Organisational Change - Question 3
WHAT ARE THE STRENGTHS AND LIMITATIONS OF A RATIONAL, STRATGEIC
APPROACH TO ORGANISATIONAL CHANGE?
1.0 Introduction
Organisations are never completely static. Whilst such entities have been conceptualised in
a variety of different ways (Morgan (1997), Bolman and Deal (1997) and Dawson (1996)), if
we are able to accept the notion that organisations may be viewed as social systems
(composed of people) then the interaction with their various environments predicates
change of one sort or another. The human components of the organisation undergo
constant change as they age, customers change, internal processes result in some form of
transformation of inputs, resources are consumed, outputs are created, success promotes
expansion of operations and failure leads to decline and possible ‘termination’.
In this essay I will explore one particular type of organisational change – namely the
rational strategic approach. On the basis of my analysis, I contend that the approach has
both strengths and limitations. There is not ‘one best way’ to manage change, but an
understanding of organisational behaviour and the conditions in which an organisation
must operate can enable those who manage change to realise the strengths of the
approach and to mitigate its limitations.
In the first section I attempt to define what is meant by a rational strategic approach and
set some parameters for the essay. In the second section I focus on the strengths of this
particular approach before going on to assess its limitations in section three. I attempt to
draw some conclusions from my analysis in the final section. Throughout the essay I will
refer to academic research to support my arguments as well as drawing on case studies to
illustrate the key issues.
2.0 The rational strategic approach to organisational change
Organisational change has been described as the process by which an ‘...organisational
entity alters its form, state or function over time’ (p 128) (Stevenson (1998)). As Mckenzie
Davey (2001) notes ‘..the phenomenon of change is vast, sprawling and complex.’ (p 12). A
review of the literature indicates that attempting to uncover one universally accepted
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Organisational Change - Question 3
approach to organisational change is futile. However, it is important to achieve some
degree of clarity over what is meant by the ‘rational, strategic approach’ to this
phenomenon if we are to go on to examine its strengths and limitations. This will assist by
establishing the parameters for the subsequent analysis of the strengths and limitations of
this approach.
The term ‘rational approach’ can be used in wide number of different ways when
discussing organisational phenomenon (Stacey (1996)). Townley (1999) refers to
‘substantive rationality’, ‘instrumental rationality’, ‘bounded rationality’ and ‘deliberative
rationality’, amongst others, to illustrate the ‘plethora of rationalities’ (p 291) that abound
in current management writing and research. It soon becomes clear that ‘rationality’ is a
subjective, socially-constructed concept. However, as Jackson and Carter (2000)
demonstrate, despite the arguments and evidence against the applicability of an objective
rationality, the ‘discourse on organisational behaviour shows a tenacious attachment to
this concept’ (p 103).
For the purposes of this essay and in the context of defining how we will understand the
‘rational, strategic approach to organisational change’, I have adopted the concept of
‘formal rationality’ referred to by Townley (1999). This is the notion that an individual,
group or organisation confronts a set of choices (‘means’) to achieve certain ‘ends’. The
means are evaluated from an external, detached standpoint and an appropriate course of
action is selected through the application of objective logic to arrive at an objectively
optimal position.
Stacey (1996) views organisations and those people that populate them as facing a
constant need to consider and implement their next actions in order to survive and
prosper. In this sense, change in organisations is all pervasive. As Hartley (1996) points
out, such change can be ‘minor...in procedures, activities or personnel, but can also refer
to large-scale transformations where the whole purpose, structures and values of an
organisation are modified’ (p 408). Differences in the scale of change may be defined in
different ways – for example Golembieski et al (1976) (quoted in Mckenzie Davey (2001)
uses the terms ‘alpha’, ‘beta’ and ‘gamma’ to describe increasingly radical and
fundamental organisational change, whilst Fox-Wolfgram (1998) uses ‘first order’ and
‘second order’ in a similar manner. The latter type of organisational change described by
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Organisational Change - Question 3
Hartley (1996) above, may be considered to be more ‘strategic’ than the former as it
impacts fundamentally on the whole of the organisation.
For the purposes of this essay I have adopted the definition of strategic change used by
Rajagopalan and Spreitzer (1996) and I will restrict my work to those changes that affect
the fundamental content of the ‘strategy’ of the organisation. But what do we mean by
‘strategy’?
Strategy, like change, is not a concept that lends itself to a single, universally accepted
definition (Johnson and Scholes (1993)). For Quinn (1998), strategy is the ‘...pattern or plan
that integrates an organisation’s major goals, policies and action sequences in to a
cohesive whole.’ (p 5). However, this appears to be a rather linear, rational approach to
strategy and may be contrasted with adaptive, incremental or learning approaches and
interpretative or cognitive approaches (Hendry (2000), Rajagopalan and Spreitzer (1996)).
Yet for the purposes of this essay, given its focus on the rational strategic approach to
change, Quinn’s definition appears appropriate.
Rational approaches to strategic change are those that emphasise an instrumental
conceptualisation of the change process involving a rational-intentional choice that is
based on an objective ontology (Hendry (2000)). This usually involves assumptions that the
environment and organisation are also objectively perceived, conceptualised and analysed
in a similar way by managers and other stakeholders (ie: an objective epistemology)
(Schneider and Barsoux (1997)). Furthermore, rational strategic approaches appear to
assume that managers are able (and are motivated) to pursue a sequential planned search
for optimal solutions to well-defined problems. Acting rationally, managers optimise
organisational performance by establishing the best ’fit’ between the organisation and its
external environment.
It is possible to distinguish certain basic premises on which the rational, strategic approach
to organisation is based (the following are extracted from an analysis of the literature
reviews on the subject conducted by Mintzberg (1994) and Rajagopalan and Spreitzer
(1996)):
1) Organisational change should be a conscious, formalised process that is broken down
in to distinct, sequential steps
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Organisational Change - Question 3
2) The environment is objectively determined and is viewed as a source of opportunities
and threats
3) Such environmental conditions determine the content of strategic change initiatives
through the structured assessment of alternative options for action
4) Internal organisational factors (that can either support or inhibit change) are also
objectively determined and manipulated.
5) Organisations change in order to achieve optimal levels of efficiency and effectiveness
by systematically identifying and reducing performance ‘gaps’
6) The process of achieving the future desired form, state or function is through attention
being paid to formal objectives, budgets, change programmes and plans
I would contend that on this basis the rational, strategic approach to organisational change
can be viewed as being largely synonymous with the concept of strategic ‘design and
planning’ (Mintzberg (1994), Ansoff (1965) and Ackoff (1970)). This approach to change has
been the attention of much research and Calori (1998) suggests that it ‘contitutes the
othodoxy’ (p 284) having produced many ‘practical’ tools that are taught in business
schools and applied in organisations. Such tools include business portfolio matrices,
SWOT analysis, Porterian competitive analysis and a host of organisational development
(OD) techniques.
Thus, in summary, we may identify the rational strategic approach as but one of a range of
different conceptualisations of organisational change. Such an approach is based on a
number of fundamental premises. These include the ability to generate options for the
future form, state or function of the organisation through the systematic collection and
objective analysis of relevant information. The option that enables the organisation to align
its internal capabilities so as to ‘best’ overcome external threats and take advantage of
environmental opportunities will be selected and systematically implemented. As has been
demonstrated, this approach assumes an objective ontology and an objective
epistemology.
3.0 The strengths of the rational strategic approach to organisational change
When seeking to identify ‘strengths’ and ‘limitations’ of an approach, one is seeking to
make a judgement or evaluation of the effects (desirable or otherwise) of that approach.
Yet the evaluation of organisational change can be fraught with difficulty (Mckenzie Davey
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Organisational Change - Question 3
(2001) and Guba and Lincoln (1989)). Such difficulties arise from a variety of sources,
including problems in quantifying causal relationships between organisational
performance and change initiatives, political behaviour in organisations and the
complexity of utilising atrributional and interpretative based evaluation methodologies.
It is perhaps because of these difficulties that Hartley (1996) observes ‘...the number of
published evaluation studies is relatively small...this lack of widespread evaluation
supports the contention that ...too little (, of what is written, is) about the impact of
organisational change’ (p429).
For the purposes of this essay I define ‘strengths’ as the advantages or benefits of one
approach to change relative to that of alternative approaches. Adopting the concept of
Hendry’s ‘rational-intentional choice’ (see page 3, above), the strengths of an approach to
change are often assessed in terms of the extent to which it enables an organisation to
achieve its stated objectives in a manner that is more effective than alternative approaches.
In practice this means that much of the evaluation of organisation change is in terms of the
achievement of financial and performance targets. Conversely, ‘limitations’ are defined in
this essay as the relative weaknesses or disadvantages of one approach compared with
another.
In reviewing the evidence of the strengths of the rational strategic approach in this essay, I
have identified two key strands of arguments. The first relates to empirical evidence that
supports a causal relationship between such approaches and measures of organisational
performance. The second regards the alleged benefits of the process of adopting the
rational strategic approach. These will now be assessed.
In terms of available empirical evidence relating to the strengths and benefits of strategic
change in terms of organisational outcomes, the research is equivocal (Rajagopalan and
Spreitzer (1996), Porras and Robertson (1992) and Mckenzie Davey (2001)). However,
certain studies (including those undertaken by Hambrick and Schechter (1983), Haveman
(1992) and Zajac and Kraatz (1993)) have been presented that demonstrate that rational
strategic approaches result in enhanced financial performance and increased likelihood of
organisational survival. Thus it is argued by these researchers that adoption of this
approach results in superior performance compared with not adopting this approach. Such
studies are open to criticism from a variety of perspectives including the limitations of their
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Organisational Change - Question 3
quantitative, statistical (positivist) bias that ignores many of the ‘humanist’ concerns over
the effects of organisational change. Furthermore, for every study that claims to
demonstrate the benefits of the rational, strategic approach in terms of measures of
organisational performance, another study exists to show that it has no effect or a negative
effect (Mintzberg (1994)).
These contradictions in the empirical evidence on the alleged strengths and benefits of this
approach are well summarised by Boyd (1991) who conducted a meta-analysis of 49
surveys and concluded that the overall effect of planned (rational) approaches was ‘very
weak’ (p362). Such studies adopt a predominantly ‘positivist’ paradigm, mirroring perhaps
the objective ontology and objective epistemology of the rational, strategic approach to
organisational change (see page 3, above). Rajagopalan and Spreitzer (1996) show that
such research often suffer from methodological flaws that seriously threaten the validity
and reliability of the results produced. These flaws include the poor operationalisation of
key variables, a lack of longitudinal research and ‘contamination’ by uncontrolled
exogenous variables.
So, if the empirical evidence in terms of organisational performance is equivocal, can we
identify any strengths in the process of rational, strategic change? Here the evidence
appears to suggest that certain benefits may accrue to organisations from adopting
aspects this approach to change.
Mintzberg (1994) identifies a number of ‘roles’ for the rational strategic approach to
organisational change and its advocates. These include communication, as a control
device, as analysts and as catalysts. These are assessed briefly below:
a) Communication. The rational strategic approach may promote improvements in
communication and co-ordination by providing a framework for management and
employees to engage in a dialogue about the change. Hafsi and Thomas (1985) use the
example of a planned change programme in Air France in the mid-1980s to
demonstrate how a 15 page summary of ‘Le Plan’ contributed to the programme’s
success by gaining commitment, promoting understanding and building consensus
amongst the organisation’s workforce.
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Organisational Change - Question 3
b) Control Device. The rational approach may also have a role in mediating the enactment
or implementation of change. Mintzberg (1994) demonstrates that ‘whilst too much
planning may lead us to chaos...so would too little, and more directly’ (p 416). To
ensure that the needs of a variety of stakeholders (including senior managers,
investors, external customers, unions, etc) are met, it is claimed that there is a need to
compare ‘actual’ progress against ‘planned’ progress. It is in this way that the rational,
strategic approach to change may add value to the change process as a ‘control
device’.
c) Analysts. Whilst one of the great criticisms of this approach is the emphasis it places on
the role of analysis in promoting ‘over-rationalised’ decisions, based on ‘hard’ data that
ignore a host of critical ‘soft’ factors, there appears to be value in undertaking analysis.
Given the great time pressures and turbulent environments in which managers must
act (Mintzberg (1973), Burnes (2000)), such analysis must deviate from the ’idealised’
view of ‘analysts in their ivory towers’ if it is to promote organisational success.
However, if it is to do so, such analysis must respond to the ‘realities’ of management –
including great time pressures and turbulent environments – rather than adopting an
‘idealised’ approach with ‘expert’ analysts that can result in ‘analysis paralysis’ (Peters
and Waterman (1982)). Lindberg and Zackrisson (1991)) show how in this way rational
strategic approaches can assist organisational change by raising issues that senior
management should have been aware of, but may have missed; and how insightful
analyses may assist in shifting managers perspectives (or ‘mind sets’) on important
issues by enabling them to become ‘more explicit about their key assumptions’
(Lindberg and Zackrisson (1991), p 272). Mintzberg (1994) highlights this role with
reference to the example of Shell, where strategic analysis helped senior management
to successfully redefine the way they conceptualised their business.
d) Catalysts. In this role proponents of the rational strategic approach have been viewed
as ‘corporate psychiatrists’ who present a mirror to the organisation and support the
change process by posing the question ‘where does the organisation want to go?’
(Blass (1983). Here, the role of the catalysts is less on strategic ‘planning’ and more on
strategic thinking and acting. One may view such a role as being incompatible with a
formally rational approach.
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Organisational Change - Question 3
Yet the role of ‘process catalyst’ and ‘formal rational planner’ are not necessarily
mutually exclusive. As Langley (1989) claims ‘formal analysis and social interactive
processes (ie: those promoted by the catalyst) must be viewed as intertwined...formal
analysis acts as a kind of glue within the social interactive process of generating
organisational commitment and ensuring action’ (p 626).
Thus, there a are a variety of ways in which the rational strategic approach may contribute
to the success of organisational change. However, as has been demonstrated in this
section, these contributions may be less direct than proponents claim and difficult to
measure and evaluate.
4.0 Limitations of the rational strategic approach to organisational change
The rational strategic approach has come under increasing levels of criticisms with regard
to its appropriateness and efficacy since the early 1980s onwards (Burnes (2000)). Such
criticisms are wide-ranging and effectively challenge the extent to which the approach’s
fundamental premises (see page 3, above) can be taken to apply in an organisational
setting.
In order to contain this assignment within the stated word limits, I have selected three key
limitations of the rational strategic approach – namely; organisational politics,
organisational culture and the limits of human rationality – which I will assess in this
section. This selection is based on my identification of those limiting factors that interest
me and that from my research represent recurring themes of importance in this field of
study. It is, however, not an exhaustive review and other important criticisms of this
approach exist.
a) Organisational Politics:
The rational strategic approach appears to repress the political aspects of organisation and
change. Whilst such approaches may recognise the existence of political factors, they
appear to treat them in a relatively superficial manner (Buchanan and Budham (1999)).
Several leading proponents of rational strategic approaches have actively argued that
change agents should not be political operators (French and Bell (1995) and Ward (1994)).
The ‘rational logic’ that is central to the approach is seen as being sufficient to gain the
buy-in of organisational members and to mitigate resistance.
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Organisational Change - Question 3
However, the repression of politics and the inability of this approach to account for this
dimension of change in an appropriate manner, appear to be a major potential limitation.
Power and politics are pervasive aspects of life in organisations and, as Buchanan, Claydon
and Doyle (1999) write, ‘change heightens the prevalence and intensity of political action’
(p 20).
The success or failure of a change initiative has been viewed as being ultimately
dependent upon how power and politics are recognised and dealt with by an organisation.
Indeed, as Burnes (2000) demonstrates, for proponents of the post-modern approach, how
an organisation changes and survives (or fails) over time, is not the outcome of a rational
strategic process but rather is ‘the product of power and politics’ (p 156). Thus, from the
post-modern perspective, for organisational change to occur and be ‘successful’ (whilst
recognising the multiple possible interpretations of what contitutes ‘success’), it is vital for
those managing the change to build coalitions of groups and forces that are able to
exercise power to overcome those who would ‘resist’ such change.
Kanter (1983) reviews the ‘power skills’ required by ‘change architects’ and Buchanan and
Budham (1999) state that ‘a reluctance to address this topic (organisational politics and
competence in managing political behaviour) can be seen as naive’ (p 625). These are
issues that the rational strategic approach to change gives little attention.
Buchanan and Budham’s (1999) research provides a number of useful case studies that
powerfully demonstrate how political behaviour, rather than rational-instrumental
processes, can determine the success or otherwise of organisational change. One
particularly interesting case is of an external change agent working in an NHS Trust to
implement a major initiative who needed to gain the ‘buy–in’ of a reluctant senior internal
manager. This was achieved by the change agent writing an assignment for the manager
for an experience-based university course that the manager was undertaking. The change
agent included in the assignment (on change strategies!) a piece on the exact change that
he was advocating for the Trust. As a result the manager got a very good grade and the
change agent got his ‘buy-in’.
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Organisational Change - Question 3
Thus, politics can play a critical role in the success of organisational change. The lack of
explicit attention that the rational strategic approach pays to this important dimension of
change may therefore be seen as a significant limitation.
b) Organisational Culture:
It has been argued that another significant weakness of the rational strategic approach is
that it fails to recognise that change is ‘essentially a cultural and cognitive phenomenon’
(Johnson (1993)). By failing to properly understand the organisation’s culture, it is
proposed, such an approach will encounter resistances and tensions that will result in the
change being unsustainable. Sathe (1983), Schall (1983), Weick (1985) and DiTomaso
(1987) have all claimed that a major reason for the failure of change initiatives is that they
ignore the strength of organisational cultures. Dawson (1996) views the importance of
culture as arising from the recognition that rationally-derived structures are unable to
provide an appropriate ‘social glue’ in organisations.
Thus, for certain researchers and practitioners, an essential factor in ‘successful change for
organisations is to possess or to be able to develop an appropriate culture’ (Burnes (2000),
p 289). However, the ability to manipulate culture is the subject of much dispute. Harris
and Ogbonna (1998) state that those who believe that culture can be managed and
changed tend to focus on changing behaviour and visible manifestations of the existing
culture in order to achieve shifts in values, unwritten norms and underlying assumptions.
However, there are those who deeply oppose this view. Gagliardi (1986), for example,
claims that organisational culture is deeply embedded in the subconscious and cannot
therefore be consciously manipulated. Achieving an instrumental change in underlying
values is also claimed to be very rare. Values and beliefs are so entwined with basic
processes of human cognition, and changing them can cause such cognitive anxiety, that
they cannot be manipulated in any rational, linear manner (Gagliardi (1986)).
Thus, a further limitation of the rational strategic approach is the inadequate way in which
it accounts for issues of corporate culture. As demonstrated above, culture can have a
major impact on the success or failure of organisational change. However, the extent to
which one can manipulate culture to achieve explicit objectives is strongly challenged.
Nonetheless, it is clear that issues arising from organisational culture need to be better
understood and given more attention than that afforded by the rational strategic approach.
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Organisational Change - Question 3
c) The Limits of Rationality in Human Behaviour:
The rational strategic approach assumes that people involved in the change process make
decisions based on systematic and logical analyses (see pages 3 and 4, above). Calori
(1998) identifies three ‘biases’ that are inherent in the rational model of strategic decisionmaking that represent significant limitations to its efficacy. These are:
‘•
a bias towards thinking, to the detriment of other forms of knowledge,
•
a bias toward binary logic (ie: a decision is a logical, optimising choice between
mutually exclusive alternatives),
•
a disregard of feeling (emotions and morals) in understanding, reasoning and
decision-making’ (p 284)
Such inherent biases limit the effectiveness of the rational strategic approach and
according to Mintzberg (1994) this is why the approach has failed so often and so
dramatically. Indeed Peters and Waterman (1982) attribute the malaise that many US firms
encountered in the 1970s and 1980s to ‘over rational’ modes of decision-making.
It is argued that such an approach fails to address the role of intuition in rational strategic
change and decision-making (Mintzberg (1994), Calori (1998)). Khatri and Ng (2000) define
intuition in this context as ‘being able to bring to bear on situation everything you have
seen felt, tasted and experienced in an industry’ (p 59). Thus, intuition can be viewed as a
‘synthetic’ psychological process that attempts to comprehend the holistic nature of a
situation.
From their empirical research into the performance of a number of US firms in the
computer, banking and utility industries, Khatri and Ng (2000) conclude that their research
‘contrary to conventional (rational, planned) wisdom, findings...suggests that experience,
judgement and gut-feelings (intuition) may play a significant role in financial
performance....In view of the general trend of increasing complexity and dynamism in
most business environments, intuition is likely to play an increasing role in strategic
decision-making’ (p 78).
A further criticism of the rational strategic approach is that it excludes emotions from
reasoning. As Stacey (1996) points out, such approaches adopt an over-simplified view of
organisations that fail to account for the organisational reality of the very human dynamics
of multiple-loop, non-linear feedback systems. Calori (1998) comments that it is
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Organisational Change - Question 3
astonishing the extent to which orthodox (rational) approaches to organisational behaviour
exclude emotion in decision-making, given how such emotions are a fundamental aspect
of the human condition.
Psychodynamic approaches to organisational change place a central emphasis on the
emotional and unconscious processes at play during such transitions. Jarrett and Kellner’s
(1996) research provides a useful case-study in to how a senior management team in a UK
local authority experienced a significant organisational change in 1994. Given the
uncertainty and anxiety predicated by this change, the senior managers enacted a variety
of social defences. In this case paranoid self-defence strategies could have become selffulfilling – resulting in the destruction of the senior team. Proponents of the
Psychodynamic approach claim that rational strategic approaches fail to provide adequate
holding space and containment to facilitate organisational change. As a result, destructive
psychodynaminc forces are not accounted for and the success of the change process is
threatened.
Before drawing conclusions, it may be useful to briefly consider the environmental
conditions under which the relative strengths and limitations of the rational strategic
approach are most apparent. Burnes (2000) and Mintzberg (1994) share the opinion that
there is no ‘one best way’ to manage organisational change. They place a central emphasis
on the role that environmental conditions – and the organisation’s ability to influence its
environment – play in determining when the strengths of a rational, planned approach to
change are likely to be realised (and conversely, when the threats posed by its limitations
are most prevalent). Burnes (2000) writes that where the environment is ‘chaotic and
unpredictable...and unknowable; planned and structured approaches are impractical’ (p
206). However, in more stable conditions with mature industries it appears that the
rational, strategic approach can bring certain benefits and advantages to the change
process.
5.0 Conclusions
In conclusion, the available empirical evidence is equivocal with regard to how the
‘content’ and plans that represent the ‘output’ of the rational strategic approach may
contribute to success in organisational change initiatives. Furthermore, there are a number
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Organisational Change - Question 3
of serious limitations to this approach. As this essay has demonstrated such limitations
centre on the inadequate manner in which certain critical aspects of organisational change
(eg: politics and culture) are dealt with and also on challenges to the validity of the
approach’s fundamental premises (eg: human rationality).
However, it would be wrong to confine the approach to the ‘waste bin’ on this basis alone.
As shown, there are a number of important areas and sitution where this approach can
contribute to the process of organisational change. As Dwight Eisenhower is claimed to
have once remarked ‘Plans are nothing, planning is everything’, and whilst the rational
strategic approach certainly does not offer a ‘universal panacea’, certain aspects of the
process involved in adopting the approach can be of considerable value to those
responsible for managing organisational change.
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