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ORGANISATIONAL THEORY
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ORGANISATIONAL
THEORY &
DYNAMICS
COMPILED FROM
Organization Theory: Modern, Symbolic,
and Postmodern Perspectives
4th edition
Mary Jo Hatch
Organizational Change: Perspectives on Theory and Practice
Piers Myers, Sally Hulks, and Liz Wiggins
OXFORD
UNIVERSITY
PRESS
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Compiled from:
Organization Theory: Modern, Symbolic, and Postmodern Perspectives 4e
By Mary Jo Hatch
ISBN: 9780198723981
© Mary Jo Hatch 2018
Organizational Change: Perspectives on Theory and Practice
By Piers Myers, Sally Hulks, and Liz Wiggins
ISBN: 9780199573783
© Oxford University Press 2012
CONTENTS
1. A brief history of organization theory
(Chapter 2 from Hatch: Organization Theory: Modern, Symbolic,
and Postmodern Perspectives 4th edn)
2. Organizational social structure
(Chapter 4 from Hatch: Organization Theory: Modern, Symbolic,
and Postmodern Perspectives 4th edn)
42
3. Organizational technology
(Chapter 5 from Hatch: Organization Theory: Modern, Symbolic,
and Postmodern Perspectives 4th edn)
90
4. Power in and around organizations: organizational
politics, conflict, and control
(Taken from chapter 8 from Hatch: Organization Theory: Modern,
Symbolic, and Postmodern Perspectives 4th edn)
5. Intentions and realities of change
(Chapter 3 from Myers, Hulks, and Wiggins: Organizational Change:
128
164
Perspectives on Theory and Practice)
6. Change from the perspective of organizational culture
(Chapter 6 from Myers, Hulks, and Wiggins: Organizational Change:
190
Perspectives on Theory and Practice)
7. Change from the perspective of power and politics
(Chapter 7 from Myers, Hulks, and Wiggins: Organizational Change:
215
Perspectives on Theory and Practice)
8. Approaches to change implementation: directed change
(Chapter 9 from Myers, Hulks, and Wiggins: Organizational Change:
241
Perspectives on Theory and Practice)
9. Approaches to change implementation: facilitated change
(Chapter 10 from Myers, Hulks, and Wiggins: Organizational Change:
266
Perspectives on Theory and Practice)
10. Communicating change
(Chapter 12 from Myers, Hulks, and Wiggins: Organizational Change:
291
Perspectives on Theory and Practice)
V
ORGANISATIONAL THEORY & DYNAMICS
CHAPTER
1 • A BRIEF HISTORY OF ORGANIZATION THEORY
A brief history of
organization theory
Organization theory is a multidisciplinary enterprise that draws from diverse sources, as
illustrated by Figure 2.1. This figure indicates the broad range of ideas on which the field
depends and shows roughly when each entered organization theory. It also shows when the
three perspectives introduced in Chapter 1 emerged and some of the major disciplines and
thinkers who contributed ideas to their development. Of course, this timeline is incomplete;
more perspectives will form in the future, and some will undoubtedly challenge those shown.
While Part II of this book will focus on concepts and theories developed within the modern,
symbolic, and postmodern perspectives, this last chapter of Part I presents some of the most
influential ideas from which these perspectives emerged. These ideas will be presented in
more or lessthe historical order in which they first influenced organization theory. We begin
with a little prehistory, because the three perspectives were all anticipated by scholars and
practitioners who appeared before organization theory emerged fully as a field of study.
The prehistory of organization theory
There was precious little written about organizations and organizing as the industrial age took
hold in the late eighteenth and early nineteenth century in Europe and the United States,
but there was growing demand for knowledge coming predominantly from two sources.
Executivesand consultants raised normative questions about how best to design and manage
organizations to enhance their productivity, while the economists and sociologists to whom
they turned for insights wanted to know how industrialization was changing society and what
new types of organization would appear in its wake. These normative and academic interests
would combine to form a new field-organization theory.
The diverse normative and academic interests present at the founding of this new field
created tension between practice and theory, a tension that has endured. 1 Even if the label
'organization theory' makes it seem as though practice is lessimportant, practical application
has always been a major concern for organization theorists. But bear in mind that these tensions, presented by the need to apply abstract concepts and theories to concrete situations,
are never fully resolved. At its best, the tension between theory and practice leads to the
continual formulation of new concepts, theories, and perspectives; at its worst, it produces
factions that prompt some researchers to form warring camps.
1
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Smith (1776)
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Fayol (1919)
Weber (1924)
Barnard (1938)
Bertalanffy (1950, 1968)
Trist and Bamforth (1951)
Boulding (1956)
March and Simon (1958)
Woodward (1958, 1965)
Burns and Stalker (1961)
Lawrence and Lorsch (1967)
Thompson (1967)
Schutz (1932)
Whyte (1943)
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Rorty (1980)
Clifford and Marcus (1986)
Baudrillard (1988)
Figure2.1 Sources of inspiration for the perspectives of organization theory.
Note: The boxes in the center of this figure are ordered along a timeline to indicate approximately when the modern, symbolic, and postmodern perspectives
entered organization theory. The disciplines from which these perspectives are borrowed appear above the timeline in the rough order of their initial influence,
while the contributing theorists are listed below alongside the publication dates of what many consider to be their most influential contribution to this field.
2 A BRIEF HISTORY OF ORGANIZATION
THEORY
25
Below you will meet, in quick succession, political economists and sociologists whose
ideas were highly influential when organization theory was born and whose work continues
to inform this field of study today.
Adam Smith: Scottish political economist (1723-90)
Although organizing was much in evidence among the pyramids of ancient Egypt and no
doubt occurred even further back in human history, the historical record concerning organization does not extend much into ancienttimes. 2 What we do know is that Adam Smith
was the first person on record to publish a formal theory of organization. In 1776, in An
Inquiryinto the Nature and Causesof the Wealth of Nations, Smith explained how the divi-
sion of labor creates economic efficiency. As you read an excerpt from this work, be sure
to notice Smith acknowledging his debt to practice as he explains his theory of efficient
pin-making:
To take an example ... in which the division of labour has been very often taken notice
of, the trade of the pin-maker; a workman not educated to this business {which the division of labour has rendered a distinct trade), nor acquainted with the use of the machinery
employed in it (to the invention of which the same division of labour has probably given
occasion), could scarce, perhaps, with his utmost industry, make one pin in a day, and certainly could not make twenty. But in the way in which this business is now carried on, not
only the whole work is a peculiar trade, but it is divided into a number of branches, of which
the greater part are likewise peculiar trades. One man draws out the wire, another straights
it, a third cuts it, a fourth points it, a fifth grinds it at the top for receiving the head; to make
the head requires two or three distinct operations; to put it on, is a peculiar business, to
whiten the pins is another; it is even a trade by itself to put them into the paper; and the
important business of making a pin is, in this manner, divided into about eighteen distinct
operations, which, in some manufactories, are all performed by distinct hands, though in
others the same man will sometimes perform two or three of them ... I have seen a small
manufactory of this kind where ten men only were employed, and where some of them
consequently performed two or three distinct operations. But though they were very poor,
and therefore but indifferently accommodated with the necessary machinery, they could,
when they exerted themselves, make among them about twelve pounds of pins in a day.
There are in a pound upwards of four thousand pins of a middling size. Those ten persons,
therefore, could make among them upwards of forty-eight thousand pins in a day. Each
person, therefore, making a tenth part of forty-eight thousand pins, might be considered
as making four thousand eight hundred pins in a day. But if they had all wrought separately
and independently, and without any of them having been educated to this peculiar business,
they certainly could not each of them have made twenty, perhaps not one pin in a day; that
is, certainly, not the two hundred and fortieth, perhaps not the four thousand eight hundredth part of what they are at present capable of performing, in consequence of a proper
division and combination of their different operations.
In every other art and manufacture, the effects of the division of labour are similar to
what they are in this very trifling one; though, in many of them, the labour can neither be so
much subdivided, nor reduced to so great a simplicity of operation. The division of labour,
however, so far as it can be introduced, occasions, in every art, a proportionable increase of
the productive powers of labour.3
3
ORGANISATIONAL THEORY & DYNAMICS
26
PART I APPROACHING ORGANIZATION THEORY
Smith's theory of the division of labor included the concepts of task differentiation and
specialization, concepts that are central to many explanations of social structure. However,
at the same time as Smith saw reasonsto be optimistic about the 'increases of the productive
powers of labour' made possible by industrialization, Karl Marx saw reasonsto be concerned
about others of its effects.
Karl Marx: German economic philosopher and revolutionary (1818-83)
Marx's theory of capitalism begins with the human need to survive and the will to thrive
once survival needs are met. According to Marx, survival needs create economic order when,
in trying to cope with danger and to feed, clothe, and house themselves, people discover
the economic efficiencies of collective labor and the social structures that support it, such
as the division of labor Adam Smith had recommended nearly a century earlier. Economic
efficiency eventually creates resource surpluses of raw material and of time. These resources,
Marx argued, can be invested in cultural enhancement to fulfill desires for human self-expression and advancement. 4
This is all well and good, but for the problem of power. In Marx's theory, the economic
base on which people build their cultures is subject to power relations worked out between the interests of capital and those of labor. The relations of power pit capitalists,
who own the means of production (tools, equipment, and factories), against laborers,
who produce the output of the production process using the means the capitalists provide. Antagonism between the interests of capital and labor, Marx claimed, lies at the
heart of capitalism.
Contention between the interests of labor and capital arises over how to divide the excess profits generated when products or services are exchanged on a market at a price that
is higher than their costs. Since profit is generated by a combination of labor and capital,
Marx explained, each can reasonably claim any surplus. Laborers base their claim on having
performed the profitable work, while capitalists claim that, without their investment, labor
would have no means to work. Marx referred to this standoff as a case of social conflict
because the parties to it are separated by their membership in separate social classes-capitalists and workers. The conflict intensifies due to demands for profitability. Without profit,
the survival of the individual firm and the entire capitalist economy would be in jeopardy
because capital would ceaseto be invested and work would disappear. Profitability magnifies
the conflict between the interests of capital and labor, and leaves labor subject to the laws of
economic competition.
Competition from sellers puts downward pressure on the prices of products and services,
which in turn causesfirms to want to reduce their production costs in order to maintain profit
for their investors. Since the biggest production cost is typically labor, capitalists pressure
laborers to work more efficiently (or at least more cheaply), which is achieved by continuously imposing new forms of managerial control on work processesthat put an even bigger
squeeze on labor's claim to a share of the profit.
The story of labor under capitalism becomes gloomier still, Marx noted, when, in the
drive for efficiency, capitalists define labor as a cost of production. Such thinking equates
labor with any other commodity bought and sold on a market, and gives humans a purely
4
ORGANISATIONAL THEORY & DYNAMICS
2 A BRIEF HISTORY OF ORGANIZATION
THEORY
27
instrumental relationship with one another based on the economic value of their potential
to do work. Once this commodification of labor becomes acceptable, labor can be treated
like any other raw material that is exploited for its economic value.
By focusing on the economics of work rather than on the welfare of workers or society,
labor commodification leads to the exploitation of labor by capitalists and to the alienation
of laborers. Alienation, a state of estrangement from their own work, occurs when workers accept the commodification of their labor and willingly sell it on terms of employment
favoring the powerful interests of capital, which amounts to self-exploitation. Unless workers organize resistance to managerial control, for example by forming labor unions, worker
exploitation and alienation under capitalism is inevitable.
Marx predicted that the dynamics of capitalist economies would sustain a society only
until a culture willing to overthrow capitalism builds on its economic base.This has been the
most controversial prediction Marx drew from his theory, and many people interpreted the
collapse of communism in the Soviet Union as proof that Marx was wrong. However, recent
social challenges to capitalism, such as those initiated by Los lndignados and the Occupy
movement, suggestthat Marx's theory may yet prove insightful. It could explain the formation
of subcultures that currently question the distribution of the wealth produced under capitalism or that experiment with new means for organizing the material resources that capitalism
consumes. Organizing via social media, whether for the sake of participatory art, crowdsourced employment, or entrepreneurial investing, indicates that changes in the ways resources are used and organized are already on the way.
Marx's ideas about labor and capitalism inspired critical theory, thereby providing one departure point for the postmodern perspective. His focus on social conflict and the dynamics
of change within politically influenced capitalist economies offered a stark contrast to the
more harmonious visions offered by Smith, and later by Durkheim and Weber.
Emile Durkheim: French sociologist (1858-1917}
Durkheim's The Divisionof Labor in Society (1984/1893) explained the then recent structural
shift from agricultural to industrial societies in terms of the effects of the increased specialization of labor that industrialization brought about. Durkheim's theory echoed Adam Smith's,
adding hierarchy and task interdependence to the division of labor as concepts related
to social structure, one of the core concepts that would form the modern perspective of organization theory. Durkheim also developed the quantitative research methods that helped
to shape modernism, which he demonstrated in two other influential books, The Rules of
SociologicalMethod (1982/1895) and Suicide(1966/1897).
In addition to formal organization-the fixed rules, procedures, and structures designed
into an organization-Durkheim proposed the concept of informal organization to addresses the sociability of workers. Studies revealing the effects of informal organization
helped to establish the fields of organizational behavior and industrial and organizational
psychology, and paved the way for the concept of organizational culture. Moreover, the
distinction between formal and informal organization exposed a tension in organization theory between the (hard) economic and (soft) humanistic aspects of organizing that rivals the
tension between theory and practice discussed earlier.5
5
ORGANISATIONAL THEORY & DYNAMICS
28
PART I APPROACHING
ORGANIZATION
THEORY
Karl Emil Maximillian (Max) Weber: German sociologist (1864-1920)
Like Marx and Durkheim, Weber wanted to understand how industrialization affects society.
He was particularly interested in a new kind of authority structure that had arisen alongside
industrial organization. According to Weber, pre-industrial societies organized themselves
using either traditional or charismatic authority, but industrialization brought a new order,
which Weber described as rational-legal authority.
Traditional authority rests upon inherited status, as defined by such things as bloodlines
and the ownership of property. In traditional societies, property and status transfer from parent to child. Nepotism threatens the survival of such societies when the heirs to status and
power are not fit or willing to lead. Leadership succession is highly problematic for these
societies.just as it is in societies organized by charismatic authority.
In societies ruled by charismatic authority, an exceptional individual gains influence
based on the devotion of followers who sanctify that individual as heroic or exemplary and
sometimes as a prophet. In ancient times.Jesus Christ and Muhammad were accorded charismatic authority within their religious communities. More contemporary examples from
political arenas include Gandhi, John Fitzgerald Kennedy, Martin Luther King,J r., and Nelson
Mandela. Becausecharismatic leaders are irreplaceable, their deaths disorient their societies,
making the succession of new leaders problematic. But another risk inherent in charismatic
authority can be seen in the personality cults that upheld the dictatorships of Hitler, Stalin,
and Mussolini before and during World War II.
Weber predicted that the rational-legal authority he observed in industrial organizations would replace the nepotism of traditional authority and the personality cults of charismatic authority with merit-based selection driven by rationally formulated rules and laws. He
believed that reliance on rational-legal authority ensures the appropriate behavior of those
in charge by binding them to the same laws and rules that define their right to lead. What is
more, the talent pool available to organizations governed by rational-legal authority is larger
because, by following the established rules and laws, nearly anyone can lead.
Weber's observations of rational-legal authority led him to propose the theory of bureaucracy. In his 1924 book The Theoryof Socialand EconomicOrganization,Weber proposed
bureaucracy as a means to extend to the rest of society the benefits of the technical efficiency
demonstrated by industrial organizations. His theorizing was based in analogy: Weber saw
the ways in which technology rationalizes the economic order of business organizations as
analogous to how bureaucracy improves the efficiency and effectiveness of social organization. In other words, he saw bureaucracy as a social technology for improving the efficiency
of nonindustrial organizations, such as those of government.
Weber was not without his misgivings about bureaucracy, seeing the danger involved in
treating humans like machines. He feared that if humans submitted to being managed like
machines, then bureaucracy would not only rationalize society, but also imprison its members in an iron cage. He famously stated that bureaucracy had the potential to make every
human a 'cog in an ever-moving mechanism.'6 To help societies avoid the 'iron cage of bureaucracy,'Weber distinguished between formal rationality and substantive rationality.
Formal rationality involves techniques of calculation, such as those developed by engineers to measure efficiency, or by managers to track and eliminate costs, and it is built
into the technologies we use. Substantive rationality involves taking the desired ends of
6
ORGANISATIONAL THEORY & DYNAMICS
2 A BRIEF HISTORY OF ORGANIZATION
THEORY
29
action into account when assessingthe effectiveness of an organization. Formal rationality
encourages following rules without questioning whether they achieve desirable ends, while
substantive rationality involves questioning the goals and values driving our actions. Substantive rationality keeps the exercise of formal rationality from creating an iron cage. Weber
believed that while both were useful, substantive rationality should direct when and how
formal rationality is applied (see Box 2.1).
•
Box
2.1
Case example
Why do we need both substantive and formal rationality?
Once, while conducting research in a company that manufactured mainframe computers, I observed a
management team as it moved the company to a just-in-time
(JIT) inventory management system.JIT
inventory management relies on formal rationality to ensure that needed parts and materials arrive at a
manufacturing site at the time they are needed and not before.JIT is designed to eliminate the costs of
maintaining inventory, and establishing such a system involves measuring inventory levels and setting
targets for their inventory reduction. Top executives of the company, to whom the team reported, were
eager to see the more fluid manufacturing processes and related cost savings thatJIT promised. Wanting
the transition to be as rapid as possible, they set challenging targets, monitoring the decline in inventory
levels quarter by quarter. Their close attention to the figures the system produced put enormous
pressure on those responsible for implementingJIT throughout the company.
During the transition to JIT,the inventory team managers often found themselves unable to achieve the
aggressivelytargeted inventory reductions. Their successdepended in large part on the speed at which the
company's suppliers responded to the aggressive schedule faced by the inventory team. The team had to
'qualify' all suppliers, which meant determining that the parts and materials each supplier provided met the
precise specifications required by the company's multiple manufacturing facilities. Suppliers confronted
great difficulty in building the requisite quality control and logistical systems into their production and
delivery processes.This slowed progress and left the inventory team worrying about shutting down the
company's manufacturing processesdue to lack of supplies or poor quality. The inventory managers knew
it was risky to allow inventory levels to drop before a supplier had been fully qualified. They considered it
their professional responsibility to ensure continuous delivery of needed parts to manufacturing, even if it
meant a slower transition to JIT. But the intense pressure they faced took its toll.
From the perspective of the inventory team managers, substantive rationality came into conflict
with the demands of a formally rational system for progressing toward a company-wide JIT delivery
system. During the transition, the formal rationality-managing
inventory using technology to monitor
progress toward an organizational goal {i.e.JIT delivery throughout the company's manufacturing
facilities)-came
into conflict with the substantive rationality of inventory management as a professional
responsibility. Being trapped between two rationalities led the managers to pursue an 'irrational' path
to satisfying the targets set by their superiors. Realizing that inventory shipped was not counted as
inventory held, the managers 'fooled' the formally rational monitoring system by putting inventory on
delivery trucks and sending it out on the last day of each quarter, a practice they jokingly referred to as
]am-it-in-the-truck.'
They would re-enter the 'shipped' material into inventory the day after quarterly
inventory levels were reported. But, of course, the team then had to figure out how to 'catch up' to their
even more aggressive target for the following quarter, adding to the pressure they faced.
This case illustrates the irrationality that misalignment of formal and substantive rationality can
produce. In the example provided, the mismatch produced a solution that was formally irrational
because it wasted time, and it was substantively irrational because it frustrated the professionalism of
the inventory managers charged with implementing aJ IT system.
(continued...)
7
ORGANISATIONAL THEORY & DYNAMICS
30
PART I APPROACHING
ORGANIZATION
THEORY
The situation that the executives in this case created by not responding to their subordinates'
substantive objections to the formally rational control system ('Stop complaining and do your job!' was
their typical response) is not unusual in many organizations. It is common practice to insist on speed in
transitioning from old to new methods and systems for managing them. But the example shows how
a gap between substantive and formal rationality can lead to irrational behavior that actually slows
the very change process managers are trying to speed up. Such difficulties can arise at any level of an
organization when substantive rationality is not considered alongside formal rationality.
Exercise
Can you think of anything irrational about an organization with which you are familiar? Analyze the
irrationality you identify by locating the gap between formal and substantive rationality. If nothing else
comes to mind, try this exercise on your university. For instance, you might analyze the assessment
requirements imposed on instructors at your university. At many US universities, instructors are
expected to follow the 'normal curve' when distributing grades or marks among the students in
each course they teach. Using this as your example, you might think about how such normal curve
distributions can be formally rational while at the same time undermining the substantive rationality of
learning. I am sure you will find many other examples of organizationally induced irrationality now that
Weber's theory has alerted you to the difference between formal and substantive rationality.
While Weber is best known among organization theorists for his concept of bureaucracy
and analysis of the rationalizing effects of industrialization, his ideas about rational-legal authority and formal versus substantive rationality contributed to recognizing the important
role that culture plays in organizations. In addition to his contributions to the modern perspective, Weber proposed that people act toward things on the basis of the meanings they
ascribe to them, and that these meanings arise in and from symbol-rich social interactions.
Meaning and the symbolic context in which it is made would later become foundational
ideas for the symbolic perspective. The fact that this perspective traces back to Weber helped
symbolic researchers establish themselves as legitimate organization theorists. 7
For some, Weber's influence extends beyond the symbolic to the postmodern perspective.
For instance, the iron cage points to the dystopian possibility of a world in which the majority
of people work in systemsthat proliferate when humanistic or democratic values are ignored.
Postmodernists argue that when formal rationality prevails over substantive, authority has
a tendency to become totalitarian. On this basis, critical postmodernists draw on Weber to
argue against the restrictive practices of management control systems or the oppressive practices of surveillance.
Frederick Winslow Taylor: American engineer and manager; founder of
scientific management (1856-1915)
At 28 years of age Taylor was named chief engineer at the Midvale Steel Company in Philadelphia. His first efforts to manage combined persuasion with force, which was accepted
practice at that time. Taylor became disaffected with this approach when he realized that,
to manage workers effectively, he needed to know about the technical aspects of the work
to be performed and about the psychological motivation to work. Based on his belief that
applications of scientific research methods would improve management practice, Taylor
8
ORGANISATIONAL THEORY & DYNAMICS
2 A BRIEF HISTORY OF ORGANIZATION
THEORY
31
conducted experiments at the Bethlehem Steel Company, north of Philadelphia, and several
other places. His experiments focused on the hand Ii ng of raw material, the use of tools and
machines, and incentives to work.
As discussed in his 1911 book The Principlesof ScientificManagement, Taylor's experiments
inspired scientific management theory. The principles of his theory include the use of work
standards, a target rate for performance set higher than the average rate at which laborers
work, and uniform work methods to guarantee that workers could achieve the targets set
for them, including instruction cards, order-of-work sequences, materials specifications, and
inventory control systems. Scientific management also embraced skill-based job placement,
a variety of supervision methods, and incentive schemes.
Taylor believed that applying standards and principles based on scientific research and experimentation would allow managers to pay high wages while lowering production costs. He
predicted that, by following his principles, the benefits of factories to society would be maximized and high levels of cooperation between management and labor achieved. Scientific
management, according to Taylor, would maximize capitalist profits by motivating workers
to perform at or above the standards set for them. Moreover, by paying workers fairly in accordance with their productivity, management could avoid the social conflict Marx predicted
would topple capitalism.
Taylor's work inspired an international efficiency movement. Among the early adopters
of his ideas were time and motion studies experts like Frank and Lillian Gilbreth, a married
couple who devoted their lives to enhancing worker productivity. For example, Frank Gilbreth invented a method of bricklaying that reduced the number of movements required to
lay one interior brick from 18 to 2, thus increasing the bricklaying rate of a single individual
from 120 to 350 bricks per hour.
Such impressive productivity gains led many heads of state and business leaders, including Lenin, Stalin, and Henry Ford, to adopt scientific management, which was sometimes
referred to as Taylorism. Today, methods of quantifying workers' inputs and outputs for the
purpose of evaluation and control can be observed in businessesaround the world. Critics of
scientific management now sometimes refer to its practices as Ford ism in homage to Henry
Ford's more or lesswholesale adoption ofTaylor's techniques in the production of automobiles. Other critics seeTaylor's scientific management reflected in the fast food industry's routines and highly controlled management processes,whose vast organizational influence has
been described as the McDonaldization of society.8
Even at the time scientific management appeared, many workers and business owners
considered Taylor's ideas subversive and dangerous. In spite of his claims to the contrary, critics warned it would ruin trust and cooperation between management and workers. Attempts
to introduce Taylor's principles into the Watertown Arsenal (a US government manufacturing
plant) led to union opposition and a strike, which precipitated an American congressional
investigation of scientific management. However, these humanistic concerns were soon
overshadowed in the United States by the 'threat of communism,' which became associated
with labor unrest. Meanwhile, in the United Kingdom, France, Sweden, and Denmark, where
Marx's theories, along with socialism and worker rights, were better defended, scientific
management was resisted for a longer time. Today, it appears that these societies, too, have
succumbed to Taylorism as devotion to technical efficiency and formal rationality spreads
throughout the globalizing economy.
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Taylor's belief in the powers of objective measurement and the discovery of laws governing
worker efficiency carried over into the modern perspective, where scientific management
techniques justify all manner of rationalization schemes. Critical postmodernists, on the
other hand, regard Taylorism not as a way to make organizations more rational through efficiency, but as a rationale that is used to justify the unprecedented power that capitalists and
their managers enjoy today.
Mary Parker Follett: American social reformer; government and
management consultant (1868-1933)
Based on consulting work with community centers, governments, and business organizations, Follett believed that the principles that make social communities strong can be applied to creating successful governments and other organizations. In 1924 Follett presented
a management theory based on the principle of self-government, which she claimed would
facilitate 'the growth of individuals and of the groups to which they belonged.' She argued
that 'by directly interacting with one another to achieve their common goals, the members of a group fulfilled themselves through the process of the group's development.' Her
ideas anticipated by many decades contemporary interests in workplace democracy and
nonhierarchical structure.
Follett promoted the view that organizations within a democratic society should embrace democratic ideals and that power should be power with, not power over, people. As
she put it:
You cannot coordinate purpose without developing purpose, it is part of the same process.
Some people want to give the workmen a share in carrying out the purpose of the plant and
do not see that that involves a share in creating the purpose of the plant.9
Thus, in opposition to Marx, Follett proposed the idea that power is a source of creative energy. She saw the process of creating joint power over a conflict situation as an alternative to
viewing power as a competitive force based in the domination of one individual or group
over others.
Follett considered domination to be only one of three possible approaches to conflict
resolution. Compromise, the second, is similar to domination in that none of the parties'
interests are served completely. Of the three, only integration incorporates everyone's interests through a creative redefinition of the problem. To illustrate integration Follett used the
example of two people reading in a library: One wants to open a window; the other prefers
to keep it shut. While domination means one gets their wish while the other sacrifices theirs,
and compromise means that nobody's desire is fulfilled, opening a window in an adjoining
room-an integrative solution-permits both desires to be equally satisfied. Follett arrived at
the integrative solution by recognizing that the person who wants the window open really
only desires fresh air (opening the window being only one means of achieving this goal),
while the person who wants it closed merely does not want the wind to blow directly upon
them. This solution is not a compromise because both parties get what they want (fresh air,
no wind).
Although Follett'swork is currently experiencing something of a revival,you might be surprised
by how often her work is ignored in historical surveys of organization theory. By contrast, her
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management theories have long been recognized in Japan, where the Mary Parker Follett Association has disseminated her ideas since the 1950s. Some feminists attribute the slow uptake
of Follett's contributions in other parts of the world to her gender, an insightful comment on
the influence of power conceptualized as domination. Even so, Follett'swork on organizations
as communities contributed to theories of organizations as communities of practice, and her
democratic principles of organization apply wherever workplace democracy is promoted.
Henri Fayol: French engineer, CEO, and administrative theorist (1841-1925)
Fayal, an engineer and manager in the mining industry, earned great admiration as a CEO
for his successful turnaround of a failing French mining company. Upon retirement he established a center for the study of administration to codify and pass on the administrative
principles he had followed during his career. In 1919 his book Generaland IndustrialManagement presented principles he believed were universally applicable to the rational administration of organizational activities.
Among Fayol'sprinciples, span of control defined the optimal number of subordinates to
be overseen by one manager, while the unity of command principle states that each subordinate should report to only one boss. That subordinates should handle routine matters using
standard operating procedures (SOPs)was part of his principle of delegation. Designed
to leave managers free to handle exceptions as they arose, delegation involves assigning responsibility for routine tasks to subordinates, who can be trusted to carry them out when
they follow designated SOPs.The principle of departmentalization involves grouping similar activities within units (or departments), each unit taking responsibility for a portion of the
overall activity of the organization. The scalar principle ties the whole organization together
by dictating that subordinates at every level follow the chain of command, communicating
only with their immediate boss, who reports to their boss, and so on.
Fayal also presented the concept of esprit de corps. Defined as the unity of sentiment
and harmony existing among employees in smoothly functioning organizations, this idea
reappeared in the concept of strong culture popular amongst those adopting the modern
perspective on organizational culture.
Chester Barnard: American executive and management theorist (1886-1961)
In Barnard's 1938 book The Functionsof the Executive,this former president of the New Jersey
Bell Telephone Company suggested that managing the informal organization identified by
Durkheim was a key function of successful executives. Barnard presented normative advice
for developing organizations into social systems based on cooperation, focusing on i ntegrating work efforts through the communication of goals, and attention to worker motivationideas that echoed Mary Parker Follett, as well as Frederick Taylor.
Postmodernists sometimes blame the significance Barnard attached to the cooperative
aspects of organizations for having blinded early organization theorists, especially in
the United States, to the importance of conflict that Marx suggested was a fundamental
aspect of all organizations. Nonetheless, the consideration Barnard gave to issues of value
and sentiment in the workplace identified themes that reappear in symbolic research on
organizational culture, meaning, and symbolism.
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The economic and sociological theories found in the prehistory of organization theory,
together with early scholarship on management and administration, provide inklings of what
came next. The modern, symbolic, and postmodern perspectives borrowed heavily from
these sources, as you will now see.
Modern organization theory
During the Enlightenment in eighteenth-century Europe, also known as the Age of Reason,
the ideas of philosophers such as Rene Descartes (France), John Locke (England), and Immanuel Kant (Germany) were built on their staunch belief that reason would eventually free humankind from slavery and superstition. Their philosophies promoted the influential idea that
the steady accumulation of rational knowledge would propel humankind forward through an
arc of progress stretching well into the foreseeable future. Soon, this idea morphed into the
ideal of progress now associated with the Enlightenment.
The ideal of progress, however, can be traced even further back, at least to the twelfth
century. In 1159 John of Salisbury attributed the progressive ideal to the French philosopher
Bernard of Chartres:
We frequently know more, not becausewe have moved ahead by our own natural ability,
but becausewe are supported by the mental strength of others, and possessriches that we
have inherited from our forefathers. Bernard of Chartres used to compare us to puny dwarfs
perched on the shoulders of giants. He pointed out that we see more and farther than our
predecessors, not because we have keener vision or greater height, but because we are
lifted up and borne aloft on their gigantic stature.10
Those who first adopted the modern perspective never doubted the promise of scientific
achievement or questioned the progressive ideals promoted by Enlightenment philosophers, and many cling to them still. Three theories that exemplify the ideals of progress and
rationality will provide you with important background for studying the modern perspective
on organization theory: general systems, socio-technical systems, and contingency theory.
General systems theory
In the 1950s, Austrian-born biologist Ludwig von Bertalanffy proposed general systems
theory (GST). It was designed to integrate all scientific knowledge, including that produced
by the physical, biological, behavioral, and social sciences. GST was based on the observation that all phenomena are related in a vast hierarchy: Societies contain groups; groups
contain individuals; individuals are composed of organs; organs, of cells; cells, of molecules;
molecules, of atoms-and so on. Elaborating this idea, American economist Kenneth Boulding, one of GST'sstaunchest early supporters, presented the hierarchy of systems you see
in Table 2.1. 11
General systemstheory treats all phenomena generically as systems,regard lessof their level in
Boulding's hierarchy. Bertalanffy defined a system as a set of subsystems(i.e. the parts comprising the system) that interact within a supersystem (i.e. its environment or context), th us placing emphasis on their relationships to surrounding hierarchical levels. For example, an organic
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Table 2.1 Boulding's hierarchy of systems
Level
Characteristics
Examples
1. Framework
· labelsand terminology
anatomies,geographies
· classificationsystems
lists,indexes,catalogs
• cyclical events
solar system
· simple with regular(or regulated)motions
simple machine (pulley,clock)
• equilibria or statesof balance
equilibrium systemof
2. Clockwork
economics
3. Control
4. Open {living)
• self-control
thermostat
• feedback
homeostasis
• transmissionof information
autopilot
• self-maintenance
cell
• throughput of material
river
• energy input
flame
• reproduction
5. Genetic
• division of labor (cells)
plant
• differentiated and mutually dependent parts
• growth follows 'blueprint'
6. Animal
7. Human
• mobility
dog
• self-awareness
cat
• specializedsensoryreceptors
elephant
• highly developed nervoussystem
whale or dolphin
• self-consciousness
you
• capacity to produce, absorb,and interpret
me
symbols
everyoneelse
• senseof passingtime
8. Social organization
· value system
businesses
· meaning
governments
cultures
9. Transcendental
· 'inescapableunknowables'
metaphysicalentities (e.g.God)
Source:Based on Boulding (1956).
molecule is composed of atomic subsystems that interact within a cellular supersystem, while
a cell composed of interacting molecular subsystems inhabits an organic supersystem. In
organization theory, GST defines social organization as a system composed of interacting
departmental subsystems inhabiting a supersystem in which it interacts with other socially
organized systems. Be sure to notice that if you consider an environment as your system of
interest, socially organized entities (e.g. corporations, small and medium-sized businesses,
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government agencies, nongovernmental organizations, and nonprofits) act as subsystems
within a supersystem (e.g.the globalizing economy or other world order, the universe) that is
composed of other environment-level actors.
General systems theory is 'general' in the sensethat it proposes laws and principles that are
valid for all systems in general.One example is the law of exponential growth, which biologists have found to apply alike to cells, bacteria, animals, and humans, raising the question
of whether or not this law also applies to social organizations. Though it would be difficult to
find the numbers, you might address this question by estimating the number of organizations
found during various eras, starting with those that emerged in the tribes and villages of ancient times (which figure might be estimated from the assembled archeological records) and
culminating in all the public and private organizations found around the world today, then
determining whether growth in their numbers has been exponential.
Organization is itself one of the laws GSTproposes: The existence of any system depends on
maintaining the organization of its parts-something GSTproposes to be as true of molecules
as it is of groups and societies. The practical implication of this law is that no system can survive disorganization, at least not for long, which is a central premise of organization theorists
who adopt the modern perspective.
An important proposition of GST is that you cannot define a system solely by explaining
its subsystems. In other words, a system is greater than the sum of its parts. Take an automobile. No matter how much you know about subsystems like electrical wiring, the fuel pump,
or the engine, unless you have holistic knowledge of the automobile as a system in its own
right, you will not be able to design or operate one, diagnose a systemic problem, or find
its solution. Holistic understanding requires addressing a system on its own terms, but also
demands having knowledge about its relationship to the supersystem of which it is a part.
In the case of an automobile, you need to understand the uses to which it is put in order
to fathom why it takes the many different forms it does or to redesign one adapted to new
conditions.
Shifting your focus between levels in the systems hierarchy, as Ijust asked you to do with the
automobile, introduces a problem well known to organization theorists-levels of analysis.
This problem involves choosing what you will define as the system of interest, thereby differentiating it from its subsystems and supersystem. Problems in theorizing arise from a sudden
unacknowledged shift between levels, creating confusion for yourself and those who want to
test or apply your theory. To avoid this confusion, organization theorists increasingly define
their theorizing in terms of the level of analysis occupied by their phenomenon of interest.
Theorizing about the environment in which organizations operate (e.g. society, the economy,
one or more national or regional cultures) is described as macro-level theory; theorizing
about organizations or groups produces mesa-level theory; theorizing at the individual level
of analysis results in micro-level theory. Becauseall these terms involve levels of analysis, it is
important that you remain vigilant as you study organization theory. It may take a little time to
get used to the mental gymnastics that moving between levels demands, but in time you will
become more comfortable making these distinctions.
Another GSTlaw worthy of consideration involves the relative complexity of systems at different levels. According to the law of requisite variety, lower-level systems are not complex
enough to map onto higher-order systems. One implication of this law is that any explanation of an organization will be partial at best, due to the disparity between the organizational
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phenomena addressed by organization theorists and the limitations of any human system to
know them fully. The law of requisite variety might help you come to grips with why there are
so many theories of organization rather than just one. Some go so far as to say that organization theorists play the role of the blind men of Hindustan who, when each grabbed a different
part of an elephant, could come to no agreement about what they had just encountered.
Though GSTholds out the tempting image of a unified theory for all scientific disciplines, its
law of requisite variety implies that this is not possible. However, this challenge has not discouraged modern theorists from trying to solve higher-order problems using systems theory
thinking, as is done at the interdisciplinary Santa Fe Institute in New Mexico, which is devoted
to the branch of GSTknown as complexity theory.
Socio-technical systems theory
In the 1960s, concern for the interaction between what were regarded to be two primary organizational subsystems-social structure and technology-led to the development of sociotechnical systems theory. The Tavistock Institute of Human Relations in the UK theorized that
any change in technology affects social relationships, including attitudes and feelings about
work, which in turn affects the way the now-changed technology is used. Consequently,
Tavistock researchers recommended optimizing the combination of technical and social subsystems, even when this means the optimality of one or both is undermined.
Socio-technical systems theory derives from studies conducted by Tavistock researchers
Eric Trist and Ken Bamforth. Trist and Bamforth examined the impact of technology on workers' productivity, motivation, morale, and stress in a British coal mine in the early 1950s.12 In
the then-dominant 'long-wall method of coal-getting,' the miners worked independently at
stations situated along a conveyor belt that ran the length of the coal face. Working in this
dangerous and monotonous environment, the miners had minimal personal contact, which
meant that they had little or no influence over their work or the work of their colleagues. Trist
and Bamforth's research revealed many shortcomings of this method, including high stress,
absenteeism, labor turnover, low productivity, and constantly laying blame for poor performance on other workers, particularly those working different shifts.
However, one mine they studied in Durham stood out. It had adopted a short-wall method
in which multiskilled work groups were responsible for the whole cycle of coal mining on
their shift, for example controlling their own task assignments and self-managing their productivity. Trist and Bamforth found that although the methods developed by these autonomous work groups were technically not as efficient as those designed by the company's
engineers, these groups accomplished more work, and their workers were more satisfied with
their jobs than had been observed in the other mines. In other words, in the Durham mine
the suboptimization of the technical system paradoxically optimized the performance of the
combined socio-technical systems.
Fred Emery, another Tavistock researcher, mapped the impact of the technical and social
systems on the psychological needs of individuals to suggest that production systems be redesigned to allow for teamwork, multiskilling, and self-management. 13 He theorized that
organizational performance depends upon each subsystem (or group) being able to adapt
to problems and integrate with every other subsystem, and with the whole. Many of Emery's
ideas anticipated the concept of self-organizing systems and complexity theory.
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The work of the Tavistock researchers focused attention on a number of humanistic issues: organizations as social systems; the social and psychological consequences of work
design; the importance of the work group compared to the individual; and the need for a
division of labor that considers increasing, rather than decreasing, the variety of work skills
and tasks.Their work also suggested that self-managed teams should be the building blocks
of organizational design and that the use of such teams would reduce the need for hierarchical forms of organizing.
Socio-technical theory contradicted many of the principles of scientific management, but,
like Taylor, their proponents intended to offer the means to overcome the disempowering,
socially conflicted tendencies that Marx identified with capitalism and Weber identified with
the iron cage of bureaucracy. Tavistock researchers took their work into many organizations
around the world, including calico mills in India, shipbuilding and fertilizer plants in Norway,
an American mining company, and oil-refining plants in the UK and Canada. Socio-technical
systems theory underpins newer forms of organization such as networks (discussed in Chapter 3) and matrix structures (Chapter 4), and lends support to Follett's ideas about workplace
democracy and Durkheim's about informal organization. Their work is sympathetic with all
later efforts to humanize organizations.
Contingency theory
Until the 1960s, normative interests urged organization theorists to use science to discover
the best way of organizing for optimal performance. But the science was not working as well
as expected, and ambiguous answers regarding the one best way of designing an organization caused some to realize that what works best is contingent upon factors like the environment, goals, technology, and people involved. In contingency theory, organizations are
made effective by aligning their multiple subsystems in ways that maximize performance for
their particular situation. Contingency theorists built upon the insights of both general systems and socio-technical systems theory. 14
You can usually identify a contingency approach by the formulaic proposition: 'If this situation exists ... then that should be done.' For example, if a manufacturing organization exists
in a highly competitive environment and has to produce a dependable number of widgets
each day to precise quality standards, then the production process should be highly standardized, and there should be clear output goals, formalized standards and operating procedures,
and close supervisory control. Managers often like the assurance of formulae such as these,
which reduce uncertainty by implying that there are correct answers to their problems. The
reassurancethey provide may explain why contingency theory has long held a dominant position in the modern perspective. There are, however, several drawbacks to contingency theory.
For one thing, contingency theory leads to increasingly complex formulations as more and
more contingencies are discovered. As variables are added and their geometrically increasing
number of interactions taken into account, the theory becomes unwieldy. Another drawback
comes from the overreliance of contingency theory on criteria of technical rationality, efficiency, and profitability. Though these are often preferred because they are objectively measurable, these are not the only outcomes that define organizational success,as was revealed
by developments emerging from the then new symbolic perspective.
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Enterthe symbolic perspective
The modern perspective was the first to establish itself in organization theory and became, for
many in the new field, the one and only way of thinking about organizations and organizing.
But while organization theorists were hard at work developing modern theories and their
applications, other fields-particularly interpretive sociology, social psychology, and cultural
anthropology-began presenting organization theorists with an alternative based in subjective ontology and interpretative epistemology.
In 1928 American sociologist William Isaac Thomas declared: 'If men define situations as
real, they are real in their consequences.'15 Following his line of thinking led to the claim that
subjective beliefs about reality can affect behavior every bit as much as do objective observations of it. Put in ontological terms, 'social facts' exist just as do objective facts. American poet
Wallace Stevens vividly illustrated the difference between objective and subjective views of
reality with these lines from his 1937 poem 'The Man with the Blue Guitar':
They said, 'You have a blue guitar,
You do not play things asthey are.'
The man replied, 'Things asthey are
Are changed upon the blue guitar.'16
As is the case with the blue guitar in the poem, interpretation can change reality. The combination of interpretive epistemology with a subjective approach to defining reality appealed
to those organization theorists who had become dissatisfied with the boundaries set around
notions of organization and organizing by their modernist colleagues. They felt that subjectively inflected and interpretively nuanced understanding complemented objectivist and
positivist explanation by bringing different aspects of organization and organizing into view,
particularly phenomena involving symbols and meaning. Culture, enactment, and institutionalization were among the phenomena they preferred to study, using either ethnographic
methods borrowed from anthropology or narrative methods borrowed from literary theory,
most of them inspired by social construction theory.
Social construction theory
In 1966, in a small book entitled The SocialConstructionof Reality,German sociologists Peter
Berger and Thomas Luckmann presented their theory that the social world is negotiated, organized, and constructed by our interpretations of reality, which are communicated through
symbols-meaning-laden objects, actions, and words. The authors claimed that symbolismnot structure-creates and maintains social order within a socially constructed reality.
Berger and Luckmann proposed that the interpretations involved in the social construction of reality are based on implicit understandings formed intersubjectively. lntersubjectivity is that realm of subjective experience occurring between people that produces a sense
of shared history and culture. Locating the process of social construction in intersubjectivity is
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what makes this theory social-which contrasts with modernist definitions of objective reality
as independent of human experience.
According to Berger and Luckmann, social construction operates through three mechanisms: externalization, objectification, and internalization. Learning to use symbols allows
humans to externalize subjective understanding. Externalization occurs when meaning is
carried by and communicated through symbols, because in this way meaning travels outside
the strictly private realm of one's personal self. lntersubjectively produced understandings
appear to be objectively real, but instead are objectifications. In internalization, one unquestioningly accepts the intersubjectively externalized and objectified understandings of a
social group as reality. Over time, ongoing externalization, objectification, and internalization
processes sustain shared social constructions that can be transferred to succeeding generations in ways analogous to an inheritance of land or other property.
You will become aware of social construction processeswhenever you are socialized into
a new organization. In the first days of socialization, you are Iikely to come home exhausted
even though you have done nothing that you would normally consider tiring. This is evidence of the intersubjective work others are helping you to accomplish as you internalize
the externalized and objectified socially constructed reality that is the organization. Those
joking corrections of your behavior and the subtle suggestions made verbally or with nods
of approval or disapproving glances are all part of your socialization. Eventually, established
ways of working become second nature to you as you take on the role of helping the next
generation of newcomers. Ironically, even when someone resists socialization, their identity
as a misfit depends on how the group socially constructs and communicates inclusion and
exclusion.
Change in socially constructed reality occurs when something new is externalized (e.g. by
borrowing a symbol from another group or inventing one), objectified through acknowledgment and use, and internalized. All of this occurs within the same ongoing social construction
processes that produce stability. In the symbolic perspective, stability and change intertwine
over time as new symbols become linked to old meanings, and old symbols take on new
meanings.
Enactment theory
Following cognitive psychology by defining reality as the product of mental representation,
American social psychologist Karl Weick was among the first to treat organization as a cognitive process. He claimed that organizations exist only in the minds of organization members,
where they appear as cognitive maps of socially constructed reality.17 Weick used the metaphor of cartography to suggest that humans create mental maps to help them find their way
around what they presume exists. He called organizations 'convenient fictions' talked into
existence by their members and argued that organizing should replace organization as the
phenomenon of interest to organization theorists. Verbs, not nouns, inspired his theorizing.
Weick combined Berger and Luckmann's concepts of externalization and objectification
into the cognitive process of reification (which means making something real). He claimed
that by mistaking a cognitive map for the territory, humans reify organization and order their
interactions accordingly. Of course, human interaction implies a certain amount of cooperation in the mapping process, and one of the most compelling implications of Weick's theory
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is that organizations are products of a collective search for meaning by which organizational
members then organize their experience. Their organizing occurs through the enactment of
beliefs about what is real. Thus sensemaking is not about discovering truth, but about creating it by organizing experience in ways that produce (make) understanding (sense).All of this
leaves behind a perceptual trace that gets reified. Thus organization is seen as the product of
processesof organizational cognition.
Weick stated, in The Social Psychologyof Organizing,that he carefully selected the term
'enactment to emphasize that managers construct, rearrange, single out, and demolish many
"objective" features of their surroundings ... When people act they unrandomize variables,
insert vestiges of orderliness, and literally create their own constraints.' 18 Weick and others used enactment theory to understand phenomena like the bandwagon effect in stock
trading, years before the global financial crisis of 2008 provided convincing evidence of the
power of enactment to create reality.
According to Weick, a rumor that a trader has a good record for finding hot stocks leads
others to mimic the trader's buying behavior. This in turn increases exchange activity around
certain stocks, which often raisestheir value (i.e. making them 'hot'), thus supporting the trader's reputation. Confirmation of belief in the trader encourages further mimicry, attracting
more buyers and further enhancing certain stock prices, at least for a time. As Weick stated:
'The fact that a bandwagon effect drove up share prices, and not the quality of the stock,
suggests a powerful pathway for enactment in the investment community.' 19 It also shows
how enactment, sensemaking, and social construction combine to explain behavior that is
inexplicable from the purely objective and rational perspective favored by modern organization theory.
Institutions and institutionalization
In 1949 Philip Selznick, an American sociologist, studied the Tennessee Valley Authority
(TVA). The TVA started as a project funded by the US government to build dams for producing electricity and controlling floods in the Tennessee river valley, an agricultural region that
served much of the United States. In additional, the TVA protected forests, developed recreational areas, and aided local farmers.
Selznick's TVA and the GrassRoots:A Study in the Sociologyof FormalOrganization(1949)
described how the TVA, which began as a grassroots project for the benefit of society, had its
initial purpose perverted by various interests, including land-grant colleges, county extension
agents, politicians, and business leaders. He claimed that the TV/\s cooptation had transformed the organization from an efficient distributor of resources and coordinator of tasks
into a distinctive American institution that was supported by a legitimacy that did not derive
from, and was unrelated to, its formally stated purpose.
In another book, Leadershipin Administration(1957), Selznick explained the cooptation of
the TVA with his theory of its institutionalization, which included a distinction between organizations and institutions. He defined an organization as a rational tool for achieving economic efficiency, such that if another organization offers greater efficiency, it will replace the
first one. On this basis, he concluded that organizations should be dispensable, which was not
what he had observed in the perpetuity of the non rational TVA. He explained that the TVA
had protected itself from its own irrationality by becoming institutionalized. Selznick'stheory
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of institutionalization was that an institution makes itself indispensible to society by asserting its value in symbolic terms-something the TVA had accomplished in the United States
by associating itself with the popular idea of grassroots democracy. In spite of the fact that
its behavior diverged significantly from rational expectations, recognition of its claims to social legitimacy served as the justification for its continued existence. Some years later, in
1977, American sociologists John Meyer and Brian Rowan borrowed Selznick's concept of
social legitimacy for use as the foundation of their theory regarding institutional myth. 20 They
claimed that social legitimacy hides the irrationality of organizational behavior from public
view by creating a myth that allows cooptation of resources to go undetected for long periods
of time. The claim that big banks in the financial crisis of 2008 were 'too big to fail' provides a
recent example of the power of an institutional myth to mask inefficiency or even malfeasant organizational behavior from public view.
Meyer and Rowan's focus on institutional myth introduced institutional organization
theorists to the symbolic perspective that had, around the same time, started to appear in
organizational culture theory. To emphasize the differences between Selznick's institutional
theory and the more symbolic approach adopted by Meyer and Rowan, the latter became
known as new or neo-institutionalism. The neo-institutional theorists were interested in how
institutions (e.g. marriage, business) influence the behavior of individuals through rules and
norms and, later, in how the practices that support institutions (e.g.sensemaking) become discursively embedded in institutional logics. Interest in these institutional phenomena aligned
neo-institutional theories with those focused on organizational culture, a phenomenon of
growing interest that appeared more or less concurrently in organization theory. However,
those who theorized organization culture looked to symbolic cultural anthropology for inspiration rather than to neo-institutional theory, thereby setting up the conditions for later disputes.
Culture
In defining culture on the opening pages of his 1973 book, The Interpretationof Culture,
American cultural anthropologist Clifford Geertz drew upon the symbolic aspects of Weber's scholarship: 'Believing, with Max Weber, that man is an animal suspended in webs of
significance he himself has spun, I take culture to be those webs, and the analysis of it to be
therefore not an experimental science in search of law but an interpretive one in search of
meaning.' 21
Geertz's 'webs of significance' and claims to 'interpretive science' helped to establish the
symbolic perspective in both his field and organization theory. His treatment of culture attracted a host of young organizational scholars looking for an alternative to the modern perspective. Geertz's method-thick description-provided a symbolic variant of traditional
ethnography that focuses on the meaning lying beneath the surface of everyday events,
thereby revealing culture and how it operates. A passagefrom one of Geertz's ethnographies
gives a feel for thick description. Listen as Geertz explains how he and his wife, recently arrived in Bali to conduct ethnographic research, gained accessto the world in which his subjects lived, a critical first stage in any ethnography:
[T]en daysor so after our arrival, a largecockfight was held in the public squareto raisemoney
for a new school. ... Of course, like drinking during Prohibition or, today, smoking marihuana, cockfights, being a part of 'The BalineseWay of Life,' nonethelessgo on happening,
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and with extraordinary frequency. And, as with Prohibition or marihuana, from time to time
the police (who, in 1958 at least, were almost all not Balinese but Javanese)feel called upon
to make a raid, confiscate the cocks and spurs, fine a few people, and even now and then
expose some of them in the tropical sun for a day as object lessonswhich never, somehow,
get learned, even though occasionally, quite occasionally, the object dies.
As a result, the fights are usually held in a secluded corner of a village in semisecrecy, a
fact which tends to slow the action a little-not very much, but the Balinese do not care to
have it slowed at all. In this case, however, perhaps because they were raising money for
a school that the government was unable to give them, perhaps because raids had been
few recently, perhaps, as I gathered from subsequent discussion, there was a notion that
the necessary bribes had been paid, they thought they could take a chance on the central
square and draw a larger and more enthusiastic crowd without attracting the attention of
the law.
They were wrong. In the midst of the third match, with hundreds of people, including,
still transparent, myself and my wife, fused into a single body around the ring, a superorganism in the literal sense, a truck full of policemen armed with machine guns roared up.
Amid great screeching cries of 'pulisi! pulisi!' from the crowd, the policemen jumped out,
and springing into the center of the ring, began to swing their guns around like gangsters in
a motion picture, though not going so far as actually to fire them. The superorganism came
instantly apart as its components scattered in all directions. People raced down the road,
disappeared headfirst over walls, scrambled under platforms, folded themselves behind
wicker screens, scuttled up coconut trees. Cocks armed with steel spurs sharp enough to
cut off a finger or run a hole through a foot were running wildly around. Everything was
dust and panic.
On the established anthropological principle, 'When in Rome', my wife and I decided,
only slightly less instantaneously than everyone else, that the thing to do was run too.
We ran down the main village street, northward, away from where we were living, for we
were on that side of the ring. About halfway down another fugitive ducked suddenly into
a compound-his own, it turned out-and we, seeing nothing ahead of us but rice fields,
open country, and a very high volcano, followed him. As the three of us came tumbling
into the courtyard, his wife, who had apparently been through this sort of thing before,
whipped out a table, a tablecloth, three chairs, and three cups of tea, and we all, without
any explicit communication whatsoever, sat down, commenced to sip tea, and sought to
compose ourselves.
A few moments later, one of the policemen marched importantly into the yard, looking
for the village chief. (The chief had not only been at the fight, he had arranged it. When
the truck drove up he ran to the river, stripped off his sarong, and plunged in so he could
say,when at length they found him sitting there pouring water over his head, that he had
been away bathing when the whole affair had occurred and was ignorant of it. They did
not believe him and fined him three hundred rupiah, which the village raised collectively.)
Seeing me and my wife, 'White Men', there in the yard, the policeman performed a classic
double take. When he found his voice again he asked, approximately, what in the devil did
we think we were doing there. Our host of five minutes leaped instantly to our defense,
producing an impassioned description of who and what we were, so detailed and so accurate that it was my turn, having barely communicated with a living human being save my
landlord and the village chief for more than a week, to be astonished. We had a perfect right
to be there, he said, looking the Javanese upstart in the eye. We were American professors;
the government had cleared us; we were there to study culture; we were going to write a
book to tell Americans about Bali. And we had been there drinking tea and talking about
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cultural matters all afternoon and did not know anything about any cockfight. Moreover, we
had not seen the village chief all day; he must have gone to town. The policemen retreated
in rather total disarray.And, after a decent interval, bewildered but relieved to have survived
and stayed out of jail, so did we.
The next morning the village was a completely different world for us. Not only were we
no longer invisible, we were suddenly the center of all attention, the object of a great outpouring of warmth, interest, and most especially, amusement. Everyone in the village knew
we had fled like everyone else. They asked us about it again and again (1must have told the
story, small detail by small detail, fifty times by the end of the day), gently, affectionately,
but quite insistently teasing us: 'Why didn't you just stand there and tell the police who
you were?' 'Why didn't you just say you were only watching and not betting?' 'Were you
really afraid of those little guns?' As always, kinesthetically minded and even when fleeing for their lives (or, as happened eight years later, surrendering them), the world's most
poised people, they gleefully mimicked, also over and over again, our graceless style of
running and what they claimed were our panic-stricken facial expressions. But above all,
everyone was extremely pleased and even more surprised that we had not simply 'pulled
out our papers' (they knew about those too) and asserted our Distinguished Visitor status,
but had instead demonstrated our solidarity with what were now our covillagers. (What we
had actually demonstrated was our cowardice, but there is fellowship in that too.) Even the
Brahmana priest, an old, grave, halfway-to-heaven type who because of its associations with
the underworld would never be involved, even distantly, in a cockfight, and was difficult to
approach even to other Balinese,had us called into his courtyard to ask us about what had
happened, chuckling happily at the sheer extraordinariness of it all.
In Bali, to be teased is to be accepted. It was the turning point so far as our relationship
to the community was concerned, and we were quite literally 'in'. The whole village opened
up to us, probably more than it ever would have otherwise (I might actually never have
gotten to that priest, and our accidental host became one of my best informants), and certainly very much faster. Getting caught, or almost caught, in a vice raid is perhaps not a very
generalizable recipe for achieving that mysterious necessity of anthropological field work,
rapport, but for me it worked very well. 22
I know this passage is long, but I hope you found it entertaining as well as insightful. The way
it is written allows you to experience what its like to 'do' ethnography in a symbolic way, illustrating as it does so all the basics of thick description: It quotes members of the culture
verbatim, presents their observations and interpretations of their culture, and contrasts the
ethnographers prior assumptions and beliefs with those held by cultural members. Thick
description involves detailed description and careful documentation, and relies on the ethnographer's sensitivity to events that contain an element of surprise. Surprises are what allow
ethnographers to distinguish between the culture as it presents itself and any preconceived
expectations or biases the ethnographer brings to the research. Understanding how a culture
teaches its members to fit in is reproduced as the ethnographer is exposed to the same cultural influences any other new member would be exposed to. Since culture must be learned,
ethnographers learn to learn a new (for them) culture and, in doing so, are able to separate
out prior culturally embedded understandings from those of the host culture. This is what
you see Geertz doing in the passage quoted above. But he is doing something else as well,
which brings us to storytelling, a topic that straddles the border between the symbolic and
postmodern perspectives.
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Research as storytelling and narrative
Geertz's facility with language and his expressiveness offered a sharp contrast between the
style of his ethnography and that found in practically any modern research report. The strong
response to Geertz's writing called attention to the narrative characteristics of research and
the texts it produces. One of the first to write about writing in organization theory was American sociologist John Van Maanen, whose 1988 book Talesof the Fieldsuggested that all scientific writing is an act of storytelling. Van Maanen used the label tales of the field to denote
major differences in the styles narrators adopt. He grouped the styles into the categories of
'realist,' 'confessional,' and 'impressionist' tales.
Van Maanen noted that realist tales are written as objective reports of social facts that
claim to know what really goes on in organizations. Calling them 'realist' encourages you
to see how modernist researchers rhetorically construct subjective experience as objective
fact, while hiding their identity as researchers/narrators by never making reference to themselves. Realist tales stand in stark contrast to confessional tales, in which the author is very
much present in the text, confessing prejudices and other considerations that could have
influenced interpretations of what they witnessed in the field. Impressionist tales depart
even further from realist tales. These highly personal accounts put readers in the context of
the events related by the researcher, thereby allowing vicarious appreciation of the teller's
experiences, as Geertz illustrates with his telling of the Balinese cockfight. Notice how Geertz
invites you into his subjectivity through the impressions his writing leaves on you.
Van Maanen's efforts to study research as writing inspired applications of literary theory
to the writings of organization theorists. For example, Karen Golden-Biddle and Karen Locke
analyzed ethnographic studies of organizations, focusing their attention on the linguistic devices of rhetoric (authenticity, plausibility, and criticality) that organizational ethnographers
use in establishing the credibility of their research.23 In my own research, I applied French literary theorist Gerard Genette's narratology to an analysis of the roles organizational researchers played in their research.24 My analysis revealed two factors underpinning the narrative
role of the research: perspective (who sees?)and voice (who says?).
Narrative perspective defines whether the narrator 'sees'from the position of an outsider
or an insider relative to the phenomenon studied, a distinction cultural anthropologists
sometimes refer to as etic versus emic. Perspective helps to identify the preferred ontology
(objective or subjective) and epistemology (positivist or interpretive) displayed in texts written by researchers. Survey studies presenting data drawn from large numbers of organizations, for example, present their text using an outsider's perspective, while ethnographies
conducted by symbolic researchers provide an insider's perspective.
Narrative voice defines whether the narrators write themselves into their narrative. Are
they a character in the story told or do they disappear behind their writing style? This factor
aligns with reflexivity-whether or not narrators declare themselves within their narratives.
Lack of reflexivity is noted in those who write from the modern perspective, their 'hidden'
voices providing a focus for postmodern critique. But postmodernists also criticize those who
adopt the symbolic perspective for appropriating the voices of their research subjects by
speaking for them rather than allowing them to speak for themselves.
In their 1986 book WritingCulture:The Poeticsand Politicsof Ethnography,American anthropologists James Clifford and George Marcus were among the first to apply the postmodern
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perspective to studies of research writing in the social sciences. They reached beyond the
idea of researchers as storytellers to make the more startling claim that all research accounts
are fictional in the sense that they can only ever be, at best, partially true. They claimed that
the fictionality of research writing arises from the situated perspective of the researcher. A
perspective is situated within the interpretive community to which a researcher/writer belongs and establishes ways of thinking and talking revealed by their writing and storytelling.
For example, the perspective of people who believe that global warming is a hoax is situated
in a community that promotes particular ways of thinking and talking about climate change
that are at odds with the community established by people who regard climate change as a
global threat. When discourses diverge, different situated voices speak not just against, but
often across, one another, as can be seen in any discussion of climate that involves both perspectives. Be sure to notice that the theoretical perspectives of organization theory are situated in different discourses and interpretive communities.just as narrative perspectives are.
Something for you to reflect on is that no matter what perspective you adopt, the situatedness of your perspective at that moment will define and confine what you are able to see
and to say.The idea of situated perspective put forward by Clifford and Marcus has implications for comparing the perspectives of organization theory. It suggests that comparisons of
theoretical perspectives are, by necessity, constrained by the situatedness of a theoretical
perspective. I have taken this idea as bedrock in deciding how I would write this book, which
is why, when making comparisons between perspectives, I will be careful to tell you which
perspective I am using at that moment. This writing practice will not only help you figure out
the implications of each perspective for your thinking and analysis of organizations, but also
role model my techniques for switching between them. The fluidity of thinking that allows
you to shift from one perspective to another is, in my opinion, the best way of learning the
multiple perspectives of organization theory so that you can make your own choices about
whether and how you will use them.
Postmodern influences
By the early 1980s, Western colonialism was nearing collapse, and the idea that Western culture could and should be exported to less-advantaged societies had dropped from view. Up
until that time, colonized groups were typically described as 'primitive' cultures, in response
to which those colonized suggested that 'primitive' better described the colonizers, whose
exploitative and often brutal behavior they had endured for many years. Alongside demands
for self-determination through independence from their colonizers, the colonized offered a
strong critique of cultural anthropology.
One attack critics made on cultural anthropology focused on the unquestioned assumption that modern research is unbiased because its practitioners maintain objectivity. The
critics insisted that research produced by anthropologists, having been funded by government grants, was tainted by the interests and perspectives of the colonizers who funded it.
By what right could anthropologists claim greater authority to represent the 'native view'
than was communicated by the accounts given by the 'natives' themselves?2 s The fact that
this critique was raised by some of the very people whom cultural anthropologists studied
provoked considerable self-reflection, on the basis of which some researchers sought to
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reinvent cultural anthropology by adopting practices promoted by postmodernists, starting
with self-reflexivity.
Self-reflection by academics produced a phenomenon that came to be known as the
crisis of representation in cultural anthropology. 26 A famous photograph has been used to
explain why the crisis focused on anthropological representation rather than, say,the reality
of oppression under which the colonized had suffered. While no one denied that the colonized had been oppressed, postmodern ism suggeststhat eliminating oppression started with
overturning mistaken assumptions. In this case,the mistaken assumption is that it is possible
to accurately represent a culture or its members. A photograph of Bronislaw Malinowski, one
of cultural anthropology's founders, makes the point. In the photo, Malinowski sits at a small
table inside his tent typing up field notes, while outside the tent a group of 'natives' watch him
work. Absorbed by the task of recording his observations about them, the anthropologist fails
to observe his 'subjects' observing him! By reversing the presumed relationship between observer and observed, the image uses irony to undermine the assumption that the researcher
has the capacity to objectively observe a culture or to represent it accurately through descriptive writing.
Those who adopt the postmodernist perspective do not believe in an objectively definable
reality, but neither are they persuaded that the subjectivity espoused by symbolic researchers is the answer. For postmodernists, ontology is problematic no matter how it is defined
because postmodern ism questions the very concept of existence; after all, existence is only
a concept! What is more, epistemologically speaking, knowing is, at best, a tenuous affair
and, at worst, can only problematically establish knowledge, which is either an illusion or an
outright con. The advice given by postmodernists is to stop searching for Truth and be suspicious of anything pretending to knowledge. Beliefs like these converged with the critical philosophy promoted by the Frankfurt School, which emerged in postwar Germany and whose
philosophers included Theodor Adorno, Max Horkheimer, and Herbert Marcuse. All these
and the ideas introduced below helped to form the postmodern perspective as it appeared
first in the arts and a little later in the social sciences, including organization theory.
The Progress Myth and Grand Narrative
By 1932 an English physician, Montague David Eder, had already begun criticizing modernism's devotion to the goal of human progress by referring to progress as a myth. 27 Postmodernists borrowed his idea when they asserted that modernism promulgates the Progress
Myth. Defining progress as a myth is designed to reveal it as dogma, a view supported by
discourses in which the texts of science are referred as 'propaganda.' By outing progress as a
myth amid calls for reflexivity, postmodernists directed all who created and used knowledge
to be conscious of the power that knowledge conveys and to take responsibility for its uses.
French philosopher and literary theorist Jean-Franc;ois Lyotard was in the vanguard of
this movement. In his 1979 book The Postmodern Condition, he claimed that the Enlightenment had produced a Grand Narrative to justify devotion to reason on the grounds
that it brings progress, creates wealth, ensures freedom, and reveals truth. In short, Lyotard saw the Progress Myth as the Grand Narrative of the Enlightenment. You could consider, as other examples, that communism and democracy are Grand Narratives of two
opposing political forces in the world today. Lyotard argued that the modern institutions
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of education, business, and government are formed within the Grand Narrative of the Enlightenment and help to police the borders protecting the modern perspective. For example, modern universities expound particular forms of knowledge (notably scientific),
businesses embrace prevailing norms of management (most often to do with authoritarian
control harnessed to maximize profit for the wealthy), and governments create and uphold
laws (usually those supporting the status quo) to which students, employees, and citizens
are expected to conform.
Be sure to take note of the ironic use of capital letters to highlight the self-asserted power
of ideas Ii ke Grand Narrative and ProgressMyth. The irony here underscores a sharp critique
of the modern perspective at the same time as it illustrates the linguistic playfulness that
characterizes much postmodern writing. The ironic stance of so much postmodern writing
befuddles many who are not yet familiar with the postmodern perspective; you may share
this befuddlement, particularly if you are new to this perpsective.
Postmodernists, who relish Wittegenstein's concept of language games, delight in playing them to ironic effect. But be sure to notice how their effectiveness fails when irony slips
into sarcasm, the difference being that sarcasm conveys contempt for others, whereas irony
is self-reflexive. While postmodernists espouse self-reflexivity, their practices are often read
as disingenuous or sarcastic by those who see postmodernism through the lenses of other
perspectives. The danger postmodernists face, is that their perspective can encourage cynicism and contempt for those who disagree with that perspective or do not appreciate its
ironies. From the perspective of modernists, the postmodern critique can produce feelings of
disparagement and a self-defensive attitude, states that often preclude the very self-reflection
in which postmodernists want them to engage. As these considerations illustrate, ironies multiply within the postmodern perspective.
Language and language games
Modernists assume that language mirrors reality in the sense that words carry particular
meanings because of an essential link between meanings and things. Swiss linguist Ferdinand
de Saussurechallenged this view with his revolutionary theory of language, which underpins
much postmodern theorizing. 28 In Saussure'stheory, there is no natural or necessary connection between signifiers (words) and their signifieds (the things to which signifiers refer).
This implies that the relationship between a signifier and its signified is arbitrary. For example,
many different words signify a feathered flying creature: English speakers use bird; Danish offers fugl; French, oiseau-and so on. Saussureexplains this arbitrariness by observing how the
meaning of a word changes with its position relative to other words. A word's meaning shifts
as it meets new words.
Saussuretheorized that the very structure of language (langue in French) varies with the
flow of language use (parole). Over time, changes in how a linguistic community uses its
language bring about structural changes in that language. Saussure'stheory inspired German
philosopher Ludwig Wittgenstein to introduce the metaphor of language games. 29 Just as
football and chess have rules of play that guide behavior, the rules of language that guide
its use vary among the communities that employ them such that language works like these
other games. According to Wittgenstein, the way you use words and how you respond to the
statements of others will differ depending on what language game you are playing. Adopting
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modern, symbolic, and postmodern perspectives in organization theory places you within
different language games, each of which promotes different ideas and ways of theorizing
organizations and organizing. Joining one or the other of their language games in effect
changes your perspective, just as the emergence of a new perspective depends on developing a new language game (see Box 2.2).
Box
2.2
Exercise those perspectives
What are the strengths and weaknesses of each perspective?
It might seem simple to compare and contrast theoretical perspectives.just as you would compare and
contrast anything else. However, it is far from simple because of the unique language games developed
to facilitate communication among those who adopt different perspectives. The problem is that the
claims of one perspective appear more or less senselessto those who adopt another perspective, and
thus interpretations of concepts and theories can differ radically between them.
Logically, you cannot stand outside discourse and its language games to make comparisons that rely
upon language. This limitation can lead to the same problems we see in dysfunctional politics, created
by opponents who, wanting to refute each other's basic premises, dismiss anything and everything
the other has to say.To avoid this difficulty while acknowledging the limitations imposed by any one
perspective, I designed the book you are now reading to demonstrate and reveal the ways of thinking
and speaking that each perspective advocates.
To reveal the differences in perspectives to you, I will switch between them over and over
again, offering ideas and arguments from within their particular language games and discourses,
encouraging you to 'try on' different perspectives by offering examples and exercises like the one
below. In this and the chapters of Part 11,this means moving from modernist to symbolic and
then to postmodern concepts and theories, which more or less follows the historical progression
followed by organization theorists interested in the topics these chapters explore. However, the
sequence breaks down somewhat when we come to the topics of culture and physical structure,
and almost completely breaks down in Part 111,
where you will confront themes related to power and
organizational identity.
I have tried mightily to respect each perspective presented in this book and to describe what they
have to offer using the terms their adherents prefer. While I will offer insights into how the perspectives
view each other, I cannot simply list their respective strengths and weaknesses, because there are
no terms that are acceptable to all of them. That said, at the end of this chapter you will find a table
contrasting some of the unique claims each perspective makes. By examining these claims side-byside you will have the opportunity to compare them in whatever ways you find useful, appealing, or
compelling. Thus I invite you to formulate your own perspective on the perspectives of organization
theory and to watch how that perspective changes as you read this book.
Exercise
Take a moment to practice self-reflection. At this early point in your study of organization theory, which
of the three major perspectives taken in the book appeals most to you? Why? Which do you personally
find least convincing or attractive? There are no right or wrong answers here. Would you say your initial
reactions are based more on logic, rational analysis, gut feelings, or the aesthetic attractions that your
preferred perspective holds for you? Did you feel that your response was influenced by what you think
others expect you to prefer? Did any of these questions or your answers to them surprise you? If so,
why do you think that is?
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In important respects, the opportunity presented by the study of organization theory consists in your participation in its different language games. Because groups form their own
language communities that diverge from one another, learning how language games work
and becoming comfortable moving between them will serve you well when working in
cross-functional teams, on joint ventures, or across hierarchical, organizational, or cultural
boundaries. But be aware of the politics that often arise among different communities due
to the distribution of power among them. Switching between language games will give you
flexibility, but it can also mark you as suspect among staunch advocates of one perspective.
In academia, for example, power and advocacy led to paradigm wars that, for a time at least,
undermined conversation between those adopting different perspectives in organization
theory. Although conversation between different language games is difficult, it can also lead
to new ways of thinking and speaking, and hence to gaining new perspectives.
Truth claims, totalitarianism, and giving voice to silence
Inspired by Wittgenstein's notion of language games, Lyotard interpreted scientific facts as
agreements within communities of scientists to regard certain claims to knowledge as true.
He claimed that those who decide which truth claims will be honored have the ability to
dominate the community and its language game. Thus knowledge and power become intertwined as truth claims shift with changes in the distribution of power and vice versa.30
Once you accept the proposition that power is intimately associated with knowledge, you
can see why postmodernists are so concerned about uses of power that silence someone or
otherwise seek to eliminate their influence. Stories of dictators who silence opposition show
why Lyotard and other postmodernists regard the silencing of opposition as a hegemonic act
indicative of totalitarianism. They point out that hegemony and totalitarianism establish
roots in societies that have no procedures for acknowledging or engaging with diversity. The
powerful may not need to take any deliberate or conscious action in order for silencing to
occur; the weaker members of society often choose to be silent in the face of power. As the
antidote to totalitarian urges involves someone speaking truth to power, Lyotard advocated
giving voice to silence (see Box 2.3).
Box
2.3
Exercisethose perspectives
Does postmodernism matter?
Postmodernists believe that revealing the repressed or hidden elements of discourse-for example by
giving voice to silence-alters existing discursive practices, thereby undermining established mindsets
and changing the dominant discourse. The diversity movement offers an example. Hiring more people
of color and more women into management positions has changed many organizations and some
societies, though many of the same voices that contributed to these changes complain that nowhere
near enough has been achieved to establish genuine equity. Nonetheless, evidence that listening
to previously silenced voices brings change is provided by the many childcare centers appearing in
workplaces, and in protections against gender and race discrimination within a growing number of
societies. Moreover, the rights of members of the LGBTQcommunity now receive some attention as the
voices of these previously silenced minorities are heard.
(continued...)
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These examples indicate the power of voice and suggest that one ramification of including more
women, people of color, and members of the LGBTQcommunity in business and government is the
decentering of white hetero males and the toppling of existing structures that once supported their
dominance. Of course, there has been political backlash from those whose power has been threatened.
After all, dominance and hierarchy are still facts of life for humans just as they for the rest of the animal
kingdom. For some, the price of emancipation is not worth the disorganization and potential for
chaos that it produces, and so some, even of those among the minorities excluded from power, put
up resistance. It remains to be seen if growing acceptance of diversity will continue to effect change
in societies and organizations, but it is hard to deny that the postmodern discursive practice of giving
voice has already had substantial and probably irreversible impact.
Questions
So what do you think: Does postmodern ism matter? Why, or why not? Defend your answer.
The belief that free speech repels hegemony and totalitarianism is one reason why so many
critical theorists and postmodernists support democracy. Yet some argue that, in forming
a shared ambition to overturn hegemony and its totalitarian tendencies, postmodernists
merely create another Grand Narrative that privileges their cause instead of overthrowing
privilege itself. This critique of postmodernism compels many postmodernists to call for
pluralism-the acceptance of all minorities and their cultural values and traditions within
a dominant society. Its advocacy of pluralism gives many modernists the impression that
postmodern ism is an 'anything goes' philosophy-an assumption that reinforces the charge of
nihilism that modernists aim at postmodern ism. Postmodernists defend themselves by saying
that they are antifoundational rather than nihilistic, pointing out that the evils of hegemony
arise from unwillingness to question the assumptions that lie behind one's beliefs (hence
postmodernist calls for greater reflexivity).
Normativity and power /knowledge
Postmodern ism echoes through the writings of French philosopher and social theorist Michel
Foucault, who examined the effects of power exercised through normativity in his 1977 book
Power/Knowledge.Normativity refers to beliefs about what, and consequently who, is good
and bad; such beliefs dictate the labeling and treatment of deviance in any social group.
Those who do not conform to societal expectations are labeled abnormal troublemakers,
who must be disciplined by being either ignored, excluded, or institutionalized. Foucault argued that approved knowledge determines what to regard as normal, and thus only through
understanding how power is related to knowledge can you counteract the negative effects
of normativity.
In two earlier books, Madness and Civilization and Discipline and Punish, Foucault wrote
histories of psychiatric hospitals and prisons that revealed how the language games of psychiatry and social work established the conceptual categories of insanity and delinquency
into which people were sorted for institutional treatment. 31 Note the wordplay in Foucault's
choice of the second title: Discipline refers to both the academic fields (a.k.a. disciplines)
on which psychiatry and social work were founded (i.e. psychology, psychoanalysis, and
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sociology) and to the act of using punishment (a.k.a. disciplining) to correct deviance from
normalcy. He observed that by defining insanity and delinquency as problems that society
needed to address, psychiatrists and social workers established powerful social positions
from which they incarcerated and controlled those they determined to be misfits.
Foucault also wrote histories of literary criticism, anthropology, criminology, political science, and economics that similarly revealed how their uses of language created reality for
those subjected to the definitions of normalcy they established. 32 He broadly concluded,
based on all this work, that modern Western societies have delegated to the human sciences the authority to determine social norms and, in the course of developing academic
disciplines, defined their practitioners as having the right to punish the deviance invented by
these disciplines. He developed the theory of power/knowledge to account for this phenomenon. According to the theory, in the process of raising and answering questions about
what is normal, the human sciences forged a link between power and knowledge that derives
from the use of academic knowledge to categorize, control, and in some cases incarcerate the
least powerful members of society. In this sense, knowledge and power are indistinguishable,
requiring the new term 'power/knowledge.' Be sure to appreciate how, by coining the new
term, Foucault makes his own move in the language game he hopes to alter. This move ironically turns Foucault's theory back on itself in a characteristic postmodernist gesture.
Foucault initially used the term 'discourse' to indicate the multiple language games (i.e. the
disciplines of social science) in which power/knowledge is embedded and exercised-namely,
the discourse of normativity that pervades all of them. As Foucault observed, the discourse
of normativity literally constitutes the normative position in the sense that its practice determines normalcy. In later work, he constructed a theory of discourse to explain a more generalized notion of discourse and discursive practices.
Discourse and discursive practices
The concept of discourse refers to the-always partial-perspective of a particular group that
depends on its speech and writing practices.33In Foucault's discourse theory, discourses are
constructed historically according to the relationships of power existing within a society at
the point in time when those who exercised power allowed some things to be said, written,
and thought, but not others. The patterns of language use that develop within a discourse
community to maintain its power/knowledge position are known as discursive practices.
Accordingly, power-laden discursive practices produce knowledge that guides meaningmakingwithin the community, thereby constituting its discourse even as the discourse shapes
the discursive practices. A postmodernist would say that discourse and discursive practices
are mutually self-constituting.
Foucault went on to suggest that when people engage in discourse, their identity adapts to
and through prevailing discursive practices. When you self-reference using the word 'I,' your utterances, along with what others say about 'you' ('you are lazy') and about other people ('she is
bril Iiant'), forge identities, and thus the referential effects of language give hum ans the impression
that they exist. Foucault used this reasoning to arrive at the contentious idea that individuality
only recently appeared, historically speaking. He claimed 'man' only appeared by becoming selfreflexive and will disappear again 'like a face drawn in the sand' if we ever stop talking about ourselves.34It was in these terms that Foucault presented his disappearance of man proposition: If
30
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53
'man' appearsthrough self-referential language,ceasingto self-referencewill cause individuality
to disappear,and hence 'man' is a temporary phenomenon.
The proposition turns what at first appears to be only linguistic trickery-ceasing the discursive practice of self-referencing-into something with considerable practical ramificationsnamely, the disappearance of talk about individuality. The basic premise may be hard to
fathom in light of the 'selfie' phenomenon and those endless 'likes' on Facebook, yet you
could argue that social media is more homogenizing than individualizing, that it makes it
harder and harder for individuals to distinguish themselves in the vast pool of humanity.
Worse still, the increasing level of triviality that emerges as a distinguishing feature of the
most successfulYouTube videos could indicate that individuality is disappearing because it is
so insignificant.
A more organizationally relevant way to come at the 'disappearance of man' proposition
is through observations of recent downsizing activity in business. Consider the importance
attached to the customer within mainstream management discourse. 35 Where employees
were once obliged to attend to their managers, they are now told to be responsive to
the customer, with the consequence that managers are starting to disappear from management discourse. But their disappearance is not merely linguistic. Through legions of
middle management redundancies, recent delayering in large organizations is touted for
bringing companies closer to their customers, as well as reducing bureaucracy, enhancing
innovation, and, of course, cutting costs. But delayering also constitutes a 'disappearance
of man' from organizational life, which began years ago with the loss of large numbers of
agricultural and industrial jobs to machines and robots. The joke inside IBM these days is
that the company's famous acronym stands for 'I'm by myself!' Lonely managers working
from home offices connected to fewer and fewer employees distributed across the globe
could herald the end of formal employment and thus the 'disappearance of man' from the
business world.
A similar disappearing act has been taking place in public administration, with citizens
claiming the center stage.Administrators, who once avoided responding to citizens by invoking bureaucratic rules and procedures to justify why something could not be done, are being
displaced by citizens, who demand that bureaucracy serve the interests of citizens rather than
sthose of 'the system' and its administrators. In theory at least, moving citizens to the center
of attention shifts the discourse from why something cannot be done towards how to do it.
According to this postbureaucratic perspective, the once-dominant identity of the administrator will soon disappear from the discourse of governance, and administrative power will
thereby be subjected to decentering.36
Deconstruction, differance
Algerian-born French philosopher Jacques Derrida became fascinated by the idea found
in poststructural linguistics that language has no fixed meaning. 37 As Saussureargued, the
meaning of a particular set of words depends upon the context of other words to which
it is related in a particular discourse. Derrida's corollary to Saussure'sproposition was that
contexts are interchangeable. He reasoned on this foundation that no context can claim to
be more appropriate than another, and therefore any given meaning cannot possibly be correct. You need only wait for a new context to form in order for a different meaning to appear.
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An important implication of Derrida's theory is that changing the context surrounding a text
(a set of symbols) changes its meaning. This idea underlies the postmodern discursive practice
Derrida called deconstruction.
Deconstruction is a way of reading, and then re-reading, texts in the contexts of different
discourses in order to expose their potential for multiple interpretations and thereby destabilize and undermine their authority to legitimize particular meanings. Derrida concluded from
his practice of deconstruction that meaning forever eludes us because texts are always situated within ever-changing historical, cultural, political, and institutional contexts. Most consequentially for postmodern ism, Derrida argued that truth and knowledge are as unstable as
any other linguistic and discursive constructions. The purpose of deconstructing a text is not
to find any ultimate or essential meaning, but to reveal a text's assumptions, contradictions,
and exclusions in order to show that no text can mean what it says.This profoundly reorienting assertion captures the nonessentialism of the postmodern perspective by explaining
why nothing can maintain an essential quality or characteristic; all truth (note the small letter
't') and knowledge is always and everywhere in flux.
Deconstruction makes the central features of constructed reality visible and thereby frees
us from their influence on our ways of thinking and acting (see Box 2.4). Derrida used common examples of binary or dichotomous thinking to reveal how modernists structure their
use of language. He deconstructed modernist discourse by showing the binary thinking (e.g.
monarch/subject, master/slave, boss/subordinate) that linguistically and discursively constructs centers and peripheries within a discourse by privileging one set of terms (monarch,
master, boss, male, white) over another (subject, slave, subordinate, female, nonwhite). The
use of binary categories names centers and draws boundaries that express social power and
(re)produce (or change) reality.
Box
2.4
Think like a theorist
How does deconstruction work?
Derrida argued that a word derives its meaning from differences with its opposite (e.g. truth/falsehood,
good/bad, male/female); thus even when you use only one term in a binary pair, you silently invoke the
other. The absent opposite defers to its present partner. So, for example, when modernist organization
theorists talk about organization, they implicitly draw meaning from the difference between
organization and disorganization or chaos. This, in turn, suggests that the practice of management
is upheld by the often-unspoken fear of chaos. Deconstruction points to oppositions and silences in
our discursive practices, and can thereby serve to free us from them. When we voice the silences of a
text or speech act, we reveal the opposition upholding the meaning of what is written or said and give
ourselves the possibility of overturning that opposition.
Questions
What might organizations look like if they more fully embraced chaos? For example, would we
benefit from more creativity or greater innovation? Think about the most innovative organization you
know something about. Do you think it tolerates, or even encourages, more chaos than the average
organization? How might an organization embrace chaos? Now for a little reflection: Do your responses
to these questions give you any new appreciation for what the postmodern perspective offers?
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55
Consider the example of racism defined as white at the center and nonwhite on the periphery. Racism is known to lead to disparities in income, housing, healthcare, and education,
with whites systematically enjoying more of these benefits than nonwhites. Deconstructive
analysis provides an explanation for racism by pointing out that whiteness has been made a
focal center of discourse, the centrality of which depends upon maintaining difference between white and nonwhite. The theory constructed from this analysis states that the meaning
of whiteness provided by contrasts with nonwhiteness determines the value of all other races
by their proximity to the white center that, in turn.justifies racial inequality within any discursive community that employs this terminology. 38
While developing deconstruction as both a practice and a means to theorize, Derrida invoked the term differance-a play on the French verb differer,which means both to differ
and to postpone or defer.39 Derrida proposed that the meaning of any word points to other
meanings, because as you try to explain the meaning of one word, you replace it with other
words that defer to still other words, and so on. Think about the definitions you find in the
glossary to this book, many of which defer meaning to other terms defined in the glossary,
demonstrating the neverending play of differance.By speaking or writing, you move further
and further away from the original concept you are addressing, because the processes of
differing and deferring continue. Differanceshows how meaning becomes ever more diffuse
and distant from its starting point as it travels across time and space. It also helps to explain
why postmodernists describe meaning as fluid and all truth claims as suspect.
Simulacra and hyperreality
The Wachowski brothers' film The Matrix,first seen in 1999, presented a world taken over by
artificial intelligence. In this postnuclear apocalyptic vision of the world, machines breed and
keep humans in pods as power sources for the computer that controls human thought and
thereby produces images of a pre-apocalyptic world that no longer exists.The humans think
they live normal lives, but instead a computer program known as the Matrix simulates their
late-twentieth-century world, which is now a nuclear wasteland.
Neo, the film's central character, takes a pill that allows him to awaken from the computersimulated dream. In order to survive and rescue others from the treachery of the Matrix, he
has to move between the simulation and reality, where he and a small band of other awakened humans do battle with the machines. Whenever he enters the simulation, Neo's avatar
fights computer-enhanced images of superhuman bureaucrats using powers derived from
his knowledge that the world is simulated. Spoiler alert! Denying the Matrix the power to
persuade him of the existence of the simulated world gives Neo the freedom and strength to
resist the bureaucrats and ultimately to dissolve the Matrix.
The confusion between the simulated and the real that is portrayed in The Matrixis a central
theme of French social philosopher Jean Baudrillard, an early advocate of postmodern ism. In
his 1981 book Simulacraand Simulation, Baudrillard argued that our concept of image has
passedthrough successivephasesthat make it increasingly impossible to talk about what is real.
In a wink at their postmodern inspiration, the Wachowski brothers have Neo hide the illegal
software he usesto subvert the Matrix inside a copy of Baudrillard's Simulacraand Simulation.
The developmental stages of the image concept that Baudrillard identified begin with
the idea of images that reflect reality (e.g. your appearance as seen in a mirror). Reflected
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ORGANISATIONAL THEORY & DYNAMICS
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imagery is followed by images that mask reality (e.g. images of products as projected through
advertising), then images that mask the absence of reality (e.g. reality TV). An endpoint is
reached when images appear that bear no relation to reality whatsoever, thereby realizing
the simulacrum (e.g. how the world appears inside the Matrix). Using Baudrillard's term, the
philosophy of postmodern ism suits the simulacrum-it is a philosophy for a totally imagined
reality (see Box 2.5).
Baudrillard's theory is that, in pre-modern times, simulations acted in the place of reality in
the sense that a map simulates the physical geography it describes, or a computer program
simulates the feel of maneuvering an aircraft in a pilottraining exercise. However, this distinction between reality and simulation, which held up in the modern world, breaks down in the
postmodern. For example, mass production has led to phenomena such as mechanical reproductions of artwork and designer fashion knockoffs. These and other similar phenomena
move societies towards the endpoint of Baudrillard's simulacrum.
Box
2.s
From theory to practice
Do postmodern simulacra exist?
Have you tried a virtual reality headset? There is no underlying reality hidden beneath the surface on
which their simulated images play; distinctions like 'reality and fabrication' or 'original and copy' disappear
inside the simulacrum. Now consider an example provided by British visual artist David Hockney.
Years ago, when scanners and fax machines were still new, Hockney produced artworks on a scanner
by temporarily arranging colored bits of paper on the glass and faxing the result to his friends. While
his faxes appeared as copies produced by a copy machine, they were in fact Hockney originals in the
sense that the mechanical act of'copying' produced them. Today, 3D printers are able churn out similar
'original copies' based only on computer-coded instructions. The only 'originals' you can point to are
quite literally imaginary {i.e. made of, and in, the computer code), and hence reality as simulacra.
You can already observe 3D printing as a manufacturing process, but how will simulacra affect other
aspects of organizing? The concept of virtual organization enthralls many, and we now have virtual
teams operating in many global organizations. Virtual teams are composed of employees, distributed
across a variety of geographic locations and time zones, whose communication and coordination relies
on corporate intranet connections. For many who have been part of such teams, the reality is one of
bleary-eyed team members meeting as some rise early in their morning, while others stay up late at
night, to perform their interconnected tasks.
Questions
What will come next? Might organizations one day be crafted from simulated employees? Beyond
robotics, computer-generated
decision-making tools could replace much managerial and executive
work. IBM's Watson is starting to do just that, though at present Watson is positioned as a helpmate,
for example to doctors diagnosing illnesses and to management teams tackling complex problems.
Have you tried asking iPhone's Siri or Google's Alexa what the weather is or to time something you
have in the oven? Today, digital platforms operate corporate data collection and reporting systems,
much like computer-based diagnostic tools have insinuated themselves into the practices of medical
professionals. What roles will remain for human members of organizations in the future? At what point
will we no longer need organization, and, in the meantime, how will organizations, economies, and
societies be likely to change? Do you see any of these changes starting to appear around you already?
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ORGANISATIONAL THEORY & DYNAMICS
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57
Baudrillard claimed that, in postmodernism, opposing poles, such as reality/image, fact/
fantasy, subject/object, public/private, and so on, implode, resulting in a hyperreality where
'illusion is no longer possible, because the real is no longer possible.'40 According to Baudrillard, simulacra produce multiple and pluralistic contexts for our lives that immerse us in hyperreality. He claimed Disneyland as the ideal example of a simulacrum because it creates the
architecture, community, and traditional family values of a Main Street America that never
existed.41 In Disneyland real actors portray cartoon characters, and guests take real riverboat
rides down a fake Mississippi. Although we may think Disneyland is imaginary (just a performance) and the rest of the world is real, Baudrillard claims that it is the rest of the world
that is the ongoing performance through which we strive to live up to the images fed to us
by Disneyland, as well as the media, government, businesses,and other modern institutions.
Just as The Matrix portrayed a simulation within which humans live, we create our lives using
images that define ourselves to ourselves.
While Baudrillard's ideas might at first seem unrelated to organization theory, you get a
sense of hyperreality when you consider how images floating around us every day are produced by the organizations they serve. For example, most consumer-oriented businesses
count on our willingness to buy products based on images they project through seductive
brands and advertising. Or consider how, for a time at least, Enron managed to hide billions of
dollars in debt and operating lossesby creating fake partnerships (with names inspired by the
Star Wars film franchise), misleadingly complex accounting schemes, and nonexistent departments. When Wall Street analysts visited Enron in 1998 to assessits credit rating, 75 people
relocated to an empty floor, where they created a fake trading room in which they pretended
to buy and sell energy contracts. This simulacrum was staged with ringing phones and family
photos on desks-a performance that, for a period of time, worked to support Enron's falsely
inflated stock price. 42
Although highly unethical cons like Enron and more widely accepted ones like Disneyland
have occurred throughout history, postmodernists warn that the simulacra they exemplify are
now becoming the rule rather than the exception. When you consider these and other examples that postmodernists give as part of their critique of modernism, does your conception of
reality change? Is postmodern critique starting to get your attention, or are you able to resist its
imagery? What do your modernist instincts say: Do the examples postmodernists offer qualify
as scientific evidence within the discourse of the modern perspective? What would a proponent of the symbolic perspective say about symbols as simulacra? Can social construction and
enactment still produce reality and give it meaning if life is only a simulacrum? By taking different perspectives when you address questions like these, you can compare perspectives in ways
that will allow you to define in your own terms the strengths and weaknessesof each.
Summary
Academic contributors to the prehistory of organization theory came from different disciplines, primarily political science, economics, and sociology, while other contributors were
engineers, executives, or consultants to the new industrial organizations appearing at the
time organization theory was founded. Their ideas combined to forge a starting point that
continues to echo through the perspectives of organization theory.
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ORGANISATIONAL THEORY & DYNAMICS
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PART I APPROACHING
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The normative ambitions present in the field's infancy remain strong today in concerns
to find practical applications of the theories offered by modern, symbolic, and postmodern
perspectives, though each suggests different normative responses. The modern perspective
provides explanations that afford the analytical frameworks, predictive models, and principles for organizing that managers often use to diagnose problems and design organizations
based on the evidence offered by research conducted in this tradition. Those who adopt the
symbolic perspective prefer to study how organizational realities are socially constructed
via processes involving interpretation. Applications of symbolic theories of organization lead
managers to regard the management of symbols and meaning as their core responsibility, as
well as their best opportunity to effect change and other desired organizational outcomes.
Taking a postmodern perspective means giving up belief in the structures and socially constructed realities favored by modern explanation and symbolic understanding; instead, the
focus is on how language use produces the illusion of realities that remain in constant flux,
where deconstructing established power relations allows humans their best chance of liberation from restrictive hegemonies.
Contrasts between the main concerns and mindsets offered by modern, symbolic, and
postmodern perspectives are presented in Table 2.2. While this table offers some basis for an
analyzing the comparative strengths and weaknesses of the perspectives, differences in their
ontologies and epistemologies mean that such comparisons must be made from within one
or the other of the discourses and language games that form the contours of the perspectives.
Many of the discursive terms that we examined in this chapter appear in the word bubbles
shown in Figure 2.2.
Each perspective has its own ways of thinking about itself and the others, so the best way
of comparing their strengths and weaknesseswill be to suggest how proponents of the different perspectives regard the theory produced by other perspectives. This will be done as the
theories and their applications are presented and discussed throughout the book, but you
Table2.2 Comparison of modern, symbolic, and postmodern perspectives
Realityis
Realityisdefined by
Modern
Symbolic
Postmodern
An independent
A socially constructed
A plurality of
unity
diversity
simulacra
Convergence
Coherence
Incoherence and
fragmentation
Knowledgeis
Universal
Particular
Provisional
······•···•···"'···•····.
Knowledgeis developed through
Facts
Meaning
Decentering
Information
Interpretation
Deconstruction
Model for human relationshipsand
Hierarchy
Community
Reflexivity
identity is
Domination
Diversity
Prediction
Understanding
Appreciation
Control
Tolerance
Emancipation
.
..................
,
Overarchinggoal is
36
ORGANISATIONAL THEORY & DYNAMICS
Voice
.....................
2 A BRIEF HISTORY OF ORGANIZATION
THEORY
59
hierarchy
differentiation coordination
sySt ems division of labor
routine
MODERN PERSPECTIVE
objectivity
contingency
efficiency
profitability
control
rationality
intersubjectivity
socialconstruction
meaning context/contextualization
SYMBOLIC PERSPECTIVE
enactment thickdescription
narrative sensemaking
interpretation
discourse
power/knowledge
exploitation
voice
emancipation
POSTMODERN PERSPECTIVE
progress myth
linguistic turn
deconstruction
Figure 2.2 Some of the key terms associated with the discourses of the modern, symbolic, and
postmodern perspectives.
are encouraged to engage in making your own comparisons. A few general cross-perspective criticisms were examined in this chapter, including modernist criticisms of the symbolic
perspective as biased and of postmodernism as nihilistic, and the postmodern critique of
modernist theory as managerialist and therefore hegemonic. Meanwhile those adopting the
symbolic perspective see the modernist perspective as misguided and therefore constrained
by its objectifying tendencies, and the postmodern as hypocritical because it fails to critique
and deconstruct its own position.
The many ideas presented in this brief history provide you with a basic vocabulary for
tackling Part II of this book. All are defined in the glossary. You may want to come back to this
material from time to time as you read the following chapters. Returning to these framing
ideas will help you to challenge and develop your understanding of the concepts, theories,
and theoretical perspectives of organization theory.
Further reading
Calas,Marta, and Smircich, Linda (1991) Voicing seduction to silence leadership. Organization
Studies, 12: 567-602.
Clegg,Stewart (1990) Modern Organizations:OrganizationStudies in the PostmodernWorld.
London: Sage.
Greenwood, Royston, Oliver, Christine, Sahlin, Kerstin, and Suddaby,Roy (eds.)Handbook of
OrganizationalInstitutionalism.Thousand Oaks,CA: Sage.
37
ORGANISATIONAL THEORY & DYNAMICS
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PART I APPROACHING
ORGANIZATION
THEORY
The Condition of Postmodernity.Cambridge, MA: Blackwell.
Hassard.John, and Parker, Martin (eds.) (7 993) Postmodemism and Organizations.London: Sage.
Knudsen, C., and Tsoukas, H. (eds.) (2003) The Oxford Handbook of OrganizationTheory:MetatheoreticalPerspectives.Oxford: Oxford University Press.
Kumar, Krishan (7995) FromPost-industrialto Post-modernSociety:New Theoriesof the
Contemporary World.Oxford: Blackwell.
Lash, Scott, and Urry.John (7 987) The End of Organized Capitalism.Cambridge: Polity Press.
Pio re, Michael, and Sabel, Charles (7 984) The Second IndustrialDivide.New York: Basic Books.
Rosenau, Pauline Marie (7 992) Post-modernismand the SocialSciences:Insights,Inroads,and
Intrusions.Princeton, NJ: Princeton University Press.
Harvey, David (1990)
Rousseau, Denise (7 985) Issues of level in organizational research: Multi-level and cross-level
perspectives. In L. Cummings and B. M. Staw (eds.), Researchin OrganizationalBehavior.
Greenwich, CT:JAI Press, Vol. 7: 7-37.
Simon, Herbert (7957) Administrative Behavior(2nd edn). New York: Macmillan (first published
1945).
Notes
1. For discussions of organization theory as the product of the tension between sociological theory and
management practice, see Perrow (1973) and Barley and Kunda (1992).
2. C. S. George.Jr. (1968) observed that the division of labor and other managerial practices were in use from the
time of the Egyptians. He speculates that they were probably a feature of prehistoric life as well.
3. From A. Smith, An Inquiry into the Nature and Causesof the Wealth of Nations, Vol. 1 (ed. R.H. Campbell and A.
S. Skinner, textual edn W. B. Todd, Oxford: Clarendon Press,1976, 14-16).
4. For a review of Marx's influence on organization theory, see Adler (2011 ).
5. The tension between economic and humanistic interests in organization theory has been discussed by Wren
(1987), Bernard (1988), Boje and Winsor (1993), Steingard (1993), and O'Connor (1996).
6. Weber (1946: 228).
7. For a thorough discussion of Weber's contributions to the symbolic perspective, see Schroeder (1992).
8. It is uncertain where the term Fordism originated, but Aglietta used it in 1979 in A Theoryof Capitalist
Regulation(London: Verso). George Ritzer (2015) introduced the term McDonaldization in 1993.
9. Cited in Graham (1995: 56).
10. Cited in Calinescu (1987: 15). The phrase 'on the shoulders of giants' was used as the title of an influential text by
American sociologist Robert Merton (1965) that presented the case for integrating theory and practice.
11. Boulding (1956).
12. Trist and Bamforth (1951 ). See also Emery and Trist (1981 ).
13. For example, see Emery (1969).
14. See Donaldson (1985) for a review and defense of contingency theory.
15. Thomas and Thomas (1928: 572).
16. http://writing.upenn.edu/-afi1reis/88v/blueguitar.html
(accessed December 22, 2017).
17. Weick (1995); Weick and Bougon (1986).
18. Weick (1979/1969: 243; 1995: 30-1 ).
19. Weick (2003); see also Mitch Abolafia and Martin Kilduff (1988), who described attempts to corner the silver
market in the 1980s using enactment theory.
20. Meyer and Rowan (1977).
38
ORGANISATIONAL
THEORY & DYNAMICS
2 A BRIEF HISTORY OF ORGANIZATION
THEORY
61
21. Geertz (7 973: 5).
22. Geertz (1973: 413-16}. Used with permission of the author.
23. Golden-Biddle and Locke (7 993).
24. Hatch (1996}.
25. Stocking (1983).
26. See Clifford and Marcus (1986}.
27. Eder (1932).
28. Saussure (1959}.
29. Wittgenstein (1965).
30. Lyotard (1983}.
31. Foucault (2006/1961; 1975).
32. See, e.g. Foucault (1972; 1973).
33. Moran (2002: 14}.
34. Foucault (1970: xxiii),cited in Moran (2002: 135-6).
35. For examples, see articles about relationship marketing in business periodicals such as the HarvardBusiness
Review.
36. King, Feltey, and Susel (1998).
37. Derrida (1976).
38. See Dwyer and Jones (2002}, Linstead (1993}, and Kilduff (1993} on deconstructing organizations.
39. Derrida (1978).
40. Baudrillard (1981/1994: 19}.
41. Baudrillard (1981/1994: 7).
42. Wall Streetjournal, February 20, 2002. For videotaped insider accounts and related material, view 2005
documentary Enron:The Smartest Guys in the Room. The film was based on a 2003 book by Fortunereporters
Bethany McLean and Peter Elkind, entitled
The Smartest Guysin the Room:The Amazing Riseand ScandalousFall
of Enron.
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Bell, Daniel (1973)
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Bell, Daniel (1976)
Berger, Peter L., and Luckmann, Thomas (1966} The
SocialConstructionof Reality:A Treatisein the
Sociologyof Knowledge.Garden City, NY: Doubleday.
Bernard, Doray (1988} FromTaylorismto Fordism:A
RationalMadness.London: Free Association Books.
Bertalanffy, Ludwig von (1950) The theory of open
systems in physics and biology.
ScienceQuarterly,37: 363-99.
Baudrillard,Jean (1981/1994)
SelectedWritings(ed. M. Poster).
Palo Alto, CA: Stanford University Press.
New York: Basic Books.
understanding of some important organizational
of control in managerial discourse.
Baudrillard,Jean (1988)
Science,111: 23-8.
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Foundations,Development,Applications(revised edn).
New York: George Braziller.
Boje, David M., and Winsor, R. D. (1993}The resurrection
ofTaylorism: Total quality management's hidden
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ORGANIZATION
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ORGANISATIONAL THEORY & DYNAMICS
CHAPTER 2 • ORGANIZATIONAL SOCIAL STRUCTURE
Organizational social
structure
Organization occurs when people learn what can be accomplished by pooling their efforts,
resources, power, knowledge, and identities. Adam Smith was the first to explain that when
labor is divided in an organized way, groups outperform individuals. Their superior performance is due to greater efficiency that comes with the specialization of workers and coo rd i nation of their work tasks. But efficiency is not all that organization makes possible. Groups can
accomplish things no individual acting alone could dream to do: space travel, for example.
Of all the concepts used to explain, understand, and appreciate organization and its
successesand failures, organizational structure has been around the longest and made
the greatest impression on organization theory. Structure generically refers to the stable
relationships among parts of a system or entity. For example, relationships between the foundation, frame, roof, and walls of a building give it the structure needed to stand upright and
function as shelter, just as relationships between bones, organs, blood, and tissue structure
a human body and enable its life-supporting functions of mobility, digestion, respiration,
circulation, and so on.
Organization theorists are particularly interested in two types of structure: physical and
social. An organization's physical structure refers to the spatial-temporal relationships between its material elements, which includes bodies, buildings, and geographical locations,
and consideration of the style, design, heritage, and other symbolic meanings these embody.
The relationships between the roles and responsibilities members assume within their organization, such as the groups or units to which they belong (e.g. offices, departments, divisions), describe elements in an organization's social structure. Social structure arises in, and
can be altered by, changing patterns of interaction among its members, while the meanings
invested in it provide some with a sense of stability, even in the face of change. Of course, the
physical and social structures of organizations are not completely independent. These concepts overlap whenever physical structure influences patterns of human interaction or when
interaction patterns are taken into account when designing an organization's buildings. This
chapter covers social structure; physical structure will be the subject of Chapter 7.
The historical development of theorizing about organizational social structure begins with
Weber's theory of bureaucracy, which you met in Chapter 2. That theory produced the classic
concepts of hierarchy, division of labor, and formalization that modernists developed into
measurable dimensions to assessthese and other aspects of social structure. In this chapter,
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you will find definitions and measures of the most widely used dimensions and take a close
look at three on which modernist organization theory depends-centralization/decentralization, differentiation/integration, and size. A return to Burns and Stalker's mechanistic and
organic distinction, explored in Chapter 3, will show how the dimensions cluster to define
these two ways of organizing. An introduction to organizational design, along with a typology
oforganizational forms, will be presented next, covering the gamutextendingfrom traditional
and modern to postmodern forms.
The chapter continues with theories of structural change, including two based on evolutionary models taken from the modernist perspective, and one that introduces the symbolic
perspective. The latter, structuration theory, looks at how the same structures and practices
account for both organizational change and stability. You will then encounter ideas about
routines and improvisation and get an introduction to practice theory, all of which take the
symbolic perspective and, in one way or another, follow from structurati on theory. The chapter
ends with three postmodern challenges to modernist structural concepts-de-differentiation,
anti-administration, and feminist bureaucracy-and with the idea of hacking social structures
as a means to (re)discover the freedom and creativity that lie within them.
Weber's ideal bureaucracy
Although Max Weber published his theory of bureaucracy in the early 1900s, his work was
not translated from German into English until the mid- l 940s. The timing of this translation
coincided with the birth of organization theory and, for those who forged the modern perspective, gave Weber the status of founder. As you saw in Chapter 2, Weber's theory offered
an ideal model for governing organizations and societies, which he believed was preferable
to earlier traditional (i.e. feudal) and charismatic forms. The concept of bureaucracy derives
from the then-widespread use of the term 'bureaus,' which today we refer to as an organization's units or departments, each with its designated realm of activity. In a way, bureaucracy
carries the connotation of arranging, or structuring, people into jobs, jobs into departments,
and departments into organizations. The main characteristics Weber attributed to bureaucracy include: 1
•
a fixed division of labor;
•
a clearly defined hierarchy of offices (i.e. bureaus), each defined by its particular sphere
of competence;
•
a set of general rules governing the performance of offices-strict discipline and control
in the conduct of the office;
•
candidates selected on the basis of technical qualifications and appointed, rather than
elected, to office;
•
officials remunerated by fixed salaries paid in money;
•
the office as the primary occupation of the office holder, which constitutes their career;
•
promotion granted according to seniority or achievement, as assessedby superiors;
•
official work separated from ownership of the means of administration.
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Weber's use of the term 'ideal' might not be what you expect; he used it in the sense of a pure
idea-something that can only be known through imagination-rather than a perfect or desirable entity or existential state. In his original discussion of ideal types, he compared them to
similar notions in other academic disciplines, such as ideal gases in physics or ideal competition in economics. Ideals in Weber's usage do not indicate goodness or virtue; instead, their
abstract nature makes them a useful basis for theorizing, even though we cannot expect them
to exist in an imperfect world.
Weber himself recognized the potential for trouble, warning that bureaucracy could easily
become an iron cage imprisoning all who wandered into its clutches. Chari ie ChapIin satirized
Weber's warning in his 1936 film Modern Times,which showed its protagonist, an industrial
worker, comically caught up in the gears of a giant machine. Contemporary novels and films
have advanced the criticism: ReadJoseph Heller's novel Catch-22 or watch Terry Gilliam's film
Brazil, for example, both of which use dark humor to satirize the dangers of overreliance on
bureaucratic formalities. Weber pointed out that when organizations are large and operate
routine technologies in fairly stable environments, bureaucracy offers benefits enough for
many societies to continue to create and maintain numerous bureaucratic organizations in
spite of distaste for the bland work they require and frustration with the red tape they often
generate.
Today, you will find bureaucracy in most governments, nearly every university and religious
institution, and many large international aid organizations, such as the Red Cross. But you will
also find most large corporations moving away from bureaucracy due to the increasing pace
of environmental change they face and their consequent need for rapid and continuous adaptation-demands that bureaucracy cannot meet. 2 Some will have greater successthan others, however, in large part because bureaucracy is hard to turn down. It promises consistently
reliable decision-making, merit-based and fair selection and promotion, and the impersonal
application of rules.3
Organization theorists who adopted the modern perspective defined organizational social
structure using three core aspects of Weber's bureaucracy that remain relevant to the study
of organization theory: division of labor, hierarchy of authority, and formalized rules and
procedures.
Division of labor
Division of labor refers to splitting the work of the organization among employees, each of
whom performs a piece of the whole output-generating process. It distributes responsibilities and assigns work tasks. When labor is properly divided, the combination of work tasks
produces the desired output of the organization with efficiency and effectiveness. Adam
Smith's description of pin-making, as discussed in Chapter 2, provided a simple example
of how the division of labor organizes work (one draws out the pin, while another attaches
the head, and so on), but you can easily think of other examples, such as the assembly line
that produces automobiles, or the processesthat provide banking, education, or healthcare
services.
The ways in which tasks are grouped into jobs and jobs into organizational units is also part
of the division of labor. Grouping similar or closely related activities together into organizational units produces departments (e.g. purchasing, production, marketing) and/or divisions
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(e.g. consumer products, international sales) from which organizational structures are built.
The grouping of work into units is called departmentalization. Because administrators or
managers typically oversee the units and subunits created by departmentalization, the division of labor is closely related to hierarchy of authority, the second component that Weber
contributed to the definition of organization structure.
Hierarchy of authority
Distributing authority in an organization produces hierarchy. Some people believe that hierarchies are a fundamental aspect of life; they find evidence to support their belief in the
pecking order observed among chickens and the way wolves and dogs demonstrate domination and submission to each other and to humans. Organizational hierarchies, they believe,
are the human form these tendencies assume. Of course, others argue that nonhierarchical
organizations based on egalitarian values demonstrate that humans can overcome natural
hierarchical tendencies, or never had them in the first place.
Regardlessof whether or not you agree that hierarchy is natural, you will probably recognize it as a feature common to most, if not all, organizations. According to Weber, positions
higher in the organization's structure confer legal authority to make decisions, give direction,
and reward and punish those positioned lower in the hierarchy. One's authority is strictly a matter of position and is relative to that of others. Moreover, authority belongs to the position,
not the person who occupies it; when an individual retires or moves to a new position or a
different organization, the authority of their former position remains behind to be assumed
by their successor.
An organizational hierarchy defines formal reporting relationships such that it maps the
organization's vertical communication channels-downward (directing subordinates) and
upward (reporting to management). When each position in an organization is subordinate to
only one other position, what Fayal called the scalar principle, authority and vertical communication combine to permit the most highly placed individuals to efficiently gather information from, and to effectively direct and control the performance of, all individuals throughout
the organization.
In the past, many managers applied the scalar principle to their organizational structures;
however, dual reporting relationships are now quite common, as are lateral connections used
to integrate an organization's diverse activities and promote flexibility of response to environmental pressures.Weber's third component of social structure-rules and procedures-can be
used as a substitute for hierarchical authority. Rules and procedures can replace some of the
control lost when hierarchical authority structures are flattened or when work is geographically distributed across large distances, as happens in many international organizations.
Formal rules and procedures
The extent to which explicit rules, regulations, policies, and procedures govern organizational
activities defines an organization's degree of formalization. Indicators of formalization include the existence of written policies, handbooks.job descriptions, operations manuals, and
organization charts, and the use of management systems such as management by objectives (MBO), technical systems such as program evaluation review techniques (PERT),and
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operational systems such as supply chain management. Formalization through the specification of rules, procedures, position descriptions, and job classifications tells employees how
to make decisions in their realm of authority and how to perform their assigned work tasks.
Along with strict observance of positional authority, formalization contributes to the
feeling of impersonality often associated with bureaucratic organizations. It reduces the
amount of discretion that employees have in performing their work tasks, while increasing
the control that managers maintain over their employees. Studies have shown that formalization tends to discourage innovation and suppress communication. 4 By contrast, the lack of
formalization, sometimes referred to as informality, denotes the flexibility and spontaneity
of non bureaucratic organizations.
Keydimensionsof organizationalsocialstructures
Inspired by Weber's theory, early modernist organization theorists developed a variety of
dimensions to be used to assessand compare organizational social structures. The most influential of these appear in Table 4.1, three of which-centralization/decentralization, differentiation/integration, and size-will be discussed in detail to show how they relate to the Weber's
theory of bureaucracy. Notice that common ways in which to operationalize these dimensions in order to measure them empirically are shown on the right side of Table 4.1. Empirical
studies using the operationalized dimensions generate, refine, and improve theory, as you will
see in the next section of the chapter, which revisits structural contingency theory.
Centralization/decentralization
The dimension of centralization/decentralization figures prominently in most theories
involving organizational social structure. Often defined in relation to hierarchy, it suggests
how those at the top choose an appropriate leadership style. In a centralized organization,
control is maintained by making decisions almost exclusively at the top of the hierarchy and
by expecting employees to accept the decrees of their executives without question. However,
because centralization minimizes participation among lower-level employees, it can leave
those lower in the hierarchy feeling uninvolved in the organization, and can impede their
understanding and dampen their enthusiasm for achieving its goals.
By contrast, decentralized organizations rely on the participation of many members of the
organization in decision-making processes, and so encourage a sense of involvement and
feelings of responsibility for outcomes. However, because decentralized organizations are
more difficult to control, their executives have to be willing to accept a certain amount of
control loss and the leadership style that this implies. In the main, leaders of decentralized
organizations forsake the role of directing and controlling organizational activities, and adopt
instead the roles of inspiring, supporting, and facilitating other organizational actors.
There is more that you should grasp about the dimension of centralization/decentralization, however. While measuring the social structures of 52 different organizations in the UK,
a group of researchersfrom Aston University assessedthe hierarchical level at which 37 common decisions were made.5 In a survey administered by the researchers, respondents were
asked to name the level in the organization that had the authority to make each decision.
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Table 4.1 Dimensions of organizational social structure in common use by structural contingency theorists
Dimension
Operational measure
Size
Number of employees in the organization
Administrative component
Percentage of total number of employees who have administrative
linefunctions(departments involved directly
in the production of organizational outputs) and staff functions(departments
responsibilities, often broken into
that advise and support line functions with strategic planning, finance,
accounting, recruitment, training, etc.).
Differentiation
Vertical,shown in the number of levels in the hierarchy, or horizontal,reflecting
the extent of the division of labor as shown in the number of departments
or divisions spanning the entire organization and sometimes reflected in the
average span of control of managers.
Integration
Extent to which activities are coordinated across the organization using
accountability, rules and procedures, liaison roles, cross-functional teams, or
direct contact.
Centralization
Extent to which authority to make decisions concentrates at top levels of the
organization; in decentralization,
decision-making is spread across all levels in
the hierarchy.
Standardization
Extent to which standard procedures govern the organization's operations and
activities rather than individuals using their judgment and initiative to respond
to events as they arise.
Formalization
Extent to which an organization uses written (ie. formal) job descriptions,
rules, procedures, and communications, as opposed to communication and
relationships based on informal, face-to-face interaction.
Specialization
Extent to which the work of the organization is divided into narrowly defined
tasks assigned to specific employees and work units.
The researchersthen averaged the data for all 37 decisions to create an overall centralization
score for each organization. But this score did not correlate as strongly with other measures as they had expected it would, so the researchers broke down the centralization measure according to type of decision made. A replication of the study revealed that while an
organization may be highly decentralized with respect to work-related decisions, it can also
be highly centralized with respect to strategic decisions.6
You can see how this happens in universities, for example. In these organizations, decisions
about course offerings, new faculty hires, and the distribution of travel funds are typically
made in the academic departments, so you would consider these decisions to be decentralized. Decisions about university fund raising campaigns or charting new directions for university growth are centralized at the level of the university president and board of trustees. As
often happens in empirical studies, by dropping down one level or unit of analysis, the Aston
researchers discovered a more complicated picture that informed their findings. This study
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allowed the researchersto recognize that, within a single organization, different types of decision occurred at different levels of the hierarchy, thus producing mixed results on an organizational centralization scale. This does not mean that organizations cannot be compared at
the organizational level of analysis as more, rather than less,centralized; it just means that one
must be concerned with what measurements were taken in any study and use this information when interpreting its findings.
Differentiation/integration
Paul Lawrence and Jay Lorsch used a departmental level of analysis to interpret the findings
of their study of the performance of a group of chemical-producing companies.7 Their study
revealed the importance of differentiation and integration as dimensions of organizational
social structure. They defined differentiation as the separation of the organization into structural units having different tasks or functions. They found, for example, that sales departments focused on delivering customer satisfaction and building relationships with customers,
while production departments focused on efficiently using labor and equipment to maximize
production and minimize the time and resources required to produce products, to retool
equipment, and to change work processesfor individual orders. Lawrence and Lorsch'sstudy
showed that differences in tasks produced differences of orientation that led, at times, to conflict between departments, especially when performance measures were tied to substantial
rewards. The differentiation of departments kept conflicts from interfering with the performance of work and thus improved the performance of the company overall.
Organizing to accommodate specialization produces horizontal differentiation in the
organizational structure, which can take the form of units organized by function, as was the
case for the organizations Lawrence and Lorsch studied, or by products produced, services
provided, clients served, processesused, or location. According to Lawrence and Lorsch, horizontal differentiation produces the need for oversight and communication to achieve integration among the various activities. They defined integration as the collaboration required
to get everyone pulling in the same direction so as to achieve unity of effort.
Since the most common organizational integration mechanism is hierarchy-creating formal reporting relationships that allow managers to coordinate activities and resolve problems by exercising their authority-integration is often achieved by elaborating the hierarchy
through vertical differentiation. Thus differentiation and integration bear an interesting
codependent relationship: Adding hierarchical levels to achieve integration of horizontally
differentiated units creates vertical differentiation, which then requires even more integration. Hierarchy has limits where an organization's need for integration is concerned. Thus
organizations must turn to other aspects of structure to provide integration mechanisms.
Other integration mechanisms available to organizations include formal rules, procedures, and scheduling, as well as liaison roles, committees, task forces, cross-functional
teams, and direct communication between departments. For example, an organization might
have a technical sales engineer in a liaison role to talk with the customer and to coordinate
with purchasing, production planning, production, quality control, finance, and the legal
department to ensure a contract is satisfactorily completed on time. A hospital might have a
cross-functional team of medical, nursing, therapy, finance, and social services staff to manage an individual patient's healthcare program.
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Size
The Aston research that produced the findings on centralization/decentralization also
revealed that organizational size interacts with other dimensions of social structure in unexpected ways. Data collected measured six dimensions of organizational structure in 52
organizations: specialization, standardization, formalization, centralization, configuration,
and flexibility. Findings showed that when centralized organizations are large, decision bottlenecks can undermine organizational performance by slowing organizational responses
to environmental pressure. This finding explained why most studies of large organizations
had indicated a negative relationship between formalization and centralization-namely, that
these organizations can trade centralization for formalization because formal rules and procedures direct subordinates to make the same decisions managers would make. Thus large
decentralized organizations, including most bureaucracies, are more likely to be formalized
than are large centralized organizations. 8
This finding solved what was once puzzling to organization theorists. Like them, you too
may think that 'mechanistic' and 'bureaucratic' are two words for the same thing. Experience
with bureaucracies often creates this belief because the image of an unfeeling machine fits
with the red tape associated with bureaucracy. Notice, however, that there is one feature of
bureaucracies that distinguishes them from mechanistic organizations: The bureaucracy is
decentralized, whereas the mechanistic organization is centralized. The trick to resolving the
puzzle is to understand what it means to say that a bureaucracy is simultaneously highly formalized and decentralized. In a bureaucracy, many routine decisions are pushed to low levels
of the organization, but there are strict rules and procedures that govern how those decisions
are made. Thus street-level bureaucrats (police, social workers, teachers, clerks, etc.) often
have discretion, but can only exercise it within strict limits. Like mechanistic organizations,
the bureaucracy remains highly controlled, but it does so by being decentralized in such a
way that allows lower-level bureaucrats to make all the programmed decisions, while freeing
higher-level bureaucrats to form policy and make nonroutine decisions, including any decisions that have yet to be programmed.
Another look at structuralcontingencytheory
Contingency theorists attempt to specify the best fit between the design of organizational
structures and their environments. Their normative aim is to maximize organizational
performance, modernist measures of which range from financial profit and return on investment (ROI),job satisfaction, and employee turnover, to sales revenue and market share.
Factors inspired by the symbolic perspective, like brand equity and corporate reputation,
eventually expanded the list of performance indicators, while postmodern influences have
pressured organizations to assesstheir performance on the basesof social responsibility and
environmental sustainability.
In Chapter 3, you were introduced to characteristics of the environment on which the best
structure for a particular organization is contingent-complexity, rate of change, and uncertainty. So far in this chapter, you have learned about different dimensions of social structure. Contingency theorists use these, and others they continue to add, to refine their theory.
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Operational measures allow them to calculate which organizational structures max1m1ze
performance by best fitting the environments they serve, as you will see in the following
discussion.
The structural dimensions of mechanistic and organic organizations
In Chapter 3, you learned that Burns and Stalker found that mechanistic organizations outperformed organic organizations in stable environments, but in unstable environments organic
organizations were more successful.The structural dimensions shown in Table 4.2 helped the
researchers explain why.9
Once Burns and Stalker defined mechanistic and organic forms in terms of the dimensions
of their social structures, they were able to propose that high levels of hierarchical control,
clearly defined roles and tasks, and centralized decision-making all undermine the advantages offlexibility and creativity associated with organic forms. This led them to theorize that
the need for innovation limits the success of mechanistic forms of organizing, thus adding
a new contingency factor. Expressed in the terms of contingency theory, demand for innovation constitutes an environmental contingency that differentiates organizational forms in
relation to their environment such that the greater the demand for innovation coming from
the environment, the greater the advantage to organic forms of organization.
Burns and Stalker's extension of contingency theory explains why organic organizing will
be preferred under conditions of high need for innovation. First, organic organizations can
Table 4.2 Comparison of the characteristics of mechanistic and organic organization
Mechanistic structures
(producepredictability,
Organic structures
(supportflexibility,adaptability,
accountability)
innovation)
High horizontal and vertical differentiation-a
Highly complex horizontal and vertical integration-a
hierarchical structure of authority and control
network of authority and control based on knowledge
of the task
High formalization-the
definition of roles,
Low formalization-tasks and responsibilities are
responsibilities, instructions, and job methods is
redefined depending on the situation or as the
stable
situation changes
Centralization-decisions
made at the top of the
hierarchy
Decentralization-decisions
made by those closest to
and most knowledgeable about the situation, and/or
by those with responsibility for implementation
Standardization through written rules and standard
Mutual adjustment and redefinition of tasks and
operating procedures
methods through joint problem-solving and
interaction
Close supervision; authority and prestige based on
Personal expertise and creativity without supervision;
position
prestige attached to expertise
Vertical (superior-subordinate) communication in the
Frequent lateral communication, often in the form
form of instructions
of consultation between people from different
departments
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better satisfy innovation needs because employees enjoy greater discretion in performing their tasks and are not bound to follow formalized rules and procedures. In addition,
decentralized decision-making pushes authority and responsibility to lower levels of the
hierarchy, which means that employees hired for their knowledge and expertise have the
discretion to use their skills and training, and the flexibility to experiment and solve problems as they arise (see Box 4.1). In organic forms, so the theory goes, systems and people
are more proactive and adaptable to changing circumstances. In rapidly changing environments, where organizations need to innovate to survive, organizations benefit from having
teams of knowledgeable employees working together to anticipate and respond quickly to
shifting environmental demands.
Box 4.1 Case example
McDonald's
Large organizations that exist in stable environments and provide standardized services or
products operate most efficiently when they use mechanistic forms, but as environments change,
organizations need to change also. You may be familiar with McDonald's-the
hamburger organization
that operates under the sign of the Golden Arches. As of 2012, McDonald's had 33,000 restaurants in
119 countries, with 1.7 million employees serving in excess of 68 million people every day, with the goal
of being their customers' favorite place and way of eating. 10
At the end of the twentieth century, McDonald's was widely respected for its size, its centralized and
standardized structure, and its high degree of formalization, which included an operations manual over
400 pages long. Uniformity of product offerings and retail design meant you could instantly recognize
McDonald's anywhere in the world and know exactly what you could buy there. The company was the
epitome of the mechanistic organization. But increasing competition and changes in nutritional habits
have changed all that, leading McDonald's in the direction of a more flexible, organic approach.
In 2005 the McDonald's website described structural changes under way in these terms:
Decentralization is fundamental to our business model-and to our corporate responsibility efforts.
At the corporate level, we provide a global framework of common goals, policies, and guidelines
rooted in our core values. Within this framework, individual geographic business units have the
freedom to develop programs and performance measures appropriate to local conditions.
11
Since then, McDonald's has seen growth in the number of innovative changes that are pushing it out of
its mechanistic past.
Among the innovations that McDonald's has seen are a customizable burger option implemented in
the chain's Australian restaurants, delivery service in New York City, and Free Fruit Fridaysfor UK customers
ordering a Happy Meal. 12 In the UK, McDonald's is experimenting with composting and highly informative
nutrition labels. In addition, it now offers organic milk and coffee in all its restaurants. In the United States,
the Egg McMuffin, now available all day, uses real butter and cage-free eggs.The organization is clearly
adapting to changes in its environment that show that McDonald's is becoming much more organic.
Questions
Can you think of other mechanistic organizations that are under pressure to adopt organic
characteristics? What is happening in their environments that might account for this change? What
contingency factors does your analysis reveal?
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Levels within organizational structures
Lawrence and Lorsch'sresearch provides an example of how contingency theory becomes refined. In their case, refinement came from dropping from the analytical level of organization
to that of departmental units. By looking at the organizational structures of different departments, they realized that organizations can contain many different structures and that these
structures are contingent upon the degree of stability in their environment.
In their 1967 study of six organizations in the plastics industry, which, at the time, was a complex and unstable environment, Lawrence and Lorsch found that organizational departments
were confronted with different degrees of uncertainty that caused each department (sales,
production, applied research, and fundamental research) to differentiate from the others. 13
Using four measures of differentiation-degree of formality, relative amount of attention given
to task performance and relationship building, orientation to time, and goal orientation-their
data revealed that:
•
departments operating in the most stable environments (production) were more
formalized and hierarchical, and carried out more frequent performance reviews,
than those facing environmental uncertainty (R&D), with sales and applied research
departments falling in between these two extremes;
•
departments with greater task uncertainty (sales)were more relationship-oriented than
departments facing lesstask uncertainty (production), which were more task-oriented;
•
sales and production departments held short-term orientations and required rapid
feedback on results, while R&D departments had long-term orientations (of at least
several years out, depending on the length of their projects);
• the goal orientations of sales departments were towards customer issues,while
production had a goal orientation defined by cost and process efficiency.
In a follow-up study, Lawrence and Lorsch focused on the relationship between environmental stability and social structure. They selected two organizations from the packaged foods
industry, an industry at the time confronting an unstable environment with many diverse
elements, and two from the container industry, where a stable environment prevailed. They
concluded that high-performing organizations had the appropriate degree of differentiation
for their environments and used forms of integration consistent with the coordination demands of their differentiated activities. Moreover, they found that:
• unstable environments required a higher degree of differentiation than stable
environments in order to meet varying and complex demands;
•
both stable and unstable environments required a high degree of integration, but
the means of integration differed-in stable environments, hierarchy and centralized
coordination were favored, whereas in unstable environments, there was a need to
push decision-making to lower hierarchical levels so that problems could be dealt with
through direct communication with those possessing relevant knowledge.
Lawrence and Lorsch concluded that appropriate levels of differentiation and methods of
integration vary depending on the particular unit of the organization in question and the
segment of the organization's environment with which that unit interacts. An implication of
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their work is that, in complex environments, organizations differentiate such that different
departments serve different segments of the environment, thus mapping their internal complexity onto the external complexity they face in order to achieve goodness of fit with their
environment (see Box 4.2). In these terms, Lawrence and Lorsch'sdata showed that goodness
of fit correlated with higher levels of performance in the sample of businesses and departments they studied.
Box
4.2
From theory to practice
Applying levels of analysis to an organization
You can experience how different levels of analysis affect perceptions of an organizational structure
using the example of a university. At the level of departments, most administrative work in the
university is done in mechanistic ways, while the best faculty research and teaching evidences
the organic form of organization. Dropping another level of analysis to the level of tasks reveals that
all jobs have both mechanistic and organic elements. Teaching, for instance, is partly mechanistic (e.g.
testing knowledge, reporting grades) and partly organic (e.g. designing curricula, facilitating group
learning experiences, answering student questions).
At the even lower level of subtasks, additional organic and mechanistic distinctions can be made.
Testing tasks have organic components that include defining what knowledge is important, composing
items on tests to measure learning, and combining test questions into an exam format, while
mechanistic components of testing include overseeing those taking the exam, scoring test items, and
assigning grades, any of which can be seen to be composed of some elements that are mechanistic
and others that are organic, and so on down through lower and lower levels of analysis. At the level of
the subtask of assigning grades, most university teachers find that assigning a top or a failing grade is
mechanistic, whereas figuring out where to draw the line between exams that fall into the middle range
is not straightforward and therefore is a much more organic process.
Exercise
Choose any organization with which you are familiar other than your university. You might use your
family, a religious institution to which you belong, an organization for which you have worked, or
any organization that interests you and with which you have familiarity. Analyze this organization by
specifying its subunits or departments, the jobs at least one of the units requires, and the tasks and
subtasks that comprise one or more of the jobs in that unit. By analyzing an organization from different
levels, you will help yourself to understand how organization theorists approach their theorizing and
what they need to consider when they apply their theories to actual organizations.
The lessons of contingency theory
Contingency theory makes it clear that there is no one best way of organizing. Many different
ways of organizing prove successful depending upon the environment in which the organization operates and, as you will soon see, on the organization's technology and possibly culture as well. Specifying what constitutes successful organizing remains an ongoing problem
for contingency theorists, who continue to refine, study, and identify new factors that they
can then measure and correlate with measures of organizational structure. 14 Their ongoing
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discovery process leads to refinements of contingency theory that suggest other factors and
dimensions, as shown in the examples provided by Burns and Stalker and by Lawrence and
Lorsch.
Critics argue that the endless discovery of additional factors and dimensions to measure poses limits to the value of contingency theory due to the theoretical problem
of overdetermination and statistical problems associated with multicollinearity. You
might say that contingency theory suffers from an overabundance of knowledge. It certainly
is in need of new approaches to estimating the causal probabilities of the outcomes it wants
to explain. In spite of its challenges, though, contingency theorists continue to offer advice to
managers eager to know how best to organize.
Typesof organizationand organizationaldesign
For purposes of identification, categorization, and comparison, organization theorists offer
a variety of organizational types, often described by constellations of structural dimensions
depicted using organization charts (e.g. Figures 4.1-4.6). An organization chart is a tool for
mapping the structure of roles and responsibilities distributed throughout an organization,
and is a useful guide when designing or redesigning an organization's structure and communicating how it will be implemented. These charts provide a fairly clear representation of the
hierarchy of authority and a general idea of the division of labor, but are not able to depict
coordination mechanisms such as liaison or other lateral relationships (although these are
sometimes partially represented with dotted lines), or the effects of power flowing outside
formal hierarchy. Moreover, as organizing moves toward constant flux, the charting of structures becomes less relevant or is replaced by depictions of organizing, such as supply chains
that map the flow of resources to be transformed as they passthrough a production or service
delivery process (as shown in Figure 4.6).
Composing and broadcasting typologies based on a subset of generic organizational forms
has been a central practice among members of the field of organizational design. This field
offers normative guidance derived from research findings supplied by mostly modernist research. It assumes that the type of structure determined as best can be adopted by management decree-an assumption questioned by symbolic and postmodernist researchers, who
prefer lessobjectivist definitions of social structure. Nonetheless, the practice of designing organizations continues. In what follows, the most commonly referenced types of organization
are presented. The typology offered begins with simple structures and ends with complex
structures, some of which align with the postmodern perspective. You will see in these descriptions what is known or has been theorized about the merits and drawbacks of each type.
Simple structure
Extremely small organizations often appear to have little, if any, formalized social structure or
rules. Characterized by completely flexible social relationships with limited differentiation, the
simple structure evidences almost no hierarchy. There is little need for delegation and little opportunity for specialization since everyone works, more or less,side by side to get the job done.
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In a simple structure, the assignment of tasks, whether determined by management decree or by mutual agreement, is open to direct and informal coordination and supervision
that occur as part of the flow of activity because those in authority are constantly available
for consultation and instruction. Simple organizational designs are characteristic of newly
formed organizations (e.g. an entrepreneurial venture with one or only a few employees) or
permanently small organizations (e.g. a medical or dental practice having only one doctor or,
at most, a few). They also occur in prototype laboratories, in product design or project teams,
in cross-functional management groups, and in some subunits of large organizations (e.g.
research and development labs), or they can result from the dismantling of one or more of
the structures produced by the following organizational designs.
Functional structure
When an organization grows too complex to maintain a simple structure, its growing differentiation will be reflected in the functional structure that emerges. Functional designs are
so called because they group activities according to similarity in the nature of the work performed. Within each unit of a functional structure, people do related and/or interdependent
work and strive to accomplish a particular set of goals. Figure 4.1 depicts a generic functional
organization.
Take,for example, a typical manufacturing organization with jobs grouped into line functions responsible for purchasing, sales, engineering and production (a.k.a. operations), and
staff functions including personnel (or human resource management, a.k.a. HR), accounting,
finance, marketing, research and development, public relations, communication, and facilities management. Functional designs are also commonly used by many government organizations, as shown in Figure 4.2, the organization chart for the city and county of Honolulu,
Hawaii. 15
Functional designs maximize economies of scale resulting from specialization and thus are
efficient in their ability to limit duplication of effort. Their transparent logic allows employees
to easily recognize the connections between the tasks performed within their unit and the
tasks others perform. For example, marketing department staff can easily differentiate their
work from that of the accounting, sales,and manufacturing departments.
There are several downsides to functional structures. One is that the goals of different
units may come into conflict. Another is that employees may develop greater loyalty to their
General manager
Purchasing
Engineering
Manufacturing
Sales
Accounting
Figure 4.1 An organization chart showing a functional design.
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City and county of Honolulu
ORGANIZATION CHART
Electorate
I
I
Mayor
city and county
of Honolulu
Department of
the prosecuting
attorney
----
Board of
water
supply*
City council
city and county
of Honolulu
I
I
Office of the
managing
director
I
I
Oahu civil
defense
agency
Neighborhood
commission
office
I
I
Department of
budget and
fiscal services
Department
of community
services
I
I
Department of
environmental
services
Department of
facility
maintenance
I
I
I
Department of
the corporation
counsel
Office of
the city
clerk
Office of
council
services
I
Department
of customer
services
Honolulu
fire
department
I
I
Department of
parks and
recreation
Department of
planning and
permitting
Office
of culture
and the arts
Royal
Hawaiian
band
Office
of economic
development
I
I
I
Department
of design and
construction
Department
of emergency
services
Department
of enterprise
services
I
I
Department
of human
resources
Department
of information
technology
Department
of medical
examiner
Honolulu
police
department
Department of
transportation
services
I
*Board is appointe d
by the Mayor
Figure4.2 Organization chart for the city and county of Honolulu.
function than to the organization as a whole. These problems can produce functional silos,
a metaphorical reference to the towering grain storage containers found on farms standing
side by side to manage and protect their contents. It falls to top executives to coordinate the
activity of the functions, an arrangement that may give the chief executive officer {CEO)tight
control in the sense that she or he is the only person with the big picture regarding what everyone else in the organization is doing. However, tight control can be a major shortcoming.
For example, as the solitary pinnacle of authority, the top manager can easily become overburdened with decision-making responsibilities, particularly when the organization starts to
grow. And, because no one else in the organization has the same breadth of perspective and
responsibility, if the top manager is suddenly lost, other managers in the organization will
likely be ill prepared to take over.
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Multidivisional (M-form) structure
When an organization outgrows a functional design, it usually creates multiple divisions in
order to distribute the organization's decision-making load across a greater number of executives. The multidivisional structure, or 'M-form' for short, consists of a set of separate, often
functionally
structured, organizations, each run by a dedicated management team that re-
ports to executives based at headquarters (see Figure 4.3). The management of each division
handles the day-to-day
internal operations of the business or businesses for which they are
responsible, while the headquarters staff assumes responsibility for financial controls, policymaking and long-range strategic developments, as well as HR, which includes management
training and organizational development. Top executives focus on formulating
the strategic
direction, capital investment, and budgeting procedures, and on the creation, acquisition, or
divestment of divisions.
Multidivisional
organizations group people, positions, and units in one of three ways: by
similarities in products or production
processes, by customer type, or by geographical re-
gion of activity. For example, in 2015 the NASA Glenn Research Center in the United States
had five directorates (Mission Support, Aeronautics, Science, Human Exploration, and Space
Technology), each of which was subdivided into missions, with a sixth directorate for Mission Support. 16 British Telecommunications (BT) is divisionalized by customer type, with six
divisions: Consumer (residential customers), EE(retail store customers), Business and Public
Sector (business and public sector customers), Global Services (worldwide
and solutions), Wholesale and Ventures (other communication
business services
providers), and Openreach
(providing all companies with equal access to BT's local access network in the UK), all of which
are managed by the holding company BT Group plc. 17 The US Geological Survey (a department within the US Department of the Interior) is structured into seven geographic regions:
Southeast, Northeast, Midwest, Southwest, Northwest, Pacific, and Alaska. 18
Organizations that adopt a multidivisional
structure are rarely as profitable as those using
functional designs. This is because the M-form organization duplicates every function within
each of its divisions. To the extent that the work these functions perform is redundant, M-form
organizations will be more costly to operate. The redundancy can be reduced by centralizing
General manager
Division B
Division A
Division C
Figure4.3 An organization chart showing a multidivisional design.
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some functions (e.g. salesforce, supply chain); however, coordination costs are higher due to
the larger size of these organizations, and the advantages of responsivenessto the market will
be lost if the organization moves too far back toward a fully centralized functional design. The
costs of integration are also greater for M-form organizations. They have a greater need for
costly executives to coordinate their multiple divisions, which are often geographically separated and can be, in the case of conglomerates, spread across industries as well. Therefore
control systems, travel expenditures, and demands for communication all increase the costs
of integration for M-form organizations.
In spite of the drawbacks, the M-form has several advantages to recommend it. The first
of these is size. Multidivisional organizations consistently grow larger than their functional
counterparts. Size gives organizations a competitive advantage in that large organizations
have greater influence on their environment and usually occupy more central positions
in their inter-organizational networks than do small organizations. Larger organizations
can typically hire the best executives because most are attracted to the power and influence large organizations command, not to mention the salaries they offer. Furthermore, the
resources that are under the control of large organizations give them more opportunities to
broaden their competitive activities both domestically and abroad. The M-form also provides
better training for future executives than does the functional structure: Divisional managers
operate with roughly the same perspective and set of responsibilities as would the president
of a functionally designed organization, and members of headquarters staff acquire broadbased experience that they are unlikely to gain within the functional form.
M-form organizations offer enhanced responsiveness to the needs of customers because
the specialization within the organization allows greater focus on the businesses each division operates. Their multidivisional designs allow for accountability based on divisional
profits, which is not possible in a functional structure where greater interdependence
makes each department's profitability impossible to determine. The profitability of each
independent division, by contrast, can be determined and used to compare it with both
internal and external competitors. However, recognize that each division faces the internal
problem of functional accountability, and the intense focus on profitability and cost reduction can produce a lack of attention to other crucial aspects of management.
Matrix structure
The matrix design was developed to combine the efficiency of the functional design with the
flexibility and responsiveness of the multidivisional form (Figure 4.4). You can think of matrix
organizations as having two structures, each of which is the responsibility of a different group
of managers. Managers on the functional side of the matrix are responsible for allocating
specialists to projects, helping them maintain their skills and acquire new ones, and monitoring their performance with respect to the standards of their functional specialty. Managers
on the divisional or project side of the matrix are responsible for overseeing specific projects:
planning, allocating resources, coordinating work, monitoring task performance, and ensuring that project requirements and deadlines are met. The goal of project managers is to bring
the project to completion on time and within budget.
The greatest difficulty with the matrix design lies in managing the conflict built into the dual
lines of authority faced by employees working inside the matrix. Functional managers expect
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General manager
~-------------1
ENG
f------1
SOCIAL STRUCTURE
Project
A
MFG
SALES
ACCTG
f------1
Project
t------t
B
t------1
Team members drawn
from functions
Figure4.4 An organization chart showing a matrix design.
project team members to meet the requirements of their specialty, while project managers
want them to adjust to the requirements of the rest of the project team and meet or exceed
customer expectations. Thus matrix employees confront the contradictory expectations of
performing complex tasks to high-quality specifications, while at the same time facing pressure to minimize costs and meet tight schedules. When employees serve on more than one
project team, they face added pressure to meet the conflicting demands of multiple project
leaders and teammates. You should recognize, however, that this conflict also provides the
primary benefit of matrix structures: They promote simultaneous attention to both functional
standards and project goals.
Conflict in a matrix structure is also built into the jobs of functional chiefs, project bosses,
and the executives who oversee their work. For example, conflict frequently emerges between functional chiefs and project bossesover the assignment of persons to projects. Obviously, some individuals and some task assignments will be preferred over others, and political
maneuvering is to be expected in regard to project team assignments. The person who overseesthe matrix structure as a whole needs to balance the functional and project interests to
be certain that one side of the matrix does not dominate the other.
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In spite of the conflicts and pressures inherent in a matrix, this organizational design has
offsetting advantages to recommend it. One is the enormous flexibility of its project structure.
Within both functional and multidivisional designs, starting up a new activity generally requires a major structural adjustment (i.e. adding a responsibility to every function or creating
a permanent new division), whereas starting a new project is a common event within matrix
organizations that only requires naming a project manager and recruiting a team. Thus a
matrix retains the flexibility of the M-form to provide customer service and respond to opportunities in the environment without making the structural divisions permanent.
Another advantage of matrix designs derives from their unique ability to maximize the
value of expensive specialists. This is because the talents of specialists can be pooled for use
among a wide variety of projects, some of which may be otherwise unrelated and thus likely
to remain structurally unconnected in the M-form. Although the individual specialist will
have to deal with the fragmentation that this disconnectedness implies (e.g. working on two
or more unrelated projects for project managers who have little concern for the specialist's competing responsibilities), from the perspective of the organization the sharing out of
specialized capabilities creates the considerable efficiency that the functional design offers
relative to the M-form. This is because where the M-form would hire potentially redundant
specialists for each of its divisions, the matrix can more easily use its specialists to their full
capacity. Of course, any imbalances between the functional and project sides of the matrix
can result in loss of either flexibility or functional efficiencies, or both.
Global matrix
In these days of increasing international compet1t1on, many organizations strategically
position themselves to take advantage of global opportunities. An organization that desires
to move beyond a purely domestic orientation to operate on a multinational, or even global,
scale will undergo structural adaptations that previous designs do not adequately describe.
These adaptations tend to happen in stages. For example, a functionally designed organization just beginning to market its output abroad, or to take advantage of low-cost foreign
labor to produce products for its domestic market, will generally form a new department to
hand le the details of import and export, usually by subcontracting with experts in the markets
in which the organization wants to be involved. At this stage, the organization is really not
multinational because it remains committed to the logic of its domestic business, but it has
started the differentiation process that leads to globalization by adding a new structure to
handle international business relationships.
As its international business grows and the organization becomes aware of additional opportunities abroad, it become more experienced, at least in one or a few of its foreign locations. At this point, many of the activities that were originally subcontracted will be brought
in-house to form an international division. Notice that the multidivisional structure gives the
organization what is essentially a multidomestic orientation-that is, it acts like a firm operating domestically in several different national markets simultaneously.
When the activities of the firm can no longer be separated into domestic and international
divisions, the international division is replaced by a multinational product or geographic
M-form structure in which each divisions engagesin the coordination of international activities. At this point, it becomes designated as a multinational corporation, or MNC. This shift
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typically occurs when international salesbecome the main source oforganizational revenuesand
as suppliers, manufacturers, and distributors from a variety of countries form an interdependent
inter-organizational network on a truly multinational scale.An MNC can achieve its multinational structure through internal growth.joint venturing, and mergers and/or acquisitions.
The MNC confronts the same drawbacks as do domestic M-form organizations, but the
desire to be more efficient and flexible leads the MNC toward the global matrix structure
depicted in Figure 4.5. A global matrix is served by managers of both geographic regions and
of products or product groups. Local units are then organized to achieve (1) effectiveness in
serving the particular region of the world to which the regional manager is assigned, and (2)
efficiency in producing and supplying the mix of products for which the product manager is
responsible. Each of the local units acts as a fully operational company in its own right, and
the array of the units that comprise the global matrix can be hybrids of any of the other designs described above.
Obviously, a major drawback of MNCs organized into global matrices are their often
mind-boggling complexity, which demands attention to the now-three dimensions of operating this matrix: region, product, and function. Even with electronic communication and
rapid transportation, the coordination problems these organizations face are costly in terms
of management time and expertise, as well as other resources. The fragmentation and incoherence these organizations often experience confirms much about what postmodernists
write, and explains growing interest in new organization forms that reduce the need for so
much formal structuring and management control.
Exec committee
Asia
North
America
EU
Eastern
Europe
Product
group A
Product
group B
Product
group C
Local
firms
Figure 4.5 The global matrix.
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New organizational forms
New organizational forms are most likely to appear in environments characterized by
rapid technological change, shortened product lifecycles, and fragmented, specialized
markets. These are among the conditions postmodernists use to justify organizational
changes they see as emerging in the so-called new economy, which rests on computerbased technologies ranging from the internet and social media to nano-technology, robotics, and 3D printing.
Network organizations
Benetton stands as an example of one of the first new organizational forms to be recognized
by organization theorists-the network organization. Composed of hundreds of small
clothing manufacturers and thousands of franchised sales outlets arrayed around a central
distribution channel, the network is organized by a shared information system that allows its
members to rapidly customize their production to the ever-changing demands of the international fashion market. In addition to providing a centralized distribution channel, Benetton
provides member suppliers with technical manufacturing expertise, much of the necessary
equipment, and sometimes capital, and handles marketing efforts on behalf of the network.
Its supplier partners, who manufacture Benetton's clothing, were either spun off from the
original Benetton operation or joined the network because their small size would otherwise
have left them out of the international fashion market.
The German TV industry provides another example of a network-based new organizational
form, this one taking the shape of a matrix of temporary project-based organizations. 19 When
a broadcaster commissions a TV program, producers in the network bring together independent writers, directors, camera people, actors, and other media specialists to collaborate
on the project. The collaboration ends when the program is completed, at which point that
piece of the networked organization dissolves, its members returning to the pool of potential
human resources that other projects can draw into new collaborative projects. The temporary nature of relationships render the organizational structure of the German TV industry
even more difficult to pin down than that of Benetton's, yet the two share the advantages of
networking.
Some of the advantages associated with network organizations make them particularly
attractive to postmodernists: They encourage information sharing, liberate decision-making,
inspire innovation, and encourage democratic management. By enhancing the spread of
information and bringing together different logics and novel combinations of information,
along with the freedom to try new things, networks provide conditions for creativity, innovation, experimentation, and learning to which other organizational forms can only aspire.
Networks are capable of extremely rapid information exchange because they can process
information in multiple directions simultaneously, and their ability to exchange knowledge
quickly diffuses successful ideas throughout the network. And because vertical communication and control relationships are replaced with lateral relationships among network partners, this new organizational form tends to be more democratic.
The advantages just mentioned enable network partners to exploit opportunities before
competitors realize they exist-an advantage with strong appeal to modernists, who tend to
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focus on the economic advantages of the network form of organizing. Modernists point out
that network organizations act like a free-market system in which goods are bought and sold
between network partners just as they would be on the open market. Competitive pressures
on the supplying partners keep downward pressure on prices, while the use of market mechanisms to coordinate activities eliminates much of the need for the vertical hierarchy of traditional organizations, which reduces costs. Reduced administrative overhead and flexibility,
along with the high levels of efficiency and profitability that make them highly competitive,
are the chief economic benefits modernists claim for network organizations.
However, there is a down side to approaching network organizations as though their economic relationships are all that matter: It can lead to exploitation by network partners who
are able to gain control of critical information or resources. For example, key suppliers can
take advantage of dependencies in the larger system by charging higher prices once demand for their products is generated by the rest of the network. In these situations, one segment of the network holds the rest hostage for higher profits. This potential for exploitation
gives an advantage to networks built on friendship, reputation, shared ideology, trust, and
cooperation.
Because the advantages networks enjoy depend upon members working voluntarily together to innovate, solve problems of mutual concern, and coordinate their activities, interorganizational teamwork cannot be taken for granted. Therefore the webs of information
exchange and mutual obligation that provide a foundation for healthy network relationships
must be managed. Among the main management challenges are those of developing and
maintaining an organizational identity and sense of purpose in the face of geographic and/or
cultural diversity and loosely coupled interests and activities. Benetton's controversial 'United
Colors of Benetton' international advertising campaign offers one example. This long-running
ad campaign challenges viewers with images of human injustice and interracial and gay couples.20These ads focus Benetton's identity and give network partners a rallying point, both of
which suggest the importance of branding for new organizational forms.
Supplychainsand value chains
The supplychain model of organizing, shown in Figure 4.6, focuses attention on how material
flows through a more or less linear chain of entities originating in the sourcing and procurement of raw materials (e.g. petroleum supplied by oil companies), followed by its transformation into outputs by those operating in the middle of the chain (e.g.oil refineries). Those sitting
at the end of the supply chain distribute output (e.g. petroleum distributors) to customers (e.g.
gasoline/petrol stations) and, ultimately, end users (e.g.the consumers of petroleum products,
such as users of cars and lawn mowers). Benetton might seem like a supply chain organization,
but since it operates as a single organization, it cannot technically be classified as one. Member
Raw material
Part
supplier
supplier
~---~
Figure4.6 The supply chain.
a
Wholesaler
BID
Retailer
nd
user
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organizations devote only a portion of their total activity to the supply chain. They engage in
activities lying outside the purview of the supply chain (e.g.strategy, human resource management, IT. marketing) and may participate in more than one supply chain.
Organizations that participate in a supply chain may use models like the generic one shown
in Figure 4.6 to help them agree on what is to be done by whom, and to track, monitor,
and improve the transfers of resources, responsibility, money, and information critical to
accomplishing the work of the entire chain as seamlessly and efficiently as possible. Dividing the required tasks among partners in the chain brings the advantages of division of labor
without the costs of adding layers of management or bureaucracy. Transparency in the supply
chain ensures that any remaining coordination costs are equitably distributed and reduces
the attractions of shirking responsibility. Operating as a member of a supply chain means taking the whole chain into consideration when making decisions and taking action; often, this
requires the use of shared information, monitoring, and control systems.
While supply chain thinking can be applied to both product and service delivery systems,
it is most easily imagined as the linear production process. A related way of conceptualizing
the same set of relationships that has more obvious applicability to services is the value
chain. You may have heard the concept 'value added' used by managers. This term derives
from a model introduced by American strategy Professor Michael Porter.21 Porter used the
term 'value chain' rather than 'supply chain' to emphasize that each partner in their turn not
only supplies input to the next link in the chain, but also is expected to add unique value to
the output the end user receives. Defining the value their link provides becomes an obsession
for those subject to Porter's model because doing so justifies their existence within the chain.
Among managers, value chain thinking has largely usurped the supply chain.
In a way, supply and value chains both represent a new form of organization. One thing
that makes them stand out from previous organizational forms is that they arise in and from
attending to the processes involved in product or service delivery. The emphasis on action in
the supply chain model requires the dynamic thinking that the symbolic perspective encourages. Another distinguishing feature is that supply/value chains interpenetrate traditional
organizational types, portions of which perform the supply chain's processes. In these ways,
a supply/value chain positions itself between more traditional organizational forms, coexisting with them rather than offering a formal alternative.
Crowdsourced organizations
A crowdsourced organization is distinguished by its use of social media. The relationships on
which it depends are primarily or entirely electronically mediated as opposed to being forged
through face-to-face interaction, and thus it is sometimes called a virtual organization. For
example, online retailers like eBay and Amazon let buyers and sellers negotiate economic exchanges through virtual contact via the internet. The on line encyclopedia Wikipedia, another
crowdsourced organization, is set up to enhance the exchange of knowledge. Wikipedia is created and maintained by user volunteers, who edit one another's entries and socialize new contributors to its culture and rules, all of which is accomplished online. Of course, virtual networks
such as online dating services exist to create opportunities for people to meet nonvirtually, so
you can find hybrids that blend virtual with traditional ways of structuring human relationships.
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Other crowdsourced organizations reinvent employment for the digital age. For example, Amazon's Mechanical Turk organizes its 'micro-workers' by paying them meager sums of
money to accomplish small work tasks online. Opportunities for more substantial employment are offered virtually by Uber and Lyft, crowdsourced organizations that provide transportation alternatives to traditional taxi services (see Box 4.3).
•
Box
4.3
Case example
Uber
You have seen that, at some point in the historical development of organizational forms, the
postmodern image of fragmenting and fluid organizing replaces modernist images of planned and
highly controlled organizations. The shift between old and new organizational forms often creates
disruption in one or more of the institutions that organize human life. Uber provides an example.
Uber Technologies, Inc., a multinational on line transportation network company headquartered
in San Francisco, operates a smartphone app that allows customers to hail and pay a driver near their
location to pick them up and deliver them to their destination.
22
As an organization, Uber is structured
by the logic of its IT platform rather than by the human relationships that occur within the system, such
as those arising temporarily between riders and their drivers, or between the drivers and managers of
Uber Technologies. For the most part, the managers operate at arm's length from drivers and riders,
whose main channel of communication is through the app.
There is an imbalance of power between the owners of the Uber platform and their entrepreneurial
employees and customers/clients, which has made Uber a target for criticism. Its riders have claimed
prices are set too high, and drivers complain about not being reimbursed for the cost of using their
own vehicles, not to mention the lack of employee benefits like healthcare. Some riders complain that
Uber drivers are unprofessional; others claim they have been endangered; some, that they have been
physically assaulted. These problems attract competitors such as Lyft, Curb, and Hailo, which use similar
IT platforms, but offer different pricing strategies and/or select their drivers more carefully. Another
level of resistance attacks the foundation of Uber and its crowdsourcing competitors. Taxi drivers are
pressuring government regulators to force Uber and its lookalikes into institutional alignment with
traditional transportation organizations, insisting that their drivers pay the same fees and be subject to
the same rules and regulations they face.
Questions
All organizational forms, including newer ones like Uber, face institutional pressures. Suppose Uber
succumbs to institutional pressures. What do you think institutionalization would change about
Uber? How would an institutionalized Uber differ from traditional taxi services? Can Uber avoid
institutionalization? If so, how? Should it want to? Why, or why not?
Airbnb, VRBO, and others have used a business model similar to Uber's to disrupt the hotel industry.
Similarly disruptive businesses are being proposed for different industries, which suggeststhe
'uberfication' of society is well on its way. What characteristics would distinguish 'uberfied' society from
the modern society it displaces? One possibility is the institutionalization of power imbalances between
platform owners and their entrepreneurial employees and customers/clients. What other changes
might 'uberfication' bring? You might frame your thinking using the sectors of Figure 3.4 presented in
Chapter 3. Based on your analysis, do you think management and/or organization will be transformed
or replaced in the future?
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Theories of structuralchange
Comparing the forms that organizations adopt at different stages in their lifecycles shows that
organizational structures change over time. This observation led some modernists to study
how organizational structures evolve. Greiner's organizational lifecycle theory and Katz and
Kahn's open systems model led modernist theorizing about how structures change. Inspired
by the symbolic perspective, Anthony Giddens followed this urge by examining processes
that explain how social structure can both maintain itself and change.
Organizational lifecycles
According to American organization theorist Larry Greiner, just as children pass through
infancy, childhood, and adolescence to maturity, so organizations pass through entrepreneurial, collectivity, delegation, formalization, and collaboration phases (see Figure 4.7).23 According to Greiner's organizational lifecycletheory, each phase is dominated by a different
focus that leads to a crisis that threatens the organization's survival. If successfully met, the
crisis brings about a revolutionary change that moves the organization into its next developmental phase.
In the entrepreneurial phase, an organization is focused on creating and selling its product. This phase usually takes place within a simple structure wherein every member of the
organization is familiar with what the other members are doing. The entrepreneur can easily
control most activities personally, and this personal contact makes it easy for other employees to sense what is expected of them and to receive direct feedback and close supervision. If
successful (and be aware that the vast majority of organizations fail at this early stage), the entrepreneurial organization will find itself in need of professional management. Entrepreneurs
are usually ideas people or technical experts rather than organizers, and further development
often necessitates bringing in management skills from outside the organization, although
Renewal
crisis
Red-tape
Collaboration phase
crisis
Formalization phase
Autonomy
Delegation phase
crisis
Leadership
cns1s
Collectivity phase
Entrereneurial phase
Figure4.7 Greiner's model of organizational lifecycles.
Source:Adapted and reprinted by permissionof Harvard BusinessReview.From 'Evolution and revolution as organizationsgrow'
by Larry Greiner,50 (July-August) 1972. Copyright 1972 by the Presidentand Fellowsof Harvard College,all rights reserved.
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sometimes professional management develops from within. In rare cases,the entrepreneur
evolves along with the needs of the organization, as did Bill Gates at Microsoft, Michael Dell
of Dell Computers, and Apple's SteveJobs.
It usually takes a crisis to convince an entrepreneur that professional management is
required, since the early successes that allowed the organization to prosper give the impression that things are fine the way they are. However, growth brings with it specialization and horizontal differentiation, so that, sooner or later, the organization becomes too
complex for a single individual to monitor all activities. This condition is exacerbated if the
entrepreneur feels distaste for management activities, which is not uncommon among those
who start their own businesses in order to avoid being controlled by others. According to
Greiner, the result of early structural differentiation among organizational activities, coupled
with top management's inadequate attention to integration, throws the organization into a
leadership crisis, the successful resolution of which moves the organization into the next
phase of its development.
By providing the organization with centralized decision-making and a renewed focus on
its purpose, the organization's introduction of professional management usually overcomes
the leadership crisis. The primary concern of the new managers is to manage the increased
differentiation brought on by growth. This period is known as the collectivity phase because
of overriding concern with establishing a clear direction, which comes about as decisions are
coordinated by the set of well-integrated decision-makers who form the new professional
management team.
Eventhe most effective managers of a centralized social structure cannot keep pace with the
decision-making required by an ever-more-complex organization structure. Sooner or later,
centralization creates a bottleneck for action, and decisions must be pushed down the hierarchy if the organization is to continue functioning. Greiner called this the autonomy crisis
because critical decision-making is missed at the level where action needs to occur. Managers
often find it hard to relinquish centralized control, and their hesitation to allow autonomy at
lower levels of the organization eventually provokes this crisis as actors await decisions yet to
be made at higher levels.
The delegation phase solves the autonomy crisis, but the added growth it allows brings
more demands for coordination and integration that cannot be met by the structure that
emerged in this phase of the lifecycle. Too much decentralization leads to control loss, and
thus the crisis of control follows. As the organization does not wish to return to centralized
control and its bottlenecks, it looks for a new solution in the creation of formal rules and procedures that will ensure that decentralized decisions are made in the way that management
would make them if they had the capacity to do so. At this point, bureaucracy appears.
In the formalization phase that resolves the crisis of control, the organization continues
to grow and differentiate, adding ever-more-formal control mechanisms to integrate the increasingly diverse set of activities. Mechanisms of control include planning, accounting and
information systems, and formal review procedures. Control through these formalized and
bureaucratic means eventually goes too far, ending in a crisis of red tape.
The crisis of red tape is what gives bureaucracy a bad name. Bureaucracy is not the real
villain, according to Greiner; instead, managers overindulge in bureaucratic control mechanisms. Their attempts to apply formal rules and procedures in a universal and impersonal
manner create an organizational environment that becomes not only ineffective, but
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increasingly distasteful to workers. The situation worsens when management's first response
to the breakdown of bureaucratic controls is to implement more bureaucracy. The problem
reaches crisis proportions either when employees cannot work out how to make the system
of rules and procedures work, or when they rebel against it.
Proceeding to the collaboration phase pulls the organization out of its red-tape crisis.
During this phase, teamwork redistributes the now overdifferentiated tasks into more recognizable chunks and assignsshared responsibility for them to groups of individuals in ways
that render work once again comprehensible. What was too complex or uncertain to be
effectively managed by formalized rules and procedures can be reorganized into smaller selfmanaged units that are granted decentralized decision-making authority. This brings about a
significant change in organizational structure, as well as in management ideology.
Trust is a big issue for managers to address if the collaboration phase is to take hold and
endure, and so the skills and leadership styles demanded of managers changes considerably.
Instead of the former emphasis on control, top managers must shift their focus to inspiring
motivation, often accomplished by relating organizational goals and purposes to employees'
sense of the organization's identity and its links to its heritage. However, if, at some point,
management fails to allow for necessary change, the organization will undergo a crisis of
renewal marked by what in humans would be described as lethargy. The primary symptom
of this crisis is employees and managers who suffer from burnout and other forms of psychological fatigue, which are likely due to the strains associated with temporary assignments, dual
authority, and continuous experimentation. According to Greiner, the crisis of renewal will
either lead to a new form of organization or to organizational decline and eventual death.
The organizational lifecycle theory describes organizations as changing through a series
of evolutions and revolutions. Every evolutionary phase contains the seeds of crisis, with
each crisis either pushing the organization forward or leading to its demise. Evolution occurs,
according to Greiner's theory, because the organizational arrangements and management
strategies that are adaptive for one phase of the lifecycle become maladaptive at the next.
His conclusion is that structural arrangements and leadership styles must constantly evolve
throughout the life of the organization. But Greiner's theory did little to explain the environmental determinants of structural change in organizations. Daniel Katz and Robert Kahn took
up this challenge.
Organizational structures as open systems
Katz and Kahn'sopen systems model applies insights from general system theory to organizations. Be sure to notice that this model examines organizations from the open systems level
of the systems hierarchy, even though they exist at all levels up to and including the level of
social organization. Theorizing them as open systems means that the model does not embrace the full complexity of organizations, but what is lost in complexity gains from insight
into the evolution of organizational structures and their relationship to the supersystem, the
organizational environment. According to Katz and Kahn, from simple beginnings the organizational system evolves in response to internal (subsystem) and external (supersystem)
pressures,all the while attempting to buffer its technical core so that there is no disruption to
the core transformation process that sustains the organization. 24 Over the course of its elaboration, the organization's social structure passesthrough the phases depicted in Figure 4.8.
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THE ENVIRONMENT
3
MAINTENANCE
2
1
INPUTS
Purchasing
CORE
ACTIVITY
Sales
OUTPUTS
Accounting, personnel, facilities
Figure4.8 Katz and Kahn's open systems model, showing how an organizational structure develops from a
primitive to a fully elaborated form.
Source: Based on Katz and Kahn (1966).
The first phase of structural development involves the differentiation of purchasing and
sales activities from core production tasks. Separation into these formal departmentalized
units allows production or service employees to focus their attention and energy on transforming raw materials into products or providing services to clients, while the support functions procure needed inputs and sell and distribute outputs to customers and clients. This
support phase creates pressures to integrate to make sure that any lack of raw materials or
other inputs will not interrupt transformation processes,to ensure that inventory is turned
over, to achieve optimal use of the labor force and other assets,and to continuously generate
revenue. Integration at this stage is typically provided by a general manager, whose job it is
to oversee purchasing orders and production schedules, to plan production levels based on
sales projections, and to manage sales and distribution activities.
If the organization continues to survive and grow, it will find it necessary to supplement
core production and support activities with HR, accounting, facilities management, and public relations. Employees quit, and others must be recruited and trained, bookkeeping tasks
expand to include corporate tax considerations and financial planning, physical facilities
require regular upkeep and modification, and the local community and media may begin
making inquiries and demands. Katz and Kahn referred to differentiation to accommodate
these activities within the organizational structure as its maintenance phase. Because maintenance activities are not highly interdependent with those of purchasing, production, sales,
and distribution, they can be carried out with considerable independence of support and
technical core activities. This additional differentiation, however, creates the need for greater
integration. The increased integration is typically provided by the addition of middle managers to what then becomes a full-blown hierarchy, on top of which sits a CEOwho oversees the
now much more complex organization.
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The organization that continues to grow does so by adding to its capacity to respond to environ mental changes, pushing it into the adaptation phase.The development of new product or
service offerings, new markets for existing offerings, or activities aimed at managing the organization's future profitability or its goodwill, corporate brand, and reputation all demand more
differentiation via the addition of strategic planning, economic forecasting, corporate equity,
market research, R&D, tax planning, legal advising, and lobbying functions. According to Katz
and Kahn, the addition of adaptive functions marks the culmination of the organization's structural evolution at the point at which it fully integrates these activities into its structure, which is
most often done through the creation and training of a high-functioning executive team.
Structuration theory
While the models presented by Greiner and by Katz and Kahn explain how an organizational structure evolves over time and what changes to organizational structure evolution
demands, the symbolic perspective focuses attention on what processes structural change
involves. Symbolic theorists pointed out that the seeming stability of social structure is underpinned by numerous interactions that maintain it, but sometimes also transform it. They
claimed that what seems like a stable social structure is the product of dynamic relationships
among humans and the meanings in which they traffic. In this sense, social structures are
metaphorically comparable to material objects, which are composed of dynamically circulating molecules and atoms.
The idea that social structures are dynamic arose from a perennial debate among sociologists concerning the relationship between human agency and the structure of society
that gives agency its shape and meaning. Advocates for the primacy of structure believe that
structures shape the behavior of actors, while advocates for agency claim that social structure
arises in and from the interaction of actors. Proposed by British sociologist Antony Giddens in
1984, structuration theory offered to reconcile the two sides.25
The duality of structure and agency
Giddens began with the premise that structure and agency form a duality in the sense that
while structure enables and constrains action, action constitutes structure. On the structure
side of the duality, agents are enabled to the extent that social structure supports their activity
and constrained whenever it does not. On the agency side, actions constrained and enabled
by structure become routinized, thereby producing stable patterns of activity guided by rules
concerning the use of society's various resources. Giddens referred to the mutual processes
through which structure influences agency and agency influences structure as structuration.
Giddens urged us to think about structuration as taking place across space and time. A
structuration process taking place in one location can spread to and combine with those taking place elsewhere, and structuration occurring at one point in time influences that which
follows at later points in time. Steven Barley and Pamela Tolbert visualized the spatial-temporal ordering of structuration as indicated in Figure 4.9.26 However, while this figure implies
that the actions of agents in one time and place produce the structures of the next time and
in other places, Barley and Talbert's model does not fully embrace the mutuality Giddens
claimed for structuration when he proposed that structuration is instantiated.
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Structural
contextT 1
Structural
contextT2
Structural
contextT3
~
~
~
Act1-ACtz-ACt3
Act 4-Act 5-Act 6
"----y-------1
"----y-------1
135
Act 7-Acts-ACt9
"----y-------1
Figure 4.9 The duality of structure and agency, as proposed by Giddens in his structuration theory.
Source:Based on Barley and Tolbert (1997).
Instantiation and modalities
The concept of instantiation implies that structuration occurs everywhere at every instant,
and thus something is constantly occurring in the relationship between structure and agency.
This insight led Giddens to theorize structuration as taking concrete form within three different modalities, each defined in terms of the rules and resources that organize and are organized by observable social practices. The modalities he identified are interpretive schemes,
facility, and norms. Table 4.3 presents his theory concerning how the modalities intervene
between different dimensions of structure and agency.
Giddens' structuration theory proposes that interpretive schemes align structures of
signification with the communication practices of agents, that the facility agents have to
act aligns power relations with domination structures, and that norms align legitimation
structures with the ways agents sanction one another's behavior. In a nutshell, Giddens'
theory states that accepted and routinized social practices, born of the duality of structure and agency, constitute society in the actions of its members. Therefore neither structure nor agency alone can explain the social order experienced by its agents; instead,
what needs to be understood is how structure and agency work on and with each other
always and everywhere to reproduce the social order.
Table 4.3 Social practices for using rules and resources sit at the intersection of structure and agency
Structure
Signification
Domination
Legitimation
Modality
Interpretive schemes
Facility
Norms
Agency
Communication
Power
Sanction
Source:Anthony Giddens (1984)The Constitution of Society.Berkeley: University of California Press.
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Structuration
While the earlier theories of Greiner and of Katz and Kahn presented snapshots of how structure appears at sequential stages in a developmental or evolutionary chain in which change
was implicit, by focusing on the action of structuring Giddens made change the explicit focus
of his theorizing. Making structuring his focus allowed Giddens' to describe social practices that
structure action and give it meaning, thereby enabling and constraining the actions through
which structure is either maintained or changed. Moreover, because structuration can happen
with or without the awareness of its agents, Giddens' theory describes the unseen social forces
always and everywhere at work in the constitution of society. Structuration theory promises
better understanding of our active role in constituting the social order that enables and constrains us; in forcing recognition of our complicity, the theory adheres to the emancipatory
purposes set forth by postmodern theory (see Box 4.4).
Box 4.4 Think like a theorist
What does structuration look like?
You confront the duality of structure and agency every day. For example, all humans construct systems to
manage themselves (e.g. legal systems, bureaucracies) and then tell themselves they cannot act in certain
ways because the system does not allow it. Our failure to recognize our complicity in constructing the
systems that control us prevents us from realizing that the system can be changed using the same creative
forces that produced it in the first place. We thus imprison ourselves in our habits, routines, and expectations,
all of which are supported by the powerful, who use their influence to maintain the status quo that keeps
them in power. All the while, minute changes within the ever-present dynamics that produce and reproduce
society keep social structures from ever attaining more than the appearance of solidity. Accordingly, even the
most stable social structure is defined by cooperative actions that agents always and everywhere have the
capacity to change. Figure 4.10 is one way of representing the mutual forces for stability and change that are
always at work everywhere, whether you are viewing a society or an organization.
Exercise
Apply the idea that social structure is sustained by the cooperative actions of its agents to plan a change
you would like to see in society or in your organization. Which agents will you target? What cooperative
actions might you disrupt to bring about change, and how will you disrupt them? What resistance can
you anticipate, and how will you respond? What does this analysis teach you about structuration?
•
Structure
Structure enables
and constrains
action via:
• Signification
• Domination
• Legitimation
The countervailing forces
operate through:
• Interpretive schemes
• Facility
• Norms
~
Action reproduces
or changes
structure via:
• Communication
• Power
• Sanctions
Agency
Figure4.10 A visualization of structuration. As structure both enables and constrains action, actions
constitute structure.
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Structuration in time
American sociologists Mustafa Emirbayer and Ann Mische extended Giddens' theory by
explaining how past, present, and future operate on and within structuration via iteration,
practical evaluation, and projection. 27 In the iterative process, agents acting in the present
reactivate past patterns of behavior as routines, thereby reproducing prior structures. By
engaging in practical evaluation, agents make informed judgments that influence their actions, thereby either reproducing or changing existing structures. And through projection,
the possibilities of the future signal creative options that allow the reconfiguration of existing
structures to be intentional and sometimes even planned. Emirbayer and Mische combine
these three processes to explain the observation that structures both reproduce themselves
and change.
Be sure to notice that Emirbayer and Mische, like Torbert and Barley, struggled to fully
embrace instantiation, the notion that the abstract dualism of structure and agency becomes
concretized at every instant everywhere. Tackling instantiation gives rise to paradoxes created by defining duality recursively, for example in propositions such as 'structure shapes and
is shaped by agency,' and in the assertion that structuration occurs 'always and everywhere.'
The seeming paradoxes of structuration theory arise partly from the linearity of the English
language, which is not well suited to describing the reciprocal influences embraced by structuration theory. Another challenge lies in the propensity of modernists to mistake interpretive
description for positivist explanation. While structuration theory provides insight into why
people and societies behave as they do, prediction of the outcomes of structuration is neither
possible nor its purpose. Instead, among the theory's main contributions has been turning
attention to the social practices and activities that constitute organizing and thereby reveal its
processes in real time (see Box 4.5).
Box 4.5 Exercise those perspectives
Critiquing structuration theory
Structuration theory has been accused of mixing levels of analysis and ignoring important differences
between perspectives. First notice that, within the modernist perspective, agency is an individual-level
phenomenon, while structure appears at the level of social system, which includes organizations. Then
consider how Giddens used the symbolic perspective to explain the duality set up by modernist ways
of thinking about structure and agency, including the assumption that they occur at different levels of
analysis.
Giddens' modalities, which describe the instantiation of structuration processes at particular
junctures of space and time, conjoin agency and structure and thereby overcome, or at least sidestep,
the riddle that their duality poses. In this way, advocates of structuration theory counter modernist
critiques by claiming that mixing levels and perspectives freed Giddens from dualism, and thereby
led to a new and valuable way of understanding social reproduction and its role in the constitution of
society. But notice the change in focus: The phenomenon of interest is no longer social structure, but is
now the socialreproductionof social structure, or structuration.
Exercise
Take another look at the different perspectives and the levels of analysis introduced in Chapter 2. Where
do you stand: Are you friendly to or critical of mixing perspectives? Do you think that ignoring levels of
(continued...)
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analysis presents a problem or offers new possibilities? Defend your position, and then consider how
someone opposing you might argue. These are matters of deep division among organization theorists
and other social scientists, and you may, like many of them, feel a strong urge to resist one position
and embrace the other. Experience what it feels like to grapple with these divisions and what trying to
produce a resolution requires. Does this help you to understand and appreciate organization theorists
and the work they do?
The symbolic perspective:the socialpracticesof
organizational structuring
Structuration theory turned attention from social structures to structuring as practice and
process. Other symbolic theorists took Giddens' ideas in several directions. First and foremost
was French sociologist Pierre Bourdieu's theory of practice. In combination with structuration
theory, the theory of practice inspired the study of organizing practices, exemplified in what
follows by routines and improvisation.
Practice theory
Pierre Bourdieu's theory of practice turned attention from Giddens' proposition that agency
is enabled and constrained by social structure to how everyday practices are shaped by the
positions humans occupy in their various fields of endeavor, for example business, medicine, education, art, or organization theory. 28 According to Bourdieu, a practice is any set
of repeatable actions informed by the knowledge shared among those situated in a field.
However, as can be seen in the fields of sport and in performance arts like music and theater,
'practice' carries the added meaning of actively exercising a skill for the sake of acquiring or
maintaining first competence, and then expertise and mastery.
Central tenets of Bourdieu's theory are that practice is embodied and that all practices,
including those of organizing, require embodied learning. For example, mastering the skill
needed to play music requires practicing to the point at which the knowledge of how to play
a musical instrument becomes absorbed into the body. The same need for embodiment applies to learning to throw a pitch in cricket or baseball, or to kick a football. One proposition
Bourdieu derived from embodiment was that sensory awareness and tacit understanding
lie beneath rational ideology. According to Bourdieu, actors do not continuously calculate
according to explicit rational or economic criteria as modernists often assume; instead, they
operate according to a tacit practical logic and to bodily dispositions that shape and are
shaped by their context. Bourdieu believed that embodied tacit understandings operate in
and through fields structured by negotiable forms of capital.
Fieldand capital
According to Bourdieu, a field is a structure with an internal logic that establishes hierarchical relationships on the basis of the distribution of particular forms of capital.
Bourdieu claimed that every field is structured by its dependence on a specifiable form of
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capital: The cultural field is structured by cultural capital (celebrity, media attention); the social
field, by social capital (networks of trust and cooperation); the academic field, by academic capital
(scholarly reputation and honors); the economic field, by economic capital (wealth)-and so forth.
Consider cultural capital, which Bourdieu described as embodied in styles of speech, gesture, dress,and physical appearance, as well as in the possession of valued abilities like playing
music, literary writing, dramatic acting, or producing visual works of art. For example, in the cultural field, you will find in the production and consumption of literary works signifying practices
like writing and interpreting texts that establish social distinctions. These distinctions legitimate
agents in their roles as authors, critics, publishers, and readers, and communicate their status
within the cultural field, thereby constituting a hierarchy. In much the same way, wealth constitutes hierarchy in the field of business and academic achievement in the field of education.
While the rules of a field interact with each individual's stock of capital (e.g. social, cultural,
economic) to define the hierarchy of positions in that field, each field interacts with other
fields. Bourdieu believed that interaction between fields reflects the relations of class and
power within a society and that these social distinctions determine which individuals have
enough power to influence their own field or those of others. However, once individuals
establish themselves as dominant, they are unlikely to desire change, preferring instead to
reinforce and reproduce the conditions upholding their social position. In this sense, while
Bourdieu presented fields as imminently transformable, he also showed why change is more
likely to be incremental than revolutionary.
Habitus
Bourdieu drew on ideas presented by French sociologist and anthropologist Marcel Mauss,
who claimed that bodily actions like eating and walking display aspects of the culture in which
they are learned such that culturally shaped habits reflect the culture that upholds them. 29
Following Mauss, Bourdieu defined a habitus as the site where the internalization of the
social order into the body occurs, which becomes visible in the practices in which bodies
engage as they respond to their field. Bourdieu theorized that the habitus permeates the field
in much the same way as culture permeates the body as it forms dispositions to think and act
in certain ways that can be observed as learned habits and motor skills (e.g. riding a bicycle,
swimming, playing a musical instrument), style (e.g. conservative, radical, artistic), and taste.
The habitus gives members tacit understanding of how the field operates and allows them
to know how they and others should behave, given their relative power position and the
amount and kind offield-relevant capital they control.
Bourdieu made two important points about field and habitus that align with the conclusions that Giddens drew from structuration theory. First, because the internal workings of a
field are often hidden from view, the habitus can be well protected from outsiders. Second,
because the habitus operates without need of awareness, insiders can reproduce the field and
its hierarchies while remaining oblivious to their own involvement.
Routinesas organizing practices
In thefirstyears of its alliance with Renault, Nissan senior assembly-lineworkers and engineers
wrote standard operating procedures (SOPs)to help transfer knowledge about effective work
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practices to their alliance partner. For example, Nissan gave Renault's dashboard assemblyline workers directions that included hand-drawn sketches showing the exact order in which
dashboard wires were to be connected, what tools to use, and how to reach the wires.30Thus
routines developed at Renault were guided by knowledge communicated through standardized rules and procedures developed by Nissan. The Nissan-Renault example is but one of
many indicating that routines can be learned and that they offer great value to organizations,
including enhancing productivity and stability through the consistent performance of work. 31
Every organization depends to some extent on routines, from techniques associated with
the use of production tools and factory equipment, to the hiring and firing of employees,
strategic planning cycles, annual performance evaluations, quarterly reporting, and budget
reviews. These and many other routines preserve organizational knowledge and transfer capabilities so that work can be successfullyaccomplished and coordinated in an uninterrupted
stream through time. 32The link to knowledge, as underscored by the Nissan-Renault example, led modernist organization theorists to compare organizational routines to habits, computer programs, and genetic codes like DNA, and led practitioners into the field of knowledge
management. 33
American organization theorist Martha Feldman argued that routines offer stability, but
also contain the seeds of change. By defining routines as practices, she proposed they be
seen as flows of connected ideas, actions, and outcomes that emerge as organizational
members try to understand what to do in particular contexts when facing specific situations.34 For example, police officers dealing with an incident of domestic violence know
the expected routine for dealing with the situation because they have been trained in
policing procedures, but they may also have developed their own way of dealing with
these situations based on experience. In the moment of confronting a domestic scene
involving violence or its potential, the officers can combine experience and formalized
police procedure to deal with the circumstances of that particular occasion. It is unlikely,
then, that the officers approach their confrontations with domestic violence in identical
ways each time.
Feldman observed that differences in how routines are enacted introduce changes that
subsequently affect the routine. In the dynamic light of structuration theory, she and colleague Brian Pentland concluded that routines do not just stabilize organizational activities
and performance; they are always and everywhere open to adjustments that subject their
organizations to change.3s They argue that changes in routines can spread within and across
organizations, or alternatively a routine may disappear through lack of use-in other words,
routine represents a dynamic state, rather than a stable structure.
In a study of a university's residence halls, Feldman reported finding that the routines she
observed-budgeting, hiring, training staff, opening residence halls at the beginning of the
academic year and after holidays, and closing them at the end of the academic year-changed
substantially over the course of her four-year study. For example, at the outset of her study,
applicants for residence hall employment were required to submit an application to every
residence hall for which they wanted to work, but later a centralized submission process was
implemented such that only one application was required even though applicants might be
considered and interviewed by staff from multiple residence halls, and each received at most
only one offer of employment. Moreover, Feldman noted that none of the routines she observed in practice was ever performed in exactly the same way twice.
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Feldman and Pentland concluded that routines contribute to making social systems flexible
and dynamic because any alteration of a practice-in-action feeds back on the interpretation
of the rules governing it and thereby on future enactments of the practice. In their review of
practice theory as it applies to organizations, Feldman and American organizational theorist
Wanda Orlikowski pointed out:
The notion of mutual constitution implies that social orders (structures, institutions, routines,
etc.) cannot be conceived without understanding the role of agency in producing them, and
similarly, agency cannot be understood "simply" as human action, but rather must be understood as alwaysalready configured by structural conditions. 36
Organizational improvisation
Jazz great Charles Mingus famously said: 'You can improvise on anything, but you can't improvise on nothing.' 37 If improvisation requires something to improvise on, then routines
offer many possibilities for organizational improvisation, a concept introduced by Karl
Weick.38 Although routines may reinforce established interaction patterns and reproduce
and stabilize social structures, organizational members often behave like jazz musicians who
refuse to play what has been played before. By playing outside established structures, jazz
musicians produce new musical forms.
While writing about how the structuring of jazz performance applies to organizations, I
argued that social structures always have coordination gaps due to the impossibility of fully
structuring all organizational activities. 39 To minimize the problems created by these 'empty
spaces of organizing,' I suggested that organizational members adopt techniques used by jazz
musicians. For example, jazz tunes are performed in successive waves of improvisation that
begin by playing the head of the selected tune in a recognizable and often routine way (e.g.
think of the first chorus of 'I've Got Rhythm'). The head provides the musicians with a basic
structure consisting of a melody, harmony, and rhythm, which they use as a departure point
for their improvising.
As the performance of a jazz tune unfolds, each soloing musician attempts in turn to lead
the band away from both the originating and emerging structures by playing in their empty
spaces. Improvising then occurs as musicians play in the rhythmic spaces between beats
played before, by introducing a new harmony, and/or by redirecting the melody outside its
expected musical path. As they take turns soloing, different musicians improvise differently
such that each successive musician can build on improvisations introduced by the others
until, collectively, a unique playing of the tune is achieved. The structure provided by the
head can be discerned-if only in absentia-throughout the playing of a tune. The relationship
between the starting structure and its culmination is reinforced when, at the conclusion of
the tune, the musicians replay the head, embellishing it with the best ideas their improvising
produced. In this way, a structure and its empty spaces are combined in performance in a way
that reveals how structure is intertwined with agency, whether the agency is that of i mprovisingjazz musicians or members of an organization.
As the example of jazz performance shows, improvising alters the very structure that provides its departure point, and, in this way, organizational improvisation appears to be a structuration process. Like variations on a routine, improvisations may disappear once they have
served their immediate purpose, or they may be incorporated into old interaction patterns,
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or may establish new ones. The paradox at work here is that an institutionalized improvisation
turns into a routine just as agency begets structure in structuration theory. Agency changes
structure when organizational improvisation allows an organization to spontaneously adapt
to environmental change, for example by reacting creatively to a threat or taking advantage
of an opportunity in a timely manner.40 Novelty and innovation, as well as flexibility and
speed of adaptation, have been found to be other advantages of organizational improvisation, but research findings also show it can lead to control loss and lack of coordination
between improvising teams.41
Postmodern deconstructions of organizational structure
Postmodernists tend to be suspicious of claims about structure and are skeptical even of
those who assume it operates in ways that are hidden from view, as do structuration and
practice theorists. Instead, postmodernists believe that it is the illusory existence of structure and concepts such as hierarchy and authority that exercises control and allows those
to whom knowledge/power is attributed to maintain dominance over others. To expose the
illusory foundations of domination, postmodernists deconstruct concepts and management
practices to reveal how they perpetuate belief in the need for rational order and control that
privileges some, while exploiting and/or marginalizing others.
In an influential series of articles, British organization theorists Robert Cooper and Gibson
Burrell interpreted modernist organization theory as an expression of the drive to create
order out of disorder. 42 They associated the term 'formal' with unity, routine, and rationality,
claiming that these associations define a moral code built upon the intention to suppress
disorder. Acceptance of this moral code is predicated on the fear that arises when the devalued term 'disorganization' (associated with the chaos of the informal, local, spontaneous,
and irrational) is presented as a threat to the privileged term 'organization.' Suppression of
disorganization hides any phenomenon or person associated with it behind a wall of silence
and repression.
Many deconstructionists do not specify alternatives to the constructions they decry-they
believe doing so would only impose a different Grand Narrative. Nonetheless, some suggest
that by deconstructing taken-for-granted ideologies and practices, space for new organizing possibilities opens. Notice how close this idea comes to the empty spaces of organizing
pointed out by symbolic theorists interested in organizational improvisation. Postmodernists
introduce into these spacesof possibility concepts that include de-differentiation, feminist organization, and anti-administration theory. Following discussion of these ideas,a more radical
deconstructive possibility will be considered: the idea of hacking institutionalized structures.
De-differentiation
You will recall that modernist organization theorists Lawrence and Lorsch defined organizational differentiation as the division of labor into specialized units overseen at multiple hierarchical levels. Researchshowed that horizontal differentiation produces a need for integration,
which calls forth vertical differentiation, introducing the need for more integration and so
on, which, over time, transforms organizational structures from simple to complex forms. In
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opposition to this idea, postmodernists suggest de-differentiation, which they distinguish
from integration. 43 Where integration implies the coordination of differentiated activities,
de-differentiation reverses the very conditions that created the need for integration in the
first place. In de-differentiation, organizations integrate activities not through hierarchical
or structural elaboration, but by allowing people to self-manage and coordinate their own
activities. De-differentiation satisfiesthe emancipatory interests of critical postmodernists by
undermining the controlling mindset of modernist thinking.
British sociologist Scott Lash claimed de-differentiation marks the defining moment of
postmodernism in that it reverses the modernist progression of ever-greater specialization
and separation in the social order.44 Borrowing Lash'sidea, Australian organization theorist
Stewart Clegg accused today's overdifferentiated organizations of causing their members to
experience incoherence, thereby creating dependence on elite members of the hierarchy
to tell them what to do and provide meaning to their work. The self-organizing or semiautonomous team concept from socio-technical systems theory offers a modernist example
of de-differentiation. Workgroups organized as semi-autonomous teams are given responsibility for a broadly defined set of tasks;they schedule their own time and monitor, assess,and
correct their performance, including quality. For example, in Volvo's Kalmar Plant in Sweden,
entire automobiles were assembled start to finish by teams of self-managing workers. Examples like Kalmar'ssuggest that integration can be achieved independently of hierarchy.
De-differentiation makes it easier to imagine democratic organizations in which integration and coordination are the responsibility of everyone and not just management's concern. This is the idea behind community-owned firms such as the Green Bay Packersfootball
team in the United States and Spain's Barcelona football club, behind cooperatives such as
Mondragon in Spain, and employee-owned firms such as the John Lewis Partnership, which
owns and operates department stores in the United Kingdom. You will find many more laborist (vs. capitalist) organizations participating in the cooperative (coop) movement, which
has produced a variety of autonomous associations organized to provide, for example, food,
childcare, housing, and credit. However, some postmodernists warn that these types of organization will turn out to be just another servant of managerial interests, one that projects
an image of democracy, autonomy, and self-management, but which image merely disguises
the power struggle by dressing it in new clothes.
Anti-administration theory
David Farmer, an American philosopher and economist, offered a radical proposal for the
field of public administration. Much as particle physicists have shown that antimatter and
matter annihilate each other when they collide, Farmer proposed that confronting administration with anti-administration would lead to significant changes in society.4 s
Farmer believed that government bureaucracies serve their political masters and
enforce justice by privileging hierarchy, efficiency, and technical expertise. He claimed
that anti-administration would collide with administration by invoking radical skepticism
toward its ends, its means, and the hierarchical rationality it employs. Practicing anti-administration means reflecting on what is absent from administrative policies, procedures, and
actions, and especially on the consequences of administrative action for those ignored or
silenced by administrative policies.
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One example of the practice of anti-administration theory can be found in the field of
criminal justice in the United States,where those involved with the Black Lives Matter movement confront the concept of justice with that of injustice. While activists in this movement
demand the removal of injustice from the criminal justice system, those resisting their demands rely on the administrative logic of the administrative hierarchy and on the efficiency
and technical expertise of the police. Black Lives Matter campaigners point out that most
police forces across the United States are currently structured in ways that support white
privilege. The awareness and activism the Black Lives Matter movement generates is but one
source of growing concern about racial and other forms of injustice. The feminist and LGBTQ
movements, which Black Lives Matter advocates support and with which they cooperate,
offer other examples where confronting administrative notions of justice with the anti-administrative focus on injustice is making social change possible. Other examples can be found
in organizations that confront male-gendered and typically white-male-dominated organizing practices with feminist principles. 46
Feminist bureaucracy
In contrast to male-gendered organizations, feminist organizations evidence equitable and
flexible structures, participatory decision-making, cooperative action, and communal ideals.
They can be found in women's health centers and domestic violence and homeless shelters
where men and women, people of color or of different ethnicities, the young and old experience greater equality than do members of traditional (modernist) bureaucracies.
Feminist theorists propose that the modernist theory of bureaucracy privileges and justifies hierarchy by claiming that power and position are based on the objectively rational
criteria of technical competence. They point out that terms such as 'objective,' 'rational,' and
'competence,' when defined within a white-male-centric discourse, lead to domination of
women, as well as people of color and many minorities. In the discourse of a male-dominated
management practice, individual performance is generally evaluated against criteria such as
decisiveness and the possession of leadership qualities that become gendered when their
definitions favor white males. Describing a woman as aggressive, for example, is code for
male evaluators to dismiss her leadership qualities, whereas this term holds positive connotations for male candidates. Openly confronting such practices with feminist alternatives
undermines and replaces them.
Karen Lee Ashcraft's definition of the feminist bureaucracy keeps the seemingly incompatible elements of both bureaucratic and feminist characteristics in play within work practices.47In this form of organization, informal tasks are recognized (e.g. comforting someone
who is emotionally distraught), and hierarchy and centralization are constantly challenged by
egalitarian and decentralized practices. Ashcraft's research in a nonprofit organization concerned with domestic violence studied the interplay of bureaucratic elements (a hierarchical
organization chart) with feminist ideals of ethical communication (the right to express views
and emotions, and to be heard). This hybrid employed the tensions between its contradictory
elements to help it cope with paradoxical pressures.For example, the organization needed to
display many of the features of a bureaucracy in order to secure external funding, but it also
needed to stay small, flexible, and responsive to individual clients in order to achieve its goal
of serving abused women.
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Hacktivism: organization by design(ers)
Because designers are trained to make use of empathy and aesthetic imagination, some
believe that designers approach organizational design tasks in ways that differ from classical organization development practices. Of course, the fields of design stretch across many
disciplines, ranging from product and service to architecture, fashion, and web design. Application of the design disciplines to organizations is just getting under way, but, to offer you
a tantalizing example, consider how Swedish fashion designer Otto Von Busch introduced
new-economy freedoms to old-economy organizations in the fashion industry.48
Von Busch based his design practice, in part, on the work of French philosophers Gilles
Deleuze and Pierre-Felix Guattari, who developed the postmodern concept of lines of
flight. 49 The concept describes escape routes that penetrate any bureaucracy or hierarchy
(see Figure 4.11). These theorists claimed not to be talking about random responses to exogenous shocks, like a flock of birds startled into flight by a gunshot; instead, they used the
term to describe ever-present opportunities found within all repressive social structures.
They argued that lines of flight allow organizational members the opportunity to escape and/
or undermine the repression of thinking imposed by a discipline, an organization, a field, or
a discourse. Deleuze and Guattari compared lines of flight to music that ruptures expected
patterns or to plants that propagate rhizomatically.
Figure4.11 Linesofflight.
Note: The grid in the background of this figure represents Deleuze and Guattari's notion of the state apparatus from which the
lines of flight depicted by the arrows represent escape routes.
Source:Adapted from 'A 5-cube' by Joseph Malkevitch. Reproduced with kind permission.
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Von Busch used lines of flight to theorize the mindset required for hacking the fashion industry in ways that allow ordinary people to be fashionable like the wealthy segment to which
the industry caters. He borrowed the concept from the computer field, which distinguishes
'cracking'-opening a computer program in order to harm or destroy it-from 'hacking,' which
builds on existing computer code to get it to do new things. Extending the concept of hacking
through the use of technology to hacking using design skills, Von Busch studied 'fashion-able'
activities-that is, those intended to play with fashion in order to change how the industry operates and to help people transform their wardrobes into creative things of beauty in the process. He referred to the ideology behind using the generic concept of hacking as hacktivism.
One example of hacktivism offered by Von Busch involved hacking the Gucci brand in
order to produce 'Gucci-fied' fashion, as designer Stephanie Syjuco illustrated with her Counterfeit Crochet Project. 50 This project offered instructions for counterfeiting a Gucci design by
first enlarging a photocopy of a handbag until it created a low-resolution, pixilated image that
could be used as a crochet pattern. The playful variants on Gucci bags produced by those who
crocheted from the patterns were not really copies but rather novel expressions of the brand.
The crocheted bags also offer ironic commentary on that nemesis of the fashion industry, the
fashion counterfeiter.
Von Busch carried out an industrial hack in a small rural shoe manufacturer in Norway.
At the time of his hack, the company was suffering from competitive woes that led to the
gradual reduction of its workforce from a couple of hundred to ten employees. At this low
point in the company's history, Von Busch engaged employees in a workshop involving six
prominent Norwegian fashion designers, an established fashion photographer, a stylist, and
a shoemaker/teacher. Von Busch explained:
The hope was to create some new approaches to post-industrial production and try to probe
'nonlinear' means of action and co-design, open for spontaneity and crafty interventions
during the normally strictly linear production process ... All the experimentation during the
workshop was to be firmly based on collaboration on the factory floor. An ability to merge
these roles and create a wider range of possibilities for interaction between the participants
would change the flow within the factory, while at the same time create unique designs,
using the full skill of all those involved.51
The process combined chaos with the traditional manufacturing technology used by the
company known as Dale Sko (skomeans 'shoe' in Norwegian):
Operational misuse of the factory equipment, using machines at the wrong moment in the
process,assembling pieces in wrong order or using wrong sizesof tools for various elements
in production proved to be ways that opened new action spaces ... [even though t]his can
only be done in small quantities [and] still remain within mass-production or economy of
scale,and this mix of craft and mass-production is the scale of manufacture for a small factory such as Dale Sko.
Von Busch next described how the workers reacted during the three-day workshop:
During the first day of the workshop the atmosphere was filled with anticipation and at first
the craftsman of the factory seemed slightly skeptical of the working process.Why change?
But as the processwent on the mood changed. On the first day, all workers went home when
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the bell rang signaling the end of the working day. But on the last day of the workshop many
of the workers stayed after working hours, helping the participants to finish their shoes and
chatting.
To explain the role the designers played, Von Busch described how one of them worked with
the process:
It is perhaps the works of [designer] Siv St0ldal that can be seen as a quintessential modus
operandi of this type of hacking. She used the already existing models from Dale Ska,
recombined materials and parts into new forms. She changed leather materials, shifted soles
between models, and introduced random punched decorations into the designs. But at the
same time she preserved the general design of every sub-part intact. With these schemes
for individualizing the shoes, every pair became unique. Still preserving the integrity of the
traditional models from Dale Ska this model became a point of departure and an instrument
for her future collaborations with Dale Ska.
The project attracted media attention that brought important benefits for Dale Sko:
During the workshop, the project also received an amount of local coverage in the press,
radio and TV. Bringing in the eyes of media as well as putting the spotlight on the collaborative working process created a renewed pride in the craft element in the factory. Dale Sko
came to be recognized and respected not only for its century old merits but also for its
concern to go further, innovate and continue to be a progressive local player with global
fashion connections. The media attention became a form of recognition for this hard work
and boosted the confidence of the factory ... The factory, in the past the main employer and
gem of the town, now demonstrate[d] an imaginative and innovative spirit with high future
ambitions and is now once again the source of local pride.
Other results were equally impressive:
After the finish of the workshop the traces of the project are still visible today. St0ldal has
continued her collaboration with Dale Ska and is currently making her fourth collection
with them, still using the existing models as a practical point of departure. The new shoes
have been shown at the fashion weeks in London, Parisand Tokyo and are for sale in stores
in London and other cities. The factory also developed a prototype lab and since the hack
has hosted several other designers and interns from fashion schools. In addition, the board
of directors of the factory has been changed and one designer as well as the shoemaker/
teacher was taken onto the board. In 2008 the project also won a special prize at the
European FashionAwards.
Von Busch claimed that his hack of Dale Sko deliberately confronted modern technology
with postmodern ways of organizing. It also shows a designer intentionally using lines of
flight as inspiration for designing an intervention that changed an organization. Von Busch
demonstrated how hacking can generate creative solutions to problems left behind by modernist industrial organizing practices, thereby changing those very technologies. His method
of helping Dale Sko escape the constraints of its former work practices shows how lines of
flight created change in that organization's practices and could be adapted to inspire change
in other organizations.
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Summary
Every organization consists of social elements, including people, their positions or jobs, and
the groups or units to which they are assigned. Modernists define social structure mainly in
terms of three types of relationship among an organization's people, positions, and units:
division of labor, hierarchy, and coordination mechanisms. The division of labor indicates
who does what in terms of tasks that are grouped into positions in the hierarchy. The division
of labor and distribution of assigned tasks, in turn, creates dependencies between jobholders, whose activities require coordination to manage interdependencies. The hierarchy of
authority defines formal reporting relationships that can handle some of the needed coordination, but other mechanisms are also used. Coordination mechanisms, ranging from formal
rules and procedures to spontaneous and informal hallway conversations, augment the social
structure of the organization.
Dimensions of social structure that continue to interest modernist organization theorists
include centralization/decentralization, differentiation/integration, and size. Another d isti nction of continued importance contrasts mechanistic with organic organizing. Contingency
theory offers advice for structuring organizations that is based on empirical studies of the
relationship between these and other dimensions of social structure, contingency factors
such as characteristics of the environment, and organizational performance. For example,
research based on early applications of contingency theory showed that small organizations
operating in stable environments using routine technologies are best organized as simple
or functional structures having minimal hierarchy and highly centralized decision-making,
while large organizations require different structures due to their greater degree of vertical
and horizontal differentiation and need for integration. Successful large organizations in stable environment are characterized by formalization, routinization, and specialization, while
those operating successfully in unstable environments have organic organizational structures
that rely on decentralization to prevent decision-making bottlenecks and to make the most
of technical or professional knowledge held by lower level employees. As new contingencies
like these are discovered, new patterns of relationships appear, and this leads to even more
complex formulations of contingency theory that make it so complex as to be unwieldy.
Other modernist organization theorists offer alternatives to the static approaches described above. One focuses on how organizational structures change as organizations grow.
Greiner's organizational lifecycle theory proposed that organizations grow through a series of
predictable evolutions and revolutions or crises. Each crisis overcome propels the organization into its next evolutionary phase, until the organization ultimately dies. The intermediate
phases are described as entrepreneurial, collectivity, delegation, formalization, and renewal,
each followed respectively by crises of leadership, autonomy, control, red tape, and decline.
A second modernist theory of structural change was offered by Katz and Kahn, whose open
systems theory models the evolution of an organization's structure as it develops support,
maintenance, and adaptive layers in response to changes in both the internal demands of its
technical core and the external demands of its environment.
A more dynamic alternative to theorizing social structural change developed within the
symbolic perspective. Instead of treating social structures as modernist objects to be manipulated, symbolic organization theorists proposed that they arise in and from human
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interaction and social practices, the study of which reveals organizing as an ongoing accomplishment rather than a stable structure. Therefore symbolic researchers focused their attention on structuring and organizing activities or practices. Giddens, for example, theorized that
while social structures enable and constrain human action and the social practices that shape
it, those same actions and practices constitute social structure. Giddens' structuration theory
proposed that agency expressed through communication, power, and sanction is codeterminant with structures of signification, domination, and legitimation, and that their duality is instantiated in the modalities of interpretive schemes, facility, and norms. Interpretive schemes
align structures of signification with the communication practices of agents; power relations
facilitate the alignment of domination structures with agents' ability to act; norms influence
the alignment of legitimation structures with the ways agents sanction one another's behavior. Structuration theory turned attention to the micro level of activities underpinning structural phenomena and how these reveal the symbolism, meaning, and interpretation that lie
beneath the practices of organizing. Following structuration theory, symbolic organization
theorists focused attention on routines and improvisation as organizing practices.
Postmodern challenges to modernist ways of looking at organizational social structure
produced additional alternatives to modern organization theory. Advocates of postmodernism add concepts such as de-differentiation and feminist bureaucracy, as well as antiadministration theory, to the literature on organizational social structure, and ideas involving
lines of flight and hacktivism suggest actions that undermine modernist organizing structures
and practices.
Furtherreading
Argote, Linda {2013) OrganizationalLearning:Creating,Retainingand TransferringKnowledge
{2nd edn). New York: Springer.
Bacharach,Samuel B.,and Aiken, Michael {1977) Communication in administrative
bureaucracies.Academy of Managementjournal, 20: 356-77.
Bouchikhi, H., Kilduff, M. K., and Whittington, R. {1997) Editorial: Action, structure and
organizations. OrganizationStudies,18/1: v-vii.
Chia, Robert {1996) OrganizationalAnalysisas DeconstructivePractice.Berlin: de Gruyter.
Cohen, Michael D., and Bacdayan,P.{1994) Organizational routines are stored as procedural
memory: Evidencefrom a laboratory study. OrganizationScience,5: 554-68.
Drazin, Robert, Glynn, Mary Ann, and Kazanjian, Robert K. {2004) Dynamics of structural change.
In M. S. Poole and A.H. Van de Ven {eds.),Handbookof OrganizationalChangeand Innovation.
New York: Oxford University Press,161-89.
An ExecutiveBriefingon Strategy.Structureand
Galbraith.Jay R. {1995) DesigningOrganizations:
Process.San Francisco:Jossey-Bass.
Gergen, K.J. {1992) Organization theory in the postmodern era. In M. Reedand M. Hughes (eds.),
RethinkingOrganization:New Directionsin OrganizationTheoryand Analysis.London: Sage.
Ghoshal, Sumantra, and Bartlett, Christopher A. {1990) The multinational corporation as an
interorganizational network. Academy of Management Review,15: 603-25.
Hage,Jerald, Aiken, Michael, and Marrett, C. B. {1971) Organization structure and
communications. AmericanSociologicalReview,36: 860- 71.
85
ORGANISATIONAL THEORY & DYNAMICS
150
PART II CORE CONCEPTS AND THEORIES
HarvardBusinessReview.January-February: 127-33.
Koh, Sarah {1992) Corporate globalization: A new trend. The Executive,6: 89-96.
Jaques, E. {1990) In praise of hierarchy.
Meyer.John W., and Rowan, Brian {1977) Institutionalized organizations: Formal structure as
myth and ceremony. AmericanJournal of Sociology,83: 340-63.
Parker, Barbara {1996) Evolution and revolution: From international business to globalization. In
S. R. Clegg, C. Hardy, and W. Nord {eds.), Handbook of OrganizationStudies,484-506.
Perrow, Charles {1986)
House.
Complex Organizations:A CriticalEssay{3rd edn). New York: Random
Powell, Walter W. {1990) Neither market nor hierarchy: Network forms of organization.
in OrganizationalBehavior,12: 295-336.
Scott, W. Richard {1975) Organizational structure.
Research
Annual Reviewof Sociology,1: 1-20.
Notes
1. See Weber {1946, 1947), as cited in Parsons {1947) and Scott {1992).
2. Davis (2013).
3. du Gay (2000).
4. Hage (1974); Rousseau (1978).
5. Pugh and Turner (1968); Pugh and Hickson (1979).
6. Grinyer and Yasai-Ardekani (1980).
7. Lawrence and Lorsch (1967).
8. Pugh and Turner (1968); Pugh and Hinings (1969); Blau and Schoenherr (1971 ); Mansfield {1973).
9. Burns and Stalker (1961 ).
10. Figures accessed in 2012 on McDonald's website: http://www.aboutmcdonalds.com/mcd/our_company.html
(accessed December 22, 2017). In 2015 McDonald's reported 420,000 employees working for McDonald's
Corporation, including its wholly owned retail outlets, but many more work for the 80 percent of McDonald's
outlets that are franchised. This data was found in the 10-K report the company filed in 2015: http://corporate.
mcdonalds.com/mcd/investors/financial-information/sec-filings.html
(accessed December 22, 2017).
11. McDonald's website: http://corporate.mcdonalds.com/mcd/sustainability/sustainability_CR_reports.html
(accessed December 22, 2017).
12. http://abcnews.go.com/Busi ness/m cdonalds-us-u k-british-ceo-transform-bu
rger-chain/story?id =28575441
(accessed December 22, 2017).
13. Lawrence and Lorsch (1967).
14. Donaldson (1996).
15. https://www.honolulu.gov/rep/site/bfs/bfs_docs/Volumel
December 22, 2017).
16. https://history.nasa.gov/orgcharts/orgcharts.html
OperatingProgramandBudgetFY201 0.pdf (accessed
(accessed December 22, 2017).
17. http://www.londonstockexchange.com/exchange/news/market-news/market-news-detai
1/BT.Nl 2680211.htm I
(accessed December 22, 2017).
18. https://www.usgs.gov/science/regions
(accessed December 22, 2017).
19. Windeler and Sydow (2001 ).
20. See article about Benetton's 'Un hate' advertisements showing world leaders kissing, one example of the
longstanding effort this company makes to address political and social issues with consciousness-raising
advertising campaigns: https://www.huffingtonpost.com/2012/06/20/benetton-unhate-campaign-can
nes-adfestival-award_n_ 1613757.html (accessed December 22, 2017).
21. Porter (1985).
86
ORGANISATIONAL THEORY & DYNAMICS
4 ORGANIZATIONAL
22. https://www.uber.com/our-story/
SOCIAL STRUCTURE
151
(accessed December 22, 2017).
23. Greiner (1972).
24. Katz and Kahn {1966).
25. Giddens (1979, 1984); see also Ranson, Hinings, and Greenwood (1980); Riley {l 983); Barley and Tolbert {1997).
26. Barley and Tolbert {1997)
27. Emirbayer and Mische {1998).
28. Bourdieu (1980/1990).
29. Mauss (1973).
30. Yoshino and Fagan (2003: 9).
31. See, e.g. Stene {1940); Cyert and March (1963).
32. March (7991 ); Olivera and Argote
(7999).
33. Huber (1991 ); Stene (1940) used the metaphor of habits; March and Simon (1958) suggested the metaphor of
programs; the metaphor of genetic material was introduced by Nelson and Winter (1982); see also McKelvey (1982).
34. Feldman (2000).
35. Feldman and Pentland (2003).
36. Feldman and Orlikowski (2011).
37. Gene Santoro (2000: 346); see also http://www.jazzshelf.org/minguspageahum.html
(accessed December 22,
2017), which reports that quote as Mingus' response to free jazz. See Kamoche, Cunha, and da Cunha (2002) for
a recent selection of influential articles on organizational improvisation.
38. Weick {1998).
39. Hatch (7993).
40. Moorman and Miner (1998a, 1998b) and Miner, Bassoff, and Moorman (2001) described the role that
improvisation plays in aiding new product development teams.
41. Pina e Cunha, Miner, and Antonacopoulou
(forthcoming).
42. Cooper and Burrell (1988).
43. Clegg {1990).
44. Lash (1990).
45. Farmer (1997).
46. Ferguson (1984); Martin (1990); Eisenstein (1995); Gherardi (1995).
47. Ashcraft (2001 ).
48. Von Busch (2008).
49. Deleuze and Guattari {2004).
50. You can read about the Counterfeit Crochet Project and see images of the crocheted items produced for the
project by visiting http://www.stephaniesyjuco.com/p_counterfeit_crochet.html
photos/49646846@N00/sets/72157600032922624/
or https://www.flickr.com/
(accessed December 22, 2017).
51. This and the remaining quotes are from Von Busch (2008: 208-14).
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ORGANISATIONAL THEORY & DYNAMICS
CHAPTER 3 • ORGANIZATIONAL TECHNOLOGY
Organizational
technology
While social structure involves the division of labor, hierarchy, and mechanisms of coordination that organize workers, the work that they do and how they perform it both defines and
is controlled by the organization's technology. Techne,the ancient Greek root of 'technology,'
originally referred to the skill of the artist. En route from ancient Greece to modern times,
techne,as found in the word 'technique,' was used by artisans during the Middle Ages and preindustrial era craft workers. Technique was overshadowed by the related term technology
when the industrial age took shape as industrial production overtook art and craftsmanship
in the making of goods for everyday living.
Making no obvious reference to craft or artistry, modern organization theory defines the
components of organizational technology as the knowledge, processes, tools, and equipment used to transform inputs into products and/or services. However, recent industrial developments incorporate a renewed emphasis on design, pushing technology's meaning back
in the direction of its ancient roots. Nissan, for example, now gives designers key roles in all
phases of its automotive design process to ensure that every aspect of the way the company
builds cars is artfully infused with the brand's Japanese aesthetic and its promise to 'Shift
thinking.' 1 Apple and Allesi, whose product ranges also rest heavily on design, similarly demonstrate the fusion of craftsmanship and artistry with modern industrial production technology. The technologies of these and other design-centered companies translate ancient
meanings of techne for future use.
In contrast to the modernist focus on technology as the producer of products and services,
symbolic researchers study how technology itself is produced by social construction and
enactment. Informed by historical, ethnographic, and linguistic methods borrowed from the
humanities, symbolic technology theorists take as their phenomena of interest the actors, actions, and processesthat define and are defined by technology. Their dynamic way of thinking
provides insight into the difference between organizing and organization and will enhance
your understanding of how and why symbolic theories differ from modernist explanation.
Postmodernists approach technology in ways that both challenge modernist ideas and
push beyond the symbolic perspective, often into moral territory. Because control can be
hidden inside technology, technology seems innocuous to employees and thus is less likely to
be contentious than more overt forms of control. By revealing the nefarious side of technology, postmodernists hope to liberate those it oppresses. But other postmodernists point out
that technology can be a positive, as well as a negative, force and often facilitates both good
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TECHNOLOGY
155
and ill at the same time. For example, social media have been used for liberation, democracy,
revolution, crime, and terrorism. Because technology is not in itself good or evil, the morality
of those who control its use comes into question, as does where new and emerging technologies will lead us. Postmodernists who have examined the implications of emerging technologies for organizations and organizing provide the concepts of technologies of control and
representation, cyborganization,
and the global village.
In what follows, you will learn how the concept of technology developed, along with the
three perspectives of organization
theory. As you read, feel the philosophical
ground shift
beneath your feet as each successive theory challenges the explanation, understanding, or
appreciation of technology presented by its predecessors.
Defining organizationaltechnology:the modern perspective
Automotive
firms design and manufacture cars and trucks; hospitals care for sick people;
universities educate people. According to modernist organization theory, an organization's
purpose links its technology to the environment
that provides it with the resources it needs
to survive (see Figure 5.1). Using objectivist ontology, modernists propose that
every organi-
zation employs a specific technology, or set of technologies, to transform its resource inputs
into product or service outputs. Addressing what and how product is produced or service
delivered through the application of relevant knowledge, techniques, tools, and equipment is
the focus of modernist theories of organizational technology.
Levels of analysis in the study of organizational technology
The concept of technology can be applied to any analytical level you choose, ranging from
the organization as a whole to units and the tasks performed by technicians and other workers. Because a technology exists at all these levels, each nesting within another like traditional
Russian dolls, you must take care to define your level of analysis. Level switching can be illuminating, but if you lose your bearings, it will be hard to avoid confusion.
The environment
The organization
Inputs
t
~
~
gtOMIII
....
outputs
I
Figure5.1 The organization as a technical system for transforming inputs into outputs.
Note: Modernists define organizational technology as the tools, techniques, and processes the organization usesto transform
its inputs into outputs. The needs for resource inputs and for a market to absorb its products and/or services connect
the organization's technology to its environment, as shown in this figure. The arrow running from outputs back to inputs
represents the revenue stream that funds new resource inputs to keep the transformation process operating and thereby
ensures organizational survival.
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PART II CORE CONCEPTS AND THEORIES
At the organizational level of analysis, the organization's core technology is depicted as
the uninterrupted flow of inputs (e.g. raw materials, knowledge) into transformation processes (e.g. production of products, service delivery) from which revenues are extracted in
order to maintain the organization and allow it to grow. Some organizations employ more
than one core technology, as can most easily be observed in conglomerates that combine
unrelated businesses,as do General Electric, Tata, or Thailand's Charoen Pokphand. With such
technologically complex organizations, you need to consider the core technology of each
different kind of work activity separately and then analyze the relationships between them
(or lack thereof).
Different technologies operate simultaneously within any one organization, as seen when
an analysis focuses on the level of units or departments. Using Katz and Kahn's open system
model, presented in Chapter 4, units that surround the technological core-the support functions of purchasing and sales, the maintenance functions of marketing, accounting, and HR,
and the adaptive functions of strategy and finance-each operate using different technologies. Unit-level technologies, of course, can be broken down further into technologies operating at the task level, such as those that involve machinery maintenance, product assembly,
complaint handling, budget formulation, the purchase of supplies, and the design and implementation of IT systems, to name only a few possibilities.
Consider as an example your university's core technology, which you might define as research and education-or, more simply, knowledge production. A richer image of this technology can then be formed by separately analyzing how knowledge production is accomplished
by various departments of the university and in each classroom, research laboratory, and
administrative office. The technologies of these units could be analyzed further at the task
level by focusing, for example, on the technologies of teaching (e.g. the uses of desks, chairs
and video projectors, as well as classroom engagement, knowledge transmission, and examination methods), research (e.g. research design and data collection), and administration (e.g.
student recruitment and matriculation). Of course, you could analytically break down any of
these tasks even further into subtasks, and so on.
Distinguishing service from manufacturing technologies
Consider the service provided by a news organization like the Wall Street journal, CNN, or
Al Jazeera. Because information only becomes news when it is communicated, the output of
these organizations is consumed at the moment it is produced. Moreover, news cannot be
stored-what is news today will not be news tomorrow-and is intangible in the sense that
it occurs in the act of communication rather than in the material form a specific act of communication takes (e.g. a newspaper or a radio or TV broadcast). Now contrast news with an
automobile. Automobiles are tangible goods that can be consumed for long periods after
they are produced. They can be stored for months or years without losing much of their value,
and they can be sold and resold for years after their date of manufacture.
While aspects of service delivery will be found in the production of products, the technologies of service delivery differ from those of manufacturing in three important respects. As the
news organization example demonstrates, services are (1) consumed as they are provided
and (2) intangible, so (3) they cannot be stored in inventory. Any material output produced
during service delivery is merely a byproduct of the service provided. For example, a service
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ORGANISATIONAL THEORY & DYNAMICS
5 ORGANIZATIONAL
TECHNOLOGY
157
provider may produce formal action plans or written reports that describe services or assess
their outcomes, but these are tangential to the service the client receives.
The distinction between service and manufacturing technologies is rarely clean; it blurs
as manufacturing organizations deliver a variety of services to their customers, and service
providers make use of product language to appeal to their clients. Banks,for example, often
refer to their services as 'products' and engage in marketing activities that are remarkably
similar to those of manufacturing firms (e.g. packaging and product branding). Meanwhile,
for their part, many manufacturing firms have become obsessed with providing customer
service. For example, the warranty accompanying newly manufactured automobiles promises a host of after-sales services. Be sure to note that while warranty service supports automobile sales, it does not replace the core technology of automobile manufacturing; it is a
support technology seen most clearly at the unit level of analysis.
Although not a clean one, the distinction between manufacturing and service technologies will help explain the historical development of modernist typologies of technology.
Typologies began with the differentiation of various manufacturing technologies, then service
technologies were added, and finally task-level technologies came into view.
Typesof technology and three typologies
Organization theory began its foray into technology by defining and analyzing the different
types of core technology used by organizations. The typologies suggested dimensions of difference that were measured empirically, producing data that allowed contingency theorists
to investigate how technology types relate to measures of organizational performance, social
structure, and environmental factors. In this section, you will learn about the types of organizational technology identified by Joan Woodward, James Thompson, and Charles Perrow,
and in the following section, you will explore how research using their typologies helped to
refine contingency theory.
Woodward's typology
Although British sociologist Joan Woodward was the first organization theorist to draw attention to technology, her initial research question did not concern technology at all. At the time
Woodward designed her study, the legacy of the classical management school still dominated
organization theory. It was in this context that Woodward designed what, at the time, was
a large-sample scientific study.2 Her intention was normative: to find out, once and for all,
which organizational structure was best.
To answer her research question, Woodward surveyed 100 manufacturing organizations
operating in the vicinity of South Essex,England. She measured each organization's relative
level of firm performance {above average, average, and below average for their industry),
average span of control, number of management levels, degree of centralization in decisionmaking practices, and management style. Woodward expected to find that a particular
constellation of these classical management variables would consistently relate to high levels
of performance; thus she was surprised when her data yielded no significant relationships
with performance whatsoever.
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PART II CORE CONCEPTS AND THEORIES
Such an unexpected result could not be presented without explanation, so Woodward
tried different approaches to her data. When she grouped companies according to the degree of mechanization of their core manufacturing process,the pattern that made Woodward
famous appeared. Her analysis showed that structure was related to performance after all,
but only when the type of core technology used by the organization was taken into account.
In other words, the best structure for an organization (i.e. one associated with high performance) was contingent upon the core technology employed; thus Woodward's study was to
make a major contribution to the formulation of contingency theory.
Another key contribution of Woodward's study was the technical complexity typology
she developed for comparing technologies in her sample oforganizations (see the far left side
of Figure 5.2). Arranged from the lowest to highest levels of technical complexity, the types
of technology she proposed were: (1) unit or small batch, (2) large batch or mass production,
and (3) continuous processing. Definitions and examples of these are presented next, along
with some key relationships with social structure that Woodward discovered.
Unit and small batch technologies
Unittechnologies produce one item or unit at a time, from start to finish, whereas small batch
technologies produce a few units at the same time. Custom-made clothing, such as a tailored
suit or theatrical costume, is the product of unit production technology. Other products typically produced unit by unit include original works of art, hand blown glassware, commercial
building projects, and an airliner. Wine is produced using small batch technology, in which
a vat of wine is produced in one lot. Small batch technologies are found as well in traditional bakeries and most university classrooms. In both unit and small batch technologies,
Production of single pieces to customer orders
Group I
Small batch
and unit
production
Low
II Production of technically complex units one by one
111Fabrication of large equipment in stages
IV Production of pieces in small batches
V Production of components in large
batches subsequently assembled diversely
Group II
Large batch
and mass
production
Group Ill
Continuous
process
production
VI Production of large batches, assembly line type
VII Mass production
Technical
complexity
VIII Continuous process production combined with
the preparation of a product for sale by large
batch or mass production methods
IX Continuous process production of chemicals in batches
X Continuous flow production of liquids, gases, and
solid shapes
High
Figure 5.2 Woodward's typology basedon the technical complexity of different types of technology.
Source:Woodward (1958). Crown copyright is reproduced with the permission of the Controller of HMSO.
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workers typically participate in the whole production processfrom start to finish and so have
a fairly complete understanding of the technology they use. Woodward's study showed that
organizations employing unit or small batch technologies are more successful when they
have smaller spans of control and fewer levels of management, and when they practice decentralized decision-making. These are the characteristics Burns and Stalker identified with
organic organizations.
Largebatch or massproduction technologies
Large batch or mass production technologies produce great quantities of identical products using highly routinized processesin which workers repetitively perform the production
tasks required to transform inputs into outputs. In these technologies, the total production
process is broken into many discrete steps to be performed by human hands and/or machines. An automobile assembly line is an example of mass production technology, while
steel production and industrial beer-brewing exemplify large batch technology. In mass
production, each worker or machine performs a specific task that completes a portion of
the finished product that will appear once all the tasks have been performed. Workers and/
or machines are physically located along the production line according to the sequence of
their assigned task, and as each person performs their task, the work flows to the next person in line. Large batch technology is similar to mass production except that a quantity
of product is produced at one time instead of in an unending stream. Woodward's study
indicated that organizations using large batch and mass production technologies are more
successful when their managers have large spans of control and when they practice centralized decision-making-characteristics you may remember Burns and Stalker associating with
mechanistic organizations.
Continuous processingtechnology
Whereas mass production is a series of discrete tasks performed sequentially, continuous
processing is a series of nondiscrete transformations occurring in a sequence. Consider the
examples of oil refining and waste treatment. In these cases,raw material (crude oil, raw sewage) is fed into one end of the production process, and as it flows continuously through the
system, contaminants and other unwanted substances are removed, until the desired degree
of refinement is reached (refined oil, treated sewage). In continuous processing, humans
tend equipment that performs the transformation automatically, although human intervention may be required at some stages of the production process (e.g. adjusting the pace of
production to allow for differences in the qualities of the input being processed, stopping
the process when output quality is substandard). Woodward's study showed that the types
of organizing used by successful continuous processing plants were similar to those for unit
and small batch technologies: They had smaller spans of control and decentralized decisionmaking, though they required more levels of management than either small batch or mass
production technologies due to the greater technical complexity of their manufacturing
processes.
In general, Woodward found that the highest levels of performance were achieved when
firms either combined mass production technologies with mechanistic organizational forms,
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Table 5.1 Findings from Woodward's study linking core technology to organizational social structure
Structural dimension
Technology
Unitproduction
Mass production
Continuousprocess
Levels of management
3
4
6
Span of control
23
15
Ratio of directto
9:1
1:1
indirect labor
Administrative ratio
low
medium
high
Formalization (written
low
high
low
Centralization
low
high
low
Verbal communication
high
low
high
Skill level of workers
high
low
high
Overall structure
organic
mechanistic
organic
communication)
Source:Woodward {1965). By permission of Oxford University Press.
or when small batch or continuous processing technologies were combined with organic
forms. (Table 5.1 presents these and other findings from her study.) Subsequent studies
showed that Woodward's typology was limited in two respects. First, her study examined
only small and medium-sized organizations, and the moderating relationship she found between technology and the structure-performance link proved to be less important when
organizational structures are large and therefore more complex. Second, Woodward ignored
organizations whose core technology delivered service.
Thompson'stypology
In the late 1960s, American sociologistjames Thompson extended Woodward's typology to
include organizations whose core technology involved service provision. 3 His typology differentiated technologies based on the standardization of their inputs, outputs, and transformation processesrather than their technical complexity, the key differentiator in Woodward's
typology. Not only did Thompson differentiate the technologies of service delivery from the
long-linked manufacturing technologies that Woodward had already identified, but he also
proposed an intensive type found in both manufacturing and service industries.
Long-linkedtechnology
Woodward's mass production and continuous processing categories are combined in
Thompson's category of long-linked technology. Automobile assembly lines, as well as
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technologies for producing chemicals and generating electrical power, fit this category.
Thompson described these technologies as long-linked because they all involve linear transformation processes in which inputs enter at one end of a long series of sequential steps from
which products emerge at the other end.
Mediating technologies
Thompson described technologies that bring clients or customers together in an exchange
or other transaction that provides a service as mediating. Banks, brokerage firms, and insurance companies all operate using mediating technology that links participants by helping
them locate one another and conduct their transactions, often without ever having to physically meet. For example, banks use mediating technology to bring together savers who want
to invest their money and borrowers who want to take out loans. Banking technology mediates between savers and borrowers by providing a meeting place for both types of customer
and by providing standardized procedures to facilitate their mutual benefit: in this case, interest payments for savers and funds for borrowers. eBay and Amazon similarly link buyers and
sellers through mediating technology consisting of a software platform rather than a physical
facility, though it is notable that Amazon recently opened several retail stores. Virtual marketplaces trigger additional mediation by financial service providers like PayPaland credit card
companies, which transfer funds from sellers to buyers.
Intensive technology
Intensive technology occurs in hospital emergency rooms or casualty departments, in research laboratories, and in project organizations such as those typical within the construction
industry, engineering firms, and consultancies. Intensive technologies require coordinating
the specialized abilities of two or more experts in the transformation of a nonstandard input
into a customized output. Each use of intensive technology requires on-the-spot application
of expertise to new problems and/or unique circumstances. For example, a doctor, an anesthetist, and at least one nurse form a surgical team to operate on a patient whose particular
physiology and health problems combine to make every operation they perform different
from the others.
Thompson observed that long-linked, mediating, and intensive technologies differ depending upon the degree of standardization in their transformation processes,as well as on
the extent to which their inputs and outputs are standardized. His theory can be summarized
in the two-by-two matrix shown in Figure 5.3, in which Thompson's technologies are classified according to standardization of inputs/outputs and transformation processes. The four
cells of the matrix accommodate Thompson's three types of organizational technology and
suggest an extra one he left empty: (7) standardized inputs/outputs with standardized transformation processes, i.e. long-linked technologies; (2) unstandardized inputs/outputs with
standardized transformation processes, i.e. mediating technologies; (3) unstandardized inputs/outputs with unstandardized transformation processes, i.e. intensive technologies; and
(4) standardized in puts/ outputs with unstandardized transformation processes,i.e. the empty
cell. (See Box 5.1 for an application of these concepts.)
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Transformation processes
standardized
standardized
nonstandardized
?
Long-linked
Inputs/
outputs
nonstandardized
Mediating
Intensive
Figure5.3 Thompson's two-by-two matrix of technologies based on the standardization of inputs/outputs
and transformation processes.
Source:Based on Thompson (1967}.
Box
s.1
From theory to practice
1
Applying Thompson s typology
In traditional mass-production automobile manufacturing, standardized parts are assembled into
standardized automobiles using the standardized transformation process of the assembly line. Now
contrast the long-linked automobile manufacturing technology with the intensive technology employed
by a hospital emergency room (ER)or casualty department. Here, workers face the challenge of
converting unstandardized patients in acute need of medical aid into healthy patients ready for discharge
or stabilized patients ready for additional hospital services (e.g. surgery, critical care, routine nursing).
Be sure to notice that the ERunit is but one part of the long-linked technology of the hospital as a
whole, which more or less continuously processes a steady stream of new patients in a highly routinized
and often mechanistic or bureaucratic way. Also note that the multiple units of a hospital (e.g. ER,
diagnostics, surgery, critical care, imaging, laboratory, pharmacy) each treat patients using unit or small
batch technology and that the hospital itself represents mediating technology, in the sense that it brings
patients needing medical services together with the experts who can treat their problems.
Exercise
Using the analysis of the ERas a template, analyze the technology of your university using all three
categories ofThompson's typology.
Discussion questions
What do the multiple types of technology operating within a single complex organization like a
hospital or university tell you about using different levels of analysis to study the technology of an
organization? Is an organization's core technology really operating at the organizational level, or is
what we call an organizational-level technology just one among several unit-level technologies that the
organization employs? Does this difference in analytical levels make a difference to your understanding
of technology? Why, or why not?
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Norms of rationality
The fourth cell ofThompson's typology presents something of a puzzle. By the time he wrote
his book Organizationsin Action, managerial rationality had come under attack from James
March and Herbert Simon's notion of bounded rationality. 4 The theory of bounded rationality proposed that managers always operate with less than full knowledge, and often under
conditions of cognitive limitation and considerable uncertainty-conditions that place severe
limits on rationality. Thompson's response to this threat was to emphasize the rational, so he
began each proposition of his theory with the qualifier 'under norms of rationality' to indicate
that it was still possible for managers to avail themselves of rational choice with the help of
management science, such as that offered by his book.
Thus sensitized to rationality, Thompson developed his typology around technologies
that aligned with norms of rationality-namely, those whose efficiency could be demonstrated in relation to their level of standardization of inputs, outputs, and transformation
processes.Lack of efficiency explains why he ignored the fourth type of technology presented
in Figure 5.3. According to Thompson, norms of rationality preclude producing standard outputs from standard inputs using nonstandard processes.
It is worth noting that technologies that apply nonstandard transformation processes
to standardized input and outputs do occur. An example is the development of prototypes,
a method used in industrial and new product design. Architectural, industrial, and fashion
design all use prototyping, which involves trying out multiple ways of designing and producing an output to see which proves most efficient and/or effective. Though they may serve
rational ends, the innovative and experimental processes used in prototyping require the
temporary suspension of norms of rationality in the sense in which Thompson used this
concept.
Thompson elaborated on the relationship of non routine work to technology that Woodward emphasized in her typology and, in doing so, inspired American sociologist Charles
Perrow to propose yet another typology. However, whereas Thompson's analysis had begun
at the organizational level and worked down to analysis of tasks to explain the differences in
technology he found, Perrow built his typology from the task level up.
Perrow's typology
Perrow's typology describes technological differences based on the variability and analyzability of tasks.5 These two dimensions frame another two-by-two matrix, as shown in
Figure 5.4.
Task variability refers to the number of exceptions to standard procedures encountered in
the application of a given technology. This dimension can be related to technical complexity.
For example, one might predict that the greater the technical complexity of a technology, the
greater the variability of tasks workers are required to perform. But, of course, this relationship will depend on the extent to which work is divided through organizational structuring.
Task analyzability is defined as the extent to which, when an exception occurs, there are
known methods for dealing with it. This dimension can be related to centralization: Highly
analyzable tasks allow decentralized authority structures because standardization and routinization ensure they will be performed efficiently and effectively. Low analyzability, on the
other hand, requires more oversight because the large number of exceptions encountered
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Task variability
high
low
high
Routine
Engineering
Craft
Nonroutine
Task
analyzability
low
Figure5.4 Perrow's two-by-two matrix based on the task variability and analyzability associated with
different types of technology.
Source:Basedon Perrow (1967).
introduces opportunities for things to go wrong. Here, greater centralization and lower spans
of control are typically warranted.
Arraying technologies according to the degree of task variability and task analyzability they
require produces the two-by-two matrix shown in Figure 5.4, with cells represented by four
technology types: routine, craft, engineering, and nonroutine.
Routine technologies are characterized by low task variability and high task analyzability.
To take examples from both manufacturing and service organizations, assembly line workers
and filing clerks each encounter few exceptions to their standardized work practices, and when
they do, there is almost always a known method of resolution, such as hierarchical referral (i.e.
ask the boss).These examples show that Woodward's mass production category and Thompson's long-linked and, to some extent, his mediating technologies overlap with Perrow's routine technology category and thus cover service, as well as manufacturing, technologies. In the
service realm, think of the standardized practices of making bank loans or selling real estate.
However, these mostly routine technologies can also become craft-Ii ke when exceptions arise,
such as a client whose needs do not fit the standardized procedures set by the organization.
Craft technology shares with routine technology the condition of low task variability, but
unlike with routine technologies, craft technologies are characterized by low task analyzability. Although standard procedures are common in craft technologies, when exceptions
arise, workers rely on their experience and intuition, and improvisation will often come into
play. For example, during a building project, construction workers typically encounter few
exceptions to standard procedures. However, some exceptions almost always arise, such as
a mistake in the blueprints or unavailable materials, and when they do, a way of dealing with
them must be improvised if the project is to move forward on schedule. Visual artists also
face exceptions as they engage in tasks with low variability such as priming canvas and mixing colors, but some will produce exceptions deliberately by refusing to use their well-honed
techniques to solve problems that arise as they paint or sculpt, which they do to force themselves to produce something original.
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Engineering technologies are associated with high task variability combined with high
task analyzability. The technologies of laboratory technicians, executive secretaries, accountants, and most engineers fitthe engineering category. In engineering technology, many exceptions to standard practices arise, but the employees who operate them possessthe knowledge
needed to solve these problems. Often, the knowledge required to overcome exceptions in
this type of work comes from advanced and highly specialized training; thus the presence of
professionals or other highly educated workers usually indicates an engineering technology.
Non routine technology is composed of tasks with high variability and low analyzability.
These conditions occur, for instance, in research and development departments, in aerospace
engineering, and in design and prototype laboratories. Perrow's nonroutine category overlaps Woodward's unit and small batch technologies, and has commonalities with Thompson's
intensive type, as well as his missing category of standardized inputs/outputs and unstandardized transformation processes.The high number of problems encountered in nonroutine
technologies and the lack of known methods for solving them place employees using these
technologies in a more or less constant state of uncertainty that is the polar opposite of conditions faced by workers operating routine technologies; thus embedded in Perrow's two-bytwo as a third dimension is Woodward's routineness of work.
Box 5.2 applies the typologies developed by Woodward, Thompson, and Perrow.
Box s.2 Think like a theorist
Applying the three typologies
Even though the typologies offered by Woodward, Thompson, and Perrow overlap, you should still
begin a modernist analysis of an organization's technology by applying all three. Doing this engages
the six dimensions of technology: technical complexity, routineness of work, standardization of inputs/
outputs, standardization of transformation processes, task variability, and task analyzability. Although
you may ultimately conclude you do not need all six to describe the technology you are studying, until
you try them all, you will not know which are most helpful. Many times, I have been surprised by the
insight provided when I applied a theory I did not initially think would help me.
To see how applying the three typologies works, consider a company that manufactures buses. A
chassis is brought in at one end of the factory and passes down the assembly line as axels, an engine,
the body, interior trim, and so on are added. Using Thompson, you might describe the core technology
(organizational level of analysis) as long-linked,but all the customization involved probably moves it
closer to Woodward's small batch category. You can see that it is not a largebatch technology because
even though there are 50 buses at various stages of completion on the assembly line (ten are for
one customer, five for another customer, two for another), each order has different requirements for
heating, air conditioning, internal features, and external trim. At the unit level of analysis, the Chassis
and Suspension Departments appear to fit Perrow's routinetechnology category because their task
variability is low (the only variation is the choice of two chassis lengths), and task analyzability is
high (there are standardized methods for positioning and bolting the suspension on the chassis).
The Internal Trim Department, however, is better characterized by Perrow's engineeringtechnology
because task variability is high (different customers want different seating configurations, heaters,
handrails, doors, lights, decals, etc., situated in different places), as is task analyzability (there are known
procedures and methods for dealing with these differences).
(continued...)
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The bus-manufacturing example highlights the danger of ignoring one or more typologies or
considering only one level of analysis. By focusing only on core technology at the organizational
level, you lose the interesting details that emerge in analyses conducted at the task level of analysis in
multiple units of the organization. This loss can be justified on the grounds of the power of abstraction
to make generalized comparisons across organizations, but you should never forget what you give up
in the bargain. In the end, you will probably want to combine different typologies when conducting
an analysis of an organization's technology and use multiple levels of analysis, always with care not to
confuse them by switching levels without noticing you have done so.
Exercise
Choose any organization that interests you, and develop your skills at analyzing its technology by
applying the typologies provided by Woodward, Thompson, and Perrow. When you have tried all
the categories on your example and settled on those that best fit your organization, see if you can
characterize the organization along the dimensions of technical complexity, routineness of work,
standardization of inputs/outputs, standardization of transformation processes, task variability, and task
analyzability. For example, ask yourself: Is this organization high, medium, or low with respect to each
dimension? Comparing the technology you analyzed with the example of bus manufacturing offered
above will be helpful here. Or, better yet, analyze another organization's technology, and use both of
your analyses to make these comparisons. It might seem like a lot of work, but with a few applications
under your belt, it will become second nature to see technology in these terms.
Technology'scontributionsto structuralcontingencytheory
One conclusion drawn from Woodward's study of small and medium-sized organizations was
that technology determined the social structure an organization should adopt-a proposition that came to be known as the technological imperative. However, a team of scholars
from Aston University in the UK studied a sample that included large, as well as small and
medium-sized, organizations, which revealed that the influence of technology on structure
depends on the size of the organization. Their work added the variable of organizational size
to contingency theory and proposed that the smaller the organization, the greater the significance of core technology for the structure-performance relationship. 6 The Aston researchers
explained that when organizations consist of little beyond their core technology, as was the
case for the relatively small organizations Woodward studied, technology has a significant,
and possibly determining, effect on social structure. But as organizations grow larger, this
relationship becomes more complex, requiring further refinements to contingency theory.
Debunking the technological imperative led researchers to propose other new dimensions
to help explain how technology relates to social structure. In what follows, you will learn more
about Woodward and Perrow's proposal of the routineness of work and uncertainty as contingency variables, and about Thompson's addition of task interdependence as a contingency
factor explaining the use of different coordination mechanisms.
The routineness of work
You will recall that Woodward compared technologies according to level of technical complexity, measuring this variable as the extent to which machines perform core transformation
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processes. In relating technical complexity to structural arrangements, Woodward noticed
that organizations using unit and continuous processing technologies, which were found at
the two extremes of her technical complexity scale, were more similar structurally than either
were to organizations using the large batch and mass production technologies found in the
middle range. She explained this pattern using the concept of the routineness of work:
Both unit and continuous processing technologies involve work that is nonroutine, while
mass production requires highly routinized activity. The relationship Woodward proposed
between the routineness of work and technical complexity is shown in the inverted U-shaped
curve of Figure S.S.Woodward's findings indicated that both unit and continuous processing
technologies are associated with low routineness, while mass production technologies have
high routineness; thus the relationship between routineness of work and technical complexity takes the shape of an inverted U.
Organization theorists use Woodward's routineness of work variable to explain why unit and
continuous process technologies best align with organic structures-namely, because these
technologies both support nonroutine work. By the same logic, mass production technologies
better suit mechanistic structures because they support routine work. The relationship between structure and technology is thus proposed to be contingent on the routineness of work.
As an example, consider a graphic art firm that serves clients by designing logos and producing finished artwork for use in magazines and on websites. Such a firm uses a unit technology
that has low technical complexity, but requires fairly nonroutine work. The nonroutiness of
this work explains the likelihood that such organizations will be organically structured. Compare this organization with a manufacturer of standardized electrical components, whose raw
materials and manufacturing processes vary little across time (a mass production/large batch
technology with high routineness of work and moderate complexity). Now compare both of
these to a nuclear power plant, where most of the work done by humans consists of monitoring machines (a continuous processing technology with high technical complexity and low
routineness due to the nonroutine nature of work that occurs when problems arise).
The graphic design firm needs to be much more responsive to client needs and flexible in
relation to how work is accomplished than does the manufacturing company. And although
Small batch
Mass production
High
Routineness
of work
Continuous
processing
assembly workers
artisans
technicians
\
(
artists
design engineers,
scientists
High
Low
Complexity of the technology
Figure 5.5 The relationship between routineness of work and technical complexity.
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most work in a nuclear power plant is highly routine, when the equipment malfunctions,
workers must be ready for anything. For this reason, both of these organizations, one using
unit and the other continuous technology, keep their structure flexible to support the
nonroutine activity their technologies require.
Nonroutiness and organizational uncertainty
Although Perrow used a different basis to categorize technologies than did Woodward, he
too noted the importance of routineness. In fact, tasks located within Perrow's two-by-two
matrix can be collapsed onto a unidimensional scale of routineness, as shown in Figure 5.6,
which involves projecting points in Perrow's two-dimensional space onto a line formed by the
diagonal running through the routine and non routine quadrants. The points in each quadrant
represent tasks associated with the technology identified with the quadrant, and the projection of each point onto the line shows the degree of routineness of the task so located. As you
can see, tasks associated with craft and engineering technologies generally fall between the
two extremes of routine and non routine work, but there is a range of routineness associated
with tasks in every technological quadrant.
In Figure 5.6, the projection shows that each type of technology is associated with a range
on the unidimensional scale of routineness such that, for example, some tasks associated
with engineering and craft technologies will be more routine than some of those associated
with routine technologies (see the projections labeled a, b, and c), and some will be more
nonroutine than others associated with nonroutine technologies {d, e, and f). Where a particular task from one of Perrow's technology types falls on the routi neness scale is determined
by its degrees of analyzability and variability.
Perrow used the scale he developed to propose routineness as a contingency factor explaining uncertainty in organizations. According to Perrow, technology contributes to
Task variability
low
high
,b
I
I
I
I
high
Routine
Engineering
I
I
I◄
,-d
I
.,.
I
I
I
I
I
I
I
Task
analyzability
I
I
◄
I
I
I
I
I
I
I
I
I
I
I
I
I
I
a/
I
I
I
c/
high
,f
I
◄
I
.,.
I
I
I
Craft
I
I
Nonroutine
I
I
I
I
e/
Figure 5.6 Projection of Perrow's two-dimensional typology onto the single dimension of routineness of
work tasks.
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organizational uncertainty either through variations in the quality and/or the availability of
inputs to the transformation process, or through the variable nature of the transformation
process itself. According to Perrow's theory, high uncertainty makes it difficult to structure the
activities of the organization due to the difficulties of predicting which tasks will be required.
In his theory, uncertainty moderates the relationship between the routi neness of work associated with an organization's technology and its social structure.
Task interdependence and coordination mechanisms
Thompson recognized that technologies varyalong a different dimension than the routinenessof the work tasks that support them. He saw technologies in terms of the extent to which
they can be defined by their varying levels of task interdependence. Thompson then proposed that the types of task interdependence associated with different technologies require
that different types of coordination mechanism be built into their social structures. His work
on task interdependence identified the coordination mechanisms that best support mediating, long-linked, and intensive technologies.
Pooledtask interdependencecoordinated by rulesand procedures
In a mediating technology, organizational units perform their work tasks independently of
one another. Work does not flow between them, and therefore little direct contact is needed
to coordinate their activities. Thompson used the term pooled task interdependence to
refer to cases in which the organization's output amounts to the sum of each unit's efforts, as
illustrated by Figure 5.7.
Inputs
Client 1
Transformation
processes
.
G;J
G;J
[;JJ
s
Inputs
.
Client 2
.
Client 4
+
Client 3
.
s
+
Client 5
..
~
~
s
Client 6
I
+
Outputs
Figure 5.7 Mediating technologies generate pooled task interdependence.
Note: Notice that A, B, and C'sjoint product forms the output of the organization, yet these three units operate more or less
independently of one another.
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Take banking as an example. Banks mediate between borrowers and savers, or debtors
and investors. Mediation can be accomplished simultaneously by several bank branches that
operate almost independently of one another. Day and night shifts on an assembly line, franchised restaurants, and the different departments of a university or a large retail store provide
additional examples of organizational units whose task interdependence can be characterized as pooled.
According to Thompson, groups operating with pooled task interdependence demand
very little in the way of coordination. The coordination required to ensure that services are
consistent across units can, for the most part, be accomplished through the use of rules and
standard procedures for routine operations. For example, rules and standard procedures for
tasks such as opening bank accounts, investing in certificates of deposit or mutual funds, and
applying for and approving loans and lines of credit produce sufficient coordination for a
bank to integrate the activities of its branches.
Sequentialtask interdependencecoordinated by planning and scheduling
Several assembly lines can operate at once in a manner that leavesthem largely independent
of one another. The different production lines then have pooled task interdependence in the
sense that their outputs are aggregated into the total output of the organization. However,
within each line, task interdependence is greater because each worker is dependent on the
work of others located at positions prior to theirs on the line. If workers early in the production process are not performing their tasks properly, then the work of those further down
the line suffers. This is called sequential task interdependence because the work tasks are
performed in a fixed sequence, as illustrated by Figure 5.8.
The sequential nature of task interdependence found in long-linked technologies requires
more planning and scheduling than does pooled interdependence. Again, consider the assembly line as an example. All work tasks must be designed and workers assigned and scheduled to work together in order for the assembly line operation to function properly. Because
any break in the line can interrupt production, careful planning of tasks and scheduling of
workers is imperative. Of course, in addition to coordination by plans and schedules, rules
about coming to work on time and procedures to follow when something on the line has
created a problem are also part of coordinating this type of technology.
Transformation processes
Inputs
f:..s
tasks
B's
tasks
C's
tasks
Outputs
Figure 5.8 Long-linked technologies are associated with sequential task interdependence.
Note: This type of technology generates an unbalanced relationship where A experiences the least dependence and C, the
most, with B'sdependence being less than C's, but more than ks.
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Reciprocal task interdependence coordinated by mutual adjustment
Intensive technologies create reciprocal task interdependence, which means that they demand ongoing exchanges of information between workers who perform the transformation
of inputs into outputs. In a restaurant, for example, kitchen and wait staff are reciprocally
interdependent because the kitchen needs the wait staff to provide orders, and the wait staff
needs the kitchen staff to provide meals prepared to the customers' satisfaction. Whereas the
sequential task interdependence of long-linked technology involves workflows that move in
one direction only, in intensive technologies workflows move reciprocally among workers, as
illustrated by Figure 5.9.
Coordinating the tasks central to the operation of an intensive technology requires mutual
adjustment on the part of the individuals or units involved, due to the reciprocal nature of
their task interdependence. When intensive technologies involve immediate reciprocal coordination, mutual adjustment takes the extreme form of teamwork. In teamwork, work inputs
to the transformation process are acted upon simultaneously by members of the work team,
rather than passing inputs back and forth, as is the case for less-intensive forms of reciprocal
task interdependence.
Take the case of an emergency surgical operation. A surgeon needs to be able to continuously exchange information with the anesthesiologist and the assisting doctors and nurses
while performing the surgery. Thus intensive technologies require joint decision-making and
either physical colocation or a direct channel of communication, such as a satellite link or
other instantaneous communication device.
Be sure to notice that intensive technology involves pooled and sequential, as well as reciprocal, task interdependence. Mutual adjustment, planning, scheduling, rules, and procedures
all contribute to the ability of experts to perform when and where their services are required.
For example, doctors who practice emergency medicine have scheduled work hours and
rules to follow, ranging from established surgical procedures to wearing a beeper when they
are on call. Notice how as task interdependence increases from pooled to sequential to reciprocal, more sophisticated mechanisms of coordination are needed by the organization
(see Table 5.2). While pooled interdependence can be handled by rules and procedures
Transformation processes
Inputs
Outputs
.....____,,.
Figure 5.9 Intensive technologies create reciprocal task interdependence.
Note: A, B, and Care mutually dependent; thus this type of technology generates the highest levels of task interdependence.
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Table 5.2 As task interdependence increases, increasingly sophisticated coordination mechanisms will be
added to those already in use by an organization
Task interdependence
Rules and procedures
Schedules and plans
Pooled
X
Sequential
X
X
Reciprocal
X
X
Mutual adjustment
X
Source:Based on Thompson (1967).
alone, sequential interdependence requires not only scheduling and planning, but also rules
and procedures. Reciprocal interdependence depends on all three forms of coordination:
rules and procedures, scheduling, and mutual adjustment.
As you have seen already, contingencies multiply rapidly as organization theorists propose
additional variables and moderators. The difficulty of empirically examining the increasing
number of contingency factors, including the now more elaborated concept of technology,
as well as the environment and social structure, renders contingency theory unwieldy and
hence lessattractive to many. Nonmodernist approaches to studying technology provided by
the symbolic and postmodern perspectives offered alternatives, many of which accompanied
the dawning of the information age, with its computer-based technologies.
New and emerging technologies
The rise of computers and their applications in many workplaces raised new questions for
those interested in organizations and organizing. In her book In the Age of the Smart Machine, published in 1988, American business Professor Shoshana Zuboff reported one of the
first studies concerning the effects of computer-mediated work on workers and their organizations.7 The new technologies made possible by computers included, for example,
microelectronics, satellite communication, lasers,and robotics. Technology gurus today are
more often concerned with emerging technologies, a term used to describe technologies
with the potential to alter or disrupt current social and/or economic conditions regardless
of whether they are old or new. For example, although 3D printing was introduced back
in 1981, it is considered emergent in spite of its age because it is only now disrupting older
manufacturing technologies and the socioeconomic relationships with which they are intertwined. Other technologies considered to be emerging today include gene and stem cell
therapies, nanotechnology, and artificial intelligence (Al). Al, in turn, has led to the creation
of IBM's Watson, an example of a potential disruption to older technologies for data analysis,
diagnostics, and machine learning. 8
Those adopting the symbolic perspective take particular interest in technologies that depend upon information or data manipulation, because these depend in turn upon interpretation. Development of the symbolic perspective on technology has extended or outright
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replaced many modernist ideas.Two contributions in particular have had considerable influence on organization theory. One was offered by Weick, who took on the problem of defining
how new technologies differ from their predecessors.Another was provided by Perrow, who
studied the unpredictable consequences of the complexity that new technologies bring. Although their theories were presented as extensions of modernist typologies, they introduced
questions about how technology is understood and interpreted, thereby indicating the value
of taking a symbolic perspective.
New technology as stochastic, continuous, and abstract
Karl Weick became fascinated by how computer-mediated technology is understood by its
operators. 9 Typically found in continuous production processeslike those used in oil refining
and steel production, computer-mediated technology allows operators to monitor production processeswithout ever touching-or, in some cases,even seeing-the transformation of
inputs into the end product. Operators typically rely upon the numeric and/or graphic data
displayed on computer screensto monitor and control the system that actually performs the
work from which they are once removed. Based on his own and the observation of others,
Weick theorized that new technologies differ from old technologies by being stochastic,
continuous, and abstract.
Old technologies only occasionally produce events that create unexpected interruptions
in their product or service delivery process, for example when a boiler blows up for no apparent reason. But operators of new technologies experience such interruptions as a matter
of course. Weick characterized new technologies as stochastic due to the frequency of
unexpected events they engender. Their stochastic character does not allow learning from
experience, so operators cannot anticipate and successfully prepare for events requiring
their intervention.
Another defining characteristic of new technologies is that they operate nonstop, which
is why they are referred to as continuous. Even though Woodward, Thompson, and Perrow included continuous processing in their typologies, they did not anticipate the qualitative change in this property that new technologies would bring about. For example, a key
feature of computer use is constant revision and updating of both hardware and software,
which means that, in a continuous tech no logy, computer technicians and programmers must
change the technology while it is in use. Consider what this means for updating a flight reservations system that operates continuously 24 hours a day, 7 days a week, 52 weeks a year.
If the system were to stop, even for a short period, chaos could ensue, for example due to
booking failures and inaccurate flight times and destination. Weick concluded that, when
compared to old technologies, the continuous nature of new technologies pushes them into
much higher levels of complexity, increasing the risks of system failure.
In old technologies, you can see the moving parts of a machine or shadow a service provider, whereas the working processes of computer-mediated technology are abstract and
often hidden from view inside the computer programs that operate and control them. Understanding new technologies therefore presents technicians with highly abstract models once
or twice removed from what the technical process is actually doing at any given moment
in time. Differences arising between the two processes-the cognitive one taking place in
the technician's head and the one controlled by the computer-can lead to error. Moreover,
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when a malfunction occurs, there can be a confusing multiplicity of possible interpretations
of what is going on. This has always been a problem for those who work with computers
because computer hardware is operated via software that can never map the hardware's processescompletely. Computer programmers and usersboth face the possibility of error due to
misunderstanding what the computer is actually doing.
Weick's point was that even the most complex technologies described by Woodward,
Thompson, and Perrow cannot match the complexity of stochastic, continuous, and abstract
new technologies. He proposed that one implication of the significantly greater complexity of new technologies was a need for high reliability from the organizations that operate
them. This becomes evident when new technology involves dangerous or risky activities,
such as nuclear power production or air traffic control. Weick's theory therefore added
reliability to the dimensions used to assesstechnologies: technical complexity, routineness
of work, standardization of inputs/outputs, transformation processes, task variability, and
task analyzability. Taking a different approach to some of the same ideas Weick was concurrently exploring, Perrow examined the consequences of unreliability created by technical
complexity.
Technical complexity, tight coupling, and normal accidents
In his book Normal Accidents,Perrow analyzed technological failures including naval ship collisions and the 1979 partial core meltdown of the US nuclear reactor atThree Mile lsland.70 As
in Weick's theory about stochastic processes,Perrow pointed out that the failures of complex
technology are impossible to anticipate because they are unique and randomly distributed.
Perrow explained that the unpredictable behavior of such systems and the consequent inability to analyze them result from the interaction of two key factors: technical complexity,
determined by the number of components in a system, and the tight coupling or interdependence between the component parts.
Perrow's theory is that technical complexity interacts with tight coupling to confuse human
reactions to unexpected events. This confusion creates conditions ripe for the rapid escalation of a crisis and leads to failure if the problem cannot be accurately diagnosed and successfully resolved. Perrow explained that complexity inevitably interacts with tight coupling
in technologies that require interpretation by human operators, their inevitability prompting
Perrow to call such failures 'normal' accidents. Bolstered by Weick's proposition that the reliable operation of all new technologies depends upon interpretation, Perrow's theory suggests that even an emphasis on reliability will not prevent accidents from occurring within
systems dependent upon new technology. Although normal accidents should be expected,
they cannot be predicted.
Perrow's analysis of the partial meltdown in the nuclear reactor at Three Mile Island is
revealing. The initiating problem was traced to the simultaneous failure of two fairly minor
safety devices embedded in a complex, tightly coupled system. According to Perrow, the
dense interactions between these and other components of the technically complex systems
controlling the plant made it impossible to deduce the interacting causesof the problem, and
a series of inappropriate human interventions followed. Those interventions created further
mechanical failures that increased the operators' confusion, rendering diagnosis almost fatally impossible. Perrow's diagnosis? Two simultaneous mechanical failures interacted with
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the limits of human understanding. Perrow concluded that prevention of normal accidents is
unlikely because humans will never be able to understand the underlying interaction effects
of complexity and tight coupling either well enough or quickly enough to guarantee effective
intervention.
Similar failures continue to arise, such as the 1986 meltdown at the Chernobyl nuclear
facility in Ukraine, the 2010 oil spill in the Gulfof Mexico, and Japan's2011 Fukushima-Daiichi
nuclear disaster, providing support for Perrow's gloomy predictions. However, Perrow cautions us not to overextend the theory of normal accidents to instances of moral failure, for
example theorizing that moral failure better explains the global financial crisis of 2008.11 He
reported that some bankers wanted to use his theory of normal accidents to claim they did
not understand the complex interactions of tightly coupled financial instruments, but Perrow
refused to classify the financial crisis as a normal accident. He saw it instead asthe direct result
of unconstrained human greed.
Information processing and new technologies
Picking up on an idea inspired by new technology-namely, thatorganizationsare informationprocessing systems-American organization theorist Jay Galbraith proposed that technical
complexity, task uncertainty, and task interdependence place demands on organizations to
communicate. 12 Galbraith claimed that the need for communication shapes organizational
structure. In his contingency theory, technical complexity creates structural complexity, uncertainty promotes organic forms of organizing, and task interdependence intensifies demands for coordination because each of these factors increases the communication load
carried by an organization. In his view, it is the need to communicate, not the information
or the technology chosen to relay it, that affects how people interact and thus influences the
structure of the organization. As you can see, his theory added communication and information processing variables to the already-complex puzzle presented by contingency theory.
However, by focusing on human communicative activity, which involves interpretation and
understanding, he joined Perrow and Weick in paving the way for symbolic approaches to
technology.
Symbolic theories of technology
Although the technology theories proposed by Weick, Perrow, and Galbraith moved into
symbolic territory by introducing issuesrelated to interpretation and communication, their
efforts to refine the dimensions by which technology is described, and to add new variables
to measure them, aligned with the modernist perspective. Those who more fully embrace
the symbolic perspective try instead to understand technology as the product of social construction and/or enactment processes. Their empirical approach lies mainly in observing
how people interact with and through technology, and their theorizing involves describing
how the social and material aspects of technology are related. The symbolic perspective
begins with descriptions of how technology relates to the organization of work and, from
that vantage point, explores the social processes, practices, and actions involved in the use
of technology.
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The socialconstructionof technology
The social construction of technology {SCOT)theory was developed by Dutch science and
technology theorist Wiebe Bijker in collaboration with British sociologists John Law, Thomas
Hughes, and Trevor Pinch. This theory describes how technology is influenced by complex
sociocultural tradeoffs that these and other symbolic researchers observed while studying the
historical evolution of technological innovations. 13 For example, while studying innovations
in the bicycling industry, Bijker, Hughes, and Law noticed that, in the early 1900s, women
cyclists had demanded modifications to the bicycle frame in use at that time. Long dresses
were then in fashion for women, who found this style of clothing restrictive and prone to
entanglement in the machinery. The bicycle designed to meet the demands of these women,
however, did not satisfy men, who wanted their bicycles to be stable and designed for speed
in order to compete successfully in the bicycle races becoming popular at that time. Variations in bicycle designs proliferated in response to these different demands, until market
forces arose to select one model, the one retained as the bicycle we know today.
Although SCOT theorists found Darwin's model of evolution a useful way of explaining
innovation such as occurred in the bicycle industry, Biker and Pinch's historical analysis also
revealed the sociocultural context in which bicycle innovation occurred. Their analysis suggested that how one rode a bicycle in the early 1900s was influenced by norms regarding how
to dress that differed between men and women, and that the variation this produced forced
the market to choose between several options, the one succeeding having been dependent upon another social factor: the growing popularity of bicycle racing. Since an account
of these social factors was needed to understand variations in bicycle designs, SCOTtheory
claimed that innovation processes are at least partly social, as is technology itself.
But the story Bijker and his colleagues told did not end with the social influences that affected technological innovation in the bicycling industry. Selection of the speedier and more
stable model in its turn had sociocultural consequences that included supporting the wearing
of trousers by women cyclists. This practice contributed to change in the styles of women's
dress away from that which had produced the bicycle variation they preferred in the first
place. Thus, according to SCOT theory, women's fashion in the early 1900s influenced the
technological innovation process that produced the bicycle we know today, but that same
fashion was in turn influenced by the technological innovation it helped to construct.
While many SCOT theorists focus on the societal level of analysis, as Bijker and his colleagues did, others examine how interpretive processes influence technology at a lower level
of analysis. American anthropologist Julian Orr's ethnographic study of the work of photocopier repair technicians at Xerox provides an example. 14 In order to explore how meaning is
negotiated in and around technology, Orr, who was then a researcher at the Xerox Palo Alto
ResearchCenter (now PARC),immersed himself in a community of Xerox photocopier repair
technicians by attending training classes,hanging out, and going on service visits with them.
Orr audiotaped interactions and kept field notes documenting his observations. He also interviewed customers/users and studied their organizations and the copy machines they used.
Orr's data analysis indicated that copy machines had both a technical and a social presence in the everyday world of their operators. He defined a machine's technical presence
as its mechanical and/or electronic systems, noting that they also have a social presence,
defined by the behavioral responses they elicit from technicians and users. Going further in
the direction of defining copier technology as social, he noted that individual machines have
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idiosyncratic ways of behaving. For example, some of the machines he studied had a history
of breakdowns, while others made distinctive noises. Orr observed that technicians and users
became attuned to these individual characteristics, and even though they were trained to use
an operating manual when interacting with the copy machines, they sometimes went beyond protocols, their improvisations involving relationships with the copiers that were more
socially, than technically, driven.
Actor-network theory
As Orr observed, humans sometimes form social relationships with computer technology.
These relationships are now being encouraged and enhanced by voice-operated interfaces
like Apple's virtual helper Siri and Google's Alexa. Have you formed a relationship with technology? Maybe you talk to your computer, respond to your smartphone, or interact with a
gaming platform as if it were a sentient being. Forming socio-technical relationships like these
affirms the influence technology has on us, but also implies something more, at least according to those subscribing to actor-network theory (ANT).
ANT, an offshoot of SCOT,originated in research conducted by Michel Callon and Bruno
Latour, two French sociologists interested in science and technology. In the 1980s, these researchers worked together with SCOT theorist John Law in the Department of Science and
Technology Studies at the Ecole Nationale Superieure des Mines de Paris.There, they focused
on using the research methods of the symbolic perspective to describe how knowledge is
produced in laboratories in order to better understand scientific and technological innovation and its failures. 15
Latour laid much of the groundwork for ANT with his two-year study of how research was
conducted in a laboratory at California's Salk Institute for Biological Studies. Reflecting on
his experiences, Latour observed that he found himself 'trying to account for the various ways
in which truth is built' by a complex amalgam of scientists, routine lab work, publications,
financing, and prestige.16 Writing about how knowledge looks when caught in the act of
its construction, he and British sociologist Steve Woolgar provoked considerable controversy
by describing scientific work as socially and politically constructed from a 'seething mass of
alternative interpretations' and from 'the confrontation and negotiation of utter confusion.' 17
Because modernist scientists expected research focused on laboratory practices to use objective scientific methods, not the qualitative methods of the social sciences, they were roundly
criticized. Nonetheless, their descriptive theorizing presented an early version of what would
later become ANT.
The actor-network
The central concept that gave ANT its name is the actor-network, defined as an association
or assemblage of human and nonhuman actants (see Box 5.3). According to ANT, every act
performed involves a network of actants to construct and/or enact the phenomenon of interest. Driving a car, for example, requires a driver, a car, roads, road signs, driving rules and
regulations, informal negotiations between actors on the road, and so on, which collectively
construct and enact the act of driving. The term 'actant' had been coined earlier by French
semiotician A.J. Greimas to avoid the human-only connotation of actor, even though 'actor'
was used in naming both ANT and its core concept.
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Box s.3 Case example
Technology as actant
To see how nonhumans can act, consider developments in marketing technology that have, step by
step, moved the merchant and the consumer further and further apart in the performance of retail
transactions. Once, merchants in intimate shop environments selected the goods their customers came
in to buy; later, display racks presenting goods directly to the customer displaced the merchant. The
material presence of display units made it possible for customers to select what they wanted without
consultation, unless they sought information or advice from the merchant. Such human interaction still
occurs in the retail shops typically found in small towns or their modern recreations in shopping malls,
and occasionally in mass retail establishments, though in the latter you will be hard pressed to find a
knowledgeable clerk to aid in your buying decisions.
Then, technology intervened once again. Today, thanks to new technology, shoppers can point their
devices at barcodes that bring product information onto the screens of their smartphones. And, with
the arrival of online shopping, every role once performed by a merchant is mediated by technology.
During on line sales transactions, buyer and seller remain largely anonymous to one another. Now that
big data has arrived, we can anticipate the distance between buyers and sellers will grow even more as
consumers become invisible within an information system that predicts their wants and automatically
targets their desires; producers, who are mostly robots, will be freed from the need for marketing
intervention that once was performed by humans. It is in the sense that technology can insert itself into
human relationships, sometimes replacing humans altogether, that ANT theorists like Bruno Latour and
Steve Woolgar claim this nonhuman actant has agency-in other words, it has the capacity to act.
Questions
All technology, whether old or new, has been and will continue to be an agent for changing human
lives and relationships, as well as the organizations, institutions, and societies that embrace it. While
you may find it easy to see that adopting new technology requires humans to change, why do ANT
theorists stress the agency of technology? Compare the ANT approach to analysis of organizational
technology using the modernist typologies. Does ANT look different when you consider different types
of technology like those identified by Woodward, Thompson, or Perrow?
Crucially for ANT, the actor-network as a whole performs the act, and this interactive
network of performing actants is the central focus of those who use ANT as a template for
designing, conducting, and analyzing their research. When seen in this light, science, technology, and pretty much every other socio-material phenomenon, including organization, is
performed by actions taken by and embedded in actor-networks. Following reflections that
Latour later shared, ANT theorists claimed that, in spite of its name, ANT is not a theory, but
rather a method that tells its users how to perform research that produces ANT-inflected understanding, the latter described as a combination of semiotics and materiality.
Semiotic-materiality
Referring to actor networks as both semiotic and material means that actants operate at
one and the same time in the symbolic sphere of meaning and the domain of material existence. Relying on interpretive epistemology, ANT claims the semiotic and the material realms
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are ontologically inseparable because symbols combine objects with meaning, and knowledge is composed and communicated by symbols (e.g. words). One important implication
of semiotic-materiality is that the meaning that actor-networks carry is unstable and temporary even when the material that carries its meaning provides a semblance of stability
or continuity.
ANT shares the principle of materiality with embodiment theory. According to ANT, the
material forms of buildings, machines, actors' bodies, written documents, other physical objects, and speech are as important as their interpretations for understanding how actor-networks construct reality. Material is semiotic by extension of Saussure'sidea that words derive
their meaning from their relationship to other words. As John Law explained, 'entities take
their form and acquire their attributes as a result of their relations with other entities,' an idea
that introduced a third ANT principle: relationality. 18
Relationality
The ANT principle of relationality states that relationships among actants give rise to an
actor-network's form and identity. Relationality accounts for how an actor-network sustains
the appearance of higher-order macro entities like technology, organization, or society, even
though these can have no existence independent of their actor-network. According to Latour,
society and technology must be studied and managed as integral parts of their actor-networks and cannot be separated from them, even for analytical purposes, because it is the
network that performs the action, not any one of its composite elements. It is in this sensethat
ANT ascribes material agency to nonhuman actants. Objects are part of the network that
constitutes an action and so have a share in its agency.
Performativity
Last, but not least, the principle of performativity in ANT concerns the highly controversial
attribution of agency to nonhuman, as well as human, actants. BecauseANT focuses on the
agency the taking of action involves, it changes the research question from who performs
which acts to what constitutes and is constituted by acting-in other words, by performing.
Be sure to notice that the process ANT describes folds back on itself, reflexively pushing
actors, including ANT researchers, to come to terms with their own materiality and the relationality and performativity of the networks within which they are embedded. Thus ANT
can be used to reflexively describe how actor-networks construct, maintain, change, and/or
make sense of themselves.In this reflexive mode, ANT not only addressestechnology, but also
is a technology for producing ANT research. ANT thus embraces the reflexivity of the postmodern perspective, although postmodernism suggests other ways for organization theory
to address technology, as you will soon see.
The performativity principle traces to British philosopher of language J. L. Austin's book
How to Do Things with Words.19 There, Austin defined a performative as words that, when uttered, perform an action. Examples include 'I thee wed' and 'You're fired!' By extension, ANT
theorists use performativity to refer to the process of constructing or enacting a technology
or organization by talking in certain ways, or, to use postmodern terminology, in and through
discourse.
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Criticismsof ANT
Some critics object to ANT's assumption of nonhuman agency, accusing its proponents of
anthropomorphism. 20 At the base of this criticism lies the assumption that agency implies
intentionality, which ANT's defenders say fails to grasp that agency lies within the actornetwork as a whole rather than being attributable to any component part, whether human or
nonhuman. In this sense,ANT decenters actants in favor of the actor-network and implicates
materiality as well as meaning.
Swedish organization theorist Barbara Czarniawska offered a different criticism, suggesting
that although it claims to focus on action, ANT does not go far enough. For her, action should
be the phenomenon of interest rather than the actor-network responsible for it. To make
her point, she offered the concept of action nets as an alternative to actor-networks. 21 Her
action net theory focuses attention on how actions relate to other actions in more or lessa
sequential fashion, and thereby suggeststhere is a temporal dimension hidden within ANT.
Becauseactions precede or follow each other in time, action nets have a narrative structure
or plot. Czarniawska then relates the narrative structuring done by action nets to organization. The central proposition of action net theory is that because accounts of the intertwined
actions socially constructing an organization take the form of narratives, an organization is
constituted by narrative. Her empirical study of a Swedish public sector organization showed
the narrative structure that employees collectively produced through their accounts of the
organization. Czarniawska observed that their collective narrative sounded like a soap opera,
with multiple continually unfolding and intricately intertwined storylines. 22
Technology-in-use: applying structuration theory to technology
The shackles of contingency thinking as applied to technology were thrown off by the symbolic perspective that came into view when organizational culture became of interest to
organization theorists. 23 Although contingency theorists have since attempted to account
for organizational culture, the introduction of the symbolic perspective that came with it
took thinking about technology in new directions that resulted from adopting interpretive
methods to study it. The results of these studies did not attempt to explain technology, as
modernists had done, but sought greater understanding of how technology affects workers
and organizations. Most of these studies applied structuration theory to the phenomenon of
technology-in-use.
Studyingtechnology-in-use
Departing from the contingency theory approach of locating intervening variables that
account for all variations in the relationship of technology to social structure, American organization theorist Stephen Barley used institutional, as well as structuration, theories to formulate his assumption that '[s]tructure can be viewed simultaneously as a flow of ongoing
action and as a set of institutional traditions and forms that reflect and constrain that action.'24
His symbolic perspective led him to predict that the use of new technology would be related to actions that, in turn, produced and were constrained by organizational structure. In
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contingency theory terms, action moderates the relationship between technology and structure. However, hidden in this formulation is that pesky problem of switching levels of analysis.
Barley studied how the introduction in 1982 of a new medical imaging technology, the CT
scanner, altered organizational and occupational structures in radiology departments in two
hospitals. He found that 'identical technologies can occasion similar dynamics and yet lead
to different structural outcomes.' 25 Although the radiology departments he studied both encountered the same challenges and made similar adjustments to the tasks being performed,
differences in context and in the historical path to adaptation taken by each led one group to
adopt a decentralized, while the other adopted a centralized, structure. Specifically, technicians in the decentralized department took overmuch more of the responsibility of interpreting CT scansthan did technicians working in the centralized hospital.
Barley concluded that objectivist studies that focus on measuring technology at the
organizational level of analysis are insensitive to the organizational contexts that explained
the two different patterns of interaction described by the participants in his study. In a contingency framework, the two opposing structural responses to the introduction of the same
CT scanner would cancel each other out and lead modernists to the conclusion that there is
no relationship between technology and structure. By taking a closer look using qualitative
methods, Barley discovered that differences in the interaction patterns of technologists
and radiologists who worked with the new machine accounted for the differences in how
technology related to social structure. His work supported prior findings of a significant relationship between technology and structure, but indicated the relationship held only in the
sensethat the new technology occasioned changes in structure, not that it caused structure to
take a particular form. In addition to these findings, Barley noted the importance of keeping
levels of analysis in mind when trying to understand the organizational effects of technology.
As Perrow had shown earlier, focusing on the level of actors and actions brings new insight
and understanding, but Barley's study showed that it also transforms structure into process,
bringing with it the dynamic way of thinking that comes with an emphasis on organizing.
Adaptive structuration theory
Complementing Barley's findings, American organization theorist Wanda Orlikowski found
that individuals often use the same technology quite differently. 26 Graphic artists and accountants, for example, prefer different software programs, and some people type with two
fingers, while others use all ten. Orlikowski argued that individual usage constitutes differences in what objectively might seem like the same technologies, explaining that users identify and use different features, develop their own style of interacting with technology, and
make different interpretations of technologically mediated data. Thus humans give meaning
and shape to technology at the same time as it shapes them-in other words, technology and
its meanings are mediated by practices.
A technology-in-use may be resistant to change as we develop habits and then attribute
them to the system, but it may change as we modify the technology or improvise new practices. In another study, Orlikowski observed how different groups in a multinational consulting firm used a software program called Notes. She found that technology staff used Notes
extensively and often customized it to their own needs. Routines they enacted around the
Notes technology included electronic discussions, information sharing, and cooperative
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troubleshooting-a collaborative technology-in-use. However, most consultants used the
software minimally, enacting a more limited version of Notes-in-use. These users had little
knowledge about Notes and were skeptical about its value in helping them do their jobs. So,
even though the technology was technically the same for both groups of users, practices varied across contexts depending upon the users' levels of interest and the practical, institutional,
and interpretive limits of the technology they perceived.
According to technology-in-use theory, structure emerges from both the physical properties of technology and the ways we interact with and construct that technology. As Orlikowski
put it: 'Technology is physically constructed by actors working in a given social context, and
technology is socially constructed by actors through the different meaning they attach to it
and the various features they emphasize and use.'27 This can be seen across the field of information technology (IT) and in the practices of dotcoms and social media companies like
Google and Facebook, where technology and social structure emerge as people improvise
their use of technology while they produce the technologies still others will use. In these organizations, the product is not necessarily a concrete object, but may be a database, website,
or information-processing routine. In this technologically oriented application of structuration theory, the methods of production are interwoven with the end product as people use
technology for their own purposes, as well as those of the organization.
Postmodernism and technology
Many postmodernists believe that new and emerging technologies make modernist organizational structures obsolete. One common explanation is that as electronic communication
increases via ever more sophisticated new technologies (e.g. of communication and social
media), physical proximity among organizational members becomes unnecessary, obliterating the need for face-to-face mechanisms of integration such as the direct and personal
supervision of work and the geographic colocation of organizational members. These and
other changes wrought by new technology already appear in organizations as decentralized
decision-making, increased spans of control, and reduced hierarchy that results from downsized management.
In general, organizations that use new technology are becoming vastly more organic than
prior forms of organizing. As a result, postmodernists predict that if organizations as we currently know them do not disappear altogether, they will soon become so fragmented, their
members geographically dispersed so far and wide, that the concept of organization will
no longer be needed. Instead of organization, what becomes of interest is the use of technology to control and represent members of a group or society. In this regard, technologically enhanced means of control, such as those involved in monitoring and surveillance, are
among the more concerning uses of technology studied by postmodernists. While critical
postmodernists express angst over the abusive potential of technologies of control, those
who have taken the linguistic turn address the technologies of representation that define us.
Other postmodernists focus on the fusion of technology with organizing to form cyborganization and the creation of a global village of such dense interconnections that notions of risk
and reliability will take on greater importance in coming years.
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Technologiesof control
In a twist of postmodern irony, the cross-border flows of people, goods, and information
made possible by new and emerging technology have created conditions that demand more
technology to abate attendant risk. Take, for example, technologies that make it possible to
share and integrate the information collected by multiple public and private organizations,
and local, national, and international government agencies. These include DNA testing,
information systems for handling border control, and software programming designed to
predict and manage risk. As Perrow warned, the many interconnections between these and
other increasingly complex and interconnected technologies present ample opportunity for
catastrophe and abuse. Is it any wonder postmodernists fret about the future?
Critical postmodernists analyze the ways technologies place behavioral demands on their
users. For a simple example, think about how your computer forces you to hold your head
in particular ways in order to view the screen, or how a bicycle demands that you sit in a
particular way to pedal. Similarly, manufacturing and service technologies control employees
who use their machines, devices, routines, and standardized procedures in the ways required
to perform their assigned tasks. Postmodern organization theorists emphasize the discipline that technologies force on their users to conform to physical, mental, and emotional
demands as they perform jobs that appropriate their labor along with their bodies and, in
some cases,their minds and identities.
Illusions and addictions
According to critical postmodernists, technology controls users in ways that imprison them
in an illusionary reality, or turn them into addicts and then feed their addiction. Think about
fans of video games and smartphone users,or consider the daily bombardment of marketing
images on TV and on line, the latter of which are specifically targeted by computer programs
able to learn users' preferences and customize the ads they see. Most consumer marketing
today is designed to create illusory lifestyles and identities that are sold by spokespeople
whose celebrity status is bestowed by the same technologies that attract and addict users. It
is not much of a leap from these examples to the nightmare of technologically imprisoned
lives depicted in dystopian films like Blade Runner, Minority Report, and The Matrix. The
critics argue that it is in creating illusion that technology exhibits its most pernicious and
subtle effects.
The postmodern condition
In 1979 Jean-Francois Lyotard defined the postmodern as rejection of the Grand Narratives
of modernism. 28 One premise on which he built his thesis is that the technologies of industrial capitalism have replaced social values of integrity, truth, and justice with rational values
of efficiency and profitability. He claimed, for example, that the technologies of industrial
production led to evaluating employees, departments, and entire organizations based on the
ability to maximize efficiency and profit, and that lurking behind these values lay the wealth
and power of those who most benefit from them.
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Modernists consider the values of production efficiency and profit to be rational in the
sensethat they can be objectively measured and controlled. Lyotard argued that prioritizing
rationality eventually leads to neglect of social values and, subsequently, to their withering
away. On the basis of his analysis, he warned that the logic of rational efficiency embedded
in technologies of control leads to institutionalized systems of thought that imprison us in
dehumanizing power structures of which we would be largely unaware. He referred to this
scenario as the postmodern condition, which postmodernists believe we are living today.
At the time Lyotard wrote, computers were an emerging technology, and he predicted that
the computerization of society would lead either to totalitarian control of the market system
and of all knowledge production or to greater justice. He warned that the path to justice only
opens with free public accessto information, which today is a point emphasized by those
who devote themselves to the open-source movement in computing and to maintaining free
public accessto the internet. But, as we well know now, the internet itself is morally neutral:
It aids those pursuing democracy, as well as criminals and terrorists. When used as a tool
of economic, social, and/or political action or resistance, communication technologies like
social media can inform, mobilize, and organize people acrossthe globe, both for better and
worse, which is why postmodernists frequently position themselves on the high ground of
morality and ethics.
Lyotard also predicted that future knowledge will be valued only if it can be translated into
information that can be analyzed and disseminated by computers, and that power struggles
will occur not over geopolitical territory, but over control of knowledge and information (see
Box 5.4). Current fascination with big data comes to mind as an emerging technology that
supports his prediction. A witty and ironic portrayal of the realization of these predictions can
be seen in British film Brazil, in which the Ministry of Information is depicted at the center
of a byzantine web of unintentional bureaucratic malfeasance. Watching this and the other
dystopian films mentioned earlier will bring postmodern critiques of modernist technology
starkly into view.
Box
s.4
Case example
Cybersurveillance
For many, cybersurveillance symbolizes the controlling nature of all computer-based technologies.
Computer programs can now be used to track your every keystroke, record the websites you access,
and hack your online accounts. Security cameras on street corners and many buildings make it possible
to identify anyone passing by using face recognition software and personal image data file retrieval. To
combat some of the privacy loss created by the demands for data coming from various authorities and
to thwart those who would steal your identity or security codes, browser DuckDuckGo keeps no record
of user searches, and numerous organizations offer security against identity theft by preventing access
to those seeking to access your electronic files. A number of people today live off the grid, some to
limit damage to the environment, but others to avoid electronic surveillance or the effects of electronic
existence in general. Whether you use technologies of control, adapt to them, or avoid them, your life
and the lives of everyone else have been forever changed by the postmodern condition to which new
technologies contribute.
(continued...)
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Questions
For many, the interesting question today is what new forms of control are hidden in emerging
technologies such as social media, robotics, 3D printing, and genetic engineering. Can you identify
any behavioral controls these technologies hide within them? Choose one emerging technology, and
imagine how it will affect your life as well as organizations, society, and the world in general. Think
about both the good this technology is likely to bring and its potential to do harm. Then imagine a
debate between those who see only the good in the technology you chose and those who only see the
bad. Who wins? Why?
The power in technology
You shou Id note that modernists do not disagree that technology provides overt control. In fact,
it is for this very reason that some promote technology as a management tool for controlling
employees. It is the modernist tendency to ignore the moral implications of technology use
that focuses the critiques of critical postmodernists on the effects of technologies of control on
those who are subjected to them and on the ways of organizing they encourage. Among those
who have studied organizational technologies of control are British organizational theorists
Rod Coombs, David Knights, and Hugh Willmott, who presented the case against information
technology (IT), arguing that it provides the means to direct thought and action and to discipline
organizational members for noncompliance with the desires or expectations of managers.29
According to Coombs and his colleagues, the seeming objectivity of performance data
generated by IT control systems conceals the fact that the categories into which data are
sorted and reported impose values on those who work within the system. For example, when
members of the medical staff of a hospital are forced to report the number of patients they
serve each day, their behavior will likely conform to a value for speedy processing, often at the
expense of the value for quality care. Doctors, nurses, and administrators, who feel pressured
by the desire to keep their jobs and perhaps also to protect their self-esteem in a competitive
environment, buy into the speedy processing of patients, which results in lower quality of
care delivered as medical practitioners race between patients, often not having or taking the
time to listen to them or consult with their families. The simple act of reporting the number of
patients served on a daily basis may seem innocuous, but this very impression, according to
the authors, demonstrates the subtlety of how technologies of control operate.
Power, however, is never a one-way street. The patient-centered medicine movement is
an example of patients and medical staff successfully reasserting the value for quality of care
in a growing number of hospitals. Critical postmodernists laud efforts to counteract the imposition of unacceptable values and consider them a potent strategy of resistance. In this
vein, Coombs, Knights, and Willmott added three strategies to negate control by technology:
sabotage (e.g. entering false data into the information system), non responsiveness (e.g. ignoring feedback provided by the system), and humor (i.e. as a psychological defense against the
imposition of values they do not hold).
Because power is relevant to every organization theory, you will hear about it in many
places throughout this text. These threads will be woven together in Chapter 8, where you
will read about theories of power, politics, conflict, and control. Feelfree to read that chapter
now if power holds great interest for you.
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Technologies of representation
For some postmodern ists, control is primarily a question of representation. They take as their
phenomena of interest technologies of representation, included among which are print,
photography, film, sound, computational media, and (to the extent they rely on the others)
social media. Their main interest lies in how technologies of representation promote certain
lifestyles and identities, manipulate power, and exercise control. According to those pursuing
this line of research, technologies of representation control users by defining how success,
fame, celebrity, and other identity markers are acquired.
Technologies of representation can be employed to make organizations and actions appear to be real when they are not. As postmodernist social theorist Jean Baudrillard argued,
symbols and images have the power to produce a simulacrum that is hyperreal. 30 Both he
and Umberto Eco offered the example of Disneyland, where technology is used to fake nature and fantasize reality.31 Computer games involving three-dimensional virtual realities
and other sensory experiences provide examples of what he meant by hyperreality. Because
these games give users the illusion of immersion in an objectively real experience, they invent a reality that is detached from objective existence, yet can seem-and, for users, may
even become-more real than ordinary reality; hence hyperreality. The danger comes when
hyperreality dominates other possibilities, thereby limiting imagination, while appropriating
its processes and controlling its products.
Cyborgs and cyborganization
Machine-human interfaces are emphasized by the idea of the cyborg popularized in science fiction films like Robocop and The Terminator.Described as the fusion of technology
and the human body, the term 'cyborg' was coined by Manfred Clynes, a space scientist who
researched ways of freeing astronauts from routine maintenance tasks while in space. Today,
you will find cyborgs produced by technologically sophisticated prosthetic devices, such as
the carbon-fiber running blades worn by athlete amputees, and in the speech synthesizer
that allows ALSsufferers like Steven Hawking to communicate.
American feminist Donna Haraway used the cyborg to represent the postmodern hybrid
as a denial of all dichotomizing polarities, including human/machine, natural/artificial, male/
female, mind/body. In Simians, Cyborgs,and Women: The Reinvention of Nature, Haraway
defined cyborgs as 'a kind of disassembled and reassembled, postmodern collective and
personal self.'32 She claimed that embodiment in a single technologically enhanced entity
breaks down dualisms, permitting old, stale social-political standoffs to be reconfigured. She
applied cyborg imagery to encourage embracing contradiction, deconstructing boundaries,
and opening new connections-all of which postmodernists claim as contributions of their
perspective. In particular, she emphasized the role that feminist tech no-science plays in specifying the positive implications of high-tech culture for humankind and thereby challenging
the views of her critical postmodernist colleagues.
British organization theorists Martin Parkerand Robert Cooper extended Haraway's cyborg
image to organizations by proposing the cyborganization, a contraction of cybernetic and
organization. Cybernetics is a branch of systems theory that focuses on communication and
control in humans and machines. It defines organization in terms of patterns of information
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or activity, thereby overlapping ideas present in many theories informed by both symbolic
and critical postmodern perspectives. On the postmodern side, an important contribution of
cybernetics has been its insistence on viewing organization as the outcome of bipolar forces,
primarily stability/instability and order/disorder. Cyberneticists not only acknowledge the
complexity of bipolarity, but also introduce the notion of complicity such as occurs when humans partner with machines in man-machine hybrids, which, of course, relates to Haraway's
cyborgs and inspired Parker and Cooper's extension of the concept to cyborganization.
Parker and Cooper were also inspired by developments in information theory suggested
by American mathematician Norbert Wiener. According to Wiener: 'A piece of information,
in order to contribute to the general information of a community, must say something substantially different from the community's previous stock of information.' 33 The implication of
Wiener's insight, according to Cooper and John Law, is that information systems,which postmodern organizations increasingly are, thrive on their openness to novelty and surprise.34
To appreciate cyborganizations, you need to recognize how they are bound up with technologies not just in their core production processes, but through and through. Think of all
the computers, video equipment, photocopiers, communication and transportation devices,
manufacturing gear, and so on that make up most organizations. Czarniawska, for example,
suggestedthat news agencies-she studied Reuters,SwedishTT,and Italy's AN SA-are cyberfactories in which organization members find themselves increasingly reliant on machines (especially computers), which are becoming more and more central to theirwork. 35 Seen in this light,
can you think of any organization today that does not fit the description of a cyborganization?
The global village
Concerns about unlimited and surreptitious control, or breaches of privacy and security, create images of the evils to which technology-in-use can lead, but technology also unleashes
powerful forces to combat these negative effects by providing support for freedom and democracy. Postmodern theorists interested in the liberating potential of technology concentrate on understanding and enhancing its ability to transform the world. Some, for example,
see new technology creating a global village tied together by strong social bonds that work
even when large geographical or cultural distances separate people. 36
Others believe that new technology and social media will play as-yet-underappreciated
roles in social and cultural developments. Even though these developments are only beginning to take shape, we can observe some of their effects. For example, new technologyenabled social media were used by those who participated in the Arab Awakening and by
members of the Occupy movement to help them organize, lobby, and take collective action,
sometimes reaching around the globe to find inspiration, as well as social, technical, and
financial support, from likeminded others. Media in general-traditional, as well as socialincreasingly affect how members of democracy chose candidates to represent them. Sellers
appropriate the internet using data collection information technology that predicts, and then
targets, our desires with marketing based on our past buying behavior. On a smaller and typically more local scale, performance artists use social media applications such as Facebook
and Kickstarter to invite potential participants to join their upcoming performances and to
solicit investors to support them. It remains to be seen how these and other usesof new technology will affect the shapes and forms that organization and organizing take in the future.
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Summary
From the modernist perspective, technology is typically defined in terms of its:
•
products and services, and the tools and equipment used in their production and
provision;
•
production/provision methods, consisting of tasks, routinized procedures, and processes;
•
knowledge to develop and use equipment, tools, and methods of production/provision.
In modernist organization theory, the term 'technology' refers not only to technologies
that contribute directly to organizational output, but also to technologies that indirectly
maintain this function (e.g. purchasing, sales,accounting, internal communication), and to
technologies for adapting the organization to its environment (e.g. economic analysis, market research, strategic planning, external communication). To avoid confusion, organization
theorists use the term core technology to mean the transformation processes by which the
organization's product and service outputs are produced. Large, diversified organizations
often have multiple core technologies, but every form of work has a technology that can
be defined at the unit or task level. Thus the modern perspective on technology describes
the set of interacting and interdependent technologies on which an organization depends.
Although modernist theories provide an image of technology lying inside organizational
boundaries, while the environment stays outside, these two key concepts are closely connected in the modernist perspective. First of all, the knowledge needed to operate a technology is normally produced outside the organization's boundary and imported, except when
basic research is conducted internally, as is sometimes done in R&D departments. Second,
tools and many production processes are imported in the form of hardware, software, and
skilled or educated employees. The environment provides the technological ingredients of
an organization just as it provides the material resources upon which the organization depends for its survival. Another way of looking at it is that technology and other resources are
scattered throughout the environment in a more or less random fashion until they become
organized-that is, until resources and technologies are combined by an organization to provide outputs that satisfy a portion of the environment's needs or demands.
The symbolic perspective offers quite a different image of technology. Drawing on subjectivist ontology, symbolic researchersstudy how technology is enacted and interpreted within
a sociocultural context of meaning and shared understanding. Both SCOTand ANT provide
views of how the social and material organization of society shapes technology, as well as
its products, processes,and practices. This raises the question of how society, in its turn, is
shaped by technology-a theme addressed by postmodern theories of technology that focus
on technologies of control, oppression, or representation. Ideas like cyborganization and
the global village predict some of the effects new technologies will have on society and its
organization in the future. For example, the nomadic and yet technologically interconnected
lives enabled by new and emerging technologies will move organization toward the virtual,
perhaps one day disappearing the need for this concept, replacing it with completely fluid
and flexible organizing practices that can no longer be identified as an organization.
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Further reading
Barad, Karen (2003) Posthumanist performativity: Toward an understanding of how matter comes
to matter. Signs.')ournalof Women in Cultureand Society,28/3: 801-31.
Coyne, R. (1995)
Press.
DesigningInformationTechnologyin the PostmodernAge. Cambridge, MA: MIT
Czarniawska, Barbara, and Hernes, Tor (2005) Actor-networkTheoryand Organizing.Malmo: Liber
& CBS Press.
Goodman, Paul S., Sproull, Lee S., et al. (eds.) (1990) Technologyand Organizations.San Francisco:
Jossey-Bass.
Modest-Witness@Second-Millennium.FemaleMan-Meets-Oncomouse:
Feminismand Technoscience.New York and London: Routledge.
Haraway, D.J (1997)
Huber, G. (1990) A theory of the effects of advanced information technologies on organizational
design, intelligence, and decision making. Academy of Management Review,15/1: 47-71.
Latour, Bruno (1987) Sciencein Action:How to FollowScientistsand Engineersthrough Society.
Milton Keynes: Open University Press.
Latour, Bruno (1996) Aramis,or the Loveof Technology.Cambridge, MA: Harvard University Press.
Law, J. (ed.) (1991) A Sociologyof Monsters:Essayson Power,Technologyand Domination.London:
Routledge.
Law,J., and Hassard, J. (1999) Actor NetworkTheoryand after. Oxford: Blackwel I.
MacKenzie, D., and Wajcman,J. (eds.) (1985)
Open University Press.
The SocialShaping of Technology.Milton Keynes:
Pels, Dick, Hetherington, Kevin, and Vandenberghe, Frederic (eds.) (2002) The status of the
object: Performances, mediations and techniques. Introduction to special issue of Theory,
Cultureand Society,19/5-6: 1-21.
Pinch, T.J.,and Trocco, Frank (2002) Analog Days:The Inventionand Impact of the Moog
Synthesizer.Cambridge, MA: Harvard University Press.
Such man, L. (2007) Human-machine Reconfigurations.New York: Cambridge University Press.
Zeleny, Milan (1990) High technology management. In H. Noori and R. E. Radford (eds.), Readings
and Casesin the Management of New Technology:An OperationsPerspective.Englewood Cliffs,
NJ: Prentice-Hall, 14-22.
Notes
1. See more about Nissan'sShift campaign and its relationship to corporate identity at: http://www.nissan-global.
com/EN/COMPANY/SHIFT_jindex.html (accessedDecember 22, 2017}.
2. Woodward (1958, see also 1965}.
3. Thompson (1967}.
4. March and Simon (1958}.
5. Perrow (1967, 1986}.
6. Pugh et al. (1963}.
7. Zuboff (1988).
8. See http://www.ibm.com/watson
(accessed December 22, 2017) for an overview of what this technology can do.
9. Weick (1990).
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PART II CORE CONCEPTS AND THEORIES
10. Perrow (1984}.
11. Perrow (2011 ).
12. Galbraith (1973).
13. Bijker, Hughes, and Pinch (1987}; Bijker and Law (1992).
14. Orr (1996}.
15. Collon (1986}; Latour (1991, 2005); see also Law (1992).
16. Latour and Woolgar (1979: 36).
17. Latour and Woolgar (1979: 36).
18. Law (1992: 3).
19. Austin (1962).
20. Friedberg (1993), cited in Czarniawska (2004).
21. Czarniawska (2017).
22. Czarniawska (1997).
23. Desanctis and Poole (1994); Griffiths (1999).
24. Barley (1986: 84}.
25. Barley (1986: 105}.
26. Orlikowski (2000).
27. Orlikowski (1992: 406}.
28. Lyotard (1979).
29. Coombs, Knights, and Willmott (1992).
30. Baudrillard (1994).
31. Eco (1986}.
32. Haraway (1991: 163).
33. Wiener(l954},
cited in Parker and Cooper(l998:
214).
34. Cooper and Law (1995: 268).
35. Czarniawska (2012).
36. McLuhan and Powers (1989).
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CHAPTER 4 • POWER IN AND AROUND ORGANIZATIONS:
POLITICS, CONFLICT, AND CONTROL
ORGANIZATIONAL
hall outside speculating about who the occupant of such a prestigious space must be, their
hushed tones a symbol of respect produced by my office rather than my much less elevated
person. I no doubt encouraged this mistaken identity by purchasing a large and expensive rug
to cover the cheap linoleum tile, atop which I placed a small, but tasteful, conference table,
both of which satjust inside the door next to a book-lined wall. Meanwhile, my crumbling old
desk and I sat out of sight around the corner from the door.
How symbolic power affects status is the main theme of a highly successful and long-lived
musical comedy How to Succeed in Businesswithout ReallyTrying.A favorite among business
students, its plot reveals how a young man works his way into an organization and then up
the corporate ladder by systematically associating himself with the organization's symbols of
success(e.g. wearing the right suit and tie, being assigned an office and a secretary, being seen
associating with the powerful who themselves have ascribed power to him on the basis of his
accumulation of its symbols). While believing that symbols are all that is required for power is
undoubtedly going too far, focusing on symbolism and its use will give you great insight into
how power operates in organizations.
Territorialization and identity
As is true among other animal species, humans are known to mark their territory and defend
it. When organizations are divided into multiple territories to accommodate the different
activities carried out within them (e.g. marketing, accounting, finance, human resources),
their occupants are likely to become territorial about their space. For example, groups will
physically mark their territories with a particular decorative style or other visual expressions
of identity and ownership, which can then be interpreted as signs of inclusion and exclusion
(i.e. who belongs and who does not, who can enter without asking permission, and where
the boundary lies) and group identity (e.g.what work they do, how they wish to be known). 19
American architecture Professor Jean D. Wineman found evidence that the presence of
physical barriers around groups (e.g. walls, partitions, furniture) influenced group cohesiveness and interpersonal relationships. 20 She also found that prior cohesiveness compensated
for the negative effects of an inadequate physical environment, underscoring the interconnection of the physical and social dimensions of organizational structure. In Street Corner
Society,American urban sociologist William Foote Whyte noted that the emergence of street
gang subcultures coincided with the marking of territories. 21 However, what is not known is
whether territorialization gives groups a strong sense of identity or whether groups in the
process of forming a strong identity tend to mark their territory. It is possible, of course, that
these are mutual influences. Remember too that strong group identity can interfere with
inter-group cooperation, which contributes to the formation of silos in an organization's social structure. It may also indicate organizational conflict.
Theoriesof organizationalconflict
As did Marx, some modernist organization theorists assume that conflict is an inevitable outcome of organizing that can be explained by unequally distributed power and the politics
it brings into play. However, modernist theorists are mostly concerned with the effects of
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conflict on organizational performance, as is the first theory we will examine below. A second
and more comprehensive model, focused on conflict arising between different organizational units, explains the sources of conflict as lying in some combination of contexts located
at local, organizational, and environmental levels of analysis.
Conflict and its curvilinear relationship to organizational performance
In general, conflict is a state favoring one group of actors over others and is experienced
when one or more actors perceive the efforts or outcomes of others as interfering with their
own. As defined by American social psychologists Daniel Katz and Robert Kahn, conflict is
'a particular kind of interaction, marked by efforts at hindering, compelling, or injuring and
by resistance or retaliation against those efforts.'22 As these definitions suggest, power and
politics often contribute to conflict. Organizational conflict, then, is defined as the struggle
between two or more individuals or groups in an organization, or between two or more
organizations.
Like politics, conflict sometimes enhances organizational performance, but at other times
gets in the way. Studies show that the relationship conflict bears to performance is curvilinear:
Both too little and too much conflict result in poor organizational performance, as shown
in Figure 8.1. Optimal performance, according to these findings, occurs in the intermediate
range. The explanation offered is that intermediate levels of conflict produce optimal stimulation of ideas and fresh points of view, strengthen intragroup cohesiveness,and minimize the
negative effects of uncooperative behavior and open hostility, while too little conflict leaves
people unfocused and unmotivated, while also distracting and/or politicizing them.
Researchinspired by the curvilinear theory provided much normative advice about how to
manage conflict in organizations. One common strategy for underperforming organizations involves intentionally creating competition between units to raise conflict to optimal levels.This
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conflict. Characteristics typical of those experiencing conflict at low, intermediate, and high levels are described beneath the curve.
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Table 8.1 Ways of handling conflict in organizations
Recommended action
Conflict management strategy
Physical separation
Avoidance
Increase resources
Avoidance
Repressemotions and opinions
Avoidance
Create superordinate goals
Collaboration
Emphasize similarities
Smoothing
Negotiate
Compromise
Appeal to higher authority
Hierarchical referral
Rotate jobs
Structural change
Physical proximity
Confrontation
Source:Basedon Pondy (1967); Neilsen (1972); Robbins (1974).
is a risky strategy, however: If it is taken too far, expected productivity gains will be undermined
by lack of cooperation and poor inter-unit communication. Conflict management involves the
careful monitoring of conflict and timely and effective responses when conflict moves outside
the optimal range. Conflict studies reveal many techniques for managing conflict, from which
theorists have inferred strategies ranging from avoidance to confrontation, as shown in Table 8.1.
You should note that the causality of the curvilinear model is not unidirectional. Strong organizational performance can reduce conflict, for example by enhancing the pool of available
resources over which organizational members compete, while low performance increases
conflict via reduction of the resource pool. Further complicating the picture, the inter-unit
conflict model introduced a wide-ranging survey of the potential sources of conflict occurring inside and outside the organizational boundary.
The inter-unit conflict model
Based on their empirical study of conflicts between the sales and production departments of
two firms, American organization theorists Richard Walton and John Dutton formulated the
inter-unit conflict model shown in Figure 8.2.23 The model identifies potential sources of conflict defined at multiple levels of analysis. As you can see from the figure, all the phenomena
to which organization theory's key concepts refer are impicated: organizational environment,
social structure, technology, physical structure, and culture.
The theory presented by Walton and Dutton is that the environment and organization act
as contexts that enable the local conditions for conflict, which may or may not be realized in
actual conflict. Observed instances of conflict can be analyzed by reference to the local conditions and context of their occurrence. For purposes of presenting the model, I find it useful
to use an analytical approach that starts with the observable indices of conflict shown on the
far right side of Figure 8.2 and proceeds to local conditions followed by the contextual factors
of strategy, organization, and environment.
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Context -----.
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Figure 8.2 A model representing possible sources of inter-unit conflict in organizations.
Source:Basedon Walton and Dutton (1969).
Observableindices
Observing conflict in organizations can be tricky because humans employ numerous psychological defense mechanisms and other strategies to disengage from overt conflict, including
avoidance, smoothing, compromise, problem solving, and hierarchical referral. Thus overt
conflict does not occur every time the opportunity for conflict presents itself. You will find
that explanations for specific instances of conflict are easily constructed in retrospect, but
predicting when overt conflict is going to occur before it actually happens is much more
difficult.
The range of observable behaviors associated with conflict appears on the right side of
Figure 8.2. Lying between the two extremes of open hostility and complete avoidance of interaction, they constitute only the surface of a conflicted situation. You may find some of these
behaviors difficult to observe at first: Lack of cooperation and avoidance of interaction, for
example, will often be more felt than seen. Experience will make you sensitive to the full range
of behavioral expressions.
Localconditions
Once you have observed one or more of the behavioral indices, you should next look for
explanation in terms of the nine local conditions listed below.
Interpersonaldifferences
It goes without saying that not all people get along together, and you will hear many explanations for conflict given in terms of interpersonal differences. Among these, you will find
differences in authoritarianism, sociability, and self-esteem, as well as the diversity of genders
identities, races, ethnicities, ages, and socioeconomic backgrounds. However, although you
may be sorely tempted, resist the urge to simply blame one party or the other when conflict
occurs, as taking sides will only aggravate the situation.
Application of the remainder of the model is likely to show you that interpersonal differences rarely provide a full explanation for organizational conflict and very often play no role
at all. You should note that many people routinely work together without difficulty in spite of
their differences, proving that this factor alone cannot account for all sources of conflict. One
or more of the remaining local conditions are likely to be involved.
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Groupcharacteristics
Each specialized unit of an organization performs a unique task and/or copes with a different
segment of the environment. These differences produce conditions ripe for conflict, particularly when they are accompanied by the development of distinct discourses, subcultures,
and group identities. Expecting differentiated units to coordinate their activities and share
resources and opportunities can magnify the risk of conflict and its intensity. Some organizations add layers of management or additional units to bridge relations between conflicted
parties, but this only multiplies opportunities for future conflict among now more numerous
individuals and units.
William Foote Whyte studied a classic situation of conflict between the wait staff and cooks
in a restaurant. 24 Whyte found the two groups differed markedly in their flexibility, their time
horizons, and the results for which they were held accountable. Wait staff followed strict
routines in order to be efficient enough to give adequate attention to all of their customers,
while cooks remained flexible so they could adapt to the unpredictable flow of customer orders coming into the kitchen. Wait staff generally kept track of time in terms of the stages of a
meal, whereas cooks thought in terms of shifts (e.g. lunch, dinner). Customers evaluated wait
staff on their efficiency, demeanor, accurate taking of orders, and skill in serving food, while
cooks were evaluated on their culinary achievements. These differences contributed unique
characteristics to the subcultures formed by the wait staff and cooks, making communication
and coordination between them challenging.
Goal incompatibility
Goals defined at the highest levels of an organization must be translated and divided between
the units and positions of the organization so that a variety of activities will ultimately be performed to achieve the overall strategy (see the far left side of Figure 8.2). Once the goals have
been translated to the operational level, however, it is often the case that conflict-inducing
tradeoffs are revealed. For example, marketing departments typically state their goals in terms
of sales to customers, which are enhanced by responsiveness to customer demands for services, such as fast delivery or customized product designs. A manufacturing unit, on the other
hand, will usually specify its goals in terms of cost savings and production efficiency. Since its
goals may be incompatible with marketing's responsiveness to customer requests, there is
plenty of opportunity for disagreement and hostility to develop.
Taskinterdependence
As James Thompson explained, there are at least three different forms of task interdependence and each tends to bring with it different amounts and types of conflict. Pooled task
interdependence produces minimal direct conflict because interdependent units have little
reason to interact as they pursue their goals and interests independently of one another.
The unreciprocated dependence arising from sequential task interdependence holds greater
possibilities for conflict, but these are often dampened by limited interaction between units
and also by the lack of incentive for the more independent unit to respond to complaints and
demands made by the dependent unit.
Reciprocal task interdependence is a different story. It demands almost continuous interaction and therefore offers unlimited opportunities for conflict. However, conflict in these
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conditions tends to be moderated by the incentive to manage relationships well. Because
each actor or group depends upon the others to achieve its objectives, open conflict hinders
all parties simultaneously. In practice, reciprocal task interdependence tends to produce periods of smooth interaction punctuated by periods of intense conflict, because when reciprocal interdependence breaks down, rapid escalation usually occurs on both sides.
Rewardsand performancecriteria
When performance criteria and rewards are not carefully coordinated between units, they
may refuse to cooperate, which will damage the combined performance of the entire organization. Consider the problem of giving exams to multiple sections of students taking the same
course during a semester. One way of ensuring that students taking the exam early will not
reveal the questions to students taking it later is to inform them that all examinations will be
graded on the same standard.
But notice that while creating competition between students creates a disincentive to share
exam questions, it also eliminates incentives to cooperate. This strategy increases fairness in
the assessment system, but is counterproductive for encouraging information-sharing and
the formation of cooperative study groups that benefit all students and the classesthey attend. Just so in organizations: The conflict produced by competitiveness can destroy muchneeded cooperation and must be handled with care.
Common resources
Competition over operating funds or capital allocations, physical space, shared equipment,
and centralized staff services can produce conditions ripe for conflict, and all of these exemplify dependence on a common pool of scarce resources. Consider how your frustration level
increases with the length of the line for using a shared printer or one of a limited number of
online catalog screens in the library. When individuals or groups face pressure to work rapidly,
claims about their relative need for accessto shared resources can quickly escalate into open
hostility or seething rage.
Members of organizations share the resources that their organization garners for pursuing
its objectives and therefore constantly face opportunities for conflict produced by the need
to share them. Power plays into this source of conflict, as in most others, because it gives certain individuals leverage that they can use to compete successfully; when they do, it creates
one condition for conflict.
Status incongruity
Asking groups with significantly different statuses to coordinate their activities produces another condition conducive to conflict. The imbalance of status is not likely to be problematic so long as higher-status groups influence lower-status groups; however, if lower-status
groups initiate activities or exercise influence over higher-status groups, then the conditions
for conflict become more acute.
Walton and Dutton observed status incongruity when lower-status engineers directed a
higher-status research group to do routine testing. In addition to finding conflict due to group
characteristics, Whyte's restaurant study found conflict due to status incongruity when wait
staff routinely initiated activity for higher-status cooks by giving them (customer) orders. In
both cases, the inversion of an established status hierarchy contributed to breakdowns in
inter-unit cooperation.
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I have frequently observed status incongruity in business school cultures. In a business
school where quantitatively gifted students (e.g.finance majors) usually enjoy high status, an
organizational behavior (OB) class that awards nonquantitative abilities (e.g. high social or
emotional intelligence) inverts the normal hierarchy. This status incongruity frequently leads
to conflicts between finance students and OB professors and contributes to devaluing the
subject matter, thereby lowering the status of anyone associated with OB, including students
who excel in this subject matter.
Jurisdictionalambiguities
Jurisdictional ambiguities occur with unclear delineation of responsibility when credit or
blame is at stake. Situations in which it is unclear who deserves credit or blame present an
opportunity for units to come into conflict as each tries to take credit from, or assign blame
to, the other. A lost order in a busy restaurant kitchen is a problem that triggers this sort of
conflict when wait staff and cooks each can claim the other is at fault. In his restaurant study,
Whyte showed that food servers taken on to buffer communication between wait staff and
cooks eased this conflict, but only when the new employees were given responsibility for
tracking all orders, thus eliminating the ambiguity of who was at fault for a lost order.
Communicationobstacles
When units speak different languages, they are less likely to agree on issues of mutual concern and more likely to attribute the lack of agreement to intransigence and self-interest by
the other party. Take the example of resident doctors and hospital administrators. Conflicts
between these groups can often be traced, at least in part, to the different ways in which they
communicate. Each of their discourses (medical vs. administrative) depends upon language
that serves the unique purposes of their group, but as each group uses its preferred terms, the
other feels its interests being marginalized-a situation that can provoke resistance and lead
to hostility between them.
Similar communication obstacles are familiar sources of conflict between organizational
units whose members are professionally committed to producing well-differentiated discourses.Academia offers a clear example in which, from time to time, conflict emerges among
proponents of competing theories or theoretical perspectives. Looking at things in incompatible ways creates local conditions for conflict that trace to communication obstacles.
Context
Deeper patterns underpinning the observable indices of conflict and their local conditions
can be found by focusing on the environment and organizational levels of analysis. Understanding the role that context plays will help you to put conflict in a larger perspective that
takes account of nearly every key concept of organization theory you have studied up to now.
Making use of this larger perspective in a conflict situation will help you to take a step back
and avoid being trapped by negative emotions and/or misunderstandings that might otherwise undermine the effectiveness of your response.
Environment
The principle of isomorphism suggests that organizations attempt to match the complexity
and rate of change in their environments through internal differentiation and adaptation.
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Changing conditions in complex environments are often experienced as uncertainty within
the organization, and groups that develop greater capacities for coping with that uncertainty
can alter organizational power relations between themselves and other units. Altered power
relations can shift control over resources, reward distributions, and other local conditions of
conflict. Thus complexity and change in the environment work their way into and through the
organization in the ways described next.
Strategy
A growth strategy for an organization leads to increases in size and differentiation, with effects similar to those just attributed to environmental complexity and change, including an
increase in internal complexity and changes in the existing power structure. If growth involves
mergers, acquisitions, or joint ventures, then adaptation to new units and the cultures they
bring will also put strains on the organization that can contribute to conflict. Strategies involving downsizing contribute to conflict by creating the perception of shrinking resources,
which provokes competition over what remains to be divided. When jobs are on the line,
competition becomes fierce. Thus strategies that affect organizational size in either a positive
or a negative direction can magnify the effects of local conditions on conflict. On the other
hand, periods of abundance can mask conflict, so in these periods you may not find it easy to
observe conflict even where it exists.
Technology
The organization's tasks are defined in large measure by its choice of technology, and changes
in technology mean changes in the tasks assigned to units and their members. Since the
assignment of tasks influences the amount and type of interdependence between units of
the organization, technologies set up at least one local condition for inter-unit conflict. But
technology can influence other local conditions as well, for example status incongruity (e.g.
when a new technology is introduced, lower level technical experts may need to instruct
higher-level organizational members in its use), reward criteria (new tasks demand different
control structures), and even group characteristics (such as when computers were new and
organizations added IT specialists to their organization structures).
Socialstructure
The creation and maintenance of a hierarchy of authority defines opportunities for vertical
conflict in the organization, while the division of labor separates the organization in a way
that presents opportunities for horizontal conflict. Meanwhile, choices regarding coordination mechanisms that are meant to ensure cooperation sometimes create conditions ripe for
conflict. Thus choices about social structure contribute to all of the local conditions of conflict.
Organizationalculture
When subcultures develop in opposition to dominant cultural values, they are likely to create
conflict, as in the case of countercultures. Divergence in basic assumptions between subcultures can help to explain the communication obstacles that arise in many organizations, such as
incompatible discourses and silos. Differing basic assumptions can also produce incompatible
goals: For example, the assumption that science is a communal activity that requires sharing researchfindings within the scientific community brings research and development scientists into
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conflict with the corporate legal department, which assumesthat not sharing research findings
is the best way of protecting the organization's intellectual property.
Physicalstructure
Differences in the size, location, quality, or style of physical spaces assigned to different units
can feed feelings of superiority or inferiority. These conditions can contribute to all the local
conditions for conflict or may increase sensitivity to conflicts inherent in other contextual factors. Layout of physical facilities and location can produce or eliminate communication obstacles and affect the level of conflict that is due to task interdependence. Physical proximity
contributes to conflict when it makes otherwise conflicted groups accessible to one another,
while physical distance can reduce opportunities for engaging in conflict behavior, but may
introduce a communication obstacle.
Applyingthe inter-unit conflict model
There are probably endless ways of combining the factors producing the context and local
conditions in which conflict may or may not overtly occur, and many other scenarios than
those discussed above might be formulated. However, by now you should see how the model
works as a diagnostic tool. While not all factors will be present in every case of conflict you
observe, it is always a good idea to check them all to be sure not to miss something important.
Following diagnosis, the model can be used to suggest strategies to lower or raise the level
of conflict by pinpointing the sources of conflict or lack thereof and using this knowledge to
produce a desired change.
The inter-unit conflict model is also useful in ways related to theorizing organization. Try
imagining an organization embedded in its environment, responding with strategy, social
and physical structure, technology, and culture to changes that constantly bring new potential conflicts into play. In this sense,the Walton and Dutton inter-unit conflict model presents
a general theory of organization grounded in the Marxist assumption that conflict is central
to organizing. Think of it in relation to the five circles of Figure 1.2. Seen in this light, the interunit conflict model suggeststhat when the organizational environment and/or its subsystems
misalign, the organization will face conflict in its daily operations. Conversely, alignment of
the subsystems promotes survival and competitive success, although this may need to be
achieved in a way that optimizes conflict levels.
Never forget that manipulating conflict levels, or anything else about an organization, depends upon having power over and/or the authority to control others-and that power and control, like conflict, may be suppressedor hidden from view. Thus do the themes of power, conflict,
and control ceaselesslyintertwine with each other, as well as the other concepts presented by
organization theory. The last of the modernist concepts we will tackle in this chapter is control.
Theories of organizational control
Advocates of the modern perspective expect managers to use their power to control workers.
In the words of American organizational psychologist Arnold Tannenbaum: 'Organization implies
control. A social organization is an ordered arrangement of individual human interactions.
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Control processes help circumscribe idiosyncratic behavior and keep members conformant
to the rational plan of the organization.' 2s According to this logic, organizational control is
necessitated by the diversity of employee motivations to join organizations and by the problem of aligning their different interests to serve organizational objectives. Yet, as postmodernists point out, allowing the necessity of organizational control to go unchallenged legitimates
control systems and their managerial executors.
One widely used modernist organizational control system traces to cybernetic theory. As
will be described below, a cybernetic system controls organizations by controlling the outcomes and/or behaviors of its members. Next, you will find a typology oforganization based
on different types of organizational control, followed by two theories of organizational control grounded in economic sociology: agency theory; and a theory explaining the different
organizational implications of market, bureaucracy, and clan (i.e. cultural) control. As you
read along, be sure to notice the subtle shift that occurs as ideas from culture theory and
ideological analysis creep into modernist theories about what controls organizations and
their members-evidence that the symbolic perspective has made its contributions felt here,
much as it did in the study of organizational power and politics.
Cybernetic control
Informed by both open systems theory and the ideal of rational decision-making, cybernetic
control systems align organizational and individual goals by using resource allocation to
direct employee attention to performance data that then acts as corrective feedback to the
system (see Figure 8.3). Designing such a system usually starts with setting goals and designing measures to assessprogress toward desired levels of performance. Deviations from the
desired level provide feedback, and the feedback is linked to rewards and punishments. Like
a thermostat, the cybernetic control system controls an organization's performance through
constant and more or lessautomatic adjustments that ensure performance optimization.
Measurement issues
Becausecybernetic control requires measurements that motivate employees to serve organizational goals, key variables explaining performance must be carefully defined, operationalized, and measured. Whether to measure outputs directly or measure the behaviors that
achieve them becomes a key consideration in the design of a cybernetic control system.
Directly measuring desired results supports output control. Such control is encouraged by
measuring variables such as the number of units produced or rejected on an assembly line,
customers or clients served over a given period of time, processing errors made, or customer
complaints received. However, the relationship between output measures and performance
can sometimes be highly ambiguous. Take the case of a hospital, where the determination
of patient health outcomes is complicated by many factors that medical personnel cannot
control (e.g. the genetics, mental health, or exercise and dietary habits of patients). When
control by output measurement proves difficult or impossible, managers turn to behavioral
measures.
Measuring behavior rather than its outcomes supports behavior control. For example,
nurses can be assessedon their demeanor with patients, their responsiveness to doctors'
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8 POWER IN AND AROUND ORGANIZATIONS
orders, or their effectiveness working in a team. Behavioral control works best when behavioral indicators are known to relate to desired outcomes, so that measuring behavior acts as a
surrogate for output measures when the latter are difficult or impossible to assess.However,
you should recognize that even when measuring output is problematic, many modernists still
insist on output control. For example, some governments force their schools to use standardized achievement tests to assessthe quality of teaching in spite of the fact that many factors over which teachers have no control influence student learning (e.g. learning disabilities,
socioeconomic status, mental health, parental involvement). Notice that the emphasis on
outcomes in such cases provides support for theories of institutional myth.
Difficulties in measuring both outcomes and effective behaviors lead some practitioners
to combine them, in the hope that doing so will lead to desired outcomes. Take the case
of governing faculty members in a university department. Performance standards are typically set with reference to knowledge of and enthusiasm for the subject matter, clarity of
communication, and classroom management skills. These behavioral measures are typically
assessedusing student evaluations and peer review processes,which are complemented by
output measures such as the number of research articles published, the amount of grant
money awarded, and number of students signed up for courses offered (shown by number
of students enrolled). Data derived from evaluating employee outcomes and behaviors are
combined and used to assessand compare the performance of individual faculty members
relative to established goals and to each other.
Rewardsand punishments
Cybernetic control systems ultimately control organizational performance by linking behavior to desired outcomes. The link is made using sanctions triggered by deviations from
established performance standards that are stated in terms of the measures used (output, behavioral, or some combination). Punishments for negative deviations in the example of university faculty members can range from the denial of contract renewal or promotion to the
assignment of unpleasant courses or undesirable committee work. Meanwhile, rewards in the
cybernetic control of university faculty members include the offering of permanent positions
on the faculty, promotion, and public recognition such as through a chaired professorship,
research fellowship, or teaching award, all of which may provide significant remuneration.
Be sure to notice how a system that sanctions employees can contribute to power and
politics. Because rewards symbolize power and sometimes provide differential access to
resources, a cybernetic control system opens itself to opportunism. Some employees will
manipulate the measures used to achieve desired rewards; this can trigger power struggles
over who designs control systems and can also encourage politicking around the data input
to them. The political consequences of using cybernetic control can affect group, as well as
individual, relationships.
Levelsof analysis
As Figure 8.3 indicates, organizations apply cybernetic control at multiple levels, from individuals to groups to the entire organization. At the group level, measures include things
like statistical reports on unit output volumes (e.g. number of students or courses taught
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8 POWER IN AND AROUND ORGANIZATIONS
by a university department), quality control data (e.g. number of rejected items per 1,000
produced by a factory shift), or occupancy rates (e.g. in a hospital, hotel, or apartment complex). Data from measures like these then provide feedback to units about their performance
relative to goals and targets, and help to determine their rewards or punishments, including
resource allocation levels during the next budget cycle. At the organizational level, measures
of profit and loss and returns on investments and assets provide the means to assessthe
performance of divisions or the entire organization-information
that is used by boards of
directors, financial analysts,and investors. Comparisons with other organizations occur at the
environmental level of analysis.
Negative deviations between goals and performance will usually be addressed in one of
several ways. First, the goal or its measures can be adjusted if deviations are found to be the
result of an error in the control system. Second, the individual, group, or organization can
decide to alter behavior or output levels. Often, this option is encouraged through the use
of pay or other incentives made contingent on specified outcomes. Third, individuals, units,
and sometimes the entire organization can be replaced or removed if it is determined they
no longer function effectively.
The cybernetic control system is designed to act like the thermostat it emulates: The system
can be set to desired goals and standards, and it will adjust its behavior accordingly. To change
the control system itself requires the intervention of managers, who make adjustments to
support new activities when these are deemed necessary or desirable. But management
intervention introduces a problem that can challenge the rationality of any organizational
system-the agency problem.
Agency theory
Marx and his followers saw the interests of owners and managers as a more or less holistic
force pitted against the interests of workers. This condition, which Marx theorized as the
central conflict of capitalism, was further problematized by agency theory, which pits the
interests of principals (e.g. shareholders, the owners of the firm) against those of agents (e.g.
company executives and managers). The agency problem is that the capital that agents control is provided by principals, and therefore agents and principals face different levels of risk.
To overcome the agency problem, agency theorists design control systems that ensure that
agents act in the best interests of principals. The practical value of recommendations for how
to control agents is determined by the degree of alignment achieved between the behavior
of agents and what principals would do if they were able or willing to manage their capital
investments directly.
One recommendation produced by agency theory is to control agents via contracts that
specify goals and measures to be used to monitor and sanction (i.e. reward or punish) agent
performance. Up to this point, agency theory overlaps with cybernetic control. However,
agency theory goes a step further, taking account of information asymmetry according
to which the ability of principals to monitor the performance of their agents depends upon
the amount, relevance, and quality of information available to them. Since agents typically
control the collection, analysis, and dissemination of information fed into the control system,
they have the opportunity to place principals at a relative disadvantage by manipulating the
information on which principals monitor and assessthem.
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Agency theory both explains and offers correctives to information asymmetry that take into
consideration the costs of information collection and dissemination. For example, choosing
between behavior or outcome controls hinges on the costs associated with collecting the
information required to minimize the chance that agents will shirk their responsibilities to
principals. Behavioral controls can be costly if monitoring behavior requires either the use of
added layers of management (e.g. hiring agents to monitor other agents) or the development
of sophisticated information systems,such as cost accounting, budgeting, and formal reporting. As behavioral control becomes too unwieldy or too expensive, output control generally
becomes more attractive. Output control is least costly when output can be readily measured
(e.g. number of units shipped, proportion of rejects per unit of manufactured or assembled
output); however, if outputs are difficult to measure (e.g. quality or customer satisfaction are
as important as production quantities), output control becomes lessattractive. 26
American organization theorist Kathleen Eisenhardt suggested that agency theory provides
organizations with a variety of control strategies.27 The first alternative is to design simple
routine jobs so that behaviors can easily be observed and to reward based upon the performance of targeted behaviors (i.e. pure behavioral control, for example the efficiency control
exercised through task/job design as inspired by Fredrick Taylor'sscientific management). The
second alternative is to design more complex and intrinsically interesting jobs and to invest
in information systems (e.g. budgeting systems, audits, or additional layers of management)
as a means of gaining knowledge about behaviors and rewarding performance according to
a combination of output and behavior measures.
The third alternative is to again design complex and interesting jobs, but use a much simpler evaluation scheme that basessalary increases and/or bonuses (including stock options)
on the overall performance of the firm (e.g. profits or revenues).This alternative places agents
in the same position as principals with respect to risk and reward, which is presumed to align
their interests and thereby to lead agents to make the same decisions that principals would
make if they acted on their interests personally. When this alternative is successfully implemented, the need to monitor agents is greatly reduced, thus incurring fewer costs than do the
other two alternatives.
But the third alternative has a major drawback of its own: Agents will resist being penalized
for things over which they have no control and will therefore demand higher inducements
to offset the market risk that this option forces them to accept. According to Eisenhardt, this
deficiency makes a fourth option attractive: using the organization's culture as a control system, an idea explained more fully by William Ouchi's notion of clan control. But since both
Eisenhardt's and Ouchi's ideas arose within the field of institutional economics, I need to introduce you to the theory of transaction costs before further discussing clan control, to which
you were introduced in Chapter 6.
Transactioncosttheory
In his book Markets and Hierarchies,American institutional economist Oliver Williamson
provided an intriguing economic explanation for bureaucracy that involves consideration
of the transaction costs associated with the exchange of goods and services. These are costs
incurred to overcome market imperfections, such as communication and legal fees, and expenses associated with collecting needed information (e.g. to determine pricing, sales and
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distribution). 28 In free markets, transaction costs are held in check by the forces of competition
and thus are minimal, but when market failure occurs, competition is compromised, at which
point transaction costs begin to spiral out of control. Wi Iliamson concluded that when markets
fail, control over transaction costs switches from market control to bureaucratic control exercised through rules and procedures, formal job specifications, and the hierarchy of authority.
You may think that a lack of market competition forces all public sector and not-for-profit
organizations to use bureaucratic control. However, many such organizations have found
ways to incorporate, or at least simulate, market control. For example, subsidiaries or partners
in a law firm or consulting practice are treated as profit centers: Their performance is assessed
by contributions to profit, or by the prices they can command, just as would be true for a
standalone business unit. Similarly, allowing school choice in a community establishes competition among schools, and outsourcing city services (e.g. waste or facilities management,
data collection, tech support) forces city departments to compete with external contractors.
These moves create market-like conditions that can substitute for market controls, thereby
reducing the need for at least some bureaucracy. Reasons typically given for adopting such
moves include the efficiency and effectiveness of market control mechanisms that reduce
costs and improve quality. Moreover, they reduce the need for expensive and demotivating
bureaucratic control mechanisms.
In spite of its advantages, questions arise about making decisions strictly on the basis of
cost and profit, particularly where education, healthcare, justice, or fire protection are concerned. Do we really want the cheapest schools or profit-driven prisons? Another concern
involves asking government agencies to compete with private sector contractors that may be
at liberty to employ workers on a part-time basis with no benefits. Should government agencies be allowed to mimic the sometimes discriminatory practices of private contractors in
order to compete with them, or should we expect them to provide a living wage and benefits
to their employees as part of their mission of public service? Might this dilemma indicate that
there are conditions under which both markets and bureaucracies fail?
Clan control
According to American organization theorist William Ouchi, both markets and bureaucracies
fail when environments are complex and rapidly changing because, under these conditions,
clear market signals are unavailable, and established rules and procedures prove ineffective. 29
The high levels of ambiguity and uncertainty produced in such environments undermine
both market and hierarchical control because timely adaptation of the organization depends,
respectively, on unambiguous market signals and the certainty that established rules and procedures will be effective. According to Ouchi, the failure of both markets and bureaucracy
increases the likelihood clan control will be adopted-an idea that can be traced back to
American sociologist Amitai Etzioni.
The power bases of organizational control
Etzioni defined three types of organizational control, each rooted in the form of power upon
which it most relies: coercive, remunerative, and normative. 3 Coercive control usesthe threat
of force to align behavior with organizational objectives, such as that exercised by prison guards
°
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and psychiatric personnel to control prisons and mental institutions. Remunerative control,
the primary form used by modern economic organizations, rests on the power to provide or
withhold payment for labor (i.e.wages and salaries).Normative control is exerted through the
power of cultural values and assumptions to control how members perceive, think, and feel; it
dominates organizations ranging from churches and gangsto those that rely on volunteers.
According to Etzioni, in spite of their dominance in particular types of organization, all
three types of control exist in every organization. This theory prompted Ouchi to look for
normative power in economic organizations, to which he applied the concept of clan
control. (Be sure to notice that Etzioni's theory also supports critical and postmodern assertions that economic organizations rely heavily on coercive power, otherwise known as
domination.)
Market, bureaucracy, and clan control
According to Ouchi, unlike market or bureaucratic control, clan control requires a fairly high
level of commitment on the part oforganizational members who frequently sacrifice at least
some self-interest to become socialized.31 But, once members are socialized, internalized
cultural understandings help direct, coordinate, and control organizational activities in ways
that require much lessovert monitoring than do markets and bureaucracies, thereby lowering transaction costs. According to Ouchi, once established, clan control becomes more efficient and effective than control by either markets or bureaucracy.
Organizations with large numbers of professionals offer particularly good examples of
clan-controlled organizations. Because professionals are highly socialized to the norms and
expectations of their profession, their commitment to preserving and enhancing their professional reputation helps to control their behavior. However, professional commitment can
diverge from the interests of the organization, and when this happens, professionals typically
sacrifice organizational interests to the maintenance of their professional identities. So while
professionalization may be a good model of clan control, simply employing professionals
does not realize the promise of clan control in an organization.
Ouchi agreed with Etzioni that while all organizations employ a combination of the three
forms of control, dominance of one form differentiates types of organization. Ouchi theorized that the dominant form of control would be related to other formalistic organizational
characteristics. In support of his theory, Ouchi observed, for example, that the social systems
observed in clan-controlled organizations are more highly developed than those found in
bureaucracies and are least developed in market-controlled organizations. By contrast, he
suggestedthat market-controlled organizations possessthe most highly developed information systems (e.g. for tracking costs, prices, and profits), while those typically found in clancontrolled organizations will be the least well developed, with the information systems of
bureaucracies falling into the middle range.
Another observation Ouchi made is that market-controlled organizations rely heavily
on output control strategies, while bureaucracies tend to emphasize behavioral controls.
This prompted Ouchi to wonder if clan control might involve a qualitatively different form
of control. Drawing on his observations that clan-controlled organizations are less reliant
on formal information systems and more on social systems involving cultural values, he
concluded that clan-controlled organizations rely on symbolic control. But Ouchi, being a
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staunch modernist, never paused to reflect on the ethics of manipulating human perception and understanding for the purpose of control nor on its dangerous (e.g. totalitarian)
implications-a concern that was expressed by critical and postmodern organization theorists, whose ideas we take up next. But first let me pause to summarize and compare the
modernist theories.
Comparing modernist theories of organizational control
Table 8.2 summarizes the main points of cybernetic theory, agency theory, and transaction
cost theory, the last of which is extended to include clan control along with control by markets and bureaucracy, thereby adding the option of symbolic control to those of output and
behavior control.
By emphasizing the practicalities of controlling organizational performance and employee
behavior, modern theorists of power and control in organizations left themselves wide open
to critique. Although dogged from the start by critical theory, the critique of modern organization theory led in new directions as the postmodern perspective took hold. Postmodernism
brought with it many new appreciations of power, conflict, and control, as well as suggestions
for how to intervene in organizing processesand management practices so as to emancipate
organizations and their members from the ill effects of domination and exploitation, thereby
revisiting and extending ideas introduced long before by humanists. We next consider critical organization theories in which you can see the influences of both Marx and the modern
perspective. Postmodern ideas will be presented in the following section.
Table 8.2 Contrasting cybernetic, agency, and transaction cost theories of control
Cybernetic theory
Purpose
Agency theory
Transaction cost theory
Align actual with desired
Ensure agents (managers) act
Use type of control that
performance
in the best interests of owners
minimizes transaction costs
(capitalists and shareholders)
Type of control
Output and/or behavioral
Output and/or behavioral
Output, behavioral, and/or
symbolic
Control process
1. Set organizational
goals
2. Set work targets or
standards for each
1. Establisha contract between
Market-use transaction costs,
principals (owners) and
prices, and profit as indicators
agents (managers)
of economic performance
2. Obtain information to
(output control)
ensure agents meet their
Bureaucracy-use close
contractual obligations and
supervision to monitor
{individual and group)
thus serve the interests of
compliance with rules
against targets
principals
(behavior control)
organization level
3. Monitor performance
4. Assessand correct
deviations
3. Reward agents for fulfilling
Clan-socialize organizational
the demands of the contract
members to cultural values,
or punish them for failing
norms, and expectations
to do so
(symbolic control)
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Critical theories of power
Marx's labor process theory inspired critical organization theorists to focus their attention
on exposing and undermining power, particularly that which is hidden within technology,
culture, and the ideology of management practice. It inspired one of the earliest critiques of
hidden power-the deskilling hypothesis-as well as theories of ideology, managerialism, and
hegemony. The idea that power has three faces, including one that is hidden, presents a summary of the critiques of power inspired by Marx's theory.
Labor processtheory and the deskilling hypothesis
American sociologist Harry Braverman specified a mechanism implicit in Marx's labor process theory. Braverman extended Marx's theory by arguing that the owners of the means of
production (capitalists) control work by systematically deskilling labor through job fragmentation and routinization, practices that had been introduced by Taylor's scientific management.32 The deskilling of labor would continue, he explained, until the work is so simple that
very little expertise or training is required, and labor becomes completely commoditized. The
commoditization of labor allows managers to easily replace any worker who puts up resistance to the hegemonic power of management, and, in this way, labor power erodes to the
point where workers regard resistance as futile. When this occurs, management's control of
the labor process is complete, and owners can drive down the price of labor to enhance their
profits. Deskilling also exploits and degrades workers and contributes to their alienation from
work and the workplace.
Graham Sewell, an Australian organizational theorist, illustrated labor process control in
his study of teams in a manufacturing organization operating in the electronics industry. 33
Sewell found that control was maintained through electronic quality tests at various stages of
an assembly process. The resulting quality data were symbolically displayed over each employee's workstation using traffic lights: Red meant the team member had exceeded quality
error allowances; amber, that they were within an acceptable range of error; and green, that
he or she had made no quality errors. This practice led not only to management control, but
also to intense peer pressure. In support of the notion of clan control, Sewell's study shows
that the horizontal control that team members exerted upon each other by expressing their
approval or disapproval was far more potent than the vertical control exerted by managers.
One of the most telling features of current labor process theory research is the emphasis
it gives to the everyday life of industrial workers, and it is here that connections to both the
symbolic perspective and postmodern ism can be found. This you can see in the observational
methods of ethnography applied at the micro-sociological level in American sociologist
Donald Roy's article 'Banana time.' 34This article at first seemed to present an innocent and
humorous symbolic analysis of ritualistic work breaks taken at the author's place of summer
employment, but it proceeded to reveal the inner workings of horizontal power as enacted
among machine operators in an industrial organization.
Meanwhile Braverman, who was a long-term industrial worker when the Fordist labor
management movement was at its peak, used methods similar to Roy's to reveal the inner
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workings of management control over the labor process, as seen from the factory floor.
His research, like that of labor process theorists who moved into postmodernism, addressed questions not only about how work is controlled, but also who controls control
processes.35 He based the deskilling hypothesis on his longitudinal study, although the
hypothesis itself was to be later undermined by considerable evidence of active worker
resistance to Ford ism and, more recently, by the limits to deskilling that arise when robots
take over deskilled tasks, returning power, as well as skill, to labor, at least insofar as laborers remain part of the picture.
Ideology, managerialism, and hegemony
Wherever you find a group of people systematically expressing belief in a definable set of
ideas, you encounter ideology-a set of beliefs held with such firm conviction that they are
rarely questioned by their proponents and therefore remain resilient to outside attack. This
definition renders cultural assumptions ideological, as critical theorists assume they are. But
because claims to know a culture's ideological nature require standing outside that culture,
critical theory rejects the epistemological foundations of the symbolic perspective, which is
one reason you do not find more of the symbolic perspective in this chapter.
Ideology is of particular interest to critical theorists because it defines a mechanism by
which domination operates. Critical organization theorists define managerialism as the
ideological belief that owners and managers have a right to control their workers. They build
on Marxist theory and the concept of false consciousness to argue that workers participate
in their own exploitation when they consent to oppression by adopting (or at least not questioning) managerial ideology and the corporate culture it produces.
Italian critical theorist Antonio Gramsci explained that workers accept oppression and
exploitation when institutional and ideological forms of domination become part of their
taken-for-granted everyday reality. 36Hegemony then occurs when the practices and values
of a culture or institution align with and maintain existing systems of wealth and power.
Hegemonic practices never overtly coerce anyone; instead, they subtly and incessantly lull
cultural members into regarding as normal ways of thinking and talking that privilege the
elite. Through the mechanism of normalization, hegemony hides expressions of power
and domination from view-a practice that Barbara Czarniawska described as ideological
control. 37
For example, consider how readily lower-level managers adopt the ideological practices offered by consultants hired to train them (see Box 8.2). The training produces control through
ideology that is hidden within program descriptions that use readily accepted terms like 'participation,' 'involvement,' 'engagement,' and 'empowerment' to mask their hegemonic intentions.38 Ideological control can be considered the linguistic equivalent of technologies that
silently control workers via the equipment they use (see Chapter 5), physical structures that
silently channel interaction in offices and factories (see Chapter 6}, or cultures that silently
direct the thoughts and actions of organizational members through tacitly communicated
norms and expectations (see Chapter 6}. The constellation of these organizing practices, all
of which have been promoted by managerialists, paints the ominous picture of management
that drives critical theorists to critique.
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•
Box s.2 Think like a theorist
Ideology at work
Inspired by Japanese statistician Genichi Taguchi and American management consultant W. Edwards
Deming, many consultants promulgate programs such as total quality management (TQM), business
process re-engineering (BPR),and Motorola's trademarked Six Sigma Practices. These consultants
promote the use of statistical measurement to control outcomes like costs and variability in
manufacturing and business processes, for example software development, sales, and service delivery.
Critical theorists find such control practices prime examples of hegemony.
Hegemony arises not just through the control embedded in these statistical tools, critical theorists
argue, but by control embedded in human consciousness through the training programs required
of those subjected to them. TQM training, for example, involves initiation into the use of concepts
such as quality control, defects (errors), continuous improvement, customer involvement, excellence,
and Deming's Plan-Do-Check-Act Cycle. Initiates are trained in the use of this terminology, which
constitutes a secret language that identifies the initiated to each other and distinguishes them
from the noninitiated. Other identity elements can be added: For example, Six Sigma graduates
are given symbolic identity labels-black belts and green belts-that symbolize their different levels
of achievement relative to program goals. Such programs often provide initiates with 'graduation'
certificates and sometimes offer T-shirts or coffee mugs carrying the program name and/or logo that
can be, and often are, put on display.
While modernists position these training programs well within the legitimate purview of managerial
control, the critic sees the statistical tools and symbols of membership in 'the club' as means to seduce
employees into accepting their highly controlling work environment without objection or resistance.
Any elements of status or fun associated with participation in the programs only serve to incite further
suspicion that hegemony is at work.
Questions
In what sense do training programs of any sort enact ideological control? If you have attended a
training workshop at your place of employment, use your personal experiences and observations of
your coparticipants to reflect on the possibility that you were subjected to ideological control. If not,
your classroom can provide your example. In either case, use the following questions as guides for
reflection. What ideology underpins the training program? Whose ideology is it? What does it conceal?
Consider that some participants in a training program may be well aware they are being controlled and/
or seduced. Does this possibility affect your interpretation of those participants who enthusiastically use
a training program's jargon or openly display its identity badges? What about any who resist influence?
What does resistance to ideological control look and sound like?
Exercise
To push this exercise a bit further, try your hand at explaining how the ideology manifested in your
training program affects you and your coparticipants. For example, you might apply the theory that
culture presents opportunities to use ideology to normatively control participants. In that case, describe
the culture and discuss how program participants may have been socialized to accept its controlling
influence. Or you might choose to apply agency theory or the 'three faces of power' typology discussed
below to examine how the program aligned the interests of you and your colleagues with those
of the organization's owners or with the institution that offered your training. For a real challenge,
apply theories from two or more different perspectives and ask yourself: What does each perspective
contributes that the other/s cannot see?
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The three faces of power
The silent and consequently hidden aspects of hegemonic power and ideological control,
highlighted in critical organization theory, fit what British political social theorist Steven
Lukes cal led the 'third face of power.'39 Lukes explained how the three faces of power show
themselves. The first appears in decision-making forums in which various actors or groups
fully, openly, and equally participate in every aspect of decision-making processes, such
as occurs in a workplace democracy. The second appears in instances when the powerful limit or prevent the involvement of the less powerful in decision-making processes. In
what becomes essentially nondecision, the powerful can determine what issues do and do
not appear on meeting agendas, thereby suppressing discussion of undesired alternatives,
silencing potential disagreement, and moving contentious alternatives forward without debating their merits.
While the second face of power is more covert than the first, those whose participation is limited will recognize this face easily since it is not hidden from their view at all.
However, while they may complain, their accusations can be readily denied by those who
dominate the decision-making process or brushed aside (e.g. with claims that the accusers are suffering from paranoia). Those who are subjected to it often describe the second
face of power as hypocritical and those who display it as liars. But as Gramsci explained in
his theory of hegemony, the third face of power is even more ominous because it is better
hidden. It hides in social practices and cultural norms that shape the desires and behavior
of the dominated in ways that render them willing to work against their own interests,
thereby leading them quietly into oppression. Lukes'stheory is that, by giving their silent
consent to hegemonic interests, those subjected to the third face of power collude in their
own domination.
Worker collusion in their own domination can lead to paradoxes, for example cases in
which employees who are granted greater autonomy at work end up relinquishing their
self-interest to benefit the organization. In a study of a knowledge-intensive firm, American
critical communication theorist Stanley Deetz found that employees worked long hours and
underreported the hours they worked, sometimes sleeping at worksites in order to maximize
their working time, and that they dealt with aggressiveand sometimes abusive clients, all the
while relishing their 'autonomy.' 40 Gramsci suggested that to resist and change hegemonic
power relationships like these, one must understand how power is constituted through social structures and practices. One such strategy was suggested by German social philosopher
Jurgen Habermas, who recommended communicative rationality as a means to confront and
overturn hegemonic power.
Communicative rationality
Habermas claimed that modern society is dominated by scientific, technical, and administrative experts organized into institutions that focus attention on the most technically efficient,
and thus instrumentally rational, way of achieving goals.41 Accordingly, technocratic ideology
based in instrumental rationality invades modern life and, at the same time, ignores and
denies humanistic efforts at individual and social development. As an alternative, Habermas
presented his theory of communicative rationality, which he exemplified with practices
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such as open debate and consensus. He proposed that instrumental rationality distorts or
undermines communicative rationality through the widespread acceptance and use of the
logic of efficiency, a hegemonic ideology to which communicative rationality provides an
effective antidote.
Consider this example. You are invited to a meeting of all departmental employees to
discuss how work could be more productive and satisfying. The discussion ranges from
streamlining procedures to eliminating the duplication of work that causes uncertainty and
conflict between department members. Someone suggests that the department manager
give an employee-of-the-month award, with a bonus for attaining results above targets.
Another person suggestsweekly meetings to clarify individual responsibilities and share information. Departmental members might be able to come to some consensus about which
of these proposals would make their work life better and feel good about their involvement
in the process. And yet Habermas argued that communication was systematically distorted
during the meeting just described. First, those in power framed the discussion with their
initiating question, which presumed a distinction between productivity and work satisfaction, suggesting these are competing concerns that require making tradeoffs between
them. Second, those in charge had the possibility to distort communication by responding
only to suggestions that supported instrumental rationality, thus ignoring the workers' interests, while making them feel as though their interests were given consideration.
From the perspective of Habermas's theory, systematically distorted communication is an
implicit form of manipulation and control because it privileges one ideology over others, involves deception (of self and/or others), and precludes sincere and ethically informed conversation. In this example, the goal of the meeting was not to create a satisfying workplace
by exploring a range of possibilities through open discussion and mutual understanding
(i.e. communicative action), but a way for those in authority to take advantage of employee
ideas to obtain consensus (although false) on how to improve productivity. Only open debate used to achieve true consensus will provide a foundation for successful organizing.
Habermas'stheory extended earlier humanist theories of cooperation by identifying communication, which by definition involves interdependency, as the mechanism for achieving
cooperation. Becausehis theorizing embraced the linguistic turn, his theory straddles critical
theory and the postmodern perspectives on power.
Postmodernperspectiveson power
Postmodern treatments of power in organizations include theories of disciplinary power,
deterritorialization, and gendered organizations; all three are discussed in this section. Gendered organization theory will demonstrate the reflexive application of feminist views of
power to organization theory, and these ideas conclude the chapter with the postmodern
proposition that all acts of theorizing should be considered suspect.
Disciplinary power
As part of his study of how power and domination tactics have transformed over time, Foucault compared modern prisons to the public executions and tortures commonly used when
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societies were governed by sovereign power (e.g. monarchy). 42 His comparison highlighted
the difference between overt repression and the subtle and inconspicuous forms of power
upon which modern societies rely for social control. Foucault claimed that modern power is
disciplinary in nature and looked for evidence supporting his thesis not only in prisons, but
also in the fields (i.e. disciplines) of medicine and psychiatry.
In his study of the history of psychiatry, Foucault provided a detailed look at how disciplinary
power works. The body of knowledge governing psychiatric practice legitimates the exertion
of control over people deemed by the same body of knowledge to be socially abnormal or
mentally incompetent. The intertwining of power with disciplines of knowledge production
led Foucault to propose the concept of power/knowledge discussed in Chapter 2. Key to understanding psychiatry's role in creating disciplinary power is the widespread acceptance of
the concept of normalcy as the goal and ideal for human behavior.43 According to Foucault,
those allowed to define what is normal can then use their power/knowledge to discipline
others via technologies of control. In the casesof psychiatry, for example, these include drug
therapy and hospitalization.
Disciplinarypower in organizationsand organizationtheory
Stan Deetz applied Foucault's theory of disciplinary power to explain why so many organizational forms of control are inescapable and unobtrusive. He linked the internalization of disciplinary power to organizational culture and clan control, theorizing that d iscipl inary power
arises from the ways in which values, ideals, and beliefs are shared and become part of everyday life. According to Deetz: 'Disciplinary power resides in every perception, every judgment,
every act .... It is not just the rule and routine which becomes internalized, but a complex set
of practices which provide common-sense, self-evident experience and personal identity.' 44
Deetz claimed that his empirical description of knowledge workers who worked excessive
hours, slept in their offices, and willingly served abusive clients evidences the disciplinary
control operating in the modern business world.
British organization theorist Gibson Burrell built on Foucault's idea of disciplinary power
to critique modern organization theory. He argued that if contemporary organizations both
reflect and maintain the disciplinary power of society by categorizing, analyzing, and normalizing us, or by making us focus on productivity or efficiency to the exclusion of other
interests, then modern organization theory is complicit in reproducing the chains that critical
postmodernists seek to break.45 He reasoned that the reigning truth of the modernist perspective, capitalism, is based on the idea that profit can be generated through the efficient
management of productive resources. On this basis, Burrell concluded that the discipline of
modern management provides knowledge that addresses how efficiency can be achieved
and recommends designing organizational hierarchies, technologies, culture, architecture,
and processes(e.g.training and performance appraisal) to implement the findings of modern
management research. Experts who create and disseminate this knowledge (i.e. professors
and consultants) are powerful because they influence what is done by whom and how, as
well as who gets rewarded or punished. The reflexive implication for organization theory
is that as long as the modern perspective dominates, those who resist the assumptions and
philosophical position of the dominant modernist (i.e. hegemonic) discourse will be excluded
from the mainstream.
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Incarceration and the gaze
Foucault's theory of disciplinary power is extended and supported by his history of incarceration practices that begins with an eighteenth-century prison design called the Panopticon. 46
First described by Jeremy Bentham, the Panopticon has a central guard tower around which
prison cells are arranged in a circle. The prison is constructed so that prisoners cannot see into
the guard tower, but guards can observe everything that goes on in the cells. The Panopticon
encourages prisoners to conform to the rules at all times because a guard might be watching
them. In Bentham's words:
[T)he more constantly the persons to be inspected are under the eyes of the persons who
should inspect them, the more perfectly will the purpose of the establishment have been
attained. Ideal perfection, if that were the object, would require that each person should
actually be in that predicament, during every instant of time. This being impossible, the next
thing to be wished for is, that, at every instant, seeing reason to believe as much, and not
being able to satisfy himself to the contrary, he should conceivehimself to be so.47
Foucault used the example of Bentham's Panopticon to theorize that surveillance leads to
self-surveillance through two complementary mechanisms he described as the gaze and
interiorization. 48 According to Foucault, the gaze sets up the expectation of surveillance,
while anticipation of the gaze, through interiorization of its psychic force, leads to self-surveillance. Since the self-monitoring prisoner only requires potential surveillance, this control
system operates without the overt repression of pre-modern control systems. The psychological presence of authority subtly and inconspicuously controls self-monitoring subjects,
and it works whether those subjects are prison inmates, hospital patients, schoolchildren,
assembly line workers, or university students.
British organization theorist Barbara Townley applied Foucault's ideas to argue that organizations embed the gaze in tools used by human resource managers, for example interview
protocols, psychological tests, performance appraisals, and assessment centers.49 Insofar as
individuals anticipate the use of these techniques and practice using them in order to secure
a job, they help to construct the very disciplinary control system to which they have submitted. Similarly, Townley claimed, job descriptions, training programs, and the technologies
workers employ to do their work lead to the interiorization of expectations. Some people
even pay large sums of money to be trained to excel at the tasks these techniques require,
as you may have done by taking a preparatory course prior to sitting an important entrance
examination required by your university.
Foucault also saw the possibilities of disciplinary power to produce pleasure. Think about
the discipline you adopt to learn a trade or profession wherein you allow disciplinary practices to transform your subjectivity and often your body for the sake of gaining knowledge.
For instance, as you 'take the subject matter in,' pathways in your brain are reshaped, and
your body adapts to the physical environment in which you study. You will similarly find
the effects of disciplinary power in sports, the arts, health and wellness, and parenting, all
of which help individuals realize their dreams. But remember discipline has a dark side. You
can see this in the expectations that society aims at normalizing physical appearance, which
cause some people to diet obsessively or risk disfiguring themselves with unnecessary plastic
surgery. The same practices that promote physical and mental health or good parenting can
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lead to outcomes opposite to those desired. Disciplinary power and control are both good
and bad.
Organizational theorists who build on Foucault's theory have examined the micropractices of power and how these may be influenced by broader strategies that apply
power at an institutional and societal level. For example, Australian organization theorist
Stewart Clegg studied the power created through techniques of discipline and production
that reinforce the status quo. 50 His study suggested three circuits of power that work
simultaneously: episodic, dispositional, and facilitative. He located each, respectively, in
daily interaction (episodic circuit), socially constructed rules (dispositional circuit), and
systems and mechanisms that include technology, work, and rewards (facilitative circuit).
Clegg theorized that the three circuits intersect, leading to the empowerment or disempowerment of groups who use them. For example, if a group of workers have knowledge
about a particular technology on which others depend (e.g. how to fix computers or protect them from viruses), their ability to facilitate the outcomes of others will empower
their group to negotiate to their own advantage within the episodic and dispositional
circuits. Be sure to notice how Clegg's theory elaborates Pfeffer and Salancik's resource
dependence theory by defining mechanisms that allow power to circulate. (See Box 8.3
for a relevant exercise.)
Box s.3 Case example
Exposing the circuits of power
Clegg's theory can be applied to understanding the power of lower-level workers observed by Crozier,
whose study of maintenance workers in a French cigarette factory you read about earlier in this chapter.
Re-read the description of Crozier's study provided there, and analyze the case from the perspective
of Clegg's three circuits of power. See if you can find all three circuits at work in the example, and then
decide which one best explains the behavior of the maintenance workers. How did the maintenance
workers parlay the advantage gained in one circuit into advantages in the other two? What does your
analysis reveal about the intersections of the three circuits of power?
Exercise
Now apply Deleuze and Guatarri's theory about lines of flight (see Chapter 4) to the cigarette factory case.
Can you identify any line/s offlight pursued by the maintenance workers? What lines offlight within the
factory control structure were not pursued? (Hint:Think about other workers in the cigarette factory.)
Discussion question
Be sure to notice how, even when formulated from within a single perspective, different theories
give you different ways of thinking about a case and offer different concepts with which to structure
your thinking. Reflecting on this, debate with a colleague whether theories offer lines of flight, or if
theorizing amounts to just another controlling disciplinary practice. Explain the reasoning behind the
position you took in this debate. If you do not have a colleague with whom to debate, try arguing the
other position yourself. What does contrasting the two arguments reveal?
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Deterritorialization
Deleuze and Guattari borrowed the term 'deterritorialization' from psychoanalytic theory
to explain the schizophrenic subjectivity of individuals living in cultures produced by late
capitalism (a.k.a. the postmodern condition). 51 In the context of cultural globalization,
deterritorialization points to the loosening of subjectivity and identity from longstanding
institutions of modernity whose borders are breached by new technologies of communication and transportation. (Note that this technological breaching of borders contributes to the
space-time compression remarked upon in Chapter 7.) Invoking lines of flight, Deleuze and
Guattari theorized that deterritorialization is produced when escape routes are discovered
and pursued, thereby loosening the control of social structure and changing it from within
its own borders.
The necessarily unfinished work of social organization produces lines of flight that,
upon transversal, release formerly territorialized aspects of human knowledge and/or consciousness, such as that which disciplinary power produces. For example, globalization
releases culture from prior associations with particular places, at least symbolically freeing
it of spatial ties. Deleuze and Guattari note, however, that reterritorialization will occur
whenever new processes of institutionalization stabilize emergent interaction patterns
and/or when symbolic understanding takes new material forms. The new structures then
await further rounds of de/reterritorialization, presenting us with the tantalizing prospect
of ever-present freedom in the face of the domination, power, or control that always tries
to contain us. Two phenomena that organization theorists have argued are in great need
of deterritorialization involve gender: the stratification of labor markets, and gendered
organization theory.
Matters of gender and identity politics
Using labor market analysis, researchers provide evidence that high-paying, powerful, and
prestigious positions are inequitably distributed in most modern organizations, and numerous studies find an extreme disproportion of white males holding the more desirable positions. The stage was set for gendered explanations of these findings by the highly modernist
theory of dual labor markets, which was followed by feminist theories, including one that
describes organization theorizing as gendered.
Dual labor market theory
Based on evidence of labor market stratification, American labor economists Peter Doeringer and Michael Piore proposed dual labor market theory, which argues that the
market for labor is composed of primary and secondary sectors.52 According to the dual
labor market theory, high wages and good career opportunities are typical in the primary sector, while the secondary sector is marked by lower wages and poor employment
conditions, such as a lack of job security and limited or no benefits. Doeringer and Piore
explained this stratification of opportunities by suggesting that, to remain competitive,
employers must have a steady supply of qualified workers who can maintain the firm's
technological advantage in the marketplace. This means that they must pay top wages
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8 POWER IN AND AROUND ORGANIZATIONS
and provide substantial benefits to employees who have desired skills and education.
Employers then offset the costs of their primary sector workforce by employing unskilled
workers to perform less central tasks for less pay, often subjecting them to less desirable
working conditions as well.
While dual labor market theory offers stratification as an explanation for the distribution of people between the primary and secondary sectors of the labor market, it cannot
explain why women, ethnic minorities, and both the young and the elderly are so underrepresented in the primary sector and so overrepresented in the secondary. Because dual
labor market theory considers only the economic and technological reasons for labor market stratification, it misses important explanations that can be found only by considering
other factors, among which discriminatory practices that disadvantage women and minorities are favored by critical and postmodern theorists. But such explanations do not reveal
how stratification operates-a problem examined by two Swedish organization theorists,
Barbara Czarniawska and Guye Sev6n.
Double-strangenessin higher education
Czarniawska and Sev6n applied narrative analysis to the biographies of four female scientists
to explore labor market stratification in higher education. 53 Their focus was the rare women
who infiltrated the primary labor market in universities; each woman they interviewed was
the first woman in that country to be named to a professorial chair at her university. To explain how these women came to hold their positions in the male-dominated primary sector
of this labor market, Czarniawska and Sev6n proposed a theory of double strangeness-the
women were not only nonmale, but also were foreigners to the country in which they were
chaired.
The first thing to notice is that the universities who placed these women in chaired professorships faced political, regulatory, social, and/or cultural pressure to correct the gender imbalance in their faculties. While this factor explains the low number of women breaking into
the primary sector (tokenism being deemed compliance in most cases),it could not explain
why the women were all foreign-born. Since each woman they interviewed had faced competition for their posts from similarly qualified women nationals, Czarniawska and Sev6n proposed that the foreignness of these female academics cancelled at least some of the negative
implications of their womanhood, thereby rendering these talented women lessthreatening
to those already in power. They reasoned that foreign women had lower status and less accessto power than did female nationals and therefore would be seen by their male colleagues
(and decision-makers) as the lesser of two evils. Foreignness minimized the female influence
that the still-dominant male faculty had to endure.
Gendered organizations
One popularfeminist theory about why organizations are gender-stratified holds that such
stratification is a direct reflection of the split between the domains of private and public life.
Private life is characterized by qualities said to be feminine, such as caring and the sense
of community, while public life answers to cultural expectations of rationality and competitiveness, characteristics identified as masculine. A number of feminist scholars have
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argued that the separation of public/male and private/female domains and the practices
associated with them (e.g. working outside the home versus child rearing) reinforces a
binary view of gender that underpins the everyday actions and interactions of both men
and women in the workplace, as well as in society. Men are considered natural decisionmakers and leaders, while women are expected to play supporting and nurturing roles.
Gendering thus reproduces traditional societal relations of domination and subordination
between men and women and leads to gender paradoxes, such as men seeking to develop
feminine virtues when organizations ask their leaders to be transformational or to coach
subordinates.
Calls to undermine the taken-for-granted ways organizations produce and reproduce
gendered outcomes have led second-generation feminists to look beyond ready explanations for why women and other minorities are not better represented in the primary
sector. Simply replacing male with female practices, after all, would not end stratification;
it would only replace the practices of one with those preferred by the other and therefore would remain gendered. Although the feminist literature is far from homogeneous,
developing tactics for deconstructing and overturning the practice of constructing gender as part of organizational life became a priority for some who turned their attention to the 'systematic forces that generate, maintain, and replicate gendered relations of
dam i nation.' 54
Joan Acker, an American sociologist, was among the first to base her theory of organization
on the feminist postmodern argument that language is gendered because meaning circulates
around a network of images that have distinctive male or female associations.55 If language
is gendered, Acker reasoned, then organizations must be gendered as well, because they
are the discursive products of gender-based power relations. She explained that masculine
ways of doing things are not only inherent in structural, ideological, and symbolic aspects of
organization, but also built into the everyday interactions and practices of organizing, thus
producing gendered organizations. 56
Building on Ackers theory, others have suggested that masculinity is deeply embedded
in bureaucracy due to its focus on hierarchy, the impersonal application of rules, and the
separation of work and private life. For example, several organization theorists maintain that
hierarchy is premised on the assumption of a masculine elite that depends on a feminized
support staff, and careers are based on one's continued commitment to the organization. 57
As a counterargument to the idea of masculine domination in the workplace, you may hear
that women's interests are well represented in organizations through such policies as those
establishing women's advisory committees. But, in effect, these efforts maintain, rather than
undermine, unequal representation by being explicitly separated from the dominant male
structure, which has the effect of both stigmatizing women and keeping them outside the
inner circle of power. With the ambition of overcoming this situation, both scholars and activists have proposed creating alternatives to bureaucracy that reflect 'women's ways of organizing.' In practice, such organizations have proven effective, particularly in the domains of
healthcare and domestic violence.
At the level of jobs rather than organizations, other feminist scholars explored gendered
work in organizations and its construction. For example, in her study of female engineers,
Joyce Fletcher suggested that definitions of work have a masculine bias.58 In a high-tech
organization, she found that the characteristics and behaviors worthy of promotion were
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autonomy, technical competence, self-promotion, individual heroics, and being able to
quantify issues. Relational practices (which she associated with feminine belief systems),
included watching over the wellbeing of a project, contributing to programs, mutual empowerment, and collaborative teamwork, were all undervalued or ignored. Inspired by
Foucault, Fletcher claimed such biased practices had the effect of disappearing relational
practices by interpreting them as inappropriate for work and/or as a sign of weakness.
Fletcher found that the female engineers themselves, while wanting to work differently,
colluded in the disappearing act by warning their female colleagues not to openly engage
in relational behaviors.
Feminist theorist Karen Ashcraft and communication scholar Dennis Mumby-both American-articulated a feminist communicology of organization in which they suggested that
researchers explore how meanings and identities are created intersubjectively in embodied
everyday communication. 59 They used the example of airline pilots to show that the construction of pilot identity is tied into various discourses of gender involving: cultural icons and
stories of male fliers (e.g. Superman); stories of romantic 'ladybird' female pilots (e.g. Amelia
Earhart); the discursive production of an ideal technically capable professional white masculine pilot by the commercial aviation industry; the separation of professional/commercial
pilots and 'lady-fliers' by questioning the ability of women to fulfill their duties because of
family obligations or lack of physical strength; and the reconstruction of the masculine pilot
as the adventurous, rugged, yet civilized professional. Ashcraft and Mumby suggested that
these discursive practices, woven together over time, produced gendered identity among
airline pilots through the unobtrusive exercise of power.
If current gendered constructions lead to devaluing women's work and to keeping
women out of power, it follows in the name of social justice that these constructions be
changed. Feminist organization theorists propose using their own research politically to
produce this change by: giving voice to women and minorities; making room for multiplicity through exposing and overturning unitary representations and replacing them with
representations inclusive of gender, race, ethnicity, age, and class; and changing the subjects and objects (audiences) that their research targets. For example, studying, writing
about, and giving voice to women, people of color, indigenous people, the working class,
youth, and the aged, rather than dominant white males, exposes and overturns dominant
assumptions, as Czarniawska and Sev6n did in their research into the double-strangeness
of female chaired professors.
Changing understandings of gender identity suggesta more radical approach to the problem of domination. The binary terminology of male and female is being supplemented by
the myriad options that members of the LGBTQ+community and others are recognizing
(e.g. 'cis male' and 'cis female,' 'gender fluid,' 'gender nonconforming,' 'trans'). While these
identities diffuse around the world, it remains to be seen if such efforts will subvert stratification practices or will just make them more complex. Like racial identities defined by skin
color, gender redefinition recognizes differences that might simply alter prior disempowering stratification practices by offering more fine-grained distinctions on which to base
discrimination and divide loyalties. On the other hand, acceptance of a person's right to
self-identify based on more than a sex-based binary imposed at birth promises lines offlight
with the capacity to permanently deterritorialize stratification practices and the structures
they uphold. Stay tuned.
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Is organization theory gendered?
Feminists have questioned whether organization theory is gendered, some suggesting that
the modern perspective is rife with masculine values, ideas, and identities. 60 Pointing to Mary
Parker Follett, others note that feminists and their ideas have always been if not mainstream,
at least waiting in the wings, and, of course, early modernists had Joan Woodward. Feminists
decry the citing of the rare counterexample as tokenism. The facts show that women and their
scholarship were scarcely found in early books about organization theory and, relative to
their numbers, are underrepresented in such books even today. Of course, similar arguments
have been made about other types of bias in organization theory, and in this regard I point to
the crisis of representation in anthropology (discussed in Chapter 2) as a harbinger of what
happens when those previously excluded find their voice. Are we confronting a similar crisis
in organization theory, with gendered organization theory as the tipping point?
The idea of gendered organization theory points to the perennial question of perspectives and the power inherent in allowing one 'mainstream' perspective to dominate all others. Power shows us that defining perspectives requires more than pointing to philosophical
assumptions about ontology and epistemology; it requires identifying ourselves in the perspectives we adopt. Seen in this light, there can be as many perspectives as there are people
to hold them, and, what is more, anyone can change their perspective or, for that matter,
their identity. For me, this way of thinking explains one of the most profound implications
of postmodern ism: that all boundaries, regardless of whether they surround a perspective,
a theory, a concept, or one's sense of self, are illusory and dissolve the moment we look
another way.
So, yes, organization theory is gendered in the same way that its perspectives are also
bent by the race, ethnicity, age, and other characteristics that identify their adopters. We will
only recognize the bias of one perspective by adopting another and the bias of those two by
adopting another still, placing us in pursuit of perpetual lines of flight. This book does more
than raise the question of which perspective/s you adopt; it confronts the problem of perspective taking and the change that taking different perspectives brings. Studying the three
perspectives put on display in this book may seem inadequate when seen against the sea of
infinite possibility and fluidity postmodernists describe, but practicing perspective taking can
aid your journey to self-knowledge, understanding, and appreciation.
Summary
The phenomenon of power appears in the domination of one person or group over others and is reflected in social, economic, organizational, and class structures. In this light,
organizations appear to be networks of power relations that exist within broader historical,
ideological, economic, and social patterns and conditions. This perspective traces back to
Karl Marx, whose ideas criticized the societal and organizational effects of capitalism, while
humanism inspired others to promote cooperation. Following Marx, critical organization
theorists focused on the oppression of workers by owners and managers, and on explaining
how power is maintained without the necessity of awareness.Their scholarship later inspired
examinations of the hegemonic ideology of managerial ism and the hidden face of power
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that are silently at work within technology, culture, and unquestioned managerial, and organizing, and theorizing practices.
As it emerged from the classical period, the modern perspective presented power as a
strategic tool of management, offering managers normative advice about how to gain and
use power both formally and informally. Modernist ideas about power informed theories of
conflict and control, and how their use by managers might leverage worker and organizational performance. These managerial uses of power were interpreted by some within the
framework of political theory, at which point politics became a focus for theorists interested
in how power operates within organizational practices, including decision-making processes.
Political theories of organization led to the coalitional decision-making model, which
countered prior belief in the rationality of organizational decisions and exposed the bounded
rationality most decision-makers face. According to James March and Herbert Simon, when
politics is needed to overcome legitimate differences in preferences for goals or methods of
achieving goals, the coalitional model of decision-making resolves conflicts and thereby allows decision-makers to take action under the conditions of uncertainty confronted by most
organizations most of the time. Their work loosened the grip that the modern perspective
held on organization theory.
Meanwhile, methods that developed within the symbolic perspective inspired students of
power to study acts of domination and resistance within the contexts of everyday organizational Iife using ethnographic methods to perform micro-sociology. Interest in the symbols of
power and how symbolic power operates trace back to this perspective, which, on the whole,
made far fewer inroads into mainstream theories of power and politics than did critical theory and the postmodern perspective. Nonetheless, the symbolic perspective contributed
ethnographic methods for exposing and confronting domination, ideology, and hegemony.
Critical theorists made their contributions to the study of power by focusing on inequalities lying within managerial ideology and organizational technologies and cultures. Steven
Lukes' theory of the three faces of power took ideas about decision-making into the covert
regions of nondecision and even more hegemonic hiding places that Marx described as the
self-delusional practices of workers who accept the rules and conditions set out by managers.
Negative effects of instrumental reasoning (i.e. rationality) found in systematically distorted
communication were explored in relation to the antidote of communicative rationality proposed by Jurgen Habermas.
As the postmodern perspective took root in organization theory, concepts of disciplinary
power and surveillance reinvigorated critical challenges to mainstream modernist management and organizing practices. These ideas were complemented by theories focused on
organizing processes, one describing how power circulates through everyday interaction,
disposition, and facilitation, and others proposing various mechanisms by which disciplinary
power operates: normalization, interiorization, and self-surveillance. Other postmodern offerings presented strategies for fighting domination and the controlling interests of the powerful, including finding lines offlight, deterritorialization, and engaging in identity politics. In
the hands of feminists, identity politics theorizes the ways in which organizations are constructed around concepts of race and gender, pointing out along the way that organization
theory is a prisoner of the identities and perspectives it condones.
Table 8.3 summarizes and contrasts modern, critical theory, and postmodern conceptions
of power, control, and conflict presented in this chapter.
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Table 8.3 Modern, critical, and postmodern theories of power, control, and conflict
Source of power
Modern
Critical
Postmodern
The authority, knowledge,
The social, economic, and
Everyday social
and/or ability to solve key
political institutions and
relationships and the
organizational problems or
ideologies that constitute
discursive and non-
manage uncertainty
and uphold hegemony
discursive practices that
constitute them
Aims of theory
Organization
seen as
Managerial
control by
View of conflict
Improve organizational
Emancipate dominated
Interrogate and reveal
survival and performance
groups, and develop
practices that lead to
through applications of
democratic and humanistic
marginalization and to
rationality to achieve
forms of organizing,
self-disciplinary behavior
efficiency and effectiveness
communication, and
and to free humans from
decision-making
these hidden constraints
A rational or boundedly
A structure of domination
A producer and the
rational system; a political
arising from exploitation
product of disciplinary
arena
and calling for resistance
power
Market (output),
Hegemony and
Disciplinary practices
and technologies that
bureaucracy {behavioral),
systematically distorted
or clan (cultural) control
communication that gets
encourage self-surveillance
mechanisms
employees to consent to
via interiorization of 'the
their own exploitation
gaze'
Needs to be managed by
Inevitable consequence
Emerges within the
those in power so as to
of capitalism's social and
network of power relations
maximize performance;
economic inequalities;
as interdependent groups,
offers strategies for both
encourages resistance and/
and individuals frame their
reduction and stimulation
or radical change
reality and subjectivity
through discourse
Further reading
Burawoy,M. (1979) ManufacturingConsent:Changesin the LaborProcessunder Monopoly
Capitalism.Chicago:Universityof ChicagoPress.
Czarniawska-Joerges,
Barbara(1988) Poweras an experientialconcept.Scandinavianjournal of
Management,4: 31-44.
Emerson,R. M. (1962) Power-dependencerelations.AmericanSociologicalReview,27: 31-40.
Gabriel,Yiannis(2000) Storytellingin Organizations:Facts,Fictionsand Fantasies.Oxford:Oxford
UniversityPress.
Gherardi,Silvia(2007) Gendertellingin Organizations:Narrativesfrom Male-dominated
Environments.Copenhagen:CopenhagenBusinessSchool Press.
Kanter,Rosabeth Moss(1977) Men and Women ofthe Corporation.New York:BasicBooks.
March.JamesG. (1994) A Primeron DecisionMaking:How DecisionsHappen.New York:Free Press.
Martin.Joanne (2000) Hidden gendered assumptionsin mainstreamorganizationaltheory and
research.Journalof Management Inquiry,9: 207-16.
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ORGANISATIONAL THEORY & DYNAMICS
8 POWER IN AND AROUND ORGANIZATIONS
McKinlay, A., and Starkey, K. (eds.) (1998)
London: Sage.
Foucault,Management and OrganizationTheory.
Mills, AlbertJ.. and Tancred, Peta (eds.) (1992)
CA: Sage.
GenderingOrganizationalTheory.Newbury Park,
The Politicsof OrganizationalDecision-making.London: Tavistock.
Pringle, Rosemary (1988) SecretariesTalk:Sexuality,Powerand Work. London: Verso.
Seiler,J.A. (1963) Diagnosing interdepartmental conflict. HarvardBusinessReview,41: 121-32.
Simon, Herbert A. (1979) Rational decision making in business organizations. American Economic
Review,69: 493-513.
Wildavsky, Aaron (1979) The Politicsof the BudgetingProcess(3rd edn.). Boston, MA: Little, Brown.
Williamson, Oliver E. (ed.) (1995) OrganizationTheory:FromChesterBarnardto the Presentand
Beyond.New York: Oxford University Press.
Pettigrew, Andrew (1973)
Notes
1. Bacharach and Lawler (1 980: 1).
2. Lukacs (1920/1971 ).
3. Barnard (1938).
4. Follett (7923; 1924).
5. Mondragon has recently deviated from cooperative principles by hiring nonmember workers and centralizing
decision-making: http://www.geo.coop/story/cooperative-movement-vs-global-capitalism
(accessed December
22, 2017).
6. Craig and Pencavel (1992).
7. Dahl (1957: 203).
8. Dalton (1959); see also Mechanic (1962).
9. March and Simon (1958); see also Cyert and March (1963); March (1978).
10. Simon (1957, 1959).
11. Crozier (1964).
12. Hickson et al. (1971 ).
13. Pfeffer (1978; 1981 b).
14. Salancik and Pfeffer (1977).
15. Pfeffer and Salancik (1978); see Pfeffer and Moore (1980) for a study of power in university budgeting processes.
16. Pfeffer (1981 a).
17. Bourdieu (1979/1984).
18. Konar et al. (1982); Baldry (1999).
19. Richards and Dobyns (1957); Wells (1965).
20. Wineman (1982).
21. Whyte (1943).
22. Katz and Kahn (1966: 615).
23. Walton and Dutton (1969).
24. Whyte (1949).
25. Tannenbaum (1968: 3).
26. See Ouchi and McGuire (1975) for a study comparing the benefits of output and behavior control.
27. Eisenhardt (1985).
28. Williamson (1975).
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PART Ill THEMES AND APPLICATIONS
29. Ouchi {l979).
30. Etzioni {1975).
31. Ouchi {l979).
32. Braverman {1974).
33. Sewell {1998).
34. Roy {1959).
35. See, e.g., studies included in Knights and Willmott {l990).
36. Gramsci {1971 ).
37. Czarniawska-Joerges {1988).
38. Alvesson and Willmott (1996); see also Karreman and Alvesson (2004).
39. Lukes {1974).
40. Deetz (1998).
41. Habermas (1971 ).
42. Foucault (1980a).
43. Foucault (1980b).
44. Deetz (1992: 37).
45. Burrell (1988).
46. Foucault (1975).
47. Bentham (1787).
48. Foucault (1973).
49. Townley {1994).
50. Clegg (1989).
51. Deleuze and Guatarri (1972/1977); Deleuze (1993).
52. Doeringer and Piore (1971 ).
53. Czarniawska and Sev6n (2008).
54. Czarniawska and Sev6n (2008: 139).
55. This part of Acker's theory traces to Ferguson {1994).
56. Acker {l 992: 249); see also Calas and Smircich (1992, 1999).
57. For example, see Grant and Tancred (1992); Martin, Knopoff, and Beckman {1998); see also Huff (1990-2009).
58. Fletcher (1998).
59. Ashcraft and Mumby (2004).
60. Hearn and Parkin (1992).
References
Acker.Joan (1992) Gendering organizational theory. In
A.J. Mills and P.Tancred {eds.),GenderingOrganizational
Theory.Newbury Park, CA: Sage,248-60.
Alvesson, M., and Willmott, H. (1996) Making Sense of
Management: A CriticalIntroduction.London: Sage.
Ashcraft, K. L., and Mumby, D. K. {2004) Reworking
Gender:A FeministCommunicologyof Organization.
Thousand Oaks, CA: Sage.
Bacharach, Samuel B., and Lawler, EdwardJ. (1980)
Power and Politicsin Organizations.San Francisco,
CA:Jossey-Bass.
Baldry, Chris (1999) Space: The final frontier. Sociology,
33/3: 535-53.
Barnard, C. I. (1938) The Functionsof the Executive.
Cambridge, MA: Harvard University Press.
Bentham, J. (1787 /1995) Panopticon; or the inspectionhouse. In J. Bentham, The PanopticonWritings{ed.
Miran Bozovic). London: Verso, 29-95. Also at
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163
ORGANISATIONAL THEORY & DYNAMICS
CHAPTERS
• INTENTIONS AND REALITIES OF CHANGE
Intentions and Realities
ofChange
(- ______
1_1n_t_ro_d_u_ct_io_n
_____
~)
PARTA: The Change Process
PARTB: Perspectiveson Change
Organizational
2 Causesof Change
3 Intentions and Realities of Change
6 Change from the Perspectiveof
Organizational Culture
7 Change from the Perspectiveof
Power and Politics
8 Change from the Perspectiveof
Organizational Learning
Psychological
4 Emotions of Change
5 Sensemaking Processes in Change
PARTC: Delivering Change
9 Approaches to Change Implementation:
Directed Change
10 Approaches to Change Implementation:
Facilitated Change
11 Roles People Play in Change
12 Communicating Change
13 Sustaining Change
(- ______
1_4_Co_n_c_lu_s_io_n
_____
~)
Introduction
In the last chapter, we considered the issuesthat prompt change in organizations. The first purpose of
this chapter is to explore the nature of organizational change, to examine the different scales of change
and targets for change within organizations. We will then consider what happens in practice to change
plans and explore the extent to which people can expect change programmes to deliver what is
intended.
•
Main topics covered in this chapter
•
Scalesof organizational change: their size, span, and timing
•
The focus of the change: what is expected to change
•
Exploration of planned and emergent views of change
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ORGANISATIONAL THEORY & DYNAMICS
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•
AND REALITIES OF CHANGE
37
Examination of the extent to which change can be planned and the implications of this for managing
change
Section1: The realities of change-scale, span, and timing
Organizations are never static: people join and leave; new processesare introduced; customers are lost and won; technology moves on. Some of these changes are of no significance to
the majority of the employees, who barely notice them happening; others affect most people in the organization. Some changes result in little disruption to ways of working; others
fundamentally change past practices overnight. These differences in pace and magnitude are
what is meant by the scale of change: how rapid and substantial the change is. Scale ranges
from small, focused, and bounded improvements, to radical changes to the organization.
Small-scale changes, typically conducted step-by-step, are often referred to as incremental
change, and large-scale changes, major shifts in strategy, or practices executed rapidly, as
discontinuous change (Nadler and Tushman, 1995). So we are really comparing ideas of
evolution versus revolution (Burke, 2008). Incremental change may be highly significant, but
it is gradual (Holbeche, 2006). Discontinuous change is typically more dramatic and more
demanding. One example is the change that was brought about by the collapse of financial
institutions, such as Lehman Brothers Holdings Inc., a global financial services company that
had to file for bankruptcy in September 2008, the largest bankruptcy case in US history. The
overnight collapse and the subsequent fallout resulted in shock and, indeed, disbelief that
this could happen, followed by changes in public perception of the financial industry and a
return to part-government ownership of some banks. The scale of the change was sudden
and significant, with the majority of organizations within the industry affected by events.
A related distinction is the span of change across the organization. Some changes affect
the whole organization, as in the corporate collapse of Lehman's or the nationalization of
other banks, while other changes are more local, limited to a particular section, department,
or team within the organization. In discussing discontinuous change, Dunphy and Stace
(7993) distinguish between modular transformation, limited to one section or department,
and corporate transformation, involving the whole organization.
Organizations tend to create their own ongoing incremental changes during periods of
relative stability and many undergo major discontinuous change when things happen in the
external environment, often affecting whole industries (Mintzberg, 1991; Pascaleet al., 2000).
The challenge for those managing change lies in deciding how large any change needs to be
at any given time, whether the change is a one-off event or needs to keep happening, and
the speed at which it needs to happen. It is then a question of using the right tools or methodologies for the right task (Burke, 2008).
So what does this tell us about change? That change can occur in waves across a whole
industry; that it is not easy to foresee or plan for such waves; that, in this case, apparently
sound decisions can, with hindsight, be seen as dramatically flawed; that, at times, major
radical moves, of a discontinuous scale, such as the acceptance of government funding, are
See Chapter 9 for
more on Dunphy
and Stace: p. 195
See Chapters 9
and 10 for more
on possible
methods and
techniques
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ORGANISATIONAL THEORY & DYNAMICS
38
PART A: THE CHANGE PROCESS
■
Change in Practice 3.1
Discontinuouschange at RBSand Barclays:A tale of two banks
With a long history dating back to the 1700s, The Royal Bank of Scotland (RBS)was the first Scottish
bank to install automatic cash machines and the first bank in the world to make its cash machines
available to cardholders from other banks. In August 2005, RBSexpanded into China, acquiring a
10 per cent stake in Bank of China for £1.7 billion. The bank was the 2005 recipient of the Wharton
Infosys BusinessTransformation Award, given to enterprises and individuals who use information
technology in a society-transforming way.
Barclays Bank similarly traces its origins way back to 1690. It launched the first credit card in the
UK, Barclaycard, in 1967, developed some of the best-known products, and set out on international
expansion, first establishing a US affiliate in San Francisco. Thus, by the mid-2000s, both banks were
well-established players in the global market.
In March 2007, Barclays announced plans to merge with Dutch bank ABN AMRO, one of the
largest in Europe, with operations in some sixty-three countries. In the past few years, ABN AMRO's
stock price had stagnated and it had failed to break into the ranks of its top five peers. However, the
financial market was at its peak of profitability and ABN AMRO was still seen to be a significant
player, commanding a high value. Barclays was proceeding with merger talks when RBSput in a
higher counter-offer, nearly 10 per cent higher than Barclays' offer. As a result, shortly afterwards,
RBSwas announced as the successful bidder and work began on the merger of the two entities.
Just one year later, the financial markets were in trouble. The price paid for ABN AMRO now
looked ridiculous: vast losses, rather than opportunities for profit, had been acquired. On 22 April
2008, RBSannounced the largest rights issue in British corporate history, to shore up its reserves
following the purchase of ABN AMRO.
The markets continued to collapse and, in October 2008, the British Prime Minister Gordon Brown
announced a UK government bailout of the financial system. The Treasury had to put £37 billion of
new capital into RBSand two other banks, to avert financial sector collapse. As a consequence of this
rescue, the chief executive of RBS,Sir Fred Goodwin, offered his resignation, which was duly accepted.
In January 2009, it was announced that RBShad made a loss of £28 billion, of which £20 billion
stemmed from ABN AMRO. The UK government now held a 70 per cent stake in RBS.
In the meantime, despite the global financial meltdown, Barclays rejected the need for any
government assistance and instead turned to the China Development Bank and Qatar Investment
Authority to increase their holdings. In 2008, Barclays bought another credit card {Goldfish), gaining
1.7 million customers. It also bought a controlling stake in a Russian retail bank, Expobank. In
September 2008, with the dramatic collapse of the investment bank Lehman Brothers, Barclays was
well placed to acquire a significant slice of its core business.
Within the space of twelve months, the tables were turned and the bank that failed to secure one
merger was positioned to play an influential role in the future of the finance industry, backed by
sources from the Middle East and China, operating without government constraints. 1- 3
needed to survive, even though they may appear unpalatable and fundamentally change the
nature of the organization.
As Change in Practice 3.1 illustrates, the challenge lies in diagnosing what is happening and
then deciding on the appropriate response. As discussed in Chapter 2, organizations need to
be alert to what is happening in their industry and the wider business environment, as well as
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AND REALITIES OF CHANGE
39
cope with the myriad of other internal and external issuessuch as trade union views, managers joining or leaving, and so on (Tushman et al., 1986). The senior leaders of an organization
may need to consider both their own organization's place within its cycle of growth and the
impact of the cycle of the industry within which it sits in order to decide whether incremental
or discontinuous change is needed. The Schumpeter column of The Economist,26 September, 2009, comments that:
The businesscycle continues to prey on the modern economy. The 2008 (financial) debacle
might have come as lessof a surprise if (students) had been taught that there have been at
least 124 bank-centred crises around the world since 1970, most of which were preceded
by booms in house prices and stock-markets, large capital inflows and rising public debt.
(ibid: 85)
The timing of changeinitiatives
Despite the difficulties in interpreting the external environment, organizations do make
changes in anticipation of what might be needed, known as anticipatory change (Nadler
and Tushman, 1995). Anticipatory changes can be incremental, such as making alterations to
formal structures or particular processes,for example, in order to prepare for an increase in
product volumes in a particular range. But anticipatory change can also be discontinuous,
involving a fundamental redefinition of the organization to be ready to face future opportunities and challenges. While usually initiated by senior management, such changes can also
begin with the actions of others in the organization. For example, at Sony, it was a mid-level
engineer who challenged top management to overcome its prejudice against making 'toys'
and developed the PlayStation, which, once launched, accounted for more than 40 per cent
of Sony's profits (Hamel, 2000) and continues to be a leading product. This was a change
that had enormous impact on the allocation of resources and structures-getting ahead of,
and indeed changing, the focus of the market at that time.
Yet, sometimes, organizations are forced to respondto changes in their industry's environment and to respond immediately, such as in the collapse of the financial markets, when
both RBSand Barclays were forced to effect significant change in how they were funded in
order to survive. These responses are reactive change (Nadler and Tushman, 1995). Like
anticipatory change, reactive change can be either incremental or discontinuous. For example, incremental reactive change can be driven by the need to offer the same type of
product or level of service as a competitor. This was the case with Nokia's update of its own
Internet-connected multimedia smartphone in response to the launch of the Apple iPhone.
On its launch weekend, in January 2007, Apple sold 270,000 iPhones in the first thirty hours:
the product was a clear success and competitors were left standing, needing to find a rival
product fast. Discontinuous reactive change typically occurs in response to a crisis. This may
involve deep changes in the organization's way of doing business. This was the case with the
impact of RBS'ssuddenly imposed part-nationalization, which resulted in the departure of
the chief executive and a fundamental review of the business operating model.
Burke (2008) suggeststhat more than 95 per cent of change remains rooted in incremental change, and Tushman and Nadler (7986) note that the most effective organizations take
advantage of the relatively stable periods to continuously build incremental change, and
that even the most conservative of organizations expect some ongoing small changes, both
167
ORGANISATIONAL THEORY & DYNAMICS
40
PART A: THE CHANGE PROCESS
anticipatory and reactive, which do not make too many waves. They cite the commonly
held view that almost any organization can tolerate a 'l O per cent change' without disruption-that is, changes that are still compatible with the prevailing structures, systems, and
processes. Romanelli and Tushman (1994) depict organizations as evolving through relatively long periods of stability with bursts of discontinuous change, and those bursts of discontinuous change, in turn, laying the foundations for new periods of equilibrium. They call
this the punctuated equilibrium model of change. Others suggest that it is possible for organizations to continuously adapt themselves in a fundamental manner, such that they are
constantly reinventing themselves (Burnes, 2009). This enables them to avoid discontinuous
change. Indeed, it is easy to overlook the importance of the overall impact of incremental
changes and the role of personal initiatives in making change happen (Frohman, 1997). The
Sony PlayStation is such an example: whilst its creation brought about discontinuous
change, the instigation of the initiative came from the determination of one engineer building one new product, which would typically be classed an incremental change, in terms of
its small-scale beginnings.
Change in Practice 3.2
Delivering mail: Changeat TNT and Royal Mail
TNT operates a global distribution business through two divisions: Express(parcels) and Mail {letters).
Born of a Dutch state-owned postal company, it was privatized in 1989 in response to the perceived
threat of technology to the traditional mail industry. Following a series of mergers and takeovers, it
was listed on the stock exchange in 1998. It now continues to expand and serves some 200 countries,
employing around 160,000 people.
Royal Mail is the UK's national postal service, a limited company owned by the government. It
employs over 155,000 people in the UK. It has invested significantly in new technology and
continues to be the main mail delivery provider in the UK.
The principle issue facing both companies is the fundamental change in their external context.
Online shopping continues to drive volume growth in parcels, whereas delivery of letters continues
to decline, by some 9 per cent per annum.
Both organizations have been forced to change working practices, to reduce staff numbers and
costs, to find new ways forward.
TNT has had to work hard to improve the margins of its parcel business and to deal with the
decline in mail volumes. It has continued to invest in its parcels infrastructure, growing its intercontinental success in this field. In 2010, it announced its intention to lose 11,000 mail person jobs.
Discussions with the unions were difficult, but agreement was reached on a reduced number of
redundancies at the end of January 2011. It is now operating its Mail and Express businesses as two
separate entities, recognizing that Mail faces a continuously declining market.
Royal Mail has faced an uncertain future, with the ongoing question of privatization hanging over
it. In the past decade, it has made many attempts to modernize its work practices, but without
significant change. The Communication Workers Union has fought to protect employment,
engaging in a series of disputes and strike action. Year after year, commentators have suggested that
modernization is moving too slowly to save the service. Its future remains uncertain_4 - 7
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AND REALITIES OF CHANGE
Perhaps modernization at Royal Mail is moving too slowly to save the service; the incremental
changes that it has managed to introduce have not been of a scale or speed to sufficiently impact profitability. Mintzberg (1991) notes that, during periods of growth and stability, incremental change is relatively easy to implement, but that this in itself can become a double-edged
sword because the internal forces for stability develop self-reinforcing patterns, so that organizations may not register external changes that are a potential threat. Somewhat more dangerous is that, where they do recognize the threat, the response isfrequently heightened conformity
and commitment to 'what we do best' rather than response by changing-the shadow side of
playing to one's strengths. Royal Mail continues to cite the quality of its delivery and its public
service ethos, wanting to ignore the continuing fall in number of users and profit. This lack of
recognition may exacerbate the situation, until the decline in performance is so severe that the
organization risks failure and unwanted or unexpected discontinuous change is forced upon it,
in order to survive. This could yet be the outcome at Royal Mail.
In our experience, different changes may be taking place in the same organization at the
same time: some may be anticipatory changes, while others may be in reaction to new external issues;some may be incremental and others discontinuous. It can be difficult for organizations to be clear about the scale of change that they anticipate versus that which they
experience, particularly whilst in the midst of it. For example:
•
Buchanan and Boddy (1992) note that change that is seen to be of strategic importance
in one setting may well be considered a mundane adjustment to another
organization;
•
Beugelsdijk and Slangen (2001) report that, often, employees at lower levels in the
organization experience the change as incremental, whereas senior managers tend to
describe it as discontinuous and revolutionary.
It seems that change may have many different, subjective interpretations; the realities of
41
See Chapter 6 for
more on Royal
Mail: p. 122
See Chapters for
more on sensemaking: p. 91
change are often contested and it is certainly clear that hindsight plays a significant role in
defining the 'reality' that has taken place.
The depth of change: First-order and second-order change
The descriptions of incremental and discontinuous change focus on its pace and scale as well
as its span. A further distinction is between what is known as first-order and second-order
change. First-order change makes changes within an established way of doing things,
whereas second-order change creates a completely different way of looking at the situation
(Senge, 2005). But what does that mean in practice?
First-order change involves trying to improve how something is done. It can typically be
measured in a comparative way by assessing how things are before and after, to see how
much improvement has taken place. For example, a team-building day might help a group
to get to know each other better, resulting in generally improved levels of trust. At an organizational level, the acquisition of ABN AMRO was a first-order change for RBS-continuing
a familiar business expansion model.
Second-order change refers to a change that results in operating from a different perspective or frame of reference-that is, thinking completely differently about the issue. Hamel
(2000) refers to the process of reorientation as 'learning to forget': finding ways of letting go
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ORGANISATIONAL THEORY & DYNAMICS
42
PART A: THE CHANGE PROCESS
of biases and assumptions about what is viable to allow the creation of something new. Taking the previous examples, the team may decide that trust has nothing to do with its effectiveness and focus on other aspects beyond the team, which result in going about its task
entirely differently. At an organizational level, banking may be undertaken in an entirely different way: for example: the experiment undertaken by the Virgin Money company, which
has launched a person-to-person lending service that allows individuals (or groups of individuals) to structure formal loans with people whom they know, using Virgin Money as the
service provider rather than as the lender (Pritchard, 2009).
Despite the apparent logic, first-order change is not always automatically incremental, nor
is all second-order change discontinuous.
• Incremental,second-orderchange An organization's sales team may completely rethink
its approach to working with the research and development (R&D) unit, so that, instead
of trying to instruct the unit about areas of research that it must undertake and facing the
same resistance time and again, it decides to listen and understand the R&D unit's interests, energy, and resources, enabling both parties to develop the research agenda together, collaboratively-a second-order change.
• Discontinuousfirst-orderchange Looking back to Change in Practice 3.1-the tale of two
banks-the Barclays' entity now appears largely unchanged despite a significant period of
disequilibrium, changes in funding sources, and subsequent mergers. The change it has
undergone is first-order in the sense that it builds on what already exists: the overall organization and its thinking remains largely intact.
SeeChapter 6 for
more on culture
and change:
p. 115
It may be important to understand the nature of change in this way in order to assesswhat else
needs to happen. Typically, organizations change their structures and processes (first-order
change) and then wonder why employees are adapting old practices to the new circumstances,
rather than rethinking their approach (second-order change). The informal systems in organizations are as important in achieving shifts in thinking as the formal ones; it is often the informal
ways of'how things get done around here' that hold an organization in its past ways of operating
and prevent second-order change from occurring (Hatch and Cunliffe, 2006). In our experience,
desiring second-order change, but achieving only first-order change, is one of the biggest organizational frustrations.
Exercise3.1
Identify an organizational change with which you are familiar or interview someone else about his
or her experience of an organizational change. Discuss your interpretation of this change.
•
How great was the scale of the change-incremental
or discontinuous-and
to what extent did it
span across the organization?
•
Was this change brought about in anticipation of the need or in response to external changes or
pressure?
•
How deep was the change-first-order
or second-order?
•
How easy or difficult is it to classify the change in these ways? Why do you think this is so?
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Section 1 Summary
In this section, we have:
•
examined two key scales of change, incremental and discontinuous, and considered how
change processes can be local or span the organization;
•
explored the implications of anticipatory and reactive timing for organizational change;
•
considered the depth of change-first-order
and second-order organizational change.
Section2: What changes?
Some change theories focus on the whole organization-the macro level-and others on
the group or the individual-the micro level. Inevitably, these are not discrete groupings:
all are interrelated and, indeed, organizations interrelate with other organizations and
their external environment in ways that are crucial to understanding how change happens. However, it can be helpful from a practical point of view to understand the primary
focus of the change intervention. This section explores change at the individual, group,
and organizational levels.
Changefocusedon individuals
Some approaches to change begin with the individual, the assumption being that changing
individuals' skills or views will help the organization to move in its new direction. Individuals
have a sense of what they expect to do at work and get from being at work-and their own
idea of whether their expectations are satisfied. Employers are generally trying to motivate
people-to work harder or to undertake tasks in a different way, or with a different focus.
Formal training and induction schemes are often as concerned with generating appropriate
approaches to the work (in terms of flexibility or teamwork, for example) as they are with
specific skills.
Many changes at the individual level are in the service of a limited change. An example of
this is the training of the sales and marketing team in selling skills to improve its effectiveness
at winning new business. Whilst crucial to business success,the training is directed at one
team within the organization. On the other hand, NHS hospitals in the UK have focused the
fight against the spread of 'superbugs' resistant to antibiotics at the individual level, with
training in hygiene and hand-washing. They expect this to improve the success rate of containing the spread of superbugs at the organization level.
Lessfrequently, but significantly, change focused on individuals can be second-order in
nature. For example, post-privatization, British Airways embarked on a change programme
to put customer service at the heart of every activity. Whilst training took place at the individual level, the programme was expected to achieve a significant cultural shift across the
airline through the creation of new ways of thinking about the customer, thereby achieving
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such quality in its customer service that it could claim to be 'the world's favourite airline'.
Because the change was directly linked to the strategic intent of the organization, BA was
able to reinforce its importance and model different ways of behaving towards the customer in many ways beyond the individual training, encouraging second-order change to
take hold.
Training in new skills is just one intervention at the individual level. Others include the
following.
Recruitmentand selection This involves getting the right people in the right jobs or changing the people within a team, taking on new hires with different skills or different motivation.
It may include placing people in positions that are important to the overall change effort.
The appointment of key people in strategically important roles may serve to plant new ways
of working across the organization. As examined in Chapter 2, one of the more extreme examples is the appointment of a new CEO whose primary purpose is to deliver significant
change-to fundamentally transform the organization in ways that the existing leadership is
unable to do.
Executivecoaching This may be used, particularly at the more senior levels, to achieve a
change in individual approach: it offers the individual space to think through the change that
is required of him or her, perhaps in a new role, or to face new organizational demands.
Change at the group level
See Chapter 5 for
more on how
change is
understood: p. 85
Work within organizations is increasingly delivered via project teams, comprising various
representatives or specialists rather than individuals working on their own. The particular
prevalence of self-directed groups or flexible project pools has resulted from the 'flattening'
of old-style hierarchies and the organization's need to be flexible, to be able to bring a group
together and disband it once the need has passed. Burke {2008) points out that the work
group is the primary source of social relationships at work; as such, it plays a key role in determining the individual's sense of organizational reality. For this reason, working at group
level may provide a powerful change intervention.
Change interventions at group level include:
• assisting with setting goals, defining roles and responsibilities within the group, and clarifying group purpose in relation to new or future needs;
• exploring decision-making, communication, and interpersonal processes,to improve
ways of working.
Most of these interventions are likely to result in first-order change-that is, altering the response to the situation and each other, without fundamentally changing the thinking about
the situation. Sometimes, our work with teams focuses both on how they work together and
how they think together-to form their strategy, for example. Where that takes the team to
a fundamental shift in thinking, such that it together creates a new strategy, based on different assumptions, for example, then the change in frame of reference is likely to constitute
second-order change.
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Change at organizational level
Alternatively, the intended focus for change may cover a large swathe of the organization. In the current market, changing the shape and structure of organizations is often
seen as the route to corporate salvation, initially led by 'best practice' firms in Japan and
Germany in the 1990s, and then propelled into a range of restructuring approaches as a
result of the recession in 2009-11. Large-scale organizational change takes many forms
including the following.
Delayering There is a trend for the creation of leaner organizations by taking out layers in
the hierarchy, for example delayering by creating a global matrix structure across countries
and products. This approach first took hold in Europe in the 1980s and, by the 201Os,had
become accepted practice across the private sector in Western Europe.
Such structural changes may require different job design and behaviours, with employees assigned new roles and responsibilities, typically at middle manager grades. Those who
remain may find themselves more accountable, which can be a source of job satisfaction,
but can also bring greater pressure to perform, which can be a source of stress (Lawrence,
2002).
Another significant change has been through reducing headcount to reduce
costs-also often referred to as rightsizing.The global recession of 2008-11 created large-scale
job losses,particularly in the US and the UK, as well as in Greece, Spain, and Portugal. Cost
containment is not always triggered by revenue reduction, however, and has now become a
common way of increasing profits and managing performance even in steady market conditions. Lawrence (2002) notes that investors respond positively to headcount reductions, even
when profits are already good; typically, shares soar when a global entity announces major
job cuts worldwide. Thus, the focus of the organization change is sometimes selected to
impress external parties, such as investors, rather than to respond to perceived internal issues.
Downsizing
Outsourcing Contracting out key services to a third-party provider remains a strong trend.
The drivers are competitive pressures to reduce costs and to divest the company of all but its
core business. In the first wave of outsourcing, the 'back office' functions such as physical
security and catering were outsourced to specialist providers, followed by IT and parts of
human resource management, and then other administrative tasks (airline ticketing), as well
as manufacturing. Alongside potentially reducing costs, outsourcing offers ways of flexing
resource to respond to needs.
It is common for organizations' outsourced call centres to be offshored anywhere in the
world to service that organization's entire global client base, with India known as 'the back
office of the world' for a period in the 201 Os(Lawrence, 2002). The quality and predictability
of offshored work has increased exponentially, so that the choice is no longer automatically
between cost-saving and quality. A European retail client recently compared the difference
between first moving manufacturing to China in the late 1990s and the move to new markets
in Eastern Europe in 2010. He told this author that he believes that his managers have
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developed, through experience, the skills to manage such fundamental changes, which, in
turn, has decreased the pain and increased the successof such ventures. Yet even this market
continues to evolve: the dynamism of wage levels resulted in call centres moving from India
to the Philippines and Malaysia, offering yet more choices and potentially new issuesof skill
and capability.
This change focuses on reviewing processes or the technology to
improve the performance of the organization. Specific methods, such as Lean or Six Sigma,
are seen to produce significant cost savings by streamlining processes to maximize outputs.
Such approaches tend to come in cycles of fashion. In global organizations, such as Dow
Chemicals, GE, or Toyota, such methods are applied on a worldwide basis,compelling different countries and operating units to adopt standardized approaches, the outcomes of which
can be compared across the organization.
Process reengineering
See Chapters 9
and 10 for more
on change
methods
See Chapter 12
for more on the
communication
of mergers and
acquisitions
(M&As): p. 286
Merger and acquisition Although the terms 'merger' and 'acquisition' are often conflated,
they mean slightly different things. When one company takes over another and clearly establishes itself as the new owner, the purchase is called an acquisition, as happened when
RBSacquired ABN AMRO. From a legal point of view, the target company ceases to exist,
the buyer 'swallows' the business, and the buyer's stock continues to be traded. In the pure
sense of the term, a merger happens when two firms, often of about the same size, agree to
go forward as a single new company rather than to remain separately owned and operated.
This kind of action is more precisely referred to as a 'merger of equals'. Both companies'
stocks are surrendered and new company stock is issued in its place. For example, both
Daimler-Benz and Chrysler ceased to exist when the two firms merged and a new company,
Daimler-Chrysler, was created.
In practice, however, actual mergers of equals do not happen very often. The merger is
often a defensive move to avoid being taken over by the biggest players. Being bought out
often carries negative connotations, so, by describing the deal as a merger, deal makers and
top managers try to make the takeover more palatable. Usually, one company will buy another and, as part of the terms, simply allow the acquired firm to proclaim that the action is
a merger, even if it is technically an acquisition.
Holbeche (2006) points to the intense pressure on merged organizations to achieve discontinuous change in short time horizons; where this is not evident, the merger is seen to
have failed. This change goes beyond financial results and is seen to encompass the idea of
'fit' between the two organizations in terms of their people, culture, and values-change of
second-order. This requirement has brought focus firmly on the totality of the change effort,
including the quality of the management and leadership. Researchundertaken at Roffey Park
Institute found that people working in merged organizations were subjected to multiple
waves of change, which had a strongly destabilizing effect (Holbeche, 2006). Thus, achieving
the second-order change needed to bring two entities together to create a successful new
whole remains challenging.
Cisco is an example of an organization that is seen to have managed successfully the
acquisition of a range of partners. Founded by a married couple in 1984, Cisco was one of
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the first companies to sell commercially successful routers supporting multiple network
protocols, and expanded by acquiring a variety of companies to bring products and talent
into the company. Acquisitions, such as Stratacom, were the biggest deals in the US at
the time. Cisco has developed criteria for deciding whether or not to acquire a company
and a process for managing the acquisition, such that this in itself has become a core
competence. It remains one of the most valuable companies in the world (see http://www.
cisco.com).
Strategic alliances Strategic alliances reflect the increasingly boundless nature of new
organization forms (Lawrence, 2002). A strategic alliance is a formal relationship between two or more parties to pursue a set of agreed-upon goals or to meet a critical
business need. This is a way of extending the 'boundary' of the organization while each
remains independent. Partners may provide the strategic alliance with resources such as
products, distribution channels, manufacturing capability, project funding, capital
equipment, knowledge, expertise, or intellectual property. The alliance is a cooperation
or collaboration that aims for a synergy in which each partner hopes that the benefits
from the alliance will be greater than those from individual efforts. The alliance often
involves shared expenses and shared risk. In the UK, the Disasters Emergency Committee
is an umbrella group comprising thirteen UK charities. These charities are all associated
with disaster-related issues such as providing clean water, humanitarian aid, and medical
care. It brings together a unique alliance of the UK's aid, corporate, public, and broadcasting sectors with the purpose of rallying the nation's compassion, and ensuring that
funds raised go to DEC agencies best placed to deliver effective and timely relief to people most in need.
Sometimes, strategic alliances cross national boundaries and, increasingly, cross industries. They are sometimes formed between a company and a foreign government, or
among companies and governments. These kind of alliances have the potential to impact significantly the shape of the market, as has occurred in the airline industry, where,
for example, American Airlines and British Airways (along with several other smaller airlines) formed the One World Alliance sharing, amongst other things: advertising and
marketing; coding; reciprocal lounge access; and consolidated frequent flyer programmes (Lawrence, 2002). This and other airline alliances have been formed because
profit margins within the industry are thin for all and ownership of the assets expensive.
They hope to increase their collective market share in all major world markets, in which
there is now overcapacity. This illustrates the extent to which the environment influences
change in organizations and, in turn, organizations move to shape the environment in
which they operate.
All such structures can provide real challenges for the employees working within them,
and the work of Hirschhorn and Gilmore (1992) highlights the issues of working in the
'boundaryless organization'. They consider the example of an engineer working on an interfunctional project who must play multiple roles, sometimes being the technical expert,
sometimes acting as the representative of the engineering department to make sure that it
does not get too much to do with too few resources, and sometimes needing also to be a
loyal team member as part of this project team. He has to play all three roles, sometimes
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within one meeting, juggling 'hats' in ways that were unknown in traditional organization
structures with clear roles and accountabilities.
Exercise3.2
Consider again the organizational change that you chose for Exercise 3.1.
•
Was the change focused at the individual, group, or organizational level?
•
What form did the change actually take?
Section2 Summary
In this section, we have:
•
explored the distinction between change focused at the individual, group, and whole
organization level;
•
examined some of the many forms that organizational change can take.
Section3: How intentions and realities of change relate
Implicit in deciding who or what is the focus of change and how large or fast the change
needs to be is the belief that you can take such decisions, that change can be planned for and
implemented in accordance with that plan.
The planning of change has played a significant part in change management theory
from the 1940s to the present day, yet, in reality, change is rarely delivered totally in accordance with the plan, as noted in Change in Practice 3.1. Similar unexpected twists
happen to us even in our day-to-day lives. For example, you may plan a barbecue to
celebrate a relative's birthday, when the weather forecast is set fair and all of the family
are free to attend; you are delighted, and decide upon champagne and cake to open the
proceedings. However, on the day in question, the rain sets in early, two of the cousins
quarrel, drink too much champagne, and behave badly, and the aunt providing the cake
falls ill and cannot attend. The plan was sound, but a barbecue turned out to be an unwise choice in the context of the weather on the day and unforeseen issues produced
unplanned outcomes.
This section will examine two contrasting views of change, planned change and emergent change, and consider how they inform change management. Planned change emphasizes the managers' deliberate intentions to achieve organizational change, with a
clearly defined start and end point for the change. Emergent change emphasizes the view
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that whether or not change is intended, organizations are, in fact, constantly evolving. It
focuses on creating the conditions for change to occur, to enable change through continuous ongoing processes of organizational experiment and adjustment, with no defined
end state. The section then draws together the implications of these views for managing
change.
Planned change
Over the past half-century, it has become accepted practice for most organizations, particularly medium-to-large-sized organizations, to undertake some kind of business planning, for
example plans to meet budgets, for growth or market segmentation, or for specialization.
Plans tend to encompass actions for the immediate year and sometimes strategies for, say,
five years hence. Public sector organizations need to provide plans that are open to central
authority scrutiny as part of the process of review of their performance; voluntary sector
bodies face similar requirements from funders. So plans are used both in the service of
achieving maximum effectiveness and in response to regulatory or governance requirements. Organizations may have dedicated planning departments and use formal planning
techniques to assessthe external environment as part of this process.This type of planning is
often used to decide what needs to change in the business,with the underlying assumption
that intentions will translate in to realities.
Important early work in developing a view of planned change was undertaken by Kurt
Lewin, a German-American psychologist working in the early 1940s; indeed, the very term
'planned change' is often attributed to him. He distinguishes change that is consciously embarked upon from that which just seems to happen, and undertook research into the conditions that enable individuals and groups to change. He incorporates his research findings
into his approach to change and two of his frameworks, force field analysis and the threestep model, are still used by practitioners today to decide what needs to change and to create
plans to effect the change.
Forcefield analysisis a planning tool that provides a framework for looking at the factors
(metaphorically described as 'forces') that influence a situation. The process requires a
change agent to identify forces that are either driving movement towards the change (helping forces) or blocking movement towards the change (hindering forces). Thus, Lewin draws
attention to the tendency of organizations to seek to maintain their equilibrium in response
to disrupting changes. The underlying principle of the 'force field' is that helping forces must
outweigh hindering forces if change is to happen.
Forcefield analysis:An example
A manager deciding whether to introduce new technology (called SAP)for his billing system
acrossa global organization might draw up a force field analysis,as in Figure3.1. In the diagram,
the intensity of the 'forces' is represented by the thickness of the arrows.
Once the manager has carried out an analysis, he can decide whether the project is viable.
In the example in the figure, he may initially question whether it is worth going ahead with
the plan.
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Forces against change
Forces for change
Customer pressure for
timely invoices
Staff frightened of new
technology
Improve speed of
production
Plan:
Upgrade with new
SAP technology
Environmental impact
of new technology
Control rising admin
costs
Cost
Businessdisruption
Figure 3.1 Force field analysis
Exercise3.3
Trying out force field analysisfor yourself
Now apply this approach to a change that you are considering making in either your work (such
as reorganizing a team that you manage) or personal life (such as taking up exercising, starting a
new course of study, or applying for a new job). Identify the forces for and against the change.
•
What does the exercise tell you?
•
How could that affect your decision and approach to the change?
Lewi n's three-step model of change
1. Unfreezing the present
2. Moving to a new level
3. Refreezing the new level
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This planning process has been adapted many times and continues to be widely used. It
encompasses the following.
1. The first phase involves sound analysis of the internal and external environment to gain a
clear focus for the unfreezing.Using the SAPexample in Figure 3.1, unfreezing at the
individual level may involve promoting employees with good IT skills; at group level,
introducing new approaches to team productivity, which do not depend on individual
overtime; at an organizational level, designing a new matrix structure to improve the
information flow and to discourage units from operating in separate silos. Planscan then
be aimed at helping employees to understand the need for change, so that they are ready
to unfreezefrom the present.
2. The second step in the plan is movement, when it is expected to see people behaving
differently. Successdepends on very careful planning, to ensure that all key parties who
need to change are targeted, and that the process is lead by managers who have the skill
and determination to overcome resistance from their teams.
3. The final phase, refreezing,involves stabilizing the changes, making them part of the
system, so that people experience what is new as integral to what they do. For example,
part of the refreezing may involve making changes to the recruitment process for the
future, to ensure the hiring of more people with the new skills sets or behaviours, or
changing the reward system to ensure that it reinforces the behaviour changes.
Lewi n's original ideas of planned, participative change focused on the needs of small groups
of employees to adopt change through being involved with the implementation. As noted in
section 1 of this chapter, organizational change may encompass a whole range of different
scales and spans of change, from the rollout of new technology, to the sale of part of the
business. Once change is discontinuous and affecting the whole organization, the principles
of 'unfreezing' and 'refreezing' become more complex. Some argue that Lewin'sthree phases
are ill-suited to this purpose (Conger, 2000). In large-scale changes, the leader often has little
connection with or control over the people affected or the actions of the incoming organization or provider, so that planned change now sometimes becomes top-down imposition of
structural and process changes (By, 2005).
Many writers suggest that the planned view is most applicable to incremental changes
(Burnes, 2009). Here, leaders can plan small-scale changes, try out new ideas to see which
are likely to be effective (that is, where there is movement), and try to induce commitment
within the organization through continual, but low-scale, change. This is sometimes called
logical incrementalism(Quinn, 1980). So, as we noted in Change in Practice 3.1, the introduction of cash machines was an important change, probably planned well in advance in
order to gradually install the machines. The resulting changes in how business was conducted, the reduction in counter service, and the subsequent reduction in the number of
bank branches on the high street was a gradual shift, introduced through careful planning
over a number of years. Had the customer shown no appetite to use the machines, cash
machines might have died away and alternative plans might have been made.
Leaders who embrace the view that change must be planned for assume that they can
be sufficiently certain in their analysis to decide what needs to change, and how, as well as
sufficiently able to control the variables in the plan to achieve the outcome they want. Such
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views tend to pay attention to patterns of authority in an organization and expect that
commands that are issued from the top (for example to introduce a new structure) will
travel through the organization in a determined way to create a particular effect. Thus, the
planned change view:
•
anticipates a relatively predictable external environment, in which the economic conditions or government intervention or changes in competitors do not get in the way of the
plans before they are exercised-that is,the assumption of a reasonable degree of predictability and control during the time span of the change;
•
expects communication to be efficient and skilled, ensuring that there is minimal distortion within the system so that everyone understands the same picture of the future
state;
•
depends on a critical mass of people within the organization becoming quickly aligned to
the change and working to create the new future state without resisting or refusing;
•
believing that change is systemic and, in paying attention to the impact of key interventions in the system, changes in the overall system can be effected.
Most managers do adopt a planned view of change, for without it there seems to be little
alternative, except to 'wait and see'. Large consultancies typically work with change models
based on Lewin's three-stage principles, producing timetables, objectives, and methodologies for the different stagesof change, so that the view remains prevalent in USand European
organizations. However, the planned view is sometimes criticized for seeming insufficiently
flexible to be helpful in unexpected, discontinuous change (Burnes, 2009).
Johnson (1993) suggests that managers often consciously pursue a planned incremental
approach, aware that it is not possible to know about everything that could affect the organization, but recognizing the need to cope with uncertainty and to keep moving-that planning has its place, but cannot account for everything that happens. He suggeststhat the total
pattern of action requires constant, conscious reassessment of the whole organization, its
capacities, and its needs. We have certainly found this pragmatic, ongoing reassessmentto
be helpful: by so doing, organizations can find ways in which to shape the direction and to
integrate the small changes. Allowing for this is a crucial part of the planning process.
Emergent change
In the last twenty years, some organizations have chosen to step back from strategic longterm planning because they perceive the inevitability of other events getting in the way,
which renders it invalid. However, those who criticize the planned view do so from a range
of different perspectives: there is not one single alternative view. Some comment on the
complexity of modern organizations; others, the speed of change in a high-tech global environment; others still, on issuesof power and politics that make plans unmanageable, and so
on. What they largely share is a view of change as emergent-that is, as an ongoing process
of organizational adaptation, with the organization being interdependent on the much
larger external environment. The environment affects the organization in unpredictable
ways, resulting in a complex mix of messy decisions, with no one right answer, such that
decisions need constant refining (Dawson, 2003).
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This section will now examine more closely what it means to work with an emergent view
by examining three different lenses on emergent change.
l.Emergentchange:Readinessforchange
One view of emergence focuses on organizations developing the capacity to change, to be
agile enough to change.
In examining the issue of readiness, Boxall and Purcell (2008) distinguish between shortrun responsivenessand long-run agility. Short-run responsiveness includes being able to
increase or decrease the headcount, for example, through use of fixed-term contracts to
match cyclical needs, applying fixed salary base rates, with top-up bonuses to match the
organizations results, adopting multi-skilling across roles, such as the BBC requiring radio
studio managers to be able to perform some studio engineering tasks, as well as balance the
sound. Long-run agility focuses rather on being able to change technology or products faster
than competitors, for example by outsourcing some aspects of production (as discussed in
section 2), whilst protecting the critical core workers, whose skills are crucial to a firm's core
or distinctive capability.
To achieve agility, the organization needs the capacity to continually scan the environment
for patterns or trends in order to inform the focus for experimentation and action. Scanning
involves picking up small signals, making sense of an incomplete picture. For example, in
2008, a small number of property companies were able to recognize the signals of overstimulation in the housing market before the crash, but the majority paid attention to the
relative market share of their competitors and, because the competition continued to perform strongly right up to the moment of the crash, their narrow focus rendered them blind
to other signals.
The emergent-readiness view defines the leader's role as the communicator of the longterm intentions and encouragement of employees to be alert to possibilities to move in that
direction. It includes the acceptance of, and paying attention to, issuesof power and politics.
Experimentation is encouraged, with enough trust between parties to take some risks. This
combination of experimentation, risk, and trust is used to convert opportunities into results,
as in the example of the Sony manager's interest in the PlayStation; it is expected that change
will emerge through starting where there is some interest to cultivate (Handy, 1994; Holbeche, 2006). This may require more skill on the part of the managers than simply offering
instruction; it is a more sophisticated approach to leadership.
See Chapter 7
for more on
power and
politics
2. Emergent change: Renewal
Another way of thinking about emergent change is based on the principles of the ecosystem,
explored by Hurst (2002: 2) who suggests:'Modern business organizations advance strategically by accident, economically by windfall and politically by disaster. This does not mean
that events in organizations are random or capricious or unmanageable.'
Hurst (2002) proposes that rational actions and plans are not wrong, but are not sufficient
when organizations face complex dilemmas, that there are oscillations between the need for
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clear analysis and clear direction and the times when this will not work. He considers what it
takes to renew or revitalize an organization and likens the patterns of oscillations to those of
the ecosystem,describing the life cycle of the forest by way of example.
•
Change is continuous, sometimes smooth and incremental, sometimes rapid and discontinuous-steady growth of trees, then huge bursts during which the forest spreads. In
industry terms, this might equate to the exponential growth in the music industry from
the 1960s to the 1990s,with the sale of CDs peaking in the early 1990s.
•
Renewal requires destruction. The point is reached at which the only way to open up
spaces is to creatively destroy the large structures within the forest that are eating up
resources. In music industry terms, new sources of music became available-with some
musicians moving cautiously to releasing their albums via the Internet and CD sales
starting to decline. The music industry's first response was to try to block this
change-expecting that it would destroy the industry.
•
New plants and trees emerge from the open patches, surviving because they can
cope with the constraints of that environment. They self-regulate to survive and
renew in the new forestry conditions-that is, they have the capacity to selforganize. In terms of the music industry, a digital music report written in 2009
reported the emergence of new business models between the music industry and
mobile phone operators, and revenue-sharing deals with Internet service providers
(ISPs).They found that music companies were working on licensing arrangements
with YouTube and MySpace, etc., such that the sites became part of the legitimate
music economy (IFPI, 2009). The instigation of Spotify, a proprietary music streaming
service that allowed free instant listening to any tracks, which was launched for
public access in October 2008, was one attempt to take advantage of this new landscape. An experiment that raised funds through a combination of subscription and
advertising, it represented one of the first 'green shoots' for the industry.
• Thus, it is the whole ecosystem that evolves. Organisms do not evolve by adapting
individually to environmental changes. It is the pattern, not just the separate units
comprising this pattern, that evolves.
Hurst suggests that it is at the point of decline that an organization needs to 'destroy' itself
creatively by creatinga crisis to shatter the constraints. The crisis serves to erase parts of the
organization's memory-the framework of logic-so that it can be open to fundamental
second-order change. At this stage, it is imperative that an organization is creative and bold
rather than 'planful'. In our experience, many managers understand the role of crisis in galvanizing organizations into action, but find it difficult to do in practice; such 'creation' is
often experienced by employees as manipulative or scaremongering. Yet it is apparent that
crisis can be a valuable catalyst for change, especially in contexts that constrain effective
action, as discussed in Change in Practice 3.2. The view further stresses the need to hold
onto and return to the organization's original purpose and values as part of the renewal
process. In so doing, it suggeststhat, unless leaders embody in their behaviour the ideals of
the organization that they are trying to change, it is inevitable that their change efforts will
be seen as self-serving.
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55
3. Emergent change: Complexity theory
A third way of thinking about change as emergent has formed through the study of complexity theory. Complexity theorists suggest that complexity sciences have implications for
how we think about our lives and our organizations. Whilst they point out that the science
cannot be taken and simply applied to organizations (Stacey,2011), they suggest that it can
be used to provoke thinking about how we view organizations. Stacey (2002-03), Griffin
(2002), Shaw (2002), and others invite us to think of organizations as social rather than physical objects. As such, they suggest that an organization is not an entity, but an ongoing selfreferencing process of gestures and responses between people. People are constantly
engaged in interactions with each other, from which overall behavioural patterns emerge.
This way of thinking about organizations has become known as a complex responsive processesperspective (Griffin and Stacey,2005).
Stacey (2002-03: 28) illustrates what he means through a description of the weather system:
The weather is not just unpredictable ... it's predictably unpredictable, or unpredictably
predictable. It's not confusion. It has pattern. We predict seasons;we predict a lot of rain at
this time, but just when and how it's going to take place we can't predict over more than a
short time in to the future. So we're not talking about something that is completely unpredictable; we're talking about a system producing patterns that are recognizable and paradoxical.
He draws further on particular dimensions of the weather example to suggest principles to
bear in mind in organizational life.
• The need to look for patterns means paying attention to patterns of interaction between
people. He suggeststhis is often best achieved by focusing on interactions at the smallest
local level-a group within a business unit, for example, noticing what is important for
them, how they operate. When these interactions change, then a new pattern-or way of
doing things-is likely to emerge. Griffin and Stacey (2005) call this the phenenomenon
of self-organization and emergence.
•
Griffin and Stacey (2005) note the issuesof power relations in organizations, and how
often people are included or excluded through the dynamics of power: 'these groupings
establish powerful feelings of belonging' such that our identity is derived from the groups
to which we belong, creating 'complex patterns of power relating' in our daily lives (Griffin and Stacey, 2005: 6).
• To achieve new patterns, the existing system needs to be disturbed.That means having
the greatest diversity possible in the group. Difference in views can be uncomfortable
and organizations often hire people who 'share values' or 'think in our way'. Complexity theorists believe that where there is enough difference and enough anxiety, then
new thinking will occur. Often, in organizations, this sort of difference is introduced
through the hiring of a new chief executive. But this does not create difference in the
day-to-day relationships between people, which remain largely untouched by the
new person at the helm. So diversity means encouraging people with different views
and experiences at all levels of the organization to be equal partners, to express their
views.
See Chapter 2 for
more on new
leaders: p. 25
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56
SeeChapter 5 for
more on sensemaking: p. 91
PART A: THE CHANGE PROCESS
•
Patterns may change because people have the capacity to do what they think is best-to
self-organize. People do the best they can in the organization, which is simultaneously
full of cooperation and conflict. Not everyone gets on in the typical workplace, but, on
the whole, people adapt and find positive ways of getting the work done.
•
An important aspect of the complex responsive processes perspective is the understanding of the nature of leadership. If change happens through local patterns of interaction,
then no one person can be 'in charge' of an organization. When a powerful person makes
a statement, it may bring about many different responses throughout the organization.
Leaders cannot control those responses, but they can pay attention to them and participate in the conversation as fully as possible, listening carefully to what is going on and
trying to understand what sort of meaning is emerging. They can also encourage connectivity and feedback between different parts of the organization.
This view of change acknowledges the complexity of organizational life, challenging previous
assumptions about what happens in organizations. It assumesthat individuals are self-directing,
and want to be part of a shared vision and shared values, with leaders and followers mutually
dependent. It also suggests leaders should be capable of simultaneously creating a general
sense of direction, but not directing people in how to go there; managing performance yet
encouraging diversity; creating enough tension to damage the status quo and provoke innovation, but not so much that people are completely destabilized. Evidence does suggest that
creativity and innovation increase where there is a balanced distribution of internal power, and
a strategy of continuous experimentation and learning (Pascaleet al., 2000). However, a complex responsive process view of change is difficult to pin down. It certainly does take a leap of
faith to embrace: this view is as much a way of thinking and being as it is a set of actions.
Exercise3.4
Reflect on Stacey's (2002-03) description of the weather and think back on events in your country
in the past twelve months (what has happened to retailers, the housing market, car sales, or the
sustainability agenda, for example).
•
What examples can you find of 'predictably unpredictable patterns'-patterns
you can see with
hindsight?
•
Can you identify any fresh thinking about key issues?Where has that come from? What might that
tell you about the conditions needed to foster creativity?
•
What are the pros and cons of this view of change?
Emergent change: Summary
In summary, proponents of emergent change are a broad group, each holding to important
points of difference in their views.
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57
AND REALITIES OF CHANGE
Nevertheless, there are some key principles of emergent views of change that we find
helpful in terms of:
•
understanding change as a continuous, unpredictable process of trying things out
and adapting, trying to match resources to opportunities in a dynamic way (Burnes,
2009};
• thinking about ways of human interaction and sensemaking as crucial to the creation of
change;
•
recognizing the impact of organizational culture and politics on what happens;
See also
Chapter 5
• the move from 'understanding individual persons as autonomous to thinking about
them as interdependent' (Stacey,2011: 464};
•
seeing the leaders' role as one of shaping a general direction of travel, and facilitating the
thinking and learning of everyone to create new ways forward.
Implications for managing change
Views of change have evolved alongside the development of leadership practice and
theory. They have also had to adapt to the fact that, in many Western countries, manufacturing-where process improvement could bring about huge improvement in efficiency and productivity-has been replaced by service and creative industries, where
success is much more dependent on the less tangible or measurable features of organizational culture and environment. Western leaders rely on planning principles to find
a route through the highly uncertain situations and the majority still believe in a rational, planned approach. The planned view of change carves out a clear, traditional leadership role, whereas the emergent view perceives the leader to be a catalyst for change,
creating conditions that enable others to change, rather as a coach or facilitator. This
may be a less familiar role for leaders to take. Weick (2000} notes that if leaders take
notice of emergent change and its effects, they can be more selective in their use of
planned change.
Managing change offers real opportunity-to innovate, to refresh, or simply to achieve
survival. So how then can a leader decide the best way of going about change? Which
style is likely to give best chance of implementing change effectively? Table 3.1 overleaf
summarizes some key dimensions examined in this chapter.
When reviewing this list, it is not surprising that managers are uncertain about which approach to adopt. Whether viewing change as planned or emergent, leaders do still find
themselves responsible for ensuring that change takes place. Additionally, organizations in- See Chapter
creasingly need to manage through periods of both incremental and discontinuous change 11 for more
on the role
(Burke, 2008}. If periods of businessvolatility become more commonplace, then change may
of leaders:
need to be initiated and implemented rapidly. This all means that leaders are less likely to be p. 244
able to rely on their own preferred approaches.
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58
PART A: THE CHANGE PROCESS
Table 3.1 Views of change: Key features
View of
change
Scale of change
under consideration
Leadership role
Benefits and limitations
Planned
Incremental
• Decide priorities for the immediate
future and create a plan
• Target the parties that need to change,
generally specific groups or individuals
• Promote understanding of what is
required
• Manage any difficulties, such as
resistance
• Encourage participation in all aspects of
the change
• Enables employees at all
levels to be involved
• Steady pace
• May be considered slow
• May be so incremental
that no tangible change is
evident
Planned
Discontinuous
• Create a plan and drive the change
from the top
• Create the vision of the future
• Offer clear, efficient communication
• Offer participation though formal
workshops e.g. on specific aspects of
implementation
• Set the goals, monitor the project,
control and manage any resistance and
difficulties
• Deliver to agreed timescales (generally
tight)
• Clarity; clear picture of the
future state
• End state can be planned
and worked towards
• Can cause great disruption
• Top-down approach may
not achieve employee
engagement
• Unpredicted events
get in the way of achieving
the planned end state
• Little opportunity to
amend or respond to new
circumstances
Emergentreadiness
Typically
incremental-and
cumulatively may
lead to discontinuous
change
• Actively involve employees in decisionmaking and problem-solving
• Encourage experimentation
· Recognize issues of power and
politics-and encourage trust
• Enable flexibility in staffing
arrangements to better respond
to changes
• Coach, support
• Models empowerment,
rewards reacting to the
unpredicted
• Can become self-servingnoticing and reacting rather
than taking the initiative
• Its iterative nature means
there is no clear end state
Emergentrenewal
Typically
discontinuous
• Notice the patterns in the environment
• Provoke and create the
crisis that leads to a return to values
• Role model the change the leader
wants to create
• Demonstrates possibility for
fundamental renewal
• Depends on the notion of
crisis to create energy
Emergentcomplexity
Either incremental or
discontinuous
dependent on
outcome
•
•
•
•
•
• Encourages selforganization
• Difficulties of creating
the appropriate levels of
certainty/uncertainty and
safety/tension
• May feel direction less-no
clear start or end state
Encourage diversity
Facilitate, listen
Make things uncomfortable
Hold the tension
Notice patterns, and encourage
experimentation
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59
Section 3 Summary
In this section, we have:
•
examined different views of planned and emergent change;
•
considered the views in relation to their intentions about change and the realities of the
outcomes;
•
drawn together the implications of the different views for approaching the management of
change.
■
Integrative Case Study
Nike: Emergentand planned change
The athletic footwear industry has experienced explosive growth in the last two decades. The
branded shoe segment is dominated by a few large companies, including Nike, Reebok, and
Adidas. The story of the Nike organization is often said to symbolize the benefits and risks inherent
in globalization.
Nike was founded in 1964 by two young entrepreneurs, a track star and his coach, who wanted
to improve the performance of running shoes for track competition. Hurst {2002) describes them
as 'muddling along', testing and redesigning shoes without planning. The famous 'swoosh' logo
was created by a graduate design student in 1972 for US $35.
A shared passion and purpose rather than financial reward held together the early team. Having
established itself in track shoes, Nike developed products for other sports in a highly flexible way,
with little plant or infrastructure. Hurst {2002: 41) describes the strategy as emergent through its
sense of purpose-a mixture of'planning and opportunism in an unexploited field'. Locke {2002)
notes that Nike was the first to outsource shoe production to lower-cost Japanese producers.
In time, the trial-and-error approach evolved in to set ways of doing things and, as the company
grew, there was a need for structure and hierarchy. Objectives and financial rewards became
routinized. Performance and profits continued to increase, although some of the early founders
left the organization, perhaps 'bored' by its professionalization. But sustained success reinforced
the appropriateness of more of the same. When Japan became an expensive source of labour,
Nike moved production to Korea and Taiwan. When costs began to rise in these countries as well,
it began to urge its suppliers to relocate their operations to other lower-cost countries.
However, in subsequent years, Nike was shaken by a series of scandals about the treatment of
its workers, the factory conditions, poor wages in Indonesia, and the use of child labour in
Pakistan. In 1996, Life magazine published an article with a 12-year-old boy stitching a Nike
football. At first, Nike managers tried to deflect these criticisms, arguing that the Indonesian
factories were owned and operated by independent contractors, not by Nike.
However, as pressure grew, this hands-off approach changed as Nike formulated a code of
conduct for its suppliers that required them to observe basic labour and environmental/health
standards. Nike created new departments, which became organized under the corporate
responsibility and compliance department, with some eighty-five people specifically dedicated to
labour and environmental compliance, all located in countries in which Nike products are
manufactured. It developed a new incentive scheme to evaluate and reward managers for
improvements in labour and environmental standards amongst its supplier base.
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PART A: THE CHANGE PROCESS
Nike also became actively involved in environment issues,virtually eliminating the use of
petroleum-based chemicals in its footwear production and taking the initiative in organizing an
industry-wide organic cotton consortium.
Today, Nike's products are manufactured in more than 700 factories, employing 500,000
workers in fifty-one countries.
Questions
1. Can you identify the key points of change in Nike's history?
2. Specifically what changed and what do you think was the scale of that change, using Nadler
and Tushman's (1995) dimensions?
3. Read the case, applying first a planned view of change. Re-read it, applying an emergent view
of change. What do you notice about the application of these different views?
Conclusion
In this chapter, we have examined what really happens when implementing change in organizations, exploring the extent to which intentions become realities. We began by considering
the scale, span, and timing of change, and the issues involved in deciding on the scale of
change needed at any given time. We then looked at examples of first-order and second-order
change, noting the challenges of achieving second-order change across organizations.
In section 2, we considered the different targets for change, from the individual to groups
and, indeed, the whole organization. This provided the backdrop for section 3's exploration
of different views of how change happens, focusing on planned change, which has been the
dominant approach to change management for the last twenty years, and emergent change,
which, in contrast, sees change as an open-ended and continuous process of adaptation, a
view of change that is beginning to gather ground in organizations.
In our own practice, we continue to approach change in a planned way because it
enables us to explore the decisions we are making at any given time, not because we
expect the change to be delivered exactly in accordance with the plan. We recognize the
power of some of the processes adopted by those holding an emergent view of change
in harnessing the input and energy of all employees, and will examine these further in
Part C of the book.
Please visit the Online ResourceCentre at http:/ /www.oxfordtextbooks.eo.uk/orc/
myers to accessfurther resourcesfor students and lecturers.
Change in Practice sources
1. BBC News {2000) 'NatWest merger's mixed fortunes', 11 Feb. http://news.bbc.eo.uk/l/hi/
business/639201.stm
2. Sutherland, R.(2007) 'Barclays boss: RBSoverpaid for ABN Amro', The Observer,7 Oct: 1.
188
ORGANISATIONAL THEORY & DYNAMICS
INTENTIONS
AND REALITIES OF CHANGE
61
3. Wilson, A. (2008) 'RBSnow 58% owned by UK government', The Telegraph,28 Nov.
http://www.telegraph.co. uk/fi nance/ newsbysector /ban ksandfi nance/3532604/
RBS-now-58pc-owned-by-U Kgovern ment.html
4. BBC News (2009) 'Q&A: Royal Mail disputes', 5 Nov. http://news.bbc.eo.uk/l/hi/business/8260701.stm
5. Royal Mail website: http://www.royalmail.com/portal/rm
6. TNT Group (2010) Annual Report.http://group.tnt.com/annualreports/annualreportl
0/
7. Wearden, G. {2010) 'Royal mail to be privatized or sold', The Guardian,10 Sep. http://www.guardian.
co.uk/uk/2010/sep/10/government-privatise-sell-royal-mail
IntegrativeCaseStudysources
BBC {2000) Panorama:Gap and Nike: No Sweat?,15 Oct. http://cdnedge.bbc.eo.uk/l
panorama/970385.stm
/hi/programmes/
Hurst, D. (2002) Crisisand Renewal:Meeting the Challengeof OrganizationalChange, Boston, MA: Harvard
BusinessSchool Press.
Locke, R.(2002) The Promiseand Perilsof Globalization:The Caseof Nike, IPC Working Paper 02-007,
Cambridge, MA: Massachusetts Institute ofTechnology Industrial Performance Centre. http://web.mit.
edu/ipc/publications/pdf/02-007.pdf
Nike Inc. (undated) 'Responsibility at Nike Inc.'. http://www.nikebiz.com/responsibility/
er_governance. htm I
Furtherreading
Beer, M. and Nohria, N. (2000) Breakingthe Codeof Change, Boston, MA: Harvard BusinessSchool Press.
Particularly chs 10-12, which further explore planned and emergent change.
Stacey, R. {2011) StrategicManagement and OrganisationalDynamics,6th edn, Harlow: FT Prentice Hall.
A comprehensive review of approaches to change.
Tushman, M., Newman, W., and Romanelli, E.(1986) 'Convergence and upheaval: Managing the unsteady
pace of organizational evolution', CaliforniaManagement Review,29(1): 29-44.
Explores why organizations may make incremental changes for a long time and then make painful
discontinuous shifts.
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CHAPTER 6 • CHANGE FROM THE PERSPECTIVE OF ORGANIZATIONAL CULTURE
Change from the
Perspectiveof
Organizational Culture
( _______
1_1n_tr_o_d_uc_t_io_n
______
)
PART A: The Change Process
PART B: Perspectives on Change
Organizational
2 Causesof Change
3 Intentions and Realitiesof Change
6 Change from the Perspective of
Organizational Culture
7 Change from the Perspectiveof
Power and Politics
8 Change from the Perspectiveof
Organizational Learning
Psychological
4 Emotions of Change
5 Sensemaking Processesin Change
PART C: Delivering Change
9 Approaches to Change Implementation:
Directed Change
10 Approaches to Change Implementation:
Facilitated Change
11 Roles People Play in Change
12 Communicating Change
13 Sustaining Change
( _______
1_4_C_o_n_c_lu_s_io_n
______
)
Introduction
Viewing change from the perspective of organizational culture highlights the shifts in thinking, understanding, and patterns of behaviour that organizational change involves. It is a perspective that draws
attention to what is actually happening in organizations, rather than what should be happening. It
emphasizes the way in which informal patterns in organizational life can obstruct formal change strategies. This leads to a further issue: if those informal patterns are holding an organization back, can they
be changed? Section 1 of the chapter introduces Part B of the book by discussing the contrast between
the formal and informal organization. Section 2 looks at the contribution of the culture perspective to
understanding organizations and organizational change. In section 3, we consider the challenges that
organizational culture can present for change practitioners. Finally, in section 4, we examine the challenge of changing organizational culture itself.
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112
PART B: PERSPECTIVES ON CHANGE
•
Main topics to be covered in this chapter
•
The informal organization: an introduction to Part B of the book
•
The nature and dynamics of organizational culture
•
Challenges of change from a culture perspective
•
Culture change: planned and emergent
Section 1: The informal organization-introduction
SeeChapter 2 for
more on
organizational
viability: p. 12
to Part B
Each of the three chapters in Part B discuss a distinctive perspective for understanding
change: firstly, organizational culture; secondly, power and politics; and thirdly, organizational learning. Each of these perspectives provides an approach to analysing the need for
change, selecting approaches to tackling change, and assessingdeliberate and unintended
change processes. It will become clear that each perspective highlights 'unofficial', as well
as 'official', aspects of organizations and organizational change. These aspects of organizations are often distinguished in this way: the formal organization consists of hierarchy,
structure, official communication channels.job roles, management and leadership responsibilities, and the processes for converting resources into goods and services that make the
organization viable; the informal organization consists of those aspects that are not officially defined, are often less visible, and are characteristically human. For example, the informal organization includes networks, friendships, rivalries, gossip and rumour, meeting
places, norms and idiosyncrasies of behaviour, commitments, beliefs, convictions, thoughts,
and emotions-all of which greatly influence the way in which work is accomplished. The
informal organization may enable or obstruct, enrich or frustrate, inspire or sometimes
destroy formal organizational work. So, in working with organizational change, because
this involves dealing with the way things are in organizations, rather than with the way they
are supposed to be, we find that perspectives offering insight into the informal organization are crucial.
Like the iceberg in Figure 6.1, the formal organization is what is seen 'above the surface'.
The informal organization is like the greater part of the iceberg, which exists 'below the surface'. Only by understanding the informal organization can the peaks and troughs of the
formal organization's fortunes, and the way in which it changes, be understood; just as the
strange shape of the iceberg in Figure 6.1, and the way in which it melts over time, can only
be understood in the context of the much more substantial section of the iceberg existing
under the sea. In this chapter, we see how change can be seen from the perspective of organizational culture, those aspects of the informal organization that establish some consistency
in how events, and in particular changes, are interpreted among staff. Chapter 7 will focus on
how change can be viewed from the perspective of power and politics, looking at change
from the perspective of behind-the-scenes 'political' behaviour, largely in the informal organization. Finally, Chapter 8 will focus on change viewed from the perspective of organizational learning and, again, reveals that organizational learning and failure to learn is partly
rooted in informal aspects of organizations.
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CULTURE
Figure 6.1 The iceberg model
Source: Corbis
Section 1 Summary
In this section, we have:
•
distinguished between the formal and informal organization, and discussed the 'iceberg'
metaphor;
•
introduced the three chapters in Part B, highlighting that each of the perspectives we addressculture (this chapter), power and politics (Chapter 7) and organizational learning (Chapter 8)-is
rooted, to a large extent, in the informal organization.
Section2: Organizationalculture
In this section, we begin by considering what is meant by taking a cultural perspective on
organizations and then explore the significance of organizational culture as a perspective
on organizational change in particular. We next consider the key aspects of an organization
that make up the culture, allowing people to develop distinctive shared understandings of
internal and external events and situations. Finally, we look at the way in which these different aspects interact in a dynamic relationship.
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114
PART B: PERSPECTIVES ON CHANGE
Culture as a perspective on organizations
Organizations differ from one another. Of course, they differ in many ways: in size; in business activity; in being for-profit, not-for-profit, or public sector; in success; in the morale of
staff; and so on. But they also differ in the way in which people in the organization conduct
themselves and, underlying that, the way in which people think-the way they understand
and interpret their situation. This is where organizational culture comes in.
Many definitions have been given oforganizational culture. According to Morgan (1997: 138):
Shared values,shared beliefs, shared meaning, shared understanding, and shared sensemaking are all different ways of describing culture ... a processof reality construction that allows
people to see and understand particular events, actions, objects, utterances, or situations in
distinctive ways.
SeeChapter 5
for more on
sensemaking:
p. 92
Here, Morgan highlights that culture can refer to shared meanings or understandings
that enable people to work together, or it can refer to the sensemaking processes that
make those shared understandings possible-underpinned
by shared beliefs and values.
Brown (1995) focuses on these shared beliefs and values, which enable shared understandings,
and also points out that the patterns of shared understanding are associated with distinctive
ways of behaving, and with material objects:
Organisational culture refers to the pattern of beliefs, valuesand learned ways of coping with
experience that have developed during the course of an organisation's history, and which
tend to be manifested in its material arrangements and in the behaviours of its members.
(Ibid: 8)
Organizational culture establishes consistency in employees' thinking. For example, openness
about the failings of a key project might be seen as wise or foolish, upright or mischievousdepending on the organizational culture. Seen from the perspective of culture, key challenges
of organizational change occur because culture constrains new thinking, and therefore new
behaviour, and change can itself be about shifts in culture-that is, new patterns of employee
thinking (Schein, 2009).
Exercise 6.1
Consider two organizations with which you are familiar, and which you regard as having different
cultures {they might be where you work, study, volunteer, or worship, for example).
•
what kind of similarities
are there in how related events or situations are seen in these two organizations?
•
what kind of related events or situations are seen in differentways in these two organizations?
•
what effect do the differences that you have identified have on the way in which people behave
and on the success of the organizations?
Culture as a perspective on organizational change
How does organizational culture affect the feasibility of strategies for change, and their implementation? As shown in Figure 6.2, culture has three effects on strategic planning.
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ORGANISATIONAL THEORY & DYNAMICS
CHANGE FROM THE PERSPECTIVE OF ORGANIZATIONAL
--------
EXTERNAL
ENVIRONMENT
,
,,
CULTURE
115
----...................
,,
I
I
I
I
I
I
I
I
''
I
I
\
\
''
Perceivedstrengths,
weaknesses,
opportunities, threats
Organizational culture influences: (1) Data employed in planning and
evaluation; (2) Plans formed; (3) Impacts
Figure 6.2 Culture and change strategy
1. Culture acts as a filter that influences perceptions of the internal and external
environment of the organization. Perceived strengths, weaknesses,opportunities, and
threats are a product not only of the internal and external situation, but also of the
organizational culture through which the situation is perceived and assessed(Lorsch,
1985).
2. Culture influences the formation of strategic plans (Mintzberg et al., 2009).
3. Culture influences the implementation of plans and their consequent feasibility
(Schwartz and Davis, 1981; Pant and Lachman, 1998).
This means that culture may discourage radical change and, in particular, second-order
change; instead culture tends to foster first-order change in which shared understandings
are unaltered by the transition (Gagliardi, 1986; Mintzberg et al., 2009). These issues are adSee Chapter 3
dressed in section 3. The reality is that sometimes a new strategy needs to be taken forward for more on
even though it is inconsistent with the organizational culture. In that case, the present orga- first-order and
nizational culture may have to be analysed in more detail and steps taken to alter it. This is second-order
change:p.41
taken up in section 4.
In fact, processes of change can be analysed from the perspective of organizational culture
whether they are regarded as planned or emergent. Change in Practice 6.1 illustrates this by
discussing a change process of very rapid growth and spectacular col lapse at Enron.
■
Change in Practice 6.1
Growth and collapse at Enron
Enron, by 2000 a huge multinational with headquarters in Houston, Texas,started life in 1985 with
the merger of two natural gas pipeline companies. It grew rapidly, especially during the 1990s,
owning power plants, water companies, and oil and gas transportation infrastructure. However, by
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ORGANISATIONAL THEORY & DYNAMICS
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PART B: PERSPECTIVES ON CHANGE
the end of that decade, Enron focused increasingly on commodity trading, involving gas, electricity,
metals, coal, paper, Internet bandwidth, weather derivatives, etc. So much so that, in early 2001, its
mission to be 'the world's leading energy company' was replaced by an aim to be 'the world's leading
company'.
Enron claimed to be committed to communication, respect, integrity, and excellence.
Communication. We have an obligation to communicate. Here, we take the time to talk with one
another ... and to listen. We believe that information is meant to move and that information moves
people.
Respect. We treat others as we would like to be treated ourselves.We do not tolerate abusive or
disrespectful treatment. Ruthlessness,callousnessand arrogance don't belong here.
Integrity. We work with customers and prospects openly. honestly and sincerely.When we say we
will do something, we will do it; when we say we cannot or will not do something, then we won't
do it.
Excellence. We are satisfied with nothing lessthan the very best in everything we do. We will continue to raise the bar for everyone. The great fun here will be for all of us to discover just how good
we can really be. (Enron website, 2 December 2001)
However, many practices at Enron contrasted markedly with these stated values.
For example, internally, Enron operated a performance review process that came to be known
as 'rank and yank' on which continued employment, as well as bonus levels, depended. Every six
months, employees went through an appraisal process involving feedback from peers, and were
then evaluated and given a ranking from 1 to 5 by their managers. It was a requirement that
15 per cent of all employees be given the lowest ranking of 1, facing certain redeployment and
probable redundancy. Employees 'traded' positive peer assessments to secure their positions, and
their managers 'traded' employee rankings in order that overall 15 per cent quotas could be met.
This employee evaluation process was intimately interwoven with dynamics whereby staff
colluded in inflating the value of Enron's financial deals because their rankings could be
contingent on this complicity. Externally, Enron's accounts were audited by one of the big five
accounting companies, Anderson's. Huge consultancy earnings, as well as reputational benefits
from having Enron as a client, led Anderson's to sideline concerns about its largest client and to
approve both these improper accounting practices and the use of nominally independent
companies as vehicles to absorb and disguise Enron losses. The creation of such offshore
partnership companies further obfuscated Enron's accounting practices by maintaining a false
impression of corporate profitability. At board meetings in June and October 1999, Enron
directors explicitly waived the company's code of ethics in order that the chief financial officer,
Andrew Fastow, could continue in post at Enron while also running and profiting from some of
these offshore partnership companies, which hid Enron's losses. So, ruthlessness rather than
respect, deception rather than integrity, and withholding
evident in at least some key facets of the business.
rather than communication
were
In March 2001, Fortune magazine published an article pointing to the lack of transparency in
Enron's books and questioning its inflated share price. On 14 August that year.Jeffrey Skilling, Enron's
famously abrasive CEO, resigned, having been in post for only six months. Kenneth Lay,the
long-standing chairman of the company, reassumed the CEO role the following day. The next day,
Enron accountant Sherron Watkins sent Lay a lengthy anonymous memo detailing dubious financial
instruments the company was employing and the resulting precariousness of its position. Subsequently, Lay and other senior executives sold off some of their own shareholdings while continuing
to talk up Enron stock to investors and employees. But, over the next few months, the share price
collapsed.
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the end of that decade, Enron focused increasingly on commodity trading, involving gas, electricity,
metals, coal, paper, Internet bandwidth, weather derivatives, etc. So much so that, in early 2001, its
mission to be 'the world's leading energy company' was replaced by an aim to be 'the world's leading
company'.
Enron claimed to be committed to communication, respect, integrity, and excellence.
Communication. We have an obligation to communicate. Here, we take the time to talk with one
another ... and to listen.We believe that information is meant to move and that information moves
people.
Respect. We treat others as we would like to be treated ourselves.We do not tolerate abusive or
disrespectful treatment. Ruthlessness,callousnessand arrogance don't belong here.
Integrity. We work with customers and prospects openly, honestly and sincerely.When we say we
will do something, we will do it; when we say we cannot or will not do something, then we won't
do it.
Excellence.We are satisfied with nothing lessthan the very best in everything we do. We will continue to raisethe bar for everyone. The great fun here will be for all of us to discoverjust how good
we can really be. (Enron website, 2 December 2001)
However, many practices at Enron contrasted markedly with these stated values.
For example, internally, Enron operated a performance review process that came to be known
as 'rank and yank' on which continued employment, as well as bonus levels, depended. Every six
months, employees went through an appraisal process involving feedback from peers, and were
then evaluated and given a ranking from 1 to 5 by their managers. It was a requirement that
15 per cent of all employees be given the lowest ranking of 1, facing certain redeployment and
probable redundancy. Employees 'traded' positive peer assessments to secure their positions, and
their managers 'traded' employee rankings in order that overall 15 per cent quotas could be met.
This employee evaluation process was intimately interwoven with dynamics whereby staff
colluded in inflating the value of Enron's financial deals because their rankings could be
contingent on this complicity. Externally, Enron's accounts were audited by one of the big five
accounting companies, Anderson's. Huge consultancy earnings, as well as reputational benefits
from having Enron as a client, led Anderson's to sideline concerns about its largest client and to
approve both these improper accounting practices and the use of nominally independent
companies as vehicles to absorb and disguise Enron losses. The creation of such offshore
partnership companies further obfuscated Enron's accounting practices by maintaining a false
impression of corporate profitability. At board meetings in June and October 1999, Enron
directors explicitly waived the company's code of ethics in order that the chief financial officer,
Andrew Fastow, could continue in post at Enron while also running and profiting from some of
these offshore partnership companies, which hid Enron's losses. So, ruthlessness rather than
respect, deception rather than integrity, and withholding rather than communication were
evident in at least some key facets of the business.
In March 2001, Fortune magazine published an article pointing to the lack of transparency in
Enron's books and questioning its inflated share price. On 14 August that year.Jeffrey Skilling, Enron's
famously abrasive CEO, resigned, having been in post for only six months. Kenneth Lay,the
long-standing chairman of the company, reassumed the CEO role the following day. The next day,
Enron accountant Sherron Watkins sent Lay a lengthy anonymous memo detailing dubious financial
instruments the company was employing and the resulting precariousness of its position. Subsequently, Lay and other senior executives sold off some of their own shareholdings while continuing
to talk up Enron stock to investors and employees. But, over the next few months, the share price
collapsed.
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On 2 December, Enron filed for 'Chapter 11' bankruptcy protection as vast off-balance-sheet debts
came to light. Criminal proceedings were subsequently launched against senior Enron executives
including Fastow, Lay,and Skilling. Numerous former employees had lost not only their jobs, but also
the savings built up in pension plans invested in Enron stock; the sense of disillusionment among
them was palpable. Yet many, after they had left, reported that Enron was the best place they had
ever worked, even while describing feelings of betrayal. 1- 5
Aspects of culture
What is it in an organization that makes up organizational culture, allowing people to develop distinctive shared understandings of events and situations? The most immediately
noticeable aspect of organizational culture is its observable features: the objects, structures,
and patterns of behaviour that typify an organization. They include products, stories, logos,
buildings, routines, hierarchy, reward systems, common ways of behaving toward subordinates, managers, and colleagues,jargon, types of speech, strategy documents, and so on. In
the terminology of organization studies, these observable features are usually called artefacts (Hatch and Cunliffe, 2006; Schein, 2004), even though patterns of behaviour and stories are being included as well as objects. Figure 6.3 represents these observable features
as the outer layer of culture. At Enron, for example, the notoriously plush offices in downtown Houston, Texas,were artefacts. But so were the sexist jokes that peppered email exchanges (Myers, 2008), the stories of spectacular deal-making that circulated (Cruver,
2002), and the 'rank and yank' system of performance review and associated informal 'trading' of rankings and assessmentsdescribed in Change in Practice 6.1.
At a deeper level are symbols, and shared values and beliefs.These are not immediately evident, but they are accessiblethrough discussion, observation, and reflection. Symbols are the
particular established meanings associatedwith certain artefacts. For example, the open door of
Sharedvalues
and beliefs
Artefacts
Symbols
Figure6.3 Aspects of culture
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PART B: PERSPECTIVES ON CHANGE
managers' offices may be taken in one organizational culture as a symbol of approachability.
Alternatively, in another organizational culture, those open doors might be generally understood as a symbol of how managers constantly keep an eye on staff. At Enron, the share price-its
meteoric rise and, later, spectacular collapse-became a symbol of successand, finally, of failure.
Sharedvaluesare the goals and standards to which employees aspire (Hatch and Cunliffe,
2006). For example, staff might aspire to support one other, to take on responsibilities, to build
a diverse organization, to put customers' needs first, or to provide excellent service to customers-or, for that matter, they might aspire to exploit potential customers ruthlessly. Every individual has values to which he or she aspires.Values are part of an organizational culture if they
are shared-that is, held in common among many staff. In Enron, a value for innovation appears to have become embedded-a shared value reflected and reinforced when, every year
between 1996 and 2001, the company won Fortune magazine's accolade as America's Most
Innovative Company'. Shared beliefs,views regarded as true by many staff, underpin shared
values. They can be ethical or pragmatic in nature. For example, a value for diversity could be
underpinned by a belief that reflecting the diversity of the wider society is the right thing to do,
or it could be underpinned by a belief that a commitment to diversity will pay dividends in
terms of staff commitment and the bottom Iine, or wil I bui Id the reputation of the organization.
Sometimes, you might recognize values of an organizational culture from the way in which
staff behave. A value for customer service, for example, might be evident because members of
staff go the extra mile to make sure that you are happy with their service. These values, reflected in behaviour, are called values-in-use.Often, organizations make a point of proclaiming shared values, whether in internal documents, posters, advertisements, or websites. When
organizations do this, the values are called espousedvalues.Espoused values in an organization may, of course, reflect actual values-in-use. But they may also differ considerably: what an
organization claims are its principles may not correspond to reality as staff and other stakeholders experience it (Murphy and Mackenzie Davey, 2002). For instance, Change in Practice
6.1 contrasts the espoused values at Enron of communication, respect, integrity, and excellence with actual practices at the company. Privately, both employees and other stakeholders
can often turn a blind eye to the differences between what is said and what is put into practice.
While values, beliefs, and symbols are at a deeper level than artefacts, there is a deeper level
still. Some beliefs and values-about work, organizations, relationships, people, etc-become
so ingrained that they are often unrecognized; these are called 'assumptions'(Schein, 2004;
Hatch and Cunliffe, 2006). Assumptions in many enterprises include believing that it is a function of senior management to maximize returns to shareholders. In a charity, assumptions
might include the belief that education is beneficial or a value for alleviating poverty. At Enron,
there was apparently an assumption that the company would continue to be successful,which
led many employees not to diversify their pension investments beyond the Enron shares.
All of the aspects of culture-artefacts, symbols, shared values and beliefs, and assumptions-play a part in establishing similarity between employees' understandings of events. To
take an example discussed earlier, openness about the failings of a key project might be seen
as wise: if a value for learning is prominent; if there are artefacts such as time set aside in
meetings to discuss lessons learned; if there are symbols such as leaders acknowledging
where they have gone wrong, or stories of success arising from discussion of failure, which
have come to stand for the benefits of facing up to mistakes; and if there are underlying assumptions in support of collaboration and using resources to focus on the future. It might be
seen as foolish:if there is a value for perfection; if artefacts such as project evaluation forms
rate only how successful the work has been; if symbols, such as employees being put down
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in meetings or stories of rising stars who have got 'everything right', have come to stand for
the importance of not putting a foot wrong; and if there are underlying assumptions in support of individual responsibility and continuity of working methods.
Dynamics of culture
Organizational culture is not simply a static amalgam of artefacts, symbols, values and beliefs, and assumptions. The various aspects of culture interact (Hatch, 1993; Hatch and Cunliffe, 2006). We now introduce two models of this interaction that we find helpful both in
understanding how different aspects of culture affect one another, and in understanding
how culture change occurs. Firstly, in Schein's (7985; 2004) model, organizational culture has
three strata: artefacts; values and beliefs; and assumptions. Culture in the form of artefacts
can be directly observed. In terms of the iceberg metaphor introduced in section 1, artefacts
are above the waterline. But artefacts can be hard to assessin terms of their significance for
the way in which events are interpreted. At an intermediate level, organizational culture in
the form of shared values and beliefs is somewhat more difficult to discern. In terms of the
iceberg metaphor, shared values and beliefs would be just under the surface of the water. But
it is somewhat easier to see how values and beliefs influence the way in which events are
interpreted. Finally, assumptions are generally hidden, and can be difficult to recognize even
after careful reflection. In terms of the iceberg metaphor, assumptions would be concealed
in the ocean depths. But assumptions underlie values and beliefs-and make them difficult to
alter. For Schein, there is a mutual influence between these layers of culture. An assumption
that employees avoid hard work when they can might lead to values for close control and
monitoring of people, which might lead to artefacts such as time clocks or, for that matter,
open-plan offices. Conversely, the open-plan offices or the time clocks may reinforce values
for close control and monitoring, and these values may in turn reinforce the assumption that
employees avoid hard work.
Secondly, the cultural dynamics model (Hatch, 1993) explains in more detail how the different aspects of culture interact. It incorporates artefacts, symbols, assumptions, and values
and will be helpful when, in section 4 of this chapter, we examine how culture change is accomplished. The model is in the form of the cycle in Figure 6.4.
r~I 17
Val,~
I
Assumptions
Artefacts
L~1 1J
Symbols
Figure 6.4 Cultural dynamics
Source:Adapted from Hatch (1993)
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PART B: PERSPECTIVES ON CHANGE
The model proposes that the aspects of organizational culture interrelate as follows.
•
An assumption that employees avoid hard work when they can might lead to values for close
control and monitoring of people, which might lead to artefacts such as time clocks or, for
that matter, open-plan offices. Over time, these may become symbolsof distrust in people, in
turn reinforcing-for managers and staff-the assumption that employees avoid hard work.
•
Moving the other way around the cycle, the assumption that employees avoid hard work
makes it more likely that open-plan offices will become symbols of distrust. That distrust
may lead to presenteeism as an additional artefact associated with the offices, in turn reinforcing a value for close control (are people working or playing on the Internet?), making it
lesslikely that the assumption that employees avoid hard work will be questioned.
• But changeis alsopossible.Whether intentionally or not, the open-plan offices may become
symbols of fun at work or of productive interaction-rather than of distrust-which may, in
turn, tend to undermine the assumption that employees will avoid work when possible.
Hatch's model not only clarifies how different aspects of culture interact, but also provides a
framework for understanding different approaches to changing organizational culture. For
instance, behaviour patterns and other artefacts, or values that inform behaviour patterns, or
symbols-meanings associated with artefacts, or underlying, taken-for-granted assumptions,
are all potential starting places for culture change. This is explored in section 4. Prior to that, in
section 3, we turn to how organizational culture challenges and enables organizational change
in general. Section 3 also introduces alternative points of view on organizational culture'differentiation' and 'fragmentation'-which shed further light on its implications for change.
Exercise6.2
Discuss with a colleague some of the observable artefacts of organizational culture in your own workplace, university, or another organization with which you are familiar. At a deeper level, identify some
of the values and symbols that characterize the culture of the organization.
•
Are the values really values-in-use or are they simply espoused (for example in marketing material)?
•
Is it possible to hypothesize about any underlying assumptions?
Section 2 Summary
In this section, we have:
•
introduced a cultural perspective on organizations;
•
considered the significance of organizational culture as a perspective on organizational change;
•
looked at the key aspects of organizational culture;
•
discussed different models of how the aspects of culture interact.
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Section3: The challengesof changefrom a
culture perspective
How does organizational culture impact on organizational change? This section discusses
how organizational culture and subcultures affect the course of planned and unplanned
change processes, and can foster or undermine organizational agility-that is, the potential
for successful change (Kotter and Heskett, 1992). We also explain how looking at culture
from contrasting viewpoints gives insights into both planned and unplanned change.
Culture, subcultures, and change
In 2006, a Wall Streetjournal article credited Mark Fields, a Ford executive, with the remark
that 'Culture eats strategy for breakfast' (WSJ,23 January 2006). In other words, organizational culture can render an apparently 'good' change strategy unworkable; the intended
strategy wi II not be realized. Schwartz and Davis (1981) propose that, before plans for orga- See Chapter 5 for
nizational change are finalized, a risk assessment is made, examining the degree to which more on strategy:
p. 100
each element of the proposed changes is compatible with the organizational culture. If an
element of the change strategy is highly important to the successof the strategy and likely to
be fundamentally incompatible with the values of the culture, then they strongly advise that
an alternative strategy is adopted. Pant and Lachman (1998) have a rather different way of
looking at this. They recommend identifying the values needed to take a change strategy
forward. For example, in the case of Enron, the strategy of establishing new utility trading
businesses may have required a value for innovation. A strategy core value is one that is
central to the successof the strategy, while a strategy peripheral value is one that would be
helpful, but which is of relatively minor importance to the success of the strategy. Pant and
Lachman point out that an organization is unlikely to realize a strategy if its core values run
counter to the values of the organizational culture. If its peripheral values are inconsistent
with the culture, the strategy may be implementable.
Sometimes, however, strategy core values conflict with values strongly held within just one
part of an organization. So far we have considered organizational culture from the point of
view of sharedvalues and assumptions. And for a very good reason: this quality of shared-ness
is central to how organizational culture is usually conceived. But it is clear that values (and
assumptions) are not always held in common across the whole organization. Of course, even
in the most unified organization, there will be some people who overtly or covertly hold opposing views. In an organization with a value-in-use for diversity, there may be individuals
who privately do not value the contribution of all sections of the workforce. In an organization with a value-in-use for customer service, there may be those inclined to sabotage that
ethos. Sometimes, these differences between mainstream values of organizational culture
and values of particular employees can be treated as individual anomalies. That said, often,
groups of people who may be associated with one particular section or hierarchical level or
function within the organization hold distinctive views-which they themselves hold in common-forming a subculture with values, beliefs, symbols, and assumptions that differ from
those of other employees. For example, there may be a management subculture with values
for maximizing profits and performance-related pay, and a front-line employee subculture
with values for maximizing benefits and an egalitarian reward system.
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If core values required for a change strategy conflict with subcultural values, a way forward frequently adopted is to avoid the conflict by subcontracting elements of the strategy that would normally be performed within that subculture (Pant and Lachman, 1998).
In the UK, for example, this is often the case with organizations in which there is a frontline workforce value for a reasonably egalitarian reward system, but costs are being reduced as part of a change strategy. By subcontracting functions such as cleaning or
catering, value-consistency can be at least nominally maintained, while labour costs are
reduced. A similar dynamic is seen in the trend for offshoring product manufacture from
Europe to Asia.
Sometimes, when organizational culture is discussed, subcultural differences are ignored
or treated simply as irregularities to be eliminated. This is called the integration point of
view on organizational culture (Martin, 1992; Meyerson and Martin, 1987). The integration
point of view focuses attention on commonality in values, symbols, artefacts, and assumptions across the organization, leading to shared understandings-shared ways of viewing
what is happening in the organization and its environment. Martin (1992) and Meyerson
and Martin (1987) point to alternative points of view for understanding organizational culture and culture change. One of these alternatives is the differentiation point of view. Instead of seeing organizational culture as reflecting consistency across the whole
organization, this point of view focuses on consistency within subcultures. Subcultural dynamics are highlighted that may support or obstruct change programmes. In particular,
change initiatives can be undermined by one subculture even while being in keeping with
another.
Exercise6.3
In late 2009, there were a series of strikes in Royal Mail (the UK postal service) in response to perSeeChapter 3 for
more on Royal
Mail: p.40
ceptions of a change programme to 'modernize' the service. In the following short videos, Communication Workers Union members and Royal Mail managing director, Mark Higson, talk about
the situation at the end of October 2009.
The view from the union subculture
Thursday, 29 October 2009: http://news.bbc.co.uk/1/hi/business/8332288.stm
Saturday, 31 October 2009: http://news.bbc.co.uk/l/hi/uk/8335528.stm
The view from the management subculture
Thursday, 29 October 2009: http://news.bbc.co.uk/1/hi/business/8331169.stm
•
What differences do you notice between the union subculture and the management subculture in
terms of values, beliefs, or assumptions?
•
In 2009, do you think 'modernization' and 'the strikes' had become symbols in these two subcultures and, if so, what did they stand for in each subculture?
•
How would you say the contrast between the two subcultures affected the prospects for planned
change at Royal Mail?
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123
It may be clear, watching the videos referenced in Exercise 6.3, that, in the culture of Royal
Mail, seemingly intractable understandings-albeit contradictory ones-dominate the organization, the change initiatives under way, and the prospects for their success.In many organizations, the culture, when analysed from a differentiation point of view, is seen to be yet
more complex because there can be many subcultures, overlapping and nested within one
another. For example, in a university, there may be faculty subcultures, subcultures of lecturers and administrators that span faculties, subcultures associated with specific research
groups, a management subculture, and so on. To an even greater extent, such an intricate
array of subcultures can complicate the implementation of change.
A third point of view, fragmentation, does not focus on the notion of cultural unity even
on a subcultural level (Feldman, 1991; Meyerson, 1991). Instead, it recognizes that the same
event might be interpreted in contradictory ways even within a single subculture or, indeed,
by a single person. Seen from a fragmentation point of view, multiple, often inconsistent
values, assumptions, and symbols may be in play that come to the foreground for staff in
different situations. Analysis might reveal that the introduction of a diversity programme was
driven by ethical values for diversity among a minority of senior managers, a value for enhancing the reputation of the business among others, a value for personal profile and advancement held by some in the HR department, and a value for profit among specialist
external consultants. Later, the emergent focus and direction of the diversity programme
might be affected by values brought into play by specific situations that emerge. In hiring
new managers, a value for looking after friends could undermine commitment to diversity;
equally, if there were a perceived risk of ongoing discrimination in the organization being
exposed, the values for business reputation among senior managers and advancement
among HR professionals might lead to a cover-up. Seen from this point of view:
an organizational culture is a web of individuals, sporadically and loosely connected by their
changing positions on a variety of issues.Their involvement, their subcultural identities, and
their individual self-definitions fluctuate, depending on which issuesare activated at a given
moment. (Martin, 1992: 153)
The fragmentation point of view highlights the role of leaders in bringing to the foreground
situations that positively influence the values, symbols, and assumptions drawn into play. This
is what is happening when leaders convey a sense of a 'burning platform' to put across the
messagethat the survival of an organization depends on radical change. The purpose is to
bring into play a value for the continued existence of the business.
Culture and agility
As discussed in section 2, culture reflects alignment of interpretations (Harris, 1994). From
this point of view, it makes sense to talk about the 'strength' of an organizational culture as
the degree to which there is consensus on values and other aspects of the culture. A strong
organizational culture (Chatman and Cha, 2003; Kotter and Heskett, 1992) is one in which
there is a deeply held consensus on values, symbols, beliefs, and assumptions among the organization's people. By implication, subcultural differences are minor. Once consensus is established, it can be reinforcedthrough two separate processes. The first is that the people
tend to be attracted to work, selected to work, and more likely to stay in an organization
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See Chapter 11
for more on the
leadership of
change:p.244
124
PART B: PERSPECTIVES ON CHANGE
when there is a good fit between their patterns of behaviour, values, and assumptions, and
those of the organization {Schneider, 1987). The second is that employees become enculturated as they work in the organization, tending to adopt the behaviours, values, symbolic
meanings, norms, and assumptions of the mainstream organizational culture (Schein, 2009).
Historically, many experts put forward the view that a strong organizational culture is not
simply characteristic of some organizations, but is an asset that leads to success (Peters and
Waterman, 1982; Ginsburg and Miller, 1992). However, it may be that success tends to
strengthen culture as much as strong culture leads to success(Kotter and Heskett, 1992): for
instance, doubts about shared values may be set aside as employees see apparently positive
See Chapters 3
and 13 for more
on organizational
agility: pp. 53, 301
There are
connections
here with the
discussion in
Chapter 8 of
'learning
organizations'
results from them. In fact, while organizations in which there is a strong consensus on values
may sometimes be particularly successful,they can also fail spectacularly because of a lack of
dissident voices to provide alternative perspectives when the viability of the organization is
under threat. As Tom Peterswrites, 'successis the result of deep grooves, but deep grooves destroy adaptability' (Peters,1992: 616). Many successfulorganizations today have strong cultures,
but many that have suffered catastrophic decline or failure in recent years after a period of successcould also be said to have a strong organizational culture-for example, Enron and Lehman
Brothers in the US, and Royal Bank of Scotland and Northern Rock in the UK. It seems that a
strong organizational culture can both foster successand generate vulnerability.
Earlier in the book, we introduced the idea of organizational agility, the extent to which an
organization maintains the capability to change rapidly. While some organizational change
initiatives are intended to change the culture, which cultures themselves enable change?
Dyer and Shafer (1999) help to address this by setting out a series of artefacts-patterns of
behaviour-that contribute to organizational agility. These are:
•
proactively spotting and addressing threats and opportunities;
•
rapid redeployment of people as priorities require;
•
spontaneous collaboration to pool resources for quick results;
•
innovating; and
•
rapid and continuous learning.
Schein (2004) calls a culture that favours agility a 'learning culture'. There is some common
ground with Dyer and Shafer'swork. Schein sets out assumptions underlying the behaviours
that Dyer and Shafer list: assumptions that proactivity is appropriate, that learning is beneficial, and that solutions to problems derive from a pragmatic search for truth. But Schein also
adds a value for full and open communication, and a belief that the world is complex and
interconnected. To this, he adds three more assumptions favouring agility:
•
that human nature is basically positive;
•
that the environment can be dominated; and
•
that it is valuable to focus on the medium-term future.
Finally, and significantly, Schein emphasizes the importance for organizational agility of a
culture with diversesubcultures.Sometimes, as in the case of the Post Office considered in
Exercise 6.3, subcultures are a source of friction. Nevertheless, after many years of study,
Schein's conclusion is that diversity of subcultures is an important aspect of building agility,
providedthat the other characteristics, listed above, are in place. A strong culture is less likely
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125
to be agile-that is, less likely to be open to change-however successful it is in the short term.
For example, a university could be expected to be more agile if diverse values, such as commercial success,teaching quality, reputation for research, and academic freedom were given
different priorities in different subcultures. On this view, Enron, while displaying extraordinarily rapid growth, may have lacked true agility because of an increasingly consistent set
of values across the company. The role of subcultures in building agility reinforces the i mportance of analysing culture from a differentiation, as well as an integration, point of view. While
an integration point of view may provide a more or less complete picture when discussing a
'strong' organizational culture, in other scenarios it can lead to important elements of organizational culture being neglected.
Section 3 Summary
In this section, we have:
•
discussed the constraints and opportunities that culture and subcultures create for change
strategies;
•
considered the complementary implications for change of integration, differentiation, and
fragmentation viewpoints on organizational culture;
•
discussed the relationship between organizational culture and agility, including the impact of
strong cultures.
Section4: How culture changes
In the previous section, we discussed how organizational culture can support change or
obstruct it. This raises the question of how an organization's culture can be changed if it is
not conducive to the success of the organization or to change strategies that are deemed
necessary.Over the past several decades, the importance of culture change has been widely
recognized and promoted. On the other hand, there is considerable evidence that outcomes
of culture change programmes are very variable (Smith, 2003). We think this is partly because
culture is difficult to change, and partly because emergent culture change processes often
outweigh the effects of intended culture change strategies. In this section, we begin by considering how the need for culture change can be diagnosed. We then look at planned culture
change and emergent culture change. Of course, culture change in practice will often include
both planned and emergent aspects.
Diagnosing the need for culture change
If change in organizational culture is to be deliberately initiated, then some kind of analysis or See Chapter 11
diagnosis of culture needs to take place. Often, this begins with observation by leaders, or inter- for more on
internal and
nal or external consultants. There may be a clear cultural artefact, such as poor customer satis- external
faction, inadequate business performance, or a lack of speed in getting products to market, consultants:p. 257
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126
See Chapter 7 for
more on the
politics of change:
p. 142
See Chapter 11
for more on
transformational
leadership: p. 244
PART B: PERSPECTIVES ON CHANGE
influenced by values and symbols, which highlights the need for change. However, usually,
because much of culture is hidden from view, a more formal process of investigating culture
is necessary in order to gauge what is going on.
There are different approaches to this. Schein (2009) recommends that organizational culture be analysed in relation to a goal of resolving a specific organizational issue-for example
a business problem or the need to implement an organizational change. He suggests that
groups of between ten and fifteen people from different levels in the organization, who share
a concern about the issue, are facilitated through a process of identifying both artefacts and
espoused values. Inconsistencies between these are used to surface values-in-use and
assumptions. These shared values-in-use and assumptions are then assessedin terms of how
they aid or hinder the goal that has been set out, and necessary changes in the culture can
be identified. Our personal experience is different. People often find it difficult to fully understand the concepts. One way in which to help them with this is to encourage them to consider the culture of well-known brands first: in the UK, this might be Marks & Spencer, Virgin,
or Royal Mail. Also, our experience of the politics of most organizations is that doing this in
a single group with people from very different levels in the hierarchy can be problematic.
Using workshops with separate groups, each drawn from similar levels, to analyse the culture
may be more practical.
In any event, a programme like this is not only a cultural analysis, but also introduces a new
artefact: the workshops themselves. In line with Hatch's model of cultural dynamics, the workshops in themselves may become a symbol of change that influences assumptions and which
highlights new behavioural artefacts. For example, this may be the first time that some lowerlevel employees feel their views have been sought. Equally, established artefacts in the form of
routines and habitual behaviour, and ingrained assumptions, may influence how the workshops are understood-as, for example, an unnecessary distraction or a historical blip. We have
seen processes along both these lines in our work and, as Schein suggests, transformational
leadership skills are likely to play the key role in tipping the process in one direction or the
other.
An alternative approach to analysing organizational culture is based on employee surveys
as a diagnostic tool. Cameron and Quinn (2006), for example, set out a questionnaire that
they called the 'Organizational Culture Assessment Instrument' (OCAI). This is intended to assess organizations in terms of various categories of artefacts and values, such as leadership
style, management responsibilities, and successcriteria. It is a much simpler approach to diagnosing organizational culture than that proposed by Schein. But can questionnaires capture
the idiosyncratic characteristics of particular organizational cultures? Cameron and Quinn's
measure assessescultural values along just two dimensions:
•
a focus on flexibility and discretion as against stability and control;
•
a focus on competing with external rivals as against a focus on internal unity.
From this, organizational cultures are then evaluated according to the degree to which they
resemble four archetypal cultures. Other commercial questionnaires are more complex, but
the principle of 'measuring' organizational culture against a limited range of characteristics
remains the same. Many of these products result in compelling visual representations of the
culture. On the other hand, much of the detail that distinguishes one culture from another
may be glossed over. To their credit, Cameron and Quinn acknowledge this by citing critical
comments from John Van Maanen, an expert in organizational culture: 'Leaving readers with
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127
the suggestion that four and only four cultures represent the wonderful world of organizations is a mistake' (Van Maanen, cited in Cameron and Quinn, 2006: 20).
Nevertheless, we have found that, even though they cannot capture all of the detail of organizational culture, precisely because they are straightforward and accessible, these kinds of
tools can be very useful in provoking discussionof cultures and subcultures in organizations.
So they can make a very good starting place for analysing and changing organizational culture. Again, from the cultural perspective, questionnaires of this type are not only a diagnostic
instrument, but they are also themselves a new artefact in the cultural landscape, which may
become a symbol influencing or entrenching assumptions, patterns of behaviour, and values.
Planned culture change
Organizational culture change is never going to be a comfortable, quick, or easy process.
There are several key reasons for this. Firstly,because culture change involves a change in
thinking, it is always second-order change. Secondly,as explained, organizational culture incorporates different facets, all of which will need to change if culture change is to be achieved. See Chapter 3 for
Some of these-like artefacts-are more observable, some-like assumptions-are crucial to more on secondorder change:
shared interpretations, but exist at a deep, unspoken level, which makes them hard to inves- p.41
tigate, let alone alter. They are, as explained earlier using the iceberg metaphor, far below the
waterline. Thirdly,organizational culture affects, and depends on, a range of other characteristics of the organization such as the formal structure, informal networks, planning systems,
power distribution, and strategy (Johnson et al., 2008; Pettigrew, 1999). Fourthly,organizational culture has its roots in the history of the organization. Sometimes, when we work with
an organization and ask 'why are these beliefs prevalent here?' or 'what makes these principles important in the company?', the answers begin ten, fifteen, or twenty years beforehand.
If organizational culture is to change, then the perceived history of the organization may
have to change (Pettigrew, 1999). Past 'successes'may later be viewed in a different light as,
for instance, treading water or even unprincipled. What were once viewed as past 'failures'
may later be regarded as the seeds of success.
Gagliardi (1986) suggeststhat, in practice, there are three kinds of culture change. The first of
these is apparent culture change, in which the culture accommodates change and does not
genuinely alter: for example, the maintenance of blame culture (based on an underlying assumption of individual responsibility/culpability), but with a shift of blame from one department or group to another, or explicit artefacts such as a pattern of accusations at meetings
being replaced by more subtle ones such as gossip about individuals, or people being sidelined
in decision-making following their 'mistakes'. A second form that supposed culture change
takes in practice is what Gagliardi calls revolutionary cultural change. In revolutionary culture
change, the organization is forced into abandonment of values by adoption of new, antagonistic ones. For Gagliardi, rather than genuine culture change, it would be more correct to say that
the 'firm has died and that a new firm ... was born' (Gagliardi, 1986: 130): for example, a turnaround or acquisition can result in this kind of abandonment of values. In the UK in early 2008,
in the midst of a banking crisis, the Northern Rock bank was nationalized. The culture of the
bank had been characterized by risk and rapid expansion. The Northern Rock trading results for
the first half of 2007 showed that it had sold mortgages worth £10.7 billion, up 47 per cent on
the same period a year before, and amounting to almost one in five of all UK mortgage policies
sold in that period. In the year following nationalization, the bank adopted conservative
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lending policies, actively aimed to reduce its portfolio of mortgage customers, and chose to
adopt a limit of selling 2.5 per cent of all UK mortgage policies. This is a revolutionary culture
change in Gagliardi's terms: a new firm was born even though the name remained the same.
A third form of culture change is incremental cultural change: the incorporation of new
values and assumptions (and usually corresponding symbols and artefacts) into an existing
organizational culture. Although there is bound to be some antagonism between new and
old values and practices, in this case new values, beliefs, and assumptions build on or modify
those already established (Legge, 1995). For example, a value for customer service might build
on a value for treating employees well. A value for investigating mistakes thoroughly to find
out whom to blame might be adapted into a value for investigating mistakes thoroughly to
learn and implement improvements, without blame. At Enron, a value for risk-taking was built
on an established value for innovation that had been already inculcated into the way in which
the corporation did business, as it deliberately diversified during the 1990s from a traditional
utility business to focus on commodity trading. This association between risk-taking and innovation can be seen in a 1998 industry magazine article by Jeffrey Skilling, at that time the
president and chief operating officer of Enron, entitled 'Competitive corporate cultures: Why
innovators are leading their industries'. He wrote:
Maintaining an Innovative Workplace
While strategic recruiting is a critical starting place for building a competitive workforce, retaining experienced, creative people who are effectiveat risktaking and change is even more
important.
... By cultivating a corporate culture that encouragesemployees to act like entrepreneurs
and take greater risks,energy companies will be well equipped to pursue the significant
growth opportunities of the 21st century and customers will receive enormous benefits from
their creativity and vision. [emphasisadded]
So how is incremental culture change achieved in practice? It has already been suggested
that each of the elements of the cultural dynamics model-values, artefacts, symbols, and
assumptions-offers potential leverage for organizational culture change. Hope Hailey (1999)
focuses on two of these: artefacts and values. A focus on artefacts includes altering observable
features, such as patterns of behaviour, office layout, technology, routines, hierarchy, reward
systems, responsibilities, appraisal measures, management style, and the kind of stories that
are in circulation. New values can gradually be influenced by a focus on these observable
manifestations of culture. A value for customer service could be developed by focusing on
corresponding artefacts such as new technology to improve customer communications,
measuring customer feedback and attaining year-on-year improvements, appraising and rewarding employees or teams on their service performance, and so on. At a major professional
services firm with which one of us worked, linking reward to working in a way that was consistent with new values, alongside the traditional link with revenue generation, gradually
achieved changes not only in behaviour, but also in thinking. This took more than three years.
Hope Hailey discussesa similar process at Glaxo pharmaceuticals.
A direct focus on changing values, on the other hand, can be carried forward through training
and development, role-modelling, and persuasivecommunication. Employee involvement in discussingand proposing appropriate values is a key tool not only in arriving at an appropriate value
set, but also in building employee commitment to the new values (Schein,2004, 2009). Another
powerful tool is the use of recruitment, selection, and induction to build commitment to new
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values among employees. The replacement of executives and senior managers whose thinking is
not in keeping with new values plays a key role (Cummings and Worley, 2008). Another, related,
intervention is the systematic promotion of people from a particular subculture that reflects desired values and behaviours (Schein, 2004). Change in Practice 6.2 describes how both influencing
values and influencing artefacts were used to modify the culture of a London-based charity.
■
Change in Practice6.2
Thames Reach
Thames Reach is a charity that has been working with homeless people in London since 1984. Since
1995, Thames Reach has been developing effective employment schemes for service users, including
a painting-and-decorating
course, a farm and conservation project, and a shoe-cleaning business. At
Thames Reach, the central shared value is to work to end street homelessness. Among other shared
values was a commitment to professionalism. This had been translated into a pattern of rarely
employing people with actual experience of homelessness in Thames Reach itself, and clear-cut
boundaries between employees and 'service users'. However, among statutory funding organizations,
there was a value for rehabilitative working practices. In this context, the senior management team of
Thames Reach initiated the GROW (Giving Real Opportunities for Work) initiative in July 2005. Its aim
was to increase the number of Thames Reach employees with a personal history of homelessness.
This was an innovative response not only within the organization, but also within the sector.
A steering group consisting of two members of the senior management team and three members
of the human resources team, including a dedicated GROW manager, were responsible for planning
and implementing the initiative. Initially, this involved ensuring that all structural barriers restricting
the employment of homeless people were removed, for example by reviewing contracts and
insurance requirements, and by adapting relevant policies, including recruitment procedures and the
Thames Reach code of conduct.
The next stage aimed to transform the values of the majority of employees whose entrenched
views about supporting the homeless had fostered strong professional boundaries within Thames
Reach of 'us and them'. Initially, the scheme was communicated throughout the organization by the
senior management team, steering group, and acknowledged champions who were either individuals who had been previously involved in service-user employment initiatives or current employees
who had disclosed a history of homelessness. Through senior management team briefings,
departmental and team meetings, the intranet, dedicated events, focus groups, and away days,
employees were engaged, informed, and persuaded about the initiative, and success stories were
promoted. Then, twenty-six employees with a history of homelessness were recruited through four
trainee intakes. By July 2007, a GROW trainee had been on placement in almost all of the twenty-six
different teams in Thames Reach, which enabled team managers and core staff to experience the
value of having ex-service-user colleagues. The final approach was to involve employees in the development and delivery of the initiative, which helped to build organization-wide commitment.
Eighteen months into the project, 85 per cent ofThames Reach staff had been directly involved. For
example, each trainee had a supervisor, life coach, and buddy, who were selected from core staff
volunteers, and team and service managers were involved in recruitment panels. After two years, in
July 2007, the GROW initiative was mainstreamed, which meant, for example, that there was no
longer a dedicated manager and the trainee scheme was harmonized with other similar schemes in
Thames Reach.The initiative was viewed within Thames Reach and across the sector as a success,
and an example of good practice. By March 2010, 103 staff-23 per cent of the total-had
experience of homelessness, compared with just 6 per cent in March 2005.6
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129
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Symbolsalso offer a leverage point for culture change. For example, a share option scheme
See Chapters 5
and 11 for more
on sensegiving:
pp. 96,248
seen as giving staff a stake in the success of a company might influence employee assumptions about profit and, in terms of artefacts, make the share price more salient and help to
establish flexible working patterns. Change in Practice 6.2 also shows the part that can be
played by new symbols in culture change: the new trainees and existing staff with experience
of homelessness were promoted as symbols, capturing the importance of offering employment to ex-homeless people and the importance of experience of homelessness in serving
other users.The introduction of key staff, particularly leaders, from outside an organization
{Schein, 2004)-already discussed as a way in which to directly foster new values-can also be
a potent symbol of cultural change. Shaping the shared meaning of symbols is a form of
sensegiving, a concept that we introduced in Chapter 5.
Finally, it is worth considering the part played by assumptionsin instigating culture change.
Because assumptions are taken-for-granted beliefs and values, which are generally not reflected on and may not be recognized, we think that planned, deliberate organizational
culture change rarely, if ever, begins with the reworking of assumptions. But as values, behaviours, and symbols change, assumptions are altered.
The discussion of planned change above implicitly takes an integration point of view on
organizational culture. That view guides people to see cultural change in terms of uniform
change across the whole organization. The changes, as Enron grew from a pipeline company
to a major multinational energy and commodity trading conglomerate with a shift in values
toward innovation, risk-taking, and ruthlessness,can be viewed from the integration point of
view as a culture change across the whole organization, driven from the top. However, as
already stated, there is considerable evidence that the majority of planned culture change
efforts are not fully successful. The difficulty is that emergent processes of culture change or
stability in culture often dominate planned processes.We now turn to culture change as an
emergent process. Different factors in the emergence of culture change are illuminated from
integration, differentiation, and fragmentation viewpoints.
Emergent culture change
See Chapter 3
for more on
emergent change:
p. 53
Culture change should not only be regarded as the result of strategic planning; it can also be
regarded as an emergent processthat happens with or without planning, or despite planning.
We look at this first from the integration viewpoint, and then from the differentiation and
fragmentation points of view. From an integrationpoint of view, there can be a variety of
causesof unintended culture change. One is that new artefacts, values, symbols, and assumptions filter into organizations from the societal and business environment. For example, new
technological artefacts such as laptops and Blackberry devices can impact cultural dynamics;
over time, they may weaken a value for presenteeism or strengthen a value for seven-day
commitment. An assumption of gender equality, filtering in through societal influence, while
far from universal or unopposed, has much more traction in many Western European organizations today than would have been the case a few decades ago. Assumptions and values can
also filter into organizational cultures from their interactions in the commercial environment.
At Thames Reach, as explained in Change in Practice 6.2, the instigating factor for culture
change was the commitment of statutory funders to a value for 'rehabilitative working practices'. Equally,societal culture-or predominant cultures in the commercial environment of an
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organization-can have an inertial effect on culture change initiatives, tending to reinforce
established values. For example, a value for linking rewards to performance might be more
difficult to introduce in a company that operates in a heavily unionized industry.
The integration viewpoint also highlights culture change arising from growth, decline, or
crisis in the development of the organization (Schein, 2004). In the first place, the predictable
growth of an organization through stages of growth and crises (Greiner, 1998; Phelps et al.,
2007) consists in part of changes in culture. Another cause of emergent culture change is
scandal and reputational damage (Schein, 2004). Decline and failure also cause culture
change (Schein, 2004).
The differentiation and fragmentation viewpoints offer alternative insights into processesof
emergent change. Seen from a differentiationviewpoint, alongside change led from the top,
subcultures can influence one another. For instance, values can spread from one subculture to
another, or there can be revolutionary, or apparent, or incremental change within a subculture. Seen through a differentiation viewpoint, an analysis of culture change at Enron as the
company grew would require an examination of whether changes in the culture of the organization arose not from unified leadership, but, for example, from tensions between utility
company and commodity trading subcultures.
In mergers and acquisitions, distinct subcultures are always present, at least on a temporary basis. Mergers and acquisitions often do not realize their potential. According to
Harding and Rouse (2007), nearly two out of three companies lose market share during
the first quarter after a merger; by the third quarter, this rises to nine out of ten. For a
minority of mergers and acquisitions, it can be possible for the two former organizations
to function independently, particularly if they operate in different markets. Cartwright and
Cooper (1993) call this an extension merger. However, usually it is imperative-part of the
aim behind the merger-to integrate aspects of the two organizations and, in so doing, to
reconfigure the subcultures. Many experts recommend that, prior to merger or acquisition, cultural differences between the organizations are analysed. Some believe that there
needs to be a certain degree of cultural fit as well as financial/business fit between organizations in order for a merger to be appropriate (Buono et al., 1985; Cartwright and
Cooper, 1993; Harding and Rouse, 2007). Integration of cultures can take place through
collaboration in building a new organizational culture (an incremental culture change).
Cartwright and Cooper call this a collaborative merger. Alternatively, as in many acquisitions, integration of cultures can take place through annexation of one organizational
culture by the other (a revolutionary culture change). Cartwright and Cooper call this a
redesign merger. Harding and Rouse (2007) point out that, in the case of a redesign
merger, the cultural acquirer may not necessarily be the larger organization. Sometimes,
a smaller organization is acquired precisely because of the values, symbols, assumptions,
and artefacts that it can offer a larger organization.
When does a collaborative merger succeed in building a new culture? Researchsuggests
that, contrary to expectation, this does not necessarily depend on the degree of 'fit' between
two organizational cultures. Instead, the single most important factor is the degree to which,
formally and informally, there are cross-organizational socialization activities. According to
Larsson and Lubatkin (2001), if the autonomy of each organization is respected, measures
such as introduction programmes, joint training and retreats, employee visits, joint celebrations, and other rituals are likely to be sufficient for a joint organizational culture to be
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131
See Chapter 2 for
more on growth
as a driver of
change: p. 27
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PART B: PERSPECTIVES ON CHANGE
created emergently. If autonomy is restricted, as when savings are expected by eliminating
replication of physical or human resources, then more formal measures such as transition
teams, cross-organizational senior management involvement, and employee exchange/
rotation are likely to be required. But, again, Larsson and Lubatkin's research suggests that
such measures are usually successful.This research runs counter to the view of some practitioners that specific planed projects to build a new organizational culture are required
(Schein, 2009).
Finally, seen from the fragmentationviewpoint, organizational culture change is not necessarily centred within or between subcultures. It can emerge simply from unpredictable individual and group understandings of specific issues.This viewpoint highlights how culture
change can emerge from, for example, the actions of whistleblowers, and the conflicting
emotions and interests of leaders at all levels. The fragmentation viewpoint would allow an
understanding of the development of Enron's culture in terms of shifting commitments to
values for growth and personal wealth accumulation, respect, and ruthlessness, as circumstances changed over time.
Exercise6.4
Identify an organization in which you consider that the culture has changed in the last five years. It
could be where you work, or an organization you know well, or a well-known brand.
•
Can this be regarded as a planned culture change? Can it (also) be regarded as emergent culture
change?
•
Whether deliberate or unintended, how do you think the change in culture was accomplished?
•
In which ways, or from whose standpoint, has the change in culture been beneficial, and in which
ways, or from whose standpoint, detrimental?
Section 4 Summary
In this section, we have:
•
considered how the need for culture change can be diagnosed;
•
examined types of culture change and approaches to culture change implementation;
•
discussed emergent culture change.
■
Integrative CaseStudy
Culture change at Pace
Pace is a manufacturer of set-top boxes that allow reception of digital television. In 2006, when a
new chief executive and HR director were appointed, Pace was close to bankruptcy. The company
had debts of f30 million and was making a loss of fl 5 million on sales of fl 75 million. The HR
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director recalls communication
CULTURE
being poor, 'mired in eight tiers of management' while
'engineering and sales "threw stones at each other over a high brick wall" rather than
communicating or working together', hindering decision-making. According to the chief
executive-who
had previously been sales and marketing director-'engineers
were questioning
why we did things in a certain way because they weren't close enough to the customer to know
what they wanted and why they wanted it'.
A key aspect of turning this around was a culture change programme. So-called 'Pace values'
{passion, integrity, accountability, innovation, and appreciation) and 'Pace behaviours' (customer
focus-external
and internal, driving for results, leadership, communication, teamwork, and
personal responsibility) were introduced. According to the HR director, focusing on customers led
to the need to increase responsiveness and the removal of four of the eight layers of management.
It was also decided that engineering and sales staff would work together in customer account
teams rather than operate separately. She is quoted as explaining:
Combining salesand engineering in the same team was a symbolic move. But actually it turned
out to be incredibly successful . . Staff were told they were Jointly accountable' for delivery to the
customer. {Churchard, 2010: 20)
The performance management and reward system was tailored to incentivize the desired
behaviours. Each ofthe six behaviours was operationalized in more detail. For example, customer
focus was operationalized as:
•
Understands and supports our objective of putting the customer at the heart of the business
•
Listens to the customer; understands and manages their expectations
•
Responds appropriately, accurately and promptly to customer needs
•
Develops and maintains effective customer relationships
•
Thinks ahead, creating solutions to meet customer needs
{Pace ExecutiveCommittee, 2010: 11)
Assessment against the new behaviours made up 50 per cent of an employee's performance
rating. Performance management also applied to members of the senior executive team, who
were similarly reviewed and rewarded against the behaviours. Three 'critical success factors' for
the change programme were established using the mantra 'on time, on margin and on quality'.
In 2008, following the success of these measures, Pace acquired the set-top box business of
Phillips, the Dutch electronics manufacturer, for £68 million. Embedding the Pace culture at the
new site was a major strategy in the takeover. At Pace, there were dramatic improvements in
business performance, profitability, and employee satisfaction. The business rose from seventh
place to second place in the league of set-top box manufacturers between 2006 and 2009, with
revenues in 2009 of £1.1 billion.
Questions
1.
Pace set out five values: passion, integrity, accountability, innovation, and appreciation. What
would you need to know to establish whether these were espoused values or values-in-use? Are
there other values-in-use that you can identify?
2. Can you judge whether culture change at the company was 'apparent', 'revolutionary', or
'incremental'?
3. In 2010, the leaders of Pace were certain that culture change at the company had contributed
directly to radical performance improvement. Do you agree?
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ORGANISATIONAL THEORY & DYNAMICS
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PART B: PERSPECTIVES ON CHANGE
Conclusion
Although organizational culture can be difficult to analyse because it is rooted in the informal aspects of organizations, it provides a powerful perspective on organizational change.
Central to this is the recognition that how an organization functions and changes depends
on the way in which individuals understand and perceive what is going on around them. For
this reason, organizational culture may constrain change or enable change to take place,
whether change is regarded as planned or emergent. The chapter also addressed the challenge of analysing and changing organizational culture itself. It showed how the various
models of culture and cultural dynamics provide insights into how to deal with both change
in the context of culture and the challenges of culture change.
Please visit the Online ResourceCentre at http:/ /www.oxfordtextbooks.eo.uk/orc/
myers to accessfurther resourcesfor students and lecturers.
Change in Practice sources
1. Cruver, B. (2002) Anatomy of Greed:The UnshreddedTruth from an Enron Insider, New York:
Carroll & Graf.
2. Enron (2001) 'Enron values', 2 Dec. http://www.enron.com
3. Fox, L. (2003) Enron: The Riseand Fall, Hoboken, NJ:John Wiley & Sons.
4. Fusaro, P. C. and Miller, R. M. (2002) What Went Wrong at Enron: Everyone'sGuide to the Largest
Bankruptcy in US History. Hoboken, NJ John Wiley & Sons.
5. Powers Jr, W. C.,Troubh, R. S., and Winokur Jr, H. S. (2002) Report of Investigation by the Special
Investigative Committee of the Board of Directors of Enron Corp. http://i.cnn.net/cnn/2002/LAW/02/02/
en ran. report/ powers.report. pdf.
6. Based on interviews with Thames Reach staff.
Integrative Case Study sources
Churchard, C. (2010) 'In the top set', PeopleManagement, 16(7): 18-21.
Gaydon, N., Hall, S.,and Ezard,J. (2008) 'Pace analyst briefing'. http://www.pace.com/media/corporate/
PDF/080619 _pace_analyst_briefi ng. pdf
Pace Executive Committee (2010) 'Code of Business Ethics'. http://www.pace.com/media/corporate/PDF/
bus_ethics_aprl 0.pdf
Pace pie (2008) 'Transaction overview'. http://www.pace.com/media/corporate/pdf/08033l_transaction_
overview.pdf
Palmer, M. (2010) 'Pace to take second set-top box slot', Financial Times,1 Mar: 22.
Stafford, P. (2008) 'Change of channel for TV set-top boxmaker', Financial Times,16 Apr: 24.
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FROM THE PERSPECTIVE
OF ORGANIZATIONAL
CULTURE
Further reading
Daymon, C. (2000) 'Culture formation in a new television station: A multi-perspective analysis', British
Journal of Management, 11 (2): 121-35.
A case study of one culture change from three points of view-integration,
fragmentation-showing what each reveals.
differentiation, and
Schein, E. H. (2009) The Corporate Culture Survival Guide, 2nd edn, San Francisco, CA:Jossey-Bass.
A practical account of Edgar Schei n's influential standpoint on diagnosing and changing culture.
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CHAPTER 7 • CHANGE FROM THE PERSPECTIVE OF POWER AND POLITICS
Change from the
Perspectiveof
Power and Politics
( _______
1_1n_tr_o_d_uc_t_io_n
______
)
PARTA: The Change Process
PARTB: Perspectives on Change
Organizational
6 Change from the Perspectiveof
Organizational Culture
7 Change from the Perspective of
Power and Politics
8 Change from the Perspectiveof
Organizational Learning
2 Causesof Change
3 Intentions and Realitiesof Change
Psychological
4 Emotions of Change
S Sensemaking Processesin Change
PARTC: Delivering Change
9 Approaches to Change Implementation:
Directed Change
10 Approaches to Change Implementation:
Facilitated Change
11 Roles People Play in Change
12 Communicating Change
13 Sustaining Change
(_______
1_4_Co_n_c_lu_s_io_n
______
)
Introduction
This chapter examines the three related phenomena of power, politics, and resistance, offering different theoretical interpretations as to what they mean, their role in organizational change, and the implications for both theory and practice. We call this a 'political' perspective on change. This perspective
highlights the adversarial nature of change and is based on the assumption that organizations are
formed of different interest groups, whose aspirations for a particular change are often incompatible.
Indeed, one researcher describes organizations as 'a cacophony of complementary and competing
change attempts, with managers at all levelsjoining the fray and pushing for issuesof particular importance to themselves' {Dutton et al., 2001: 716).
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137
Where there are competing change agendas, choices may not be straightforward about where
and how to allocate time, money, people, and assets,or about what to change and what to keep the
same. Rather than seeing those choices as being made through rational decision-making, a political
perspective focuses on the way in which decisions are made through the exercise of power and
influence, and the way in which those decisions may then be rejected through the exercise of
a form of counter power, often referred to as 'resistance'. However, this exercise of power and
counter-power is often seen as self-serving, which contributes to the largely negative view of
power and politics: 'Most people perceive only the dark side of politics, and indeed there is a dark
side, characterized by destructive opportunism and dysfunctional game playing' (Ferris and Kacmar,
1992: 113). This is a fundamental issue in working with organizational politics, which we will explore
further.
A political perspective also suggeststhat the neatness and clarity of planned organizational change
is a facade masking the interests and moves behind the scenes of different groups and individuals.
Planned approaches emphasize rationality and logic. A political perspective on change allows for ra- SeeChapter3 for
tionality and plans, but suggeststhat this on its own is insufficient. While groups bending the rules in more on planned
their own interests may have perfectly logical reasons for doing so, the resulting behaviour by the or- organizational
change:p.49
ganization may no longer appear rational (Davey, 2008: 651).
•
Main topics to be covered in this chapter
•
Power and politics and their relevance to organizational change
•
Political interventions
•
Alternative ways of understanding resistance
•
Interventions to increase commitment or decrease resistance
Section 1: Power and politics and their relevance
to organizational change
In this opening section, definitions of power and politics are examined, and their relevance
to organizational change is explored.
Power
Power has traditionally been defined as the ability to change other people's behaviour so
that they do what you want them to do. More recently, there has also been an interest in 'soft
power'-the ability to get others to think the way you do. Whereas power is often described
as a resource, politics tends to be seen as power being actively used.
There are three main ways of conceptualizing power in the literature (Buchannan and
Badham, 2008): power as an individual property; power as a relational property; and power
as embedded in organizational structures and procedures.
1. The most popular understanding of power views it as something that individuals possess.Sources of power can be structural, such as your formal position in an organization, your
accessto information, the centrality of your business unit, your physical and social place in
the organization's communication network, or your role in resolving critical problems.
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PART B: PERSPECTIVES ON CHANGE
Sources of power can also be individual. Exampleswould be energy, the ability to 'read' other
people, flexibility, and a willingness to engage in conflict and confrontation (Pfeffer, 1992).
Managers who are able to draw from both sources can wield significant power.
2. The second and related view treats power as the property of the relationship between
individuals rather than the property of one person and is a view associated with French and
Raven (1958), who offer the categories outlined in Table 7.1.
Here, power is understood as a relational construct because it depends on the beliefs of
others. For instance, a change agent may have superior knowledge and be able to control
rewards and penalties, but if nobody believes that he or she has such attributes, others are
unlikely to comply with his or her requests, so that, in fact, he or she has limited power. Another feature of this view of power is that individuals may use different power bases at different times and in different contexts, and these bases are interrelated. So, once a change agent
has used coercive power, it may be hard to subsequently use referent power. Raven added
the sixth power base, information power, in 1965.
However, these categories are arguably quite broad and it is questionable whether, in
practice, power can be fitted into six neat categories, or eight, as later theorists proposed
(Benafari et al., 1986). As Clegg and Hardy (1996) note, such sources are likely to be infinite, and highly dependent on what resources are available and appropriate in specific
circumstances.
3. Proponents of the third view of power argue that a problem with both the first two approaches is that they focus on visible or semi-visible aspects of power. They suggest that
power is pervasive and embedded in less obvious features of organizations, such as regulations, norms, and routines that perpetuate existing power relations. For instance, Davey's
(2008) research shows that women continue to be excluded from existing informal networks
and mentoring relationships, making it harder for them to progress their issues or their careers. This embedded view is valuable in alerting people to the way in which taken-for-granted
patterns and practices in an organization, or indeed society, can serve to perpetuate existing
power relations, rather than to encourage or allow change. As Buchannan and Badham say,
'invisibility and intangibility cannot be equated with insignificance' (1999: 57).
Table 7.1 Individual power bases
Positional
power
Derived from your formal position
Coercivepower
Your ability to threaten others and to carry out
threats
Expertpower
Derived from knowledge and experience
Rewardpower
Your ability to reward others
Personalor referentpower
Based on others liking you and believing that you
have desirable qualities and personality traits
Informationpower
Derived from access to data
Sources: French and Raven(1958; 1965)
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Change in Practice 7.1 illustrates different uses of power and political behaviour.
■
Change in Practice 7.1
Introducing a new IT system in a hospital
A large teaching hospital in the UK, with 1,500 beds, was the UK pilot for the implementation of a
new hospital-wide IT system, costing £10.1 million. The team charged with introducing the new
system was aware of the challenges generally experienced when trying to introduce IT, which is often
seen as costly, difficult to implement, time-consuming to operate, and of marginal significance to the
organization and its core purpose.
The same year, the hospital achieved Trust status, which meant that it became independent and
self-governing, with a Trust board and chief executive, accountable directly to government ministers.
The move to Trust status had strengthened the formal position of the executive directors and the
chief executive, however in practice they were constrained by the need to meet the demands of the
government, public opinion, and powerful internal groups, particularly doctors.
The IT implementation team explicitly recognized two key interest groups within the hospital
i) clinicians, such as doctors and nurses, whose primary concern was the quality of patient care; and
ii) managers, including the Trust board and finance managers, who were interested in control,
economy, and efficiency. A third internal stakeholder group was support staff, consisting of porters,
secretaries, and those working in medical records, but these were not thought to be critical to
successful implementation of the new IT system.
Brown (1995), a researcher working in the hospital, perceived the new Trust board to be highly
sensitive to internal or external criticism and that there 'seemed to be an active constraint on their
willingness to force through change' (ibid: 957). So, in order to gain user acceptance for the new IT
system, the implementation team had to 'engineer others' understanding of the system through
calculated argument (and) control over the flow of information ... so that they viewed it more
favourably than might otherwise be the case' (ibid: 952). The implementation team did this by
identifying the main benefits of the system, but then tailoring the message in conversation to meet
the interests of those whom they were trying to influence. In the words of the project manager:
The trick with those particular staff (clinicians) is that you don't go in there saying you could save
them three nurses and whatever-it's the clinical benefits which again are easy to point out.
. (as
for) ... emphasiz(ing) the financial benefits ... you talk about that when you're talking to the Trust
Board and the finance directors and people outside the Trust. (Quoted ibid.: 959)
The team also deliberately withheld key information about the system that could have been used to
help junior doctors with the diagnosis and treatment of patients, because the team did not want to
be seen to be attempting to de-skill doctors. Another feature of the system would have allowed the
hospital to evaluate the cost-efficiencies of different clinicians. This too was never mentioned,
because the team did not want to upset the doctors.
The implementation team and its sponsors referred to all of these activities as 'marketing' or 'sales',
denying for themselves and others the extent to which they were involved in political activities.
'Politics' was seen as a very derogatory word in the hospital, whilst at the time, marketing and sales
had positive, private-sector connotations. The project manager was steeped in the culture and
traditions of the NHS, and therefore adept at managing meanings of the new IT system, whereas the
chief information officer, a recent joiner to the health sector, encountered considerable difficulties in
articulating the benefits, building credibility, and influence. After a year, he was, in effect, sidelined,
while the project manager was promoted. 1
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139
140
See Chapter 6 for
more on the
iceberg model:
p. 112
PART B: PERSPECTIVES ON CHANGE
In Change in Practice 7.1, the implementation team did not perceive the organization as a
monolithic entity, but as composed of different interest groups with different attitudes towards the proposed changes.The team also made a judgement about the degrees of power
and importance that the team believed the different interest groups possessed: it paid
significant attention to the concerns of clinicians and managers; no attempt was made to
engage with support staff. The Trust board members had positional power because they
were technically in charge of the organization. However, they were reluctant to push th rough
any changes because they recognized the greater power of the doctors who had medical
know-how (expert power) and knowledge without which the hospital could not survive
(coercive power). This is the group that the implementation team targeted. The support
services group was largely ignored by the implementation team because it did not regard the
group as possessingany of these sources of power and the team was, therefore, not seen as a
threat to the project. The implementation team itself used information power very carefully,
sharing some information about the system and withholding other information.
The example illustrates another key feature of power and politics-its hidden nature.
Although 'political behaviour sometimes takes the form of two or more armed camps pub1icly fighting things out, it usually is much more subtle. In many cases it occurs completely
under the surface of public dialogue' (Kotter and Schlesinger, 1979: 108). In terms of the
iceberg analogy, it is under the water, but significantly shapes what happens above it. Indeed, Lukes {2005: 1) suggeststhat 'power is at its most effective when least observable'. He
looks at power in relation to decision-making. A one-dimensional view of power looks at
whose view dominates in decision-making. A two-dimensional view of power is also interested in non-decision-making, because power can be used to veto and stop things happening.
However, Lukes{1974; 2005) contends that even this is too simplistic. The third dimension of
power is that of being able to limit the political agenda so that certain issuesdo not even get
to the table to be discussed openly. In Change in Practice 7.1, the implementation team
deliberately withheld information about the control features of the new IT system, so team
members were using the third dimension of power to ensure that this aspect was never even
discussed with the doctors.
Politics
The word 'politics' comes from the Greek word polis meaning 'city state'. Aristotle advocated
politics as a means of reconciling the need for unity in the city state (that is, the polis)with the
fact that the polis was made up of diverse interests. Definitions of organizational politics fall
into two broad categories (Zanzi and O'Neill, 2001 ). The first seespolitics as negative and selfserving, leading to divisive, illegitimate, and dysfunctional behaviour and conflict. The second
view sees political behaviour more neutrally, believing that it can sometimes be beneficial.
These two different views about politics derive from different views about organizations.
Those with a unitarist perspective on organizations tend to emphasize cooperation and
collaboration, and view politics as an aberration because any activity that is not directed to
shared organizational goals is seen as both deviant and irrational. Pluralist approaches acknowledge the inevitability of politics in the activities of subgroups in an organization competing for limited resources. The implementation team in Change in Practice 7.1 recognized
different interest groups, so was taking a pluralist view.
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Defining political behaviour is challenging because the discussion is not purely theoretical.
Definitions tend to carry with them an underlying criticism of those who act politically. Mintzberg
(1985: 172), for instance, describes politics as 'individual or group behaviour that is informal,
ostensibly parochial, typically divisive, and above all, in a technical sense, illegitimate-sanctioned neither by formal authority, accepted ideology, nor certified expertise'. The notion of
politics being illegitimate or unsanctioned is a key element of many definitions (Poon, 2003),
but who decides what behaviours are sanctioned or not and does that make some of them
wrong, because they are not sanctioned? Whistleblowers' activities are, by definition, not
sanctioned by those in authority within the organization, but may be regarded by others as
morally right.
Definitions of politics do not just emphasize the unsanctioned nature of political behaviour. There is often an assumption that individuals playing politics do so for personal gain
and individual career achievement, as well as sometimes for organizational benefit. It is this
potential for politics to be self-serving that contributes to the 'taint' associated with politics.
The following definitions both include this element.
•
'Organizational politics exploits unofficial networks and contacts to achieve personal
gain.' (Ferris and Kacmar, 1991)
•
'Organizational politicking involves engaging in activities to acquire, develop, retain and
use power, in order to obtain your preferred outcomes in a situation where there is uncertainty or disagreement'. (Huczynski, 1996: 247)
Politicalskill
However, of course, the really skilled politicians disguise their self-serving intentions. Ferris
et al. (2000: 30) describe political skill as 'an interpersonal style that combines political astuteness with the ability to relate well, and otherwise demonstrate situationally appropriate
behaviour in a disarmingly charming and engaging manner that inspires confidence, trust,
sincerity and genuineness'.
Baddeley and James (1987) offer an interesting distinction in this respect, following their
research into local government. They differentiate between the clever and the wise. Both
types of people are skilled at 'reading' the politics of an organization, but whereas the former
tend to be concerned primarily with their own self-interest, the wise are concerned primarily
with what is in the interest of the organization and are predisposed to act with integrity.
Whilst an interesting distinction in theory, this assumes that what is in the organization's best
interests is clear and objective rather than dependent on whom you talk to. It also assumes
that others' intentions and motivations are transparent, and that it is easy to discern those
acting with the collective interest in mind and those acting with self-interest. In our experience, neither is always the case in practice.
Exercise7.1
Contemplate an example of what you consider political behaviour that you have noticed where you
work or study.
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PART B: PERSPECTIVES ON CHANGE
•
What do you imagine the individual was hoping to achieve through such behaviour?
•
What feelings did this evoke in you?
•
What circumstances or situations have, or would, encourage you to engage in political behaviour?
•
What would stop you, personally, from involvement in political behaviour?
Colloquially people are referred to as 'playing politics'. Some theorists describe organizations
as political or games arenas (Ferris et al., 1996; Mintzberg, 1985), in which some of the players are unknown and many of the rules are unclear. Others talk of 'winning the turf game'
(Buchanan and Badham, 2008). In such games, organizational politics pits individuals or
groups against each other, sometimes without all parties being aware of it. Tactics, according
to Conner (2006), may be to outwit, outplay, or outlast. For instance, a co-worker may spread
rumours to make a colleague's change proposal look badly conceived, simply so that he or
she will have a better prospect of promotion. The colleague may be completely oblivious to
such behaviour, as a feature of such games is creating a lack of transparency about what is
going on. So groups of insiders and outsiders emerge, with not all organizational members
having access to the necessary information, alliances, or understanding of the rules of the
political game, which can subsequently lead to perceptions of organizational injustice.
This leads to another common theme in the organizational politics literature-the notion
that, regardless of the actual existence of politics, the perception of politics is extremely important (Ferris and Kacmar, 1992). Gandz and Murray (1980) suggest that organizational
politics is best understood as a state of mind rather than an objective reality.Judging political
actions and their outcomes is therefore largely a function of the values and perspective of the
evaluator, and what becomes important for the change agent is the meaning ascribed to
their actions in their context by other organizational players. So behaviour can be seen as
political if someone defines or rejects a behaviour as political (Connor, 2006).
The relevance of power and politics to organizational change
There are two main reasons to suggest that understanding organizational change through
the perspective of power and politics is useful and important. The first is that, when an organization is in the midst of change, there is likely to be an increase in political behaviour,
which affects everyone, whether leading change or on the receiving end of change. The
second is that there is a view held by some that change agents need to engage in politics if
they are to be successful.
To expand on the first point, organizational politics involves unsanctioned and informal
forms of behaviour (Zanzi and O'Neill, 2001). These forms of behaviour are more likely when
there is uncertainty because formal rules and procedures are no longer adequate guides to
what should be done. Uncertainty and ambiguity increase when an organization is in the thick
of change. The more complex the change, the harder it is to anticipate the potential consequences, which increases uncertainty, in turn amplifying the likelihood of political behaviour.
Lack of trust is also associated with an increase in political behaviour (Poon, 2003). In a lowtrust climate, people are more likely to be suspicious of the motives and intentions of others
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143
and, in such situations, informal and non-sanctioned behaviours are more likely to be
perceived negatively and as political. Trust is likely to decrease during change because psychological and implied contracts are deemed to be violated, so an increase in ambiguity and SeeChapter 5
uncertainty, and a decrease in trust, all contribute to the likelihood of increasing political be- for more on
psychological
haviour during change.
contract
However, this increase in political behaviour is neither inherently positive nor negative. violations:
p. 88
Table 7.2 demonstrates the potential impact of political behaviour on change.
With flatter organizational structures and many change programmes being run as crossfunctional project teams, change agents, whatever their particular roles, are unlikely to have
line authority over those whom they need to influence. Hence, the argument goes, the need
to use political skills. Such a view is anathema to proponents of organization development,
who emphasize the value of trust and openness. We know from our own work teaching
change that many leaders find politics distasteful too. However, 'the change agent who is not SeeChapter 10
politically skilled will fail' claim Buchannan and Badham (2008: 18). 'You may find ... power for more on
organizational
plays and the politicians behind them unsavoury-and they can be. But you'll have to get development:
over your qualms if you want to bring about meaningful change' concurs another commen- pp.222-8
tator (Pfeffer, 2010: 87).
Certainly, studies suggest that the perceived effectiveness of organization change is in part
dependent on the political skills of change agents (Ferris et al., 2000). Indeed, an anonymous
survey of 250 British managers (Buchanan and Badham, 2008: 27) found that:
•
60 per cent agreed that 'politics become more important as organizational change becomes more complex';
•
79 per cent agreed that 'politics can be used to initiate and drive useful change initiatives';
•
81 per cent that 'politics can be effective in dealing with resistance to change';
Table 7.2 Potential impact of political behaviour on change
Positiveeffectsof politics
Negative effectsof politics
Accelerates change when formal methods of
influence are slow
Behind-the-scenes lobbying and building
coalitions can absorb significant amounts of time
and energy that could be used elsewhere
Stimulates debate and helps to ensure that all sides
of an issue are aired and debated
Those with less real power may have their
interests ignored and those with power may
advance their own interests to the detriment of
others or the organization
Can be a critical source of dynamic energy
Creates a climate of mistrust and suspicion
Keeps conversation about change 'in play', ensuring
that proponents of change hone and refine their
arguments
Distraction from organizational goals
Recognition and achievement for the change agent
Unproductive allocation of resources
Increases involvement of key political players. and
so increases their engagement and ownership
Excludes those who are not able, or do not wish,
to play politics, perpetuating existing inequalities
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PART B: PERSPECTIVES ON CHANGE
•
93 per cent agreed (21 per cent strongly) that 'politics can be used to slow down and
block useful change initiatives';
•
only 9 per cent agreed with the item 'change agents who avoid organization politics are
more likely to succeed in their roles'.
Buchannan and Boddy (1992) offer a useful framework for change agents to think about
their behaviour, introducing the metaphor of the front stage to describe the rational arena
of action for change agents and back stage to describe the political arena. They suggest that:
the change agent has to support the 'public performance' of rationally considered and logically phased and visibly participative change with 'backstageactivity' in the recruitment and
maintenance of support and in seeking and blocking resistance... 'Backstaging'is concerned
with the exerciseof'power', with 'intervening in political and cultural systems',with influencing, negotiating and selling, and deliberately tailoring messages.(Ibid: 27)
In times of change, holding onto the appearance of rationality may be an important source
of security and reassurance, even if there is an intensification of political activity back stage.
Section 1 Summary
In this section, we have:
•
explored definitions of power and politics and the challenges associated with those definitions;
•
explored the relevance of power and politics to organizational change and change agents.
Section2: Politicalinterventions
A political perspective on change assumesthat people want to influence strategy or changes that
are likely to impact on their interests. In this section, we examine a number of different political
interventions from forming coalitions, presenting ideas for change and approaches to mapping
the positions and power of different groups and individuals relative to a particular change.
Coalitionsas political alliances
SeeChapter 11
for more on the
role of leaders:
p.244
The coming together into groups of those who share particular interests, or who want to
advance specific approaches to change, is described as the formation of coalitions. When
more people are involved, and are organized, an issue can become more visible and the
group potentially more powerful and influential.
Leaders wanting to initiate change need to ensure that at least a majority of those on their
own executive team are actively in support of the change. Without what Kotter and Cohen
(2002) refer to as a 'powerful guiding coalition', it can be hard, if not impossible, to sustain the
momentum and energy required for radical change. It can also be hard to convince employees that the leadership is serious about change. This is why many consulting interventions
around change often begin with one to one interviews with the board or leadership team to
identify whether or not there is indeed a sufficiently strong guiding coalition.
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The word 'guiding coalition' tends to refer to coalitions formed of senior leaders. However,
coalitions can be formed from different levels within the organization. For instance, we
worked with a leading Asian airline, in which the impetus for organizational change came
from a coalition of confident, highly qualified graduates who had been managers for three
to five years. They threatened to leave unless there were changes to the very paternalistic
ways of working in the organization, posing a significant risk to the company's reputation, in
a country that takes 'loss of face' very seriously.
Coalitions also form against change. In 2010, British Airways cabin staff formed a coalition
against changes to pay and conditions that they claimed had been imposed without consultation. In this case, the trade union, Unite, provided a critical catalytic role in targeting employees to join the coalition. Sometimes, there may be shared interests, but no coalition
forms. In Change in Practice 7.1, members of support staff were all worried about losing
control to the new computer system, but they never coalesced. Instead, in the words of the
director of radiology, resistance was 'passive and quiet-the soggy sponge' (Brown, 1995:
961), absorbing what was happening, but not actively challenging it.
The formation of coalitions is the primary means by which individuals go from being on
the same wavelength to being allies who recognize their common interest and are willing to
devote resources (time, phone calls, and contacts) to a common effort (Bacharach and
Lawler, 1998). So why do some individuals decide to collaborate to further their interests
rather than go solo? Workers who have very standard, highly routine tasks may view themselves as potentially expendable and may therefore be motivated to join forces with others
to create critical massto influence a particular change. The decision to join a coalition is also
often affected by social similarities such as departmental membership, professional affiliations, or demographics such as gender, age, and ethnicity.
Some coalitions, over time, become so entrenched they become explicit, openly acknowledged sources of political identities such as 'head office', 'the regions', 'the old guard', and 'the
union', with reputations for, or against, change. In other cases,coalitions remain unacknowledged explicitly, but widely suspected or inferred. They can thus be thought of as subtle, informal 'institutionalized substratum of organizations' (Baccharach and Lawler, 1998: 73). In
other words, they have continuing existence and influence, hence are institutionalized, but
they are part of the organization that operates under the water, to return to the iceberg
metaphor.
The politics of presenting ideas for change
Sometimes, managing politics around change is less about joining coalitions and more
about the way in which proposals for change are drawn to the attention of senior people in
an attempt to influence them. Rather than using the value-laden terms of politics, Dutton et
al. (2001) use the term issueselling to describe the behaviour of people outside top management who compete for attention for their ideas about what should change and how.
Understanding how attention is allocated inside an organization can provide insights into
organizational change because some issueswill come to be seen as more important and,
through this, certain decisions will be made and others not made (Ocasio, 1997). This perspective thus offers a more emergent way of understanding organizational change, rather
than a directed, top-down view, as it shows how the source and energy of ideas for change
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PART B: PERSPECTIVES ON CHANGE
can come from people below top management, who may not even consider themselves to
be change agents. However, in competing for senior managers' attention for their ideas to
be adopted, 'issue sellers' are also recognizing the decision-making power of senior management and want their ideas to become accepted, legitimized, and resourced as part of
any planned, directed change.
In an empirical account of issue selling, Dutton et al. {2001) found that managers who were
successful in selling their ideas used a range of approaches to packaging the issue, and also
drew on their knowledge of people and organizational norms. These included the following.
1.
Usingthe logicof the businessplan, which is also an example of what Buchanan and
Boddy {1992) call a front stage activity.
2.
Persistence:
one respondent described how he tried to influence a vice president-'when
you tell him about a concept, you sort of acclimate him to the situation and you
repeatedly tell him about it for several months so he knows it is coming ... and then you
hit him with the big package' (Dutton et al., 2001: 722).
3.
Incrementalism:packaging the issue as incremental refers to the way in which the size of
a proposal is presented so that it appears more palatable to the target audience.
Fincham {1999) also found that consultants frequently use incremental ism as a tactic
when selling change projects, so that they appear more do-able.
4.
Bundlingis the term Dutton et al. (2001) use to describe managers' efforts to connect
their issue to other issuesor goals that had value and were salient in the organization,
such as profitability, market share, or organizational image, or were important to key
individuals whom they were trying to influence.
Three kinds of knowledge of the change context are important for issue sellers. An individual's ability to 'bundle' effectively is highly dependent on what Dutton et al. (2001) describe as
strategic knowledge. Those who are aware of what has currency in their organization are,
thus, better equipped to shape change. Strategic knowledge also includes a sense of the organization's competitive landscape and broader external context (Floyd and Wooldridge,
2000).
Relational knowledge refers to managers' understanding of individuals and social relationships. It enables them to answer questions such as: who will be affected by this change? Who
has power to help or hinder this issue? When will people be ready to hear about this? This
knowledge allows managers to anticipate and indeed to pre-empt responses, to work with
the power structure, and 'to navigate the political aspects of a context' (Dutton et al., 2001:
727). The project manager in Change in Practice 7.1 showed evidence of using relational
knowledge, tailoring what he said depending to whom he was talking.
Managers' understanding of the norms of expected or appropriate behaviour is what
Dutton et al. (2001) refer to as normative knowledge. Those with normative knowledge
know how data is normally presented, what kind of meetings would be legitimate for discussing a change, and how much challenge within formal meetings is tolerated. In Change in
Practice 7.1, the project manager's boss, the chief information officer, was new to the sector.
He struggled to gain credibility and influence because he could not read the signs of what
was appropriate to say and what was not. Management consultants too are frequently unable to influence the internal politics around an organizational change because, as outsiders,
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they do not have access to normative and relational knowledge, so cannot 'play the game'
and manage meanings with the same subtlety as those inside the organization (Fincham,
1999). In contrast, the project manager in Change in Practice 7.1 had relational, normative,
and strategic knowledge, so could orchestrate the involvement of the right people in the
right way at the right time. Arguably, such knowledge could also be described as understanding
the culture of the organization.
Understanding how middle managers can influence change by packaging their issues in
ways that capture senior leaders' attention challenges the notion that change happens only
because of the heroic efforts of those at the top. Senior management can facilitate this process if they provide opportunities for managers to deepen their understanding of contextual
knowledge through involvement in conversations about strategy (Floyd and Wooldridge,
2000). Conversely, 'by failing to make sure that people are equipped with the knowledge to
achieve effective selling from below, organizations rob themselves of this vital source of
internal change initiatives' (Dutton et al., 2001: 731).
Exercise 7.2
Think of an issue about which you feel strongly and would like to see changed in an organization
of which you are a member. The organization could be where you work, the college at which you
are studying, or a social organization to which you belong, such as a sports or voluntary organization. Imagine that you would like to bring this issue to the attention of 'top management'.
•
•
How could you package this issue to gain the attention of those leading the organization?
In what way does your relational, normative, and strategic knowledge influence your choices as to
how to package the issue?
•
Ask one or two people who do not know the organization what they would do to gain senior
management attention. How different is their approach from yours and to what extent does this
reflect their lack of relational, normative, and strategic knowledge?
•
How do you think his or her approach would have been received? What insights does this give
you into the politics around organizational change?
Stakeholder mapping and commitment planning
What should those charged with leading or implementing a change do when faced with different coalitions for, or against, change? How do they know how to tailor the message and to
whom? Sometimes, change agents or leaders rely on their intuitive political judgement or what
Dutton et al. (2001) would call relational knowledge. A more systematic approach to understanding the political dimension of a particular change is through stakeholder mapping (Scholes, 1998). Indeed 86 per cent of a survey of 250 British managers agreed with the statement
that managing change is about managing stakeholders (Buchanan and Badham, 1999: 18).
The notion of stakeholders recognizes what we have referred to earlier as different interest
groups. To ensure the successful implementation of a change and to minimize the likelihood
of resistance, stakeholder mapping involves identifying, in advance, groups and key individuals who will want to have a say: groups who will be affected significantly and groups who may
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147
SeeChapter 6
for more on
culture:
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Low power
A: Minimal effort
B: Keep informed
High power
C: Keep satisfied
D: Key players
Low interest
High interest
Figure7.1 Stakeholder mapping
Source: Scholes{1998)
need to make just minor adjustments. It involves careful consideration of views, motivations,
power bases,and ability to help or to hinder the change.
One of the most frequently used tools is what Scholes (1998} refers to as a power-interest
matrix. This is a two-by-two template, with level of interest along one axis and power on the
other, as illustrated in Figure 7.1.
Change agents and leaders using this type of map need to decide whom to include and
whom to leave out when populating the four quadrants. 'Avoid plotting long lists of stakeholders
who "in principle" or "potentially" could have influence', counsels Scholes (1998: 155). In our
experience, it is helpful to keep in mind that the focus is not about the general power of a group
or individual, but their power in relation to this particular change. It is also helpful to subdivide
groups if there are different levels of interest within those groups. So, when creating a stakeholder map for the implementation of a new IT system for customer relationship management,
putting all of the executive team in the quadrant high power and high interest may not be appropriate if actually it is only the marketing director and the IT director who really want this
change.
Once a stakeholder map has been created, using dimensions such as those suggested
above, a stakeholder management strategy needs to be created. It should set out tactics in
relation to the different stakeholder groups and identify who is responsible for implementing
the activities in relation to each group. In some cases, managing stakeholders may occur
through formal project management processessuch as quarterly project reviews; sometimes
it may be more of a 'back stage' activity (Buchanan and Boddy, 1992}.
Exercise7.3
Take the example of a change you would like to initiate, which may be the same as the one you
considered in Exercise 7.2.
•
•
Create your own stakeholder map.
Reflect on your experience of creating the map: What was easy? What may have been more
difficult? What insights does this give you into the potential usefulness of such maps?
•
What tactics come to mind for dealing with people in each of the quadrants?
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Commitment mapping focuses on the commitment of the key players that have been
identified. To create a commitment map, the names of target individuals or groups, whose
commitment is needed if the change is to be successful, are written down. The focus is thus
on the key players from Scholes' matrix. An estimate of their current position, attitude, and
ability/power to influence the change is made, as is the position that you would like them to
hold. An estimate of the critical mass of commitment needed to ensure the effectiveness of
the change is also made and a created plan for getting this, with dates for reviewing progress.
Beckhard and Harris (1987) suggest there are three different kinds of commitment: 'let it
happen' (that is, those who will not actively derail the change); 'help it to happen' (those who
proactively support the change); and 'make it happen' (those who proactively drive the change).
They also recommend settling for the minimum commitment required to effect the change,
rather than trying to get as much support as possible, because it takes time and energy to convert
people into supporters of the change. A fictitious example of a commitment map for Change in
Practice 7.1 is shown in Table 7.3. The names of each individual or group who can have a major
impact-that is, the key players-are written in the left-hand column. The letter 'O' is put in the
appropriate column for the minimum commitment that the team assumed would be required
for the change to occur and an 'X' put in the box that represents their current commitment. If the
0 and the X are in the same box, no further influencing is required. A plan is then put together
to identify how the change team is going to try and influence each player's position.
Table 7.3 A commitment map
Key players
Opposed
Let it happen
Help it happen
•····························· ►
1. CEO
X
2. Finance director
X ·········· ►
0
3. Medical director
X ·········· ►
0
4. Support staff
XO
5. Clinicians
X
6. Managers
X ··················•········· ►
·········· ►
Make it happen
0
0
0
Exercise7.4
Taking the example of a change you would like to initiate, which may be the same as the one you
considered in exercise 7.2:
•
Create your own commitment plan, focussing on key players.
•
What are the benefits you might gain from having created your commitment plan?
•
What, if any, challenges did you experience in creating the plan?
•
What might you do to mitigate these challenges?
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The creation of stakeholder and commitment maps provide a forum for explicitly discussing the critical, back stage activity of influencing those who have the power to support
or block the change. Without it, team members may gossip or moan about different stakeholders, but have no systematic approach for dealing with them. The creation of a map also
gives team members the opportunity to check out or challenge their own and each others'
perceptions of key players' interest and power. It also allows the team to think creatively
about who is best placed to influence key players or groups. In one case, a team realized
that none of them had the credibility to influence a particular individual, and that instead
their job was to influence someone else outside the team and to persuade them to go and
talk to this key player.
On the downside, some people feel uncomfortable in engaging in political activity so explicitly. Others find it frustrating because the positions on the map and judgements about
the level of critical mass required are subjective and based on intuition, not hard fact. If
stakeholder or commitment maps are to remain useful, they also need to be regularly reviewed and adjusted as unfolding events impact stakeholders' positions. In addition, it can
sometimes be hard to identify all of the stakeholders. One of us worked with a project team
implementing an IT system at an embassy overseas. The team had made a commitment
map, but only after the project stalled did they realize they had missed off a key player, who
was not even employed by the embassy: the ambassador's wife! At the social occasions she
hosted, she heard staff's concerns about the project being expressed by their partners. She
then passed on those concerns to the ambassador, who became more and more opposed to
the change.
Section 2 Summary
In this section, we have:
•
examined the formation and role of coalitions as political alliances for or against change;
•
examined the politics of presenting ideas for change;
•
looked at stakeholder and commitment maps and explored their benefits and limitations.
Section3: Resistance
This section begins with a brief overview of the nature of resistance and then explores
three different ways of understanding it. Traditional views take an evaluative stance and
assume resistance is something to be managed and 'dealt with'. Psychological approaches
tend to adopt a non-judgemental stance. They see identity as key to understanding resistance, and seek to explore the complexities of individual and group responses. Although
psychological approaches do not dismiss resistors as mad or bad, they still view them as
being in opposition to the change. The last approach we will consider challenges this, and
takes a more critical view, suggesting that 'resistance' is actually a creation of change agent
sensemaking. The section concludes with a brief review of the potential value of resistance
to organizations.
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Introduction to resistance
Few organizational change efforts are complete failures, but equally few are complete successes.Most encounter some form of opposition to change, which costs time, money, and
emotional effort, and may sometimes derail the change. One of the main reasons conventionally given to explain why change management proves difficult in practice is that of resistance to change. Indeed, resistance is often presented as the major difficulty (Grey, 2003: 14).
The term 'resistance' literally means a restraining force that attempts to maintain the status
quo of the current situation. In the context of organizational change, resistance can be defined as 'intentional acts of commission or omission that defy the wishes of others' (Ashforth
and Mael, 1998: 90). In other words, resistance may take the form of people actively doing
something they should officially not, or, equally, deliberately not doing something they should.
Managers and change agents often perceive resistance negatively because it can get in the
way of them achieving their goals. This can encourage a view of resistors as obstacles, shortsighted, insubordinate, and disobedient. As such, the label of resistance can encourage a
dismissive attitude to potentially valid reasons for opposing a change. The convention historically has been to refer to acts by those in authority, for example leaders or managers, as
acts of control and to refer to employee responses that are intended to oppose these acts as
resistance. This may be because it was assumed that employees who were not part of the
management or supervisory structure were more likely to be the targets rather than the instigators of change. More recent writers would regard managers, especially middle managers, asjust as likely to resist as those with no management or supervisory role.
However, it is somewhat arbitrary to label one behaviour an act of control or power and
the other an act of resistance. As Knights and Vurdubakis argue, 'acts of resistance are also act
of power' (1994: 191). Indeed, a distinctive feature is that 'power and resistance are embedded in a dynamic relationship that tends to be mutually reinforcing' (Ashforth and Mael,
1998: 90). This can be seen in heavily unionized environments such as British Airways, in
which leaders and unions follow a pattern of frequent threats and strikes. So, attempts to
exercise control meet with resistance, which prompts an act of counter-resistance, inciting
more resistance in a potentially never-ending cycle. Indeed Buchanan and Boddy (1992) talk
of resistance as counter-implementation and change agents' responses as counter-counter
implementation.
Traditional approaches
Traditional approaches to resistance encourage leaders to analyse resistance objectively. The
dominant assumption is that leaders have the legitimate right to minimize, or even to 'mow over',
resistance,to use Kotter and Schlesinger's(1979) term. They identify four sources of resistance.
1. Parochialself-interestsuggeststhat people resist change because they focus on their own
best interests and not those of the total organization. Note the heavily value-laden nature
of the label, which assumes that leaders and managers occupy the moral high ground
and know what is best for the organization. One could also argue that we all act in our
self-interest, at least to some degree.
2. People resist change because of misunderstandingand lack of trust.This is particularly
likely to occur when there is a climate of low trust, because managers are unable to surface
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misunderstandings and clarify them before the mood has hardened to one of resistance.
This type of resistance can catch managers by surprise if they assume that people resist
change only when it is not in their best interest.
See Chapter 4 for
more on
emotions and
change: p. 63
3. Sometimes, people resist because they have a low tolerancefor change,and experience
anxiety, insecurity, and fear that they may not be able to develop the new skills or
behaviours required. Such resistance can apply to all employees, and may often apply to
managers themselves, who may intellectually accept the change, but be emotionally
unable to make the transition.
4. The last source of resistance identified by Kotter and Schlesinger is that of different
assessments.Sometimes, individuals or groups interpret the facts or data differently from
those initiating or explaining the change, or indeed may have accessto different
information. In doing so, they may conclude that there are more costs and fewer benefits
to themselves and/or the organization itself than those presented.
The desire to analyse resistance objectively is taken a step further in Beckhard and Harris'
(1987) formula:
Conly if (ABD) > X
where
C = the change
A= the level of dissatisfaction with the status quo
B = the desirability of the proposed change or end state
D= the practicality of the change (minimal risk and disruption)
X= the 'cost' of changing
The factors, A, B,and D need to outweigh the perceived costs (X) for change to occur. If those
whose commitment to change is required are not sufficiently dissatisfied with the present
state of affairs (A), keen to achieve the desired end (B), and convinced that the change is
feasible (D), then they will be likely to resist change.
In our experience, leaders are often drawn to this formula, perhaps because it appears to
take the apparent messiness and unpredictability of people's response to change and summarize the potential level of resistance with logic and objectivity, the hallmarks of front stage
activity. It can also potentially diagnose what type of intervention may be required to increase dissatisfaction with the status quo (A) or to convince that the change is possible (D).
However, as with the commitment map, it relies on perceptions and judgements about people and their potential reactions, which are inherently subjective. It also assumes that an individual's responses will be very similar to those of others, can be standardized, and easily
understood and evaluated by others, for example managers and change agents.
Psychologicalapproaches
Psychological approaches to understanding resistance focus on the point of view of those
resisting and tend to take a non-judgemental stance, maintaining that whether resistance is
seen as positive or negative, rational or irrational, is largely a matter of perspective. The main
contention is that acts of resistance are inherently meaningful to those carrying them out
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and to their peers, and that resistance is often prompted by a perceived threat to a valued
conception of the self-that is, individuals' sensesof who they are.
At a certain point, with all organizational changes, high-level plans become translated into
changes to individuals' jobs. This might be changes to the role itself, to ways of working, or
newly desired attitudes and behaviours. Any unilateral change to these terms is likely to be
perceived as a breach of contract or a breaking of implied promises and commitments. It can,
therefore, be a threat to face, inciting anger and a desire to retaliate. Resistanceis more likely
when people feel that change is imposed. This is particularly so when norms of procedural
justiceare not observed (for example there is perceived to be no warning or explanation of why
terms or jobs are being changed), when the threat is perceived to be severe, and when the
changes threaten individuals' identity. For instance, in the conflict between British Airways leaders and the union in March 2010, some of the latter's grievances were that the union and staff
had not been adequately consulted on the changes and, therefore, norms of procedural justice
had been breached.
As people tend to believe that bad things do not happen accidentally, they require a causal
agent. The stronger the threat to their reputation and sense of who they are, the more likely
individuals are to believe that the threat was deliberate and to personalize the blame onto
the organization or management (Rousseau, 1995). In the British Airways dispute, striking
staff, for instance, were vilifying the CEO, Willie Walsh.
Some individuals may choose not to resist a threat when it first appears, and may then be
progressively less likely to resist as compliance creates strong norms for continued compliance, adopting identities as non-resistors (loyal employees or wimps, depending on the
point of view.) Those with limited power, in their own eyes, may choose to resist through
gossip, minor theft, non-cooperation, or simply tolerating the change rather than confronting managers directly (Tucker, 1993). 'Power therefore has a stronger impact on the form of
the resistance than on its frequency' (Ashforth and Mael, 1998: 110).
Resistanceoften occurs with others, either in collusion with them, following the creation of
coalitions or with their tacit support. The formation of coalitions can be prompted if the
changes are targeted at groups rather than individuals. So a change to flexible working may
impact everyone at a particular location. A sense of shared fate and shared threat can thus
create a shared identity and cohesion, which can rationalize attitudes that an individual on his
or her own may find hard to sustain. This can give a shared motivation for collective resistance,
but recent commentators argue that a form of leadership is required to actually galvanize the
collective into action (Zoller and Fairhurst, 2007).
Ashforth and Mael (1998) provide a framework for examining different forms of resistance
using three dimensions.
1. Targetedversusdiffuseresistance Resistance is targeted when it focuses directly on the
perceived threat. So when a new computer system was being introduced, employees
openly challenged the wisdom of computerization in computer training sessions, refused
to do what the instructor asked, disseminated literature criticizing this particular system,
and sabotaged the new computers (Prasad, 1993). Diffuse resistance is not targeted
directly at the source of threat, but is displaced more generally in the workplace. An
example would be employees starting to spend long periods outside smoking. Diffuse
resistance tends to be more covert and passive, and is valued for its symbolic rewards,
whereas targeted resistance tends to be used when the source of the threat is clear and
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153
See Chapter 11
for more on
resistance
leadership: p. 251
154
PART B: PERSPECTIVES ON CHANGE
there is a reasonable chance of thwarting the change because the threat is remediable
and the resisters have (or at least believe they have) a degree of power.
2. Facilitativeversusoppositionalresistance Brower and Abolafia (1995) define facilitative
resistance as acts that further the public or organizational interest, and define
oppositional resistance as acts that serve narrow, self-interests. A parallel framing is
offered by Baddeley and James (1987), which distinguishes between self-interested
behaviour and behaviour in the interest of the organization. The problem with this
distinction is that it assumes that self-interest is obvious and that there are unambiguous
definitions of what is in the organization's best interest.
3. Authorizedversusunauthorizedresistance This third dimension refers to the means of
resistance rather than the purpose of resistance. Authorized resistance encompasses
those acts that are within the norms of the organization, so might include complaining to
one's manager, filing a grievance, legal strikes or sharing concerns during a focus group
about a proposed change. Unauthorized resistance includes acts of violence and
insubordination that go beyond the bounds of acceptable behaviour set by the
organization. An example would be the workers in one of Uni levers factories in France
who were angry at changes to working practices and locked the manager in his office for
48 hours, before he was released by police. Authorized resistance may be used for
oppositional ends and unauthorized means be used towards facilitative ends.
■
Change in Practice 7.2
Resistance as sabotage at a travel operator
As part of its strategy to appeal to more upmarket holiday makers, a mass-market package holiday
operator bought a highly successful premium travel company specializing in art and culture tours.
The company employed fifty people and was based in Wales. After the acquisition, the acquiring
company decided to move all of the company's activities to its main site in the north of England.
Some of the fifty employees were offered relocation packages, but none of them took up the offer.
Just before the transfer of activities, employees stopped sending customers their tickets and
destroyed all of the computer records. Believing that they had nothing to lose and much to be
angry about, resistance took the form of sabotage. Using Ashforth and Mael's (1998) framework,
this resistance was targeted,oppositional,and
2 3
unauthorized.
•
More recent psychological approaches suggest that the word 'resistance' is too blunt to
capture the subtlety of employee responses to change. Piderit (2000) suggests capturing
employees' attitudes to change along three dimensions: cognitive, emotional, and intentional. The cognitive dimension refers to an individual's beliefs about the change; the emotional refers to his or her feelings in response to it; the intentional dimension includes both
an intention to resist at the attitudinal level (that is, a plan or resolution to do something)
and a protest at the behavioural level (actually taking some action).
An employee's response to an organizational change along the cognitive dimension may
range from strong positive beliefs (that is,'this change is absolutely what the organization needs')
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to strong negative beliefs (that is, 'this change will sink the organization'). On the emotional dimension, responses may range from excitement, on the strong positive, to anger, anxiety, and
despair on the negative. On the intentional dimension, an employee's response may be to support the change or oppose it.
According to this view, resistance to change is represented when there are negative responses along all three dimensions and support for the change is represented when there
are positive responses along all three dimensions. Those with a mix of reactions are what
Piderit would label ambivalent. The subtlety of this approach is that it recognizes that initial
responses to change may not be consistently negative or consistently positive, but can be a
mixture of the two.
Exercise7.5
Think about a change you have experienced recently that was not of your own choosing and which
was imposed on you. It may be a change to your role or your work; it could be changes to your
timetable or course at university.
•
Make notes on your response to the change using each of Piderit's three dimensions: emotional,
cognitive, and intentional.
•
Now go and find a colleague or friend who has experienced the same change and explore his or
her emotional, cognitive, and intentional responses.
•
How easy was it to distinguish between the three dimensions?
•
What might have been missed in simply viewing your response, and your colleague's response, in
terms of resistance to the change or support for the change?
Piderit (2000) suggests that understanding resistance as ambivalence makes it easier to
identify the most appropriate process for addressing employees concerns: active listening
and support if employees have emotional concerns; exploring the reasons for change if
their concerns are more cognitive. However, differentiating between the three dimensions
of attitude requires well-developed people skills and takes time, as perhaps you found when
undertaking Exercise7.4. For change agents or leaders running sizeable change programmes,
this work suggests the importance of ensuring that all dimensions are addressed rather
than, for instance, focusing only on the cognitive dimension in change communication.
Reframing resistance as a product of change agent sensemaking
An alternative approach to understanding resistance claims that conventional views of resistance favour the perspective of change agents and their sponsors, by suggesting that the
latter are doing the right and proper thing, whilst resistance is dysfunctional and irrational.
This 'change agent-centric' point of view assumesthat resistance is an accurate report of an
objective reality by unbiased observers (change agents). On the other hand, resistance can
be seen as an interpretation by change agents of the behaviours and communications of
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those on the receiving end of change (Ford et al., 2008). Ford et al. suggest that this can be a
self-fulfilling prophecy, a creation of change agent sensemaking:
See Chapter 5
for more on
sensemaking:
Expectations,by shaping the very phenomenon to which change agents are paying attention,
predisposechange agentsto look for and find resistance,thereby confirming its existence,validating their expectation, and sustainingthe receivedtruth that people resistchange.{Ibid: 364)
p. 85
This also allows change agents to claim that any unexpected problems in the change process
are due to resistance, using others as a ready scapegoat, rather than examining any potential
failings of themselves or the change programme {Meston and King, 1996).
Conventional approaches to dealing with resistance focus on doing things to or for those
on the receiving end of change {Kotter and Schlesinger, 1979). Viewing resistance as a product of change agent sensemaking encourages change agents to review their own behaviour
and actions. For instance, the way in which change agents communicate may unintentionally
encourage resistance. Change agents may oversell the benefits of change, without necessarily
intending to be deceptive or misleading. When the reality of the change experienced is different, those on the receiving end can feel that they were misled and promises were broken,
which then leads them to resist change, in protest, thereby behaving as perceived resistors.
So perhaps the question should no longer be 'why do recipients resist change?', but 'why do
some change agents call some actions resistance and not others?' {Ford et al., 2008: 371).
The value of resistance
See Chapter 8
for more on
conversations:
p.175
Even though conventionally dismissed as dysfunctional and irrational, some commentators
have identified benefits to resistance. For instance, Kotter and Schlesinger {1979) recognize
that resistors who have more accurate or up-to-date information can benefit the organization, stimulating a re-examination of particular aspects of the change. Yet if leaders and
change agents assume that resistance is always negative and automatically try to overcome
it, they, and the organization, may not benefit from these alternative assessments.Grey {2003)
similarly suggests change agents need to countenance the possibility that resistors actually
know whatthey are talking about and are not just defending their own economic or psychological interests. Failure to do so can lead to costly and embarrassing failures. He gives the
example of a newly privatized electricity company in New Zealand that laid off so many staff
that Auckland was blacked out for six months. Similarly, lay-offs in early days of the privatized
rail companies in the UK led to subsequent safety problems and service cancellations, despite
employees having said that more staff were required than the change programme predicted.
Organizational change entails introducing new conversations and shifting existing patterns
of discourse (Ford et al., 2008). However, new conversations have to compete with existing
and habitual discussions, which can be hard, because they are novel and ephemeral and not
fully understood {Czarniawska,1997; Kanter et al., 1992). A challenge for change agents is,
therefore, how to ensure that there is talk about the change in enough places and by enough
people that it starts to have momentum and take root. Resistance can play a useful function
in this respect because, even if it is negative in tone and content, it keeps the topic 'in play',
allowing others to participate in the conversation. Paradoxically, resistance may thus help to
ensure the ultimate success of a change {Ford et al., 2008). Recognizing the likelihood of
cognitive and emotional resistance, or ambivalence, to use Piderit's {2000) terms, may also
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157
encourage leaders to stop moving too hastily to congruent positions, and allow disagreement and discussion to improve initial change proposals (Floyd and Wooldridge, 2000).
Section 3 Summary
In this section, we have:
•
examined traditional approaches to resistance that view it as something managers need to 'deal
with';
•
explored resistance from the point of view of the resistors themselves, taking a more
psychological stance;
•
considered reframing resistance as sensemaking on the part of change agents;
•
explored the potential value of resistance.
Section4: Interventions to increasecommitment
or decreaseresistance
This section explores some of the potential interventions open to leaders or change agents,
if a more conventional understanding of resistance is adopted. It concludes with some interventions to consider if resistance is viewed as a product of change agent sensemaking.
Before planning what interventions are required, diagnosing the type and scale of resistance or the gaps between current and required commitment is often helpful, as discussed
earlier. Frequently, managers use the same change intervention regardless of the context, so,
the bully continually coerces, the cynic always manipulates, the people-orientated person
always tries to involve, and the intellectual relies heavily on learning and communication
(Kotter, 1977). We would also add that, in our experience, one intervention on its own is
rarely sufficient. Of the approaches below, 1-6 are those originally proposed by Kotter and
Schlesinger (1979).
1. Communication This is one of the commonest ways to overcome resistance and is
particularly effective when resistance is based on inadequate or inaccurate information.
However, it requires a pre-existing atmosphere of trust, otherwise those resisting will not
believe what they are being told. Bridges (2003) also reminds managers that they need to
communicate ten times more than they would have originally thought.
2. Participationand involvement The underlying assumption here is that involving
potential resistors in the design and implementation of a change initiative can pre-empt
resistance. Participation generally leads to commitment rather than compliance, and can
allow people to take part of the old ways of doing things with them. Sometimes,
participation is chosen not to neutralize potential resistors, but because employees have
the information and knowledge required to design the change. Whatever the rationale
for involvement, it takes time.
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SeeChapters 5
and 10 for more
on involvement:
pp. 98,220
158
See Chapter 4 for
more on
providing
emotional
support: p. 78
PART B: PERSPECTIVES ON CHANGE
3. Educationand support These can be alternative ways in which to deal with resistance.
This might be listening and providing emotional support; it might involve training in
new skills. Support may also take the form of respecting the past and marking endings
(Bridges, 2003). These approaches also require investment in terms oftime, money, and
patience.
4. Negotiationand agreement These involve offering incentives to actual or potential
resistors. It is effective when it is clear that someone is, or a group are, going to lose out
from a change and their power to resist is significant. Negotiation may compensate
them for losses.The downside of such negotiations is that the deals struck can be
financially costly. They can also create an unfortunate message to others in the
organization that those wanting change will negotiate to avoid serious resistance.
5. Manipulationand co-optation These involve covert attempts to influence others.
Co-optation is one form of manipulation in which an individual or leader of a group is
drafted into the design or implementation team. This is not a case of participation,
because there is no interest in the individual's opinion; only their symbolic endorsement
is required. Co-optation can be cheaper than negotiation and quicker than
participation. However, if people feel that they are being manipulated or tricked into
not resisting, their reactions can be extremely negative.
6. Explicitand implicitcoercion This means that managers force people to accept the
change by explicitly or implicitly threatening them with loss of jobs, promotions,
bonuses, or actually firing or transferring them. As with manipulation, it is risky using
coercion because people resent forced change. However, in some cases in which
changes are highly unpopular, it may be considered to be the only option left to
managers. Sometimes, coercion is targeted at specific, outspoken, and seemingly
intransigent leaders, who are fired. Their exit then is not just the removal of a resistor,
but can also be a symbolic act, demonstrating the seriousness of those leading the
change and providing a salutary lesson to others.
7. Problemfinding This is a neutral way of encouraging a wide variety of people to
identify and clarify aspects of the problem. The purpose is not to identify solutions or to
take actions, so this approach encourages people to listen and explore others' ideas and
perspectives, without the need to adopt positions on what should or should not
happen. It can be very helpful at the beginning of a change process, as it often enables
employees to see or construct for themselves the need for change and ensures that
those leading the change have a broad appreciation of the issues to which they will
need to pay attention. When working with Xerox Europe, the change programme began
with focus groups in all of the major markets to identify the problems as perceived by
employees. Firm facilitation is required to keep people focused on scoping the issues
rather than wanting to share their particular solution.
8. Rolemodelling The importance of role modelling is premised on the idea that people
are more likely to believe what they see rather than what they hear talked about. If
leaders talk about the importance of changing to a more innovative culture, but then
shoot down every new proposal as too risky, observers will draw their own conclusions
and are unlikely to support or believe in the new culture. Whilst role modelling can be
convincing, it is rarely sufficient on its own to convert doubters and resistors.
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9. Changingrewardstructures This is sometimes used when resistance is around a
requirement for exhibiting new behaviours. This can be seen as a coercive measure to
force change or at least to make resistors aware of the consequences of not embracing
the new behaviours. Arguably, it too can be seen as a symbolic act, underlying the
seriousnesswith which the leaders are taking the change. Whether it has an impact on
resistors is largely dependent on whether rewards actually do change in practice.
Sometimes, of course, changes to the reward structure may be the content of the
change, rather than an intervention to support some other change.
In addition, the insights offered by Ford et al. (2008) into resistance as a self-fulfilling
prophecy on the part of change agents suggest the importance of change agents becoming more reflexive and aware of the role of their own thinking and behaviour in the creation of 'resistance'. In our work coaching leaders, we often find ourselves helping leaders
to revisit their own preconceptions, challenging their framing of individuals and groups
as awkward and incompetent resistors. Becoming more aware can then help them to
behave differently with those whom they had hitherto written off. As leaders, in giving a
different gesture, they may allow 'resistors' to give a different response (Stacey, 2002),
and allow a situation to become less stuck (Watzlwick et al., 1974). Ford et al. (2008) also
emphasize the importance of change agents building trust, communicating honestly, and
being clear about what action is required. These behaviours are lesslikely to trigger resistance
in others.
Section 4 Summary
In this section, we have:
•
explored a number of different interventions designed to reduce resistance or to increase
commitment to change;
•
identified the importance of change agents being aware of their own assumptions
and biases.
■
Integrative Case Study
HBOS:Power and politicsfor and against change
Between 2003 and 2006, shares in HBOS rose by 53 per cent, far ahead of most of its competitors.
The bank had a very strong sales culture, with even junior bankers receiving significant bonuses.
Some people in the bank became concerned that the bank was 'going too fast', taking excessive
risk because of the sales-driven culture, and without the appropriate balance of systems and
controls. However, few people wanted to speak out because of fear of being branded
troublemakers and concern that doing so would jeopardize them receiving large bonuses. The
reward power of leaders thus quashed any emergent resistance and made it difficult for any
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PART B: PERSPECTIVES ON CHANGE
coalition to form to challenge or change the culture or risk management practices. Paul Moore,
head of global risk at HBOS from 2002 to 2005, was responsible for ensuring that the executives
complied with the regulations of the Financial Standards Authority. He did speak out. He was
subsequently dismissed: an example of a coercive approach to dealing with resistance and
undoubtedly intended to silence any other resistance. Moore received a settlement for unfair
dismissal under the Public Interest Disclosure Act 1998 (the 'Whistleblower Act'), but broke his
gagging order in February 2009 when the bank nearly collapsed during the credit crisis, only to be
saved with a taxpayer-funded bailout and a merger with the Lloyds Banking Group.
Moore gave evidence to the Treasury Select Committee investigating what had happened at
H BOS. He paints an insider's view of the power of the guiding coalition and senior executives' use
of politics to prevent changes to the status quo, which was making them personally very rich.
Among the many incidents he describes are the following.
1. The company secretary failed to minute crucial comments he made at a formal board meeting,
reporting his investigation that the sales culture at HBOS had got out of control.
2. He was strongly reprimanded by a board member for tabling the full version of a critical report
at a group audit committee meeting, which made it clear that the systems and controls, risk
management, and compliance were inadequate to control the 'over-eager' sales culture.
'Mysteriously, this had been left out of the papers even though I had sent it to the secretary',
writes Moore (Comment 3.15).
3. After Moore was dismissed, an ex-sales manager who had no experience of risk management
was appointed as group risk director.
4. A personal friend of the HBOS chairman was appointed to be the chairman of the risk control
committee. Moore recounts that this individual 'admitted to me that ... they met quite often
socially. Of course, he was supposed to be challenging (the Chairman) ... He obviously had no
technical competence in banking or credit risk management to oversee such a vital governance
committee' (Comment 3.15).
Questions
1. What types of power are being used by HBOS executives in this account, with what purpose?
2. In 2005, what would you have advised Moore to do to improve his chances of altering risk
management practices at HBOS?
3. What lessons about power, politics, and resistance, in relation to organizational change, do you
draw from this study?
Conclusion
This chapter shows that a political perspective on change draws attention to the dynamics of
power and influence, which can become amplified during the uncertainty caused by organizational change. It introduces the idea of opposing interest groups that may form into coalitions for, or against, change. It highlights the different forms that resistance may take. The
chapter also introduces the notion of front stage activity, which is rational and logical, and
the rather more messy back stage world of power, influence, and politicking, and suggests
that being able to read and work with power and politics is a critical skill for change agents.
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CHANGE
FROM THE PERSPECTIVE
OF POWER AND POLITICS
Pleasevisit the Online ResourceCentreat http://www.oxfordtextbooks.eo.uk/orc/
myers to accessfurther resourcesfor students and lecturers.
Changein Practicesources
1. Brown, A. D. (1995) 'Managing understandings: Politics, symbolism, niche marketing and the quest for
legitimacy in IT implementation', OrganizationStudies, 16(6):951-69.
2. Ashforth, B. E.and Mael, F. A. (1998} 'The power of resistance: Sustaining valued identities', in R. M.
Kramer and M.A. Neale (eds) Powerand Influence in Organizations,Thousand Oaks, CA: Sage,
pp. 89-120.
3. Based on personal experience.
IntegrativeCaseStudysources
Bingham,J. and Porter, A. (2009} 'HBOS whistleblower Paul Moore breaks silence to condemn Crosby',
The Telegraph,11 Feb. http://www.telegraph.eo.uk/finance/newsbysector/banksandfinance/4592025/
HBOS-whistleblower-Paul-Moore-breaks-silence-to-condemn-Crosby.html
The Guardian(2009} 'Daggers drawn: Conflict at HBOS' 12 Feb. http://www.guardian.eo.uk/
busi ness/2009 /feb/12/pau-moore-james-crosby-h
bas
The Telegraph(2009} 'HBOS whistleblower Paul Moore: Evidence to House of Commons' 'Banking Crisis'
hearing', 11 Feb. http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/4590996/
HBOS-whistleblower-Paul-Moore-Evidence-to-House-of-Commons-Banking-Crisis-hearing.html
The Telegraph(2009} 'Gordon Brown must go says HBOS whistleblower Paul Moore', 15 Feb. http://www.
telegraph.co.u k/fi nance/fi nancialcrisis/ 4629670/Gordo n - Brown-must-go-says- H BOS-wh istlebl owerPau1-Moore. htm I
Furtherreading
Buchanan, D. and Badham, R. (2008} Power,Politicsand OrganizationalChange:Winning the Turf War, 2nd
edn, London: Sage.
A very readable account of the politics of organizational change.
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ORGANISATIONAL THEORY & DYNAMICS
161
CHAPTER 8 • APPROACHES TO CHANGE IMPLEMENTATION: DIRECTED CHANGE
Approaches to Change
Implementation:
Directed Change
('--______
1_1n_t_ro_d_u_ct_io_n
_____
~)
PARTA: The ChangeProcess
PARTB:Perspectiveson Change
Organizational
6 Change from the Perspective of
Organizational Culture
7 Change from the Perspective of
Power and Politics
8 Change from the Perspective of
Organizational Learning
2 Causes of Change
3 Intentions and Realities of Change
Psychological
4 Emotions of Change
5 Sensemaking Processes in Change
PART C: Delivering Change
9 Approaches to Change Implementation:
Directed Change
10 Approaches to Change Implementation:
Facilitated Change
11 Roles People Play in Change
12 Communicating Change
13 Sustaining Change
(_______
1_4_C_on_c_lu_s_io_n
_____
~)
Introduction
This chapter and the following one explore the range of choices that senior managers face in deciding
their approach to the implementation of change. The spectrum extends from change that is driven
from the top and imposed upon staff, to change that is developed through wide involvement of staff
at all levels. In this chapter, we will first explore the nature of both directed and facilitated change,
before turning our attention to a more detailed examination of directed change, looking at some of SeeChapter10
the methods deployed to effect directed change. Chapter 10 will then pursue this in respect of facili- for more on
tated change, examining those methods that aim to maximize involvement of all in the change facilitated
approaches
process.
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PART C: DELIVERING
•
CHANGE
Main topics covered in this chapter
•
•
Exploration of directed and facilitated change
A sample of directed change methods, examining their relative strengths and weaknesses in enabling
change
•
A framework for implementing change with a directed approach
Section1: Directedor facilitatedchangeimplementation?
Exploring directed and facilitated approaches
Theories of organizational change talk typically of two distinctive approaches to change
implementation: directed change, which is driven from the top of the organization; and
facilitated change, in which the wider membership of the organization is involved in the
shaping of what needs to happen. Historically directed approaches tend to be connected
with 'hard', economic-based change strategies such as changing structures, closing units,
making people redundant, and reducing costs. Approaches that seek active employee participation are often linked with 'soft', or people-related, organizational strategies, concerning
perhaps team performance, cross-divisional working, or the development of organizational
values (Bradford and Burke, 2005).
Directed change is assumed to be adopted by those holding a planned view of change,
whereas facilitated change may encompass a planned or an emergent view. Many of the
changes identified in Chapters 2 and 3, such as organizational mergers, strategic alliances, or
SeeChapter 3 for downsizing, might be expected to be decided by those in charge and received with some remore on planned
luctance by those whose jobs are affected. Such change is seen as the implementation of
and emergent
change: p. 48
corporate strategy, which places responsibility with the chief executive and senior managers
(Dunphy, 2000). Decisive leadership can be seen to be particularly important in crisis, turnaround situations, in which urgent decisions must be taken-and in which there may be strong
opposition to change {Stace and Dunphy, 1991). In such circumstances, speed is of the essence, and both staff and shareholders (or other governing bodies) will be anxious for action.
Change in Practice9.1
Directed change at Marks and Spencer
In May 2004, when Stuart Rose first took over as chief executive of Marks and Spencer, the major
UK retailer, the company was in a vulnerable state and fending off a range of takeover bids. Within
two months, by July 2004, Rose had announced a recovery plan that involved selling off the
financial services business to HSBC bank, buying control of the Per Una clothing range, which was
one of the best-selling lines, closing the experimental concept store known as 'Lifestore', stopping
the expansion of its 'Simply Food' line of stores, and cutting 650 jobs. As a result, Philip Green, a key
competitor, withdrew his takeover bid after failing to get sufficient backing from shareholders. 1- 2
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Change in Practice 9.1 demonstrates the power of Rose'sdecisive leadership, bringing about
change swiftly and with confidence; there was no expectation from management or shareholders that staff should be consulted about the strategy.
Where facilitated change approaches are adopted, there is a greater intention for staff
at different levels in the organization to input to and shape the change. By implication,
senior management have less control of what gets decided, as employees have the opportunity to influence and negotiate some aspects of the outcome; change is seen as
more of a collaborative venture. Dunphy (2000) points out that, particularly in knowledgebased organizations, for example financial services or high-technology-based companies, the workforce is likely to be skilled and well informed, understanding their segment
of the market better than the senior executives may do. In such circumstances, excluding staff from the planning of change does not make sense. Equally, where organizations
are organized around complex global structures or strategic alliances, there may no
longer be one clear central management structure or power base to take and control
decisions.
In reality, there is not necessarily a sharp dividing line between directed and facilitated
approaches. Many organizations that expect senior management to be in charge of the
change process do not assume this to be at the expense of employee participation. For example, some organizations create the vision of the future in a participative way, with senior
management taking key decisions that emerge from those conversations; others set the
change in motion from the top and then engage smaller units in how they implement the
changes in their areas. The culture of the organization and the context in which it operates
may affect the range of approaches that are suitable.
Exercise9.1
Identify an organizational change with which you are familiar or interview someone else about his
or her experience of an organizational change.
•
To what extent were you and your colleagues able to give your views about the change before
it was implemented?
•
Would you classify the approach taken as directed or facilitated?
•
How did that make you feel?
•
Do you think the approach was the right one for the circumstances?
•
How might you have led it differently?
A model of approachesto change
Dunphy and Stace (1993) suggestthe choice of approach is dependent on the circumstances
the organization is facing, so that the overall business context and the scale and the span of
the change directly affect the nature of the change approach to be employed. Through a
study of thirteen service-sector organizations, including high, medium, and low-performing
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PART C: DELIVERING
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organizations, they identify four styles of change management: two facilitated styles, namely
collaborative and consultative; and two directed styles, directive and coercive.
Facilitated and Directed Styles
Collaborative
Involves widespread participation by employees in important decisions about the
organization's future and about the means of bringing about organizational change.
Consultative
A more limited involvement. Employees are asked for their views on proposals and
management may be influenced by their input.
Directive
The senior management team take key decisions about the change agenda and direct the
efforts to deliver the change. They offer a vision of the future and employ firm persuasion to engage
those affected to ensure that it is implemented.
Coercive An extension of directed change, change is imposed on staff without attempts to persuade
them, or to gain buy-in or understanding of the idea. Threats, sanctions, or force are used to gain
compliance.
{From Dunphy and Stace, 1993)
They note also that organizations face changes of differing scale and span, from fine-tuning,
involving gentle adjustments, often affecting one team or small unit, through to corporate
SeeChapter 3 for transformations (also known as discontinuous change), affecting the whole organization in
more on the scale
some fundamental way.
and span of
change: p. 37
Scaleand Span of Change
Fine-tuning
Gentle change at unit level, for example refining procedures.
Incremental adjustment Adjustments made in response to the changing environment. Such
modifications are distinct, but not radical, for example adapting structures or strategies at unit or
departmental level.
Modular transformation
Major realignment of one or more department (and not the whole
organization).
Corporate transformation
operating.
Organization-wide change fundamentally affecting ways of thinking and
Through plotting the styles of change against the scale and span of the change, they identify
four key change approaches, depicted in Figure 9.1.
1. Developmental transitions require constant gentle, incremental adjustment of the
organization in response to external environmental changes. The primary style of change
management is consultative,which aims to gain voluntary commitment to the need for
continual improvement. There is widespread involvement in the communication process
to develop trust.
2. Task-focused transitions require constant adjustment of the organization to redefine
how it operates in specific areas, for example to realign a department. The change
management style is directive,with the change leader seeking compliance. Whi 1stthis
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APPROACHES TO CHANGE IMPLEMENTATION:
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197
Scale and span of change
Style of change
management
Fine-tuning
Incremental
adjustment
Modular
transformation
Corporate
transformation
Collaborative
Developmental transitions
,,
(constant change)
,,
,
Consultative
(Avoiding
change)
Directive
,
, ,
, ,
,
, ,
,
,,
,
,
,,
,,
,
,
, ,
,,
,
Task-focused
,,
,,
transitions
Charismatic
transformations
(inspirational change)
-----------------------Turnarounds
(discontinuous change)
(constant change)
Coercive
Figure9.1 Approaches to change
Source:Adapted from Stace {1996}
means that the change is driven from the top, managers further down the organization
may adopt a more consultative approach. Nevertheless the emphasis is on formal
communication, with instructions, memos, and emails.
3. Charismatic transformations refer to change needing a more radical shift that may
involve the whole organization. It is led by a charismaticsenior management team, both
to drive the change and to gain commitment through consultation. The aim is to use key
managers to gain inspirational, emotional commitment of the staff to the vision, such
that there may be top-down communication, but with built-in feedback loops and the
use of key role models to disseminate the change.
4. Turnarounds are fast discontinuous changes to recreate the organization, needing
directivechange management with some coercionto radically challenge existing
practices. The aim is to communicate the sense of crisis in a formal and authoritative
fashion, with no time to engage staff in the thinking.
Dunphy and Stace (1993) report that each approach is seen to have a key purpose and, over
time, to have limitations; one approach will not serve for ever, and leaders need to constantly
reappraise the circumstances and requirements.
An alternative view is held by Beer and Nohria (2000), who propose that two primary approaches to change, Theories E and O-where change driven by economic imperative is
known as Theory E,and change focusing on organizational culture and capability as Theory
O-should be integrated to improve the success of change management. They argue that
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PART C: DELIVERING
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polarizing the E and the O weakens the ability of the organization to adapt in the long run,
and believe that the integration of different change approaches is the way forward: that
organizations would benefit by considering economic and organizational factors simultaneously. However, by comparing the integrated model identified by Beer and Nohria (2000)
with eighteen other change management approaches, the limitations of their model are exposed. Leppitt (2006) points out that whilst there is some common ground between the two
approaches, they do support different strategic alignment. For example, Theory Eis suited to
urgent, turnaround situations, which may not be well served by an integrated approach. This
leads to the conclusion that a more comprehensive integrated model should be developed
and tested. Overall, the research reinforces the importance of a contingency approach to
achieving sustainable change rather than searching for one 'best practice' way.
Our experience in implementing organization change endorses the need for a true integration of approaches, both leading from the top and facilitating the involvement of people
in all aspects of the change-in doing so, implementation success is much increased. However, such integration implies a united and skilful management team who, collectively, are
able to operate across the spectrum of change styles, as well as an absence of conflicting
political interests, and staff who have skills to make a genuine contribution; in reality, this is
often difficult to achieve. Other practical considerations, such as the time available to make
pressing decisions or the geographic spread of managers, can get in the way of achieving
wider involvement. Technology is now proving to be a key enabler in this respect.
Change in Practice 9.2
Alfa Laval: Directed change using technology to increase participative input
Alfa Laval is a global organization that focuses on energy optimization, environmental protection,
and food production through heat transfer technology. With production units in Europe, Asia, the
US, and Latin America, it has 11,400 employees and customers worldwide.
In 2008, Alfa Laval, a client of Ashridge BusinessSchool, needed to take swift decisions in order
to create a change plan. In the past, the chief executive and the group board had worked on such
plans. This time, they experimented with gaining the input of a wider range of their key senior
managers, based around the world, in China, India, the US, and Europe, in a just-in-time virtual
involvement process.
Ash ridge worked with the CEO, eight members of the group board, and thirty senior leaders.
From this group, five virtual project teams were set up and the work culminated just four months
later, in March 2009, with a virtual conference involving all five teams and other contributors.
Each of the project teams met via the IT platform five or six times during the four-month period,
and the structure of the meetings was designed to maximize the input of all of these senior
managers, to strengthen their connectivity, and hence to increase the effectiveness of their work
during the session. Additional cross-team virtual workshops ensured critical cross-group
exchanges.
The final four-hour virtual conference had many of the elements of a traditional conference,
such as an opening address from the CEO,group presentations, breaks for coffee, and interactive
feedback processes,but was completely virtual, again using the IT platform to create separate
small-group discussions as well as whole-group forums.
The results of this mixture of direction and facilitation included:
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199
the development of skills in working virtually and involving a wider range of key stakeholders in
business critical change projects via a virtual environment;
•
a set of clearly defined and agreed change implementation
plans and critical success factors (CSFs)
for the plans.
•
a group of senior managers with a high level of involvement in, and commitment to, the plans,
prepared to lead and champion the changes_3- 4
In this example, the CEO and group board needed to take decisions with speed, yet they
found the confidence to take a risk and experiment, involving senior managers who were
close to the business operations, without losing pace or focus. This, in turn, enabled those
senior managers to describe the vision and champion the change within their own operations, creating the conditions for charismatic transformation (Dunphy and Stace, 1993).
Section1 Summary
In this section, we have:
•
considered the difference between directed and facilitated change;
•
applied a framework developed by Dunphy and Stace (1993) to identify directed and facilitated
approaches to change in relation to the scale and the span of change;
•
considered the ways in which directed change approaches can achieve wider levels of involvement.
Section2: Directed change methods
This section will examine three of the frequently used directed change methods. They have
been selected both because of their popularity over the past twenty years and because they
are typical of their genre. We will consider the extent to which their growth has resulted from
their established effectiveness orto organizations being attracted to them because they are 'of
the moment'-the latest fashion that others are adopting, as explored in Chapter 2. They will
be examined to consider their relative strengths and weaknesses in enabling change in terms
See Chapter 2 for
of the cultural, political, and organizational learning lenses that were identified in Part B.
more on
management
fashions: p. 23
Businessprocessre-engineering
Business
processre-engineering(BPR)is an approach to corporate transformation that first came
to prominence in the early 1990sand still informs more recent versions of re-engineering that have
been adopted since.The term was adopted by Hammer and Champy, who define BPRas:
The fundamental rethinking and radical redesign of businessprocessesto achieve dramatic
improvements in critical, contemporary measures of performance, such as cost, quality,
service and speed. (Hammer and Champy, 2001: 35)
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Note the use of strong, determined language to describe BPR:radicalredesignand dramatic
improvements,which can be achieved by fundamentally rethinkinghow things get done-in
effect, starting over. This rhetoric implies powerful change, not to be taken on as an experiment or on a small scale; it is an 'all or nothing' description. The implications of this positioning will be explored through the examination of BPR implementation examples.
The redesign of core processes is the main focus of the re-engineering. These are the processesthat are at the heart of what the company does and which cut across organizational
boundaries to include, for example, the wholesaler and distribution, through to the retailer
and consumer. Hammer and Champy (2001) suggest that this encourages a focus on ultimate performance, rather than the performance of any one aspect of the business. By implication, narrowspecialistsare replaced by multi-skilled workers, often working in self-managed
teams across organizational divisions.
There are four key steps involved in implementing BPR.
1. Prepare the organization-involving assessmentof the strategic context and communication throughout the organization of reasons for re-engineering.
2. Fundamentally rethink the way in which work gets done-identify and analyse core
business processesfrom start to finish, define performance objectives, and design new
processes, in accordance with the following guidelines.
• Simplify the current process by combining or eliminating steps.
• Attend to both technical and social aspects of the process.
• Prevent past practice from being a constraint.
• Perform activities in their most natural order.
In doing this, it is expected that all assumptions about how things are done will be challenged to achieve the promised radicalredesign.
3. Restructure the organization around the new business processes.This is important: restructuring and the associated disruption are an expected part of BPR.
4. Implement new information and measurement systems to enforce change.
(From Hammer and Champy, 1993: 85)
Information technology is seen as the essential enabler of BPR and many new processes
would not be possible without it. Hammer and Champy (2001) cite the example of Kodak's
re-engineering of its product development. Kodak had a largely sequential process: individuals who work on one part of the product, such a camera body designers, did their
work first, followed by the shutter designers, then the digital mechanism designers, and so
on. The introduction of new technology enabled all individual engineers to work simultaneously, with technology combining all of the inputs on a daily basis so that any issues of
incompatibility were immediately recognized. It also enabled the manufacturing engineers to begin their tooling design ten weeks into the development process-as soon as
the product designers had given the prototype some shape. The re-engineered process cut
across design and manufacturing, reducing the time taken to get from concept to production by 50 per cent. In this way, technology can impact the scale of the redesign that is
possible. In recent years, the IT element has become the focus of many re-engineering
programmes and we will return to this in the end-of-chapter Integrative Case Study.
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Change in Practice 9.3
Business process re-engineering at Cigna Corporation
Cigna, a leading provider of insurance in the US and globally, has undertaken a range of business
process re-engineering programmes over many years, starting as far back as 1990, when BPRwas
just gaining ground, estimating savings of some US $100 million in the first three years of the
changes. Its application of BPR is one of the best-known re-engineering case studies.
The inception of BPRwas prompted by the organization facing difficulties, plus the arrival of a
new chairman, who initiated a new corporate planning process. In response to the chairman's
plans, one of the organization's divisions initiated a BPR process, aimed at changing the mix of
the business in the portfolio to meet the needs of the new strategic plan. The division downsized
by 40 per cent and staff had to reapply for their own jobs. Within eighteen months, new work
processes were implemented and cross-functional customer service teams, as well as team-based
pay incentives, were introduced. It is claimed that a two-week underwriting procedure was
compressed into fifteen minutes. The division's changes succeeded beyond expectations and
Cigna's chairman became a strong advocate of re-engineering.
Other BPR initiatives were adopted in different parts of the organization. Some delivered,
others did not, with some SOper cent succeeding at the first attempt. The chairman encouraged
people to learn from the successesand did not punish those who needed to try again or
differently.
Sometimes, where programmes foundered, the executive commitment was not fully in
place-that is, they were interested in the results, but not in personally driving the change. On
other projects, the transition from ownership at the top to front-line personnel failed to happen.
Subsequently, CIGNA International successfully applied re-engineering in two countries where
it did business, but decided that re-engineering would not automatically work in all countries;
some cultures would need any change programme to be managed in a more collaborative way.
The CIGNA's experience suggests the advantages of gaining re-engineering experience and
competency by starting with less complex initiatives. 5- 6
When applying BPR,the direction for the radical rethinking is expected to come unequivocally from top management. Hammer and Champy (2001) assert that re-engineering cannot happen from the bottom up, because a broad perspective is required to decide what to
change and because, invariably, the changes cut across organizational boundaries, such
that a middle manager would not have sufficient authority to insist on the transformation.
Hammer (1990: 105) suggests that, whi 1stthe process is undertaken in a planned way, the
radical nature of BPRmeans that the outcome does not lend itself to meticulous planning;
rather that it is 'an all or nothing proposition, with uncertain result'. This echoes some of the
findings in Chapter 3 about managers' capacity to absolutely control complex change plans.
As can be seen in Change in Practice 9.3, issues of power and resistance may affect the
implementation. At Cigna, where the process did have the full backing of the chairman,
there were still pockets of the organization in which the management allegiance was
weak and implementation failed. It may be expected that such groups will apply their
managerial or status power to push back against such initiatives, which are often driven
solely from the top until the point of implementation. It reinforces the need to make
deliberate effort to win the confidence of managers and to create champions for the
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See Chapter 3 for
more on secondorder change:
p.41
PART C: DELIVERING
CHANGE
project in the field, whatever the scale of the programme (Hall et al., 1993). Jarrar and
Aspinwall (1999) found that a directed approach and top management commitment,
plus the establishment of cross-functional teams, are all critical. Stoddard andJarvenpaa
(1995) describe the need to target a small group of gatekeepers and to allow the change
to take hold in that group, because, otherwise, communication becomes a unilateral
directive. Failure to address this may result in the misunderstanding and lack of trust,
which may further contribute to resistance.
BPRaims to achieve changes in thinking, to break out from assumptions that underpin
current approaches to work, to effect second-order change. So changing processes cannot be separated from changing how people think (Grover et al., 1995). As Hammer (1990)
points out, beliefs such as 'local inventory is needed for good customer service' may be
deeply held and not readily given up: '[Re-engineering] is confusing and disruptive and
affects everything people have grown accustomed to' (Hammer, 1990: 112). Often different roles emerge from the redesign, along with a need for skills training, all of which may
require some very different thinking about the role or the customer. Indeed, the very first
Cigna BPR project resulted in everyone having to apply for their own jobs and learn new
skills. This is a key issue: changing views and assumptions can take a long time, yet BPR is
considered a fast turnaround methodology; the speed of implementation may not allow
for people to really adjust, to truly understand the change. This may be one of BPR'skey
weaknesses.
Re-engineering assumes that an organization's performance is limited because of its processes. It further assumes the need to start the process of performance improvement by
discarding what is and starting afresh. It is positioned as an 'all or nothing' approach: the
change must be radical and happen across the organization, such that both the scale and the
span of the change and the size of the organization are implicitly large. Yet, in the Cigna
example, the first BPR experiment started as a pilot in one division, without which there
would have been no buy-in from the top, or indeed, from other divisions. McNulty and Ferlie (2002), who studied the application of BPRin a UK hospital, found that whilst the change
programme started out as radical and revolutionary, it was tempered by reality and reshaped
to meet the needs of the key stakeholders.
Overall, organizations that have previously undertaken some form of process review or
change report lessanxiety and resistancefrom their people, lower training costs, and generally gained greater improvement in performance through BPR.This suggests that cultures
that accept continuous change, improvement, and learning are better placed to deal with
such fundamental and radical rethinking. Cigna understood that the expectation of the style
of leadership in some of its operating countries militated against the likelihood of successful
BPRimplementation and left them to one side.
For these reasons,in recent years, BPRhas been criticized for its neglect of some of the cultural and political aspects of organizational life. Even at the peak of its popularity, Davenport
(1996) stated that it has become associatedwith 'massive lay-offs' and that no one wants to be
're-engineered'. He suggeststhat consulting firms, which grew fast on the back of the initiative,
were seen to overpromise and underdeliver. Whilst finding some of the principles very useful,
he believes it to be the fad that forgot people-the people aspects of process performancewhich, whilst espoused in the methodology, do not explicitly form part of the approach to
implementation.
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Hammer and Champny (2001) acknowledge the criticism and attribute the backlash to the
excessive enthusiasm with which the press and public first embraced the concept, but find
that BPR does continue to be needed as the pace of technology-enabled change persists.
They claim the possibilities are so great that, without fundamental rethinking on a regular
basis, companies simply get left behind. Whilst our recent experience largely upholds Davenport's (1996) view, we do find that the principles of BPR,whilst not always labelled as such,
can be found in many company turnaround strategies.
Exercise9.2
Imagine that you are charged with undertaking a BPRreview of your organization or university.
Your particular interest is in the link between facilities management, human resources, and your
department or school.
•
Where would you suggest the BPRreview starts?
•
What might be the problems you encounter in implementing this method?
•
Why might BPRbe a useful method for you to employ?
Lean:'The Toyota system'
The second of the methods to be examined is called Lean. Lean is a process management
philosophy derived mostly from the Toyota production system (TPS).In the 1990s, the steady
growth of Toyota from a small company to the world's largest car manufacturer grabbed attention, with organizations wanting to understand how it had achieved this. The approach
was identified as 'Lean' in the mid-1990s; the term 'Toyotism' has also been prevalent,
although events in 2011 may alter this.
Lean'sfocus is on examining process flow and streamlining existing processes (Shah et al.,
2008). It aims to reduce any activity that does not add value. Unlike BPR,which purports to
dismember the process, Lean'spurpose is to examine the whole process chain and to identify
key wastage within the process.
There are a number of likely points of wastage in a typical process. One area that is often
the focus for process review is that of production-and overproduction. Overproduction
means making too much of the product, or making it too early, before the customer needs it
(Bicheno, 2004). Overproduction in turn leads to increases in the amount of space needed
for storage-sometimes storage of raw materials, as well as finished goods. Whenever goods
are not in transport or being processed, they are waiting, another form of waste. In traditional processes,a large part of an individual product's life is spent waiting to be worked on.
Goods may deteriorate whilst they are waiting to go to the customer; operators may be waiting for goods; deliveries may be waiting for the goods to arrive. Transporting is in itself another form of waste: any movement of materials is a waste that must be reduced to an
absolute minimum. Goods should be produced in time (but not far in advance)-just soon
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enough to meet the customer demand, which is known as the pull of the customer. Defects
in the product offer the ultimate form of waste, so that achievement of zero defects is a key
theme of Lean (Bicheno, 2004).
Lean undertakes to review the process and to eliminate those points of wastage, for example smoothing demand where it can be smoothed and increasing flexibility to respond to
fluctuations in demand that cannot be smoothed, perhaps by processing smaller volumes
more frequently.
A toolkit of techniques for practical use at the operational level has been developed to
support 'Lean thinking'. Tools include, for example, value stream mapping, which is used to
analyse the flow of resources and highlight areas in which activities consume resources, but
do not add value from the customer's perspective. This map is used to generate ideas for
process redesign.
As can be seen in Figure 9.2, the simple act of mapping the stages in a process quickly
identifies steps-in this case, within the investigations and tests stage-which do not add
much value.
In application, key aspects of Lean include the following principles.
•
Customers are better for the changes that Lean identifies.
•
Lean's purpose is to pull service through the system in order to meet customer requirements, so that the product or service flows continuously.
•
Lean is not overly analytical and statistical-it requires simple observations to identify visible problems.
•
Lean is not 'big bang'; it is a continuous, long-term approach to achieve flexibility.
•
Lean emphasizes including and empowering employees through change; its underlying
philosophy is a respect for people and society, and senior management's leadership of
the methodology should reflect this.
History
-
Examination
-
Working
diagnosis
Doctor requests 'test'
Porter picks up request
Porter delivers request to department
Clerk logs request
Clerk puts in request for prioritization
Consultant prioritizes request
Consultant returns request
-
Investigations and tests
Diagnosis
& plan
-
Treatment
Clerk files request
Clerk draws request from file
Clerk makes appoinment
Clerk sends appointment by post (>6 steps)
Patient receives appointment
Patient checks in at reception
etc.
Figure 9.2 Value stream mapping in the NHS
Source: Adapted from Jones and Mitchell (2006)
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Change in Practice 9.4
Undertaking a Lean review of a hospital pathology laboratory
The pathology department of a large UK hospital employs over a hundred staff in many
specialisms. They conduct thousands of tests each day using specialist equipment and are vital to
the running of the hospital. Two years ago, they were also seen to be the source of bottlenecks
and delays, with tests taking longer than they should.
As a result of the problems, a review of the whole process was undertaken. Blood samples were
tracked from the moment they left the patient, through the haematology, biochemistry, and
microbiology laboratories. Points of delay were identified, for example a sample could not be
analysed before the information had been put on the computer, but inputting delays were
common because the samples often arrived in large batches. There were physical distances to
travel because the department had laboratory space in two buildings, across two floors.
From the initial review, a range of possible improvements were identified.
•
Knock two rooms together to cut down physical travel time.
•
Place all analyser machines together, so that there is no need to go up and down stairs to access
them.
•
Change the inputting process with a standard form that can be scanned in.
•
Analyse each rack as it is filled rather than accumulate a whole batch.
As a result of such simple suggestions, a process that had 309 steps was reduced to fifty-seven
steps and the time taken for sample results from 24-30 hours to two or three hours. Staff were
freed up for more productive work and, overall, less space was needed once the department had
been reconfigured.
The changes improved quality, safety, and delivery, providing clear standardized procedures
and engaging the enthusiasm of front-line staff. 7
Lean's roots may be in manufacturing processes, but Lean principles have been applied
across a range of industries, from the pathology example in Change in Practice 9.4, to call
centre services to improve live agent call handling, to software development and maintenance, and other areas of information technology. For example, Unilever has applied Lean
across its finance functions. Becauseone unit can be 'Leaned' at a time, the process can be
applied in a small business or one unit of a larger organization, or across complex global
organizations.
Although typically initiated as a top-down change, the nature of Lean means that people
who understand the detail of the process need to be involved at an early stage. Senior management's role is to understand and explain what is driving the change (Radnor and Walley,
2006), and to engage others quickly in that understanding. Lean is most suited to organizations with high-volume, repeatable tasks, which lend themselves to standardization and
integration, coupled with a less hierarchical management structure, which allows staff to be
engaged in effecting the changes (Womack and Jones, 2005). Proponents of the Lean approach believe that it can be applied anywhere, provided that its underpinning philosophy
of respect for people and society is clear, and that time is given to embed the change. They
refer to the 'three secrets of successful implementation' (Jones and Mitchell, 2006).
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1. No redundancies as a result of Lean exercises
2. Involve staff at all levels
3. Show and practice respect for people
These 'secrets' differentiate Lean from BPRunder which a directive approach to the implementation and job reductions arising from the change are considered key successfactors. However, implementation of Lean faces many of the same issuesof power, politics, and resistance
as noted in our discussion of BPR. Research into Lean implementation by Warwick Business
School highlighted the need to establish a critical mass of people who are comfortable working with Lean practices (Radnor and Walley, 2006). Should managers who are not interested or
do not want to look outside their part of the process, or people who are unfamiliar with the
detail of the process be selected for the team, then Lean is significantly less likely to succeed.
Expert consultancy support, which encourages skills transfer, is found to be necessary.
In a review of a service industry implementation process, Hanna (2007) reports the findings
of Upton and Statts, who researched the experience of Indian software services providers:
It was interesting to talk to some of the lesssenior team members, becausethey were getting
involved in much bigger-picture issuesthan they ever had before ... In the case of value
stream mapping, every member of the team was able to get a senseof the overall picture of
what they were doing and spot problems they wouldn't have been able to seebefore. (Hanna,
2007)
In this way, Lean expects to achieve culture change. At its best, the process serves to get
people participating, and encourages a sense of innovation up and down the organization,
such that the impact of the change begins to affect ways of thinking as much as processes.
Lean encourages the use of a whole range of techniques, such as quality circles to keep employees continuously involved in improvement beyond the life span of the immediate review. A quality circle is a group of employees who are trained to identify, analyse, and solve
work-related problems, in order to improve the performance of the organization and enrich
their own work. Quality circles have the advantage of continuity: the circle remains intact
from project to project. They encourage the concept of knowledge-sharing and learning
within an organization. As with BPR, organizations with a history of managing change and
the ability to build multidisciplinary teams typically have the greatest capacity for Lean improvement (Radnor and Walley, 2006).
In examining the move of Lean to the public sector, the Warwick BusinessSchool study found
that the sector engaged with the principles of Lean, but less with the full range of tools and
techniques, with most organizations applyingjust a few of the tools (Radnor and Walley, 2006).
One aspect that was popular was the application of a 'rapid improvement event'. This uses
rapid improvement workshops to make small, quickly introduced changes via three phases.
1. A two-to-three-week
preparation period
2. A five-day event to identify changes
3. A three-to-four-week
implementation period
The managers found that this approach helps to overcome some of the public-sector cultural and political inhibitors, for example the slow responses to the changes, where consultation with unions and staff is customary. Here, they can experience a faster return for effort.
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Equally, the disadvantage is that quick wins are difficult to sustain because they are not integrated into the overall organization strategy. Whilst all those who participated in the study
reported some improvements, most had not achieved all of their objectives, in part because
of a lack of engagement once the 'rapid improvement event' was complete.
Despite the largely positive reporting of Lean implementation, in 2011, Toyota itself faced
much publicized issueswith the safety of some of its cars, having to recall millions of vehicles
in the US, Europe, and China, as well as suspending salesof eight popular US models, because
of the potential for the accelerator pedal to stick (Sunday Times,7 February, 2010). The issues
attracted much adverse publicity, and Toyota's brand reputation for quality and reliability was
seriously damaged by the problems. A BBCdocumentary suggested that Toyota had increased
production by 50 per cent in five years and, in doing so, had significantly extended its chain of
suppliers. This, coupled with driving down costs of key car parts by 30 per cent, may have
prevented Toyota from being able to control all aspects of the process, to ensure that 'Lean'
standards were adhered to (BBCl, 25 March 2010, Panorama:TotalRecall,The ToyotaStory). SeeChapter 8 for
Lean has some evident successin improving processesand, indeed, in affecting the culture more on Toyota:
p. 187
of an organization. The Toyota story serves to reinforce very publicly that all aspects of the
process need to be addressed: the 'human factors' such as training are just as important as
any technology; the process factors that affect quality are as important as the human factors;
there is not an end to the need for continuous quality improvement.
Exercise9.3
Think of a process with which you are familiar or which you can observe: for example, your selection for your place at university from the point of application; your induction to your new job; a
hospital referral.
•
Using Figure 9.2 as your guide, create a value stream map of the process.
•
Identify points of frustration (that is, waste) from your perspective.
•
Consider how that waste may be eliminated.
•
Identify key people involved in the delivery of the process and consider the effect of your changes
on their roles. How might you manage this?
•
What does this tell you about the application of Lean?
Six Sigma
Six Sigma is the third method to be considered in this section and is the most recent of the
three. Its focus is on reducing unwanted variation in processes by applying statistical methods in order to eliminate the causes of errors or defects (Bicheno and Catherwood, 2005).
Sigma is a Greek symbol and is used in the field of mathematics to denote the measurement of variation or standard deviation (Pande et al., 2000). Examples of variation might be
differences in getting a good or bad cup of coffee at the university cafe from one day to the
next, or waiting ten minutes for your train one day and forty minutes the next. Clearly, such
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variation can cause annoyance for customers: you do not know whether it is worth waiting
in the queue for coffee or not-whether this will be a good or a bad coffee day. Variation can
also accumulate, for example, in construction or electronics, where one variation adds to
another, causing serious issues (Pande et al., 2000). Six Sigma experts claim that looking at
variance rather than average performance helps companies to fully understand what is going
on: averages mask the ups and downs in quality and standards that are often the very issues
on which organizations are judged.
The purpose of Six Sigma is to reduce variation such that it is held within a narrow band,
with limits defined by the customer specification, to 'remove the variation, hit the target'
(Bicheno and Catherwood, 2005). So, where BPRstarts by dismantling the existing processes,
and Lean emphasizes process flow and streamlining, Six Sigma concentrates on process defects, aiming to eliminate the root causes of problems (Shah et al., 2008).
The application of Six Sigma includes:
1. defining what the customer needs;
2. counting the defects-that is, the instances in which the product or process does not
meet the customer requirement;
3. calculating the percentage of items without defects;
4. calculating then the number of errors that would be experienced if the activity were
repeated a million times (defects per million opportunities, or DPMO);
5. working to reduce the incidence of defect.
(Pande et al., 2000)
Defects per million opportunities (DPMO) is the way in which Six Sigma measures performance: 3.4 DPMO is the goal and is close to perfection (Bicheno, 2002).
Defects per million chances/opportunities
•
2 sigma= 308,537
•
3 sigma= 67,000
•
4 sigma= 6,200
•
5 sigma= 233
•
6 sigma= 3.4
Clearly, different processes require different standards: an airline may find losing passengers' bags 3.4 times per million luggage transfers to be a very high standard to reach; it
may not see that as appropriate in terms of the number of times its planes fall from the
sky. Six Sigma works to the customer specification (this may be an internal or external
customer).
Six Sigma was developed by Motorola at a time when the company was experiencing serious quality issues(Frahm, 2003). Through its application, Motorola witnessed dramatic results
including a 40 per cent reduction in errors, and a 60 per cent reduction in the time it took to
design a new product (Frahm, 2003). Having witnessed its power, General Electric began using
Six Sigma with the backing of its CEOJack Welch. Six Sigma then became the latest management method with high-profile blue-chip CEO backing and organizations began to adopt it
rapidly: for example, Bombardier.Johnson and Johnson, and Dow Chemicals use the method
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Exercise9.4
Identify two or three services of which you are the customer and where you experience variation in
the quality of the service.
•
What degree of variation do you experience-how
much and how often?
•
What is the impact of that variation?
•
How much would the variation need to be reduced by to impact your experience?
•
On the basis of your experience would you recommend that the provider invests in Six Sigma to
review its processes?
on a global basis; in the UK, it is in use primarily in the automotive sector and in services such
as British Telecom and banking.
Other features that set Six Sigma apart from previous quality improvement initiatives include:
•
a clear focus on achieving measurable and quantifiable financial returns from any Six
Sigma project (most advanced Six Sigma organizations employ finance personnel to
track project benefits-Shah et al., 2008);
•
a commitment to making decisions on the basis of verifiable statistical data (rather than
mere observation or assumptions) and, therefore, a high degree of project rigour
(Bicheno and Catherwood, 2005);
•
application of Six Sigma through fully trained Six Sigma experts, who are ranked using martial arts ranking terminology (for example, black belts, green belts, etc.), which defines a
Table 9.1 Six Sigma roles
Six Sigma role
Training (days)
Executiveleadership, which includes the CEO and the executive team, responsible
for creating the Six Sigma vision and providing the empowerment and resources for
others to act.
2
Champions, who take responsibility for Six Sigma implementation across the
5
organization and who mentor the level below (black belts).
Master black belts, who act as in-house coaches to other levels and work on Six
Sigma for 100 per cent of their time. They identify and scope projects, and ensure
consistency of application of the method across different functions.
20
Black belts apply the method to specific projects, working 100 per cent on Six Sigma
20
work.
Green belts undertake Six Sigma implementation alongside other work, under the
guidance of black belts.
9
Yellow belts are trained in the use of practical tools in order to be team members.
2
Sources:Harry and Schroeder(2000); Pandeet al. (2000)
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professional career path for anyone involved in the application of the method, whichever
organization they work in (seeTable 9.1).
Yet, by the late 2000s, the application of Six Sigma was beginning to slow and criticism to
emerge. Some suggest that it really adds nothing new, that it is a limited analytical tool with
a narrow focus, and that its application can, in fact, have a negative impact on the organization. Hinda and Grow (2007) cite the rigorous application of Six Sigma at retailer Home
Depot, where staff morale dropped although productivity soared. The next chief executive
started to undo some of the Six Sigma application to allow store managers some leeway to
make decisions on their own. Bicheno and Catherwood (2005) claim that, after twenty years,
Six Sigma is fully embedded in relatively few organizations, that often training is undertaken
and projects tackled without quality levels being attained.
Change in Practice9.5
Six Sigma at 3M
3M is a global science-based company. It has over 70,000 employees in more than sixty countries.
It is known as the company of innovation, one of its early developments being masking tape and
then the Post-It note, and, more recently, films that brighten the displays on electronic products.
In the late 1990s, the company's financial performance began to weaken and it was deemed to
have lost its creative edge. In 2001, James McNerney was brought in from General Electric (GE)as
CEO, the first outsider to lead the company. The stock market expected him to take decisive
action and he did, making redundant 8,000 workers, reducing other expenditure, and introducing
the application of Six Sigma, the success of which he had witnessed at GE.The directive approach
to change management won 'accolades for bringing discipline to an organization that had
become unwieldy, erratic and sluggish' (Hinda, 2007: 1).
McKerney introduced the two main Six Sigma tools:
•
the five-step approach to problem-solving, namely 'define, measure, analyse, improve, and
control' (known as DMAIC);and
•
the systematizing of product development, so that the product can be made to Six Sigma
standards from the start (known as 'design for Six Sigma' or DFSS).
The methodology was applied with rigour: almost all staff undertook the green belt level training
and several thousand were trained to full black belt standard. Operating margins went from
17 per cent in 2001 to 23 per cent in 2005 (Hinda, 2007).
Yet, when McKerney left four years later, 3M did not appear to have rediscovered its creative
roots as a result of the Six Sigma improvements. Hinda (2007) quotes the next CEO, George
Buckley, as pointing out that innovation is, of itself, a disorderly process that can not fit into a Six
Sigma schedule.8
As Change in Practice 9.5 suggests, pushing product development into a 'DFSS'process
may reduce the capacity to think differently. The CEO of 3M was left trying to manage the
tension between innovation and efficiency, to allow space to think without damaging quality and profits. The tight control of Six Sigma may serve to enforce conformity, not to encourage experimentation.
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From a cultural perspective, the application of the martial arts career path is interesting. In
effect, when fully implemented, it creates a parallel organizational structure, which has the
potential to exert power through its specific technical knowledge and expertise. Its statistical
basis and the nature of the language and acronyms (DMAIC; DFSS-see above) are symbolic
of this being a difficult, expert field, which the average employee will not understand. The
explicit nature of the rankings introduces a formal hierarchy, with the capacity to offer different levels of reward, making measurement the primary issue, as evidenced at 3M.
Equally, by keeping the martial arts group as a separate entity, there is less opportunity for
others to engage in the work in the way in which Lean expressly aims to do. The sustainability of the approach depends upon the black belts meeting with peers, often outside of
the organization, having refresher training, and being supported by senior management on
an on-going basis (Bicheno and Catherwood, 2005). This impacts also the opportunity for
organizational learning as the development is positioned with external training bodies
rather than within the organizational structure. Six Sigma may also suffer because those who
are selected for the training are chosen for their competence to work with the statistical
tools, whilst lacking sufficient organizational power to drive major projects (Bicheno and
Catherwood, 2005). The martial arts labels leave the approach open to being criticized as a
gimmick, and where it is not wholly endorsed by the top team, it can fall into disrepute. It
has certainly served to foster an industry of training and certification, with all of the large
consultancies offering programmes to achieve the different levels of belt. This in itself impacts the application. Small companies may not have the resources available or indeed be
able to afford to adopt this model. Such a company, sending one employee on a Six Sigma
programme, will have no understanding or support back in his or her organization on which
he or she can draw and existing authority and ideas will prevail (Bicheno and Catherwood,
2005).
Lesshas been reported about Six Sigma in recent years. Where companies are still using it,
trends include:
•
organizations, such as Dow Chemicals, sharing Six Sigma with suppliers;
•
an ongoing shift to businessesoutside of manufacturing;
•
combining Six Sigma with Lean to create Six Sigma Lean. For example, KPMG offers the
Lean Six Sigma Performance Improvement Framework. Most researchers agree that
there is more commonality between Lean and Six Sigma tools and practices than differences (Shah et al., 2008). Lean emerged as a concept before Six Sigma, but it is possible to
combine both to good effect, thereby paying attention to overall flow of the process, as
well as to the root cause of specific problems.
This last joint application of methods may be useful, both because each addresses different
aspects of the process and because the combination enables a wider range of change management styles to be adopted in their application. We believe that, in order for change to
succeed, style cannot simply reflect the chosen method, but must take account of the prevailing culture, the organizational power and politics, the scale and span of change, and
other contextual issues.The combined offering of Lean with Six Sigma has the potential to
drive the change from the top, using expertise to address specific issues of variation, whilst
engaging a wider group of staff in overall reviews of processes.
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Section 2 Summary
In this section, we have reviewed the application of:
•
business process re-engineering (BPR);
•
Lean; and
•
SixSigma.
Section 3: A framework for directed change
To conclude this chapter, an overall framework for the management of directed change will
be considered. Amongst a number of well-known writers in this field, John Kotter (1996)
developed a framework that identifies the key challenges in bringing about a planned change
process, which has been used widely by organizations as a guide to implementation. It is not
in itself a method and does not intend to provide a prescriptive solution, but may be used to
ensure that key aspects of implementation are not overlooked.
The framework positions change as being both owned by top management and seeking to
achieve wide staff participation as an integral part of the process, specifically in order to
overcome resistance and to achieve buy-in to the changes. Kotter (2007) asserts that challenges can be overcome if approached in a planned, methodical way.
Figure 9.3 outlines Kotter's (1996) eight critical steps for leading change, from establishing
a sense of urgency across the organization for the change, to mobilizing a coalition that is
able to describe the vision of the new future, creating short-term wins and, ultimately, changing the culture by embedding the new ways of working such that they become the accepted
way of doing things.
1. Establish a
sense of urgency
8. Institutionalize
new approaches
2. Form a powerful
guiding coalition
7. Consolidate
changes and instigate
more change
6. Plan for and create
short-term wins
3. Create a vision
S. Empower others to
act on the vision
Figure 9.3 Facing eight challenges of change
Source:Adapted from Kotter (1996)
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the vision
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Kotter's steps relate directly to Lewin's three phasesof change discussed in Chapter 3:
•
unfreezing occurs through stages one to four;
•
moving the organization in stagesfive and six; and
•
refreezing though the consolidation processes of stagesseven and eight.
See Chapter 3 for
more on Lewin:
p.49
Kotter (2007) suggeststhat the CEO and his or her team need to create urgency for change
by spelling out the dangers of not changing; to be successful,some 75 per cent of a company's management needs to be convinced that change must happen. Once this is achieved,
successful transformations require a strong coalition of key figures in management, from all
levels in the organization, to get behind the change: managers who are powerful in terms of
titles, information, expertise, reputation, or relationships in the organization. If sufficiently
influential managers choose to become involved, they are likely to overcome the political
manoeuvres of their colleagues. This relates to issueshighlighted in section 2: the BPRneed
to manage potential resistance from middle managers at the point of implementation; Lean's
need to engage managers who are able to think beyond their own process; Six Sigma'senrolling as black belts managers with sufficient organizational power to deliver the change.
Kotter focuses specifically on using a coalition of key managers to create and communicate a vision in order for the change to become accepted and embedded in the organization
(Kotter and Cohen, 2002). His stories of doing this are vivid and offer insight into the nature
of the challenge. Relating this to the three methods, the Lean process mapping offers the
obvious vehicle for people to achieve understanding of what can be different. Six Sigma's
challenge is to move away from the technical language to bring alive the possibilities. In the
case of BPR,the likely issue is creating a picture at local unit level, bringing the change back
close to home such that people can appreciate the difference it may make to their part of the
business. Kotter (1996) points out that skipping steps in the change process creates an illusion of speed, without achieving new behaviours, as described earlier in the Lean rapid improvement events (Radnor and Walley, 2006).
In our experience, organizations find Kotter's framework to be extremely helpful in
managing the change process. Much of the appeal of Kotter's (7996) work comes from the
sense of rational certainty that it offers: a certainty that change can be planned for and
the outcome predicted. The tenor of engagement that Kotter describes is closer to 'directive' influencing than 'collaborative' exploration. However, there is a danger that, by dividing the work into 'steps', the process becomes mechanical and the nature of
engagement superficial. It does not allow for greater levels of exploration, tending to
move quickly towards achieving congruent positive attitudes and avoiding the sort of
disagreement that can play a key role in supporting organizational renewal (Floyd and
Wooldridge, 2000). Randall (2004: 138) notes that such frameworks offer 'uncritically an
explanation of change couched in mechanistic terms'. As such, they address what goes on
front stage (in terms of formal processes and relationships), but do not pay attention to
the back stage political arena, as discussed in Chapter 7. In following these eight steps, if
See Chapter 7 for
the plan hits unexpected challenges, the process may be derailed. The danger of all three
more on front
methods examined in section 2 is their potential to be rigid, not allowing for the un- and back stage:
planned or emergent change, and Kotter's (1996) framework does not offer help in this p. 144
respect. So Kotter offers a sound guide for directed change, but slavish application will
not automatically achieve success.
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Exercise9.5
Identify an issue about which you feel strongly-something
that you would like to see changed in your
organization, your university, or your community.
•
How many people would you need to influence to create a sense of urgency about the issue and
how could you go about this in a way that would help those people to understand the issue?
•
Write down your vision for the future-what
the situation can be if the change is realized. Imagine
yourself reading this to people affected by the issue. How does this affect your description or the
language you use to paint the picture of the future?
•
Now plan your change implementation,
using Kotte r's stages five to eight as a guide.
•
What do you discover about the application of Kotter's framework?
Section3 Summary
In this section, we have:
•
examined Kotter's framework for planned change implementation;
•
considered the strengths and limitations of the framework.
Integrative CaseStudy
HMRC: Culture change and Lean
Her Majesty's Revenue and Customs (HMRC} is a department of British government, responsible
for the collection of taxes and the detection and prevention of smuggling. It was formed in 2005 by
the merger of the Inland Revenue (Revenue) and Her Majesty's Customs and Excise (Customs). The
two departments had very different histories, cultures, and legal powers. The joint organization
employed some 80,000 people. It was expected that 12,500 jobs would be lost as a result of the
merger by 2008, with further job losses to result from the closure of smaller local tax offices.
Against this backdrop, HMRC declared that the level of service to its customers would be
increased by the implementation
of Lean process reviews alongside the introduction
of new
technology and stronger focus on the needs of the taxpayer. It planned to spend £2.7 billion in the
period 2007-11 on a transformation programme with the aim of becoming the UK government's
processor of choice, to:
•
redesign service delivery processes;
•
implement the appropriate management infrastructure;
•
change thinking and behaviour in staff to support the new approach.
The application of Lean within HMRC was known as the Pacesetter programme. Pacesetter
embraced Lean, along with development in leadership, with the aim of achieving a top-down and
bottom-up approach to improving performance: 'Lean drives performances up in to the wider
organisation. [Operational management and senior leadership] drive performance from the
leadership team down in to the wider organization' (Radnor and Bucci, 2007: 3}.
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DIRECTED CHANGE
215
When Lean programmes were first introduced, the organization was still in the aftermath of its
merger. Staff were preoccupied with grading issues resulting from the combining of two
different structures, with proposed office closures, and grappling with the instigation of a raft
of new roles, such as the customer relationship manager, whose purpose was to offer one face
to the customer, thereby straddling Revenue and Customs. Lean was one more change. Stories
of clear desk policies, of not being allowed any personal possessions, and of depersonalized
ways of working spread rapidly when Lean was first applied. Despite this, HMRC aimed to use
'Pacesetter' to motivate and empower staff. It hoped to integrate reviews of processes with
cultural and behavioural changes, to ensure the ongoing sustainability of Lean.
Alongside Lean, the key IT programmes were managed centrally, focusing on large systems data
storage changes. It was decided to implement Lean locally in strategic HMRC sites, which would
incorporate the work of smaller sites over time, using Lean as the way of working. To implement
Lean across these sites, a number of dedicated central and local experts were based in the offices.
Lean was introduced by a series of workshops, helping people to understand the possibilities for
performance improvement and encouraging their input to the changes.
In 2007, an evaluation of Lean was undertaken by A to Z business consultancy, assisted by
Warwick BusinessSchool, which found the following.
•
There was a direct correlation between senior management engagement and staff attitude
towards Lean: the more committed the senior team, the more positive the attitude towards Lean.
•
Lean resulted in an increase in the quality of work at all sites. This was partly to do with quality
checks being instigated, so errors were caught before the work left the team. They noted that,
in time, there was a need for front-line staff to become directly responsible for quality.
•
Lean created more reasons for front-line staff to speak to managers, which was welcomed by
many staff. The evaluation recommended supporting this shift with training to meet the new
needs of the roles.
•
Senior managers had a better understanding of Lean than front-line staff, for whom
perceptions were influenced by union documentation. The evaluation suggested better
handling of communications to overcome this.
•
Some of the new key performance indicators (KPls}, under which individual productivity was
recorded hourly and then aggregated to team productivity, worried staff and the reasons for
having such indicators were not understood. Despite this, overall team working was
acknowledged to be better under Lean, with better team spirit and problem-solving.
Lean continued to be implemented successfully in further areas and, from 2008, HMRC claimed
the best ever quality improvements in processing, with improvements in customer service and
productivity increases of at least 30 per cent in areas in which Pacesetter was operational. As a
result, HMRC remained committed to continuing to update its IT systems, to working with Lean,
and to continuing to strive for the culture change that it desired.
Questions
Consider the size of the HMRC organization, and the scale and span of the change that it wants to
achieve.
1. In light of the context described here, what style of management do you think was needed to
make the changes for which HM RC hoped?
2. What part does Lean play in effecting change at HMRC?
3. What are its limitations and why?
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Conclusion
This chapter examined approaches to the implementation of change. The first section considered the range of styles that can be adopted and when they may be most successful.Section 2
focused on three change methods that are typically associated with directed change, because
they are typically instigated and led by senior management. These methods focus first on changing structures and systems, and, whilst employee participation in the change process is offered
in a range of different ways, management is expected to retain overall control of the process and
key decisions. The final section considered one of the best-known frameworks of planned
change to examine the change challenges and successfactors that it identifies. We will continue
the examination of choices and methods in Chapter 10, turning our attention to facilitated
change methods.
Please visit the Online Resource Centre at http://www.oxfordtextbooks.eo.uk/orc/
myers to accessfurther resourcesfor students and lecturers.
Change in Practicesources
1. Marston, R. (2009} 'Sir Stuart Rose's legacy at M&S', BBC News, 18 Nov. http://news.bbc.eo.uk/1/hi/
business/8366635.stm
2. The Telegraph(2006) 'How M&S was turned around', 10 Jan. http://www.telegraph.eo.uk/
fi nan ce/29 29807 /How- Man dS-was-tu rned-aro u nd. htm I
3. Alfa Laval (undated} 'Our company'. http://www.alfalaval.com/about-us/our-company/pages/ourcompany.aspx
4. Ash ridge Business School and Alfa Laval (2008} 'Submission paper for the EFMD Excellence in Practice
Award 2009 "Partnership in Learning & Development"'. http://www.ashridge.org.uk/Website/lC.nsf/
wFARATT/Partnership%20in%20Learning%20%26%20Development/$File/PartnershiplnLearning&Dev
elopment.pdf
5. Caron,j.,Jarvenpa, S., and Stoddard, D. {1994) 'Business re-engineering at Cigna Corporation:
Experiences and lessons learned from the first five years', Management InformationSystems Quarterly,
18{3}:233-50.
6. Hayes,j. (201 O)The Theoryand Practiceof Change Management, 3rd edn, Basingstoke: Palgrave
Macmillan.
7. Jones, D. and Mitchell, A. (for the Lean Enterprise Academy) {2006} Lean Thinkingfor the NHS. Report
Commissionedby the NHS Confederation.http://www.nhsconfed.org/Publications/reports/Pages/
Leanth in ki ng.aspx
8. Hindo, B. (2007) 'At 3M, a struggle between efficiency and creativity', BusinessWeek, 6 June.
http://www. busi nessweek.com/magazine/ conten V07 _24/b4038406.htm
IntegrativeCaseStudysources
FinancialTimes {2004} 'The joys of crossing a terrier with a retriever', 9 July.
HMRC website: http://www.hmrc.gov.uk
264
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APPROACHES TO CHANGE IMPLEMENTATION:
DIRECTED CHANGE
217
Neveling, N. (2007) 'Tax bosses look to boost staff morale', Accountancy Age, 24 May.
http://www.accountancyage.com/accountancyage/news/2190607
/tax-bosseslook-boost-staff
Radnor, Z. and Bucci, G. (2007) Evaluation of Pacesetter: Lean, Senior Leadership and Operational
Management within HMRC Processing-Final Report September 2007. http://www.hmrc.gov.uk/about/
pacesetter-final-report.pdf
Tax Advantage (2010) 'HMRC tax code fiasco', 15 Sep. http://www.tax-advantage.co.uk/news/hmrc-taxcode-fiasco.html
Furtherreading
Bicheno,J. (2004) The New Lean Toolbox: Towards Fast, Flexible Flow, Buckingham: Picsie Books.
Bicheno,J. and Catherwood, P. (2005) Six Sigma and the Quality Toolbox, Buckingham: Picsie Books.
For clear accounts on the Six Sigma and Lean processes, respectively.
Kotter, J.and Cohen, D. (2002) The Heart of Change: Real-life Stories of How People Change Their
Organizations, Boston, MA: Harvard Business School Press.
For examples of directed change undertaken with the purpose of engaging people in understanding and
accepting the change.
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CHAPTER 9 • APPROACHES TO CHANGE IMPLEMENTATION: FACILITATED CHANGE
Approaches to Change
Implementation:
Facilitated Change
( _______
1_1n_tr_o_d_uc_t_io_n
_____
~)
PART A: The Change Process
PART B: Perspectives on Change
Organizational
6 Change from the Perspective of
2 Causesof Change
3 Intentions and Realities of Change
7 Change from the Perspective of
Organizational Culture
Power and Politics
Psychological
8 Change from the Perspectiveof
4 Emotions of Change
5 Sensemaking Processesin Change
Organizational Learning
PARTC: Delivering Change
9 Approaches to Change Implementation:
Directed Change
10 Approaches to Change
Implementation:
Facilitated Change
11 Roles People Play in Change
12 Communicating Change
13 Sustaining Change
( _______
1_4_C_o_n_c_lu_s_io_n
_____
~)
Introduction
This chapter continues the exploration of the range of options available to senior managers when deciding their approach to the implementation of change. Having considered those in which the change
is largely directed from the top of the organization, this chapter focuses on facilitated change-that is,
change in which the approach is designed to maximize the involvement and contribution of people.
A variety of methods sit under the umbrella of facilitated change, from those, still largely under the
control of senior managers, which encourage greater levels of consultation with staff, to others in which
the widest membership of the organization is involved in deciding what needs to happen. In this
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FACILITATED CHANGE
219
chapter, we will concentrate largely on those that are intended to maximize involvement, sometimes to
the extent that senior managers let go of their control over decisions, and, indeed, in some cases in
which the change is co-created with the involvement of all interested parties, where no one party is
seen to be 'in control'. In previous chapters, we have discussed the different views of change, from
planned to emergent: planned change emphasizing senior managers' deliberate intention to achieve
organizational change, with clearly defined start and end points; an emergent view emphasizing that,
SeeChapter 3 for
more on planned
not conform to a plan and has no end state. Facilitated approaches to change are adopted to enable and emergent
both planned and emergent change. We will consider both perspectives in exploring a sample of the change: p. 48
whether or not change is intended, organizations are, in fact, constantly evolving such that change can-
range of facilitated methods, examining their structures and their relative strengths and weaknesses in
enabling organizational change.
•
Main topics covered in this chapter
•
•
The range and purpose of facilitated change approaches
A sample of facilitated change methods, exploring their place in planned and emergent change,
and evaluating their relative strengths and weaknesses in enabling change
Section1: Why choosea facilitatedapproach?
Facilitated approaches and planned change
Chapter 9 established that, even in large-scale structural change, where methods such as
business process re-engineering (BPR), Six Sigma, or Lean are applied, successful implementation requires people on the ground, those doing the work, to have the opportunity
to explore and understand the proposed change in order to adopt new ways of working.
The chapter explored Kotter's view (1996) of the eight crucial challenges for managers in
leading change, which focus on communication with and involvement of employees, in
order that employees have sufficient understanding and motivation to adopt the changes
that are planned. So, one key reason for involving people is, paradoxically, to enable managers to maintain control of the programme of change that they have planned, by reducing
the risk of resistance to change.
So what then is the motivation for further involving employees? Dunphy and Stace
(7993) suggest that, in planned change approaches, the choice of approach is dependent
on the circumstances thatthe organization is facing. They identify two facilitated approaches:
collaborative and consultative. When adopting consultative approaches, managers may
seek employees' views, typically about gentle, incremental adjustments in how things are
done, which, whilst they may be significant, are gradual, not dramatic or instantaneous
(Holbeche, 2006). Collaborative approaches are aimed at much greater involvement, offering employees ways of participating in important decisions, such as the major realignment of a unit.
In our experience, such involvement is not often evident in matters of organization strategy or structure, but rather in relation to people-related organizational objectives, such as
SeeChapter 7 for
more on
resistance:p. 150
SeeChapter 9 for
more on Dunphy
and Stace:p. 195
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CHANGE
team performance, organizational values, or the development of increased trust or well
being, as illustrated in Change in Practice 10.1.
■
Change in Practice 10.1
Creating a high engagement culture for a global facilities services organization
The organization, which operates facilities services for organizations across 150 countries, wanted to
achieve sustainable behavioural change in its customer-facing staff, to deliver a more responsive
level of customer care. Specifically, the executive team believed that employees would offer
customers the same quality of care and attention as they themselves received within the organization, so that if they were to alter the everyday experiences of employees to improve their sense of
well-being, the positivity would be passed on to the customers.
Following advice from change consultants, the executive team agreed that high-profile speeches
from senior leaders and formal events would not have sufficient effect on people's day-to-day
working lives, that employees had limited confidence in what they were told, and that rather they
believed what they actually experienced. They therefore designed change activities so that they
minimized speeches from the top and maximized active participation on the ground. They brought
people together from across the range of countries to work on important organizational issues,to
experiment and to collaborate with possible solutions, working across organizational boundaries.
Some 150 cross-organizational change agents were trained to support local experiments. Experimentation was focused on things people wanted to change in their day-to-day work, for example being
able to take decisions about an aspect of the service without referring upwards, and having their
ideas listened to and respected by senior managers.
After the first quarter of the change programme, there was concern amongst the executive team
about the low-key nature of these activities. The lack of events, plans, and timeline created
discomfort and uncertainty about whether anything was happening. The executive had little say in
which local experiments were taken forward. Yet, for the people involved in the experiments, change
was being experienced in an immediate, local way, as team leaders offered more freedom in the
taking of day-to-day operational decisions and team meetings were put to good use to explore
people's issues and ideas.
Gradually, over the coming six months, employees began to feel an increased sense of well-being
as they worked with changes that they themselves had instigated and grew more confident in having
ideas, knowing that they could be implemented. The business evaluation showed improved quality
in interactions with customers.
Despite this, there remained a sense, from employees and the executive team, that this was not a
true 'change programme'. 7
SeeChapter 5 for
more on
engagement:
p.98
Change in Practice 10.1 illustrates change that remains the responsibility of senior management and which encourages collaboration to achieve commitment to behavioural change.
Methods that encourage involvement are often believed to contribute to the development
of employees' commitment and engagement. It is hoped that, in turn, engagement gives
people the enthusiasm and will to change for the good of their own role and the organization's future (O'Reilly, 1996). Vanstone (2010: 2) suggests that true engagement means 'excitement, anxiety, ideas, disagreements, diversity, discontinuity, innovation, experimentation,
localized decision-making and power sharing across all levels of the organization'. This description conjures up something much more complex and messy than a cascade briefing or
a team meeting to elicit responses and ideas to a planned change. Hence, there may be a
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221
point at which, if senior managers are serious about the involvement and engagement of
staff in the change process, they must go beyond collaboration to relinquish their control
over the outcomes. In Change in Practice 10.1, despite understanding the need to involve
staff, the executive team did find it difficult to leave the change to a series of local experiments, led and managed by people on the ground. They had little control over the
nature of the things that were tried out and found this to be a source of tension. This 'letting go' is one of the key issues in adopting such a method within a planned change
programme. The example highlights also the difficulty of taking seriously something that
has less structure than say, a business process re-engineering (BPR) plan: this too is a recurring issue for facilitated methods and may result in them being discounted or, indeed,
going unrecognized.
Facilitated approaches and emergent change
Facilitated change approaches may also be adopted to enable the process of emergent
change. As explored in Chapter 3, an emergent view suggests that change is inherently unpredictable. As such, organizations need to be ready to respond to external environmental
changes in an agile way, through enabling organizational experiment and adjustment, to see
what may emerge, rather than defining a specific change outcome. We have already noted
See Chapter 3 for
the importance of organizational relationships in effecting emergent change; change is en- more on agility:
abled by stimulating new forms of social interaction. To achieve this, there is a need to max- p.53
imize the diversity in decision-making, so that different patterns of thinking have space, and
fresh ideas surface (Stacey,2002-03). A leader's role is to offer no more than a general framework for direction. He or she then needs to stand back, to put aside his or her power, so that
all employees, wherever they sit in the hierarchy, have the space to collaborate as equals, to
have difficult conversations; he or she needs to make it safe enough for people to disagree in
order that novel ideas may emerge. The seeds of this approach are evident in Change in
Practice 10.1. Whilst set in train by senior managers, the change itself occurred through people working in new formations, across the normal department boundaries, not just with
teams in their own country.
Many of the facilitated approaches to change are influenced by social constructionism,
the view that 'reality' is socially constructed through what people do and say together (Lewis
et al., 2008). From this viewpoint, there can be no fixed definition of the change that the
organization wants, because it will evolve as people are able to feel it and describe it to one
another. In Chapter 8, we discussed the concept of dialogue, an inquiry-based generative
conversation. Dialogue offers the possibility for new behaviours, which last, coming from
being with others, 'listening ... suspending one's views' to come to 'new ways of seeing, from
new awareness' (Issacs, 1999a: xviii). Dialogue entails frankness about emotions, as well as
thinking, and is an approach in which feelings are welcome (Lewis et al., 2008: 117). As Isaacs
(1999b) points out, this is not the normal approach to conversations in organizations, where
people come to meetings well prepared, ready to represent their own department's policy,
to advocate a position and to defend it (the 'ping-pong' of the advocate and the opposing
party at committee meetings). It requires people to be authentic and honest in their views.
We will examine the role of social construction and dialogue in the facilitated methods we
explore in the next section.
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Section 1 Summary
In this section, we have:
•
considered when leaders may adopt facilitated approaches to change;
•
considered the merits of facilitated approaches in relation to planned and emergent views of
change.
Section 2: Facilitatedmethods
In this section, we will explore a sample of the best-known facilitated change methods, some
of which are rooted in planned change, others of which are adopted to create the conditions
for emergent change to occur. They are chosen because they represent the complexity of
managing change in modern organizations. The range of methods is illustrated in Figure 10.1
and we will consider a sample from organization development, to Open Space Technology
and virtual conferencing. As the diagram illustrates, the purpose of the approaches ranges
from collaborating to solve problems, through full engagement of all parties, to senior managers relinquishing control so that employees co-create the vision of the future, co-design
organization processes or structures, and ultimately organize themselves and their ideas
without senior management intervention.
Organization development (OD) is one of the best-known methods in the field of
organizational change. It has developed over many years, has been in fashion, then
ill-regarded, and is now seen once again as a valuable approach to change. Its purpose is
to work collaboratively across the organization in order to engage people and to effect
change.
Purpose
Engage
Vision a
common
future
Co-design
and
collaborate
Consult to
manage conflict
and resistance
Self-organize
and
co-create
Figure 10.1 Facilitated approach methods
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Humanistic
values
FaciIitated
approach
Involves the
- - _______ - .. Interdependencies
Focus on human
aspects of change
Continuous
learning
Joint ownership
of change
Medium-long term
effectiveness
Figure 10.2 What is organization development?
What is Organization Development?
It is a planned approach to change that takes in all parts of the organization (the whole system),
•
from the individual to the group to inter-organizational, noticing how they interrelate (French
and Bell, 1999).
•
It is managed from the top of the organization (Beckhard, 2006).
•
Although the emphasis is on planned change, much of OD work focuses on dealing with the human
reactionto the planned steps to achieve organizationaleffectiveness(Bradford and Burke, 2005).
•
It typically takes a long-term (say, two years plus) approach (Beckhard, 2006).
•
The work is rooted in a set of key humanisticvalues related to openness, honesty, involvement,
and the capacity to grow, these aspects positioning it firmly across the 'facilitated change' arena
(French and Bell, 1999).
Burnes (2009) cites the findings of Hurley, who undertook a survey of OD practitioners and
established five key principles that are used in their work: empowering employees; creating
openness in communications; facilitating ownership of the change; promoting collaboration; and
continuous learning. The tone of such descriptions is strikingly different from that used in directed
change examples, which used language such as driving performance, eliminating cost, maximizing speed, and optimizing service. The key dimensions of OD are illustrated in Figure 10.2.
■
Change in Practice 10.2
Taking an organization development approach to change: Outsourcing at NS&I
National Savings and Investments (NS&I) is a UK savings organization, the purpose of which is to
provide a secure establishment in which people can save, backed by the government. It has over
26 million customers and almost £100 billion invested (2011 ).
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In early 2000, NS&I entered into an outsourced partnership with Siemens IT Solutions and
Services,a German-founded global provider of IT infrastructure management and IT solutions, with
offices in more than forty countries and 35,000 employees. Over 4,000 staff were transferred from
NS&I to Siemens, which now manages all of the operational business, including the service delivery
of products, and the operation of customer call centres, IT and systems upgrade, etc. The partnership
arrangement was a major test of working collaboratively across two entirely different organizations,
with different national cultures and different business models: one to grow, to compete, to be lean
and efficient to make profits in a global market; the other to be a stable, trusted, UK-only, not-forprofit savings establishment.
There are now some 150 staff employed by NS&I, based in London, responsible for the development of the business, for the partnership with Siemens, and for the quality of service that its
customers receive through Siemens, but no longer busy running the operation.
The NS&! leaders decided to embark on a planned change programme to address the issues left
behind in the wake of the outsourcing: they had lost their old sense of purpose, they needed to make
sense of their new role and understand their responsibilities for the contract-in effect, to recreate
their identity within the new arrangement. This meant starting the work at the top of the organization, with key planned interventions to allow the leadership team space in which to develop the
organization's strategy together and to better understand their own contributions within that
strategy. Once greater clarity had been achieved, the leaders engaged the wider organization. Further
interventions were undertaken at team level, specifically aimed at enabling people to explore the
values of the organization in its new form. The quality of people's engagement and purpose
improved enormously. Yet somehow the leadership team still could not fully make sense of the
difference between itself and Siemens: they continued to have expectations of the relationship that
were not fulfilled. Finally, the programme was extended to include Siemens representatives. This
wider group undertook project work that required Siemens and NS&! leaders to present joint
outcomes to a challenge panel. In doing so, it quickly became clear that the different parties held
fundamentally different views of what comprised good partnership decision making, in terms of the
number of people to involve, attention paid to issues such as cost-effectiveness or quality of service,
and the extent to which decisions affected the roles of employees. Their views were born of different
underlying assumptions, reflecting their different organizational cultures. Whilst these differences
had been understood at an intellectual level, exposing how it felt through an experiential exercise
brought the issue to life. The clarity enabled change to occur in the relationship; each party began to
adjust its expectations of the other, to allow a professional partnership to grow that respected their
differences.
The change programme started in 2004 and continued over a period of some three years.2 - 4
The organization development process
SeeChapter 3 for
more on Lewin:
p.49
Often, senior managers will call on OD practitioners to undertake the programmes of change
rather than do it themselves; it is seen as an expert field. The traditional OD approach is underpinned by Kurt Lewi n'sframework of 'unfreezing' the situation, 'moving' it to a new way of
being, and 'refreezing', or consolidating the change that has occurred.
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entry and
contracting
FACILITATED CHANGE
225
Diagnosis
Implementation,
extension,
recycling, or
termination
Feedback and
decision to
act
Agreeing
interventions
Figure 10.3 The consulting cycle
The process is illustrated in Figure 10.3. According to Burke (2008) and French and Bell
(1999), it involves the following.
Unfreezing
l .Gainingentry with the client This is important to the approach: gaining entry means
getting alongside the client, understanding the issues through their eyes, and developing
a working relationship based on this understanding. It is expected that the practitioner
will be curious, open, and 'value neutral' (Palmer et al., 2006: 194). In Change in Practice
10.2, it was important for the consultants to gain entry with both Siemens and NS&I, and
to be open to both views of the situation, without judgement.
2. Contractingwith the client to agree the scope of the work The first task is to agree what
the issues are to be explored. This is known as 'raising the question', identifying and
prioritizing issues of concern to explore. It is seen as crucial to being able to diagnose
correctly: if the wrong issues are identified, the root cause of what needs to change may
not be discovered. The client and the practitioner plan ways of getting answers to the
question through the involvement of others.
3. Undertakingdiagnosis This comprises interviews with individuals and groups, sometimes
using a questionnaire, or observing groups in action. All data is collected through a
participatory approach, so that solutions come from the organization, not from the
consultant. The practitioner's role is that of 'helper', helping the client to make senseof the
diagnosis data, deciding where to intervene within the system (Holbeche, 2009). At NS&I,
board meetings were shadowed and managers interviewed individually and in small groups
to explore their challenges. It is fundamental that the very act of exploring the issuesgenerates
thinking and creates learning. This servesto develop the 'felt-need' for change (Burnes, 2009).
4. Feedingback the data collectedand making senseof the organizationalissues It is
important that this is done with the client, so that the outcomes are jointly owned. At NS&I,
the leadership group was involved in making sense of the findings at an off-site workshop.
There was no expert 'diagnosis', no written report; rather, a joint exploration of the issues.
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Moving
1. Agreeingthe interventions-that is, planning the change process In this, the
representative involvement of the whole system is important-that is, representation of
all parts of the organization and its key stakeholders. Traditionally, OD practitioners work
with a diagonal slice of the organization to develop a picture of the whole system (Mirvis,
2006)-that is, with people drawn from all levels of the hierarchy, across different
divisions and geographies. In doing so, they pay attention to, and explore with
participants, the interdependencies between the different parts of the organization.
Sometimes, the work starts with the top team, but this is generally with a view to
involving a wider cross-section of the organization, as happened at NS&I. In fact, the
NS&I programme succeeded only when the 'whole system' was represented-that is,
when Siemens and NS&I managers worked together on the issues,and invited views from
customers and stakeholders.
2. Implementing the interventions In NS&I, a series of strategy days, workshops, individual
coaching, action learning (in which small groups of peers tackle organizational issues),
and experiential simulations were used (for example, using actors to represent key
stakeholders; holding challenge panels to assessjoint project outcomes). These
techniques were a crucial part of people gaining new insights, starting to think differently
about the situation.
Refreezing
1. Evaluation and/or extension of the intervention NS&I chose to evaluate the change
through use of 'pulse checks' (informal staff feedback processes) and staff surveys.
See Chapter 11
for more on roles:
p. 254
The process of contracting and diagnosing has its roots in action research. This recognizes
that successful action comes from analysing the situation accurately and choosing the most
appropriate solution (Burnes, 2009). The cycle of data collection, diagnosis, feedback, intervention, and evaluation may be iterative: the action research cycle. The act of diagnosis involves the system; the diagnosis results in further action to effect change (see the discussion
about action research in Chapter 14).
A feature of OD practice is the recognition that all interventions have consequences for
the client (Schein, 1999). For example, the very act of asking a question prompts thinking in
the direction of that question; this may result in a change in focus, an opening up of thinking
or closing down of other avenues. In this way, every move counts.
Tolbert and Hanafin (2006) distinguish the OD practitioner's role from that of a technical
expert, because the focus of the work is on how the task is to be accomplished in terms of
roles and relationships rather than on the task itself or its technology, and so on. Practitioners need to understand how groups work and work with the 'back stage' of organizationsthe power, the politics, the culture of the organization to effect change. Whilst the change
programme at NS&I was led from the top, it was important that the positional power of the
executive team did not overshadow or inhibit the contribution of the wider group as the
work progressed. This proved difficult: despite the collegiate behaviours of the leaders,
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people still held back in their presence and it was the role of the practitioner to manage the
group process to overcome this, to create the conditions for people to feel safe enough to
speak out.
Exercise10.1
Consider an issue in your organization or university that requires review and impacts what employees do. Imagine yourself to be the OD consultant. Explain the issue to a colleague and, as you
do so, think about the following.
•
Notice the extent to which your mind is made up about what is going on, and the extent to which
you feel open and curious about possible ways forward. Seewhether you can identify your own
vested interest in the issue.
•
Identify who is needed to explore the issue to ensure a good cross-section of stakeholders. Consider how interested you are in their views.
•
What does that tell you about the skills required to be an OD practitioner when gaining entry and
contracting with the client, and when undertaking the initial diagnosis?
There are conflicting views about the primary purpose of OD. For some practitioners, the
term 'organization development' is an umbrella for thinking about the behavioural aspects
of change as the primary approach to changing organization culture (Bradford and Burke,
2005). As such, it is well placed to sit alongside other methods such as BPR,to deliver organization-wide behavioural change to meet the needs of new technologies and processes.
Indeed, at NS&I, is was the OD programme that sustained the delivery of a major outsourcing initiative.
Yet, perhaps because it is rooted in the humanistic values, it is often associated with the
notion of making organizations' "better" places to work' (Schein, 2006: xvii) and is sometimes
described as a 'movement' focused at the individual level, with interventions focused on interpersonal relationships. As such, it spread quickly, taking on a 'faddish quality' (Greiner and
Cummings, 2005: 87) and, through its success, began to attract more attention and then
criticism for putting the individual above the organization, for lacking businessfocus, and for
failing to deliver quantifiable outcomes. This demonstrates just how difficult it is to intervene
across a whole organization system to effect culture change in a sustainable way. Marshak
(2005) asserts that OD has failed to play a central role during times of extensive organizational change worldwide. Because it takes time (at NS&I, the programme stretched across
three years), it cannot have the same up-front impact as some of the more tangible instantaneous changes in structure or process.
Despite this criticism, many of OD's techniques have now become mainstream. Schein
(2006) cites improving communications, team building, and having processes to manage
change as examples that are rooted in an OD perspective, yet now are simply part of organizational life and key interventions to aid individual and group learning. We find the
key dimensions of OD (see Figure 10.2), such as paying attention to the interdependencies
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between different parts of the organization system and taking a longer-term view, helpful
in most change situations. We also generally apply the processes of involvement, such as
working with cross-sections of the organization, as we find this offers a deeper understanding of the issues and the opportunity to effect change that can be sustained by all
parties. We regularly deploy key tools and techniques such as coaching, feedback, and
action learning simultaneously, as Change in Practice 10.2 described, and find that their
cumulative effect helps where the organization's capacity to think differently has got stuck.
We find that, overall, OD does serve to address the human aspects of the business transformation agenda.
Appreciative Inquiry
See Chapter 8 for
more on
dialogue: p. 175
The second method that we shall examine is Appreciative Inquiry (Al) (see Figure 10.1). This
is a planned change method, led from the top, yet the aim of which is full participation and
engagement of the whole organization system. It is based on everyone participating in an
inquiry to focus on the 'strengths' that exist in the organization. Its purpose is to facilitate the
development of organizational capacity in those strengths.
Al is used with groups, often large groups, drawing on the process of dialogue (see section 1) to build consensus around the positive aspects of the organization. Storytelling is
used to recall the best examples of what is (or has been) in the organization, for example
leadership or customer care at its best. These stories form the basis for visioning what could
be in the future. Sharing the stories creates the energy and enthusiasm to develop more of
what works well.
The approach was first experimented with by David Cooperrider, Frank Barrett, and
colleagues as a complement to the conventional forms of action research described as
part of OD practice (van der Haar and Hosking, 2004). Cooperrider and Srivastva (2008)
describe a shift from problem-solving to appreciation and a shift from advocacy to inquiry, believing that the problem-solving view is the world's 'primary constraint on its
imagination and contribution to knowledge', because our assumptions and choice of
method impact our findings. They suggest that a traditional action research approach of
critiquing gets in the way of being completely open to something novel, inhibiting the
capacity to 'marvel' and 'wonder' (Cooperrider and Srivastva, 2008: 354). Therefore, unlike OD, those adopting this approach choose not to analyse what is wrong and find
remedies, but rather to focus on what works well, on the basis that we 'get more of
whatever we inquire into and talk about' (Vanstone, 2010: 6; Austin and Bartunek,
2006). The claim of Al proponents is that Al is not about wishful thinking, but rather is
grounded in the reality of what already exists. It is typically used to change the culture
of an organization, to solve conflicts, and to create renewal (van der Haar and Hosking,
2004).
Most Al practitioners are influenced by social construction ism (see section 1), believing
that change is created with and between people. Taking this as a central premise of Al, they
believe that 'by getting people to unite on a central theme or idea, Appreciative Inquiry allows people to construct their future' (Cooperrider et al., 2008: 14). This concept is explored
further in Change in Practice 10.3.
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Exercise10.2
Work in a group of four to six people whom you know reasonably well. Sit in a circle, each person
turning to face the person on his or her left and tell them:
•
what you appreciate most about them;
•
when you see them at their best;
•
what they do that you would like them to do more of.
Move on to the next person to your left and repeat the exercise.
•
How easy or difficult was the task?
•
How did you feel (embarrassed/energized/foolish/happy,
•
What happens within the group during the process?
•
What does this tell you about taking an appreciative stance?
etc.)?
There is a core structure to the Al method, which follows broadly five phases (often known
as the 'five Ds'). Phasestwo to five are often worked though at a conference or summit, generally lasting three days (Lewis et al., 2008).
1. A definitionphase
The goals, the project management structure, and the approach to
enabling people to participate are agreed, as well as the broad topic of inquiry such as
innovation (Watkins and Mohr, 2001 ).
2. A discoveryphase Participants inquire into the times when the organization is at its very
best in human, economic, and organizational terms, in terms of the topic of choice. For
example, participants may interview each other in pairs, using questions to guide them
through the telling of real stories. Sometimes, stakeholders such as customers and
suppliers are included in the process. From this, the whole group identify themes and
patterns to understand what they valued most about themselves, the nature of their
work, and the organization at those moments in time when things were at their very best,
during the 'high point' experiences (Cooperrider et al., 2008).
3. A dream phase
Participants now start to describe their picture of the future. They are
encouraged to take the best of the past and to break any rules they need to create a new
future. Cooperrider et al. (2008: 133) understand the dream stage to be strategically
significant, leading to 'higher levels of creativity, commitment and enthusiasm for the
organization and its future'. Sometimes, the dreams are acted out as a short play at the end of
the afternoon, which creates a senseof energy to take in to the third day (Lewis et al., 2008).
4. A designphase
The participants now take their dream and translate it into reality by
considering the aspects of organization life that they need to change: policies, structures,
processes, etc. It is expected that the senior leaders will be in the room as this work
happens, so that ideas can be agreed to or negotiated as the work is being done, to ensure
that it remains part of the real organization, not just a fun away day. Much of the thinking
is undertaken in small groups, with a whole-group discussion to identify who else needs to
be involved to make it happen; the phase requires 'widespread dialogue' thereby
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'co-constructing the organization's future' (Cooperrider et al., 2008: 164 ). The small groups
then prepare design statements about what is going to happen (Lewis et al., 2008).
5. A destiny phase
•
A range of projects is agreed upon to take the ideas forward.
Change in Practice 10.3
Appreciative Inquiry at Nokia
Chapter 2 explored the origins of Nokia, the technology and mobile phone provider. By 2002, Nokia
had around 60,000 employees worldwide. In that year, the executive board decided that, given the
enormous growth in employees and resultant changes in working practices as new people and new
ideas came on board, they needed to revitalize the Nokia values that had guided them through the
previous ten years. They decided to undertake the programme through a process of Appreciative
Inquiry {Al). The board believed this to be the appropriate choice because it was neither top-down
nor bottom-up, so that senior leaders could be involved, yet were not in the role of deciding what to
do and cascading those decisions through the organization. They felt that the process itself paid
attention to aspects of organization life that Nokia believe are important, emphasizing involvement
and respect for others.
Twenty people, including four members of the executive board, drawn from different countries
and functions and different levels in the hierarchy, came together to form a core team for the Al
project. They spent two days together gaining an understanding of the approach and agreeing the
specific topics of inquiry for this change intervention under the banner of 'revitalizing the values'.
This core team then embarked on the definitionphase. Over the next four months, each member
of the team carried out Al interviews. collecting stories and quotes, which were used to create a
hundred posters. One recurring theme was that of values-based leadership and it was agreed that
this would be the focus of the next phase of the work, to take place at a summit.
The three-and-a-half-day summit was designed for 200 people in Helsinki, the purpose of which
was to undertake the entire process of the rest of the 'Ds', from discoverythrough to destiny.The
participants were chosen to represent the maximum diversity within Nokia. The posters of quotes
were used to decorate the walls of the conference room-to bring the inquiry into the room.
The summit days had many ups and downs. One of the issuesthe core team faced was enabling
people to engage with the process and stay with it over such a lengthy period. The executive board
had chosen to give the event a high profile, which in turn made the core team want it to be a success.
It needed to be carefully facilitated by the external consultants to ensure that the group stayed with
the process, avoided responding to people's concerns in the moment, thereby hurrying it along or
predetermining the outcome, or changing tack when people got restless. By the final day of the
summit, those participating were immersed in the work and felt that they were achieving new
understanding of the issues and identifying ways forward. Eighteen groups formed to take forward
key actions, focusing on bringing life to Nokia's core values. These were values-in-action, to be
demonstrated through acts of leadership in everyday life.
Some of the ideas of the eighteen groups did not survive the transition from the high energy event
to the work needed to take them forward in the workplace. The 'relight the fire' team developed and
presented an updated communication of the values to the executive board, which experienced the
work as 'lively and relevant output' {Vanstone and Dalbiez, 2008), which was adopted and followed
through. The primary aim of the intervention, to refresh the values, was delivered.
Looking back, people still remember the energy of the summit and their sense of being part of
creating new ideas. Nokia reports that the appreciative approach has become part of many leaders'
and teams' ways of working, and that subsequent Al projects have happened since in other parts of
the organization, including the Far East and Latin America. 5- 6
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Al is sometimes seen as a subset part of OD-a technique to be drawn on as one aspect
of an OD change programme (Watkins and Moor, 2001 ). Al practitioners typically feel
strongly that it is a method in its own right. Where it is well received, it is best known for
the amounts of positive energy that it releases during the process, as evidenced at Nokia,
and its capacity to set innovative change in motion (van der Haar and Hoskins, 2004). Al
practitioners believe that the process enables learning and change to take place
simultaneously, because patterns of thinking shift through a high involvement process
(Whitney, 1998).
Van der Haar and Hosking (2004) note that although Al has become increasingly popular, there are few published evaluations. What is unclear is how much of the learning and
involvement continues in the workplace and has an impact on the business. Vanstone and
Dalbiez (2008) report that the work undertaken with Nokia focused heavily on the summit and suggest ensuring that this aspect does not become too stand-alone, and that
there is both sufficient preparation and follow-up to make what happened at the summit
survive back in the workplace. Other Al interventions have undertaken more work with
the teams on the ground, focusing on relationships that are happening daily between
managers, taking up to a year to work informally and locally before a summit and putting
more support in place to enable ideas to flourish after the summit (Vanstone and Dalbiez,
2008). Nevertheless, it remains difficult to find evidence that Al can produce organization-wide change.
One of the concerns of the process is its apparently rigid structure: the five Ds suggest a
process of inputs and outputs, a method that is applied and then comes to an end (van der
Haar and Hosking, 2004). It might be expected that change occurring through organizational relationships is ongoing; the structured Al process may, in fact, act as a constraint to
the relational flow. The structure offers a framework that can lend itself to clear outputs,
and managers can get impatient with the process and want to speed up and control the
choice of such projects, as they did at Nokia. The day-to-day patterns of power and politics in the organization may be unaffected by the process. Vanstone and Dalbiez (2008)
suggest that managers need support and coaching through the informal phases of the
work in order to comfortably let go of their control and to enable the full participation of
everyone.
As noted in section 1, methods such as Al link positive emotions with well-being,
through which it is hoped to improve employee engagement and ultimately productivity.
Yet many comment on the determined repression of negativity in the process as a problem
in itself. Vanstone and Dalbiez (2008) report the findings of Fredrickson and Losada that,
without appropriate negativity, the experience may become ungrounded and ineffectual.
Van der Haar and Hosking (2004: 1026) suggest that to insist on only positive ways of relating does not fit with typical relations, that 'such an injunction could hinder the openness
of the process and therefore the realities that can be "made"'. Vanstone and Dal biez (2008)
did not find this to be a problem in their work with Nokia, although the process needed
careful facilitation because they were working with managers trained in problem-solving
and critiquing, so that staying in appreciative mode did feel forced at times. The process
encourages also some deep thinking and reflection. For the first day or so of the Nokia
summit, managers more accustomed to task and action found the process at times 'slow
and ponderous' (Vanstone and Dalbiez, 2008: 189). They caution against Al becoming a
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dogma and note the skill required by the facilitator in deciding when to hold the line and
insist on an appreciative stance, and when it is helpful to speak or act from a different
stance.
New approaches to organizational psychology and HR practices, which encourage
people to play to their strengths, now form part of performance appraisal and development planning in some organizations. Organizations are therefore more familiar with
taking an appreciative approach. However, the time and expense involved in delivering
an Al summit, and the uncertainty in transferring the energy and learning from the summit to the workplace, mean inevitably that the full five stages of Al are less frequently
adopted.
Large-group methods
SeeChapter 3
for more on
incremental
change: p. 37
Al is one of the best-known approaches that adopt a large-group process and dialogue as an
integral part of the design. However, since the 1990s, facilitated approaches have concentrated increasingly on using the large-group process as an intervention in its own right (Bunker and Alban, 1997). There are now a range of methods, which sit under the 'large group'
banner, drawn from the assumption that change happens when representation of the whole
system is present and that dialogue enables people to work together with high involvement
and sustainable commitment to change (Holman and Devane, 1999; Lewis et al., 2008).
Most aim to encourage the freeing up of leaders from the ownership of a planned process
and create the environment in which people can self-organize, vision a future together, and
co-create solutions to organizational issues(see Figure 10.1). Because relevant stakeholders
are in the same place at the same time, change can happen in the system immediately,
rather than slowly over several months (Bunker et al., 2005). This has the potential to move
a facilitated approach from incremental change to rapid-response organization-wide
change.
Exercise 10.3
Think about the last time you were required to attend a conference or large-group meeting at
which you did not know everybody.
•
How did you feel when you arrived in the room?
•
Did you expect to be able to join in? What were your assumptions about what might happen?
•
Did you behave differently because of the large-group setting?
•
Was your experience positive or negative and why?
•
What does that tell you about the facilitation needed to manage large-group processes and to
achieve dialogue?
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Table 10.1 Large-group methods
Purpose
Method
Creating the future, strategic planning
The search conference
Future Search
Real-time strategic change
Work design or structuring (when strategic plan already
exists)
The Conference Model™
Fast-cycle full participation work design
Real-time work design
Work on current issues, problem identification, or process
improvement
Simu-real
Work-out
Open Space Technology
World Cafe
Maximizing involvement on day-to-day issues through
application of IT
Virtual conferencing using IT platforms
Organization-wide social networking
Sources:Bunker and Alban (1997); Holman and Devane (1999); Lewis et al. (2008)
Table 10.1 lists some of the most prevalent of large-group methods currently in use, grouped
according to their primary purpose.
These large-group methods have developed on the back of each other and, like Al, are
seen by some as simply techniques to be deployed under the umbrella of OD, rather than
methods in their own right (Bunker et al., 2005). We outline below one example of each of
the above four categories, starting with Future Search, in more detail to illustrate a whole
process.
1. Future Search: Creating the future, strategic planning
Future Search was created by Martin and Mary Weisbord and Sandra Janoff. It is one of the
best known of the large-group methods and is focused on planning the future with everyone
who has an interest (see Figure 10.1).
The process is run as an action-planning conference. The participants may include employees and senior leaders, suppliers and customers, etc. The group can range from twentyfive to over a hundred people, with around seventy being considered a good number to
create the necessary diversity and energy, yet maintain a sense of community {Bunker and
Alban, 1997). This differentiates it from another approach, called the search conference,
which typically takes input from stakeholders, but has only those directly responsible for the
issue at the conference. There is a clear structure for the conference (Lewis et al., 2008), designed around five key tasks.
i. Reviewing the past
ii. Exploring the present
iii. Creating future scenarios
iv. Identifying common ground between all parties
v. Creating action plans
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Whilst it is expected that the group will have divergent views and interests, often over dilemmas about future choices, the emphasis of discussions is on establishing where there is
already common ground on which to build, not on solving issuesof difference; the conference moves forward on actions on which the group can agree (Lewis et al., 2008; Bunker
and Al ban, 1997). The group works together without external input to the discussions from
consultants or facilitators, who are typically there to oversee and ensure that the overall
process is adhered to.
Change in Practice 10.4
Future Search at Ikea
Ikea is a privately owned international furniture and home products retailer. Founded in Sweden in
1943, it was the first to offer modern flat-packed, self-assembly furniture at affordable prices. It has
over 300 stores in thirty-seven countries, largely in Europe, North America, Asia, and Australia, with
over 12,000 products. Ikea stores have a 'one-way' layout, which guides the customer through the
store so that they see the products showcased in 'rooms' and are led through the store in its entirety.
The stores have long opening hours, restaurants, and creches, designed to attract families who work,
who have young children, and who are managing on a tight budget. Products are largely manufactured outside of Europe, with suppliers in some fifty countries, a third coming from Asia.
In 2003, the company decided to reprocess its product flow, from the drawing board design in
Sweden, through to factory and assembly distribution points, and then to customers. It decided to
adopt the Future Search process to initiate the work because it felt that its approach fitted with its
'Simply Ikea' principles: teamwork; challenge; enthusiasm; possibility; humbleness; responsibility;
simplicity; coaching; and cost consciousness.
The Future Search focused on one sofa-the Ektorp-as the prototype for all product lines and the
task was to reimagine its journey from the design centre to the customer. The conference was held in
Hamburg over three days in March 2003. Fifty-two key stakeholders attended, including suppliers
from Poland, Mexico, and China, the company's president and other staff from Sweden, Canada, and
the US, plus a range of customers. For the greater part, they had not met previously nor did they
know each other well.
The conference was facilitated by Mary Weisbord, one of the founders of Future Search, and was
designed to cover all Future Search's five tasks (from reviewing the past to creating action plans,
see above): i) describing the existing system; ii) documenting required changes; iii) proposing
options for new systems; iv) agreeing a specification for a new design; and v) developing an
implementation plan with buy-in from all key functions. Ikea's top executives were part of the
process. Their role was to join in the discussions without stepping in and deciding what form the
new system should take.
From the work, a range of changes to the product process were planned, including the involvement of customers and suppliers at the design stage, flattening the hierarchy, as well as changing the
information system, so that coordination and control of the process could be improved.
After the conference, seven task forces, working across the world, developed the changes for the
entire system, coordinating their efforts through conference calls and emails, demonstrating the
capacity to self-organize across countries and hierarchies, with people who had no formal authority
in the hierarchy taking charge of aspects of the change. Ikea and Mary Weisbord believed that the
conference had been successful in both creating the change and achieving commitment to what
needed to happen. 7 - 9
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Weisbord and Janoff (2000) consider their method to establish a 'learning laboratory' for
creating a shared vision. There are a number of issuesto address to create the conditions for
this to occur. Firstly, there is a need to spend enough time planning the process in advance,
checking out both the topic and consequently what constitutes the 'whole system'. Typically,
organizations draw back from inviting difficult clients or stakeholders who have strongly divergent views, yet achieving the rich mix is crucial to the value of the intervention. In Change
in Practice 10.4, a specific product was used to focus the discussion and Ikea was brave
enough to involve a whole range of parties from across the world.
The process starts with a review of the past, and there is a danger that people get stuck in
the problems of the past and find it difficult to move on; some suggest that starting in the
present is more productive (Bunker and Alban, 1997). Certainly, there is the need to help the
group to generate the quality of dialogue that prevents them getting stuck in advocacy-that
is 'moving' and 'opposing'.
The method is built on the belief that the process creates the energy to progress the work
and that it is the responsibility of the participants not the facilitators to drive the actions
forward. Given that such a conference typically lasts three days, after which the group disperses,there is a strong danger that the actions do not take off-that insufficient attention is
given to planning the next steps. However, this was not the experience of the Ikea participants, who were well supported within the organization. In this case, clear actions were
signed off before the close of the conference. Bunker and Alban (1997) report that review
sessions, which bring the group back together at regular intervals, assist with maintaining
momentum. The process clearly does not work where the group do not have enough interest
in the issue, or where they are not used to managing themselves and find the responsibility
difficult or at odds with the power dynamics within their organization. It is also a problem in
organizations in which a small group of senior leaders hold control and are themselves not
versed in working in this way, and find it difficult to adopt ideas that are not their own. These
issuesapply similarly to the further three interventions summarized below.
235
See Chapter 8
for more on
dialogue: p. 175
2. The ConferenceModel™:Work redesign-work designor structuring
(when a strategicplan already exists)
The purpose of The Conference Model™ is to undertake a specific redesign of organization
structure to meet new strategic needs. It aims to suppress design time and to increase commitment to design outcome by involving as many people as possible in the work as quickly
as possible (Bunker and Alban, 1997, and see Figure 10.1). The method was developed by
Dick and Emily Axlerod, based on the Future Search conference method and drawing on
ideas from BPR.Customers and suppliers are invited to join the conferences. Its point of difference is that it typically comprises a series of five conferences (each lasting two or three
days) over four to five months, with eighty or more attending each time and with work continuing between conferences. It concentrates on the technical work flow to develop a preferred design for the organization.
The five conferences each have a purpose, as follows.
i. Visioning-what
people want
ii. Customer focus-customer requirements
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iii. Technical focus-workflow,
problems, and variance
iv. Design-new ways of working
v. Implementation-time
frames for taking the work forward
A core group attends all five conferences. A 'simple commitment' process takes place at the
end of each conference, whereby groups commit to actions that they can take forward in the
next thirty days. 'Data assist'teams are trained to synthesize data from each conference and
to facilitate a 'walk-through', a two-hour mini-conference, to describe outputs to those who
did not attend and to solicit views and input, which then are fed into the next stage of the
conference. Walk-throughs are intended to generate more interest in the change process
and to get further people involved. A strong planning group is needed to sustain this structure (Holman and Devane, 1999).
When The Conference Model works well, it is known to increase the customer orientation
of participants, who hear first-hand what the customer wants (Holman and Devanne, 1999).
Becausedecisions directly affect the organization's design, it is important that senior managers are both prepared to let go of control, to enable the ideas to be freely generated, and
committed to follow though the decisions to implementation (Bunker and Alban, 1997;
Holman and Devane, 1999). The Conference Model does require commitment ohime and
resource to succeed; however, Bunker and Alban (1997) believe that the ultimate implementation happens more quickly because people have been part of the creation, unlike the issues highlighted in the implementation of BPR.
See Chapter 9 for
more on BPR:
p. 199
3. Open Space Technology: Work on current issues,problem identification,
or process improvement
The purpose of Open Space Technology is to get representation of the whole system of the
organization participating in dialogue as a means of surfacing important issues (see Figure
10.1). It is an approach for hosting conferences, which, whilst focused on a theme, unlike
Future Search does not have a formal task, structure, or agenda that is planned in advance. It
was created in the mid- l 980s by an organizational consultant, Harrison Owen, in response
to an expressed need for people to connect more effectively when attending conferences
(Lewis et al., 2008). Owen realized that people attending his conferences enjoyed the coffee
breaks more than the formal presentations and wanted to create the energy that was present
in the breaks during the periods of conference activity. Hence the focus is on networking and
community building to co-create new ideas or solutions.
The conference is built on the concept of a marketplace. When the conference convenes,
the group starts by considering the predetermined theme and spends the first hour creating
its own agenda, around that theme (Lewis et al., 2008), such that:
•
anyone who wants to initiate a discussion or activity writes it down on a large sheet of
paper, then stands up and announces it to the group, offering a time and meeting place
for the discussions, then pins his or her paper to the wall;
• when everyone who wants to has announced and posted their initial offerings, participants have time to walk around the wall, putting together their individual schedules for
the remainder of the conference. The first meetings begin immediately.
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An Open Space Technology conference lasts from a half-day to three days: the longer the
period, the greater depth is achieved through the process of people coming together to create ideas.The most basic principle is that everyone who comes to an Open Spaceconference
must be willing to take some responsibility for creating ideas from being together, participating, and being interested in the topic. As part of this principle, the 'law of two feet' is adoptedthat is, if someone is in a situation where he or she is not learning or contributing, that
person must use his or her two feet to move on, to go somewhere else (Lewis et al., 2008).
Sometimes, this may be to join another conversation, sometimes to be by themselves. From
this, other random conversations may be born as others join them. All conversations are
considered equally valid. Unlike Al and Future Search,disagreement is expected and seen to
be part of the ingredients for creating fresh thinking. Drawing on complexity theory, it is expected that that ideas and order will emerge without planning and order being imposed.
Four key principles of Open SpaceTechnology are as follows (Harrison, 1999).
i. Whoever comes are the right people.
237
See Chapter 3
for more on
complexity
theory: p. 55
ii. Whatever happens is the only thing that could have happened.
iii. Whenever it starts is the right time.
iv. When it is over, it is over.
Norris (2000) notes that there has been little formal evaluation of its effectiveness, although
the basic process is relatively straightforward, which makes it usable. He reports Bolton's
findings that Open Space Technology encourages individuals and groups to develop their
skills 'as lifelong learners and collaborative problem solvers', because they take responsibility
for resolving differences amongst themselves and finding ways forward (ibid: 15). This, in
turn, is likely to increase the organization's collective capability to adapt, to learn to cope
with change on a continuous, incremental basis. It is more difficult to prove its direct impact
on outcomes such as productivity.
4. Virtual conferencingusingIT platforms:Maximizing involvement
on day-to-day issuesthrough application of IT
Virtual working has been practised for several years in a great number of organizations.
Virtual conference sessions can be used for any purpose, from strategic planning to simply holding a team meeting. They can involve any number of people, working from wherever they are in the world. Typically, each of the participants works individually, in front
of a computer with access to a shared IT platform and with a phone or headset for communicating. The web can be used for presentations. Break-out rooms can be created on
the platforms to recreate the quality of small-group discussion used in other large-group
methods.
Most organizations still use virtual events as add-ons to face-to-face conferences
(Shimabukuro, 2000). This distracts from building effort into the virtual aspects.Whilst virtual
conferences can be staged at any time, the level of concentration involved in being online
and working with a headset means that they generally cannot be sustained for more than
four hours. However, a virtual conference can be readily reconvened and we have often
worked with organizations in which we have met virtually four hours per day for five consecutive days, in order to take forward key strategic planning, for example.
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Virtual conferencing is still sometimes an unsatisfactory experience for those involved. The technology tends to drive people to brief exchanges, focused on task, rather
than to build dialogue and generate ideas. Recent work has started to experiment with
ways of building relationships and trust when working virtually, and it is expected that
this will become an area of increased sophistication in the future (Caulat, 2010): it still
holds more possibility for wide involvement than any of the methods we have considered.
As the selection in Table 10.2 demonstrates, many modern large-group methods for facilitated change aim to overcome the constraints of owning and planning change at the top
of the organization, to allow diversity and involvement in decision-making. Those who wish
to create the conditions for emergent change to occur are drawn to these methods. Increasingly, organizations are using IT platforms in more innovative ways to create virtual conferences, as well as using wikis and biogs to keep in touch and to maintain social networks by
virtual means. These are creating new ways for ideas to form and for change to occur. They
also are proving more difficult for leaders to control. Yet their capacity to change thinking,
affect culture, and achieve learning is mentioned time and again. So perhaps the seeds of
facilitated approaches are growing.
Section 2 Summary
In this section, we have:
•
examined a selection of facilitated change methods deployed to achieve both planned and
emergent change;
•
considered their relative strengths and weaknesses.
Integrative Case Study
Culture change at 02
02 is a leading provider of broadband and mobile phones, based in the UK. It is part of the Telefonica
02 Europe group, operating across the UK, Ireland, Germany, the Czech Republic, and Slovakia. It was
launched in 2001 following separation of the business from British Telecom and was acquired by
Telefonica at the end of 2005.
Part of the company relaunch in 2001-02 was the creation of a new name and a new brand image.
Over the next two years, the brand became well recognized and its market share increased
dramatically. To achieve this, a change programme was led from the top of the organization by the
CEO for Europe, Peter Erskine, and the senior management team in the UK. There was some
significant restructuring of the business to achieve a rapid organization transformation, to throw off
the British Telecom history, to remove inefficiencies, and to make clear in the market that 02 was
gripping issues-that it meant business. In the fast-moving competitive market, senior managers felt
that speed was of the essence and a directive approach was adopted to effect the changes. By the
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239
summer of 2005, there were disputes over pay and job losses,and further redundancies. Strikes were
just avoided after several months of negotiations between senior managers and unions.
At this point in 2005, the UK CEO, Matthew Key, decided that, alongside expansion, he wanted to
focus on rewarding customer loyalty and increasing customer retention, by improving the service
provided in shops and call centres, where behaviour was driven by sales targets and efficiency metrics;
there was a need to re-establish the idea of relationship with the customer. A change programme of a
different nature was instigated, adopting a facilitated approach, to get employees' input into how to
change the customer experience. Key wanted also to unlock people's pride and passion in working for
a big brand name, which is what 02 had become.
This change programme was based on experimentation and conversation. At local level, managers
and staff were encouraged to experiment with different day-to-day ways of working to create a more
empowered culture. There was 'permission' to break some of the rules that got in the way of serving
the customer well. This became known as 'positive deviancy'. Different parties were brought together
to develop relationships and to share practice across the business. The purpose was to adopt where
possible the best of existing practice, rather than to force people to adopt one central model, or,
conversely, to allow dozens of different initiatives without everyone getting the benefit.
The formal aspect of this change programme used the Appreciative Inquiry (Al) method, with a
summit designed around the theme of a 'better place' attended by a cross-section of 300 employees.
By the end of day three, some thirty employee-led projects had been launched, including: the
creation of a 'shadow board' of employees, accepted by the board as part of its decision-making
process, to ensure that 'the customer experience sat at the heart of all business decisions'; an
environmental project to improve waste recycling rates; an inquiry process that offered some 1,000
employees the opportunity to input their view of the sort of place they wanted 02 to be. Matthew
Key said: We (the 02 Board) were making a leap of faith, but this (was) real people engagement and
we could see that' (Vanstone, 2007: 7).
As a result of the many suggestions, call centres handlers started to provide an end-to-end service,
rather than hand over to others. Retail outlets were twinned with call centres to forge better
relationships and understanding.
It is difficult to make direct connections between the initiative and profits. However, customer
retention and customer satisfaction surveys improved between 2005 and 2006. Within the
organization, every directorate recorded improvement in the employee engagement survey in 2006
and 02 was listed for the first time in the 'Best Place to Work' league tables.
Questions
1. Thinking back to Chapter 9, what part did a directed approach take in O2's change? Do you
think this was an appropriate approach when it was adopted and, if so, why?
2. Against the backdrop of redundancies and threatened strikes, how might the change in
approach in 2005 have been experienced?
3. To what extent do you think the changes that came about as a result of the summit were deep
seated or cosmetic, and why?
4. Had you entered 02 as the organization development (OD) practitioner in 2005, how would
you have gone about the diagnosis? What other interventions could assist the change?
5. What do your reflections tell you about working with a range of approaches to change?
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PART C: DELIVERING CHANGE
Table 10.2 Summary of large-group methods
Future
Search
The Conference
Model
Open Space
Virtual
Conferencing
Attendees
Whole system
representation
Whole system
representation
Whole system
representation
Whole system
representation
Format
Set format:
past, present,
future,
actionplanning
Structured design
process in five
conferences:
visioning;
customer focus;
technical; design;
implementation
Least structured:
large group
creates agenda
topics in market
place format
Entirely flexible:
structured to suit
issue
Duration
Lasts three
days
Two days + for
each of the five
conferences,
three weeks
between
conferences
Lasts one-three
days
Each conference
limited to 4 hours as
maximum online
participation time
Process
Self-managed
small groups
within large
group process
Structured
groups working
on each aspect
of redesign; data
assist teams work
between
meetings to
increase range of
those involved
and maintain
links
Interest groups
form and
self-regulate;
adopt 'law of two
feet'
Whole group or
small groups as
required; subgroups work
virtually between
sessions
Approach
Minimizes
differences,
looks for
common
ground
Works with
different
opinions from
wide range of
stakeholders
Difference seen
as part of the
creativity
Opportunity for
difference to be
explored
Led by
Requires
planning and
facilitation, but
not speakers or
expert in put;
senior
manager part
of process and
not leading
Senior managers
involved and
needed to take
forward
implementation
No experts: one
facilitator to lay
out format and
ground rules;
senior managers
part of process
and not leading
Opportunities to be
used for directive or
facilitated
approaches
Outcome
Specific
strategic action
plans
Growth in
customer
orientation;
redesign of part
of the
organization/
process
Growth in
thinking and
connectivity,
which may also
result in actions
..........................
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According to
purpose
APPROACHES TO CHANGE IMPLEMENTATION:
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241
Conclusion
In Chapters 9 and 10, we have explored the range of directed and facilitated change
approaches that can be drawn on when implementing change, and considered a sample
of different methods that support these approaches. Whilst Chapter 9 identifies directed methods that are regularly deployed in organizations, such as BPR, Lean, or Six
Sigma, Chapter 10 suggests rather that recent methods have been designed to maximize input, with large-group processes gaining momentum; employee involvement has
become the received wisdom, the 'must do' in order to achieve successful change
(Burnes, 2009).
Yet is involvement really growing? Wilkinson et al. (2004) undertook eighteen case studies
to examine the link between employees 'having a voice' and economic improvement. They
found that employee voice had increased in its scope and impact over the past ten years,
although the extent to which people had a say was still under managerial control. Employees
were found to be highly articulate and to want engagement with a wide range of concerns,
but, despite this, there was little solid evidence of collaborative approaches actually happening to any large extent in change programmes. It seems that sometimes managers go through
the motions of involving staff in decisions that are already fixed and non-negotiable. Wilkinson et al. (2004: 306) note that despite managers talking about people having influence and
say, managers are not 'seeking to convey the impression that this represents a situation in
which changes are led by employees or that their voice is actually 'heard' by managers while
making decisions'.
As evidenced in Chapter 9, senior managers rarely work with just one approach; rather
they make adjustments to meet changing circumstances. Bradford and Burke (2005) speak of
the integration of hard-edged business decisions driven from the top, with facilitating peoSeeChapter 9 for ple's input about what needs to happen in a seamless process. Dunphy and Stace (1993) note
more on choice of that each approach to change, whether directive or facilitated, has a key purpose that, over
approach: p. 195
time, develops limitations, such that one approach will not serve forever. In our experience,
senior managers often are not really sure what to do about involvement, sometimes lack the
skills, and often simply cannot find the time to undertake such processes: involving people
takes time and effort.
Pleasevisitthe OnlineResourceCentreat http://www.oxfordtextbooks.eo.uk/orc/
myers to accessfurtherresourcesfor studentsand lecturers.
Change in Practice sources
1. Based on personal experience.
2. Based on personal consulting experience.
3. NS&I (undated} Who we are'. http://www.nsandi.com/about-nsi-who-we-are
4. Siemans (undated} 'IT solutions and services'. http://www.siemens.com/entry/cc/en/#l
89380
5. Nokia website: http://www.nokia.com/home
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PART C: DELIVERING
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6. Vanstone, C. and Dalbiez, B. (2008) 'Revitalising corporate values in Nokia', in S. Lewis,j. Passmore, and
S. Cantore (eds) AppreciativeInquiryfor Change Management: UsingAl to FacilitateOrganizational
development, London: Kogan Page, pp.183-95.
7. Future Search (undated) 'Future Search applications'. http://www.futuresearch.net/method/
applications/
8. Ikea website: http://www.ikea.com
9. Weisbord, M. (for Future Search Network) (2004) 'A model for redesigning product lines at Ikea'. http://
www.futuresearch.net/method/applications/uploads/business/ikea.pdf
IntegrativeCaseStudysources
BBC News (2001) 'BT approves mobiles spin-off, 23 Oct. http://news.bbc.co.uk/l/hi/business/1615100.stm
02 website: http://www.02.co.uk
Ray, B. (2007) 'Peter Erskine calls it a day at 02', 29 Nov. http://www.theregister.co.uk/2007
/11 /29/
erskine_steps_down/
Vanstone, C. (2007) 'Better place at 02', Converse,5: 3-5.
Furtherreading
Bradford, D. and Burke, W. (2005) The Futureof OD in ReinventingOrganizationDevelopment:New
Approachesto Change in Organizations,San Francisco, CA: Pfeiffer.
A series of essays critiquing the field of organization development.
Bunker, B. and Alban, B. (1997) Large-groupInterventions:Engagingthe Whole System for Rapid Change,
San Francisco, CA:Jossey-Bass.
For detailed descriptions of a wide range of large-group interventions.
Watkins, j. and Mohr, B. (2001) AppreciativeInquiry:Change at the Speed of Imagination,San Francisco,
CA: Jossey-Bass/Pfeiffer.
For a full description of the five stages of Appreciative Inquiry process.
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CHAPTER 10 • COMMUNICATING
CHANGE
Communicating Change
(- ______
1_1n_t_ro_d_u_ct_io_n
_____
~)
PARTA: The Change Process
PARTB:Perspectiveson Change
Organizational
6 Change from the Perspectiveof
Organizational Culture
7 Change from the Perspectiveof
Power and Politics
8 Change from the Perspectiveof
Organizational Learning
2 Causesof Change
3 Intentions and Realitiesof Change
Psychological
4 Emotions of Change
5 SensemakingProcessesin Change
PARTC: Delivering Change
9 Approaches to Change Implementation:
Directed Change
10 Approaches to Change Implementation:
Facilitated Change
11 Roles People Play in Change
12 Communicating Change
13 Sustaining Change
(- ______
1_4_C_o_n_c_lu_s_io_n
_____
~)
Introduction
At one level, communication is a very basic activity, involving the sending of a messageand the receiving of that message by the listener. We are all practised communicators: we talk with others every day,
debating, listening, inquiring, asserting, disagreeing, and encouraging. Communication is essential to
building and maintaining relationships, but also to any kind of joint activity. So, for organizations, communication is not just an essential activity during change; it is essential to their very functioning. Without it, individuals cannot work together because communication is 'the central means by which
individual activity is co-ordinated to devise,disseminate,and pursue organizational goals' {Gardner et al.,
2001: 561 ).
However, although such an essentially human activity, there are many challenges with communication. As a message travels from communicator to listener, there are often various forms of
'noise' on the literal, or metaphorical, line, which means that the listener does not hear and make
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sense of the message in the way the speaker intended. Sometimes, that 'noise,' or interference,
may be caused by the speaker using words that the listener does not really understand or because
their tone of voice is alienating; sometimes, the listener cannot physically receive the message
because the speaker is too quiet, or there is the equivalent of a crackle on the line; sometimes, the
problems lie with the listener, who may not actually be paying attention, his or her mind elsewhere. We have probably all experienced the consequences of miscommunication in our personal life. In this chapter, we examine the challenges and consequences of communicating change
for organizations.
•
Main topics to be covered in this chapter
•
Different approaches to communication strategy, including the links between approaches
to organizational change and approaches to communication
•
The tensions and practical choices in planning and delivering communication during
change
•
The communication challenges in particular change scenarios
•
The limits of communication
Section1: Communicationstrategy
In this opening section, we look at why communication is important to the successful implementation of change. In Chapters 9 and 10, different approaches to change were considered
and, as will be explored here, those different approaches have a powerful influence on the
communication strategy adopted.
The importance of communication in implementing change
Researchersare generally in agreement about the importance of communication during organizational change (Lewis and Siebold, 1998; Allen et al., 2007). Clear and consistent communication was seen as essential to successful change initiatives in a survey of over 400
leaders in large US firms (Smith, 1998). Communication was seen as the most important factor in achieving successful mergers, downsizing, and re-engineering, according to a KPMG
survey of managers in Canada'stop firms (Palmer et al., 2009). However, an in-depth study of
twelve organizations involved in significant change found that ten had poor communication,
leading to cynicism in employees (Beer and Eisenstadt, 2002). Lewis (2000), in a survey of
those tasked with implementing change, found that they ranked communication one of the
most problematic areas with which they needed to deal. However, 'although the centrality of
communication during the change process is recognized, surprisingly little research has been
undertaken' (Jones et al., 2004: 736).
For leaders, communication is often seen as a critical way of ensuring that employees understand change and are supportive of it. Leaders may also want to learn of potential flaws
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ORGANISATIONAL THEORY & DYNAMICS
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PART C: DELIVERING
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from listening to others. For employees, at all levels, communication, if done well, can be
important means of reducing the anxieties that often accompany change. Communication
can reduce their uncertainty about the strategy, as well as uncertainty about their own jobs
and those of peers (Allen et al., 2007). Communication can also be seen as a means of reassessingand renegotiating the psychological contract between employee and the organization (Hubbard and Purcell, 2001).
Communication strategies and their link with different approaches to change
In a world of finite resources and finite timescales, trade-offs need to be made, based on
views as to what is most likely to be in the interests of the organization to ensure its ongoing
survival and viability. Communication strategies involve making choices too because 'executives can communicate about anything, but they cannot communicate about everything,'
(Clampitt et al., 2000: 41 ). This section explores two different approaches to understanding
communication strategy:
1. programmatic versus participatory; and
2. a more differentiated approach to communication.
Change in Practice12.1
Commitment to communicate at Federal Express
When Federal Express acquired its rival in the air freight business, Flying Tiger Line, there were
concerns from employees in both organizations about jobs, careers, issues of identity, and
loyalty. Both organizations were in the same line of business, but employees in Flying Tiger were
unionized and many had worked there for longer than Federal Express had been in existence.
Within two hours of the merger being announced on the Dow Jones Index, the Federal Express
chairman and chief operating officer gave an unscripted and unrehearsed address over the
company's satellite television network to 35,000 employees, who were based in 800 sites. The move
was described as a merger, not an acquisition. Carol Presley,the senior vice president for marketing
and corporate communications, said, the terminology 'didn't require a lot of debate or discussion ...
we wanted Flying Tiger people to feel we really did want them'.
In the months following the announcement, 'the FedExmanagement team would spend what
some might view as an extravagant amount of time and money to communicate-talk and listenwith employees' (Young and Post, 1993: 32). Face-to-face meetings in all locations, company
publications, videos, and television programmes were all used to explain and explore the consequences of the merger. In the words of the chief operating officer:
Placing such an emphasis on internal communication has made us the company we are. We
couldn't be anywhere near the size we are, and have the profitability or the relationship with
our employees we have, if we weren't deeply into the businessof communicating with people
(ibid) 1
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1. Programmatic versus participatory
A key influencer of an organization's communication strategy is the approach to change
adopted. Those adopting a directed approach to change tend to have a programmatic communication strategy; a more facilitated approach to change tends to be accompanied by a
more participatory communication strategy {Russ,2008).
In programmatic change communication, the focus is on the top-down dissemination of information, telling employees about what will be happening, giving them facts
and directives about how the change should be implemented, as in Change in Practice
12.1, in which senior leaders took immediate and early responsibility to tell employees
what was happening and why. The purpose of such communication is to generate compliance, as well as to stimulate positive attitudes and beliefs about the planned change.
It is not about seeking input. The underlying logic of this approach is that, with careful
planning, the 'right' message will get to the 'right' people and this will minimize resistance and make implementation easier. A key success outcome of communication would
be that employees understand the vision and see its relevance to them in their jobs.
Power and control is held by a few decision-makers at the top of the hierarchy, so messages are sent down, but rarely upward {Russ, 2008). In this respect, the Federal Express
example is a little different-it was reported that there was significant listening by senior
leaders.
According to Lewis {2006), participatory change communication is used less frequently by organizations, but, ironically, has been the subject of greater research. The
purpose of such communication is to gain employee input to shape the change programme, rather than to passively 'receive' it. The emphasis is, therefore, on two-way communication methods in which there is an opportunity for dialogue and listening, with
communication seen as an ongoing activity, rather than a 'one-off event'. In the Federal
Express example, there was significant two-way communication 'assuaging the concerns'
{Young and Post, 1993) of staff, but this is not the same as actively seeking the input
of employees to shape the change, which is the hallmark of true participatory change
communication.
The benefits of programmatic communication strategies are that they can foster perceptions of organizational fairness-everyone is told the same information-and they are often
highly efficient. The limitations are that leaders who use such approaches tend to assume
that there is a perfect relationship between the messageas sent and the messageas received,
a view that has been challenged from a theoretical point of view and a practical one {Shannon and Weaver, 1949, quoted in Truss,2008). Programmatic approaches can also lead to an
overabundance of unnecessary communication, which can increase employee uncertainty,
anxiety, confusion, and disengagement.
Studies have shown that, with participatory approaches to communication, resistancetends
to be minimized and motivation to implement planned change is enhanced; there is lessemployee uncertainty and increasing senseof control (Bordia et al., 2004); there is greater understanding of the rationale for change and overall satisfactionwith the change initiative (Sagieand
Kolowsky,1994). Lewis{2006) also found a positive correlation between employees' perceptions
that their input was valued and their evaluations that the implementation was 'successful'.
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ORGANISATIONAL THEORY & DYNAMICS
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270
See Chapters 5
and l Ofor more
on engagement:
pp. 98,200
PART C: DELIVERING
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However, there are also some limitations inherent in participatory approaches. The original intent of the change can get lost in the desire to involve lots of employees and other
stakeholders so that any sense of coherence, control, or direction is dissipated. This in itself
can lead some to disengage.The approach can also be highly inefficient and can be perceived
assuch, particularly by leaderswho are very task-focused. In addition, participatory approaches
are sometimes perceived as insincere: a 'going through the motions' rather than a genuine
desire to engage, listen, learn, and adapt the change programme. Participatory approaches
can also put managers in the difficult position of being asked for something they are unable
to provide, be that information, deeper understanding, resources, permissions, etc., which
can perpetuate uncertainty.
Within organizations, the labels of communication and engagement can become political battlefields around which function 'owns' what is generally seen as the more important territory of employee engagement. Internal communication functions are now
often renaming themselves the 'employee engagement function' but HR departments
often claim this is 'their' area too. As the discipline of internal communication has
evolved over the last twenty years, there has been a growing awareness that whilst
leaders may have asked for products (communication plans, speeches, newsletters),
what they actually wanted were outcomes, and the outcome required was initially
termed 'employee satisfaction', while more recently 'employee engagement' has been
emphasized. This is underpinned by a belief that engaged employees are more likely to
be productive, innovative, and committed to the organization (Lewis, 1999), a belief that
underpins facilitated approaches to change as well as participatory approaches to
change communication.
2. A more differentiated approach to communication
Clampitt et al. (2000) offer a more nuanced and differentiated typology of communication
strategies. Each strategy represents different beliefs and assumptions about the purpose of
communication during change, as well as assumptions about the role of leaders and followers in change. Four out of the five approaches are, in essence, what we have described as
programmatic communication, because leaders are directing and deciding what and how
communication happens. Some of the benefits and limitations already enumerated will be
in evidence here too.
• Spray and pray This strategy is based on a belief that the more information there is,
the better for employees. Leaders bombard staff with information and hope that they
will make sense of it. Such an approach has the benefits of being seen to be open and
transparent. However, it assumes that employees are able to sort out what is important
from what is irrelevant and allows leaders to abdicate any meaning-making responsibilities. When working with leaders, one way in which we have demonstrated the limitations
of this approach is by showering them with pieces of a jigsaw puzzle. When they cannot
work out what the pieces mean, we shower them with more pieces to represent leaders' frequent response to employees' claims that they do not understand, which is
simply to give them more communication. In fact, what is required is for people to be
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271
shown the picture on the box. Similarly, without leaders describing the context, the
purpose of the change, or the key elements, information only confuses and overwhelms.
•
Telland sell With this strategy, leaders do describe their organization's change equivalent
of the picture on the jigsaw box: they tell employees what the key issuesare and then sell
the change solution that they, as leaders, have decided to pursue. Leaders often spend
much time crafting their speeches or polishing their PowerPoint presentations. Such an
approach is consistent with a directive approach to change. An underlying assumption is
that leaders have the knowledge about what change is necessary,and that employees are
passive recipients both of communication about change and indeed of change itself.
Little time and energy is therefore spent on engaging in dialogue with staff or asking for
feedback.
•
Underscoreand explore The difference between 'underscore and explore' and 'tell and sell'
is that, in this case, leaders are not only interested in disseminating their key messages;
they are also interested in exploring those issueswith employees, engaging in dialogue to
foster understanding, and listening out for unrecognized obstacles and employee views
and feedback. An assumption here is that employees need to have the opportunity to
actively explore and make sense of the change. However, leaders still see themselves as
having the licence and authority to author and drive the change. So although there is
opportunity for some engagement, employees are not afforded the status of equal participants and co-creators in the change. Change in Practice 12.1 reflected this approach
to a large extent.
•
Identify and reply This strategy focuses on employees' issues,so is not programmatic,
but, without any commitment to alter the change programme as a result of the intervention, neither is it really participatory. Leaders focus on listening to identify
what is preoccupying staff and then respond to those concerns. The assumption is
that employees know what issues are of interest and concern to them better than
senior management, and therefore they set the agenda. This approach assumes
that employees know what questions to ask. Whilst logically feasible, the authors, in
over twenty years of consulting, have never encountered an organization that
adopted this approach with employees, although some do with other stakeholder
groups or audiences, to use communication language, such as customers, clients,
or patients.
•
Withhold and uphold With this approach, communication is on a 'need to know'
basis. Leaders adopting this approach sometimes assume that employees are not sophisticated enough to understand what is happening and, therefore, not worth communicating with. Alternatively, they may see information as a source of power and
therefore control communication tightly or, as Bridges (2003) suggests, they may
withhold until they themselves know the answers.
These five different strategies can be visualized in a crescent-shaped continuum, with strategies towards the middle offering employees most guidance in terms of prioritizing messages
(see Figure 12.1). Those at the extreme provide either too much or too little or no communication, making it hard for employees to make sense of organizational change.
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High
Underscore & explore
Tell & sell
Identify & reply
Spray & pray
Withhold & uphold
Low
Great
Little
Amount of information transmitted
Figure 12.1 Communication strategy continuum
Source: From Clampitt et al. (2000)
Exercise 12.1
Think of a change that you have experienced as an employee of an organization or as a student at
your place of study.
• What type of communication strategy do you think was being employed, whether deliberately or
not, when you learned about the change?
•
What were the benefits and limitations of the communication you experienced?
•
What alternative choices do you think those planning the communication could have made? And
how would they have fared in terms of benefits and limitations?
Section 1 Summary
In this section, we have:
•
considered the reasons why communication is an essential element of implementing change;
•
explored different ways of understanding communication strategies and how they are
inextricably linked with the adopted approaches to change.
Section 2: Tensionsand choicesin practice
This section begins by asking: what are the practical choices facing those responsible for delivering communication during organizational change? The choices sound relatively simple, but
mask some more complex dilemmas and tensions. We explore these choices in general and
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273
then as they relate to specific communication channels or media. These choices may relate to
the strengths and limitations of different media, and the phasesof the change programme.
Tensions and trade-offs
Whatever the communication strategy adopted, deliberately or by default, there are always
a number of choices to be made at a tactical level by those responsible for communicating
change.
•
What should be communicate and what should be ignored or not mentioned? Communication professionals often refer to this as 'the message'.
•
With whom should leaders communicate? The target of communication is often referred
to as 'the audience'.
•
How will leaders and employees communicate? Communication professionals refer to
this as choosing which 'media' or 'channel' to use.
•
Is the communication one-way or two-way?
•
When and where will communication occur? Those charged with leading communication in organizations often refer to this as the 'communication plan'.
Efficiencyor effectiveness?
At the heart of the choices that need to be made by those leading change or their communication advisers is the age-old tension between efficiency and effectiveness. For instance,
if a merger between two divisions of a global organization is about to take place, it may be
decided that the easiest way of communicating this change is to email news of the impending merger to all employees in the two divisions. This may be efficient and easy to execute,
but is unlikely to foster much understanding or engagement to the change. Face-to-face
communication is more costly in terms of time and effort, but, because it is two-way, it is a
much more dynamic way of communicating than email and is therefore more likely to foster
employee engagement, as demonstrated in Change in Practice 12.1.
Who givesthe message?
Employee surveys routinely find that employees prefer to find out news from their line
managers. Line managers, as they know their staff more intimately than senior leaders, are
better able to contextualize and tailor communication to employees' specific needs and interests. They are also more likely to be trusted. However, often middle managers are them- See Chapter 11
for more on the
selves unaware of the full detail of a change and so do not have enough information to communication
share with their people. Cascades,or team briefings, which are designed to flow down the challenges of
hierarchy, with individuals hearing from their bosses before briefing their own teams, are middle managers:
p.252
intended to give line managers the information that they need. However, they are subject
to significant variation and distortion in the way in which messages are given (think of an
organization-wide game of Chinese whispers); the word 'cascade' suggests information
pouring down the organization, but in reality it can take a long time for the information to
reach the lower levels.As implementation is often patchy, with only some leaders taking their
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communication role seriously, this can leave significant portions of employees without
communication, especially if the blockage occurs high up the organization. So cascades,
whilst giving a role to line managers, tend only to be used for routine change communication such as programme updates rather than for more significant announcements.
The alternative, especially for announcements about significant organizational change,
such as mergers and acquisitions, or downsizing, is to use the chief executive or senior leaders to communicate to as many staff as possible. Becausethey are decision-makers and architects of the change, they are better placed to explain the rationale for, and broad parameters
of, the change. However, not all organizations have their own television networks like Federal
Express,which allow leaders to reach employees in multiple locations simultaneously. Other
options include large-scale face-to-face events, including road shows travelling to key locations. The very fact that senior leaders are communicating about a change signals its importance. It can also make employees feel valued that their leader is taking the time to
communicate with them. However, road shows can be costly in terms of the executives' time
and the opportunity cost of large numbers of employees sitting in a room listening to their
leaders. There can also be high environmental costs if executives are flying around the world.
If senior executives visit only key sites, a communication imbalance is created, which may
reinforce or exacerbate existing divisions of who is important and who are second-class citizens. In addition, by communicating to large employee groups, leaders can rarely tailor their
message to specific groups or answer the all-important question of 'what's in it for me?'
(WIIFM?). Communication professionals often differentiate between broadcast-talking to
many-and narrowcast-communicating to more specific discrete groups. There can also be
a danger of senior executives using words that mean little to those lower down the organization, either because they are couched in management jargon or because they relate to issues
that are important for leaders, such as shareholder value, and return on investment (ROI),
but which may lack direct relevance to the forklift driver or packer in the warehouse.
Leaders communicating through video links or teleconferencing with slides has the virtue
of getting the message out quickly and potentially to all staff, but it is challenging to make
them interactive (Larkin and Larkin, 1996). Also, without a live audience, it is hard to make
such media motivating, even if they can be a good way of sharing information.
When to give the message?
Another tension revolves round the timing of communication. Is it preferable to wait until most
of the details of a change programme are known, in the belief and hope that this will reduce
employee uncertainty? Or is it better to communicate information as it emerges, even if the
picture is incomplete, so that employees are not left in a vacuum, waiting and wondering?
Further tensions hover around the question of who should receive communication first?
Should communication timing follow hierarchical lines, with more senior people being told
before more junior ones, so as not to undermine the credibility (and status needs) of those
further up the hierarchy? However, as explored earlier, this can slow down the dissemination
of messages.Should those directly affected by the changes hear first? But can they easily be
segmented? Many organizations uphold the principle that staff should always hear about
changes internally before reading about them in the newspaper or hearing about them on
the radio. However, if a change is share-price-sensitive, because it signals a major shift in an
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organization's strategy or prospects, there are legal constraints about the timing of communication. Many organizations opt to simultaneously release information to the stock market
and employees through email or the intranet at 7am when the stock market opens.
Let us now look at how some of these tensions were addressed in one organization and
how the communication approach is also sometimes a reflection of a leader's preferences.
•
Change in Practice 12.2
Communication at Sun Microsystems
Sun Microsystems was a company selling computers. Founded in 1982, it was headquartered in
California, with its main manufacturing sites in Oregon, US, and Linlithgow, Scotland. The company
was badly affected by the dot.com crash. Shares dropped from a high of US $64 in 2000 to US $5
three years later. A series of sites were closed and employees laid off. In 2003, when Terry McKenzie
joined as director of global employee communications, employee morale was low, and was worsened
by the negative perceptions of the company in the market and the media. The company's new
business strategy was to shift the focus from only hardware to solutions and systems. McKenzie's task
was to build an informed, engaged, and aligned workforce who would deliver the new strategy.
The goal of the overall strategic communication campaign was to get employees to understand,
accept, and act on difficult decisions aimed at turning the business around. McKenzie developed
what she called the KM model. For every piece of communication, the current and desired state of
employees' knowledge, attitude, and action (KM) was mapped to identify clear communication
objectives. The KM model incorporated four different phases of change: awareness; understanding;
acceptance; and action. Each phase required a different communication approach, messages,and
channels. 'Think of a shifting balance between one-way and two-way communication as you move
through the stages. During the awareness phase, e-mails, audiocasts and webcasts are good methods
to get basic messaging across. At the understanding phase, communication becomes all about the
conversation and active listening', reported McKenzie (Melcrum, 2007a: 55).
By 2006, business performance had improved, when there was another significant change: the
transition from the company's founder and chief executive, Scott McNealy, to a new chief executive,
Jonathan Schwartz. Although the latter had been with the company for ten years, the transition
evoked a great deal of emotion and also some uncertainty, as Schwartz's strong software background
made many of the hardware engineers fear that he would move the company further towards
software and away from their, and the company's, traditional core area of expertise, hardware.
The change of chief executive brought about a change in the openness and transparency of the
communication culture, giving people more information, underpinned by a belief that they could
handle the truth. Mckenzie described Schwartz as taking the company into adulthood and so the
communication objectives then developed into: i) telling employees the unvarnished facts and letting
them have the information that they need; ii) actively listening and genuinely changing plans to incorporate their suggestions; and iii) having the courage to communicate both successesand lessons learned.
Schwartz at the time was one of the most active chief executive bloggers, blogging at least twice a
week. Blogging within Sun then became a key communication channel, with over 10 per cent of
employees blogging. Together with message boards, biogs became a significant contributor to the
flow of information and knowledge virally around the organization.
However, not everyone was positive about Schwartz blogging. There were issues with the
company's lawyers and PR people at some of his comments, and, as one journalist wrote, 'as much as
I'm impressed by Jonathan's blog, I wonder how he has the time to blog when he has a company that
desperately needs management steered in the right direction' (Washington Post, 2006).2- 4
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Choiceof media accordingto 'richness'
Lengel and Daft (1988) conceptualized different types of communication channel or
media according to their 'richness'. Media richness refers to the level of cues and information available to a receiver of communication (see Figure 12.2). So, for instance, an announcement of the forthcoming merger between Federal Express and Flying Tiger Line,
pinned on the notice board, would be described as a lean communication medium because, other than the words on the page, there are no additional cues or information to
guide the receiver's understanding. The audiocasts used at Sun allow the receiver to hear
tone of voice, so are a little richer. Face-to-face meetings would be described as a rich communication medium, because there are many other cues such as voice, who sits where, and
how other people respond. These additional cues help employees to interpret and gauge
the scope and scale of the change, to assesstheir confidence and trust in leaders, and to
engage in dialogue.
Lengel and Daft recommend that routine, non-controversial communication should
use lean media to avoid overloading people with information. In contrast, they see challenging or personal issues as requiring face-to-face communication. This is a contingency
approach to communication. In Sun Microsystems, lean media, such as emails and audiocasts, were used at the beginning of the new strategy communication campaign, but
later involved small-group face-to-face conversations. Certainly, in the 1990s, the general
view was that, for communicating 'difficult' messages, face-to-face was best (Young and
Post, 1993; Larkin and Larkin, 1996). However, advances in technology such as social
networking and changing attitudes from younger people who have grown up using Facebook suggest that such assertions may not always be valid. New social media, which
allow two-way communication without it being face-to-face, are considered later in this
section.
Highest
Physical presence (face-to-face)
Interactive media (telephone,
electronic media)
Media
richness
Lowest
Personal static media (memos,
letters, tailored computer
reports)
Impersonal static media (flyers,
bulletins, generalized computer
reports)
Figure 12.2 Media richness hierarchy
Source:Lengeland Daft (1988}
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Choiceof media accordingto the phasesof change
Different stages are in evidence in Change in Practice 12.2, with Mckenzie differentiating
between awareness,understanding, acceptance, and action, and using lean media for awareness,but richer, face-to-face meetings for understanding and acceptance. As she herself said,
'think of a shifting balance between one-way and two-way communication as you move
through the stages'.
The different psychological stages associated with individuals' experience of change
and transition have been used successfully to guide internal communicators' choices
(Wiggins, 2008). As in Figure 12.3, the transition curve is, for practical purposes, divided
into four quadrants. The horizontal line across the middle recognizes that, above the
line, at the beginning and end of transitions, individuals are more willing to overtly talk
about their emotions and attitudes towards the change. Below the line, when they are
moving into the emotional territory of anger and depression, they are more likely to
hide their feelings. This has consequences for the communication approach. The midpoint line dividing the curve into left and right halves suggests that when employees are
psychologically occupying the left-hand side, they are focusing on the past, whilst on the
right-hand side, they are more orientated towards the future. This too has communication implications.
The top-left quadrant is when employees first hear about the change. At this point, employees' greatest communication need is for information about the reasons for the change, the
likely outcome, and the next steps.This is the K for 'knowedge' in Mckenzie'sKAA model at Sun.
Broadcast media with senior leaders, informing staff about what is happening, are appropriate at this stage. However, because employees may also be worrying about what may happen to them personally, some information is simply not heard. Repeating the messageoften
Past Future
INFORMATION
INVOLVEMENT
Denial
Moving on/
moving away
Open
------
Hidden
Depression
SUPPORT
VISION
Time
Figure 12.3 Communication choices depending on psychological stages
Source:Basedon Wiggins (2008}
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is therefore important at this stage, even though, in our experience, leaders may say: 'Well,
I've already told them. Why do I have to tell them again?'
The bottom-left quadrant in Figure 12.3 is the point at which employees may be perceived
as being resistant or ambivalent about change. Here, what is required is support. This is
where middle-manager communication is critical, and involves listening to employees concerns and questions in small groups or one-on-one. This is perhaps where Clampitt et al.'s
(2000) 'identify and reply' strategy may be most useful.
This is often one of the most challenging phases of change communication: many managers are uncomfortable dealing with the personal and emotional content of this type of faceto-face communication, and they themselves are rarely in possession of the facts to be able
to reassure staff. They can resort to bland, patronizing statements such as: 'Oh, I'm sure you'll
be fine.' In our experience, reminding people of what is staying the same, as well as what is
changing, can be helpful in this quadrant.
A great temptation for leaders and managers is to want to talk about the future, the positives: Kotter's step four, the vision. Whilst this is hugely important, from personal experience,
the timing of this is crucial. Only when employees are in, or moving towards, the bottomright quadrant are they really able to hear and absorb such information. However, talk about
the vision, and engagement in what it might mean for them and their teams, can help to 'pull'
individuals through the curve. A critical role for communication, according to this model, is
therefore to match the appropriate communication needs and media to the psychological
state of the majority of employees. Change communication done well will not prevent employees experiencing the transition curve, but it can help them through the curve more
quickly and can mean that their 'curve' may be lesssteep (see the dotted line in Figure 12.3).
Summarizing the strengths and limitations of different media
Some strengths and limitations of different media have already been mentioned in Change
in Practice 12.1 and 12.2, and in relation to the tensions and choices that communicators
face. This section concludes with additional exploration of specific channels.
1. Face-to-face, leader-led communication
'The reason why many organizations may encounter difficulties in reducing uncertainty during change is the often one-way nature of communication strategies' (Allen et al., 2007: 207).
The real strength of face-to-face communication is that it is potentially two-way and rich, to
use Lengel'sand Daft (1988) terminology. However, the degree of two-way communication
depends on the format face-to-face communication takes. It may involve large-scale meetings with hundreds of employees present, focus groups with cross-sections of employees,
cascades or team briefings that flow down from the hierarchy with additional tailored content for each specific layer and location, or simple one-on-one communication between a
boss and a subordinate.
There are those who advocate the absolute primacy of face-to-face communication: 'The
best way to communicate a major change to the frontline workforce is face-to-face. Do not
use videos ... do not introduce the change in a company publication and do not hold large
meetings with frontline employees', assert Larkin and Larkin (1996). However, as already
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explored, face-to-face communication may not always be feasible. In addition, certain facilitative approaches to change such as Appeciative inquiry and Future Search have developed
specific techniques for engaging large groups of people face-to-face.
Leaders often play a particularly important communication role in both announcing the
change and communicating the vision. Referring to political, rather than businessor organizational, leaders, Goodwin (1998) claims that a leader without communication skills will fail to
have impact. Yet according to a communications consultant, the majority of senior business
leaders 'don't make the strong audience connection-visceral, personal and emotional-needed
to inspire trust and action' (Morgan, 2001). Implicit in this comment is an assumption that the
role of the speech is not to give information, but to make an emotional connection that moves
others to think, feel, and behave differently. The words of William Hazlitt (1807), quoted in Gill
(2006), seem particularly apposite here: 'the business of the orator is ... not to inform, but to
rouse the mind ... to add feeling to prejudice, and action to feeling.' As another writer says:
A speech is part theatre and part political declaration; it is personal communication between
a leader and his people ... it is at once a thing of great power and great delicacy ... A speech
reminds us that words ... have the power to make dance the dullest beanbag of a heart.
(MacArthur, 1999: xxiv)
Two skills are essential to the use of inspirational language: rhetoricalcrafting and framing
(Georgiades and Macdonnell, 1998). However, such skills do not belong only on the podium.
When the purpose of a communication is to persuade or motivate, framing and rhetorical
crafting apply equally to one-on-one and small-group conversations {Gill, 2006). Rhetorical
crafting is the art of verbal expression, which can involve the use of repetition that aids recall,
the use of different rhythms to keep the audience's interest, and the use of rhetorical questions and dramatic pauses, as well as the use of stories and metaphors.
Framing requires understanding your audience, and then connecting your message with
their needs and interests (Conger, 1999). Effective leaders do this by listening to what matters
to people from multiple conversations, asking questions of those they will later seek to persuade and experimenting with their argument/line of reasoning with trusted colleagues.
Through such a process, framing develops a shared sense of destiny through dialogue
(Kouznes and Posner, 1991), people feel that they have a stake in common problems (Goodwin, 1998), and leaders can create a sense of ownership for, and commitment to, organizational change and the creation of a new shared future.
Gill (2006) describes the following specific tactics for framing.
1. Catching attention, perhaps with a joke or a personal story with which the audience can
identify (Morgan, 2001)
2. Timing: knowing when to introduce an initiative and when to pause
3. Appealing to common interests
4. Avoiding statistics where possible
5. Usingvocabulary that matchesthe audience'sown and limiting the useof multisyllabic words
6. Showing feelings through words, voice, posture, and gestures
7. Authenticity (which can be a particular challenge if someone else has written a speech)
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8. lnclusivity, which involves framing your speech as 'we' and 'our', rather than 'I' (such
inclusive language unifies rather than divides followers)
9. Presenting a solution as well as a challenge and then 'reading' an audience's response
through non-verbal signals to generate agreement and commitment to the message,
adjusting it if necessary
10. Ideally, the audience should be involved in some form of physical activity related to your
message (Morgan, 2001 ). In large-group settings, we have seen the audience encouraged
to shout a slogan, to sing, to sign up on a large wall, to write commitment cards, and to
use electronic voting devices to show their commitment to a particular change. This
introduces an element of two-way communication into what is otherwise one-way.
Exercise12.2
Find an opportunity to hear a leader talking about change-either someone in your own organization or at your university, or from listening to some famous speeches on the Internet.
• Evaluate the success of the speech as a communication event.
• What did it make you think and feel?
• Were you part of the target audience? If so, do you think you responded in the way the speaker
intended?
• What reframing and rhetorical devices did you notice? Were they effective or not? If so, why?
A risk with paying too much attention to leader communication is that is gives undue prominence to large events. Communication does not stop only because the formal set piece has come
to an end. Aswill be explored at the end of the chapter, alignment between different communication channels and employees' general experience in the organization critically influences whether
or not formal communication and the big set pieces are believed. A client recently told of us of a
large meeting to tell staff that the organization was being wound down. Whilst one of the leaders
was giving a speech, the other leaders sat working on their Blackberries in full view of staff. When
later challenged, one of them sheepishly said, 'Sorry. I was only trying to keep up with my emai Is',
seemingly oblivious to the unintended message of lack of care that he and his colleagues were
sending. However skilled at rhetoric and framing the leader making the speech, the behaviour of
his co-leaders will have tarnished any positive impact that he may have hoped to make.
Line managers' endorsement or rejection of leaders' communication
impact the effectiveness of the latter's communication (Bass, 1990: 25).
also significantly
2. Print, publications, and intranets
Print and publications, such as company newsletters and magazines, are generally good for
sharing stories and photos of life and people within the organization, including demonstrating progress with change programmes. Because they have physical form, they create a sense
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of substance and permanence, and can be perused on the way home or by employees' families. However, they are not suitable for communicating fast-changing news or for making
announcements. These are better handled by emails or news sites on the company intranet.
Some organizations provide a weekly news round-up of changes and news to try to avoid
overloading employees with information. Large organizations such as Unilever and BT often
have sophisticated teams of journalists to keep employees updated daily with changes to
products, advertising campaigns, media reactions, share price changes, and departures and
arrivals in the senior ranks. Such news sites are often also used to support major announcements or leaders' speeches by carrying reports or summaries of what was said. Many such
sites can now also include video clips or podcasts of news or leaders' speeches, so that those
who were not there or who are not based in offices, such as salespeople, can still be kept up
to date. These also tend to be divided to provide content relevant for specific audiences or
employee groups.
During a merger or immediately after the announcement of significant changes, weekly or
fortnightly branded newsletters can be a means of keeping people informed of the latest
decisions that have been made. The branding is important to create 'stand out' from all of the
general communication and emails that people receive. Print can also be used as part of a
change campaign on a particular issue targeted at a particular audience. For instance, several
years ago one of BP'sUK refineries wanted to improve its safety record. Rather than send out
more safety bulletins and pin them on notice boards, a fortnightly newspaper was produced
in the visual and easy-to-read style of British tabloid newspaper The Sun, which was what
most refinery workers read. The campaign was a huge success as people wanted to read it
and, within eighteen months, the refinery had one of the best safety records in the company
(Melcrum, 2007a).
3. Socialmedia
Social media is the name given to a range of online technologies and practices such as biogs,
messageboards, podcasts, and wikis. People use these media to share opinions, experiences,
and perspectives with each other. New applications are continually emerging. The burgeoning use and availability of new technologies have led some commentators to question
whether face-to-face communication is still the ideal communication channel (Lievrouw
et al., 2001, quoted in Jones et al., 2004).
Whilst there is no doubt that social media form an important evolution of the Internet and
provide new ways of people connecting with each other, questions remain as to the role of
social media within organizations and the possibilities that such new forms of connecting
pose for communicating change. According to a global survey of internal communicators
(Melcrum, 2007c), the perceived benefits of social media were as follows: 71 per cent believed it leads to improved employee engagement, followed by improved internal collaboration (59 per cent), the development of internal communities (51 per cent), and the ability to
create two-way dialogue with senior executives (47 per cent). Interestingly, only 28 per cent
of internal communicators who responded to the survey said they knew how to use social
media as part of an integrated communication strategy.
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One of the challenges perhaps lies in the inherently democratic nature of social media,
which can be at odds with the culture of organizations that are more top-down and have a
directed approach to change. By definition, social media are 'pull' rather than 'push' technologies-that is, users decide how and when they want to use the media. So, whilst they
may be very effective during emergent change, they are not a channel that leaders can force
on employees as part of directed change or indeed control.
In some organizations, such as IBM, BT,Sun Microsystems, and Microsoft, the culture and
the employee profile means that there has been significant proactive experimentation with
social media. As mentioned in Change in Practice 12.2,Jonathan Schwartz of Sun M icrosystems has been one of the most high-profile chief executive bloggers. An authentic voice is
essential for blogging, so this only works if senior executives are willing to invest time in
their blog and write it themselves. Nevertheless, executive bloggers can attract criticism:
'Why are leaders blogging when they have an organization to run?' (WashingtonPost,2006).
However, senior leaders who blog can suddenly seem less remote and more human; it allows them to share their views with anyone who wants to connect rather than only the
upper echelons. A comment on the blog of Uni lever's Senior Vice President HR, from an HR
manager in Nigeria, was: 'Suddenly you are only two clicks of a button away rather than
1000 miles.'
The use of social media to foster employee engagement, improved collaboration, and the
growth of internal communities suggest that they are often used to increase participation
and connection rather than to get messagesout about a particular change. In this sense,
social media are being used to make the culture of an organization more participative rather
than being communication channels for talking about the change. For instance, companies
such as IBM, Sun Microsystems, American Electric Power, and Nortel are using social media,
such as blogging and message boards, to facilitate 'side-to-side' conversation between employees (Melcrum, 2007c). The most extreme form of using technology to involve large numbers of employees has been IBM's Jams.The first, held in 2001, involved 50,000 employees
participating in a real-time, online idea-sharing session about the company's future direction. Subsequently, they invited all 300,000 employees to a ValuesJam,giving the workforce
the opportunity to redefine the core IBM values for the first time in nearly a hundred years.
Here, technology is being used to involve employees in change, which could be labelled
communication, engagement, or a participatory approach to change.
IBM now sells its jamming capability to other organizations, but it is not a cheap option.
Other virtual technologies such as using web-based conferencing can be effective, lesscostly
ways of involving groups globally in change.
4. External communication
See Chapter 7 for
more on
stakeholders:
p. 147
Some of the stakeholders that may be affected directly, or have a view on, an organization's
plans to change are external to the organization and may include investors, regulators, customers, and local or national government. Communicating regularly with such interest groups
about the plans and progress of a change programme can be vital to ensuring their continued
support or, at a minimum, ensuring that they do not intervene to jeopardize proceedings.
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283
The metaphor of front stage and back stage activity (Buchanan and Boddy, 1992) applies
here too. In terms of communication, the latter may take the form of an informal conversation over dinner or on the golf course to reassure an important stakeholder that SeeChapter 7 for
more on this
the change programme is on track and that there are no dangers to quality control or metaphor
supply. It may also take the form of lobbying to influence regulatory or government
decision-makers. External communication may also involve more front stage activities,
such as specifically targeted messages, or events for particular audiences, such as briefings for investors on a company's quarterly results, or customer events to launch new
products or services. It may also include PR activities, such as press releases and newspaper interviews with senior leaders for the specialist or general press. From a communication point of view, the most important requirement is to ensure alignment between
internal and external messages, as otherwise neither version is believed and the leader's
credibility seriously diminished.
Section 2 Summary
In this section, we have:
•
examined some of the practical tensions and trade-offs facing those tasked with
communicating change;
•
looked at communication choices in relation to the richness of different media and the various
stages of the change process;
•
reviewed the benefits and limitations of different media.
Section3: Communication in specific change scenarios
This section draws on much of the preceding sections, but highlights the communication
challenges and requirements as they relate to two specific change situations: crises, and
mergers and acquisitions (M&As).
Crisis
A crisis 'represents an unusual situation outside the normal operating frameworks of the affected organization; if standard operating procedures can handle the event, it is not a crisis'
{Reilly, 2008: 331). Crises may be caused by: natural disasters, such as Hurricane Katrina,
which devastated New Orleans in 2005, and the earthquake and tsunami in Japan in 201O;
industrial accidents; wrongdoing of top management, such as the collapse of Enron in 2001,
or individual wrongdoing, such as fraud or excessive risk taking by individual bankers, for SeeChapter 6 for
more on Enron:
example Julian Tzolv at Credit Suisse in 2009 or Nick Leeson at Barings Bank in 1995. Crisis p. 115
communication is included here because there is often significant organizational change in
the aftermath of a crisis. In addition, the way in which communication is handled during a
crisis often shapes the possibilities for change available afterwards.
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Change in Practice 12.3
Communicating a crisis at BP
The Deepwater Horizon oil well in the Gulf of Mexico, operated by BP,exploded on 20 April 2010,
killing eleven people. It became one of the world's worst environmental disasters. It was also a corporate disaster: the value of BP'sshares fell by half from their pre-crisis levels but this did not just affect
institutional investors-70 per cent of British pensioners have BP shares in their portfolios.
The chief executive, Tony Haywood, was visible from early on, basing himself in Houston, rather
than staying in London headquarters. At the beginning, he was over-reassuring, talking of 'a relatively
tiny' amount of oil spilling into 'a very big ocean' (The Guardian, 14 May, 2010). The shocking visual
imagery of dead turtles and sea birds soaked in oil, seen on the Internet and in the media, suggested
a different story. The Coast Guard Admiral, Thad Allen, initially came to be seen as better informed
and the more credible spokesperson for the disaster than the company itself. BP had no response on
the Internet for a week and no company content on Google, YouTube, twitter, or Facebook.
Days after the explosion, BP announced that it would not try to hide behind the US $75 million
statutory liability limit for marine oil spills, but would pay all legitimate claims. Instead of praising this
decision, commentators complained that the word 'legitimate' was a loophole that could let BP out
of paying some claims.
Haywood did make an apology in his 18 June testimony before the US government Energy and
Commerce Committee. However, he would not admit responsibility or accept that BP had done
anything wrong, maintaining that the facts of the accident were not yet known. This may have been
an appropriate stance from a litigation perspective; it was poor from the perspective of crisis
communication and stakeholder management. When interviewed on NBC's Today show, Haywood
said, 'there's no-one who wants this over more than I do. I'd like my life back'. This remark was widely
criticized for being uncaring and arrogant. and made corporate expressions of compassion for the
real victims sound hollow. When the embattled chief executive attended a yacht race round the Isle
of Wight while the oil was still pumping out in the Gulf, further vilification followed, with Obama's
Chief of Staff publicly referring to this as yet another in a 'long line of PR gaffes' (New York Times, 19
June, 2010: A20).
The lesson for other CEOsand crisis spokespeople is that you have to be on the ball the whole time.
Mr Hayward's 'gaffes' probably account for 0.001%of the words he has communicated to the media
over the last month, but they are the ones for which he will be remembered. In a crisis,you must be
word perfect every minute of every day. Indeed, this applies to body language as well as what you
actually say. (Hemus, 2010)
Three other factors made this crisis particularly difficult for BP.One was its poor accident record.
With an explosion at its Texas City oil refinery in 2005 and an oil spill in Alaska in 2006, BP looked like
an organization that was not learning from its mistakes. Secondly, the spill reopened questions about
the company's culture and preference for profit over safety. Thirdly, BP'sinability to stop the oil flow
for so long further diminished perceptions of it as an organization well prepared to deal with a crisis.
'As the oil continues to seep away, so does BP'scredibility' and reputation (ibid). s-10
As we have already seen, change communication is far from simple at the best of times. In a
crisis, the need for speed exacerbates the challenges and possibility of miscommunication:
'At no time in an organization's life is it more critical to communicate openly, sensitively and
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quickly ... than during a major crisis' (Pincus and Acharya, 1988: 182). Reilly talks of the importance of 'the rapid transmission of the firm's damage control message'(2008: 333). BPdid
not respond quickly or openly enough, with dire consequences.
In a crisis, the tendency is often for senior leaders to seek to impose control, developing a
consistent messageand telling managers and their subordinates what to do and say,but this
can be at the cost of speed. With the complexity, magnitude, and sheer pace of some crises,
there is often a need for effective upward communication from those on the ground, dealing
with the crisis. Yet employees dealing with the crisis may be too busy to send reports up the
hierarchy; if they do send information, it may be sanitized to be more palatable to senior
management, or if it is expressed with too much technical data, it may not be appropriately
understood and interpreted by those more senior.
Other challenges to good communication during a crisis include the tendency or desire
amongst leaders to restrict the free flow of information until details and the severity of the
situation become clearer or to minimize them, as Haywood did. At the other end of the
spectrum, there can be information overload as everyone helpfully tries to communicate
with everyone: with no filtering mechanisms in place, or official version or single spokesperson, confusion can reign. During crises, emotions also tend to be heightened, which can
impact on the way in which communications are understood. This was certainly the case in
terms of US media coverage of the BP oil spill.
For organizations, key to effective crisis management communication is having an outline
plan in advance with the purpose of maintaining reputation (Lockwood, 2005, cited in Reilly,
2008: 337) and which ensures the consistency between external communication and internal communication. Plans tend to specify who will be the key spokesperson, the roles and
responsibilities of internal and external communicators, HR, and senior leaders, who will
update the Internet, and may include logistical details such as phone numbers and email
addresses.
Leaders staying highly visible is seen to be essential to good crisis communicationpositive examples would include New York Mayor Rudy Giuliani, who was on the scene of
the attacks in the World Trade Centre in 2001 within minutes, and Sir Michael Bishop,
chairman of British Midland, who was a very public presence when one of its planes
crashed onto a motorway, killing thirty-nine people. Haywood, in Change in Practice 12.3,
was visible, but, unfortunately for him, some of his comments and his failure to admit responsibility early on severely tarnished his ability to be a credible spokesperson for the
company.
Organizational crises evoke strong emotional reactions because of their unexpectedness, and the uncertainties about the scale and scope of what is happening, and unknown
consequences for the organization. So, as well as the need for information sharing up and See Chapter 4 for
down the organization, people in stressful situations such as crises need the opportunity more on
emotions: p. 62
to voice their worries (Reilly, 2008). Listening is therefore an essential part of a crisis communication plan to provide 'emotional first aid' to employees (Jick, 1990). Crises can have
a long-term impact, often changing an organization's culture, identity, and the stories told
about it by those inside and outside the firm. An important element of recovery from
a crisis can, therefore, be to reinforce, through communication, changes to policies and
procedures.
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Mergers and acquisitions
Research on acquisitions has consistently found that about half are deemed to have failed
(Hubbard and Purcell, 2001; KPMG 1997, 1999) and that communication is a particular issue.
SeeChapter 3
for more on
Most commentators would argue that the notion of a merger, which suggests a 50:50 partmergers and
nership,
is extremely rare and more of a rhetorical device about how leaders would like both
acquisitions: p. 46
sides to feel rather than anything more substantive.
One of the authors experienced a particularly graphic example of this when working with
the heads of communication from two banks, one of which had acquired the other. We were
sitting together in a room, planning a two-page weekly newsletter to be emailed to all staff
in both banks to keep them updated as decisions were made. The newsletter had a logo
made from each bank's corporate colour. 'The logo should have twice as much blue as green,'
said the communications director of one of the banks, 'because we are twice as big as the
other bank.'
One of the most significant communication issues in acquisition announcements is that of
false reassurances that nothing will change, or that any changes will be minor and insignificant. A manager in one such case reported:
Businessas usual was the messagethat went out to all the clients and my staff, and it was a lie
as it transpired ... Businessas usual ... is a coded messagefor within six to eight weeks we will
have a radical rethink of the whole business and structurally change things. (Hubbard and
Purcell, 2001: 24)
Change in Practice 12.4
Kraft'sacquisitionof Cadbury's
After a six-month battle, the American food giant Kraft won control of British confectionery maker
Cadbury, in January 2010. As the hostile takeover battle had intensified in September the previous
year, shareholders were told that Kraft 'would be in a position to continue to operate the factory'
near Bristol which Cadbury themselves had earmarked for closure (The Times,9 February 2010).
Irene Rosenfeld, chair and chief executive of Kraft, was reported as saying 'We have a great respect
for Cadbury's brands, heritage and people ... We believe they will thrive as part of Kraft Foods' (BBC
News, 19 January 201 0). She met the British Trade and Industry Secretary, Lord Mandelson, on
2 February and indicated that there would be no formal statement about job cuts for six months. Six
days later, Kraft announced the closure of Cadbury's Somerdale factory near Bristol, which made
Crunchie bars and Curly Wurlys. It was reported that production would move to Poland.
MPs described Kraft'schange of mind 'as either incompetent or a cynical ploy' (The Times,27 May
2010). Jennie Formby, national officer of the Unite Union, said: 'Some of the workers have had their hopes
raised by Kraft management, and if they are going to lose their jobs then that is shameful' (TheTimes,
9 February 2010). Two days later, when the closure was confirmed, she said: 'This sends the worst possible
messageto the 6,000 other Cadbury workers in the UK and Ireland. It tells them that Kraft cares little for
their workers and has contempt for the trade union that represents them' (TheTimes,11 February 2010).
Kraft executives were summoned to a group of MPs to explain their actions and to give reassuranceson
future plans, although Irene Rosenfeld chose not to attend in person. Media reports all emphasized the
significant time and effort that the US food group will have to invest to restore its public reputation.11-1•
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Change in Practice 12.4 demonstrates the impact of what are perceived to be broken
promises on multiple stakeholder groups-government,
unions, and employees. Kraft
spokespeople said that, because it had been a hostile takeover bid, it had not been able to
inspect Cadbury's accounts prior to making its commitments, so it was not fully appraised
of the situation. However, in communication terms, the moral battle, the corporate reputation, and the credibility of Kraft's leaders and spokespeople had already been lost, and such
comments were merely excuses: 'Failure to manage expectations in the early period can
cast a long shadow over subsequent attitudes towards the company management' {Hubbard and Purcell, 2001: 30).
In such circumstances, whatever channels or individual leaders are used to communicate the message, they are, or rapidly become, tarnished as sources of information and
will no longer be deemed credible. In addition, such communication contributes to the
creation of a culture of mistrust between the two companies, and/or between leaders
and other employees. Employees' understanding of, and attitudes to, change are not See Chapter 5 for
more on trust:
shaped only by what they hear about through formal communication; they are also p.97
shaped to an even greater extent by what they experience of management action.
Section 3 Summary
In this section, we have:
•
examined the communication
challenges during a crisis;
•
explored some of the communication
issues in relation to mergers and acquisitions.
Section4: The limits of formal communication
This chapter started by emphasizing how important communication is to the successful implementation of change. It ends with some reflections on the limits of formal change communication, drawing on some of the themes that have emerged throughout the chapter.
Informal communication
Communication about change does not happen only through formal channels; it also happens through gossip, rumour, and informal chat around the edges of meetings and over
lunch or a coffee. Depending on the nature of the change and the culture of the organization, such informal communication, particularly with co-workers, can provide support and
opportunity for sensemaking and learning. An employee whose boss had been removed as
part of a restructure, said:
we didn't have anyone, but then the servicemanagerssupported each other as a group, and
you sort of form your own little network and lines of communication and support. (Allen
et al., 2007: 197)
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In consulting work facilitating action learning sets, we have also often experienced employees using the space and peer support to communicate and share their own change stories.
Similarly, executive coaching, whilst not a communication channel per se, is often used by
leaders and managers to process and come to terms with their own roles in organizational
change.
Management action
There is an old and familiar saying that 'actions speak louder than words'. This is particularly true when it comes to change communication. However impressive the communication strategy, or creative the way in which different channels are used, employees and other
stakeholders will not believe the message if their own experience is contrary to it. This was
demonstrated in Change in Practice 12.4, when Kraft announced the decision to close the
Bristol factory despite earlier communication that there were to be no job cuts for six
months. Similarly, BP'scommunication that it was in control of the situation was manifestly
undermined by the fact that it took the company five months to stop the oil spill. The alignment between communication and management action is thus critical to the credibility of
communication, both in terms of specific pieces of communication as well as ongoing
communication more generally.
Trust and company culture
It sounds obvious to say that change communication does not take place in a vacuum. The
very choice of communication strategy will be shaped by the norms and values of the organization, or, at the very least, by those of the leaders and by their approach to change. However, the effectiveness of the communication strategy, and tactics adopted, depend as much
on the culture of the organization as on any executional brilliance. Organizational subcultures, structures, silo behaviours, and other intergroup factors can frequently inhibit internal
communication, but perhaps one of the most significant factors is the level of trust that exists
in the organization: 'The lesson for managers is to learn how to navigate ... changes in a way
that preserves employees' sense of trust' (Robinson, 1996: 597).
Employees' perceptions of trust are mainly influenced by prior experiences and the
relationships they have developed with other members of the organization. Rousseau
and Tijoriwala (7999) were interested in how employees in a large hospital undergoing
significant restructuring evaluated information presented to them by senior leaders to
explain the reasons for the change. They found that employees were more likely to perceive the rationale for the change as legitimate in conditions of high trust, rather than
low trust.
Company performance
Effective communication, such as that during the Federal Expressmerger, can make a significant contribution to the success and sustainability of an organizational change. Effective
crisis communication can also ensure the ongoing viability of the organization. Very astute
communication can also subtly shift the meaning that employees give to events. When the
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Royal Bank of Scotland won the hostile takeover bid of ABN Amro, the Barclays communication team was busily finalizing the copy of the external and internal communication, having
lost the deal. The story goes that the corporate communications director suddenly entered
the room and changed the press release headline to 'Barclays walks away from the deal',
subtly reframing events (Gill, 2009) to appear that Barclays actively chose to walk away from
the deal rather than lost it.
However, in other cases,the effectiveness of communication, whilst necessary,is not sufficient to ensure the ongoing viability of an organization. No communication strategy could
have averted the collapse of Enron or Barings Bank. Mckenzie's communication strategy at
Sun Microsystems, with its chief executive blogger, was not enough to ensure the independence of the company-Oracle bought the company inJanuary 2010. So,whilst communication
can play an extremely important role in organizational change, it is also important to keep
that role in perspective.
Section4 Summary
In this section, we have:
•
considered some of the limitations of formal change communication-namely
the role of
informal communication and the impact of management action, trust, culture, and company
performance.
■
Integrative CaseStudy
Pfizer:Communicatingwith field staff during major change
In one of Pfizer's UK business units employing 1,000 people, 70 per cent were in sales and worked
from home. What communication strategy and tactics would work for them after the organization
announced a global transformation programme in October 2006?
Between October 2006 and July 2007, staff experienced significant uncertainty. High-level changes
to the structure, headcount reductions, and the closure of one of the regional offices were announced
in February. Previously, communication had been through regional leaders, but this was no longer
possible as these roles were abolished. The new situation placed much greater communication
responsibility on two senior directors: one in sales and one in customer marketing. They held regular
formal consultation meetings with employee representatives, which were always followed within
24 hours by an audio broadcast to which all employees were invited to dial up and listen in. Each
manager was encouraged to keep close to their homeworkers through the telephone and face-toface meetings.
In July 2007, to mark the birth of the new organizational structure, the two senior directors held
twenty-one face-to-face meetings to symbolize 'Day One' in which people were introduced to their
new managers. A conference that brought everyone together to hear about the vision for the new
organization happened in September. In the run-up to the conference, ten volunteer salespeople
were asked to take a camcorder to create a video diary recording their reflections on the new
organization and meetings with customers and colleagues. These were shown at the conference,
interspersed with talking to the volunteers in daytime TV style. The video diaries were a complete
change from the consultation process, which, of legal necessity, had been very formal and top-down.
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'As part of the transformation, we want people to take more accountability, be more innovative and
take more risks.This communication process demonstrated those corporate aspirations' said
Edwards, the internal communications manager. The video diaries from employees were then put on
the i ntranet.
With the new structure, a new leadership team of ten was created. To keep employees updated
on the change programme, the ten leaders themselves began producing video summaries to
explain progress with different workstream initiatives after their monthly meeting. This was
published on the intranet, along with key messages,supporting documents, and a feedback tool.
The video diary summaries improved the ten leaders' visibility and encouraged them to use a more
non-corporate style of communication. In addition, members of the leadership team held road
shows for groups of ten to twelve sales managers, with chairs, but no tables, and no formal agenda
or presentations.
Questions
1. What types of communication strategy do you think were being used and why?
2. What do you imagine are the strengths and weakness of the media used in this case?
Conclusion
In this chapter, we have looked at different ways of conceptualizing communication strategies and seen the close link between approaches to change and approaches to communication. The practical tensions and choices that require managing when responsible for change
communication demonstrated why getting communication right can be difficult, despite the
plethora of different channels and media available. The specific challenges for communication during crises and mergers and acquisitions were explored. The chapter ended with reflections on the limits of change communication.
Please visit the Online ResourceCentre at http://www.oxfordtextbooks.eo.uk/orc/
myers to accessfurther resourcesfor studentsand lecturers.
Changein Practicesources
1. Young, M. and Post,j.E. (1993) 'Managing to communicate, communicating to manage: How leading
companies communicate with employees', Organizational Dynamics, 22(1 ): 31-43.
2. Melcrum (2007a) Delivering Successful Change Communication: Proven Strategies to Guide Major
Change Programs, London: Melcrum Publishing.
3. Vance, A. (2008) 'Crisis hits tech sector with layoffs as sales slump', New York Times, 15 Nov. http://
www.nytimes.com/2008/l l/15/technology/companies/15sun.html
4. Washington Post (2006) 'Sun CEO among the few chiefs who blog', 16 Sep.
5. Hanson, A. (2010) 'Digital PRperspectives: The BPoil spill', Arikhanson.com, 14 May. http://www.
ari khanson .com/201 0/05/14/ d igital-pr-perspectives-the-bp-oi I-spi II/
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6. Hemus,J. {2010) 'Why BP'soil spill is the mother of all crises', The Drum, 10 June. http://www.thedrum.
co.uk/opinion/2010/06/1 0/why-bp%C3%A2%E2%82%AC%E2%84%A2s-oil-spill-mother-all-crises
7. New York Times {201 0) 'BP chief draws outrage for attending yacht race', 19 June: A20. http://www.
nytimes.com/2010/06/20/us/20spill.htm
I
8. Sandman, P.M. {2010) 'Risk communication: Lessons from the BP spill', The Synergist:Journal of the
American Industrial Hygiene Association, Sep: 29-31.
9. Webb, T. {201 0) 'Gulf oil spill? It'sjust a drop in the ocean, says BP chief, The Guardian, 14 May: 1.
10. BBC News {2010) 'Cadbury agrees Kraft takeover bid', 19 Jan. http://news.bbc.co.uk/l
/hi/8467007.stm
11. Boyle, C. {2010) '400 Cadbury workers to lose jobs despite promise', The Times, 9 Feb.
12. Boyle, C. (2010) 'Kraft censured for breaching the takeover code on Cadbury', The Times, 27 May.
13. Jagger, S. {201 0) 'Mandelson attacks Kraft over closing Cadbury plant', The Times, 11 Feb.
14. Wearden, G. {2010) 'Kraft executives grilled by MPs over Cadbury takeover', The Guardian, 16 Mar.
http://www.guardian.co. u k/busi ness/201 0/mar /1 6/ cad bury-takeover- kraft-executives-gri Iled
IntegrativeCaseStudysources
Melcrum {2008) Melcrum's Top 50 Internal Communication Case Studies, London: Melcrum Publishing.
Furtherreading
Ford, J. D. (1999) 'Organizational change as shifting conversations',Joumal of Organizational Change
Management, 12(6):480-500.
An article that takes an alternative view of change communication, regarding organizations themselves as
networks of conversations, so that achieving change and new communications are, in a sense, the
same thing.
Fox, S. and Amichai-Hamburger, Y. {2001) 'The power of emotional appeals in promoting organizational
change programs', Academy of Management Executive, 15(4): 84-94.
A discussion of the emotional aspects of change communication.
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