Summary with the 4th edition of Organizational Change: Theory and Practice by Burke

What are the basics of organizational change? - Chapter 1

What does this book focus on?

Every day organizations keep on changing. However, planned organizational change is rare. Especially revolutionary change, which means a major change in an organization resulting in a new or changed mission, change of strategy, leadership and culture, is rare. This book focusses on the differences between planned and unplanned changes and revolutionary and evolutionary changes. The most emphasis is placed on the planned and revolutionary changes, because organizations now need this kind of planning to catch up with the changing environment around them. Business organisations do not last as long as they used to anymore. Another distinction is important to know to understand organizational change. Organizations are built to be continuous (to stay). However, the external environment is built in a discontinuous way. The factors in the external environment are therefore unpredictable. These factors can cause creativity but also destruction.

There are different kinds of knowledge for organizational change. The first one is literature based on organizational change theory (continuity). The second is trade literature, professional books written by experienced consultants and practitioners. John Kotter, consultant and academic wrote an eight-stage process for organizational change, based on his experiences:

1. Establish a sense of urgency.
2. Create the guide coalition.
3. Create a vision and strategy.
4. Communicate the vision for change.
5. Empower the employees for broad-based action.
6. Generate short-term goals and wins.
7. Consolidate these gains and produce more change.
8. Try to get new approaches in the culture.

Books based on experience can be helpful, but always remember that they are based on the experience of one person. A third kind of literature is story books, with the goal of teaching something to the readers. These kind of books are easy and fun to read, but they tend to oversimplify the themes they describe. On top of these kinds, there are also books that are cannot be simply placed in one of these categories.

What are the important principles in organizational change?

There are a few important principles in organizational change. The changing of an organization is a response to the ever-changing, complex external environment. The members of an organizations must see the need for this change before they are willing to work on it (expressing the need). Therefore it is necessary to create a sense of urgency and to provide a vision for the future. People plan change in a linear fashion, but change is not linear, because of unintended consequences. Also resistance can be the case. There are individual differences in resistance. To create successful organizational change, the change leader needs to be transparent, nondefensive, and persistent yet patient.

What is organizational change? - Chapter 2

Seventy-five percent of the efforts made by executives, managers and administrators trying to change the organizations they lead are not working. Typically changes exist of fine-tuning a specific part of the organization, instead of the changes and adaptations to the environment that are needed. There are different reasons why fundamental organizational change is rare. The most important one is that deep organizational change is very difficult. Second, it is often hard to initiate change, especially when the organization appears to be doing well. Usually at the peak of success is actually the best time to start bringing changes (paradox). The third reason is that our knowledge to implement organizational change is limited.

What is planned organizational change?

When planning organizational change, it is usually planned stepwise (Step/Phase 1, Phase 2, etcetera) But this linear assumption is not what happens in reality. The implementation of plans of organizational change does not always goes the way it was planned and unanticipated consequences occur because of this. When clear change goals are stated and change leaders are staying on course, the end-result may be somewhat linear. But the process might feel very chaotic to the employees. So, although planning organizational change is necessary, we must realise that things will never turn out the way we planned it, it is a paradox.

What does organizational change consist of?

According Foster and Kaplan, we are now in the age of discontinuity. They demonstrate this concept with multiple examples. First, they looked at the Forbes list top 100 companies list in 1917 and 1987. In this time period, 61 of the original top 100 companies no longer existed. Only 18 remained in the top 100. Secondly, Foster and Kaplan refer to the Standard & Poor’s (S&P) 500 1957, of which only 74 of 500 companies still exist in 1998. Part of this is due to the pace-of-change phenomenon. Back in 1917 continuity was the ultimate goal for corporations and change was not a major concern. Companies would stay around 65 years on the list. Vertical integration, owning as much of the production chain as possible (ranging from the materials to selling it to the customers), was the spirit. Nowadays, corporations have an average lifetime of 10 years.

Other answers to the changing corporations survival rate can be found in corporations' external environment. One of the most important factors is the capital market, which is an informal aggregation consisting of buyers, sellers, stock analysts and anyone else with money to invest. Together they decide if your organization is worthy of investment. Capital markets change way faster than corporations. Also, the consumers have a fundamental role in an organizations future, because they determine the fate of any business. The main point made by Kaplan and Foster is that corporations are based on continuity, while capital markets are based in discontinuity. To succeed, corporations need to change their cultural lock-in, meaning the inability to change the corporate culture even if clear market threats are present.

Government agencies also need to adapt to the changing environment. For example, the NASA (National Aeronautics and Space Administration) which is constantly monitored by different organisations on how tax pay dollars are spent. Now change is seen even at the state level.

What does change of higher education institutions and non-profit organizations consist of?

Even institutions of higher education are no longer only present in the non-profit sector. Also for institutions of higher education the external environment is changing, they need to adapt to technological changes and they are competing with eachother about tuition prices, fighting not to be left out in the market. Another example is the A.K. Rice Institute (AKRI), an institute with interest in human relations and group dynamics training and education. the AKRI has been both a membership organization and an educational institute, the most qualified members where selected to provide education, the others had to do the dull AKRI objectives work. This caused conflicts and dissatisfied members within the organization. This example shows the AKRI was not in touch with the external world enough, because of the internal conflicts. Now that the AKRI is acknowledging the importance of adjusting to external factors (and only kept the educational mission), the likelihood is much greater that AKRI will survive.

In summary, the process of organizational change begins and ends with the external environment.

Personal view of the writer

According to Gareth Morgan we can understand an organization through different metaphors: machine, brain, psychic prison, or an organism. Morgan also warns us, metaphors can help but can also limit our perspectives. For this text, the metaphor of organism is used. In this perspective, an organization can be seen as an open and flexible entity. Also, certain needs must be satisfied to make the organization survive (which can be seen as a process, instead of a target). Downsides of this metaphor are the fact that an organism is concrete (fundamental of nature), while an organization is a social construct which does not maintain itself through an autonomic process. Furthermore, this metaphor acts as if organizations are totally dependent on the external environment, but organizations influence the external environment as well (interaction). Another limitation is that as organisms have interdependent parts, in organizations independent actions (e.g. creativity) by organization members might actually bring more result. The last limitation Morgan argues is that the metaphor might become an ideal: that interdependence always is a good thing.

The primary choice of theory accompanied with this metaphor is open system theory, derived from biology. Life sciences are more helpful in describing organizations than physical sciences are.

What are types and levels of organizational change?

Revolutionary change (sudden event) is also called discontinuous, episodic, transformational, strategic and total system change. Evolutionary change (gradual continuous process) is also called continuous, continuous flow, transactional, operational and local option change. Pascale, Milleman and Gioja say that now organizations over time need evolution and revolution. The trick for change is to correctly identify the problem and then use the right tool for the task. Revolutionary and evolutionary change both need different tools and techniques. Revolutionary change requires total systems and needs the attention of all organization members. Evolutionary change requires parts improvement measures in how something is designed/delivered/etcetera and may require only the attention of a segment of the organizational population.

Across the primary levels of any social system different effects of organizational change arise. The primary levels are individual, group/work unit and the total system. In large corporations the business unit (subsystem of larger organization) is added. Process of change is different for each level. At the individual level, the focus is on activities as recruitment, training, coaching, etcetera. At the group level, the focus is on activities as team building. At the total system level, most attention is placed at components of the organization that will be affected by the initial activity (e.g. culture, strategy, structure).

How does organizational change proceed?

To adapt to a changing external environment, organizations need to change their culture. Cultural change focuses on the human forces that either help or prevent transformations in the organization. Culture concerns deeply held beliefs, attitudes, and values. These beliefs are very hard to change when trying in a direct way (people will react with resistance) and therefore we start with changes in behavior first. These changes in behavior will lead to the desired change in attitudes and values.

The content of organizational change means the vision and overall direction for the change. The process refers to the implementation and adoption of the change. Different behaviors are needed for the content and process. Determining ‘what’ (content) requires leadership that is about composing a story of change and determining the ‘how’ (process) requires leadership that is about telling the story.

What models about organizations are there?

Frameworks about organizations are needed to simplify and focus. Good frameworks show reality and simplify at the same time. Many models or frameworks exist in both the academic and the applied worlds. When choosing which model to use, some questions are important to consider. First, what kind of theory is used for the model? Second, does the model have the most important and relevant factors or components? Third, is the model prescriptive or descriptive? Although these questions are important, they are also a bit leading. The writer describes the Burke 1-Litwin model of organizational performance and change as a very important model, because it is more normative than contingent on which actions should be proceed other actions and both transformational as transactional change is addressed.

Organizational change should be data-based and measured. Measures taken over time help to track progress, determine priorities for the next steps and determine when milestones are reached.

What is leadership?

Any planned organizational change needs leadership. In big corporations, leadership should come from the top of the organization, from executives. Leadership should take the form of specified roles and behaviors, not the form of a personality orientation. Overall, leadership is about doing things one’s own way, but with the goal of leading change according to key roles and sequenced activities.

What does the history of organizational change consist of? - Chapter 3

Organizational change is a very old concept. Actually, organizational change was already mentioned in the Old Testament, with Moses as the client. But what is new, is the study of organization change, which systematically seems to facilitate and enhance effective change (the achievement of planned change goals) and leads to failed attempts at organizational change.

What is Frederick Taylor’s Scientific Management?

The study of organization change starts with the work of Frederick Winslow Taylor, who invented scientific management in the first part of the 20th century. It is important to keep in mind that at this time, the Industrial Revolution was in full swing, manufacturing was the main type of organization experiencing considerable growth, and the most important disciplines were economics and engineering. That’s why Taylor spoke of an organization as a machine. Taylor based his scientific management on four principles.

1. The first is that Taylor gathered data by speaking to employees and time-and-motion-study methods.
2. The second is that Taylor paid great attention to worker selection and development (training).
3. His third principle is that scientific management and the trained worker need to be integrated.
4. His last principle is that management must assume new modes of work. The work of the company needs to be divided in that of the workers (actually doing the work) and that of the managers (plan and monitor the work). Taylor stressed the importance of the cooperation between these two.

Taylor showed a few times that his approach worked, but his ideas became controversial. He truly believed that taking a rational, scientific approach would be the best way for change. Also, he was one of the first to emphasize that listening to the needs of the workers, might lead to better production by the workers. His impact has been large, as seen in terms as reengineering and business process engineering, ISO 9000, six sigma, and total quality management.

What is the value of the Hawtorne Studies?

The Hawtorne Studies were of great value to psychology and sociology. The Western Electric Company sponsored a series of experiments at its Hawtorne Works in Chicago, starting in 1924 and going on till 1933. The experiment contained four categories: the illumination experiments, the relay assembly group experiments, the interviewing program, and the bank wiring group studies. The goal of these studies were to determine the effect of working conditions on productivity and morale. In the illumination experiments, was shown that it didn’t matter if workers were in the control group or not, production either increased or stayed the same. The researchers concluded that if light was an important factor for employee output, it was only one among many and that worker attitude was a significant factor. In the relay assembly experiment it was shown that regardless of the direction of change, production increased over time. The researchers conclude there is no cause-and-effect relationship between working conditions and productivity.

These studies have shown that worker attitude is a very important factor and provides information about factors other than physical working conditions contributing to positive worker attitude.

In 1928, new studies were set up to test the importance of attitude more thoroughly. One of the most important outcomes was learning how to teach supervisors about handling their clients’ complains, who actually most of the time complain because of other underlying problems. Results from the fourth study, which investigated social relations on the job, contain the importance of group norms and standards as well as the informal organization.

There are different reasons why the Hawthorne studies were precursors to our understanding of organizational change:

• They demonstrate importance of psychological or human factors on worker productivity and morale.
• Showed that autonomy on the job, lack of need for close supervision for people who know their job, importance of receiving feedback on the relationship between performance and reward, and having a choice and influence over change.
• Were the precursors of more humanistic treatment of workers.
• Provided evidence for Herzbergs’ motivation-hygiene notion (no direct cause-effect relationship between working conditions and productivity).
• They were the stimulus and provider of data for group dynamics, especially in work context.

Industrial (and organizational) Psychology

Industrial psychology started in the industrial, business and military organizations (right after World War 2) with as primary goal testing (questionnaires for selection/screening, reliability and validity), along with studies of morale and efficiency. Industrial psychology also was involved with training and development. In the late 1940’s- early 50’s, Edwin A. Fleishman started a study about whether supervisors’ attitudes and behaviour would change during a two week training on leadership principles and techniques. These tests consists of two important functions of leadership: initiation of structure (task direction and conditions for effective performance) and consideration (leaders’ sensitivity and ability to respond to the needs of employees). Surprisingly, as the training focused on consideration, supervisors sometimes showed less consideration for their employees after training. When further investigating this case, Fleishman found that there was a direct relationship between attitudes and behavior of the supervisors and those of their bosses. This led to the knowledge that organization change will probably not occur as a result of individual change strategy, unless the goal of the training is in line with overall organization change.

What is the Survey Feedback Method?

In 1947, researchers of the Likerts’ institute, combined questionnaire surveys for organization diagnosis and for group dynamics to organizational survey feedback method. One of the first studies in this field is done by Floyd Mann. He noted that when survey data was given to a manager, positive change is only seen when the manager talks the survey outcomes through with his subordinates. The survey feedback includes as a first step the survey, data collection by questionnaire to determine the perceptions of employees on various topics. Second is the feedback, in which the results of the survey are reported systematically to all the people who answered it. With systematically, an ‘interlocking chain of conferences’ is meant: the highest officer in the organization receives and discusses the results first, then subordinates do the same, until everyone who has been surveyed has gotten the results and discussed about the meaning and implications of the data. Usually, a consultant then meets with every group to help with data analysis, group discussion and plans for improvement.

Rensis Likert took this approach to the next level in 1967 with his Profile of Organizational Characteristics, a questionnaire which exists of 6 sections: leadership, motivation, communication, decisions, goals and control. The overall framework consists of:

• System 1: autocratic.
• System 2: benevolent autocracy.
• System 3: consultative.
• System 4: participative and consensus management. According to Likert and most employees system 4 is the most desirable.

When used in the proper way, survey feedback is powerful for the following reasons: it is based on data, involves organization members in a direct way, provides information about what to change and according to which priority, focuses change on the larger system.

What is the Sensitivity Training Method?

T-groups, laboratory trainings, and sensitivity training (meaning all the same) are a process invented in the United States around 1946, it consists of small-group discussions in which the most important source of learning information is the behavior of the group members themselves. Group members receive feedback on their behavior, which they can use as source for insight and development. At the same time they can learn about group behavior and intergroup relations. T-groups prove to be effective for individual change.

What aer sociotechnical studies?

In the mean time in the United Kingdom, other important social developments were worked on at the Tavistock Institute in London. Here group relations and diffuse innovative work practices and organizational arrangements were investigated (especially organization change). Eric Trist was the leader in the latter project. Trist and Ken Bamforth found, in a time when the coal industry was the major source of power in the UK, one company who could adapt to changes (e.g. mechanization). Trist conceptualized this paradigm further after his visit and developed it as sociotechnical systems. Primary principles of the sociotechnical systems are:

• Organizations consist of two interdependent systems: the technical and the social system.
• The work system is a basic set which consists of the activities that make up a functioning whole (not a single job or work).
• The work group is central, instead of the individual worker.
• An individual employee is complementary to a machine.

According to this view social (individual workers and groups of workers) and technical systems (machinery, chemical processes, etc.) are interdependent, meaning that a change in one of them will directly affect the other one. Sociotechnical studies need to be conducted at three broad levels. The first level is primary work systems, which are identifiable subsystems of a whole organization (e.g. department). The second is whole organization systems, which is the entire company or institution. The third one is macrosocial systems, which are organizations operating at a societal level or within communities and industrial sectors. Sociotechnical systems are based on open system theory.

How does the development of organizations proceed?

Organization development emerged out of sensitivity trainings and sociotechnical systems. Herbert Shepard and Harry Kolb set up the first sensitivity training to improve an organization in Louisiana. After them many names followed. Douglas McGregor is one of them, who was the founder of what is now called team building. During the late 1950’s, McGregor and Richard Beckhard helped to change some of the work structures which increased teamwork and increased decision making on the shop floor (bottom-up management), nowadays called sociotechnical systems change effort. They called it organization development. When Shepard started to work for TRW systems, much of the tools we still use today for organization change and team building were developed, such as organization mirror (reflecting back to members of a work unit in how they see themselves versus how other see them).

Action research approach, designing a study with the purposes of application and correction of some problem, started at Harwood-Weldon and gradually incorporated the method of survey feedback. So, the methodological model for organization development is action research approach. Specific tools in this methodological model are: 1) diagnosi,s 2) feedback, 3) discussion of what these data mean and planning steps for change, followed by 4) intervention.

What is the managerial grid?

Build on the work of Fleishman in the 1950’s, Blake and Mouton relabelled the two dimensions of leadership (initiation of structure and consideration) as production and people. A typical manager of leader had different concerns for each of them, the degree of concern were placed on a graph, using 9-point scales. The position on this graph resulted in a two-dimensional model that describes managerial style: the managerial grid. The combination of these two concerns determine the managers style. Blake and Mouton applied this model to organization change, and called it ‘grid organization development’. Studies of Black and Mouton showed that most issues arise due to communication problems and a lack of planning. They argued that these barriers were symptoms of less than optimal performance, not causes: which were that that management is not having a strategy/having a bad one (for lack of planning) and poor supervision and management (for communication problems). In their plan they had different phases:

• Phase 1: train all managers to become a 9,9, or participative, manager.
• Phase 2: teamwork development.
• Phase 3: intergroup development (cross-functional group work).
• Phase 4: developing an ideal strategic corporate model.
• Phase 5: the implementation of phase 4.
• Phase 6: systematic critique of first five phases.

This approach can be a very successful one, but that is mostly dependent on the managers tolerance for a lock-step approach in which there is only one best way to manage, and they have to be participative.

What is coercion used for?

Coercion has also been used as a social intervention. Groups who feel disenfranchised by their organization, confront the management with a need for changes that might be understood by in-group and outgroup theory. Muzafer Sherif , Coser and Deutsch have provided important ideas for these theories. Saul Alinsky was most important in the arena of community organizing and change. His model is very similar to one of planned change. The phases in Alinsky’s model are: entry, data collection, goal setting and organizing. Peabody argues that social dynamics are very important for studies of power.

Consulting management

One of the first management consultants is Jethro (of the Old Testament). Of modern times, Frederick Taylor is. In professional terms, James O. McKinsey was the first in the United States and in the United Kingdom Lyndall F. Urwick was. McKinsey was highly inspired by the work of Taylor, although Taylor emphasized the scientific approach and McKinsey the professionalism. McKinsey believed three key ingredients were needed for a professional practice: unquestioned respectability, professional exposure, and reputation. McKinsey’s consulting has been of great success. His emphasize is on a strict problem-solving process: first as much factual information possible needs to be found, then the cause of the problem found needs to be determined (interviews, company records, accounting and financial information). After this analysis, an initial hypothesis is formulated and tested. Third phase is to be highly structured, meaning: 1) limiting recommendation to be what can realistically done, 2) proposing a reasonable number of recommended actions, 3) establishing milestones that can be met with targets that can be achieved.

Today, management consulting is a very big and growing industry and is now referred to as change management.

What are the theoretical foundations? - Chapter 4

Organization change is grounded on two most important theoretical domains: open-system theory (stemming from biology) and a theoretical synthesis of recent thinking on shifts from physics to life science as the most important explanatory discipline.

Because of its dependence on the external world, every human organization can be understood as an open system. Closed systems only exist in non-living matter.

An organization can be understood through input-throughput-(transformation)-output, a kind of feedback loop. This means that for survival, any organization needs energy from its environment (such as money, product, service). This input is transformed into a product that can be sold on the market (back to the environment), and after it is sold the income from those sales become additional input. This sales income then reactivates the system.

Katz and Kahn argue that open systems maintain themselves through this continuous in- and output with the environment through permeable boundaries. The total organization represents a different entity as the sum of its sub elements (physical and technological parts, sub organizations or subsystems, people), just as the principles from the Gestalt psychology. For example, a hospital is something different than the sum of its beds, nurses, patients and operating room.

What are the characteristics?

Von Bertalanffy, Katz and Kahn decided 10 prominent characteristics that distinguish open systems:

1. Importation of energy: Any organization must draw energy to the organization from somewhere outside of the organization.
2. Throughput: Employees must take these raw materials and other sources from the environment and develop worker-opinion survey questionnaire, administer this survey in the client’s organization, collect/analyse data and develop a report as a result of this.
3. Output: Hand in the report, talk it through with client to determine appropriate action and collect a fee for the services rendered.
4. Cycles of events: The term 'events' is used by Katz and Kahn to describe the structure and boundaries of an organization. Events, rather than things, provide identity. Boundaries are defined by social structures, the chain of events between and among people. A cycle of events is what establishes and identifies an open system (in this case, an organization). For example, for a consulting organization: purchasing, hiring, preparing surveys and providing service along with it, collecting money from client to purchase more raw materials and eventually contracting with the same/new client is a cycle of events.
5. Negative entropy: Described in general systems theory, entropy is the universal law of nature in which all organizations eventually move to disorganization and death. This can be caused by spending more energy (money) than an organization receives (sales) (thwarting the natural process of entropy) Organizations are not self-sufficient, and need active and deliberate effort to expend to survive or grow. Interpersonal trust (must also be maintained constantly) can serve as an analogy for this process.
6. The coding process, negative feedback and information input: To correctly respond to customers or clients and avoid entropy, (negative) feedback should be given. Not all information in an organization’s environment can be used as feedback, so some kind of coding occurs as organizational members are selective and try to simplify this information in fundamental categories that seems the most relevant for this organization. For example, paying more attention to feedback from clients than from peers.
7. Steady-state and Dynamic Homeostasis: Surviving organizations are called steady-state, but this does not mean that these organizations are not moving. Lewin’s concept of quasi-stationary equilibrium means that an apparent equilibrium is actually up during one event in the cycle and down at another, but the overall state gives the steady-state appearance.
8. Differentiation: As an organization is growing, differentiation and elaboration occur: specialization and division of labor evolve.
9. Integration and coordination: To avoid too much differentiation (also called, silo effect), coordination and unification is needed. This integration can be accomplished through shared norms and values.
10. Equifinality: Von Berrtalanffy’s principle is that an organization can use different paths to reach the same goal. Openness and selectivity (in input and output) decide if an organization will be successful.

Taken all together, managers must be aware that they are managing a system that has permeable boundaries, is dependent on its environment for survival and will die unless it is actively managed.

What is systemic organization change?

Change is systemic in the way that, some aspect of the system is selected for change. There are three reasons why change should be systemic. The first reason is that when some part of the system changes, other parts will change as a result of that. This should be taken into account, otherwise the change will fail. The second reason is that it is based on our knowledge of organization change. From research on sensitivity training, researchers found that changing the individual will not likely lead to organization change. So the target for change should not be the individual, but the system, often the organization’s culture. Lewin discovered that if group standards and norms aren’t changed, individuals will feel departed from the group when they follow the instructions for change and therefore will show resistance. Also people need to have the feeling that they influence the formulation of work group norms. Because of the big influence of group norms on individual and group behavior, changing certain norms should be a major focus of an organization change effort.

The third reason is related to the open-system characteristics: an organization needs more energy from its environment than it expends. Therefore, it is very important that attention is paid to how human energy is used in an organization. This can help the leaders of the organization change things, so that this energy can be used in more effective ways to accomplish the organization’s goals. Open system theory alone is not sufficient to understand organization change.

A deeper understanding

Capra argues that a much larger set of theories constituted the paradigmatic shift from physics to the life sciences, which gives us an ecological view (fundamental interdependence of all different phenomena, which are all ultimately dependent on the cyclical processes of nature). When more comprehensive models as the open-system theories started to be evaluated, Capra pointed out that the basis for these system thinking lays in biologists, Gestalt psychologists, and ecologists. The primary criteria for system thinking are:

• Living systems are integrated wholes which are not the same as the properties their parts have.
• Living systems nest in other systems.
• A part of a system is actually a pattern in an web of relationships that is inseparable.
• There are no properties of any part of this web that are fundamental, all are following the properties of the other parts and all together their interrelations determine the structure of the whole web.

To make system theory a mathematical principle, systemic models emerged.

What are the three criteria to understand life according Capa?

The three criteria to understand life, according to Capa, are pattern, structure and process.

These three are interdependent and together they form the ‘new synthesis’, which is a deeper and more complex theory based on certain commonalities that all living systems have, from cells to humans.

The pattern of organization for a living system is the configuration of relationships, that establish the system’s essential characteristics. Maturana and Varela use autopoiesis (self-making) to explain pattern: the key characteristic of a living system/network is that it continually produces itself. Each part of the system participates in the production of other parts of the network. The membrane is a primary component of any cell, which is the input-throughput-output mechanism in a living system (takes external matter and dissipates waste into the cell’s external environment). Living systems are autonomous (and closed), they interact with the external environment to survive but the pattern of their relations is not determined by the environment. This is to some extent the same for organizations.

The structure is the embodiment of the system’s physical components. The basis for this concept lays in the theory of dissipative structures from Ilya Prigogine. On the contrary to Maturana and Varela’s closed pattern theories, Prigogine argued that systems are open. Capa argues they are open structurally (autopoeisis) and closed organizationally (the system’s overall pattern remains the same). This paradox of change and stability is called dissipative structures. With dissipative structures Prigogine and Stengers actually mean a change from order to chaos (nonlinearity, noise) to a new order while measuring physical and chemical systems, note the similarity with Lewin’s ideas of change. So, the structure of a living system is open to considerable change, but the pattern (way system deals with stimulus from external environment: input-output-feedback) remains the same. The stimulus for structure change comes from the external environment and triggers reactions and new events. With a strong enough stimulus a new structure may form. In the real world, pattern and structure are interdependent. Foster and Kaplan argue that culture-lock in (inability to change to culture, pattern of behavior) is explained with the ideas of structure and pattern, the way that the organization deals with external threats.

With process, Capra describes the connection between pattern and the reinforcement of our support for the independent structure. With cognition (a way of knowing), the process of life can be understood. The brain is seen as a structure, while the mind (cognition) as a process. Electrical and chemical activities in the brain that form connections between thoughts and emotions are analogous to process. Having a brain is not necessary for having a mind, organisms can also perceive instead of think. The concept of mind is broader than just thinking. Gardner, who worked on the topic emotional intelligence, challenges the mind-body split: emotional intelligence is an integral part of overall intelligence and feelings are not separate from thought.

Cognition occurs in interaction with the environment. With structural coupling, Maturana and Varela mean that living systems not only process information but brings it into the interaction. These interactions stimulate change, but the system remains autonomous. The living system does not react to everything in the environment but is selective (specifying with perturbation named). Also the interaction is not a linear cause and effect.

What are implications for organizations?

Our current knowledge is not sufficient to say if larger systems, organizations, and human societies are autopoietic (self-making) networks. Components of organisms are meant to serve the whole, while societies exist for their components (individual human beings). Furthermore, laws of nature cannot be broken, but laws of a society can be. There are also numerous analogies and parrels between these two:

• Organizations are influenced by their external environments and influence the environment in the same way as Maturana and Varela describe. 2) organizations also takes in energy and dispose products and services and excess human resources at times.
• Both cells and organizations are autopoietic but depended on the environment for survival.
• Organizations continually deal with entropy and in the process produce themselves.
• Pattern is not defined by external environment (for organizations a little less than for cells).
• Cells have differentiated components, that support other components in interest of the whole (open system theory), which support the Burke-Litwin model. It is clear that organizations can learn, but it is not clear how they learn.

What are revolutionary and evolutionary change? - Chapter 5

There is a difference between revolutionary and evolutionary change. Darwin’s evolutionary theory has been challenged in the way that Darwin argued that change is incremental and slow. Stephen Jay Gould called it: a punctuated equilibrium, which is a steady state for a certain period of time, followed by a sudden change (punctuated) and then equilibrium again. Change occurs both incrementally and radically.

What does revolutionary change consist of?

Connie Gersick found that the idea of punctuated equilibrium was also supported in six other domains:

1. Daniel Levinson’s idea of individual change showed that people live their live through a relatively orderly sequence, but at a certain time (especially around 40), the sequence dramatically changes.
2. Gersick’s idea of group change: groups proceed with not much happening and at a sudden point they recognize they need to move forward rapidly in a new way.
3. Organization change: organizations are likely to change in strategic reorientations that needs different kinds of operations.
4. Scientific fields: the truth is found by paradigmatic shifts, not by counting up individual theories.
5. Biologic species: punctuated equilibrium.
6. Grand theory: At times of punctuated equilibrium, there is no end state that is a given system, because parts of a system interact unpredictably (during times of transition). Therefore change is revolutionary.

These six theories result in three domains: deep structure, equilibrium periods, and revolutionary periods.

Deep structure

For individuals, it means the underlying pattern of a person’s life at a given time (basic configuration in which a system’s units are organized). For groups, it is the structure and process of a group chosen to reach its goals. For organizations, it it’s the underlying culture (decision making, accountability, control, distribution of power, and the way the organization monitors and reacts to the external environment) For scientific fields, it is the paradigm (ideas of how a discipline develops and is maintained over a time). Biologic species, network of circular and interdependent interaction with feedback loops (no single part can interact with the environment on its own). For grand theory, collective modes and parameters are the ones that determine the overall system.

Equilibrium periods

An equilibrium period exists of maintenance of the system and the choosing of activities (within the overall pattern of rules/standards). O’Toole argues that organizations are resistant to change because of 33 things, for example homeostasis (resistance is a human instinct, change is not) and the rectitude of the powerful (best leaders already brought us to the point where we are, should we question their thoughts and change?). Gersick narrowed his list to three most important barriers to change: cognition, motivation and obligation. Cognitive frameworks are useful for understanding reality, but they also limit our awareness of other ways to look at reality. Change is for some kind accompanied by loss and uncertainty, and people are motivated to reduce loss and uncertainty. Last, stakeholders have ideas of how the system is supposed to operate, when this is disturbed, they are likely to put pressure on the system to get back to the way things were.

Revolutionary periods

Changes in part of the system but not the whole, do not lead to change. Revolutionary change occurs in two ways that increase needs for change: 1) Internal disruptions that pull subsystems and activities out of alignment with eatchother or with the environment. 2) external changes in the system’s environment that threaten the possibility to obtain resources for the organization. Revolutionary change can be seen as a perturbation to the system: the deep structure has been affected significantly (for example, changing the mission of a company). A company’s most important mission is to survive. Sometimes it is enough to adapt to arising problems, sometimes the whole organization needs to be changed with completely new services or products (or both).

What does evolutionary change consist of?

More than 95% of organizational changes are evolutionary because of strong resistance to revolutionary change. Most organizational change is about improvements, steps to fix a problem or change a part of the system (not the whole): continual improvement (called kaizen in Japan). These can be part of a revolutionary change, but not if they don’t affect the whole system. Weick and Quinn named evolutionary change, continuous change. When small continuous adjustments are not closely related to eatchother, the overall organization will probably not change, only in subunits. It can result in changes in the whole organization, when managers have abilities and desires to diffuse innovation from one unit to the others. Overcoming inertia and equilibrium is difficult without a total disruption to the system, but unless the deep structure is not changed, not impossible. The field of organizational learning is an example of continuous change. Primary principles of this field are:

• Learning occurs at various collective levels within business unites and sometimes even in the entire company.
• The learning organization demonstrates organizational capacity for change.
• Must enhance individual learning but also redefines organizational structure, culture, job design and mental models.
• Participation of employees and customers in decision making, dialogue and information sharing is needed.
• It promotes systemic thinking and building of organizational memory.

What is an example of revolutionary change?

In this example, the company Dime Bancorp is used. It was the holding company of the Dive Savings Bank of New York and also provided financial services and mortgage banking via more than 260 offices in the US. It was the result of a merger between Dime Savings Bank and Anchor Savings Bank.

In 1859, The founder of Dime, William Edwards, encouraged all New Yorkers to save. In 1862, Dime was the first bank that offered people banking by mail. Anchor, was founded at the same time, with the same goal. When these two ‘similar’ companies merged, people expected the two organizational cultures would be alike: but they were highly dissimilar! This was partly because they had different ideas of attractors. These are patterns of behavior with the characteristics of ‘sensitivity to initial conditions’ and ‘stability’. Apparently, in the start of Anchor Bank, attention to detail was awarded, and their culture kept this, even 150 years later. Dime, was more concerned with the bigger picture. Their CEO’s sought the help of a consultant. The merge occurred because both companies saw their parts of the financial services pie shrinking, and knew that they would be more certain of their future when they were together. Also, commercial banks were (and are) dominant, thus the intent of the merger was to become less savings and more commercial. Three major initiatives were undertaken with the merge. 1) A strategic planning process was made to understand how the resources of the two companies could be deployed to gain market share. 2) An organization wide survey was conducted to determine morale, assess employee understanding of the whole situation (e.g. culture, strategy) and establish an internal benchmark for future survey comparisons. 3) Launch a new mission statement for the merged organization, involving many 100 employees to get opinions and suggestions. This involvement of many people in the organizations led to strong commitment to the new mission statement.

The survey revealed that many employees were positive about the merge, but not very clear of the newly organizational culture and structure and critical of systems elements and leadership and management. Because of this, the information system was strengthened, reward system improved, structure changed, and management improved. The CEO was a role model for leadership and change. With the mission in mind, six values were selected to represent the desired culture (so, corporate values were implicit within the mission statement). Thirty-six practices, 6 per value, which were behavioral manifestations of these values, were used in a questionnaire to provide feedback to the top 125 people in the company. With this feedback as a central value, a leadership program was conducted. During the program, all participants received feedback from others, which they could compare with how they rated themselves. Two years later, this training was repeated, to see how the leaders were doing. At this time, a new questionnaire was conducted with the employees, and the results were that significant improvements had been made over the 2 year period in the eyes of the employees. The survey items of both times were organized according the Burke-Litwin model. The responses given in the survey are perceptions of performance, not performance measures. Employees' responses on motivation, the business environment, individual needs and values and mission and strategy have the strongest statistical relations with this perceptions of performance. These transformational factors related significantly and positively to perceived performance. Scores on morale were problematic, which the leaders then again decided to investigate.

In summary, significant change has been made in this company the past four years. This represented a revolutionary change because the emphasis of change was mission and strategy and culture. The initial change was transformational, the transformational factors (external environment, culture, leadership and mission and strategy) were the primary levers for change.

What is an example of evolutionary change?

This example is about a smaller professional services partnership, consisting of about 50 partners. Its mission is to remain highly specialized and it is deliberately small and individualized. Growth of the firma is a goal, but not rapid growth, mergers and branch offices. The structure is rather simple and straightforward, on the top the managing partner (CEO), then the practice group chairs, followed by senior partners, junior partners, the associated, and the staff. The manager had heard of a ‘360-degree feedback process’ and invited consultants who had a high expertise in this topic. A 360-degree feedback process is a full circle of rated behavioral practices (central person, central person’s supervisor, the person’s peers, and the person’s direct reports or subordinates. This is also called multirater or multisource feedback (clients or customers might also be included). The main focus of attention is the (in)congruence between the person’s own ratings and that of the others. The consultant said in this case, that multirater feedback in the service of performance appraisal and then to base organizational rewards (promotion etc.) accordingly would create the strong possibility of rater bias. One’s ratings would then become somewhat public (known to those that make the decisions about evaluation and rewards), and people would adjust their ratings to that. Though, the feedback process, can be used for both development and administrative purposes, but this takes time. The consultant decided to use the multirater process for individual and organization development. The purposes of the organization were to 1) selected behavioral practices related to being a leader or manager in line with the CEO’s practices and 2) encourage partners through the feedback process to work on their leadership qualities and improve them to enhance teamwork. And the consultant decided that the multirater feedback process needs to be confidential. At the end, a summary must be conducted of all the information. The team decided that they needed some time to rethink the change (after all, the consultant asked them to change in a direction from what they had been asked for) and eventually decided to go along with the recommendation.

Although the firm wanted to expand to new clients and services, they still wished that the range and nature of these services would continue as they were. Therefore, requesting materials and documents from the firm (strategic plan, desired future state etc.), suggested a course of action consistent with continuous improvement, rather than a sudden change. Based on these documents, the consultants made a list of behavioral practices that were most relevant to the firm. Together with the management, they decided of a list of 59 behavioral practices. They then computed a list with each practice twice and a 5 point Likert-scale, the first time with a question to which extent the person practiced the behavior and second how important the behavior was to part of the firm represented by the partner being rated. If the behavior is very important, but practised little, change is needed. The practices were categorized according to the organizations’ most important values.

Three extra personality rating instruments were added for of two reasons. The first is that feedback can be better understood when the context is also given (is the individual extrovert or introvert?). Secondly, the firm leaders wanted to encourage their partners to assume more leadership and understand more about potential leadership. Not every employee wants to have the responsibilities of a manager or leader. The three other inventories were:

Myers-Briggs type indicator: based on Carl Jungs’ theoretical notions on individuals differences. These dimensions are: extroversion-introversion, intuition-sensing (depending on intuition or concrete fact-based information, e.g. smelling), thinking-feeling (use info in a logical way or emotional consideration), judging-percieving (prefer order or spontaneity). The MBTI is a long questionnaire (over 200 questions) but has strengths of reliability and validity. Serves the feedback process only with self-ratings.

Neo-Personality Inventory (NEO-PI): 240 items, based on extensive research and practice. Five factors: neuroticism, extroversion, openness, agreeableness and conscientiousness. There is overlap with MBTI. Consistency across instruments helps convince the person that receives feedback that their responses are credible.

Leadership Assessment Inventory (LAI): determines whether partners in the firm preferred management to leadership or neither. Consists of 18 items. It is a multirater tool, including oneself, one’s supervisor and one’s subordinates ratings. Peers are not relevant. Five sub factors: determining direction, influencing followers, establishing purpose, inspiring followers and making thinks happen.

From the results stemmed that management activities were not popular. The desire for a leader was little (LAI). The MBTI pattern was unusual (high scores on introverts, thinking, judging, and intuition), in a way that the overall pattern that occurred in the partners, occurs in less than 2% of the U.S. population. There were no abnormal results stemming from the NEO-PI.

The consultant made the following recommendations to the managing partner:

• This firm proved to be highly professional, serving clients promptly and effectively, internal norms of courtesy, respect and collegiality and a consensus about the mission of specialization.
• Insufficient attention is paid to mentoring and providing professional development for junior partners and associates.
• There is little motivation for leadership. A senior partner from another firm then was hired to help with leading and managing.

In summary, organization change for this firm comes slowly, while keeping the same mission. That’s why this change is evolutionary. Also, the firms had no problems, continuous improvement was its slogan.

What are the levels of organization change? - Chapter 6

Although changing parts of an organization might not lead to organizational change, it is important to examine the various parts and how they are affected and affect eachother. In this book, three levels of change are mentioned: (interpersonal) individual, the (inter)group and the (interorganizational) total system. While examining these, we must constantly keep in mind that individuals in organizations always behave in context (Capra would say: networks in networks).

What is the individual level?

Before implementing change on any level, it is important to know the direction of change for the whole organization. Many changes at the individual level are not aimed to change the whole system.

Recruitment, selection, replacement, and displacement concern getting, placing and keeping the right people in the right job to facilitate the overall change. As an example, the case of General Foods (now part of the Philip Morris corporation) is used, as reported by King. This organization wanted to change traditional management, and decided to let major tasks be accomplished by teams, with supervisors as a kind of team leader. Status differences were minimized. The goal of this selection process was to find people who were also compatible with a participative approach and team leaders were expected to manage participatively. A consultant and the top team’s principles for selection were:

• Selection decisions were made by the people that were going to work with the selected ones.
• Behavior in collaboration and conflicting group situations were the basis of decision.
• Every participant would get receive feedback from the decision makers why they were (not) selected.
• The process should reflect as much as possible tasks and relationships that were characteristic for the jobs (status differences were minimized, process personalized, growth and development emphasis for every employee, two-way communication, considerable activity took place in small groups).
• Tests were only used for secondary information and were not published in an individual’s employee file.
• Contact between members of the organization and applicants would grow and become more open as the selection process progressed.

Two months after the process, only two people had left the company and absenteeism was less than 1%. This early success was maintained, but this change process was not given on to the overall parent company. This also happened in more organizations. At Volvo in Sweden, the success of the initial pilot effort was given on effectively to the rest of the overall organization due to a better pilot version, better model for change, less confusion about what to diffuse, and better implementation than the others. Also, for diffusion to occur, innovative enclaves in organizations should be compatible with the overall culture.

Selecting participants in a planned way is rare, but it occurs. Same counts for replacement and displacement in the interest of organization change. A very important strategy for replacement in many organizational changes is to recruit a new leader from inside of the organization, but more often one is sought from the outside. A deliberate tactic for change at the individual level is to place a new leader especially at the top.

Most of the implemented trainings are aimed at training a manager. The example used in the book is about Citicorp (now called Citi). Citicorp launched a unique training program, because they were concerned with the increasing strain imposed on managers (leading to ‘people problems’). Because top management recognized that people are the most important resources, attention had to be paid to them. To start the process, a study was started to 1) find the best management talent in the organization, 2) determine specific set of management activities that would distinguish the best from the average managers, and 3) design a training program based on these activities. This was done by asking senior executives to identify superior (A-group) and average (B-group) managers in their groups. Subordinates were then asked to rate these managers on 5-point Likert scales. For example: your manager works with staff members (subordinates) to reach a mutual agreement on their performance appraisals. The A-group was rated significantly higher. The practices that the A-group performed, were then used as the basis for design of their training program. Then a 5-day training program was launched with 5 clusters: getting commitment to goals and standards, coaching, appraising, compensating and rewarding and building a team for continuity. Techniques were for example case method, role practice, short lectures and group-problem solving. On each cluster, managers received feedback from their subordinates, which was the most useful tool of this program.

This change was focused on the individual level, and if change occurred, it was at the evolutionary level.

When the Hawtorne studies were conducted (at least 70 years ago), counselling/coaching became recognized as a tool for organization change. To conduct counselling/coaching, individual needs and organizational goals need to be integrated. An attempt to integrate these two is called a new psychological contract. Most of coaching is carried out informally.

More recently, coaching that consists of providing help to a manager or executive, executive coaching, occurs. Whiterspoon and White specified four roles for executive coaches: 1) coaching for skills. 2) coaching for performance. 3) coaching for development. 4) coaching for the executive’s agenda. Distinguishing between these four helps the coach in better responding to the requirements of the executives. Also, keep the coaching sequence in mind: 1) gaining commitment (contract) 2) assessing the problem (which role?) 3) action to be taken by the executive after coach session 4) follow-up (to learn from experience).

Coaching is also applied sometimes in multirater feedback, when a coach can help to understand and react to feedback in a more effective way. Coaches can be able to make a positive and helpful difference. If the content of feedback is congruent with the organization’s goals, coaching might contribute to overall change.

How do individuals respond to organizational change?

The responses of individuals to change that directly affect them, can sometimes be compared to the struggle when people are faced with terminal illness (Kubler-Ross’s descriptions): 1) shock and denial, 2) anger, 3) bargaining or trying to postpone the inevitable, 4) depression, 5) acceptance. Not everyone moves through all these stages, but most do. H. Levinson argued that no matter if change is embraced or resisted, it is always a loss experience (e.g. of familial routines). People should have the opportunity to discuss and deal with these feelings.

Feelings of anxiety associated with organization change are pretty common. Resistance occurs as a reaction to loss of the known. Resistance also occurs when one’s experiencing a lack of choice (being forced). People do not resist change, they resist the imposition of change. Brehm’s theory of psychological resistance: when one’s freedom is taken, the reaction will be to regain the freedom. People might actually change their beliefs to oppose the other’s attempts at changing them, and choose a path that is not in their best interests. The degree of success of an organization’s attempt to change is directly proportional to the amount of choice that people have.

It is important to consider the kind of resistance. Blind resistance means that some people are simply afraid and will resist any change. Recommendations are to provide as much assurance as possible and allow time to pass. Political resistance means that some people believe that they will lose something important (job, status, income etc.). Recommendations are to counter with negotiation and argue long-term gain versus short-term gain. Ideological resistance means that people show resistance because of honest, intellectual differences of genuine beliefs, feelings or theories that are different. Recommendations are to present as much evidence (data, facts, substance) as possible.

Resistance to change also does not have to be a bad thing: at least someone cares about it (not apathy). Moreover, it is a natural human response and that should be respected. Resistance is not a universal human phenomenon. According to Oreg, people respond to change in four primary ways: seek routine, react emotionally, take a short-term focus, and react in a cognitively rigid way. Wanberg and Banas found that a person that's more optimistic, has a higher self-esteem and a high internal locus of control, is more open to change. But, most people are likely to be ambivalent, when confronted with change.

Helping organizational members with dealing with change can be done in three ways: conceptually, by achieving closure and through participation. First, giving a way for members to think about what they are experiencing can be helpful. For example the William Bridges framework. According to Bridges, change is when something that used to happen in one way starts happening in another and can be managed in a rational way. Transition is a psychological process which stays for a long time, that cannot be managed in a rational way. Transition consists of three steps of letting go: 1) surrender (give up role, position, title etc.) 2) no man’s land (ambiguity, confusion, reorientation) 3) a new beginning.

Jick’s perspective on transition is that some people move through emotional phases when confronted with change, but other’s get stuck. That is because people’s experience of change is dependent on an individual’s circumstances. Also, frameworks does not help us with coping with the change.

Achieving closure is most relevant to the surrender phase (letting go of the past). Most people have the need to finish things, and energy will be spent in an attempt to do so. When organizations impose a change with no time to ‘finish business’ or disengage, they will spend energy to deal with this by resisting, sabotaging new ways, or excessively talking about old ways. Recommendations are thus to provide ways for employees to disengage from the past. What is important to resolve resistance is the degree to which people will be committed to an act. This degree is a function of the degree to which they have been involved in determining what the act is. If a part of the organization is not involved, although they might rate the change logically and appropriate, they will not experience psychological commitment. This does not have to lead to unavoidable resistance, but might lead to slow, reluctant compliance.

What is the group level?

The primary work group is the most important subsystem in an organization. This work group serves as a context and locus for the interface between the individual and organization and primary social relationships and support for the individual, and determines the employee’s sense of organizational reality. The extent to which the group works effectively together, determines part of the overall effectiveness in the organization.

Work groups are usually used for organizational change. Larger organizational change is supported by team-building activities. For team-building to be in order, group members need to have the same goal and the goal(s) need cooperative interdependent behavior on the part of all members. Beckhard provided four purposes for team building:

1. To set goals or priorities.
2. To analyse how activities are performed, in terms of team member’s roles and responsibilities.
3. To examine group processes (decision making, communications etc.).
4. Analyse interpersonal relationships between the group members.

In order not to misuse any energy, one purpose needs to be determined as the main purpose and the order of the four purposes is thus important. For example, interpersonal problems can be caused by a group’s lack of clarity on group processes. Having everyone in the same direction (which can be helped with teambuilding), is crucial for organization change effort.

Kanter emphasized that, to not have adverse consequences of a highly cohesive group, teams need to be linked to their environment. Six dilemmas of linking are:

1. Sub optimization (losing sight of roles because of two much cohesion).
2. Turnover (difficulty accepting new members).
3. Problem of fixed decisions.
4. Stepping on toes and territories (highly cohesive teams feel too powerful).
5. Not invented here (reluctance to share and be influenced by others)
6. 'A time to live and a time to die’ (after effectiveness comes ineffectiveness again).

With more and more managers that decide to eliminate several layers of supervision, the use of self-directed groups increased very rapidly. Hackman defined key features of self-directed groups, specified the behaviors that make self-directed groups distinct, and suggested conditions that make self-directed groups more successful and will lead to personal satisfaction and group achievements. In some research done so far on self-directed groups, they tend to have a positive effect. Problems to overcome for self-directed groups to be effective: 1) group members must learn to share power, 2) differences and conflicts need to be dealt with in the right way to reach success, 3) not all group members have the same skills, personalities etc.: make use of the human resources in an effective way.

More self-directed groups will be needed in the future for organizations to survive, because organizations need to be more and more flexible and adaptive.

Interdependence between groups is a natural setting for conflict. Sherif showed, in the original research of intergroup conflict, that to develop strong in-group feelings it was needed to create opportunities for success and enhancing pride and then showing that competition between these groups would lead to a win-lose situation. When there was a subordinate goal, groups established cooperative efforts and reduced conflict. Shepard, Blake and Mouton demonstrated this processes with actual groups in conflicts.

Harvey argued that phony conflicts and real conflicts need to be distinguished. Real conflict involves substantive differences. Phony conflict consists of negative blaming behavior that occurs when agreement is mismanaged. Such a conflict is a symptom, not a condition. In a phony conflict, all group members know the solution to the problem, but don’t want to act on it because of action anxiety, negative fantasies, fear of separation, real risk, or psychological reversal of risk and certainty. This solution needs to come to the surface and help manage toward action. The first step to resolve real conflict (with substantive problems), is to create a subordinate goal.

Resistance by groups usually takes place in at least four forms: 1) “Turf” protection and competition (afraid that when changed this group, a central and core competence of organization occurs), 2) Closing ranks (need to stay together in one group), 3) Changing allegiances or ownership (opt for becoming a separate entity, formally departing from parent organization, e.g.: spinoff, leveraged buy-out or subsidiary), 4) To demand for new leadership (can be unconscious, to resist change).

Also on the group level, achieving closure is needed. Feelings (of loss) therefore need to be shared. To be most effective, the local group must be recomposed.

What is the larger system level?

Because of the complex structure of large system change, its useful to think of three orders of change. Order, in this case, means the level of the ultimate target for change.

First-order change: has the focus of change on some subsystem of the organization. Interventions on these levels might have some influence on the larger system, but probably (unless other complementary changes are occurring in other related parts) the change in a subsystem will be short lived.

Second-order change: means that the target is a subsystem of process that is affected by another initial change (usually a category or particular set of subsystems in the organization). For example, when we want to decrease turnover, supervisors of the employees are trained in motivation, punishment and rewards which then again influence the employees.

Third-order change: is the involvement of multiple factors in a causal sequence toward a final goal. For example, train subordinates to motivate employees, resulting in change in employees, resulting in heightened productivity. Changing the entire system is a third-order change.

Kurt-Lewin was one of the first to describe organization change at a larger-system level, but he described it as a model for change at the group level. In phase 1 we need to unfreeze the system: the system need to be shaken up, confronted with a urgent need for change and shown that the system is accessible and amenable to change interventions. In phase 2 movement (or changing the organization), is done. This can only happen when phase 1 is completed. In phase 3, refreeze, the organization need to reinforce the change that is happening. Members of the organization need to see a direct relationship between the organization’s mission and strategy and the members roles. This new state is somewhat vulnerable to new (unwanted) changes.

To start larger-system change (transformational change), we start focus on transformational factors (mission, leadership and culture) and then focus on transactional dimensions that will reinforce the transformational factors (organizational structure, the reward system, information technology and so on).

Process refers to certain interventions to implement the change effort (e.g. communication systems). Two specific examples are large group intervention and survey feedback. Large group intervention involves bringing together a large group of organizational members to address a key issue, for example a change in mission. When logistically planned and designed, large-group interventions can be powerful for moving the organization toward change. Survey feedback is already elaborated on in earlier chapters, but it aims to:

• Establish data points at a particular time so progress can be measured.
• Establish priorities in what to change.
• Send messages to organizational members in terms of what is important in the change process.
• Data-based change effort.
• Involve a large number of people in the organization.

There are different reasons why organizations join together: to share resources and to improve cost-effectiveness by reducing redundancies. Decisions to join force organization change. Most of these joining fail. Burke and Biggart found these primary reasons or conditions for failure:

• Not enough clarity about goals and how to measure progress towards them
• Imbalance of power and control between the two organizations.
• Imbalance of expertise, status or prestige between the two organizations.
• Holding erroneous beliefs of having sufficient control over important variables.
• Lack of a contingency plan.
• Lack of perceived equity.

The opposites of these are the conditions for success. Some executives shared their experiences. They emphasized the importance of having a vision for the future. Secondly, they emphasized the need of having a rationale for joining and the importance of sharing this with those involved. Third, being open and honest about the change is a key factor. Fourth, informal relations in the early stages is of great importance. Also, people need structure and that’s why decisions need to be made rapidly (even if they need to be changed afterwards). Further, matching words and actions need to be present. Finally, in the midst of organization change, often the customer is forgotten.

What are system responses?

Six examples of resistance to larger scale change are:

1. No revolution, but evolution. When the old culture is too powerful, only components of the organization will change. The deep structure does not change.
2. Not enough sense of urgency. When too many people in the organization lack the motivation to tackle an organization change process, organization will not be moved in another direction.
3. This shall pass. When management have tried too many different ways of improving the organization, organizational member’s response is to wait ‘em out. (apathy)
4. Diversionary tactics. This reflects resistance and a strong desire of organizational members to sabotage the change. One way is to create a crisis, that must be dealt with first. Or arguing that the timing of the change is wrong. This people will grab any chance to avoid the change.
5. Lack of followership/leadership. It potential followers do not follow, there is no leadership. And when there is no leadership, there is no intended change.
6. Coping with responses to change ( larger system level). Most of the same principles for individual and group level changes are applicable for the larger system: achieving closure, providing conceptual frameworks and involving organizational members in planning and implementing change. To enhance the need for change, a (change) leader should know his audience and adjust the information presented to them. This will enhance commitment. To prevent apathy and this too shall pass, change leaders should demonstrate very clearly that this time change is really needed and different, and that in the long-run this will show positive results. With respect to diversionary tactics, change leaders again need to be very clear about goals and objectives. Although not desired, some saboteurs must be dealt with, with job changes.

What does research and theory of organization change consist of? - Chapter 7

What is a research review?

Annual Review of Psychology (Friedlander and Brown, 1974) was one of the first reviews of organizational change. They wrote about organization development (OD) in terms of interventions. Two categories of interventions were:

1. People: organizational processes (e.g. decision making or problem solving).
2. Technology: organizational structures (e.g. task methods or job design).

These two had two outcomes:

1. Human fulfilment.
2. Task accomplishment.

This framework is reflective of an open-system approach. Friedlander and Brown derived two conclusions from their review. The first is that because the techno-structural change is easier to measure, showing change in this category is clearer and more definitive than in the human-process category. Secondly, OD today still has no general theory and technology of planned social system.

In 1977, Alderer wrote a review about organizational change, without using a framework. According to him more careful studies were being reported, and the overall quality of research shows signs of enthusiasm as well as rigor. On the contrary, In 1982, Facheux, Amado and Laurent argued fundamental research was still lacking. According to them, it might not even be true that changing processes changed outcomes (in the framework of Friedlander & Brown: outcomes of human processes). Facheux et al. therefore argued that there needed to be a stronger linkage between the social and the technical approaches in order to bring about true measurable organizational change.

In 1987 Beer & Walton stated some problems in organizational change research. First, organizational change research is aimed at proving causation. But while trying to prove this, researchers overlook the larger system, the interconnectedness of the different parts and the context. Secondly, most organizational change research is not longitudinal, so it can’t be determined if change is permanent or not. Furthermore, the meaning and interpretation of data used are flat (not precise). Quantitative methods are also not very useful for understanding an outcome that might have multiple causes. Finally, research often does not fit the needs of the user, for example: researchers writing difficult sentences or the use of highly technical, statistical procedures. Beer & Walton stated that to save the organizational change research, we needed to go in the direction of action science (Argryris, Putnam & Smith). This involves 1) research that involves the users in the study, 2) research that relies on self-corrective learning, and 3) research that occurs over time.

Two extra problems in organizational research can be identified. First, if the goal is scientific, then research needs to be based on objectivity. If the organization’s members are the primary users: they need to be involved in decisions about what data and how it should be collected. Secondly Golembiewski, Billingsley and Yeager made a distinction between what exactly is changed. Alpha change concerns an absolute quantitative change, typically a comparative measure before and after an intervention. Beta change concerns a change resulting from the respondent’s subjective recalibration of the measurement scale (for example, in team building: not simple perception of an increase or decrease in trust along the stable continuum but their standard for judging what trust is changed). Gamma change concerns a reconceptualization of the measured variable (change from one state to another). For example: after a team building intervention, people realized trust is not a relevant variable in this experience.

The latest review of organizational change by Oreg, Vakola, and Armenakis covers the recipient’s reactions to change. This coverage already started in 1948, and started with quantitative measures of what organization members experienced because of change.

Oreg et al. provided, based on the 79 most rigorous studies, a framework of three primary antecedents of organizational 'members’ reactions to change: 1) change recipient individual characteristics (e.g. coping style), 2) change process and 3) change content. Those three antecedents were compared to explicit reactions (behavioral, affective and cognitive), which then again were associated with change consequence. They also argued that pointing out the different between causes and effects can be tricky. Oreg et al. provided critique of the 79 studies on the following points:

• First, variable definitions need to match the measurement instruments (validity).
• Second, most of the studies were based on self-reports from a single source.
• Third, most longitudinal studies were not at every measurement measured with the same individuals, therefore only general trends could be reported and not at the individual level.
• Last, because most studies only investigated change processes in a single organization, consideration of variables at the organizational level can’t be done.

Three aspects of organizational change are critical: 1) trust (in the change leader and the process), 2) involvement (in decisions, leading to commitment) and 3) selection (of people to help, which have a positive perspective on the change intervention).

Ford and Ford focused more on leadership of change. Ford & Ford distinguished between focused and distributed leadership. Focused leadership means a single individual as a leader. Distributed leadership refers to many people with their individualistic (and hopefully, complementary) versions of leading, with two subsets: collective and co-performing. Co-performing refers to a specific group working together, and collective to leadership that is distributed among different organizational members in different functions.

Ford & Ford also distinguished between 3 ways to study leading change.

1. The first is, approaches to change: 1) whether change is simple or complex, 2) whether change is top-down driven or bottom-up. Kavanagh and Askhkanasy added 3 alternative approaches: 1) immediate, 2) incremental, 3) indifferent (no action is taken in a longer period of time).
2. Second, leadership behaviors, which is aimed at finding specific behaviors of individuals in leadership positions. They looked at traditional leadership behaviors and specifically related to change behaviors (shaping behaviors, framing change and creating capacity).
3. Leadership change activities, is the third way to study leadership of change. While one will logically assume that there is a relationship between these three, this is apparently not the case.

The research question that Ford & Ford used in their review was: whether leadership made a difference, and if it did, a difference in what? To investigate this, they used three areas: 1) personal reactions and experiences of change recipients, 2) leader effectiveness in making change happen and 3) the impact of leading on the leaders themselves. For the first, Ford & Ford concluded that, measured on the recipients’ commitment and readiness for change, there is effect of leadership on personal reactions and experiences. For the second, in one study it was shown that a highly directive approach tended to be more successful (although recipients were not happy). For the last, leaders seem to alter their behavior to help the change approach become more successful and are affected by the process. Psychophysiological costs are not investigated yet. According to Ford & Ford, research on the leadership of change is challenged by four weaknesses.

1. First, there is an over-emphasis on the role of the individual leader (in a leader position).
2. Second, the use of subjective assessment of change implementation and leadership, without addressing the original intended outcomes.
3. Third, the data collection in most studies does not include the temporality of change and its implications for the process and interactions of leadership.
4. Finally, research on leading change usually has a vocabulary that adds confusion about the research and the conclusions. Final conclusion, we still know that leaders have a significant influence on organizational change, but further research is needed to find out what this influence is.

What are recent approaches?

According to Svyantek and Brown, in 2000, organizational researchers need to take a new direction through the complex-systems approach. This means that organizational behavior can rarely be explained by breaking down the system into its component parts, and there's a need to understand 1) the variables that determine behavior, 2) the connections between these variables and 3) the fact that these are depending on a time scale. Fundamental differences between ‘normal science’ and approaches to study organizations are that the first depend on linear models, while the latter depend on nonlinear models (examination of both dependent and independent variables, qualitative variables: predictions that are context-specific). Svyantek and Brown proposed two nonlinear concepts: Phase space, which consists of a representation of multiple behavioral measurements over time (usually a three-dimensional graph). From these graphs, patterns of behaviors can be traced. These patterns of behaviors are called Attractors. Attractors have two primary characteristics: 1) sensitivity to initial conditions and 2) stability. With sensitivity to initial conditions is meant how important the organization’s history is for the organization now. With positive feedback, behavior in the early stages of an organization can be reinforced. That is why two organizations in the same domain can have very big differences, even though they originated at the same time and under similar conditions. With stability the organization’s culture is meant. A founders’ behavior is very important in shaping the organization’s culture (by emphasizing the ‘organizations’ values).

So, because of the complexity of measuring organizational change, complex approaches and methods are needed.

What is the theory of Porras and Colleagues?

In the 1990s, Porras et al. dominated the research on organizational change. They made distinctions between planned and unplanned change and first-order versus second-order change. Planned change is the deliberate decision to improve the organization or change the system in a more fundamental way. Unplanned change is the response of an organization to unanticipated external change. This response is adaptive and often spontaneous. First-order change (continuous improvement) is change that consists of alterations in existing system characteristics. This is the same as evolutionary change. Second-order change is the same as revolutionary change, and consists of a radical, fundamental change. Porras et al. placed the distinctions in a 2 x 2 table. This is an oversimplification of reality, but the distinctions are still used.

What models of organizations are there?

After the model of Friedlander and Brown (with the people/technology distinction), Porras provided a model that is grounded in open-system theory. This model consists of the environment (input), organization (throughput), organizational performance, and individual development (output), with a feedback loop from output to input. The throughput consists of organizational members’ behavior and the work setting (context). Porras found four streams (or basic dimensions) for context:

1. Organizing arrangements (e.g. goals, structure).
2. Social factors (e.g. culture, networks, individual attributes).
3. Technology (tools, machines, job design).
4. Physical settings.

Member elements are, according to Porras, cognitions and behaviors. For output, he distinguished between the performance of the organization and the individual performance (which affects organization performance).

What does the theory of organizational change consist of?

According to Whetten, in 1989, a complete theory of organizational change consists of:

• What (constructs): factors that are considered as the explanatory parts of what is being considered.
• How (linkages): how the factors under what relate to eachother.
• Why (conceptual assumptions): the logic underlying the model or theory.
• Combination of who/where/when: the temporal and contextual factors that constitute the range for the theory.

Porras and Colleagues proposed the planned process model of organizational change. This framework starts with organizational interventions that affect certain variables, which then affect individual behavior and will ultimately improve organizational performance and enhance individual performance. A little later Porras elaborated his perspective about the change process. He states that organizational members must alter their on-the-job behavior in appropriate ways, which is rooted in the belief that behavior is influenced by the nature of the setting. With this model, Porras meets Whetten’s criteria for how a complete model looks. But, it is not likely that change will occur in this manner because of different reasons. First, we assume that organizational members first plan and then implement change. But, actually behavior comes first and then cognition. So we act, and then attribute meaning to this action. Second, we cannot only look at the individual’s reaction, but we must account for how organizational members collectively react to events and how they interact with one another. In conclusion, we need to have a change plan (cognition), but the implementation should address the desired behavior and less on the rationale and thoughts. William James stated that emotional behavior precedes emotional experience (in 1890 already): we feel sorry because we cry, not the other way around. Merely at the same time C.G. Lange had the same idea, and this idea became known as the James-Lange theory.

In 1959, Stanley Schachter decided to test these ideas. In his experiment, he injected students with adrenaline (which would cause a rise in emotional energy). He hypothesized that he could determine what the emotion would be. The two conditions caused anger or euphoria. An emotion was induced, but the attribution which emotion the subject experienced came after inducement and the enacted behavior.

In the same time span, some people argued that real causes of our behavior are often unconscious. According to Wegner and Wheatley, people perceive a causal link between our thoughts and actions. To perceive this link, three criteria must be met: 1) priority (thought short before action), 2) consistency (thought compatible with action) and 3) lack of other possible attributed causes. John Bagues and colleagues argued that most of our psychological lives function through nonconscious ways (automaticity).

So, for the link between mission and action in organizations, we must not assume it is a conscious process. Second, for change at the organization level, we must rely on theory and concepts that are nonlinear, as often executives have little control on what actually happens in the change process. For organizational change, the concepts attractors, nonlinear complexity theory, organizational culture (norms and values) and what gets systematically reinforced need to be kept in mind. Also, organizational change needs to be thought of as a series of ‘loops’ (taking initiatives and then looping back to correct missed details).

What is the current view on organizational change?

One of the most recent review in Annual Review of Psychology is written by Weick and Quinn in 1999. They distinguished two kinds of organizational change: episodic (revolutionary) vs continuous change (evolutionary). Episodic change is named this way because it occurs in distinct periods during shifts that are precipitated by external events (intentional, discontinuous, infrequent).

Episodic change arises as a result of inertia and the inability for an organization to adjust. They describe continuous change as ongoing, evolving and cumulative. Small continuous adjustments are done, which can add up to substantial change. Continuous change is driven by alertness and the inability to remain the same.

In their review, Weick and Quinn also provided a new way to apply Lewin’s model. According to them, episodic change follows the stages in this order: unfreeze-movement-freeze. Continuous change is more like freeze-rebalance-unfreeze. Freezing means to find the patterns in day-to-day life in the organization and reinforce them. Rebalance is the change to these patterns in order to help continuous change. Unfreeze is to innovate and find new ways of ensuring continuous change.

What are conceptual models? - Chapter 8

The distinction between discontinuous and continuous change can help us understand and diagnose the nature of the required organization change, so one knows which actions to take.

What content is there to change?

Usually what to change begins when the leaders of an organization are confronted with some kind of change in the external environment. Peter Drucker argued in the Harvard Business Review (1994) that highly successful organizations that do the right thing often end up doing it without leading to success. This paradox is the main point of his theory of business. This theory is a set of assumptions that shape any organization’s behavior, dictate its decisions about what (not) to do and define what are meaningful results for the organization (in order to succeed in a particular environment and marketplace). According to Drucker, the theory of business has three parts:

1. Assumptions about the external environment of the organization.

2. Assumptions about the organization’s mission, purpose and reason for being.

3. Assumptions for the organization’s core competencies (skills and abilities to fulfil mission).

For a valid theory, four criteria must be met.

1. First, the three assumptions must fit reality.

2. Second, the three assumptions must be congruent with one another.

3. Furthermore, this theory of business must be known and understood by everyone in the organization.

4. Lastly, the theory must be tested constantly.

Drucker was addressing discontinuous change. He argued that when a business holds on too long to a business theory that is no longer in touch with that is going on in the external environment, the business will lead to failure. Also, organizations tend to hold on to a theory for too long.

The studies of Audia, Locke and Smith in 2000 support the ‘Paradox of success’. Their studies showed that greater past success led to greater strategic persistence, after a radical environmental change. This persistence induced performance decline. With discontinuous change, our content concerns transformational factors (mission, external environment, purposes and strategy). For continuous change, our content concerns more transactional factors (products and services, work-flow processes, organizational structure and information technology). For survival, emphasizing listening to criticism and staying in touch with one’s external environment is very important.

How does the process of change works?

Van de Ven and Poole identified 20 theories of development and clustered them into 4 types of development theories: life-cycle, teleological, dialectical and evolutionary theories.

Life cycle

According to life cycle theory, an organization is like a living organism. An organization may undergo change as it passes through different stages, nevertheless maintains its identity throughout the phases. Although Greiner’s model is both life-cycle and dialectical, it’s a good example for life-cycle theory. Greiner argued that there are five stages in an organization's life: 1) creativity (start), 2) direction (focus needed), 3) delegation (when the organization becomes bigger), 4) coordination, and 5) collaboration (working together in an effective way). Each stage brings along a different crisis, which brings the organization in the next stage of growth. This theory is popular with managers because they recognize it from experience.

Teleological

Teleological theory assumes that an organization is purposeful and adaptive, so an organization develops towards a goal. When a goal is reached, new goals are set to achieve. Therefore, an organization is never static or in permanent equilibrium.

Dialectical

In dialectical theory, the basic assumption is that organizations exist in a world with contradictory values and forces. When two different points of view collide and resolution is reached, change occurs. The desired resolution is creative synthesis, but this is a rare outcome.

Evolutionary

Evolutionary theory assumes that organization change occurs according to a continuous cycle of variation, selection and retention among organizations competing for resources. Organization change in this theory is an ongoing, evolving process. Organizations have no choice, they have to change. These four streams may seem discrete, but in reality, they are not. Therefore van de Ven & Poole developed 16 possible explanations of organization change and development: the four original ones and 12 combinations of these. Also, these streams are largely linear in nature, with researchers treating unexpected change as noise and error distributions that mess up their experiments.

What are the practice frameworks of how to change?

In the beginning of the change process, it is important to determine how ready people in the organization are to accept and implement the change and if people will resist and how. A way of assessing this is to conceptualize the potential social and psychological costs. David Gleicher’s formula: C = (ABD) > X. C means change, A is the level of dissatisfaction with how things are, B is the clear desired state, D the practical first steps towards desired state and X are the costs. So, in order to be mobilized with the change, people must have a high dissatisfaction with the current state otherwise costs are too high. Clarity of change direction and motivation are necessary for acceptance and commitment of the organizational members.

What are the three steps of Lewin?

Kurt Lewin experimented in 1940-1950 with studies to influence people to eat less desirable but cheaper foods (they had to adapt to the war needs). After four years, Lewin concluded that there is a three step-procedure needed for change: 1) unfreezing, 2) moving, 3) refreezing (at a new level).

1. First, it is needed to unfreeze the present level of behavior. What must be done needs to be tailored to the specific situation (e.g. showing employees where the company is now and where the company wants to be).

2. The second step is to move towards the desired behavior (e.g. implementation of intervention, training).

3. The last step, refreezing, is aimed at making the new behavior relatively stable against change (e.g. reward system for showing the desired behavior).

Schein has pointed out that Lewin’s steps are not discrete and that they overlap. He further stated that they are not steps but stages, and elaborated on them.

Stage 1: Unfreezing. In this stage motivation and readiness for change is created. According to Schein, there are three ways to unfreeze:

1. Disconfirmation or lack of confirmation: demonstrate a need for change by raising the organizational members’ dissatisfaction with the current situation.

2. Induction of quilt or anxiety (e.g. showing gap between current situation and desired situation).

3. Creation of psychological safety (learning there is no punishment or insecurity because of change).

Stage 2: Changing. With changing, Schein means the cognitive restructuring: organizational members need to see things different and start acting different because of that. Two processes are needed for this to happen:

1. Identification with a new leader (mentor, consultant, model) and starting to see things from his/her point of view.

2. Scanning the environment for new, relevant information (e.g. asking experienced companies)

Stage 3: Refreezing. This means the integration of the change for organizational members, with two parts:

1. Personal and individual (trying out new behavior, getting feedback, getting reward).

2. Interpersonal (to work together effectively, all members need to change).

What are the phases of planned change?

Ronald Lippitt expanded the three stages to 5 phases. He also found phases a better name because of the overlap in the different stages. These were: 1) development of need for change, 2) establish change relationship between change consultant and client 3) working toward change, 4) generalization and stability of change (refreeze), 5) Ending the change-contract.

Transition

Many people described the process of change as a concept of transition. Two models based on the idea of transition are described in this book. The first one is the ‘demand system’. Beckhard and Harris described their transition model with three distinct conditions: 1) the future state (the desired state) 2) the present state and 3) the transition state (where the organization must go through to move to the desired state). Beckhard and Harris state that change is not a neat, sequential process. After the demand system is established, the need for change and whether to change are determined. The process of conducting activities for change (e.g. where to intervene first, choosing transition technologies) called Beckhard & Harris transition management.

The second transition model is a three phase model written by William Bridges. The first phase is endings (letting go of the past and previous habits). Closure for the organizational members is emphasized in this stage. The second phase is a neutral zone, which is a period of time in which the individual is in a state of limbo and emotional disconnection (often ambiguity and anxiety provoking). Leaders of change should give the organizational members time for this phase. The last phase, new beginnings, is about starting to focus on new goals and priorities and acquiring new skills and behaviors.

Although these models are simple, they help us to see the importance of understanding organization changes at multiple levels all at the same time.

What are mini theories of organization change?

All these theories address only certain parts of organization change and none is comprehensive. Using the theories together, however, can enhance our understanding.

Individual emphasis

Maslow/Herzberg: Need theory

The content of Maslow’s hierarchy of individual needs is the extent of motivation, while Herzberg’s model’s content is the degree of job satisfaction. Furthermore, Maslow presented his hierarchy as a single continuum (from basic needs to self-actualisation) and Herzberg posited two continua (one addressing dissatisfaction and the other job satisfaction from low-high). The process of both theories would be enriching individuals' jobs (proving autonomy, recognition, achievement opportunities etcetera).

Vroom/Lawler: Expectancy theory (cognitive)

This theory of motivation focuses more on extrinsic behavior and is based on three assumptions: 1) the performance-outcome expectancy (behavior is related to outcome), 2) outcomes have different values for different people, and 3) effort-performance expectancy (relating behavior to certain probabilities of success). If all are high, people will be highly motivated. The content is both motivation and rewards. The process focus could be on changing the way the performance is measured in an organization and the reward system, to ensure the organizational members that they see a link between performance and rewards and that the value of the rewards they receive.

Hackman and Oldham: Job satisfaction

Hackman and Oldham’s content emphasis is on three primary psychological states that affect employee satisfaction: 1) experienced meaningfulness of the job/tasks, 2) experienced responsibility for the job/tasks and their outcomes and 3) performance feedback. Process focus is therefore on work and job design (designing jobs and roles for organizational members that focus on these three psychological states)

Skinner: Positive reinforcement

Most important to the organizational field is Skinner’s emphasis on control of one’s environment (his book: Walden Two). The content of change is the reward system (particularly the positive reinforcement). The process is focused on the work environment (controlling the conditions of rewarding, by rewarding the desired behavior).

What is group emphasis?

Lewin: group as the focus of change

Lewin explained individual behavior as an interaction between the needs of an individual and personality, and the forces from the external environment. How the individual perceives these forces (imposed or owned by the individual) explains if they will be embraced or resisted. Lewin also made a distinction between driving forces (push an individual to new behavior e.g. supervision) and restraining forces (inhibit new behavior, e.g. group norms). Content would be analysis of perceived forces in the work environment and what people perceive the norms and values to be. Process focuses on 1) change of the group norms, 2) reducing restraining forces (decrease resistance) and 3) increasing owned forces and decreasing the imposed.

Argyris: changing values through the group

McGregor meant with Theory X the following assumption that managers hold about their employees: they are lazy and need structure and direction, otherwise they will not work responsible. Theory Y assumptions hold the opposite. Many managers show an inconsistency between words and actions, meaning that they assert theory Y but act like X. This will cause mistrust, lower commitment and poor morale on the part of the employees. The core of Argyris’s work is the congruence between espoused theory and theory in action. Content are values (and whether decisions are congruent with the spoken beliefs and values on part of the executives). Process focus is the actual behavior of the executives.

Bion: the group unconscious

Bion stated that there is a ‘collective unconscious’. The working group’s goal is task accomplishment. According to Bion a group’s unconscious (basic assumption group) goal is destroying the group leader, and replacing it with a right one (which never happens). The main issue is thus authority (who has it and how is it exercised). As long as the work group is dominant over the basic assumption group, the outcomes can be productive. The content is collective unconscious (issues of authority) and the process focus is to enhance the work-group mode and reduce the effect of the basic assumption mode.

Larger-system emphasis

Likert: The One best way: Participative management. Likert categorized organizations according to their management approach in four categories:

1. System 1: autocratic management (top-down decisions, power exploitatively exercised).

2. System 2: benevolent autocracy (not exploitative but still top-down).

3. System 3: consultative management (managers ask people for opinions, but make the final decisions themselves).

4. System 4: participative management (decisions involve policy and are made with group consensus).

To further describe the systems, Likert used seven behavioral functions: leadership, motivation, communication, interaction and influence, decision making, goal setting and control. The content were the four systems and how they are practiced within each of the seven functions. Process focus was the use of survey feedback methodology (Survey of Organizations, 1967). Answers about the systems are profiled according to two ways: 1) what the respondent thought of the current situation (usually system 2/3) and 2) what the ideal situation would be (usually system 4). So, a gap between the current and desired state is established, which can be reduced by motivation. Likert found his choice of content and process the only best ways.

Lawrence and Lorsch: it all depends

On the contrary with Likert, Lawrence and Lorsch found that there is no best practice for management, processes etcetera, but that it depends on the interface: 1) the organization’s relations with the external environment, 2) relations within the organization and 3) the implicit contract between the organizational member and the organization (based on the research of Burns and Stalker in 1961). That is also the reason why highly differentiated organizations (having separate business units) are likely to experience considerable conflict between functions. The content consists of the interfaces, nature and characteristics of the different relationships. The process would emphasize internal restructuring, conflict resolving and management, and how the relationship between management and employee is affected by the above.

Levinson: the organization as a family

Levinson (1971) views an organization as a nuclear family (CEO as father and ego-ideal, HR manager is mother (the nurture), executives are siblings, which leads to sibling rivalry). Furthermore, Levinson believes that an organization has a personality (culture) and that the effectiveness of the organization depends on how well parts of the personality (id, ego, superego) are integrated. Levinson named this: maintaining equilibrium. The content consists of 1) the behavior of the top executive (according to family dynamics) 2) how the top-family dynamics affect the organization and 3) how integrated the various parts of the organization’s personality are. Levinson also pays more attention to the levels of perceived stress in an organization. Process would be to work closely with the top executive team (to ensure better integration of personality), to direct as much energy as possible to tasks instead of reducing stress and to conduct a ‘clinical history’ about the organization.

The content and process of strategic change

Rajagopalan and Spreitzer reviewed the literature on strategic change and classified their findings into two streams: content and process. The content are the antecedents and consequences of strategic change and refers to the what of change. The process focuses on how to change (role of managers). Rajagopalan and Spreitzer found the distinction between content and process oversimplified. Therefore, they determined three (theoretical) lenses: the rational, learning and cognitive lenses. To any combination of these three the name ‘multi-lens studies’ was given. All three lenses consider process and content. The framework of Rajagopalan and Spreitzer would fit in the open system theory and states that an organization needs his environment for survival. Rational lens focuses more on content and assumes that the external environment can be viewed in an objective way. (sequential and linear thinking). Learning lens assumes that the external environment is dynamic, changing and uncertain, therefore objectivity is very difficult and linear/sequential actions do not exist. Managers should take steps, learn from them and then take the next step. Cognitive lens focuses on the process and managerial cognitions (e.g. core beliefs). Retroactive attributions are used to deduce what managers were thinking to cause their actions. The research of Rajahopalan and Spreitzer showed that content and process are intertwined. Also they showed that strategic change in organizations is not exactly obvious, cannot be explained adequately from a single perspective and is not linear.

Effecting change in human systems

Strategic, in strategic change, refers to the organization’s strategy (how the organization implemented their mission). Strategy in the example above concerned mostly content. Now we will discuss the process in strategic change. Chin and Benne discussed strategies for planned change (conscious decision to change). Their strategies could be placed in three broader groups: 1) empirical-rational strategies, 2) normative-reeducative and 3) power-coercive.

Empirical-rational

The assumption underlying this category is that people are rational and will follow their self-interest. One will adopt the proposed change if it can be rationally justified and it can be shown that he/she will gain by change. There are six strategies within this group.

1. Basic research and general education: to wide spread knowledge so that people will understand, approve and act in accordance with the change.

2. Personnel selection and replacement: wrong people are in the responsibility positions and need to be replaced.

3. System analysts as staff and consultants: experts who deliver knowledge in a rational and systematic manner

4. Applied research and linkage systems for diffusion of research results: (applied research = action research) data driven research will be accepted for change because the methodology comes from the scientific method

5. Utopian thinking: as an effort to extrapolate from science to a future and better vision for an organization.

6. Perceptual and conceptual reorganization through the classification of language: assumption is that experts in semantics are better in communicating and reasoning and therefore create better basis for action and change.

Normative-reeducative strategies

Change agents in this group accept the assumptions of the first group, but more important is the assumption that people conform and are committed to (sociocultural) norms. So in order to change, people need to change attitudes, values, skills and significant relationships. An example of an intervention according to this strategy is the T-group or sensitivity training. A primary example is Organization Development (OD) Furthermore, people are active in satisfying their needs and our interaction with the environment is transactional (we seek information from the environment and try to influence this interactive process). There are two main strategies in this group which have the following things in common: 1) change is not imposed (client involved), 2) problem client is facing has to do with norms, values and attitudes, 3) nonconscious factors need to be addressed and 4) methods and concepts from behavioral sciences are applied.

1. Improving the problem-solving capabilities. Argyris and Schön introduced single-loop learning (fixing problems) and double-loop learning (fixing problems plus learning more about problem-solving). The latter is meant with this strategy.

2. Releasing and fostering growth in the individuals that make up the system to change. The supporters of this strategy see the individual as the basic unit within an organization or group. The individual will grow and develop. The work of Maslow and McGregor (X/Y Theory) are the basics for this strategy.

Power-coercive strategies

These strategies are about power, mostly economic and political sanctions for a lack of compliance to the change. Chin and Benne describe three strategies within this group:

1. Nonviolent: e.g. Martin Luther King. They are often dividing the opposition through moral conviction and sometimes combined with economic sanctions.

2. Use of political institutions: coercion here does not have to be oppressive, a democratic process can be sustained. But this form of change can feel oppressive to some people.

3. Recomposition and manipulation of power elites: e.g. Karl Marx: economic action and depending on a large number of people organizing, as a union, to become a power of production in society.

Evidence has shown that a sudden burst of a radical nature (transformational), followed by a transactional process, for working towards a change goal might be effective. This sequence is highly important (the other way around does not works as effective).

What are integrated models for understanding organizations, leading and managing change? - Chapter 9

Both content and process must be focused on for effective consulting. In this chapter, the term model is used as a graphic depiction, while in chapter 8 it is more used as a framework.

What is the organizational model?

With this model, the author means a representation of an organization that is often metaphorical (organism, psychic prison, machine, brain, culture, political system). Like Porras’ model, this chapter will focus on models that address both content and process and either implicitly or explicitly address ways of implementing change. There are different reasons why an organizational model can be useful. The first reason is that an organizational model can help to categorize (from thousand components to 10). Second, an organizational model can help to enhance our understanding. Third, it can help to interpret data about the organization (strategy before structure). Furthermore, an organizational model can help to provide a common language (culture). Finally, it can help to guide action for change (provide priorities and implementation strategies). A model can be very effective, but two things should be kept in mind: 1) Organizations consist of many components. These need to be categorized into a workable number and decided which components are the most important. 2) A metaphor can be paradoxal: it can create powerful insights, but can also become a way of not seeing.

What models of oganization change are there?

There are many models of organization change. Most of the current models are based on the thinking of Harold Leavitt. His model helped thinking about organizations as interdependent multivariate systems. His model was mostly descriptive but he did consider change by noting that the four major components all interacted and were interdependent. He also pointed out that change in any component would lead to change in another component. The different components are task (organization’s purpose), technology (tools, computers), structure (workflow, communications, etc.) and people (the ones that carry out the task). This model is not based on open-system theory, in the way that it only represents throughput and no in- or output. Now, three open-system based theories are addressed.

Weisbord: Six-Box Model

Weisbord relied on the organism metaphor and the air traffic controller’s radar screen. The blips on the screen will tell us which components are the most important and the intensity of the blips tells us where trouble might be. But, he also clarified that we must pay attention to the screen as a whole (organization). The arrows in the circle surrounding the boxes represent the in- and output. Weisbord stated that, inside an organization, there is a formal system (e.g. structure) and an informal system (culture). Each box in the model has a formal and informal system. The extent of the gap between these two is very important and needs to be reduced, otherwise the organization will no longer be effective. To understand each box, Weisborg identified primary questions that belong to each box (purpose, structure, relationships, leadership, helpful mechanism, rewards). These primary questions need to be asked on two levels: 1) What is the degree of fit between the individual and the organization? 2) What is the congruence between the organization and its external environment?

Because there are only six boxes in this model, it is easy to understand. But, organizations are too complicated to be fully described by these six boxes. A strength is the prominent position of leadership, signifying its coordination function. There are only a few causes of linkages, which should be more to fully understand the relations between the boxes.

Nadler and Tushman: Congruence Model

Nadler and Tushman had the same assumptions as the Weisbord model: an organization is influenced by its environment (input) and also shapes its environment (output). The input found Nadler & Tushman relatively fixed: the environment, the available resources, the organization’s history and strategies that are developed. These four help to define how people behave in the organization.

• For many organizations, the environment includes the parent system and its input (e.g. government regulations, competitors).
• Resources include capital, raw materials, technologies, people, and various intangibles (e.g. brand).
• History determines the behavior of the employees, the type of people the organization attracts and how decisions are made in a crisis (creates culture).
• Strategy is named apart in this model, and is the process of determining how to use the resources in the best way and which to choose from the environment. Some organizations are very strategic, others simply react to the environment.

Nadler and Tushman also presented four categories of outputs: system functioning, group behavior, intergroup relations, and individual behavior and effect (e.g. turnover). They highlight three primary questions for the whole organization: 1) How well is the organization reaching its desired goals (production, return on investment etc.) 2) How well is the organization using the resources? and 3) How well is the organization coping with the changes in the environment?

The transformation process consists of the following components: the people, the various tasks and jobs, the organization’s managerial structure and relations of individuals, groups and subsystems. In this model there are four components of the transformation process. The first, task component, refers to jobs that need to be done and the characteristics of the work. The individual component refers to all the differences and similarities among employees. Organizational arrangements are the managerial and operational structures of the organization, the reward systems, work flow and design and other mechanisms used by management to control the behavior of the organizational members. Informal organizational refers to the social structure within the organization.

The concept of Fit

Nadler and Tushman already pointed out that just describing the components of an organization is insufficient for modelling an organization. They use the term fit to measure the congruence between pairs of inputs and especially between the components of the transformation process. Inconsistent fits between any pair will result in less optimal organizational and individual performance. The better the fit, the better the organization will perform. Nadler and Tushman stated three steps for diagnosis:

1. Identify the system.
2. Determine the nature of the key variables.
3. Diagnose the state of fit (between components and diagnosing the link between the fits and output).

The most important point of their model is the degree to which the key components are congruent with one another, but measuring this is not easy. For diagnosing the fit, the change agent should focus on the outcome of the diagnoses of the various component fits and their behavioral consequences (on goal attainment, resource usage etcetera). Critical problems are identified through a lack of component fit. After changing these problems, the system is again monitored through the feedback loop.

The Nadler-Tushman model is mostly descriptive, but does suggest certain cause-effect linkages (congruence). But many other congruencies or incongruences could be emphasized. Ideas for determining which organizational dimensions are more central than others would be helpful for the model. Also, there are no suggestions for determining when congruence is in place and at what level of congruence produces desirable or undesirable effects. Recently, Nadler and Tushman added to their model the comment that some state of congruency is desired (for effectiveness and performance), but a system with too high congruence can be resistant to change.

Tichy: Technical, Political, Cultural (TPC) Framework

Tichy’s model is very similar to the previous one, but he focused more explicitly on organization change. His nine components should be seen as change levers:

1. The organization’s external environment (input).
2. Mission.
3. Strategy.
4. Managing organizational mission and strategy processes.
5. Task.
6. Prescribed networks.
7. Organizational processes (communicating, problem solving, and decision making).
8. People.
9. The informal organization.

Because Tichy considered management as pervading the whole framework, he did not showed it in the model. He stated that how effective an organization was depends on the function of the characteristics of each of the components of the model, as well as how these functions relate to each other. The unique aspect of this model are the three primary systems (technical, political and cultural) that cut across the nine levers. These aspects are important for understanding organizations. The technical system is hihly rational and based on science and hard data. The political system is based on power dynamics and on the assumption that in organizations some are more powerful than others. The cultural system refers to values and norms (cognitive schemes) that link people together. For effective change, change in all these systems must occur. For a good diagnosis, data from each cell of the matrix must be collected. The alignment is within a system across the matrix and between systems down the matrix.

Though it is a very promising model, there are also some limitations. The people component in the model is hardly mentioned. Furthermore, Tichy stated that alignments are very important, which could be criticized by referring to the previous argument that too much congruence can cause an adverse effect.

Comparison

All three models are based on open-system theory. In Weisbord, the output was accounted for with an arrow, Nadler and Tushman actually mentioned output (at three levels: individual, group and organization), and Tichy used performance and output. Tichy’s model is unique by using the systems rope metaphor and Weisbord is the only one that uses leadership and rewards. Tichy’s systems emphasized culture (much more explicitly), Weisbord used relationships and Naderl-Tushman included an informal organizational component.

What does the Burke-Litwin causal model consist of? - Chapter 10

In the 1960's George Litwin conducted research on organizational climate. Litwin was influenced by the work of Atkinson and David McClelland. The latter believed that human needs could be aroused by manipulating the environment. Such a need could be increased and enhanced. In line with this, Litwin wanted to show that different styles of leadership could create different organizational climates that would appeal to different motives or needs. His studies (with three kinds of leaders: power-oriented, achievement-oriented and affiliation-oriented) showed that performance and morale differed significantly across three laboratory organizations. The achievement leader had the highest performance and morale.

Based on this research, Litwin made an early model with culture (psychological priorities of a given work environment based on the perceptions of all the people in the environment together) in the centre. According to Litwin, culture is determined by norms and values and management systems. Litwin did not only address the motivational outcome of culture, but also the outcome variables of organizational performance and employee health and retention. His rationale was, the better the work unit climate, the greater the likelihood of high performance. Climate is the perception that individuals have of how their local work unit is managed and how effective they and their colleagues work together on their job. Culture is more background, and defined by beliefs and values. Culture affects climate.

What is the Burke-Litwin model?

After 1970 Burke and Litwin began to adjust the Litwin-model. Today’s model emerged from practice, as a consequence of the BA example in Chapter 5 (BA radically changed to a private corporation after the war). The organization’s external environment is critical in this process. The model is in line with the open-system thinking: the external environment box is the input, the individual and organizational performance are the output and the rest of the boxes are the throughput. The feedback-loop connects the input to the output, in both ways. The authors have taken into account larger system levels (mission, strategy, leadership, culture), group level (climate) and individual level (needs and values, task requirements and individual skills and motivation).

Because the arrows in the model connect the boxes and go in any direction, it is an open-system principle of multiple effect (change in any box will affect the other boxes). The most meaningful linkages are shown with arrows. But, the two-dimensional display is limited and a hologram would be better. Yet, this model predicts cause, so some directions are more important. Burke and Litwin state that culture helps to determine the type of reward system managers deem appropriate. Culture carries more weight, because changes in culture (e.g. organizational mission) affect the total system, while changes in structure may not.

What are transformational and transactional leaders?

James McGregor Burns defined transformational leaders as the kind of leaders that bring about change and transactional leaders as those that see the leader-follower relationship as a transaction (no change in deep structure). Transactional leaders are more interested in evolutionary change. Transformational factors are external environment, mission and strategy, leadership and culture. Changes in one of these will require new behavior of the organizational members, and leads to change in the entire organization. Transactional factors are the day-to-day factors (transactions) that produce continuous improvement.

Transformational is comparable to Zaleznik’s leader and transactional to Zaleznik’s manager. Burke stated that each leader (manager and leader) can empower others, but the behavior differs when one is a leader or one is a manager. Organization transformation needs a change leader, one that personally identifies with the organization and the new mission. Transactional change needs a manager that sees their job as constantly focusing on improvement. Each box in the model will now be described.

1. External environment. These are forces or variables outside the organization that influence the organizational performance (or for a short time)

2. Mission and strategy. Mission is what the organization is all about and its primary goals. Strategy concerns how the mission is going to be accomplished. Mission is the present. Vision addresses the future. Mission is more about purpose and vision about leadership.

3. Leadership. The one who provides direction. Persuasion, influence, serving followers and acting as a role model are meant in this model. Leadership is about vision, change, using one’s intuition, influence, persuasive and presentation skills, rewarding people with personal praise and providing opportunities to learn new skills. Management is about role, setting objectives, using the resources effectively and rewarding people with extrinsic factors.

4. Culture. The way things are done and the manner in which norms and values are shared. Culture embodies both implicit (informal rules) and explicit rules. The history of an organization is also important for understanding an organization’s culture.

5. Structure. This refers to the arrangement of organizational functions (e.g. accounting, human resource management, etc.) and operational units that show levels of responsibility, decision-making authority, and the communication and relations that lead to the implementation of the mission, goals and strategy of an organization.

6. Management practices. The particular set of behaviors that managers perform to carry out the strategy of the organization. Boyatzis is an early contributor to research about this top, using the term competence instead of practice.

7. Systems. These are policies and procedures that help and support the organizational members with performing their job and role responsibilities. This category covers a lot of subcategories, e.g. information systems and technology, the reward system , a variety of control systems (setting the goal, performance appraisal)

8. Climate. This is the collective perceptions of group members (in a work unit). Including: 1) how well are they managed, 2) how clear is it to them what is expected of them, 3) how is their performance recognized, 4) how involved they are in making decisions, 5) if they believe that they are managed according to challenging and fair standards, 6) how much support they feel from the other group members, 7) how effectively they believe they are in working (with the unit) with other units.

9. Task requirements & individual skills or abilities. Job-person match: degree to which the requirements of one’s role, job and responsibilities fit with the knowledge, skills and abilities of the individual.

10. Individual needs and values. This category concerns the extent to which one’s needs are met on the job.

11. Motivation. Being motivated is a natural state, but for the workforce the need to achieve, to affiliate with others and perhaps to have power is meant with motivation. These are directed towards goals, goals that will fulfil our needs, which will lead to a higher satisfaction level. Organizational leaders and managers therefore need to establish organizational goals and pay attention to the individual needs. Also, the job-person match leads to significant workplace motivation.

12. Individual and Organizational Performance (and group performance). Output refers to outcomes of throughput-activities (which again are responses to input). Also, there is a direct feedback-loop between the external environment and performance (the external environment might directly affect performance). Usually performance is defined by indices as productivity, customer satisfaction, quality of service or earnings per share.

What support does the Burke-Litwin model have?

Recall, the fundamental premise for the model is: planned change should go from the top (the external environment) to the bottom (performance). The arrows pointing down in the model show that they carry more causal weight. Thus, concerning change, Burke and Litwin suggest that the external environment has the greatest impact. Next, transformational factors have the greatest impact, and then the transactional factors come.

The External Environment

Texture means describing the causal nature and the understanding of the linkage between the external environment and organizations. It is important to keep in mind that the model only tries to represent reality, it is not reality because reality consists of the human beings in the organization (their decisions and daily activities). Leadership is immediately affected by the external environment. These executives determine the mission and strategy and shape the culture for a part. Leaders can significantly influence the ultimate performance (or change) of an organization. Prescott stated that the executives' perceptions of the external environment directly affect the decisions for strategy they make. The culture is also directly affected by the external environment (Hofstede: the powerful influence of national origin on the individual behavior).

What are transformational factors?

Mission and strategy are often named together because they both concern goals, direction and objectives for the organization. Mission is the what, strategy is the how. The order is important (mission first). Missions influence strategic decisions, which then again influence performance. Mission should also be related to culture, because mission statements usually explicitly or implicit include values and philosophy. Three studies are important for examining the influence of strategy. First, Chandler examined the importance of establishing strategy before structure. Therefore the model attributes more weight to strategy than structure. More recently studies showed the reciprocal relationship between strategy and structure. Third, Miller and Cardinal stated that strategic planning positively affects performance. When examining leadership, studies showed that leaders influence performance, leadership precedes management, and leadership accounted for more variance in the organizational performance than did other variables. These findings and the finding that leadership significantly relates to improved organizational performance declares the central spot of leadership in the model.

What are transactional factors?

The remaining boxes in the model (structure, systems, management practices, work unit climate, individual needs and values, task requirements, individual skills and abilities and motivation) represent transactional factors in the model. They are more related to the foreground, the work unit climate, than to the background (culture), Jocye and Slocum showed that structure and management practices both had a direct impact on climate. Lawrence showed that structure influences management practices and Galbraith showed that structure influences task requirements. Some people say that the reward system is the most important subsystem of the policy and procedures. Deutsch has shown a linkage between reward systems and individual needs and values. Huselid, Jackson and Schuler stated that Human Resource Management (HRM) effectiveness has a positive impact on performance. Strategic HRM (designing and implementing policies and practices to ensure a firm’s human capital contributes to achieve its business objectives) is a stronger predictor of positive organizational performance than technical HRM (eg.g recruiting, selecting, performance measurement) is.

Another important subsystem is the MIS (IT). Zuboff demonstrated the impact that IT has on worker behavior, particularly motivation and performance. Rosenberg and Rosenstein, independent of Litwin’s research, also found that climate influences productivity positively.

Motivation can be best understood as intervening or mediating the other variables, because in research motivation sometimes is the independent variable and sometimes the dependent. The two boxes next to motivation, task requirements and individual skills/abilities and individual needs and values significantly influence motivation.

Support for the hierarchical relationship of climate, motivation and performance (in the middle of the model) is the research that shows that the manager’s practices of participation created a climate that positively influenced motivation, therefore positively influenced performance and resulted in client satisfaction.

Finally, changing the transactional factors will lead to continuous improvement and transformational factors will lead to discontinuous change that affects the organization’s deep structure.

How can the organization's culture be changed? - Chapter 11

This chapter focuses on changing the organization’s culture. Culture is transformational, because it is systemwide, directly related to the external environment and requires more revolutionary change.

What is organizational culture?

The surface of organizational culture is what can be seen, heard, touched and smelled. Schien referred to these observations as artifacts, the visible manifestations such as technology, products, language, mode of dress etcetera. Although artifacts are easy to see, determining the meaning behind them is not easy. The interpretation of the artifact can be wrong. Surface is only one of the three important levels to understand culture. The second level is, espoused beliefs and values. When a group is first put together to achieve something, one or two members will pop up as the leaders. These leaders will provide solutions. Only until the group has acted on them, and they turned out to be successful will the whole group believe it actually works, this is called social validation by Schein (certain values are confirmed only by the shard social experience of a group). When organizational members name the values and beliefs in the organization (espoused beliefs) , but never act on them, some important ingredient of culture is unavailable to us. Below the overt artifacts level and what people espouse, and is the third level; basic underlying assumptions. These are assumptions that are rarely (if ever) discussed, taken for granted and, based on repeated successes, - avoided. They are usually non-comfortable and non-debatable, therefore they are extremely difficult to change. To change these basic assumptions, re-examination of the beliefs needs to be done, which can destabilize the system (individual or group) and therefore can cause anxiety. Schein stated that, to change culture, there are two keys: 1) management of the anxiety and 2) assessment of the potential for the new learning is even present.

To fully understand organizational culture, one must reach the third level.

A case example of Culture Change: the BA story

In the 1980’s the British Airways (BA) decided to become a private company and therefore underwent considerable change. In that time, BA was also threatened by the external environment: the fares were nog longer set by governments but were being determined by the marketplace. Thatcher was a great follower of the free-market society, and therefore the disparate government organizations in the aerospace industry needed to become one free market organization, British Aerospace. Now BA had to survive on its own. The CEO, Colin Marshall, decided that the workforce needed to be reduced from 59,000 to 37,000. He emphasized the mission of providing superior service and to focus on strategy that would increase market share and customer satisfaction. These changes of mission and strategy affected the deep structure but were not enough for complete change: the culture had to be changed. BA was formed of two companies, BEA and BOAC. BEA used to fly short trips (and wore brown suits) and BOAC flew all over the world (and wore royal blue suits). These artifacts became a problem when they merged into BA. When they were finally on the same page, the company had to change again (because of the free market decision). The culture was mostly a command-and-control culture that was engineering rather than market driven. Espoused beliefs in this company were: the employees believed strongly in the emphasis on solid engineering and maintenance of the aircraft. These activities would lead to safety. Something that has to be mentioned is that in an organization change effort, it is just as important to communicate what will remain the same as to communicate the differences. The stable component will then act as an anchor and makes it possible for the organizational members to manage the ‘chaos’. Marshall decided that in the BA situation, the maintenance and engineering functions had to be kept intact and the change was to become market and customer driven.

To help the organizational members treat people as human beings instead of baggage, a 2-day orientation to the new culture was implemented (‘Putting People first’). This would be the unfreeze step in Lewin’s model. The head of the HR department used the metaphor of a stool with three legs. If one of the legs would be removed, the whole stool would collapse. The three together were the critical process for change:

1. ‘Managing People First’: 5-day set of activities that learned managers how to 1) communicate in a better way and built trust, 2) manage the people participatively, 3) manage them more as a team, 4) provide constructive feedback in performance appraisal sessions. (e.g. multirater process).
2. Performance appraisal for all managers. Half of the managers were rated on results, the other half on how they got the results (the rated behaviors from the MPF program). This became an annual activity.
3. Pay for performance. Rewarding managers on how they were rated on stool 2.

When the boss-subordinate relationship is better, customer satisfaction will be significantly higher (has even more effect than improving subordinate-customer interactions). The MPF programme was based on these assumptions and helped learning managers how to manage in a participative way. Many more change efforts were done: for example creating a marketing function. When BA became the most profitable airline in the industry in 1990, the refreeze stage was largely realized.

What are the principles of culture change?

Behavior is the easiest to change, therefore it is highly recommended to start to tackle behavior first, instead of values and attitudes. First, it needs to be established what you want the new culture to be, followed by an indication of target behaviors. Then, you train managers on these behavioral practices via feedback and role of skill practice. After this, you introduce these practices in the managers’ performance appraisal and make sure they receive more incentive pay when they use the behavior. This is not as easy as it looks, because of the different levels of culture. Lewin described the following assumption: if you want to understand an organization fully, try to change it. Changing an organization will cause disequilibrium and the reaction then is to seek equilibrium (might be resistance). It is very important to observe the organizational members’ reaction to the attempt to change the way we do things, because these reactions might give us a glimpse into the unconscious.

Kotter and Heskett found 11 characteristics of an adaptive culture (the organizations that have the highest performance and ability to change when change is needed).

1. Willingness to make changes in culturally ingrained behaviors.
2. Emphasis on identifying problems before they are present and fast implementation of solutions.
3. Focus on innovations.
4. Shared feelings of confidence about handling problems and opportunities.
5. Trust is emphasized.
6. Enthusiasm.
7. Candor.
8. Willingness to take risks
9. Flexibility to respond to external demands.
10. Consistent words and action.
11. Long-term focus.

Attempting to be an organization like this, will help prevent ‘cultural lock-in’.

What is transformational leadership? - Chapter 13

Does leadership influence organizational performance?

There are schools of thoughts that say that leadership is exaggerated and that they do not influence organizational performance (e.g. Salancik and Pfeffer). Other people argue, for example Zaccaro, that the organizational performance is only a function of environmental characteristics and contingencies. Other people argue that precedence is a very important factor and so do organizational culture, previous decisions and activities. These conclusions are highly dependent on the methods and measurements that are used, therefore some conclusions can be questioned. According to Hogan and colleagues, leaders can be very effective (coaches turning losers into winners) but they can also have harmful effects (Hitler). Also, reactions to abusive and incompetent management may cause turnover, insubordination, industrial sabotage, and malingering which costs the productivity of an organization billions of dollars per year. A study from Weiner and Mahoney showed that leadership accounted for about 44% of the variance in profits and 47% in stock price. More evidence for high additional values is found, so leaders of organizations can and do make a difference. The influence of leadership on organizational change is not clear from research, but in this chapter it is presumed that also for change, leadership matters.

How can leadership be defined?

Everybody can see and feel leadership, but nobody knows the words to define it. Second, there are many and diverse definitions for leadership. Finally, the definitions depend on who you are talking to and what your experiences are. However, some definitions are made. Power is having the capacity to influence others, leadership is the exercise of the former named capacity (Person A gets Person B to do something that Person B otherwise not would have done).

Further distinction

Distinction between leaders and managers

Zaleznik was one of the first to distinguish between management and leadership. Leaders see no difference between their own goals and the organization’s goals and managers are more impersonal about goals. In relation with others, managers relate more according to role, and leaders more intuitively. Burns introduced the distinction between transformational/transactional leader, which was much like Zaleznik’s distinction (transformational = leader and transactional = manager). The author conducted experiments in Japan, China and Great Britain, asking 100 managers to tell the difference between managers and leaders, and surprisingly they almost made the same distinctions as Zaleznik and Burns (without reading their articles). In the mid 1990’s, Bass concluded from his research in a variety of organizations that there is universality in the transactional-transformational paradigm.

Authority and leadership

Authority means the right to make decisions that are opposed on others, to use and distribute resources and perform certain functions. Obholzer differentiated between authority from above (derived from a particular role), from below (given by subordinates or colleagues) and from within (derived from one’s individual capacity to assume his or her own authority from his or her personality). Leadership is mostly associated with authority from below and from within. Leadership is not about command and control, but about influence. Personal skills as active listening, persuasion, empathy, and awareness of how one affects others and how one is affected by others are highly important for leadership. Leadership also requires fellowship. So, leadership is about influence, but that influence is a reciprocal process. Finally, transformational leadership is used for discontinuous change and transactional leadership for continuous change.

Bass: transformational leadership

Bass developed a measure of the two leadership categories, the Multifactor Leadership Questionnaire (MLQ). From the research done with this instrument, several components of transformational leadership are derived:

1. Charismatic leadership (or idealized influence). Role models, admired, respected and trusted. Followers identify with these kinds of leaders and want to be like them. They are willing to take risks and are consistent. Furthermore, they have high standards of ethical and moral conduct.
2. Inspirational motivation. Providing meaning and challenge. Team spirit enhanced. Leader communicates clear expectations that the followers want to meet. Strong commitment to goals.
3. Intellectual stimulation. Followers are urged to be innovative and creative, think critical and to approach old situations in new ways. When the followers make mistakes, the leader does not criticize them (in public).
4. Individual consideration. These kinds of leaders pay attention to the follower’s need for achievement, and serve as a coach or mentor. They recognize individual differences. The leader practices management by walking around (MBWA). The leader checks the tasks and responsibilities without the followers feeling monitored.

Charismatic and inspirational motivation are usually combined to a single factor (charismatic-inspirational management). A significant part of transformational leadership in the MLQ is about charisma. Because of this, although Bass does not name this explicitly, it looks like transformational leadership goes together with charisma more often than not. Bass and colleagues summarize evidence for transformational leadership as a superior form of leadership. Charismatic leadership is not required for successful organization change, although it might be helpful. Qualities as persistence, having a clear vision about the future, and self-awareness are required for being a good leader.

Bass defined three components of transactional leadership:

1. Pay for performance.
2. Management by exception.
3. Monitoring of deviances from standard, mistakes and errors. This last component is less effective than contingent reward.

Laissez-faire management is something different:

• Necessary decisions are often not made.
• Actions are delayed.
• Authority is unused.

Bass stated that transformational leadership is superior to transactional leadership, but an organization can survive for some period without leadership, but not without management.

What is executive leadership?

As organization change progresses, the middle and lower levels of leadership become more critical to the success of the overall effort. This chapter is more focused on the top of the leadership-hierarchy: the executive level. Zaccaro stated that an executive has two primary responsibilities or functions. First, boundary management (external). This means monitoring the organization’s external environment, deciding where to put attention to and communicating this to the organizational members. Second, organization wide communication (internal). This means reassuring that units within the organization communicate and determining what decisions need to be made and who should make them. Also, overall performance needs to be monitored.

What is the concept complexity theory?

The conceptual complexity theory of leadership assumes that organizations operate within highly complex environments. These are characterized by higher information-processing demands and by the need to solve more ill-defined, novel and complex organizational problems. Leaders need to make sense of these complex environments. Elliot Jaques and colleagues proposed the Stratified System Theory (SST). Components of SST are: 1) emphasis on the executives as the rationale for collective action, 2) stratifying the organization according to hierarchical levels (7 layers is the maximum), 3) alignment with open-system theory and 4) the requisite leader characteristics (technical, interpersonal and conceptual). The higher the leader is in the hierarchy, the more important the conceptual characteristic is, and the technical becoming less important. Interpersonal characteristics remain important at every level.

What is the behavioral complexity theory?

This theory focuses on the multiple roles a leader plays and the multiple supporters to be served. The leader must be capable of behaving in different ways in different situations and must be capable of balancing competing demands. This theory is not independent of the former. Both theories involve abilities and intelligence. Conceptual complexity is more about analytical and thinking skills and formulating plans for action, and behavioral theory about emotional intelligence and implementing plans.

Strategic decision making theory

This theory emphasizes the importance of a congruence between the organization and its environment. It also promotes stability and certainty in the short run and flexibility and adaptation in the long run. Leader qualities that are emphasized are cognitive abilities, functional expertise, and motives (need for achievement, self-efficacy, locus of control and risk taking). These models are also about how leaders make the strategic decisions).

Visionary and inspirational theory

This theory emphasizes charismatic, transformational and visionary qualities. The leader needs to develop a vision that will focus and motivate collective action by the organizational members. Leader qualities that are emphasized are cognitive abilities, self-confidence, risk-taking and emotional intelligence.

It is important to keep in mind that all four of these executive leadership perspectives are relevant and are mostly combined. Furthermore, it's important to keep in mind the importance of the executive leader’s need to provide vision and direction for the organization.

Howard Gardner: Leading Minds

Gardner studies the thinking abilities and patterns of 11 leaders (inclusive Gandhi, Martin Luther King, Margaret Thatcher and others). They had in common that they all were leaders by choice. Zaleznik stated earlier that a characteristic of leaders was empathy, but also that a leader was a loner. Gardner stated on this that leaders provide the followers the mental structures that activate the followers’ desires. These structures are about who we are as an organization and the leader tells them as a story. According to Gardner, leaders can be categorized according the kind of stories:

1. Ordinary. The leader will tell a traditional story, focused on winning, being better than others.
2. Innovative. The leader will tell a latent story, about implicit beliefs and values.
3. Visionary. The leader creates a whole new story, mostly associated with creating entrepreneurism.

According to Gardner, successful leaders have a story that works for them. The story contains a journey that leaders and followers take together, containing identity.

McKee: A master storyteller

According to McKee there are two problems with the rhetoric of the ordinary story that Gardner uses. First, organizational members have their own ideas how to win against competitors and are arguing in their heads with the leader’s attempts to persuade. Second, if the leaders succeed in persuading, the commitment will only be intellectual. Emotion must be engaged, and this can be done with telling a good story. According to McKee, a story expresses how and why life changes. The story begins with a balanced life, but then an inciting event happens (throwing life out of balance). The leader must then compel a story by asking four primary questions; 1) how can we restore the balance? 2) what is keeping us from doing this, 3) how should we act to achieve this desire for renewed balance? And 4) is this truthful or is it just a hype? Stories are ways to remember things. The story is about the struggle between expectation and reality.

Gardner: Changing Minds

Gardner identified seven factors that provide a way of thinking about how one can lead change, and the useful action steps for persuading the followers to the leaders point of view.

1. Reason. Works for thinking, reflective people: involves logic, analogies, metaphors and taxonomies.
2. Research. Collection and presentation of supportive data (does not have to be formal).
3. Resonance. Does the argument for change resonate with organizational members? (affective component). The first two factors might conflict with the beliefs and values of organizational members. Seeing the leader as reliable might be enough to change minds.
4. Redescriptions. Number of different forms to describe one’s points.
5. Resources and Rewards. When a change leader is in the position to provide resources that will facilitate change, this will support the change effort.
6. Real-World events. Events in the external environment can sometimes change the minds of organizational members (e.g. terrorist attack)
7. Resistances. If the first six factors are inconsistent with one another and resistances are strong, changing minds will not be likely.

How can organizational change be lead? - Chapter 14

What are the phases of organization change and what is the leader's role?

Although processes are never linear, it is still important to think about the planning process in terms of phases. Phases are not discrete but overlap. Two things are important to keep in mind: 1) phases are not exclusive (more happen at the same time) and 2) contingency plans need to be made, because things usually do not turn out the way they are planned.

Prelaunch

Leader self-examination

Because leadership is personal, it is important for the leader who is about to begin a change to take some time to reflect on his/herself. This reflection has three categories: self-awareness, motives and values.

Self-awareness has been proven to be related to performance (high performance tends to show less discrepancy between how they perceive themselves and how others see them).

Successful change leaders need to be cognizant of: tolerance for ambiguity, need for control (organization chance is chaotic sometimes, so leaders can’t be control freaks), understanding how feelings affect behavior, personal dispositions (intuition is more related to leadership than sensing), and decision making.

Motives. According to O’Toole, ambition is the primary characteristic for leadership. Some people avoid highly ambitious people, but appropriately ambitious is good. A change leader needs to have a healthy dissatisfaction with the status quo and then change it. Also, this leader needs to have ambitions in the service of an organization change goal. Just as Zaleznik said, a leader is one who shows no differences between personal and the organization’s goals. McClelland defined three major motives: need for achievement, power and affiliation. McClelland and Burnham found in their study that if a manager was high in power motivation, low in need for affiliation and high in inhibition (power was not used for self-aggrandizement), the organizational goals and expectations of subordinates were more clear and the team spirit was higher. Managers with high needs of affiliation want to be liked and popular, which leads them to making impulsive decisions or trying to please others rather than making rational decisions. Managers with a high need of power that is personally oriented are no good leaders, but some amount of need for power is needed to be an effective leader. Successful managers are oriented towards organizations, enjoy work, feel greater responsibility for developing them than others and have a preference for getting things done in an orderly fashion. They are usually more mature, less ego-centred and less defensive in comparison to others. Furthermore, good leaders are concerned with the needs of their subordinates. Finally, effective change leaders need to have an above-average level of energy (to work long hours when needed), interact with lots of people and energize others.

Values. The alignment of individual needs and values with the organization’s culture will enhance motivation (and in turn performance). If an organization wants to change, it needs to modify current values or establish a new set of values, which is the responsibility of the CEO (but can involve many people).

What is the external environment?

Top leaders should gather as much information about the organization’s external environment as possible (in the pre launch phase), e.g. customer needs or changing technology in the industry. According to Porter, it includes understanding the bargaining power of customers, suppliers and unions and threats of new companies entering the market place and substitute products or services. Then the leaders need to respond to the external environment. The pre launch phase holds on to assumptions of open-system theory and that the organization needs the environment to survive. Usually change is a response to changes/challenges in the external environment. Emery and Trist discussed four kinds of environment for organizations:

1. Placid, randomized.
2. Placid, clustered.
3. Disturbed, reactive.
4. Turbulent fields.

According to them, the world is moving mostly towards the last one. It is very important to read the environment as accurately as possible so that timely and appropriate organizational responses could be made.

How can the need for change be established?

If people feel no need for change, they will probably not embrace it. CEO’s are often in a better position to see these needs, but not always (for example salespeople might know the needs of their customers better). But, it will still remain the CEO’s responsibility to communicate these needs to the rest of the organization.

Providing clarity of Vision and Direction

The final point of the pre launch phase is to provide a vision and clear direction for the organization change effort. James O’Toole states that a good vision mobilizes appropriate behaviors. Leaders do not even have to create visions themselves, but they must initiate a process to develop a vision. Leaders need to recognize their task to make the vision ‘visual’. Think about the paramount vision statement that Martin Luther King jr. used in his ‘I have a dream’ speech. In the Burke-Litwin model, vision is being associated more with leadership, but to change effectively, both who we are (mission) and who we want to be (vision) needs to be addressed.

What is the launch phase?

Communicate the need

Usually the CEO communicates the need for change, but it doesn’t always have to be like that. In the BA example, the number two person delivered the case for change, because he had more heart in the project. Although the CEO doesn’t always have to be the change leader, it is his/her responsibility to see that the delivery of the message occurs.

Initial activities

To bring about organization change an activity that will capture attention, provide focus and create reality needs to be set up. The early activity of organization change can take many forms. The book gives different examples: the Putting People first-seminar, team-building activities and a one day workshop on Extending Choice. A focused symbolic and energizing event (or multiple events at the same point in time) is very useful in launching large-scale and planned organization.

Dealing with resistance

The change leader needs to be aware of the nature of resistance to change and the forms that resistance behavior can take place (individual, group or large-system level). At the individual level, the organizational members need to have the feeling that they have a choice. The change leader also needs to be able to differentiate between blind, ideological and political resistance. At the group level, groups need to achieve closure and they want to involve key decision making. At the larger system-level, resistance can take forms of for example ‘This too shall pass’ or diversionary tactics (chapter 6). Strong leadership (clarity of direction, passion and vision and persistence) and a compelling case for change are needed to resolve this kind of resistance.

Post Launch

This phase of change is difficult for many CEO’s, and some of them experience anxiety and ambivalence in decision making. Followers of the change will at this point ask for structure (what will my new job be?). Ronald Heifetz gave advice for this phase: 1) be persistent about what is going to take to make a successful change and 2) draw the system out of its comfort zone but make sure that the associated stress with it does not become dysfunctional, 3) deal with avoidance mechanisms. It may seem to the change leader as if the change has gone his own way. The CEO then has to be persevere but also patient, so that creativity and innovation can emerge. (new values, services, markets, structures etcetera). Now five key actions for this phase are described.

Multiple leverage

For large organizations to change, one intervention will not be enough. Burke wrote two relevant summary points: 1) Again the strong leadership in times of change needed is emphasized. 2) True organization change requires multiple sources of influence (for example: developing a new process of supply chain management, training and development, process reengineering).

Taking the head

Not everyone will be happy when change is launched. Some people will look for someone to blame, and the change leader will be the easiest target. Evans and Price named this heat-receiving episode pushback. In times of pushback (usually given through opinion leaders), the change leader must use self-control, work hard to listen, not be defensive, and display patience.

Consistency

In the beginning of the change, the change leader’s behavior will be scrutinized by the followers. The most frequently asked question is: ‘’ Does the change leader really means it?”. The point here is about trust, if people trust the change leader. What behaviourally actually might be even more important to followers is the extent to which the leader’s behavior matches his or her words (consistency).

Perseverance

This term means that leaders should not change the course they were taking when it became tough. The beginning of organizational change is sometimes not this hard, but the follow-up is. A very important part of leadership then is to stay the course, continue encouraging the organizational members and keep communicating the message.

Repeating the message

The best message that can be told is about values, mission and vision. Howard Gardner stated that a good message is a dynamic perspective, given by the change leader. The story has to fit the audience it is given to and has to do with identity. The change leader tells the story and keeps reminding the audience about what it is that we are doing and why we are doing this. Also, it is critical to tell the story to the followers face-to-face, so that questions can be answered and nuances can be elaborated. Change leaders need to use multiple levers for the transformation, take the heat from followers from time to time, show consistency in words and actions, persevere, and keep on repeating the message.

Sustaining the change

Pascale et al argued in their book that chaos theory is not applicable for organizations, since they are not chaotic, but complex (complex adaptive systems). Pascale et al. derived four bedrock principles from the complexity theory and life science theory that they consider to be applicable for organizations:

1. Equilibrium means a precursor to death. Standing still places the organization at maximum risk, because they are less responsive to changes in the environment.
2. In the face of threat, organisms move to the edge of chaos. New solutions are more likely to be found in this phase, because this condition increases mutation and experimentation.
3. When the former phase occurs, components of the living system self-organize.
4. A linear path will not occur, unforeseen consequences are inevitable. The challenge is to disturb these in a manner that the desired outcome still can be approached.

The importance of sustaining an organization change effort is described according to four considerations: unanticipated consequences, momentum, choosing successors and launching again new initiatives.

Unforeseen Consequences

When change is launched, many different reactions to the disturbance arise at the same time, which makes the system move to the edge of chaos. For example, some people that you thought would help you will resist against the change, or the other way around. Going to the edge can provoke anxiety, but living systems are able to evoke new solutions and self-organize with gradual movement to a new state of equilibrium. This state is also referred to as the refreeze-state in the model of Lewin. Pascale et al. stated that the equilibrium is the precursor to death, this means that the death is not necessarily immediate and the organization still has time to change.

Momentum

It is just as important to manage further change as to manage the change that has already occurred (momentum). Managing the momentum might actually even be harder. Maintaining the change momentum is so important because the natural movement toward the equilibrium has to be tackled. Pascale et al stated that to tackle equilibrium, there are two forces: the threat of death and the promise of sex. This desire to survive is very strong. Living systems survive because they adapt to changing forces in the external environment, this is just what organizations have to do to maintain momentum.

The choosing of successors

Preventing homogeneity, can be seen as a form of countering equilibrium, according to Pascale et al. This suggests that organizations need to hire new people (or from other parts of the organization) instead of cloning (using) the people they already have (for change). Although hiring everyone new would be an absurd idea, if some percentage (20/30%) new people are hired, this counteracts the equilibrium in ways such as tired thinking, solidified norms and group thinking.

Launching new initiatives

It is critical to implement and emphasize new initiatives to renew organizational member’s energy, motivation and increase new ways of thinking. These initiatives need to be in line with the change effort, though. For example, creating a new product or acquiring another organization or business. The change leader needs to be clear and deliberate about disturbing the equilibrium with new initiatives. Sometimes it is even needed for a change leader to cause these disturbances.

How can organization change be integrated? - Chapter 15

This chapter consists of a summary of organization change, and how it can be integrated.

What are the principles to planned organization change?

Gladwell’s idea’s suggest ways of understanding organization change more thoroughly and ways of planning the process. In summary: we must find the few that help us (connectors), spread the message (vision/mission) and make sure it stays, and change the context in a way that our message becomes a reality and we can reach the goals we set. Also, we have to keep in mind the principles of organization change that are addressed earlier in the book (e.g. open-system theory, resistance, unanticipated consequences).

The first phase: pre launch

To determine the change message is step one. The message includes the vision, purpose and direction. To make it stick, we tell it in the form of a story and spread it in a variety of ways. Then we search for our connectors, that have social power and that will spread the message through the rest of the organization. Finding the right few (the ones that embrace change instead of resisting) for this job has to be done through selection, not training. Once these people know the right story, they will know how to spread it.

The second phase: launch

In this phase the ones supporting the change continue spreading the message or story and initial key activities are launched. These initial key activities are an effort to change the context. For example, the Dime Bancorp launch was the formation of a task force (15 people approximately) to craft the statement of a mission for the merged organization. These launch events are usually not done with more than 150 people.

The third phase: post launch

Multiple leverage is critical, meaning that change leaders should not rely on a singular change intervention. Gladwell adds to this that a change leader should do things that are not obvious. The message still must be repeated in this phase.

Sustaining the change

The most important ingredient in sustaining organization change is dealing with unforeseen consequences of initiatives and interventions, especially in the launching process. Gladwell stated that we proceed with our intuitions about new initiatives but he also warned that when we are acting on them, we should find the consequences fast and change to another approach to keep the change going. Sustaining the change means to understand that many consequences of interventions cannot be foreseen, that these disturbances should not become barriers to change effort and it includes taking action to ensure momentum on new ways toward the change effort.

Gladwell’s principles are not addressing all aspects of organization change, but they do help to understand certain change phenomena.

What do we know about organization change?

Some key questions and principles about organization change are here addressed again. Critical questions about the environment are:

• What do the customers think of the organization/services? Questioning these is critical because we want to know what customers will need in the future so the organization can adapt.
• What are capital markets telling our organization? (e.g. what is the stock price?)
• For a non-profit organization, the question can be: what is our mission today?
• What are our competitors?
• What do the people we attract, select, place and retain in our organization think about us?
• Are we up to date with technology?. Also, government regulations, politics, social trends and other related things need to be addressed.

There are also critical questions about the inside of the organization. For example, are we still in the right business? Or for non-profit organizations: what is the level of commitment and passion about our organization’s goals and missions?

Third, before implementing the change, it needs to be investigated how ready our organization is for the required change. The answer determines if the required change will be revolutionary or evolutionary or both? This will depend on how much change has already occurred and how many initiatives have been thrust on the organization. If the change is transformational, the question of how locked-into our culture we are arises. Strong cultures are hard to change, but they must change if the environment requires it.

Furthermore, we need to make the case for change: why are we changing the organization? Finally, we need to have theoretical and research knowledge about the following subjects: open-system theory, Capra’s ideas about autopoiesis, structure, and process, the differences between continuous/discontinuous change, understanding of level differences in organizations, understanding of what is first (behavior before cognition), measurement (alpha/beta/gamma change), distinction between process and content, organization models, culture, leadership and principles of change by Pascale, Millemand and Goija and the work of Gladwell.

All these components are not enough to know everything about organization change, because organization change is not linear and complex.

What are the successful processes?

James O’Toole focussed on cases of successful organization change, and found eight commonalities:

1. Change had top-management support (long-term commitment).
2. Change was built on the unique strengths and core values of the organization.
3. Implementing the change was not imposed from the top.
4. Holistic change.
5. Planned change.
6. Changes were made in the guts of the organization.
7. The change was approached from a stakeholder viewpoint (the external environment).
8. The change was ongoing.

What effects do negative and positive aspects have?

Recently, in psychology has been a shift from emphasizing the negative and pathological part to emphasizing the positive aspects. In terms of research, negative findings are often more powerful than the positive ones. A larger R2 can usually be found accounting for negative phenomena, and more powerful effects are likely to be published. Kim Cameron took the positive psychology movement into the organization science domain. Cameron provided the ‘paradox of positive organization change’: positive versus the negative and how important both are for effective change in organizations. Cameron defined positive in the context organizations as exceptional performance. Positive refers to an affirmative bias in change efforts with an emphasis on strengths, capabilities and possibilities. Also the assumption: ‘all human beings are inclined toward goodness for its own intrinsic value’ is part of positive psychology. Studies show for example that people judge positive phenomena more accurately than negative phenomena (e.g. rating subordinates competencies instead of errors) and positive memories tend to replace negative memories. Some explanations for our natural tendencies include that when we are overwhelmed by disruptions, we want to emphasize what is life giving instead of life depleting. People also expect to live longer than average, that positive things will happen in the future (without evidence) and that they win more than that they will lose. Most people also underestimate the change of getting a divorce, overestimate their prospects for success in the job market and overestimate themselves compared to how others rate them. But the paradox is that, even though people have more positive tendencies and biases, negative factors have a stronger impact on behavior. For example, negative feedback has more emotional impact than positive, and living systems respond strongly and quickly to stimuli that threaten their existence. Cameron explained that both these inclinations are evolutionary adaptive but they differ with respect to intensity. Most life events are positive, so a negative is more unique and will attract more attention. For organization change, both negative events (creating an urgency for change) and positive events need to occur (creating a positive vision for the future). The problem is thus, that the negative will have more impact, so the positive needs to be concentrated on.

Should an organization's culture be changed?

Because of the constancy of change surrounding us, some scholars argue that every organization’s culture should be one of change. Lawler and Worley see stability as the opposite of effectiveness. They name some dimensions and address them in terms of design and operation so that they will be built on change:

1. External environment. Lawler and Worley address the external environment as environmental scenarios: making reasonable guesses about the future and being prepared to respond accordingly.
2. Identity. The organization’s statement about how it will achieve its long-term goals an d mission and the dominant approach to business. A built-to-last organization should be able to change, and change quickly in all its dimensions, expect for the identity (anchor and core for organizational members).
3. Strategizing. Strategy is a process and constant in motion. Strategizing concerns intent (in accomplishing its mission and objectives). Five elements of strategic intent: breadth, aggressiveness, differentiations, strategic logic, orchestration. Organizational competencies are what the organization can do and that are difficult to copy (competitive advantage).
4. Organization design and structure. Lawler and Worley argue that jobs should be structures, because job descriptions become outdated, people should be assigned responsibility on a temporary basis, people’s skills change as well as organizational needs and it would be better to work from project to project instead of job to job. They also advocate business units (teams) because they are useful for more direct customer contact and with the external environment. Second, they will help in getting more people to understand the business. Furthermore, they will make business opportunities easier. Finally, executives are forced to think through the degree of independence they wish to support in this structural projection of the organization. Lawler and Worley provided two useful structural features: matrix (combinations of business units with functions) or front-back structures (customer-facing units, combined with back-units). The latter are more easy to manage.
5. Measurement. Lawler & Worley state that performance information constantly needs to be gathered. Not only financial data, but employee motivation and satisfaction and measures represented by the balanced scorecard (innovation and customer satisfaction) need to be added to.
6. Human Capital. The author stressed that it is not only important to attract the right people, but also keep them by rewarding learning and developing person descriptions for selection and placement in line with thinking as a customer and developing talent.
7. Reward system. Lawler & Worley describe the impact of goals on motivation, job satisfaction, organizational performance and other dimensions, and reward attractiveness (providing unusual rewards).