found job satisfaction and organizational commitment to be separate, but closely related, constructs. Whether or not satisfaction and organizational commitment are antecedents or consequences of each other is a separate question, and one that some believe has yet to be determined (Vandenberg & Lance, 1992). Despite this, there is no question that they represent different, but positively related constructs. For example, Mathieu and Zajac (1990) in their review and meta-analysis of organizational commitment considered them as “correlates” of each other (rather than antecedents or consequences), and found that their average correlation is 0.49 (r2 = 24%). More recently, Tett and Meyer (1993) found an average

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correlation of 0.45 (r2 = 20%) between overall job satisfaction and organizational commitment using measures similar to those used here. Second, the perception of rising job satisfaction should be negatively related to the number of labor grievances that an individual would file, as has been found in previous research (Allen & Keaveny, 1985; Dalton & Todor, 1982). In comparison to organizational commitment however, research on labor grievances has not been as extensive, nor as theoretically based, and it has yet to be summarized by meta-analysis (see Petersen, 1992, for a review). Nevertheless, that research which has considered job satisfaction as one possible antecedent of grievance filing does support its use here. Job satisfaction has been correlated with other job behaviors, e.g. turnover, performance. However, turnover and performance data were not available in the organization studied. This is because virtually no one quit. Further, there were no measures of individual performance, because much of the work done in this organization was assembly line.

METHOD Setting and Data Collection Procedures The site for this study was a unionized manufacturing plant located in the midwestern United States. The plant is a subsidiary of a large auto manufacturer devoted to producing component parts. Although roughly 80% of its business was with the corporate parent, it sold the rest to competitors of the parent corporation. Two surveys separated by 21 months were administered on site during the last hour of each work shift. All employees were paid for the time spent completing the questionnaires. If they chose not to participate, they were still paid, but were not allowed to leave work early. There was always at least one researcher present during data collection so that the surveys could be distributed and collected efficiently, and questions could be answered quickly. The data collected for Longitudinal vs. Remembered Change were tangential to the main purpose of why we were inside this organization. The purpose of our three year relationship with this organization was to obtain data about a longitudinal, quasi-experimental study of an action-research project. A report of that project was published in Volume 13 of Research in Organizational Change and Development (Wanous & Reichers, 2001). More extensive details about the host organization, its employees, details about the action-research project itself, and survey results can be found in that chapter. 291

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As the action-research project came to its conclusion, the idea of including a measure of Remembered Change on the second survey surfaced, because the oldest member of the four person research team (John Wanous) remembered having read comparisons of Longitudinal vs. Remembered Change many years ago as a graduate student in the 1960s. Because we already had the opportunity to obtain Longitudinal Change (over a fairly long 21-month period), the addition of Remembered Change was an opportunity that we took advantage of in order to extend this previous line of research, which had not generated much interest in the past 25 years. Subject Sample The sample of employees (N = 209) is composed of those people who responded to both surveys with complete data on the variables of interest for this study, and who gave their names so that the questionnaires could be matched. Only the hourly-paid employees are included in these analyses because only they could file labor grievances, as part of the working relationship between the United Auto Workers and the management of this company. The demographics for this sample of hourly workers are typical for this particular industry: sex (80% male), race (80% white), age (45 years), marital status (77% married), and tenure in this plant (19 years). Because of the restrictions placed on selecting this sample from among all respondents to the two surveys, a comparison was made between the 209 individuals used here and those hourly employees who were not included on each of the variables used in this study. There was only one significant difference, i.e. those in this study filed more grievances than those not included (p < 0.05). However, the “omega squared” effect size of this difference is only 0.003, indicating that, while statistically significant, this difference is trivial. There were no significant differences between the sample used and the other respondents in terms of: (a) job satisfaction at T1 or T2; (b) Remembered Change in satisfaction (measured at T2); and (c) organizational commitment (measured at T2). Measures All the measures used here represent global constructs. This consistency among measures is desirable, because mixing specific measures with global ones adds a spurious factor that typically depresses relationships between them (Fisher, 1980).

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Job satisfaction was measured at T1 and T2 with a single, global item (i.e. “my job, overall”). The scale points were: 1 = very dissatisfied, 2 = dissatisfied, 3 = neither satisfied nor dissatisfied, 4 = satisfied, 5 = very satisfied. On the second questionnaire respondents were asked: “Use the scale below to rate the amount of change in your overall job satisfaction from the last survey, if there has been any.” A seven point Likert-type scale was used to measure remembered change in overall job satisfaction: 1 = quite a bit less, 2 = moderately less, 3 = somewhat less, 4 = no change, 5 = somewhat more, 6 = moderately more, 7 = quite a bit more. The choice of this scale wording is based on previous research concerning descriptors that have “equally appearing intervals” between them (Bass, Cascio & O’Connor, 1974). Thus, Remembered Change in overall job satisfaction was measured in essentially the same way as the state of one’s overall job satisfaction at T1 and T2, i.e. a single item focused on overall job satisfaction. Although single-item measures have not been particularly popular among researchers, they can be used in certain situations when “. . . there is a body of work showing the adequacy of a particular single item measure, or . . . the construct is so specific that a single-item captures it fully . . .” (Sackett & Larson, 1990, p. 468). Further, Scarpello and Campbell (1983) have strongly argued that a single-item measure of overall job satisfaction is actually superior to a scale composed of specific job facet satisfaction items. Also supporting our choice to use a global single-item measure of job satisfaction is a study by Wanous, Reichers and Hudy (1997), who reviewed and meta-analyzed the accumulated research concerning single-item measures of overall job satisfaction. They concluded that a reasonable estimate of reliability for single-item job satisfaction measures was about 0.70. Subsequent work on single-item reliability by Wanous and Hudy (2001) supported this conclusion. Probably the most important reason for using a single-item measure of job satisfaction is that Remembered Change was measured with a single-item, too. Thus, both measures are comparable to each other. Because the central focus of this research is comparing these two measures of job satisfaction change as predictors of organizational commitment and labor grievances, it is very important that the comparison be “fair” (Cooper & Richardson, 1986). The essence of a fair comparison is that any pair of measures being compared should be measured in comparable ways, so as not to confound the comparison with differences in measurement. In the present case, the use of single-item measures makes the comparison of Longitudinal and Remembered Change much more fair than if one of them were measured with a scale while the other was not. We believe that a fair comparison is absolutely essential for the research question considered here. 293

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Two correlates of job satisfaction were obtained. First, organizational commitment was measured using the Organizational Commitment Questionnaire at T2 (OCQ – Steers & Porter, 1979) in its nine-item short form ( = 0.86 here). Second, the number of labor grievances filed was measured by asking each person at T2 to specify the number of grievances they personally filed “in the previous two years.” Although this is a self-report measure, it is a report of actual behavior rather than of an internal state like job satisfaction or organizational commitment. As such, it is much less susceptible to an inflated relationship with the other self-report measures (Crampton & Wagner, 1994; Podsakoff & Organ, 1986). Analytical Method Longitudinal and Remembered Change in job satisfaction will be compared by using the percentage of variance accounted for as predictors of organizational commitment and labor grievances. Correlations and multiple regression were chosen rather than structural equation modeling because the research question being addressed is relatively simple (Brannick, 1995; Kelloway, 1995). Edwards (1994) suggested that adding cross-product and quadratic terms after linear effects in regression is a way to detect non-linear relationships. This supplementary analysis will be conducted after the primary analysis that concerns the two alternative measures of change in job satisfaction as predictors of organizational commitment and the filing of labor grievances.

RESULTS The first step in assessing the two alternative measures of change in job satisfaction is to consider their measurement reliability. First, the re-test reliability of Longitudinal Change is 0.37 over 21 months. Re-test reliability for Remembered Change could not be computed, because it was only measured at T2. Re-test reliability for job satisfaction (and other job attitudes) is, however, difficult to interpret because it is likely to be sensitive to changes in the organization from actions by both management and by the OD research/intervention team, and the period of time elapsing between measurements is fairly long. Second, a method for estimating the minimum consistency reliability of a single-item measure has been developed (Wanous & Reichers, 1996; Wanous, Reichers, & Hudy, 1997). This method uses the standard correction for attenuation formula (e.g. Nunnally, 1978, p. 220). By knowing the correlation between a scale of job facet satisfaction items and the global, single-item

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measure, and by knowing the reliability of the scale of job facet items, it is possible to solve for the missing value, i.e. the reliability of the single-item. The correlations between the global single-item measure of job satisfaction and a scale of eleven job facet satisfaction items were 0.70 and 0.72 at T1 and T2, respectively. (See Appendix 1 for a list of the 11 job facet items.) Because the reliability of the eleven-item job facet scale was estimated as 0.86 at both T1 and T2, the estimated minimum reliability for the T1 global job satisfaction item is 0.56, and 0.59 for T2 global job satisfaction. These estimates of the minimum reliability are based on the most conservative assumptions possible, although more realistic assumptions would put these estimates much closer to 0.70 (Wanous et al., 1992, p. 250). The reliability of the single-item measure of Remembered Change cannot be estimated using this technique, however, because there is no parallel scale of remembered change items. Despite this, we think it is reasonable to assume that its reliability is no different from either of the single-item measures of overall job satisfaction obtained at T1 and T2. The re-test reliability for the eleven-item scale of job facets was also calculated for comparison purposes and found to be 0.53 (vs. 0.37 for the global item). Because the job facet scale has higher reliability (0.86 for both T1 and T2) than the single-item measure, the corrected-for-attenuation re-test reliabilities are 0.65 for the single-item measure and 0.62 for the facet scale (Nunnally, 1978, p. 220). Thus, the re-test reliability (measured 21 months apart) of the single-item measure of overall job satisfaction is about the same as that of the scale of 11 job facets, when differences in consistency reliability are controlled for. Table 1 shows the means, standard deviations, and correlations among all of the variables. It should be noted that the raw discrepancy measure of change (T2 – T1) is also included in this table. Although the raw discrepancy score has been strongly discouraged by experts in psychological measurement for over thirty years, (Cronbach & Furby, 1970; Edwards, 1994; Johns, 1981), it is included here for comparison purposes. Its relatively low correlations with the other variables further attests to the inherent reliability problems of raw discrepancy scores. An inspection of the mean satisfaction ratings in Table 1 appears to indicate that there was little change. For example, the means for each of the static measures of job satisfaction taken at T1 and T2 respectively are almost identical. The mean of Remembered Change is very close to the mid-point (i.e. no change) of that 7-point scale. However, these indicators can be misleading. In order to clarify the amount of change that occurred in this organization over the 21month period we studied, we classified each measure of change into just the direction of change, if there was any. Table 2 shows these results. 295

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Table 1.

Means (M), Standard Deviations (SD), and Inter-correlations.1

Variable 1. Job Satisfaction at T1 2. Job Satisfaction at T2 3. Remembered Change in Job Satisfaction 4. (T2 – T1) Job Satisfaction 5. Organizational Commitment 6. Labor Grievances

M

SD

1

2

3

4

3.62 3.67 4.18

0.91 0.94 1.19

0.37 0.13

0.29

–0.04

1.04

–0.54

0.58

0.15

3.58

0.71

0.34

0.53

0.44

0.19

2.22

7.83

0.00

–0.13

–0.20

–0.12

5

–0.13

Note: 1. For N = 209 a correlation of 0.14 is significant at p < 0.05 and a correlation of 0.18 is significant at p < 0.01.

Table 2.

Comparing Longitudinal and Remembered Change.

Direction of the job satisfaction change Satisfaction decreased No change in job satisfaction Satisfaction increased

Longitudinal Change1

Remembered Change1

Agreement Between Measures of Change2,3

23.3% 52.5% 24.2%

12.9% 57.6% 29.5%

22.2% 64.6% 40.8%

Notes: 1. The percentages refer to the distribution of respondents to each measure of job satisfaction. The first two columns add to 100%. 2. Agreement between the two measures of change was calculated after collapsing each measure into: less, no change, more. 3. The overall level of agreement between the two measures averages 48.9% across all three categories of change: decreased, no change, and increased.

Table 2 shows a more detailed view of job satisfaction change. Although both measures of change, Longitudinal and Remembered, show a majority of respondents said there was no change, about 45% of the respondents did say that there was change. The Longitudinal Change data suggest that on an overall basis there was no net change. This is because the number of those indicating increasing vs. decreasing job satisfaction are almost identical, thus balancing each other out. Examining only the means of job satisfaction at T1 and T2 gives the appearance of no change, but the more detailed data in Table 2 show that this is not true.

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In contrast to the Longitudinal Change data, the Remembered Change data indicate that there were more respondents who felt satisfaction had increased as opposed to decreased. Again, looking only at the mean of the Remembered Change measure would lead one to think there was little change, because the mean is so close to the mid-point of the scale that was used. This conclusion is incorrect, as indicated by the more detailed data in Table 2. The final column in Table 2 shows the level of agreement between Longitudinal and Remembered Change. The direction of Longitudinal Change was calculated by comparing responses from T1 and T2 to each other. To simplify the comparison, only the direction of change from T1 to T2 was calculated, and the amount of the change was collapsed into either “more” or “less”. The direction of Remembered Change was derived directly from the way that the item was worded, i.e. response categories 1–3 indicated decreases, 4 indicated no change, and 5–7 indicated increases. There are some clear differences in the level of agreement depending on the respondent’s own experience. Those who experienced no change in job satisfaction tended to provide data that agreed. However, those reporting a decrease in job satisfaction had the lowest level of agreement between the two measures. Finally, on an overall basis it appears that Remembered Change in job satisfaction is more positive than Longitudinal Change when you compare the ratio of those reporting an increase to those reporting a decrease. Table 3 shows the relationship between different measures of change in job satisfaction on the one hand, and organizational commitment and the filing of labor grievances on the other. The top two lines in Table 3 show the results for a situation when an OD researcher/practitioner has longitudinal data available, i.e. Longitudinal Change based on having measures of job satisfaction from both T1 and T2, and a measure of Remembered Change at T2. As can be seen, adding Remembered Change to Longitudinal Change adds significant explained variance in both organizational commitment (from 30% to 40%, p < 0.01) and in the filing of labor grievances (from 2% to 5%, p < 0.05). The bottom line in Table 3 shows the results when the OD researcher/practitioner has data from only one point in time (i.e. after an intervention, or T2 here). When this occurs, only Remembered Change can be used. As shown in Table 3, Remembered Change predicts a significant amount of variance in organizational commitment (19%, p < 0.01). However, the amount of variance predicted by Remembered Change alone is significantly less than Longitudinal Change (19% vs. 30%, p < 0.01). Remembered Change predicts a significant amount of variance for labor grievances (4%, p < 0.05), and the amount of 297

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Table 3.

Relationship of Change in Job Satisfaction to Organizational Commitment and Grievances. Organizational Commitment

Number of Grievances

Both T1 and T2 Data Available: T1 + T21 T1 + T2 + Remembered Change

R2 = 30% R2 = 40%

R2 = 2% R2 = 5%

Data Available only at T2: Remembered Change

r2 = 19%

r2 = 4%

Measure of Change in Job Satisfaction

Note: 1. T1 and T2 refer to job satisfaction measured at two points in time, which were 21 months apart.

variance predicted is greater than that predicted by Longitudinal Change (4% vs. 2%, p < 0.05). Finally, as has been suggested by Edwards (1994), it is possible to detect non-linear effects by entering quadratic and cross-product terms after linear effects. This was done, but no incremental variance was accounted for in any of the regressions.

DISCUSSION The basic purpose of this research was to assess two alternative measures of change in job satisfaction, Longitudinal vs. Remembered, because we believed that they might be complementary. To do this, an analysis was conducted of how the two measures of change jointly and separately predict a job attitude (organizational commitment) and a job behavior (filing labor grievances). Because there is an existing body of research and theory on both of these correlates of job satisfaction, they seemed reasonable choices for this initial investigation. As noted earlier, however, neither turnover nor job performance data were available to be studied here, although they would be excellent choices for future research of this type, because these are two important behaviors that have been linked to job satisfaction. Our data analysis approach goes beyond previous research, and is the most distinctive aspect of the present study. The approach taken here is consistent with one of the two main reasons for gathering data on change, i.e. to test hypotheses that relate two constructs having a hypothesized causal relationship. All previous studies of Remembered Change involved simple comparisons between it and Longitudinal Change, typically a percentage of agreement. Our

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replication of this approach shown in Table 2 produced results similar previous efforts of this type. The results of using these two alternative measures of change in job satisfaction together as predictors of commitment and grievance filing are quite interesting, as shown in Table 3. When used to predict organizational commitment, both Longitudinal Change (30%) and Remembered Change (19%) explain significant amounts of variance when each it used by itself as a predictor. However, combining the two together explains significantly more variance than either measure of change alone (40%). This suggests that each contributes unique explained variance. It is also interesting to compare the amount of variance explained in organizational commitment with our data to the overall results found in two meta-analyses of this relationship. In the first to be published (Mathiew & Zajac, 1990), the average correlation across studies was estimated as r = 0.45, which translated into 25% variance accounted for. In the second one (Tett & Meyer, 1993), the average correlation was estimated as r = 0.41, which translates into 20% explained variance. We believe that the main reason our results (40% explained variance using both measures of change) are stronger than either of these averages is due to the measures used here. We used two complementary measures of change in job satisfaction. This is different from most of the research reviewed for the meta-analyses in two ways. First, we used measures of change, rather than a single, static measure of job satisfaction. Second, we used two complementary measures of change. In effect, we believe that a focus on change in job satisfaction is closer to the underlying theory in which satisfaction and commitment are related to one another (e.g. Wanous, 1992) than is a static measure of job satisfaction. Further, using two measures meant that we used more predictors than in the typical study, which would just use one – a static measure of job satisfaction. For the prediction of labor grievances, a similar pattern emerges. Both Longitudinal Change (2%) and Remembered Change (4%) predict significant amounts of variance, and the combination of the two together predicts the most variance (5%). Although the results for labor grievances parallel those for organizational commitment, there is a clear difference in the overall amount of variance that was explained. We think that the most likely reason for this is that labor grievance filing is a variable with some restriction-in-range as compared to organizational commitment. The distribution of grievance filing is skewed in the sense that many employees did not file any grievances during the 21-month period studied here. A minority, however, filed multiple grievances, resulting in a relatively low mean level of grievance filing combined with a fairly high standard deviation. 299

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In a similar vein, had we used turnover as an additional criterion to be predicted by changes in job satisfaction, the explained variance would have probably been close to zero, because there was almost no voluntary turnover. It is an axiom of psychometrics that the correlation between a variable and a constant is r = 0. Both job satisfaction and organizational commitment have somewhat normal distributions, as contrasted with labor grievance filing. It might appear that there was little change in job satisfaction based on the means for T1 and T2, as well as the mean level of Remembered Change being almost at the center (i.e. “no change”) point of that scale. Upon further inspection, however, there was evidence of change in job satisfaction as shown in Table 2. It can be seen that about 45% of the sample reported some type of change (either increasing or decreasing satisfaction), regardless of which measure of change was used. From a practical point of view, the data in Table 2 suggest that using the Remembered Change measure results in more positive results compared to Longitudinal Change, because there were 2.3 persons reporting an increase for each person who reported a decrease. On the other hand when Longitudinal Change is used, the ratio of those whose satisfaction increased divided by those whose satisfaction decreased is 1.0. Some might argue that the results shown in Table 3 could be the result of common method variance. However, we believe that this often-used criticism does not apply here. The logic of common method variance is that those constructs having similar measurement will be correlated with each other simply due to common methods. To see whether this is a reasonable explanation of the results here, we will focus specifically on the relationship between job satisfaction and organizational commitment. We do this for two reasons. First, job satisfaction and organizational commitment are both job attitudes. In contrast, labor grievance filing is a report of one’s actions over a two-year period. Thus, labor grievance filing is not report of an internal state-of-mind, but rather a report of one’s own behavior. Second, the relationship between job satisfaction change and organizational commitment is not as attenuated as that between job satisfaction change and labor grievances. Measures that have common methods tend to correlate with each other because of the commonality in measurement. Despite the commonality among the measures of Longitudinal Change, Remembered Change, and organizational commitment, there were clear and significant differences among them as shown in Table 3 and discussed above. Although common method variance may elevate relationships, it elevates all relationships. Thus, it is not a reasonable explanation of the differences in explained variance for each measure of change, nor for the finding that their combination predicts the most variance in organizational

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commitment. In summary, we believe that these results suggest that there may be a future role for Remembered Change as a complement to Longitudinal Change, and possibly as a substitute when Longitudinal Change data cannot be obtained. Why Does Remembered Change Add Incremental Explained Variance? In some ways this may be the most important question that can be asked. Without a reasonable explanation these results might be considered a fluke by those skeptics who steadfastly believe that the “gold standard” for measuring change can only be Longitudinal Change. Our assumption is that the criteria used here, organizational commitment measured at T2 and the number of labor grievances filed between T1 and T2, are best explained by the amount and direction of change in job satisfaction. Further, we believe that measuring change in job satisfaction over time with two “snapshots in time”, i.e. T1 and T2 job satisfaction levels, will likely omit any change that occurred during the time interval between the two measurements. In our study the 21-month time period is fairly long by the standards for research in organizational studies. This lengthy interval increases the chances that using just T1 and T2 (i.e. “snapshots” of job satisfaction) may have missed important events that could have affected job satisfaction during this period. We may be stretching things a bit, but one needs to know more than how a golfer scored on holes No. 1 and No. 18 in order to determine how well the round went on that particular day. There is a body of work in basic cognitive psychology dealing with the meaning of “similarity” (Medin, Goldstone & Gentner, 1993) that we believe provides an additional reason why Remembered Change may be a valuable, complementary measure. Medin, et al. (1993) believe that judging the similarity of two entities is not merely a simple calculation. For example, asking someone to compare the present Chief Executive Officer (CEO) to the former CEO is a very complicated process, and one that only makes sense if the phrase “in what respects” are the two CEOs similar (and different) is added to the question. Our measure of Remembered Change implicitly asked survey respondents for a comparison of T1 with T2, because the question explicitly said: “how much has your job satisfaction changed since the first survey, if there was any change”. In order to answer this question, respondents had to engage in the psychological process of judging similarity in levels of job satisfaction between the two points in time that were 21 months apart. The respondents may have had to do more than just judge similarity of T1 and T2, because the Remembered Change question is actually more complicated than that. Respondents may have 301

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considered all of the “ups and downs” over the 21-month period, or any trend that might be apparent to them, before responding with their judgment about overall change. Asking respondents to provide Remembered Change is asking them to think about a lot of things, as should be clear by now. Although it may be a fairly simple-looking question, a thoughtful response probably requires a variety of cognitive processes, e.g. memory, interpretation of events, a consideration of whether any trend might continue, and a summary judgment. The inherent complexity of the Remembered Change question and the fact that it is an explicit measure of change are probably the two reasons why it explains variance in organizational commitment and labor grievance filing beyond the Longitudinal Change measure. Longitudinal Change is really two “snapshots” at the beginning and end of a long time period, and may have been deficient because of this. Further, Longitudinal Change was “calculated” by the researchers (by including both in a regression model). Thus, Longitudinal Change was not directly assessed by the employees themselves. In contrast, Remembered Change was assessed by the employees themselves, based on their knowledge and feelings about what they had experienced.

FINAL THOUGHTS ON REMEMBERED CHANGE Our approach was to assess Remembered Change (using job satisfaction as an illustration) in terms of its associations with other theoretically-related constructs, rather than its use as a measure of the amount of change that has taken place. Our approach is one of testing hypotheses about the relationships among constructs relevant for both the science and practice of OD, rather than measuring the amount of change in job satisfaction resulting from an OD effort. Despite our focus on research and hypothesis testing, we believe that the data presented here are encouraging for the future use of Remembered Change in the assessment of OD efforts when the focus is on documenting the amount of change that has taken place. This is because Longitudinal and Remembered Change should be considered as alternative measures of change, a perspective that has been completely ignored, if not outright rejected, up to now. The reason for believing that Remembered Change was inferior to Longitudinal Change has some basis in fact, because when the two are compared they disagree about as much as they agree. (In fact, our own data re-affirm this conclusion that had been reached over 20 years ago, because the overall percentage of agreement for our data was 49% as shown in Table 2, and this is typical of such comparisons.)

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In the past researchers concluded that the data on percentage agreement meant that Remembered Change was flawed. Our view is that both Longitudinal and Remembered Change are likely to have some true variance, as well as some error variance, as is the case for all survey questions. We did not assume that one measure of change is inherently superior to the other. This is in contrast to all previous researchers who have consistently assumed that Longitudinal Change is the better measure, and in some cases considered to be the only true measure of change. Because our data show that using both measures of change is desirable for examining relationships among certain variables, we think that the future use of Remembered Change is much brighter than it has been since the first comparisons between it and Longitudinal Change were made about 40 years ago. In situations where it is impossible to obtain longitudinal data, asking employees to remember the degree of change may be used for examining relationships among variables with reasonable confidence. Extending the use of Remembered Change to measuring the amount of change that has occurred is indirectly supported by our data, but its use for this purpose still needs to be established with more research. We must add one word of caution in using Remembered Change to measure the amount of change occurring from an OD intervention of some type. This is because there were more individuals saying that their job satisfaction had increased when Remembered Change was used than when Longitudinal Change was used. If this finding were to be replicated it might lead to an interesting discussion about its usefulness. Those who believe that Longitudinal Change is the better measure might argue that using Remembered Change introduces a bias that might make an OD intervention seem more successful than it really was. On the other hand, those who believe that both measures of change have merit (such as us) might argue that Remembered Change is the more theoretically relevant, and perhaps more sensitive of the two measures for detecting changes associated with OD interventions. At present, however, we can only speculate and hope that more research might be conducted. Although our focus was on the amount of change in job satisfaction that took place over a 21-month period, it might be wise for OD researchers and practitioners to also obtain a measure of remembered job satisfaction from an earlier point in time, similar to the “retrospective T-test” (Howard & Daily, 1979; Howard, Ralph, Gulanick, Maxwell, Nance & Gerber, 1979). The retrospective t-test was designed to measure change when one has data from only one point in time, i.e. after an intervention of some sort. Respondents are asked to remember the levels of relevant variables from before the intervention (T1), and then are asked to state their opinions about the current levels for the 303

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same variables (T2). It would be interesting to compare Remembered Change with another measure of change based on the remembered level at T1 and the level as reported at T2. This is because we think that respondents are implicitly asked to do this when asked a direct question about Remembered Change. We assume that these two methods should be closely related, but only future research can establish whether this is a reasonable assumption. Another interesting question for future research would be to provide respondents with their own responses from an earlier survey, and then ask them how their satisfaction has changed since then. To our knowledge, no one has yet to gather this latter type of data. Clearly it is more difficult to obtain than simply asking for Remembered Change, because respondents would have had to provide some means of matching two surveys to each other, e.g. their names. Besides this, respondents would have to be informed of their previous responses by those conducting the surveys. This is obviously a much more complicated way to gather data. Furthermore, pointing out one’s previous response to an item might create suspicion in the minds of respondents as to the true purpose of the research. Suspicion would be exacerbated in organizations with high levels of cynicism (Wanous, Reichers & Austin, 2000). If one were to obtain both measures just described, some interesting comparisons could be made. First, Remembered Change in job satisfaction (the type of measure gathered here) could be compared to an alternative measure that used remembered T1 job satisfaction and current T2 satisfaction. Logically, they appear to be similar, if one believes that respondents do some sort of “mental arithmetic” before answering the remembered change question. On the other hand, if the Remembered Change question is more complex, as implied by Medin, Goldstone and Gentner (1993), then these two measures might differ. A second interesting question comes from providing respondents with their actual responses to a previous survey. They could be asked to: (a) rate their current satisfaction in light of their previous level; (b) rate the amount of change in satisfaction, given the previous level. Although these two questions appear to yield the same result, they may differ to the extent that cognitive processing is not simply algebraic, a point also made by Medin, et al. (1993). Another interesting survey question would be to ask respondents if they want to revise their T1 level of satisfaction, given how they now feel about the job at T2. This would lead to a consideration of when, and under what circumstances, people prefer to “revise history.” To our knowledge, this is another question that has yet to be studied. It may also be desirable to examine the “shape” of change that has occurred by asking more detailed questions than was done here. Our measure of Remembered Change focused on overall change (how much and in what

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direction). It did not concern other aspects of change that might have occurred during the intervening 21 months between the two surveys. For example, one additional question might concern the extent to which change was steady vs. abrupt, as described by Weick and Quinn (1999). If an abrupt change occurred, it might be worthwhile to inquire as to when it happened during the intervening period. A second question might concern whether there were “peaks and valleys” during the intervening period, because this would focus on the nonlinearity of change. (We examined our data for this possibility – to the extent possible with only two data points – using polynomial regression, but found no effect.) One way to measure both of these additional facets of remembered change would be to ask respondents to trace out the “shape” of their job satisfaction during the period of inquiry. Research indicates that this more “fine grained” approach (vs. more “coarse” Likert-type scales) can be useful (Russell & Bobko, 1992). The primary advantage of this is that employees can provide a retrospective account of the “ups and downs” for a particular variable, e.g. job satisfaction, as a substitute for administering multiple surveys over time. Finally, our study of Remembered Change focused on changes in job satisfaction, because our concern was with hypothesis testing. Job satisfaction has been shown to be correlated with other job attitudes and with several job behaviors. Various theories and models have also been developed to explain the correlations with these attitudes and behaviors, e.g. Judge et al. (2001) identified seven models that purport to explain the relationship between job satisfaction and job performance. However, we believe that for the other purpose that people gather measures of change – measuring the amount of change – job satisfaction might not be the best choice, or maybe not a good choice at all. For the documentation of change that is expected to result from specific OD interventions, the researcher/practitioner should develop measures that match the nature of the intervention itself. For example, in our previous chapter in this series (Wanous & Reichers, 2001) we developed survey measures that directly related to the four task force interventions: (a) changes in the physical environment, i.e. trash containers; (b) changes in preventive maintenance activity; (c) changes in the credibility of managers as seen by lower level employees; and (d) changes in efforts to improve product quality. If the results for Remembered Change with regard to hypothesis testing, as shown here, seem encouraging, then those applying this technique to the documentation of change should ask specific questions directly related to the types of OD interventions. Using general job attitudes such as job satisfaction or organizational commitment would not be good choices for this purpose because they may be too general and, thus, insensitive to the nature of the OD activities that had been conducted. 305

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APPENDIX 1 Job Facet Items1 (1) The amount of job security I have. (2) The fringe benefits I receive. (3) The relationship I have with my co-workers. (4) The amount of independent thought and action I can exercise in my job. (5) The amount of challenge in my job. (6) The relationship I have with my immediate supervisor. (7) The working conditions. (8) The recognition I get for good work. (9) My chances for promotion. (10) The amount of variety in my job. (11) The attention paid to suggestions I make. Note. 1. The response categories for the above 11 job facet satisfaction items was: 1 = Very Dissatisfied; 2 = Dissatisfied; 3 = Neither Satisfied nor Dissatisfied; 4 = Satisfied; 5 = Very Dissatisfied, NA = Does not Apply.

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ABOUT THE AUTHORS José DelaCerda is a consultant and researcher of business and public organizations. He has published five books and numerous research articles dealing with management problems in Mexican organizations. He is considered a leading thinker in the field of management and organizational change in Mexico. J. DelaCerda obtained his B.A. from ITESO University and his M.A. (labor and industrial relations) from Michigan State University. Mike Geppert (Ph.D., Humboldt University Berlin) was a worker and management assistant before, and a consultant during, his academic career. He is a lecturer in Organizational Behavior at the University of Wales Swansea. He serves on the advisory board of Human Resource Development International. He has published in various journals, such as Organizational Studies, Journal of Management Studies and Human Resource Development International. In 2002 he received the Carolyn Dexter Best International Paper Award of the Academy of Management. Besides his studies in organizational learning in postsocialist societies, he is doing cross-national comparative research in change management in multinational firms. Judith R. Gordon is an Associate Professor of Management in the Carroll School of Management at Boston College. Dr Gordon’s research and publication interests focus on organizational change, information systems delivery, managerial effectiveness, and the career development of women. She has published articles in such journals as the Academy of Management Executive, Women in Management Review, Human Resource Planning, Information Systems Management, Information & Management, Sloan Management Review, and Academy of Management Review. She is the author of Organizational Behavior: A Diagnostic Approach, Information Systems: A Management Approach, and Human Resources Management: A Practical Approach. C. R. (Bob) Hinings is Professor Emeritus and Senior Research Fellow in the Department of Strategic Management and Organization, Faculty of Business, University of Alberta. He is currently carrying out research on strategic organizational change in professional service firms within Canada and Australia, health services in Canada and Canadian Olympic sport organizations. In 1999 311

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ABOUT THE AUTHORS

he was the recipient of the Distinguished Scholar Award from the Organization and Management Theory Division of the Academy of Management. He is a Fellow of the Royal Society of Canada and a Fellow of the Academy of Management. Lynda M. Kilbourne (Ph.D. 1990, University of Texas at Austin) is an Associate Professor of Management at Xavier University. Her research focuses on the interface of organizations and individuals, examining such issues as individuals’ perceptions of organizational change; organization culture, organization systems and individual creativity and team performance; and individuals’ use of information in high reliability organizational decision-making situations. She has published in Organizational Behavior and Human Decision Processes, the Journal of Management Inquiry, and Research in Organizational Change and Development. She has previously served the ODC Division as Representative at Large. Chung-Ming Lau is Chairman and Professor of the Department of Management at the Chinese University of Hong Kong. He obtained his Ph.D. from Texas A&M University in the field of organizational behavior. His BSSc (Economics) and MBA degrees are from the Chinese University of Hong Kong. His teaching and research interests include organization change and development, strategic change, organization culture, and management of Chinese organizations. As a result of the academic research work, he publishes in leading journals such as Academy of Management Journal, Journal of Applied Psychology, Journal of International Business Studies, International Business Review, Entrepreneurship: Theory & Practice, International Journal of Human Resource Management, and Asia Pacific Journal of Management. He was a co-editor for special issues in Organization Science, Academy of Management Journal and Asia Pacific Journal of Management. He also co-edited several books, including China Review 2000 (Chinese University Press, 2000), Asian Management Matters: Regional Relevance and Global Impact (Imperial College Press, 2000), and The Management of Enterprises in the People’s Republic of China (Kluwer Academic Publishers, 2002). Michael R. Manning is Professor of Management in the College of Business Administration and Economics, New Mexico State University. He is very active as a management educator and organizational consultant. Manning received his Ph.D. in administrative science from the Krannert Graduate School of Management at Purdue University and his B.A. and M.A. degrees from Whitworth College, Spokane, Washington. His research and publications focus

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on topics related to the management of change, whole systems change using large group interventions, organizational stress, and processes of collective action. Susan L. Manring, Ph.D. was an organizational consultant for 20 years before joining the Martha and Spencer Love School of Business, Elon University in 1996. Current areas of interest include large-scale systems change, organizational learning, high performance teams, and contingency models for leadership. A major focus of her research, consulting, and published work is the motivation, retention, and productivity of technical professionals. She received the Ph.D. in organizational behavior from Case Western Reserve University in 1980. Paul C. Nutt is a professor of Management Sciences and Public Policy and Management in the Fisher College of Business at The Ohio State University. He received his Ph.D. degree (1974) from the University of Wisconsin – Madison and a B.S. and M.S. from the University of Michigan, all in Industrial Engineering. His research interests include organizational decision making and radical change. Current topics in decision making include averting decision debacles, decision-making tactics, ethics, and learning. Change topics include organizational transformation and de-development, vision, strategic management, and leadership. He has written over 100 articles and seven books on these topics that have received numerous awards from the Decision Sciences Institute, The Academy of Management, and The Institute for Operations Research and The Management Sciences (INFORMS), The Center for Creative Leadership, AAMC, FACHE, and others. He is a Fellow in the Decision Sciences Institute. His books include Why Decisions Fail for Berrett-Koehler and The Strategic Management of Public and Third Sector Organization and Making Tough Decisions for Jossey-Bass. His work has appeared in the Wall Street Journal, Fast Company Magazine, and PRI’s Marketplace. He serves on several editorial review boards, including the Strategic Management Journal, and regularly consults for public, private, and non-profit organizations. Arnon E. Reichers is Associate Professor of Management and Human Resources in the Fisher College of Business at The Ohio State University. She has been at Ohio State since 1982. Her Ph.D. is from Michigan State University in 1983. Arnon is best known for her work on organizational commitment, particularly the concept of multiple commitments, for work in organizational socialization, and for her more recent work on cynicism about organizational change. She was co-author with John Wanous for a chapter in Volume 13 of this series. Arnon Reichers and John Wanous are married to each other. 313

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Christie K. Struckman is an assistant professor at San Jose State University. She teaches courses in organizational change and leadership. Her research interests include organizational change, leadership, research methods around change, time and organizational resistances. Before getting her Ph.D. from Binghamton University (2001), Christie worked at Intel for ten years. She worked in the Information Technology department doing project management and strategic planning for eight years, then organizational development in the manufacturing department for the last two. In addition, she has worked with various K-12 school districts to develop five-year strategic plans as well as facilitate School Board teams. John P. Wanous is Professor of Management and Human Resources in the Fisher College of Business, and Joint Professor of Psychology in the College of Social and Behavioral Sciences, at The Ohio State University. He has been at Ohio State since 1983, having previously been a business professor at both NYU (1971–1976) and Michigan State (1976–1983). He received the Ph.D. in Administrative Science from Yale University in 1972. John is best known for his research and writing about “organizational entry”, a term he coined in 1976, and particularly the “realistic job preview”. More recently, he has published research on employee cynicism about organizational change, a chapter in Volume 13 of this series, with co-author Arnon E. Reichers, and the reliability of single-item measures. John founded and has been Editor for the Managing Human Resources series of books since 1977. This series was originally published by Addison-Wesley, but since 1999 has been published by PrenticeHall. John Wanous and Arnon Reichers are married to each other. Karen S. Whelan-Berry is an Associate Professor of Management at Texas Wesleyan University. Karen’s research interests including the organizational change process, optimal resource allocation during organizational change efforts, and work-life issues. Her extensive corporate background gives Karen a unique stance regarding practice and theory, and the relevance of academic research to day-to-day organizational life. She teaches a variety of management courses, including organizational change and development. Richard W. Woodman (Ph.D., Purdue University) is the Fouraker Professor of Business and Professor of Management at Texas A & M University where he teaches organizational behavior, organizational change, and research methodology. He served as Head of the Department of Management from 1993–1997. His research interests focus on organizational change and organizational creativity. His current research and writing explores the role of the organization

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in individual change, the relationship between processes of creativity and organizational change, and reoccurring patterns in the failure of change programs. Woodman is co-editor of the JAI Press annual series, Research in Organizational Change and Development; his co-authored text, Organizational Behavior, is in its 9th edition. Francis J. Yammarino (Ph.D., State University of New York at Buffalo) is Professor of Management and Fellow and Director of the Center for Leadership Studies at the State University of New York at Binghamton. He serves on the editorial review boards of seven scholarly journals including the Academy of Management Journal, Journal of Applied Psychology, and Leadership Quarterly, and is Co-Editor of Research in Multi-Level Issues. He is a Fellow of the Society for Industrial and Organizational Psychology and the American Psychological Society. His research and consulting interests include superiorsubordinate relationships, leadership, self-other agreement processes, and multiple levels of analysis issues.

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Research in Organizational Change and Development. Volume 14

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