Summary Theories and Approaches to Change Management Rijksuniversiteit Groningen – Faculty of Economics and Business Content: #1 – Burnes (2009), Ch.1; From trial and error to the science of management #2 – Smith & Sutherland/Graetz (2011), Ch. 1; Philosophies of organizational change: ‘changing context’ #3 – Smith & Sutherland/Graetz (2011), Ch. 2; Theories about theories: ‘changing theories’ #4 – Burnes (2009), Ch.2; Developments in organization theory #5 – Burnes (2009), Ch.3; In search of new paradigms #6 – Burnes (2009), Ch.4; Critical perspectives on organization theory #7 – Smith & Sutherland/Graetz (2011), Ch. 10; The critical philosophy: ‘changing reality’ #8 – Burnes (2009), Ch.5; Culture, power, politics and choice #9 – Burnes (2009), Ch.6; Approaches to strategy #10 – Burnes (2009), Ch.7; Applying strategy #11 – Burnes (2009), Ch.8; Approaches to change management #12 – Burnes (2009), Ch.9; Developments in change management #13 – Burnes (2009), Ch.10; A framework for change #14 – Burnes (2009), Ch.11; Organisational change and managerial choice #15 – Burnes (2009), Ch.12; Management – roles and responsibilities #16 – Smith & Sutherland/Graetz (2011), Ch. 11; Conclusion. The dualities philosophy: ‘changing tensions’ #1 – Burnes (2009), Ch.1; From trial and error to the science of management Introduction This chapter sets out to explore and discuss the origins of organizations, from the Industrial Revolution to the early years of the twentieth century. Two of the overarching and complementary characteristics of this period were the conflict between workers and managers, and the search for a systematic, scientific, and above all efficient approach to running and changing organizations. The rise of commerce and the birth of the factory The birth of the factory system in the UK gave the impetus to and created the model for all that was to follow. The way the entrepreneur organized and centralized elements of production distinguished it from what went on before. This was done in order to take full advantage of expanding market opportunities to reap even greater rewards and to dodge the complex intermediary system from before. With few capital investments, wages and raw materials formed the bulk of manufacturing costs. It is this, and the original motive for moving to the factory system in the first place (to have greater control over labour) which explains the prevailing attitude of employers towards labour in the nineteenth century. The relationship between employers and employees The attitude of British employers towards employees is based on two basic propositions; (1) labour is unreliable, lazy and will only work when tightly controlled, and (2) the main controllable business cost is labour. This hostility was reciprocated by the labour force in its hostility towards the factory system for 3 reasons; (1) it involved a wholesale change of culture and environment they were used to, (2) the discipline of the factory was harsh and unremitting, and (3) employers often modeled factories like workhouses or prisons. This clash of interests echoed through the industrial world ever since, although it must be said that entrepreneurs had no text book cases that they could copy. Industrialization and the organization of work The system of organizing work that came to characterize life in Britain and continental Europe was based on the hierarchical and horizontal division of labour based on the principles of Adam Smith (experience on one task, no loss of time moving persons, concentration of attention leads to invention of machines). Change tended to be managed by imposition and force rather than negotiation and agreement. Resistance to new changes was met with physical violence, manifesting in high labour turnover. Europe: The self-generating and autonomous nature of British industrialization became an example for the rest of Europe to follow. For Germany and France, this was a matter of maintaining their position in the world. Though countries used Britain as a benchmark, the actual process of industrialization in each depended upon the unique political, social and economic circumstances that prevailed there. Germany: The formation of a unified empire made Germany driven forward by a rapidly expanding, technologically-centered industrial base. The two key factors that were responsible for this rapid pace were the geographical and political conditions of the country (cooperation with other states), and the fact that German industrialization was state-promoted rather than market driven (stimulated by nobility). This was aided by the dominant role of Prussia and the creation of the customs union (Zollverein). The state saw German industry as an extension os government, bolstering managerial authority and restricting workers rights. Based on the governmental and banking encouragement, Germany took over the British position by moving to vertical integration. All in all, the influence of the Prussian autocratic tradition, the development of a strong bureaucratic approach within both private- and public-sector organizations, and the close relationship between industry and state meant that industrial and political resistance was met by a unified and implacable alliance between employers and government. France: The French industry developed rather late, which seem to have been caused by two key factors: political change and agrarian stagnation, both of which are linked with the French Revolution of 1789. A twin-track approach was instituted. On the one hand, state aid was poured into industry, whilst on the other hand, there was the suppression of every obstacle to individual entrepreneurship. However, the progress was reversed by the revolution which seems strange, as those dominating the revolution were men of property and substance who believed in upholding property rights and placed employees in an inferior legal position. However, this was outweighed by the loss of most of France’s colonial empire and its isolation imposed by the British naval blockade. Only after the 1850s, with the upsurge in economic activity across Europe and the coming to power of Napoleon does the French economy really seem to have taken of. The other main factor which held back industrialization was the backward state of agriculture. The agricultural sector, with a strong position after the revolution, remained self-sufficient and inefficient. Second, by depressing the rate of population growth, it prevented mass supply of labour for the industry. Finally, import barriers produced a strong bond of self-interest between peasants and factory owners, both of whom saw free trade as a threat to their way of life. Scandinavia: In the nineteenth century, Norway, Sweden, and Denmark had weak domestic economies, depending heavily on exporting the products of their agricultural, mining, and forestry industries. However, the so-called compromise between capital and labour, which extended cooperation between employers and social democratic governments lead to a Nordic model of industrial relations. The close ties between these three countries meant that political and industrial developments in one affected the other two. For Sweden, the nineteenth century brought a rapidly rising population and a strong export market in grain and timber. Sweden’s progress was significant. First, changes in the 18th century had removed barriers to social mobility and created the conditions for the emergence of entrepreneurs. Second, these entrepreneurs showed an unrivalled ability to exploit Sweden’s natural resources. Finally, the high quality of the education system provided a workforce able to adapt to changing industries. For Denmark, it was changes in agricultural production that gave a large boost to the economy in the 19th century. With many fragmented producers, Denmark started working with cooperatives for the export, hereby making small-scale farming compatible with large-scale international demand. Remarkable is the degree to which Denmark preserved peasant and craft traditions. It could claim to have avoided the clash of cultures and the rise of industrial conflict. For Norway, the exports were more service-based than product-based, as shipping was its chief earner. Just before WW1, an influx of foreign capital wishing to take advantage of Norway’s potential for cheap hydroelectricity enabled the industry to flourish. Uniquely, merchants and gentlemenfarmers formed the top layers of society. All in all, its dependency on foreign capital without any local impact lead to Norway remaining a relatively poor country, though far ahead in terms of democracy and educational provision. USA: In the USA, the need for a workable, overall approach to organizational design was perhaps more acute than everywhere else, as it had industrialized far more rapidly than any other nation. Huge conglomerates dominated the entire industry. The American approach, characterized by high pressure and harsh conditions, owed little to government aid or encouragement, and much more to individual entrepreneurship. There was great pressure to find an organizational arrangement that would allow employers to control and organize their employees in a way that reduced conflict, was cost-effective, and applicable to the American philosophy. Though similar development were taking place in Europe, they lacked the intensity, commitment and scale of events in the USA. Organization theory: The Classical approach All over the industrialized world, groups of managers and specialists were forming their own learned societies to exchange experiences, and to seek out in a scientific and rational fashion the solution to all organization ills: to discover the ‘one best way’. Out of these endeavors emerged the Classical approach, portraying organizations as machines, and those in them as mere parts which respond to the correct stimulus and whose actions are based on scientific principles. Organizations were seen as closed and changeless entities unaffected by the outside world. This approach is characterized by three propositions: (1) organizations are rational entities, (2) the design of organizations is a science, and (3) people are economic beings. Frederick Taylor’s Scientific Management: Taylor created a general ideology of efficiency. His focus was on the design and analysis of individual tasks; this process inevitably led to changes in the overall structure of organizations. He believed that it is possible and desirable to establish, through methodological study and scientific principle, the one best way of carrying out any job. Furthermore, human being are predisposed to seek the maximum reward for minimum effort (soldiering). To overcome this, managers must lay down in detail what each worker should do, step by step, ensured through close supervision, and to give positive motivation by linking pay to performance. His precepts for Scientific management comprised three core elements: (1) the systematic collection of knowledge about the work process by managers, (2) the removal or reduction of worker’s discretion and control over what they do, and (3) the laying down of standard procedures and times for carrying out each job. Doing so removes the last bargaining counter of labour; scarcity of skill. Taylor met high levels of managerial acceptance as he believed in the need to reform managerial authority to be based on competence rather than the power to hire and fire. The Gilbreths and motion study: Motion studies were thought to cut down production costs and increase the efficiency and wages of the workman. To be successful, a mechanic must know his trade, must be quick motioned, and he must use the fewest possible motions to accomplish the desired results. Breaking down work into constituent components, the Gilbreths used flow process charts to split human motion into five basic elements: operations, transportation inspection, storage, and delay. Through a microanalysis, they established what was done, but also to whether a better method of performing the task could be developed. They viewed organizations and workers very much as machines. They were devoted to discovering the best method of doing any job. Henri Fayol and the principles of organization: Fayol’s focus was on the organizational level rather than the task level: top-down rather than bottom-up. However, similar to Taylor, he advocated the need for professionally educated managers who would follow the rule rather than acting in an arbitrary or ad hoc fashion. Fayol described 14 principles of organization (Division of work, authority and responsibility, discipline, unity of command, unity of direction, subordination of individual or group interest, remuneration of personnel, centralization, scalar chain, order, equity, stability of tenure of personnel, initiative, and esprit de corps. In order to achieve this, he prescribed the main duties of management as follows: forecasting and planning, organizing, commanding, coordinating, controlling. Max Weber on bureaucracy: Weber his work on bureaucracy is related to that of Fayol in that it is focusing on the overall structure of organizations and the principles which guide senior managers in this task. He argued that for a ruling elite to sustain its power and dominance, it is essential for them both to gain legitimacy and to develop and administrative apparatus to enforce and support their authority. Weber identified ‘three pure types of legitimate authority’, being (1) rational-legal, (2) traditional, and (3) charismatic. In the context of the rational-legal authority systems which prevailed in the West, the bureaucratic approach was the most appropriate and efficient. Here, laws, rules, procedures and predefined routines are dominant and not subject to the vagaries and preferences of individuals. Following this would eliminate emotions from decision making. Bureaucracy is characterized by the division of labour, a clear hierarchical authority structure, formal and unbiased selection procedures, employment decisions based on merit, career tracks for employees, detailed rules and regulations, impersonal relationships, and a distinct separation of members organizational and personal lives. Conclusions The rise of capitalism in Britain and other countries created new opportunities and new problems that could not be accommodated under the old order. The result was a move away from selfsufficient autonomous individual units to collective units of production controlled by an entrepreneur. The central features of this factory system were autocratic control, division of labour, and antagonistic relations between management and labour. However, the process and implementation style of this new system differed per country. One clear image however stands out: the factory did not emerge because it was a more efficient means of production per se; it emerged because it offered entrepreneurs a more effective means of controlling labor. The Classical approach had many merits: not least in its attempt to replace arbitrary and capricious management with rules and procedures that apply equally to everyone in the organization. Summarized, the classical approach proclaims that there is one best way, founded on the rule of law and legitimate managerial authority. Furthermore, organizations are ration entities and people are motivated to work solely by financial reward. Human fallibility and emotions should be eliminated and as a result, the most appropriate form of job design is achieved through the use of the hierarchical and horizontal division of labor. Taylor and his adherents have been criticized for their lack of scientific rigor and their one-dimension view of human motivation. Taylor was also attacked for over-emphasizing the merits of the division of labor, as the creation of jobs which have little intrinsic satisfaction leads to poor morale, low motivation and alienation. Fayol has been attacked on three fronts; first, that his principles are mere truisms; second, that they are based on questionable premises; and third, that the principles occur in pairs or clusters of contradictory statements. Weber also received criticism; bureaucracies may not be completely rational and Weber his statements sometimes poses contradictory arguments. Furthermore, rules become ends in themselves rather than means to the ends they were designed to be. Specialization and differentiation result in sub-units with different goals. Rules and regulation set minimum standards but do not govern behavior. Finally, standard rules can lead to them being applied in inappropriate situations. One of the main criticisms of the classical approach as a whole is that its view on people is negative. It seems impossible to remove the element of human variability from the running of organizations and that attempts to do so are counter-productive. The classical approach restricts growth of individuals and causes feelings of failure, frustration and conflict. #2 – Smith & Sutherland/Graetz (2011), Ch. 1; Philosophies of organizational change: ‘changing context’ Introduction Leaders´ approaches to change are based on assumptions about how change works, often based on prominent management concepts or experience. Most change leaders wield numerous philosophies at once, use different approaches depending on the situation, or change their preferred approach over time. The authors argue that whether conscious or tacit, success depends upon understanding the distinctive but intersecting philosophies of organizational change. The term philosophy of organizational change is used to describe the set of assumptions, tacit beliefs, conscious theories and implementation approaches that govern a change agents´ way of looking at the organizational world and the best approach to introducing change. In the classical, linear approach to change, leaders rely on predictable, reducible steps to establish a new work order and routines. However, change is rarely linear, infrequently predictable and only sometimes successful. The authors advocate a multi/philosophy approach because continuity depends on change as much as change depends on continuity. Both must be present for organizational growth and survival The Traditional Change Agenda Traditional n-step models imply a formulaic approach which characterizes change as a controlled and orderly affair, a simple case of unfreezing-moving-refreezing, with a magic leader at the centre of implementation. There are several flaws to this approach; (1) little evidence supports the supposition that organizations are as amenable to control as a block of ice, (2) there is limited attention for the human factor. Regardless of these flaws, the n-step model appeals to leaders as it gives a model for success and ensures top-down control of the change process. Many articles mention that organizational leaders should try to challenge the status quo, increase risk-taking and creativity, and transcend boundaries through information-sharing and teamwork. In doing so, a paradox lurks in the traditional mode of thinking because teamwork cannot be mandated through strategy any more than freedom can be enforced at the risk of penalties. Hence, organizations muddle through the simultaneous existence of two inconsistent states. All in all, however dominant and popular the logic of a leader-centric approach to change may be, it is only one view of how to manage the troublesome continuity-change conundrum. Progress requires combining and recombining multiple lenses of theoretical changes to improve integration and avoid more fragmentation. Change Philosophies Philosophies describe a way of looking at organizational change: a paradigm incorporating structured assumptions, premises and beliefs presupposing the way change works in organizations. Philosophies generate numerous different theories, all based on similar assumptions and premises. However, they may also evolve or adapt and may be revised or replaced over time. Metaphors may be used to communicate the theory. They can illuminate the way organizational change works by offering abstract but accessible explanations, liberating thinking from entrenched habits, encouraging creativity with new interpretations of old events, stimulating emotional engagement and fuelling action by probing unconscious archetypes. However, they translate poorly into practice. Philosophies are superior to metaphors as they go beyond the abstract to provide both description and prescription. They are the motors of change, incorporating metaphors, paradigms, and theories. This book introduces nine philosophies: - - - - - - The rational philosophy: Also referred to as a strategic approach, this philosophy pursues an alignment between an organization’s structure, its competencies and the environment. It assumes that a purposeful and adaptive logic motivates organizational change, initiated by senior managers in a linear way in which performance is checked by set objectives. (e.g., Kanter). Change can be introduced at any pace and on any scale deemed suitable. However, the rational philosophy tends to overestimate the power of leaders and expectations. The biological philosophy: This approach is an evolutionary approach to change and focuses on incremental change within industries rather than individual organizations. Change comes through natural selection where industries gradually evolve to match the constraints of their environmental context. They assume that there is a best fit with the environment that is an ideal configuration. An example of this approach is the life-cycle model. However, this philosophy is hard to translate into practice. The institutional philosophy: This philosophy focuses on the way organizations change as a consequence of environmental pressures. Here, it is expected that organizations are becoming homogeneous over time. The key difference of this philosophy with the biological one is that pressures for change do not only come from the market but also from for example institutional bodies which regulate and intervene such as the government. In the institutional philosophy, there is limited power for change leaders to determine the change. Hence, success is more about acquiring scarce resources and results from sensitivity to institutions. The resource philosophy: The pursuit of resources drives change as the critical activity for survival and prosperity. The resource philosophy hereby explains deviance from industryspecific pressures. The stimulus for change arrives from within, as organizations seek the resources they require to compete and win. However, this philosophy can give the false impression that change only needs the right inputs. The psychological philosophy: In this philosophy, personal responses to change govern organizational success. Here, the focus is on individual experiences as organizations attempt change and hence, individual employees constitute the most important unit of analyses in studying change. Examples are change transitions, OD, and OL. In the first, the focus is on the psychological status of organizational members (e.g. stages of mourning). OD takes an individual perspective to change but uses a more data-driven action research approach where managers must first collect the right information to change and second, remove them by assuaging organizational members fear and uncertainties. However, psychological adjustment to change cannot be enforced or accelerated, no matter how vigilant the change agent and as a result, this philosophy exposes resistance to change better than it prescribes a solution. The systems philosophy: This philosophy developed on the basis of treating organizations holistically. Organizations are the sum of their parts and any change instigates numerous effects across the whole organization. Organizations operate rationally and in absence of political pressure. Every system requires differentiation to identify its subparts, and - - - integration to ensure that the systems do not break down into separate elements. In this approach, planned rational change surrenders to chaos and complexity, as change involves an unmanageable tension between control and chaos. The cultural philosophy: This philosophy prepares managers to see change as a normal response to the environment. Most employees construct set ways of thinking about how things should be done. As a result, imposing change means fighting entrenched sets of values and beliefs shared by organizational members. The cultural philosophy recognizes individual’s choice and is focused more at shared values in comparison to the psychological philosophy. Thus, in order to introduce change, managers must diagnose the values within an organization and change them without undermining tacit behavioral fabric holding the organization together. Change will be long and agonizing and internally driven and hence, difficult to implement. The critical philosophy: This post modernistic approach to change views change as the clash of ideologies or belief systems. Based on conflict, change revolves around activities such as bargaining, consciousness-raising, persuasion, influence and power, and social movement. Change transpires when power transfers from one coalition to another and a new combination of ideologies and values gains ascendancy. However, the political philosophy overlooks pressures for change from external factors. Postmodernism introduces a second theory within the critical philosophy. Here, reality is perceived as a socially constructed phenomenon. Postmodern change takes reality as multiplicitous, fragmented and contradictory. They see language as a creator of social worlds. The dualities philosophy: At one end of the spectrum, formal, rational logic articulates action and maps structure and process against strategy. At the other end, the critical philosophy gives preference to power. Both have flaws and hence, a combination of philosophies may lead to an interesting new philosophy of change (dualities). Conclusion Managing change necessitates different modes of engagement and a rich understanding of context. Philosophies bring into focus the complementary and competing forces that organizations face in managing the tension between continuity and change, and how to deal with perennial issues such as certainty/uncertainty, tight/loose control, large/small-scale change, slow-/fast change and external/internal stimuli. A combination of these philosophies may function in a complementary sense and may reinforce one another. Tip: Study table 1.1 (Philosophies of organizational change – summary) #3 – Smith & Sutherland/Graetz (2011), Ch. 2; Theories about theories: ‘changing theories’ Introduction The term theories are used as a sweeping label for the inferences about the most effective way to introduce change that the previously introduced philosophies hold. Theories refer to statements that express relationships among concepts, whereas statements represent a theory to the extent that it offers law-like statements or hypotheses that make measurable predictions. In general, all philosophies possess at least one major theory. The term theoretical or theoretic relations is used to describe the relationship between theories from the same philosophy. Theoretic Relations: Theoretic context and theoretic continuity In examining theoretic relations, the principles of theoretic context and continuity are utilized. Theoretic context refers to the level at which a theory operates: either at a single analytical level (intra-level) or at multiple levels (inter-level). In general, the more levels of analysis a theory relates to, the greater its explanatory power. However, this also significantly increases the complexity of the theory. The concept of theoretic continuity refers to how a new theory relates to existing theories. Low continuity between theories leads to revolutionary theory change and a more radical outcome. The paradigm problem A paradigm may be understood as the established or commonly accepted perspective of a discipline. Over time, evidence against the paradigm may grow and a paradigm may be considered obsolete. Competing paradigms – and in our case change philosophies – suffer from fatal incompatibilities. Hence, following the incommensurability thesis, the content of competing paradigms cannot be compared due to the absence of common ground. Every paradigm employs a unique language and labeling system that cannot be translated. This does not mean that using a multi-paradigm approach to change management is negative sense: it may yield some advantages, including numerous avenues for theoretical exploration. However, it may also increase the confusion around change and it does not provide guidance to managers. The reductionism-unification problem The lower the level of theoretic reduction, the more powerful the theory. The level of the theory reflects the target of analyses where measurements and generalizations occur. Level defines the properties of a theory’s construct and the relationships between the constructs. Reductionists assume that despite the diversity of organizations and their change circumstances, all change looks the same when examined at its lowest level. However, the opposing view of bottom-up theory development, or emergentism, counters the legitimacy of the reductionist approaches. They contend that the whole is different to the sum of its parts and establishing connections remains less problematic than making complete reductions. As reductionism shows, the more levels of explanation a theory offers, the more complex it must become. Multi-level theories present compelling solutions because they incorporate previously unrelated explanations. Multi-level theories are those spanning numerous levels of organizational behavior and performance. They bridge the micro-macro divide by integrating the micro focus on individuals and groups with the macro focus on organization and industries, providing a richer, more comprehensive portrait of organizational life. Reductionists see this theory unification as inevitable, but it also means overcoming a number of substantial barriers; (1) in the end, one philosophy tends to take a parent role, (2) the agendas and preferences of researchers present contradictions and tensions, (3) the chasm between theoretical complexity and practical oversimplification can seem unbridgeable, (4) researchers can be discouraged by a lack of peer appreciation as multi-level change theories cannot please any faction, and (5) multi-level change research suffers from the collection and analysis complications of multi-level data. Unification also has some negative implications. First of all, organizations cannot be depicted as theory hierarchies emanating from basic, general principle that can reduce higher-level theories. Moreover, some branches of knowledge employ concepts that cannot be reduced (e.g., cultural philosophy). Finally, the derivation from the original theory would not necessarily prove explanatory. A typology of inter-theoretic perspectives On the basis of inter-theoretic context and inter-theoretic continuity, the following typology can be constructed. Theoretic context Theory continuity Low Intra-level theory Theoretic revolution Inter-level theory Theoretic pluralism High Theoretic evolution Theoretic connections - Theoretic pluralism: With low continuity and low context, this assumes that a new theory offers little connection to its predecessor. Rather, they replace, subvert and compete. No relationship can exist between theories operating at different levels. Adopting this means assuming the presence of a complex heterogeneous world that requires a complex description and is irreducible, primarily as a result of human factors. This approach also implies that no one best way to secure knowledge about change exists. Theoretic connections: Here, it is assumed that intersections can be found between adjacent theories. Reductions and unifications can occur to a certain extent. Theories may become connected in one of three ways: (1) heuristic dependence (theory of one philosophy may be used to guide the generation of new hypotheses in another), (2) conformational dependence (methods from one field confirm hypotheses in another field), and (3) methodological integration (methods cohere to assess common hypotheses and data). Theoretic revolution: This quadrant proposes that theories get exchanged wholesale at the same analytical level. New is always better and replaced old under different assumptions or paradigms. Theoretic evolution: Here, the best theories get better, becoming more comprehensive through incremental and evolutionary updating (e.g., replicating important findings from other studies) Conclusion Theoretical unification is an illusion for some and merely troublesome in practice for others. However, the nexus between multiple philosophical perspectives presents the best opportunities. Different lenses lead to a richer understanding of change situations. #4 – Burnes (2009), Ch.2; Developments in organization theory Introduction Despite its growing dominance, the Classical approach began to encounter both intellectual and practical opposition in the 1930s. Three assertions strike at the heart of this: (1) organizations are not machines but cooperative systems, (2) people are motivated by a range of rewards, not just monetary ones, and (3) motivating factors change over time. As a result, two new approaches emerged: the human relations approach and the contingency approach. The Human Relations approach In the 1930s there as the emergence of a more collectivist ethos than ever before. Based on this, the human relations approach emerged that is a distinct break from the ideas of the classical school. However, in two important ways, similarities exist. The first is their shared belief in organizations as closed, changeless entities. Second, both claim to have discovered the ‘one best way’ to running organizations, regardless of the type. The human relations approach assumes that people are emotional rather than economic-rational beings. Hence, people’s emotional and social needs can have more influence on their behavior at work than financial incentives. Furthermore, organizations are cooperative, social systems rather than mechanical ones. People seek to meet their emotional needs through the formation of informal but influential workplace social groups. Finally, organizations are composed of informal structures, rules and norms as well as formal practices and procedures. Elton Mayo and the Hawthorne experiments Elton Mayo is considered by many to be the founder and leading light of the Human Relations movement. Though his involvement within the Hawthorne experiments is disputed, he did gain his fame by this research. The Hawthorne experiments were designed to investigate the influence of different working variables on the productivity of employees. The results showed that it was not the changes in working conditions that affected output, but the fact that those workers involved had been singled out for special attention. Mayo and his colleagues put forward two major propositions. First, work processes should be seen as a collective, cooperative activity as opposed to an individual, isolated one. Second, humans have a deep need for recognition, security, and belonging. Workers performance attitudes could be influenced more by their need for recognition and security. Hence, the crucial issue became one of social relationships – human relation – in the workplace. Chester Barnard and cooperative systems Barnard put forward the idea of organizations as cooperative systems. He was the first to treat organizations as systems rather than machines. An organization is a closed systems because without the willingness of its members to make contributions to and to pursue its goals, it cannot operate effectively. Cooperation could not be achieved by monetary incentives, but should be a mixture of both moentary and non-monetary inducements. Cooperation would not be effective unless an organization possed a common purpose, the responsibility of which lies at the top of the organization, although achieving it requires the cooperation organization wide. He also asserted that the flow of authority is not from the top down but from the bottom up. To avoid a negative response from workers, Barnard advocated systematic and purposeful communication, which is the product of effective leadership. Abraham Maslow’s hierarchy of needs Maslow was one of the first to differentiate between and classify different types of human needs. He distinguished five different needs in a hierarchical order: psychological needs, safety needs, social needs, esteem needs, and self-actualization needs. A person has to satisfy substantially the need at one level before they could move up the hierarchy and concentrate on higher-order needs. However, personal experiences or cultural differences may cause differences in the hierarchy of needs. For the Human Relations approach, this theory explained why in some situations Tayloristic incentives were effective, whilst in others, they were not. However, clearly, Maslow’s work cannot be transferred fully into the organizational setting, given that the constraints on freedom of action imposed by most jobs do not allow individuals to approach self-actualisation. Douglas McGregor and Theory X – Theory Y McGregor argues that decision taken by top managers on the best way to manage people were based on their assumptions about human nature. He maintained that there are basically two commonly held views of human nature: a negative view (theory X: people dislike work, employees must be coerced, people avoid responsibility, and security is most important in employment) and a positive view (theory Y: people see work as a natural thing, workers are capable of self-direction and control, responsibility is accepted, imagination and creativity are dispersed through the population). He believed that mangers’ behavior towards their subordinates was based upon one or other of these views, both of which consist of a certain grouping of assumptions about human behavior. Managers adhering to theory X will use a combination of stick and carrot methods to control their subordinates and will construct organizations that restrict the individual’s ability to exercise skill, discretion and control over their work. Those adhering to theory y will adopt a more open and flexible style of management, creating jobs that encourage workers to contribute towards organizational goals and allowing them to exercise skills and responsibility, with an emphasis on nonmaterial incentives. Although this indicates managerial choice, McGregor believes that changes in the nature of modern societies meant that organizations were moving, and should move, in the direction of theory Y. Warren Bennis and the death of bureaucracy In the 1960s, there was a widely held view that bureaucracy was dying and being replaced by more flexible, people-centered organizations. Bennis termed this the ‘death of bureaucracy’, arguing that every age develops an organizational form that is appropriate to its time. Bureaucracy was the antidote for the personal subjugation, cruelty, nepotism and capriciousness that passed for management in the Industrial Revolution. However, new conditions emerged which made bureaucracy unsuited for current times. This is due to the increasingly rapid and unexpected changes, growth in sizes of organizations, increasing diversity of the workforce, and a change in managerial behavior Job Design: operationalising Human Relations The Human Relations school lacks a clear set of operational definitions and guidelines that allow organizations to understand implement it. However, job design, or work humanization, has become a powerful technique for rolling back the worst excesses of the Classical school. Davis and Canter (1955) argued that jobs could be designed to satisfy both human and organizational needs, arguing that job satisfaction leads to increased organizational performance. Job design can come in three main variants: job enlargement, job enrichment, and socio-technical systems theory. The concept of job design attracted so much attention as workers have become better educated with a focus on the higher-order needs, organizations had to become more responsive to the needs of their customers due to increased competitions, and low unemployment led to high rates of turnover. The popularity of Job Design fluctuated with the employment levels. The Human Relation approach: summary and criticisms The most obvious overlap between all of the above is their almost total rejection o the classical movement‘s mechanistic-rational approach. Second, the human relations proponents create a model that possesses both coherence and plausibility through three core elements: leadership and communication, intrinsic job motivation as well as extrinsic rewards, and organization structures and practices which facilitate flexibility and involvement. These are underpinned by two central propositions: organizations are complex social systems with both formal and informal social structures, and human beings have emotional as well as economic needs. However, there is also criticism against this approach. Economists rejected the argument that nonmaterial incentives have a potentially stronger influence than material incentives. The emphasized need for togetherness and belonging was seen by some as a denial of individualism or as belittling workers and portraying them as irrational beings. Sociologists criticize it for attempting a sociological analysis of organizations without taking into account the larger society within which each organization exists. Final criticism concern its claims for the ‘one best way’. What is needed, instead, is an approach that links approaches to work design to the particular context to which they are best suited. The Contingency Theory approach This theory has proved to be more influential than the ones described above. It rejects the ‘one best way’ idea from the human relations and classical approach. In its place it substituted the view that the structure and operation of an organization is dependent (contingent) on the situational variables it faces – the main ones being environment, technology, and size. Since every organization faces a different situation, the one best way for all organizations is replaced by the one best way for each organization. Contingency theorist such as Simon base their approach on systems theory, adopting the premise that organizations are open systems whose internal operation and effectiveness are dependent upon the particular situation variables they face at any one time. Here, any part of an organisation’s activities influences all other parts. In addition, organizations are not in complete control of their own fate: they can be, and often are, affected by the environment in which they operate, and this can and does vary from organization to organization. Tom Burns and George Macpherson Stalker: the importance of environment Burns and Stalkes identified five different types of environment that influenced a company, ranging from stable to least predictable. They also identified two basic forms of structure: mechanistic and organic. Mechanistic structures were more effective in stable environments, whereas organic ones were suited better to less stable, less predictable environments. Mechanistic structures are characterized by specialization of tasks, closely defined duties, hierarchical structures, instruction and information from the top to the bottom, obedience to the organization, and prestige that is determined by hierarchy, and is closely connected to the classical approach. Organic structures, resembling the human relations approach, are characterized by job and task flexibility, adjustment and continual redefinition of tasks, a network structure, consultation rather than instructions, commitment to the work group, and importance determined by contribution. Paul Lawrence and Jay Lorsch: the case for environment continued Lawrence and Lorsch focused on how individual departments within companies responded to, and organized themselves to cope with, aspects of the external environment that were of particular significance to them. In their study, the structure of each firm was analysed in terms of its degree of differentiation (the degree to which departments are distinct from each other) and integration (the degree to which they have common structures. The degree of integration was found to be critical to a firm’s overall performance. The most effective organizations had an appropriate fit between the design and coordination of departments and the amount of environmental uncertainty they faced. James Thompson: environmental uncertainty and dependence Thompson’s work took the environmental perspective forward in three ways. The first was to argue that although organizations are not rational entities, they strive to be so because it is in the interests of those who design and manage the organization that its work be carried out as effectively and efficiently as possible. Secondly, different levels of an organization may exhibit and need different structures and operate on a more rational or less rational basis. Third, he recognized that organizational effectiveness was contingent not only on the external environmental uncertainty, but also on the degree of internal dependence present. He formulated a three-type classification in relation to internal dependence; pooled interdependence (autonomous parts enabling the whole to function effectively), sequential interdependence (output of one part is input of other part), and reciprocal interdependence (direct interaction between parts). He went on to argue that the type of interdependence could be related to the degree of complexity present: simple organizations rely on pooled interdependence whereas the most complex organizations showed all three forms of interdependence. In a nutshell, he argues that different sections of an organsiation have different complexity, rationality, and formalization. The higher both the overall level of uncertainty and that faced by other parts of the organization, the greater will be the dependence. As this interdependence increases, coordination through standardization becomes less effective. Finally, the more coordination is achieved through mutual reciprocity, the less rational will be the operation of the organization. Joan Woodward: the case for technology Woodward found that more successful companies adopted an organizational form that varied according to their main production technology, being the machinery used, but also the way it is organized, operated, and integrated. She identified three types of production technology: small batches, large batches, and process production. The most complex technology, process production, was related to mechanistic structures, whereas the least complex ones, small batch, was related to an organic structure. However, a major drawback is that this approach cannot be applied to nonmanufacturing companies. Charles Perrow: the case for technology continued Perrow drew attention to two major dimensions of technology: the extent to which the work being carried out is variable of predictable, and the extent to which the technology can be analyzed and categorized. He constructed a continuum ranging from routine to non-routine. With the latter, the high quantity of exceptional occurrences require difficult and varied problem-solving techniques (organic). Routine technology can be dealt with by recourse or standard, simple techniques (mechanistic). The Aston group: the case for size The Aston group found that size was the most powerful predictor of specialization, use of procedures and reliance on paperwork. The larger the organization, the more likely it was to adopt a mechanistic structure and vice versa. This struck a blow against Bennis who saw bureaucracy as dysfunctional and dying. There are two explanation for the link between size and bureaucracy. First, to deal with the greater opportunities for specialization that come with size, managers have to impose a new system that can control the new system. Second, the difficulty of directing even larger numbers of staff makes it highly ineffective to continue using a personalized style of management. Contingency Theory: summary and criticisms There are three unifying themes to the contingency approach: organizations are open systems, structure is dependent upon the circumstances a firm faces, and there is no one best way for all organizations but there is a one best way for each organization. Structure Environment Technology Size Mechanistic Organic Stable Process Large Good performance Poor performance Dynamic Unit Small Poor performance Good performance The attraction of this theory is obvious. First, it was in tune with the times in which it emerged, a period of rapid economic and technological change. Second, it was simpler to understand and apply than the human relations approach. Finally, contingency theory seeks to apply rationality to organization design. However, there are also a number of criticisms to this approach. First, there is difficulty in relating structure to performance, as there is no agreed definition of good performance. Second, there is no agreed or unchallenged definition of the three key situational variables. Third, The relationship between size and structure has shown to be difficult to relate to performance. Fourth, the approach looks to the formal structure, but informal may also play a very important role. Fifth, structure and associated practices may be strongly influenced by external forces (e.g., regulation). Sixth, rather than managers being the prisoners of contingencies, they may have a significant degree of choice and influence over their situational variables. Seventh, it is assumed that organizations pursue clearcut well thought-out stable and compatible objectives. However, there is a high presence of conflicting objectives and objectives are often unclear. Finally, contingency theory is sometimes seen as too mechanistic and deterministic, ignoring the complexity of organizational life. Conclusions The human relations movement offers pertinent advice with regard to having clear objectives, good communication, and leadership, but is less forthcoming on how change objectives should be set, and the changes planned and implemented. Contingency theory on the other hand, gives a procedure for setting objectives and stresses the need to identify and analyze the situational variables. However, it is also silent on the issues of planning and implementation. Thus, neither of the approaches discussed here appears to be the solution to all known organizational ills. Specifically, the issue of culture barely gets a mention. Nor do they appear to take account of national differences and preferences or wider societal factors. #5 – Burnes (2009), Ch.3; In search of new paradigms Introduction Business is changing and consumers dictate to organizations that they should meet their everchanging tastes. Such has been the change in attitudes towards customers that many now speak of organizations having gone through a paradigm shift. Paradigms are universally recognized scientific achievements that over a period of time provide model problems and solutions to a community of practitioners. Applying it to organizations, a paradigm can be defined as a way of looking at and interpreting the world: a framework of basic assumptions, theories and models that are commonly and strongly accepted and shared within a particular field of activity at a particular point in time. The rise of corporate Japan forced American business to question what they did and how they did it. The 1970s also saw the return of unemployment and inflation, both assumed to have been eliminated, and two oil shocks which highlighted the reliance on imported energy. The key words for the future became variety, flexibility, and customization. Perez and Freeman argued that a new techno-economic rational was emerging with a shift towards information intensive products, a change towards flexible production systems, and a move towards integration of processes and systems. Increasingly, the term postmodernism was usd to describe the changes taking place. The Culture-Excellence approach Culture is at the heart of competitive advantages. More than 80 percent believe that an organization that lacks a high-performance culture is doomed to mediocrity. Tom Peters and Robert Waterman’s search for excellence Peters and Waterman studied the determinants of organizational excellence, using the 7 S framework. They found that the four soft Ss (staf, style, shared values, and skills)held the key to business success. They argued that the rational approach is flawed, as it leads to wrong-headed analysis (too complex to analyse), paralysis through analysis (action stops and planning runs riot), and irrational rationality (the ‘right’ answer is found irrespective of its applicability). In contrast, they believe that freedom given to managers and employees challenges the orthodox and enables experiments with different solutions. There are eight key attributes that organizations need to demonstrate if they are to achieve excellence: 1. A bias for action: Excellent companies favour methods that encourage rapid and appropriate response. One method devised for doing so is chunking. Chunking is an approach whereby a problem is first made manageable and broken into chunks, and then tackled by a small group of staff. Therefore, excellent companies are characterized by small, ad hoc teams applied to solving designated problems which have been reduced to manageable proportions. 2. Closeness to the customer: The best organizations are alleged to go to extreme lengths to achieve quality, service, and reliability. They seem to focus more on the revenue generation side of their services. 3. Autonomy and entrepreneurship: Perhaps the most important element is their ability to be big and yet to act small. Here, product champions are allowed to come forward, grow, and flourish. This championing system comprises three elements: the product champion, a successful executing champion, and the godfather. Autonomy and entrepreneurship are encouraged by the communications procedures adopted by excellent companies, in which communication is informal, the communication system is given both physical and material support, and communication is intensive. 4. Productivity through people: Workers are treated with respect and dignity. People, rather than systems and machines, are the primary source of quality and productivity gains. 5. Hands-on, value-driven: Excellent companies are value driven: they are clear about what they stand for and take the process of value-shaping seriously. Everyone in the organization should be driven by these values. 6. Stick to the knitting: These companies do what they know bests, rather than acquiring or diversifying away. Acquisitions are always in field of their core activities. 7. Simple form, lean staff: Keep things simple and small. Basic structures are left in place, while all other things revolve and change around it, giving the company great flexibility. Such structures only require a small, lean staff at the corporate and middle management levels. 8. Simultaneous loose-tight properties: This allows excellent companies to control everything, whilst on the other hand allowing and encouraging individual innovation, autonomy and entrepreneurship. Thus, main attributes of excellent companies are that they are flay, anti-hierarchical, innovation and entrepreneurship, small corporate and middle management, reward based on contribution, brain power over muscle power, and strong, flexile cultures. Rosabeth Moss Kanter’s post-entrepreneurial model Kanter argues that companies need to be speedy in order to survive. She produce the postentrepreneurial model of how the organization of the future should operate. She sees them s pursuing three main strategies: 1. Restructuring to find synergies: all non-core activities should be eliminated and companies should ensure that the essential tasks are still undertaken. The result is to create flatter, more responsive and less complex organizations that have a greater degree of focus than in the past. 2. Opening boundaries to form strategic alliances: There is a need to pool resources with other organizations and to band together to explot opportunities and to share ideas and information. These alliances take three forms: service alliances (cross-company to undertake a specific project), opportunistic alliances (JV aimed at taking advantage of a particular opportunity), and stakeholder alliances (permanent alliance with stakeholders). 3. Creating new ventures from within – encouraging innovation and entrepreneurship: Here, innovation will move from the specialized domains such as R&D to the central stage. As a result, the innovative potential of employees is being tapped, and a proliferation of new ideas, products and ways of working are emerging. The consequences of the post-entrepreneurial model Applying the post-entrepreneurial model will have impact on three major areas: reward systems, career paths and job security, and lifestyle. Employers and employees will increasingly come to look for new and more appropriate ways of rewarding and being rewarded. Changes in reward systems are driven by four main concerns: cost, equity, productivity, and entrepreneurial pressure. These are approached through applying three different payment methods: profit sharing, individual performance bonuses, and venture returns methods. However, the results of these approaches could be minimal in terms of motivation or could even be demotivating and drive out the most experienced people in the organization. As organizations become slimmer and more tasks are contracted out, structures are becoming flatter and entire layers or hierarchy are dispensed with. It is no longer sufficient just to be skilled, as jobs may change over time or disappear. Two main dilemmas for the organization are how to reconcile with their stated objectives of treating employees as long-term partners, and how to motivate employees to work in the organisation’s interest rather than their own. Finally, with stronger financial rewards and greater freedom, people are expected to work more hours and centre their life around work. All in all, Kanter shares Peters and Waterman’s view that traditional organizations stifle creativity and agrees with their call for radical change. They share much common ground on the issues of innovation, entrepreneurship, culture, flexibility, structures and jobs. However, Kanter looks also to the downside of these changes. When looking at approaches to change, Kanter distinguished between Bold Strokes (major strategic or economic change, rapid and short term, stimulated by senior managers) and Long Marches (Behavior/cultural change, slow and long term, involves whole organization). These approaches can be complementary rather than alternatives. In addition, Kanter came up with the 10 commandments for executing change: (1) analyze the organization and its need for change, (2) create a shared vision, (3) separate from the past, (4) create a sense of urgency, (5) support a strong leader role, (6) line up political sponsorship, (7) craft an implementation plan, (8) develop enabling structures, (9) communicate and involve people, (10 )reinforce and institutionalize the change. Charles Handy’s emerging future organizations Handy also believes that the emerging future organizations will be smaller, more flexible and less hierarchical. Rather than established the ‘one best way’, he identifies three generic types of organizations that he thinks will dominate the future: 1. Shamrock organization: This form is composed of three distinct groups who are treated differently and have different expectations: a small groups of specialist core workers, a contractual fringe, and a flexible labour force. The core workers are essential, have wellrewarded jobs, and are expected to be loyal. The contractual fringe is the result of an attempt to use machines to replace people and the contracting-out to individuals and other organizations of services and tasks previously done in-house. Thus, the people from the contractual fringe may not work exclusively for this company. This is cheaper, makes management easier, and enables workload balancing. The flexible labour force are temps. Follwing this structure allows companies to be big in terms of output, whilst being small in terms of layers and bureaucracy. 2. Federal organization: Handy defines this type as a collection or networks of individual organizations allied together under a common flag with some shaped identify. This organization arises for two reasons: as organizations grow bigger, the core workers find the volume of information to difficult to handle. Second, this allows the smaller parts of the organizations to be flexible and competitive. Federalism implies grating autonomy to Shamrocks. 3. Triple I organization: This comprises a set of principles rather than a structural model. The equation for organization success will be : intelligence, information & ideas = added value. For this to occur, organizations must become a learning organization. Everyone will be expected to think and learn as well as do. Handy departs from Kanter and P&W’s perspective in two aspects. First, he acknowledges that not all organizations will adopt the same form. Second, he states what is only hinted at by other writers, that new organizations will have a system where some a more equal than others and have different rewards. Culture-Excellence: summary and criticisms This approach has gained its success mainly as it offered a recipe for success that was in tune with the free market liberalism. However, there is also much criticism to this approach. First, there are concerns on the role and behavior of people in the new organizations. It pits individuals against individual and parts of an organization against the other. Second, the recommendations of this school would stimulate political behavior. Third, they advocate a one best way approach, irrespective of size, environment and other circumstances. Finally, the background of the different authors also lead to many inconsistencies within the approach itself. The Japanese approach to management With economic and technical assistance, Japan overcame its many industrial relations and quality problems of the 1950s and created a distinctive and highly successful approach to management. What is the Japanese approach to management? Many factors can be found for this success, which can be grouped within one figure: Personnel Issues Business Practices Lifetime employment Long-term planning Internal labour markets Seniory-based promotion and Timeliness Japanese Management reward systems Teamwork and bonding Enterprise unions Quality Training and education Company welfarism Important was the nature of the Japanese society and its impact on individuals and companies that gave Japan its competitive edge. For this reason, western countries were unable to replicate Japanese practices. The future of the Japanese approach Government support plans have played a strong role in the development of Japan’s science and technological base and created a strong, competitive and world-class industrial Japan. However, this does create a dependency on the government to support the industries. Japan seems to be declining nowadays. One of the most persuasive explanations for this is that Japan failed to develop the rest of its economy to similar standards. The service sector is only half as productive as its US counterpart. Personnel practices are also changing, especially those relating to lifetime employment, senioritybased promotion and the treatment of female workers. The Japanese approach: summary and criticisms The Japanese approach has delivered impressive economic results, but there are those who question the social cost involved. Japanese workers are expected to work much longer hours than their Western counterparts and partcipiate in many work-related social events. There are also other criticisms to this approach: most companies operate a two-tier labour market, where a minority has good conditions and the rest does not. Furthermore, even those with lifetime employment are little more than slaves to the corporation as they cannot change jobs. Moreover, the merits of teamwork are only gained thank to the high peer group pressure. Finally, the lack of independent trade union leaves workers defenseless in the face of managerial pressure to work even harder. Organisational learning To cope with the growing complexity, organizations are recognizing the need to acquire and utilize increasing amounts of knowledge. The second factor that generated interest in organizational learning was the rise of corporate Japan. What is organizational learning? Organizational learning describes attempts by organizations to become learning organizations by promoting learning in a conscious, systematic, and synergetic fashion that involves everyone in the organization. Though there are many, many different definitions and authors on learning, there seems to be an agreement in that learning is directed increasingly at transformational change. The potential of organizational learning to enable organizations to reinvent themselves is making it such an attractive proposition for many managers. Senge identified five disciples that organizations need to foster amongst individuals and groups in order to promote learning and success: (1) personal mastery, (2) mental models, (3) shared visions, (4), team learning, and (5) systems thinking. In terms of organizational learning, Argyris and Schon’s triple-loop learning seems to be the most influential. Cummings and Worley also identified five organizational characteristics that promote organizational learning: structure, information systems, human resource practices, organizational culture, and leadership. Finally, Probst and Buchel take a very different view and claim that organizational learning is unique to an institution. Each organization can and should find its own way to become a learning organization. They argue that there are at least four different generic approaches: learning by developing a strategy, learning by developing a structure, learning by developing a culture, and learning by developing human resources. Organisational learning: summary and criticisms For every positive statement about organizational learning, one can also find a negative one. Though it is difficult to summarize such a dispersed field, in general, most writers would agree that an organisation’s survival depends on its ability to learn at the same pace or faster than the environment, learning must become a collective process, there must be a shift towards systems (3 rd loop) learning, organizational learning can lead to transformational change, and an organization can adapt to and influence its environment. However, there are also six major criticisms to this approach: (1) there is no agreed definition of organizational learning, (2) there is scarce empirical research, (3) people learn, not the organization, (4) managers view knowledge and control as synonymous and attempt to reduce workers knowledge and increase their own, (5) most theory on this comes from the west, and (6) the general adoption of organizational learning is based on the assumption that all organization operate in a fast-moving and unpredictable environment: this doesn’t have to be the case. Conclusions The Japanese approach has similarties to Taylor, whereas cultural excellence looks like the HR movement. There is some contact between the three approaches mentioned here: OL draws on Japanese methods to gather information and stresses the importance of individuals in promoting innovation. However, advocates of OL argue that you can change the environment, which the cultural excellence does not agree with. Furthermore, lifetime employment and loyalty of the Japanese contrasts with the stress on the transient nature of jobs of the CE approach. On balance, these three approaches conflict with each other. There are five points of criticism to these three approaches. First, all three approaches claim to have the one best way. Second, the social cost of achieving excellence is high. Third, the issue of power and politics is barely touched within these approaches. Fourth, in neither approach is there any real discussion or acknowledgement of the difficulties in defining or changing culture, despite much evidence to the contrary. Fifth, the approaches say little about how change should be achieved, although the Japanese approach is more specific (Kaizen). #6 – Burnes (2009), Ch.4; Critical perspectives on organization theory Introduction The world is changing more and more, going into what some call the postmodern age. This chapter examines three critical perspectives on organization theory with a view to understanding how they view reality and the implications of their differing view for organizations. The Postmodern perspective – From modernism to postmodernism? Postmodernism concentrates on the ways in which human beings attempt to shape reality and invent their world. Reality is socially constructed and for this reason, there is not one reality but multiple realities. The changing nature of work and competition forced organization theorists to question existing and entrenched assumptions about the world. This debate created a receptivity amongst a wider audience for the work of the postmodernists, who provide a more substantial and complex explanation for the changes taking place in the world around us. In order to understand postmodernism, we first have to look at its departure from modernism. Modernism is a term used to describe the values, rationale, and institutions that have dominated western societies since the age of enlightenment in the 18th century. Modernists assume that the world and its structuring principles are accessible through the correct scientific methods of observation and analysis. Organizations are characterized by mechanistic and hierarchical structures based on the extreme division of labour and control systems that suppress people’s emotions and minimize their scope for independent action. Postmodernism opposes the emphasis on reason, logic and rationality and challenges the claim of science to establish authoritative or absolute knowledge. It argues that knowledge is a social construction and that new paradigms are brought about by changes in the community of scientists rather than discoveries per se. A crucial distinction is how view the nature of language. For the modernist, language is a tool for the logical representation of the real. For postmodernists, language gains its meaning through its placement within social interchange. They use deconstruction to reveal and overturn the assumptions underlying an argument. Postmodernists also assume self-reflexivity: a critical suspicion of one’s own suppositions. If reality and language are socially constructed, postmodernists must constantly question and be suspicious of their own assumptions, statements, and actions, which is related to triple-loop learning. In organizations, there are clear distinctions between modernists and postmodernist organizational forms: Modernist organization Postmodernist organization Structure Rigid bureaucracies Flexible networks Consumptions Mass markets Niche markets Technology Technological determinism Technological choice Jobs Differentiated, demarcated, Highly de-differentiated, deand deskilled demarcated and multi-skilled Employment relation Centralized and standardized Complex and fragmentary There are two key areas of organizational life to which postmodernist pay particular attention: culture and power. The postmodern approach to organizational culture rejects the integrationist and differentiation perspective. Instead, it takes a fragmentation perspective, believing the organizational cultures are inconsistent, ambiguous, multiplicities and in a constant state of flux. Where power is concerned, postmodernists believe that power resides in the combination of linguistic distinctions, ways of reasoning and material practices which make up the body o taken-for-granted knowledge that exists in society and organizations. Foucalt argues that power and knowledge depend on each other, so that an extension of a group’s power is dependent upon and accompanied by an extension of its knowledge and vice versa. The perspective on power has important implications for how reality comes to force. Reality is seen as the product of power and politics in an organization. A coalition of groups may be able to wield power and use political processes to achieve a dominant position in an organization. When this occurs, it is their view of reality which takes shape and comes to be accepted. The implications for organizations Though CE is more comfortable with postmodernism, the classical and HR approaches fall within the modernist approach. Organizational learning is also very much related to postmodernism, whereas the Japanese approach touches concepts of both sides. In summary, despite the somewhat impenetrable and contradictory nature of the literature, the core of postmodernism concerns the nature of reason and reality. Seen is this light, postmodernism has three important implications for the organization theories and practices on culture (changing is unpredictable and sometimes undesirable due to multiplicity of meanings), reality (power and politics), and choice (managers have choice). Postmodernism – some reservations The main drawback of postmodernism is the difficulty in defining the concept. The term has acquired a wide range of definitions. Furthermore, it is uncertain whether there ever was a modern era, so there cannot be a post modern one. In addition, there are those who maintain that the current developments are merely an extension of what has gone before rather than a significant break with the past. Finally, there are those who accept that the world is entering a new age, but believe globalization and not postmodernism is its defining characteristics. The realist perspective – What is realism? Realists also believe that reality is socially constructed, but they reject the notion of multiple realities. There is only one reality and it exists even if we have not discovered it yet. Events and patterns of events are generated or caused by mechanisms and power that exist independently of the events they generate. Realism offers support for a non-modernist and non-postmodernist approach to organizations and management. Realism and organization Realists seek to identify generative structure and to identify their capabilities. However, though these causal mechanisms possess certain capabilities, causal powers, the actual outcome of their operation will be dependent on circumstances. In terms of organizations and management, a central issue is the extent to which organizations and their practices are produced by human beings but still exist externally to them and shape their behavior. Realists argue that whilst the social world is a product of human actions, it is not necessarily a product of human design but exists independently of human beings. They also argue that social phenomena can exist without those involved having any knowledge of them. Thus, they acknowledge the socially constructed nature of the world but, unlike postmodernists, do not see the world as being merely a social construction. When studying organizations, realists stress the need to give due weight to both people and structure and the complex interplay between them. Human action is shaped simultaneously by the constraining and enabling nature of an organization’s structure, which tends to favor certain kinds of outcome, but that any actual outcome is contingent on the prevailing circumstances. Realism – some reservations Realism is a riposte to both modernism and postmodernism. It attacks the former for placing too much reliance on science, rationality and logic, whilst critiquing the latter for rejecting reality in favor of multiple and competing realities. The modernists object to the social construction side of the realists reality, while the postmodernists object to realists claim of one reality and that it can be discovered. The complexity perspective – What is complexity? Complexity theorists maintain that successful organizations need to operate at the edge of chaos and can only maintain this position by the presence of appropriate order-generating rules. There are three central concepts that lie at the heart of complexity theories – the nature of chaos and order, the edge of chaos, and order-generating rules Chaos and order: Chaos is often portrayed as pure randomness, but it can also be argued that chaos and order are twin attributes of dynamic, non-linear systems and within chaos, a hidden order may be concealed beneath what looks completely random. For complexity theorists, chaos describes a complex, unpredictable and orderly disorder in which patterns of behavior unfold in irregular but similar forms. Stacey identifies three types of order-disorder: stable equilibrium (so stable that it dies), explosive instability (too unstable and destroy themselves), and bounded instability (complex system between stability and instability). Edge of chaos: Under conditions of bounded instability, systems are on the brick between order and chaos. Creativity and growth are at their optimal when a complex system operates at the edge of chos, although order generating rules are needed to permit self-organisation to take place and to remain at the edge without falling off. Order generating rules: The operation of simple order-generating rules permit limited chaos whilst providing relative order. The concept of order-generating rules explains how complex, non-linear, self-organizing systems manage to maintain themselves at the edge of chaos even under changing environmental conditions. Under certain conditions, complex systems can even generate new, more appropriate order generating rules when the old ones can no long cope with the environment. The implications for organizations Within organizations, semi structures may be the flexible structures that are sufficiently rigid so that change can be organized, but not so rigid that it cannot occur. In order for self-organization to apply, three implications must be upheld. First, there will be a need for much greater democracy and power equalization in all aspects of organizational life. Second, small-scale incremental change and largescale radical transformational change will need to be rejected in favor of a third kind which lies between the two. Third, in achieving effective change, order-generating rules have the potential to overcome the limitations of rational, linear, top-down, strategy-driven approaches to change. Complexity – some reservations There are three significant reservations to complexity theory. First, the complexity approach requires a shift towards greater organizational democracy and power equalization. It seems rather difficult for organizations to achieve this profound internal realignment necessary to implement his concept. Second, one should be careful not to treat complexity theories as though they are established, unitary, unquestioned and uncontroversial. Finally, there appears to be a lack of clarity or explicitness regarding how writer are apply complexity theories to organizations. Conclusions This chapter shows the need to set and understand approaches to running and designing organizations into a wider theoretical frame. None of the three perspectives reviewed here was developed for organizations. However, all three have significant implications for structuring and managing organizations. Postmodernism offers enormous scope for the emergence of alternative strategies and choices, but also stresses the importance of culture, power and politics. Realists see a more limited room for choice, limited by structures. In complexity theory, choice moves from the few to the many, depending on the situation. The main implication of all three is that organizations do have a wide range of options and choices open to them as to how they are structured and operated. #7 – Smith & Sutherland/Graetz (2011), Ch. 10; The critical philosophy: ‘changing reality’ Introduction During the 1970s, the western capitalist world underwent a transformation in cultural mood and economic expectations. The rules governing the ways things had always been done loosened almost to the point of chaos. At the same time, business organizations started to soften their management philosophies and learned to capitalize on changing patterns of consumption. The postmodern organization emerged, which established an emphasis on more fluid and customized ways of doing business. The postmodern view rejects singular or grand theories and sees change functions as a socially constructed view of reality. In principle, the critical philosophy is another term for postmodernism; the critics of modernism. Change management in a changing world Postmodernism doesn’t make sense unless viewed with reference to its departure from modernism. As a result of industrialization and increased competition, the need for more efficiency and specialization emerged; thus was born the modern organization. Organizational change revolved around the maximization of productivity (Taylorism) and held no place for human irrationality, imposed by top-management. However, especially after the oil crisis of 1973, it became clear that the environmental stability characterizing modernism was replaced by a new turbulent context and leaders were faced with the imperative to change. Business began to experiment with new structures and systems and most importantly, started to recognize that satisfied employees were productive and creative. Specialization and custom-built products emerged and required a flexible and talented workforce. The growth of consumerism had three implications for organizational change, all of which proved pivotal to the postmodern approach: (1) the substitution of essential standardized products for a pluralistic array of products and services meant that organizations purveyed personal identity as much as daily needs, (2) the perceptions of high and low culture reduced in terms of distance as the traditional cultural priorities were undermined by the denial of universal value and a preference for cultural relativism, and (3) the world became a fluid combination of reality, simulation and fantasy. The postmodern change agent The postmodern approach to change is less concerned with overarching, grand theories describing social behavior, and more interested in the intedeterminacy, ambuigity and contradiction of organizational life. This perspective provides little guidance about the best way to introduce change and introduces a range of challenges for change agents. To begin with, a postmodern change manager does not seek to standardize the workforce or throw slogans at underperforming employees until they perform or leave. The postmodern view accepts novel ways of change and is reticent to declare one approach more valuable than another. Part of the mostmodern way of thinking about change can be encapsulated in the concept of pastische. Practicing pastiche requires the fusion of opposites into a new form, for example, connecting clashing ideas or symbols until they took a novel life of their own as something new and original, rather than a compromise or something in the middle. For change managers, pastiche means experimenting with a unique combination of products, structures and values. The problem with pastiche – and all principles of postmodernism – comes in its commitment that no rules guide change because change itself functions simultaneously as the journey and the destination. Postmodern change theory takes a different approach where the chaotic current of change represent the only certainty. Rather than trying to find better metaphors or countering change, postmodernism tries to look for new ways of dealing with change itself and change is embraced. All in all, though there may be some useful lessons in creating an environment of experimentation and innovation, inevitably some modernist thoughts about getting things done will surface. Politics, power and change For political theorists, change management means pursuing power through political means. Sometimes referred to as the dialectical model, political explanations on change describe clashing ideologies or belief systems, where conflict signifies the most important variable driving change. As a result, introducing a political dimensions means assuming that clashing political forces will lead to change as the status quo is likely to be challenged. Change processes revolve around activities such as bargaining, consciousness-raising, persuasion, influence and power, and social movements. Victory goes to the most powerful group. Known as discursive analysis, change arrives through discourse with organizations. Discourse analysis concerns the way language helps to reveal social phenomena and fits as a subset of the critical philosophy due to the importance it places on the analysis of organizations and their members as social units that compete for power and priority. Similar to the postmodern outlook, it has plenty to say about change but less to say about how change should be introduced in practice. Reality itself is a social construction laid down by the discourses in operation, as any individual has a different interpretation. The foucauldian view Michel Foucault explored the relationship between power, knowledge, and discourse and claimed that power and knowledge intertwine, but are mediated by discourse. Change theorists adopting the Foucauldian style of interpretation claim that each organization uniquely produces and reproduces knowledge through what is written, spoken, heard and read. The key to change lies in written documents and verbal interaction that represent an organization truth or reality influencing is acquired and discharged. The exercise of power through the control of discourse underpins the ability to introduce change. For the discourse change theorist, organizational members are players on stage, reading scripts that they did not write, and being directed by managers who do not permit anyone else to interpret scenes. Discourse analysis takes a more liberal view, where power manifests as an ever-present script-prompter hovering in the stage wings. Organizational leaders and change agents do not own or possess power, rather, they apply it. This has a substantial effect on change management approaches. Change agents and leaders do not automatically possess power, they must acquire or assume it. Positional authority is not the same as wielding the power to make things happen. This contrasts with Marxists assertions that power can only be held by those with the ownership of productive means. Rather than power residing with the control of resources, Foucault saw power as existing in the relationships between people. To the discourse change theorist, the relationship between people in organization legitimize an imbalance of power, supported tangibly through systems that facilitate the subordination of one over another. Where Marx saw power as repressive, Foucault thought it could also be permissive and productive, encouraging people to behave in novel ways. Discourse and change Discourse change theorist assume that reality is socially constructed. Thus, if individual sense-making changes, so does their reality. As a result, organization change transpires when members change their sense of the organizational situation. Sense-making involves three dimensions: history, power and imagination. History refers to the way the rules for interpreting meaning were established in the past and have been maintained through tradition. On power, traditions persevere through reinforcement, reproduction and practice, which require the application of power through choices about communication content and delivery. Third, imagination refers to the capacity to envisage a difference which provides direction. It reflects less about a change leader’s vision and more about how a member can see a positive result from a change programme. Thus, successful change comes about when history, power and imagination line up with an organization’s contextual circumstances. Planned change occurs when the capacity to conceive a difference (imagination) meets the capacity to make a difference (power). Unplanned change occurs when context meets imagination. Resistance is not found within individuals, but within their constructed realities which have been challenged. The change agents need only determine the source of resistance and remove it in order to proceed with the change programme. Conclusion Postmodernism juxtaposes the old and new, characterized by a change management approach emphasizing diffusion, empowerment, flexibility, trust and market responsiveness. The practical implementation of postmodern change ideas involves refocusing the social boundaries established in modernism. Postmodernism rejects universal management truths which makes practical recommendations problematic. Postmodern is notoriously fragmented. For this reason, it tends to fall short as a popular tool for change. Discursive models of organization change similarly discard the conventional pursuit of universal patterns of change management and focus on the individual social construction of reality. Ongoing conversations in organizations need to be made transparent so that power relations can be examined. Like all theories that fall under the critical philosophy, discourse analysis offers the critical contribution that change, power, conflict and imagination intersect. #8 – Burnes (2009), Ch.5; Culture, power, politics and choice Introduction Since the previous approaches claimed to have the one best way, the result of innovations ought to be the reduction or elimination of managerial choice and discretion. The importance of managerial choice was noted in the conclusion of the previous chapter, initiating that rather than being the prisoners of circumstances, managers have a surprisingly wide degree of choice and discretions. The cultural perspective – What is organizational culture? The work of managers is governed, directed and tempered by an organization’s culture – the particular set of values, beliefs, customs and systems that are unique to that organization. There are many different definitions towards culture. However, in general, we can say that culture defines how those in the organization should behave in a given set of circumstances, all members are affected by it, ensure that the actions of a member of an organization are judged by themselves and others in relation to expected norms of behavior, and legitimizes certain forms of action and prescribes other forms. Much attention has been paid to the roles of ceremonies, rites and rituals in reinforcing behavior. Trice and Beyer found that these include the rites of passage, rites of questioning, an d rites of renewal. Another important theme is the role of heroes, the importance of which was emphasized by Peters and Waterman. However, leadership is just one aspect of culture. Cummings and Huse define four major layers of culture, ranging from basic assumptions to values, to norms, and finally to artifacts. In fact, culture represent an onion, which multiple layers that have to be pealed off. Furthermore, where there are cultures, there are also subcultures. In particular, there can be significant differences between espoused culture and culture in practice. Handy’s typology of culture is the most prominent one, dividing culture into four types: power, role, task and person. A power culture is associated with a web structure with one or more powerful figures at the centre. A role culture is appropriate to bureaucracies, stressing the importance of procedures and rules, hierarchy and security. A task culture is job- or project-orientated, where speed of reaction and creativity are more important than structure. Finally, a person culture is, though rare, a cluster or galaxy of individual starts. Thus, role cultures are mechanistic whereas task cultures are organic. Profound implications of the cultural approach are four-folded. First, behavior is shaped by shared values, beliefs and assumptions. Second, if organizations have their own identities, are there particular types of cultural attributes that are peculiar to top-performing organizations? Third, culture guides the actions of an organization’s member without the need for instructions. Fourth, it is possible to change or manage a culture. Changing organizational culture? No organization’s culture is static: it tends to evolve in a slow and unplanned fashion as a result of the turnover of group members, changes in the environment, and changes in society. Based on the CE approach, a succesfule culture is one based on values and assumptions appropriate to the environment and its structure. Given that the environment may change rapidly, situations may arise where an organisation’s culture and structure may be out of line with its environment. In response, an organization may try and attempt to change its culture. Thus, the answer to why organizations wish to change its culture is because its existing culture is no longer fit for purpose and is having a detrimental effect on its competitive performance. Whether one can deliberately change culture is open to debate. For the optimists, culture can be learnt. For the pessimists, management is seen as being incapable of controlling culture. The realist take a position in the middle, stating that culture as a whole cannot be changed but several elements can be influenced by management. So the answer to this question is yes, culture can be changed. If that is the case, than how should one do it? Dobson found a four-step approach to culture change involving shaping the beliefs, values and attitudes of employees. It start by changing recruitment policies, reorganizing the workforce, effectively communicating the new values, and changing systems, procedures and policies. All approach to cultural change seem to focus on the two upper elements of cuclture: artefacts and norms of behavior. There are two final and very important issues that need to be recognized when looking at approaches to cultural change. First, it is a brutal process. The second issue relates to the extent that changes to artefacts and norms will lead to changes in values and thus to an overall change in an organization’s culture. Changing organizational culture: some reservations Fewer than 10% of organizations may successfully change their cultures. There seems to be a tendency to assume culture being the cause of a problem, when in fact they may arise from inapproprirate organizational structures. Any attempt to change a culture is inevitably going to meet with some resistance. Changing organizational culture: conflicts and choices The CE approach argues that there is only one form of culture that matters: strong and flexible. This is supported to a large extent by the Japanese approach and the OL approach. However, strong cultures may have a negative effect by stifling diversity and preventing alternative ideas arising. The postmodernist are skeptical of attempts to manipulate and change culture, believing that the outcomes of such attempts are unpredictable and can alienate rather than motivate employees. There are 3 main conclusions we can draw from the literature: first, managers must make their own choices based on their own circumstances and perceived options. Second, directive and coercive approaches to culture change may be successful, but may alienate a number of staff. Finally, in the absence of strong cultures that bind members together, managers may find it difficult to agree amongst themselves, resulting in power battles. The power-politics perspective – political behavior in organizations The power-politics perspective proclaims that organizations often act irrationally, their goals and objectives emerge through a process of negotiation and influence, and they are composed of competing and shifting coalitions of groups and individuals. Under such circumstances, managers satisfice. That is, rather than searching for the best solution, they select one that is satisfactory and sufficient. Furthermore, there is the tendency for individuals and groups to pursue courses of action that promote their interest, regardless of the organization’s formal goals and objectives. In organizations, there is a scarcity of resources. These resources becomes the focus for comparisons and the basis for self-esteem and, ultimately, the source of power. Power and politics: towards a definition Power is the possession of position and/or resources, whereas politics is the deployment of influence and leverage. Authority is the right to act, or command others to act, toward the attainment of organizational goals. Authority is in the position, it goes with the job, whereas power can be an individuals’ capability to influence decisions without authority per se. Poltiics may be exercised through reason, friendliness, coalition, bargaining, assertiveness, higher authority, and sanctions. The decision which one to use depends on the manager’s relative power, his objectives in seeking to influence other, his expectations of the target person, and the organisation’s culture. Power, politics and legitimacy Organizational politics is often seen as existing in a grey area between prescribed and illegal behavior. Porter differentiates between 3 types of behavior: prescribed, discretionary and illegal. The use of politics within organizations can best be described as non-sanctioned or informal or discretionary behavior, rather than behavior that is prohibited or illegal. Politics may be seen as going against on organizational goal, although the establishment of that goal can also be perceived as a political process. There are three types of power: coercive power, remunerative power, and normative power. A fourth one got added to this: knowledge power. The degree to which they are will be effective depends upon the source from which they spring. However, favorite strategies for influencing up and down are the use of reasons, whereas for influencing across, to co-workers, friendliness works best. The most detrimental outcome from the deployment of power arise when people feel they are being coerced into a particular course of action that goes against their beliefs or self interest. Many examples of other power tools showed the negative image that power and politics have. However, power and politics can also be seen as a necessary component in the toolkit of those responsible for managing change in organization and have a positive effect on improving the working of organizations by enabling them to manage change more effectively. All in all, a person’s or group’s position in the structure will determine factors as their influence on planning, their choice of technology, the criteria by which they will be evaluated, etc. Though postmodernist would not disagree with this analysis per se, their view of power in organizations is a much broader one. For them, power is the mechanism by which groups in organizations create and reinforce their view of reality. It is this shaping and construction of reality that allow dominant groups in organizations to impose their will on others rather than the use of sanctions and other control mechanisms. Managing and changing organizations: bringing back choice The view that choice and use of structure, and other key decisions, is the outcome of a political process rather than the application of rational analysis and decision-making has significant implications for organizations theory. Managers do have significant scope for the exercise of choice with regard to structure and other organizational characteristics. For rationality to prevail, an organizations must have either a single goal or agreement over the multiple goals. Since neither exist in most organizations, structural decisions are not rational and arise from a power struggle. Strategy, size, technology and environment act as a constraint on the freedom of action of groups and individuals. All in all, two interesting points arise. First, culture and structure need to be mutually supportive if an organization is to operate efficiently and effectively. Second, organizational culture is the product of long-term social learning in which dominant coalitions play a key role. Conclusions It was shown that the degree to which culture influences behavior is dependent upon the presence of clear and consistent organizational goals. If these are not present, conflict and disagreement emerge. The review of the power-politics literature showed organizations as shifting coalitions of groups and individuals seeking to promote policies and decision that enhanced or maintained their position in the organization. All in all, what is clear from this chapter is that managers, despite the constraints they face, have a far wider scope for shaping decisions than most organization theories acknowledge, and that the scope for choice and the deployment of political influence is likely to be most pronounced when change, particularly major change, is on the managerial agenda. #9 – Burnes (2009), Ch.6; Approaches to strategy Introduction Where business used to be short-term oriented, more structured and consistent approaches came to the fore later on. With the advent of the Classical and HR approaches, the emphasis moved to the effectiveness and efficiency of the entire organizations. Based on either rationality or personal considerations, the new wisdom is that for organizations to succeed, there must be a consistency and coherence to the decisions taken. That is, they must have a strategy. Understanding strategy: origins, definitions and approaches – the origins of strategy Strategy comes from the Greek work stratego, meaning to plan the destruction of one’s enemies through the effective use of resources. Chandler put forward the view that the emergence of strategy in civilian organizational life resulted from an awareness of the opportunities and needs – created by changing population, income and technology – to employ existing or expanding resources more profitably. The rise and fall of long-range planning In order to deal with changing conditions, American organizations began to adopt long-range planning techniques, necessitating finding the organization’s objectives and implementing a plan to attain these objectives. Long-range planning was a mechanism for plotting trends and planning the actions required to achieve the growth targets. In the end, it failed for a variety of internal and external reasons. Internally, many planning systems involved little more than an extrapolation of past sales trend and little attention was paid to changing circumstances. Externally, the relatively comfortable conditions of high market growth gave way to lower levels of growth, which led to increased competition as companies tried to maintain their market share. Long-range planning could not deal with environmental turbulence which limits forecasting accuracy. The slow growth and increased competition led to large single-business firms being replaced by multinational conglomerates. In response to the emergence of these conglomerates and the failure of long-range planning, the concept of strategic management began to emerge. Strategic management focuses on the environmental assumptions that underlie market trends and incorporates the possibility that changes in trends can and do take place, and is not based on the assumptions of steady growth. It sought to take a broader view of the environment than long-term planning (e.g. Porter’s five-forces or BCGs GSM). This approach portrays strategy as a rational process where managers gather quantitative data on their firms and from this information come to rational decisions. However, this received criticism, especially from Mintzberg. He argues that hard data are no more reliable than qualitative data, that organizations and managers are not rational entities, and that an organization’s strategy is as likely to emerge from unplanned actions as from any deliberate process. Defining strategy There are different perspectives on what strategy actually is, two main ones being the Planning and the Design school. The Planning school was based on formal procedures, training, analysis, and a large dose of quantification. The Design school proposed a model of strategy that emphasizes the need to achieve a fit between the internal capabilities of an organization and the external possibilities it faces (Chandler). Chandler suggested three important precepts for running organizations. First, an organization’s structure should flow from it strategy rather than being determined some universal one best way. Second, the visible hand og management was more important that the invisible hand of the market. Finally, large organizations need to decentralize and divisionalize in order to remain competitive. Mintzberg argued that there are five main and interrelated definitions of strategy: plan, ploy, pattern, position, and perspective. Johnson also distinguishes between different views, seeing strategy from the rationalistic view, the adaptive/incremental view, or the interpretive view. All in all, most writers would agree with Johnson and Scholes who described strategy as: concerning the full scope of an organization’s activities, the process of matching the organization’s activities to its environment, the process of matching its activities to its resource capability, having major resource implications, affecting operational decision, being affected by the values and beliefs of those who have power in an organization, and affecting the long-term direction of an organization. Approaches to strategy: the Prescriptive versus the Analytical stream Two issues are important in defining strategy: is it a process or the outcome of a process, and is strategy an economic-rational phenomenon or is it an organizational-social phenomenon? On these questions, there are two parallel, competing and to an extent, interacting streams of ideas. First, the Prescriptive stream that sees strategy as a controlled, intentional, prescriptive process, based on a rational model of decision-making, which produces complete deliberate strategies. Second, the Analytical stream, is more interested in understanding how organizations actually formulate strategy rather than prescribing how they should formulate it and argues that it is the outcome of the complex social and political processes involved in organization decision-making. The prescriptive stream was dominant in the 60s and 70s, but is was competing with a new variant, the positioning school of Porter. The main difference was that the planning and design schools put no limit on strategies, whereas the positioning school argued that only a few strategies are desirable in a given industry. The reason why these 3 schools have dominated strategy is threefold: first, the proponents set out deliberately to address the needs of industry and commerce by providing them with a blueprint for strategy formulation and implementation. Second, they interacted closely with a number of leading consultants and business school that promoted their works. Thirdly, as all three groups in this alliance were engaged in a business activity, selling strategy as a product, they were able to invest in promoting and developing their product in a way that others were not. The analytical streams sees strategy more as an outcome of a process. They argue that it is the dayto-day stream of decisions that determines an organization’s strategic direction, rather than the reverse. Organizations may start out with an intended strategy but due to unforeseen circumstances, many of these fall by the wayside. Rather, existing capabilities influence the decisions which are taken and from these decisions emerge new strategies that combine with the surviving elements of the original intended strategy. Thus, following Mintzberg, strategies emerge over time from the pattern of decisions companies take on key aspects of their activities. Weick views the world as an essentially ambiguous place in which it is unrealistic to make detailed plans. Child’s concept of equifinality takes this challenge even further. This concept simply means that different sorts of internal arrangements are perfectly compatible with identical contextual or environmental states. Mintzberg notes in relation to this that managers need to recognize that achieving a successful outcome is more important than imposing the method of achieving it. Understanding strategy: choices and constraints So is there a one best way for strategy? Following the equifinality concept, multiple approaches to strategy formulation may be compatible with positive outcomes. Especially since firms possess the ability to manipulate and influence these circumstances to their own benefit. The question then becomes not whether there exists strategic choice, but how much. Whitington attempted to make sense of the many definitions and categories of strategy by identifying four generic approaches to strategy: the classical approach (rational process), the evolutionary approach (reply to environment), the processual approach ( a fit is not required, compromise between market and goals), and the systemic approach (strategy is linked to social system and can be a deliberate process). The Classical and Evolutionary approach see profit maximization as the natural outcome, where the others believe other outcomes are possible and acceptable. The first three are one-best-way approaches whereas the last is a contingency approach. Choice, preference and judgment, for all but the classicists, do have a role to play in determining not just an organization’s strategy, but also the approach to strategy it adopts. However, choice is constrained by the national characteristics, organization characteristics, industry/sector, and the business environment. The case for country-specific constraints sees the operation of organizations as strongly influenced by the social system in which they operate. The culture of a country is reflected in the organization. The industry and sector norms may also influence choice, especially where the sector is highly competitive. Firms must stick to the rules of engagement in a sector or they will perish. An alternative would be to diversify and to avoid sector constraints. Third, on the business environment, this can provide constraints as well. An example could be governmental regulation. However, as was shown, there is evidence that shows that it is possible to change, control or manipulate the environment in which an organization operates. Finally, many organization characteristics may constrain or facilitate managerial choice. Particular importance are structure, culture, politics, and managerial style. Burns identified two basic organizational states (convergent/divergent) which both have an appropriate management style (transactional/transformational). Choices and constraints: summary The mix of the constraints presented above differ per company and may both conflict and complement each other. Successful firms are likely to be the ones whose managers are aware of and can balance the various constraints they face. Thus, it should be obtained that the type of strategic approach is a matter of choice, but that choice is constrained. However, even if this is the case, many firms still apply the classical model and managers still tend to satisfice. This is similar to Choen’s comment that decisions are often not taken but happen. They suggest that decision occur when four independent streams meet: problems, solutions, participants and choice opportunities – the socalled garbage can model of decision-making. Conclusions The move towards a new, more emergent, perspective on strategy has been brought about by the mounting criticisms against the Classical approach. The main criticisms are that it is mechanistic, inflexible, and reliant on quantitative tools and techniques of dubious validity, leading to a paralysis through analysis and irrational rationality. The alternative view is that organizations should move away from the reliance on mathematical models with human creativity being brought into play. Senior managers should create a vision of the future and establish its strategic intent. However, though we can identify two major perspective on strategy, within and between them there are a great number of variants which serve to confuse managers rather than help them. As a result, managers tend to choose one tool, regardless of the drawbacks. This chapter suggested a third approach, one which sides with neither the quantitative nor the qualitative schools of thought but which instead seeks to promote managerial choice. The strategy that organizations adopt is or can be the outcome of managerial choice and preference, although the degree of choice is constrained by societal, sectoral, environmental, and organizational factors. #10 – Burnes (2009), Ch.7; Applying strategy Introduction The Analytical and Prescriptive stream on strategy building represent markedly different perspectives on strategy formulation. However, this may be changing as a result of an increased number of strategic planning tools. Types of Strategy There is a wide range of approaches to strategy development that organizations can adopt. The same can be said to the types of strategy that organizations adopt. However, in the main, there are only three basic types or models of strategy. The Competitive Forces model: This approach stems from the positioning school and has become the dominant approach to strategy. Its central tenet is the need to align the organization with its environment and its direct industry, following porter’s five forces model. He argues that it is these five industry-level forces, the bargaining power of buyers and seller, threat of substitutes and new entrants, and rivalry amongst existing competition that determines the inherent profit potential of an industry. Porters maintains that there are only three basic generic strategies a firm can adopt in order to outperform competition: cost leadership, product differentiation and secpialisation by focus. Critics to this approach think that the choice of forces in the model appears to be arbitrary and without justification; nor is there any indiciation as how to assess the relative power of the forces or how they interact. In addition, it is too narrow and inflexible which leaves the organization vulnerable if environmental developments lead to rapid changes in the marketplace. Finally, it focuses to o much on a single variable, ignores political nature, is biased toward big business, and impedes learning and creativity. The Resource-Based model: The focus of the RB model is on the relation between an organization’s resources and its performance. No two firms possess the same combination of resources and the one with the best resources outperformes the other. The influence of this view has grown considerably over the last two years, it now being wisdom that organizations should (in Peters & Waterman’s terms) stick to the knitting and discard activities that are not part of their core business and which do not build on their core competences. This view challenges Porter and maintains that the possession of valuable, rare, inimitable and non-substitutiable resources may result in sustained superior performance. Criticism includes its lack of empirical support, complex and ambiguous definitions of resources, and that it is merely a rehash of the SWOT analysis. Furthermore, as competences take so long to develop, any beneficial match is likely to be accidental rather than the result of deliberate actions. The Strategic Conflict model: This model portrays competition as war between rival firms. A firm can influence profits by influencing the actions and behavior of its rivals and manipulate the market environment. Furthermore, these maneuvers are dependent on what one firm think another firm will do in a particular situation. Thus, strategic signaling is an important mechanism for influencing or intimidating rivals. This approach draw on game theory to understand the nature of competitive interaction between firms. Its emphasis on quick-wittedness, gut instinct and emotional elements of decision-making means it sits better with the Analytical stream. However, conflict-based strategies do not take account of the range of external and internal factors which could contribute to an organization’s competitivesness. Hence, strategic conflict is likely to be more appropriate in situations where there is an even balance between rivals in an industry. The three types of strategy are all fashionable, but very different in their emphasis and timescales. The strategic conflict model is outward-facing and short-term focuses. The competitive forces model is also outward-facing but is concerned with identifying and occupying a defensible market position, this tend to be medium-term focused. Finally, the RBV has an internal focus, but also a much longerterm focus than the other approaches. However, there are multiple other approaches to strategy and one could also combine strategies. The key points to remember are that all types of strategies have weaknesses and strengths and may be applicable in certain situations, but not in others. Levels of strategy There are three levels of strategic decision-making in organizations: corporate, business and functional. Each has its own strategic concerns and a different battery of strategic tools. Although there are strategies at the corporate level that have their counterparts at the business and the functional levels, it would be wrong to assume that this is always a product of a top-down rather than a bottom up approach. When running a diversified enterprise, there is a tendency for senior managers to focus on corporate-level strategy, referred to as the corporate ‘game plan’, and to neglect lower level strategies. Corporate-level strategy: Strategy at this level concerns the direction, composition and coordination of the various businesses and activities that comprise a large and diversified organization. Broadly speaking, there are six forms of strategy that organizations pursue at the corporate level: stability strategy (keep organizations quiet and stable), growth strategy (dominating one industry, most popular for managers as they are evaluated on turnover), portfolio extension (M&As, JVs etc.), retrenchment strategy (downsizing in order to match expenditure to projected income), harvesting strategy (reducing investment in a business to reduce costs, improve cash flow, and capitalize on the residual competences), and the combination strategy (combination of strategies above). However, the tide has been turning against corporate strategy, as anything other than a minimal corporate centre can only be justified in the centre adds more value than it costs and subtracts from the business. Most corporate centers destroy more values than they add (P&W). Business-level strategy: Strategy at this level relates to the operation and direction of each of the individual businesses within a group. These are developed within the framework of an overall corporate strategy, though the degree of freedom allowed to business units will vary from organization to organization. Strategic concerns of managers at this level tend to be the mission of the business, the attractiveness of the industry in which it belongs, and the competitive position of the business units within the industry. In doing so, Porter argues that there are only two basic types of competitive advantages a firm can possess: low cost or differentiation. Industry-wide scope Narrow industry scope Low-cost advantage Cost-leadership Differntiation advantage Product differentiation Specialization by focus Porter asserts that these three strategies cannot be mixed, as each requires different organizational arrangements in order to be successful. Also, if a firm does not achieve either strategy, it is bound to low profitability and below-average performance: being stuck in the middle. However, this view is criticized by multiple authors. Function-level strategies: Strategy at this level concerns individual business functions and processes such as finance, marketing, etc. These have a crucial role in achieving and maintaining competitive advantage, although it is the most neglected level of strategy. This is as the concentration of both the corporate and business level at the external world led to a lack of interest in the internal operation of organizations. Moreover, key-elements of functional-level strategy were determined and constrained by corporate strategist. Finally, interest in function-level strategy tended to be one-sided, stressing soft, personnel-type issues. All in all, there are only a limited number of forms of strategy that organizations tend to adopt based on the three approaches above. The appropriateness of any of these is related to the nature of the societal, sector, environmental and organizational constraints it faces. These include the stage of product-market evolution, the competitive position the firm has and the position it seeks, the strategies of rivals, internal resources and competences, market threats and opportunities, etc. Generic strategies will give rise to a host of variants and the choice of the most suitable one will be a highly complex task. Whatever form of strategy is adopted, it will require the organization to achieve a fit between its external environment and internal structures, culture and practices. It should also be born in mind that the possibility does exist for organizations to shape their external environment to fit with their internal arrangements. Types of organization Rather than attempting to classify types or levels of strategies, Miles and Snow classified organizations themselves as strategic types. They argue that successful firms pursue one of two basic types of strategy – innovative or stability. They classify firms as defenders (internal stability), prospectors (internal flexibility), analyzers (internal stability and flexibility), and reactors (residual strategy: unstable and inconsistent). Organizations pursuing innovative strategies (porter’s product differentiations and M&Ss prospectors) seek to achieve success though reducing price competition by offering products considered unique. Organizations pursuing stability strategies (Porter’s cost leaders and M&Ss defenders) seek to achieve success by locating and maintaining secured niches in stable product areas. For Covin, the selection and pursuit of strategy is driven by managerial style and organizational culture. However, for Waldersee and Sheather, different types of strategy may predispose managers to act in different ways (i.e. managerial style follows strategy), though Burnes thinks they take a too narrow and deterministic view. Strategic Planning tools Strategic tools tend to have either a quantitative or qualitative bias, although this differs highly per country and background. The ones that have attracted most attention are, in chronological order, the Profit Impact on Marketing Strategy model (PIMS), the Growth-Share Matrix, and the Scenario-or Vision-Building approach. PIMS: This programme was launced in 1972 by Sidney Schoeffler. The rationale underlying this model is that certain characteristics of a business and its makers determine profitability. Consequently, understanding these and acting upon them will add a company to become more profitable. There are three major which determine performance: strategy, competitive position, and the market characteristics. Underpinning this model are two assumptions: all business situations are basically alike, and the future will resemble the past. Main criticisms are as follows: it uses historical data without consideration for future changes, it is highly analytical but very limited in solving problems as it provides a lot of data that managers just accept, it asserts that profitability is linked to market share which does not have to be true, most of the factors that govern the forecasts are beyond the control of individual companies so managers cannot do anything with it, it assumes that a set of quantitative variables are sufficient to capture the state of a business, and it is based on the premise that business problems are orderly and well-structured. In summary, it is too mechanistic, overly complex, based on unreliable data, and cannot cope with dynamic and unpredictable environments. The Growth-Share Matrix: BCG found that as the cumulative production of a product doubles, the cost of producing it decrease by a constant percentage. From this, they concluded that if costs fall in relation to production volume, then cost must also be a function of market share. Therefore, the company with the largest market share should also have the greatest competitive advantage. Based on the assumption that all except the smallest and simplest organizations are composed of more than one business, they developed the Growth-share matrix that posits that businesses in an organization’s portfolio can be classified into starts, cash-cows, dogs, and problem children. Stars are business units with high growth and market share for which the best strategy is to make the necessary investments to maintain or improve their position. Cash-cows are former starts whose market growth is in decline. Because they are entrenched in the market, they have lower costs and make higher profits, therefore, the appropriate strategy for such business is to milk them in order to develop the rest of the organization’s portfolio. Dogs are business with low market share and low growth potential and need to be sold off. Finally, problem children or question marks have a high growth rate and low market share. They have high requirements to keep them on course, but their profitability s low because of their low market share. The appropriate strategy is not clear, as it may be possible to turn them into start but could also become dogs. The matrix was widely and rapidly adopted by American corporations, due to its simplicity and ease of construction, and because most large corporations were busy splitting their organizations into SBUs focusing on particular industries and products. However, the matrix has also received its fair share of criticism: the labels are seen as a vulgar and destructive vocabulary, the uniqueness of a firm may not be captured by a classification scheme, the major variables are difficult to define and measure, most component business were classed as dogs even though they were highly profitable. The key and most common criticism relates to how the matrix has been used: it takes strategic thinking away from managers and the final message is dubious at best. The scenario building approach: The use of scenarios is based on the assumption that, in a rapidly changing and uncertain world, if you cannot predict the future, then by considering a range of possible futures, an organization’s strategic horizon can be broadened, managers can be opened up to new ideas and, perhaps, the right future can even be identified. Scenarios allow organizations to exercise strategic choice in terms of whether to try shaping the future, adapting to the future, or keeping their options open by investing in a range of products, technologies, and markets. A scenario is a detailed and plausible view of how the business environment of an organization may develops in the future based on grouping of key environmental influences. Following this approach allows an organization to carry out an intensive examination of its own unique and complex circumstances and needs. The two main scenario-building approaches that have become well-established are the Delphi method and the Cross Impact method, although a third approach has become increasingly influential: vision-building. Scenario building overlaps with the post modernistic view that there are multiple realities and organizations have the ability to create their own reality. One of the main functions of this approach is that it enables organizations to question the very foundation of their existence, examine the usefulness of their values and norms. The Delphi method uses a panel of experts, who are interrogated about a number of future issues. The Cross Impact method is a variation to this and uses the same interrogation with as a differences that here, panel of experts are asked to assign subjective probabilities and time priorities to a list of potential future events and developments. The emphasis is on identifying reinforcing or inhibiting events and trends and to uncover relationship and to indicate the importance of specific events. Finally, vision building is influenced more by Japanese management practices. Compelling visions have two components: a core ideology and a strong and bold vision of the organization’s future which identifies specific goals changes. Major elements of vision building are the conception by senior management of an ideal future, the identification of the firm’s mission, its rational for existence, and a clear statement of desired outcomes and conditions needed to achieve these. However, scenario/vision-building approaches have many criticisms: they are prone to subjectivity and bias, they can encourage retrospection, participants are influenced by their preference of scenario, the process cannot be carried out by novices and can be time-consuming and expensive in terms of senior management time and outside experts, there is much debate about how many scenarios to construct and how they should be used, the more radical the vision, the more difficult it will be to get managers to commit to it, and visions require strong visionary leaders, which are in short supply. Conclusions What the above examination has shown is that, in the west, the Prescriptive stream of strategy tends to be in favor, especially due to popularity of porters 5 forces. However, the RBV and Strategic conflict model have been growing in importance, both drawing support from the analytical stream of strategy. However, neither approach is right or wrong. Both may offer much to organizations, depending on their circumstances or constraints. Organizations have a choice; they can seek to influence or mould the constraints they face in order to make them more amenable to the type or model of strategy they wish to pursue. Nevertheless, choosing the type or model of strategy is one thing, implementing it is an entirely different matter. #11 – Burnes (2009), Ch.8; Approaches to change management Introduction For both the Analytical and Prescriptie stream, change management is vitally important, whether it be for strategy implementation or development. This will be developed further in this chapter. Theoretical foundations Change management is not a distinct discipline with rigid and defined boundaries. The theory and practice of it draw on a number of social science disciplines and tradition. Thigh is one of its strengths, but does make the task of tracing its origins more difficult. In order to find a balance between capturing theoretical foundations without straying so far into its related disciplines, this examination will focus on three schools of thought that form the centre on which change management theory stands. The Individual Perspective school: The supporters of this school are split into two camps: the Behaviourists and the Gestalt-Field psychologists. The former views behavior as resulting from an individual’s interaction with their environment, whereas the latter believe that this is only partially an explanation and that an individual’s behavior is the product of environment and reason. In beahaviourist theory, all behavior is learned; the individual is the passive recipient of external and objective data. Human actions are conditioned by their expected consequences where behavior that is rewarded is repeated, and behavior that is ignored is not. Therefore, in order to change behavior, it is necessary to change the conditions that cause it. This reflects many aspects of the Classical schools, with human beings as cogs in a machine that respond solely to external stimuli. For GestaltField theorists, learning is a process of gaining or changing insights, outlooks, expectations or thought patterns. It takes into account the interpretation the individual places on external stimuli. Consequently, the Gestalt-Field proponents seek to help individual members of an organizational change their understanding of themselves and the situation in question, which in turn will lead to changes in behavior. Some writers, such as advocates of the CE school, recommend using both approaches, though this can also be found back in the HR movement and the Group Dynamics school. The Group Dynamics school: This school originated with the work of Lewin and emphasizes on bringing about organizational change through teams or work groups, rather than individuals. The rationale is that because people in organizations work in groups, individual behavior must be seen, modified, or changed in the light of groups’ prevailing practices and norms. Group behavior is an intricate set of symbolic interactions and forces that not only affect group structures, but also modify individual behavior (Lewin). As a a result, he argues that it is useless to focus on changing behavior of individuals, as the individual in isolation is constrained by group pressures to conform. Hence, the focus should be on a group level and should concentrate on influencing and changing the group’s norms, roles and values. The Open Systems school: The open systems school sees organizations as composed of a number of interconnected sub-systems. Any change to one part of the system will have an impact on other parts of the system and in turn, on its overall performance. Organisations are seen as open in two respects. First, they are open to, and interact with, the external evnrionment. Second, they are open internally, the various sub-systems interact with each other. The objective of this approach is to structure the functions of a business in such a manner that that overall business objectives are collectively pursued. The emphasis is on achieving overall synergy rather than optimizing individual performance. Miller argues that there are four principal organizational sub-systems: the organizational goals and values sub-system, the technical syb-system, the psychosocial sub-system, and the managerial sub-system. The open systems school is concerned with understanding organization in their entirety; therefore, it attempts to take a holistic rather than a particularistic perspective. This if informed by three factors: sub-systems are interdependent, training is unlikely to succeed on its own, and in order to be successful, organizations have to tap and direct the energy and talent of their workforce. However, this approach also alleged shortcomings. For example, social systems are extremely dynamic and complex entities that often defy descriptions and analysis. In a similar vein, open systems theory does not comprise a consistent, articulated, coherent theory as much of it constitutes a high level of abstraction. Summary: Four major points stand out when looking at these three schools of change management. First, they stand in sharp contrast to the mechanic approach of the Classical school and form a link to the emerging organizational paradigms discussed in Ch.3. It may be possible to go further and say that these schools provide many core concepts of the new paradigms, especially in respect to teamwork and organizational learning. Second, the perspectives on change focus on different aspects of organizational life and has different implications for what type of change takes place. Third, these three schools are no in conflict with each other per se. The key task is to identify the circumstances in which each is appropriate. Finally, the open systems perspective has a valid point in claiming that change at one level or in one area should take into account the effect it will have elsewhere in the organization. The Panned approach: from Lewin to Organization Development (OD) The magnitude and frequency of change is now greater than ever before. Planned change is a term first coined by Lewin to distinguish conscious change from unintended changes. Planned does not mean that someone sits down in advance and writes a plan detailing what will take place, rather, it means that the organization identifies an area where it believes change is required and undertakes a process to evaluate and, if necessary, bring about the change. The planned approach to change is closely associated with the practice of Organization Development (OD). OD is a unique organizational improvement strategy and is about people and organizations and people in organizations and how they function. OD is about getting individuals, teams and organizations to function better and involves common sense, hard work, and a systematic, goal-oriented approach. Underpinning OD is a set of values, assumptions, and ethics that emphasize its humanistic orientation and its commitment to organizational effectiveness. In a survey of OD practitioners, five main approaches were used: empowering employees to act, creating openness in communication, facilitating ownership of the change process and its outcomes, the promotion of a culture of collaboration, and the promotion of continuous learning. OD shares some concepts with the HR movement Kurt Lewin and Planned Change Lewin believed that the key to resolving social conflict was to facilitate learning and so enable individuals to understand and restructure their perceptions of the world around them. A central theme of much of his work is the view that the group to which an individual belongs is the ground for his perceptions, his feeling and his actions. Though planned change has four individual elements – field theory, group dynamics, action research, and the tree-step model – and though they are often treated as separate themes, Lewin saw them as a unified whole. Lewin believed that for group behavior to change, it was necessary to unfreeze the forces restraining change such as personal defenses or group norms. Field theory is an approach to understanding group behavior by identify and mapping the totality and complexity of the field in which the behavior takes place. It is necessary to challenge the status quo, the balance of driving and restraining forces, in order to change to come about. He believed that a group was never stable and always in a state of adaptation. He used the term quaisstationary equilibrium to indicate that, whilst there might a rhythm and pattern to the behavior and process of a group, these tended to fluctuate constantly owing to changes in the forces or circumstances. Once one understand the forces, it may be possible to change them. Lewin was the first to write about group dynamics and defined a group as the interdependence of fates between individuals. In order to find out what it is about the nature of a group that causes it to respond as it does and how these forces can be changed, Lewin began to develop the concept of Group dynamics, which implies that individual behavior should always be investigated in the context of a group. Lewin conceived of Action Research as a two-pronged process. First, it emphasizes that change requires action. Second, it recognizes that successful action is based on analyzing the situation correctly, identifying all the possible alternative solutions. To be successful though, there has to be a felt-need, which is an individual’s inner realization that change is necessary. The foundation of this lie in Gestalt psychology, stressing that change can only be successful by helping individuals to reflect on and gain new insights into the totality of their situation. Action research is an iterative process whereby research leads to action, and action leads to evaluation and further research. Action research stresses that for change to be effective, it must take place at the group level and must be a participative and collaborative process which involves all those concerned. The 3-step model is often cited as Lewin’s key contribution. A successful change project, Lewin argued, involved three steps: Unfreezing -> Moving -> Refreezing. Lewin argued that the equilibrium needs to be destabilized (unfrozen) before old behavior can be discarded and new behavior adopted. Schein describes three processes necessary to achieve this: disconfirmation of the validity of the status quo, the induction of guilt or survival anxiety, and creating psychological safety. When this is done, the group can move to a more acceptable set of behavior through the iterative approach of research, action and more research. Finally, refreezing seeks to stabilize the group at a new quasistationary equilibrium. New behavior must be congruent with the rest of the behavior. In organizational terms, refreezing often requires changes to organizational culture, norms, policies, and practices. Carnall draws on these various models of change to develop the coping cycle, which shows how people react and adjust when faced with change. It comprises five stages: denial, defense, discarding, adaptation, and internalization. The first three steps is similar to the first step of Lewin, with adaptation representing moving, and internalization being similar to refreezing. In summary, Lewin identified two requirements for success: one should analyze and understand how social groupings are formed, motivated, and maintained (Field theory & Group dynamics) and understand how to change the behavior of social groups (Action research & 3 step model). However, as a stand-alone model, the three-step model is rather underdeveloped, so OD practitioners have sought to develop it further. Phases of Planned change The concept of planned change implies that an organization exists in different states at different times that planned movement can occur from one state to another. Bullock and Batten developed an integrated, four-phase model of planned change based on a review and synthesis of over 30 models: exploration, planning, action, integration. Their model describes planned change in terms of two major dimensions: change phases and change processes. The focus of their model is change at individual and group level, just as Lewin’s. However, OD practitioners have recognized that organizations are being reinvented; work tasks are being reengineered, the rules are rewritten, and the fundamental nature of organizations is changing. OD has had to adapt to these new conditions and broaden its focus out beyond individual and group behavior. The changing nature of Organization Development OD is a process that applies behavioural science knowledge and practices to help organizations achieve greater effectiveness. The original focus was on work group, though this changed to a more organization-wide approach. Three developments in particular caused it to broaden out its perspective: the rise of the job design movement, increased interest in culture and organizational learning, and the increasing use of organization-wide approaches to change. However, the more OD becomes focused on macro issues, the less it can keep in touch with and involve all the individuals affected by its change programmes and the less able it is to promote its core humanist and democratic values. Planned change: summary and criticisms Planned change, as developed by Lewin, compises four elements: field theory, group dynamics, action research, and the three-step model. The original purpose of it was to resolve social conflict in society, including conflict with organizations. In organizational terms, its purpose was to improve the effectiveness of the human side of the organization. With the change from OD towards organizational transformation, two fundamental dilemmas have arisen. First, while OD practitioners are well equipped to bring about change in group behavior, there are less well equipped to achieve the same in terms of organizational transformation. Second, as OD moved to large-scale transformation, though the emphasis on organizational effectiveness has remained, a difference has emerged with regard to the participatory and democratic nature of its approach. Lewin stresses solving problems through dialogue, but now executives have a slash and burns mentality. Bullock and Batten’s model gives the consultant a more directive and less developmental role, in comparison to Lewin’s earlier idea. Those involved are now more dependent on the change agent, not just dor his or her skills of analysis but also for providing solutions and helping to implement them. This tendency for consultants to have a more directive role and for employees to have a less participatory one, has become even more pronounces as OD shifted from individuals and groups to organizations in their entirety. In addition B&B are moving towards the bhaviourist direction. The danger in this situation is that the learner becomes a passive recipient of external objective data. The main criticisms against the planned approach are as follows. Much of the existing OD technology was developed specifically for top-down organizations in stable environments. In the turbulent world, such assumptions are tenuous and organizational change is more a continuous and openended process than a set of discrete and self-contained events. Second, a number of writers have criticsed the planned approach for its emphasis on incremental and isolated change and its inability to incorporate radical, transformational change. Third, the planned approach is seen as being based on the assumption that common agreement can be reached, ignoring organizational conflicts and politics. Fourth, it assumes that one type of approach to change is suitable for all organizations, all situations, and all times. Thus, planned change is certainly applicable to the individual and group contexts, but seems less appropriate for system-wide change. However, in all of these critics, there is a need to draw a distinction between Lewin’s original approach and the more prescriptive and practitioner-orientated variants. For example, Lewin did not ignore power and politics or fail to recognize that change could be transformational. The frequency and magnitude of organizational change An appreciation of whether organizational change is to be a continuing feature or a one-off event, whether it is on a small or large scale, and whether change is fast or slow, plays a key role in judging the appropriateness of particular approaches to managing change. It is important to examine the main models that are not being promoted and to recognize that there are strong disagreements about the nature and pace of change. The incremental model of change Advocates of the incremental model of change see change as being a process whereby individual parts of an organization deal incrementally and separately with one problem and one goal at a time. The received wisdom therefore is that change will take place through successive, limited, and negotiated shifts. Main exemplars of incremental change have been Japanese companies. The punctuated equilibrium model of organizational transformation However, there can also be short periods of rapid and reviolutionary change in between the incremental changes. The punctuated equilibrium model assumes that whilst most organizations do appear to fit the incrementalist model of change for a period of time, there comes a point where they go through a period of rapid and fundamental change. However, little research has explored the empirical validity of the model’s basic arguments. Both the incremental and the punctuated equilibrium model assume that stability is the natural or preferred state for organizations. The continuous transformation model of change The arguments put forward for the continuous transformation model is that in order to survive, organizations must develop the ability to change themselves continuously in a fundamental manner. Change is a pattern of endless modification in work processes and social practice, driven by organizational instability and reactions to daily contingencies. The underpinning rationale is that the environment in which organizations operate is changing rapidly, radically, and unpredictably. Only by continuous change can one remain aligned with the environment. This is very much in line with the CE school and complexity theories. Conclusions The focus of Planned change has moved from conflict resolution to performance enhancement, as OD has grown into a consultancy industry aimed at resolving problems with client organizations. #12 – Burnes (2009), Ch.9; Developments in change management Introduction Organizations see themselves less and less as stable and more and more as work in progress subject to continuing and continuous change. Since the 1980s, the Emergent approach has taken over the planned approach to dominate theory and practice of change management. This approach starts from the assumption that change is not a linear process or a one-off isolated event but is a continuous, open-ended, cumulative and unpredictable process of aligning and re-aligning an organization to its changing environment. This is more suitable to continually changing environments in which firms now operate. From Planned to Emergent change The rise of corporate Japan precipitated the questioning of existing approaches to structuring, managing and changing organizations. Weick sees the drawbacks of planned change as: a high probability of relapse, uneven diffusion, large short-term losses, less suitability for opportunitydriven than for threat-driven alterations, unanticipated consequences due to limited foresight, hypocrisy, adoption of best practices from different context, ignorance regarding key contingencies, and lags in implementation which make the change outdated before it is finished. The main criticism of Planned change is the attempt to impose an order and a linear sequence to processes that are in reality messy and untidy. The CE approach argues that organizations are fluid entities with many personality and cannot be seen as frozen. In addition, the stages overlap and interpenetrate one another. Overall, there are two points that many scholars agree on: first, change is an emerging and ongoing process and second, they adopt an open systems perspective. The Emergent approach to change Change is a continuous, dynamic, and contested process that emerges in an unpredictable and unplanned fashion. For Weick, the advantages of this approach include: sensitivity to local contingencies, suitability for on-line real-time experimentation, learning, and sensemaking; comprehensibility and manageability; likelihood of satisfying needs for autonomy, control, and expression; proneness to swift implementation; resistance to unraveling; ability to exploit existing tacit knowledge; and tightened and shortened feedback loops from result to action. One of the main strands of the Emergent approach come from Processualists, who conduct process research in organizations. A process is a sequence of individual and collective events, actions, and activities unfolding over time in context. They recognize the importance of planning for change and the presence of processes of continuity, but they also see that these are constrained and influenced by the complex untidy and messy nature of change. Pettigrew states that processualists pursue their work through five internally consistent guiding principles: (1) embeddedness, studying processes across a number of levels of analysis, (2) temporal interconnectedness, studying processes in past, present and future time, (3) a role in explanation for context and action, (4) a search for holistic rather than linear explanations of process; and (5) a need to link process analysis to the location and explanation of the outcomes. Thus, advocates of Emergent change stress the developing and unpredictable nature of change and view change as a process that unfolds through the interplay of multiple variables within an organization, especially context, consultation and political behavior. Power and politics: In managing these transitions practitioners need to be aware of the importance of power politics. The political dimension of change is further emphasizes by the postmodernists, for whom the struggle for power is the central feature of change in an organization. However, for the processualists, the political nature of change tends to close off options, whereas for the postmodernists, the presence of conflicting interests give people a range of new possibilities and ideas to choose from. This view is in line with Pugh’s four principles for understanding change: Organizations are organisms, are political and occupational systems, all member operate simultaneously in the rational, occupational ad and political system, and change is most likely to be acceptable in departments where people experience tensions or failure. The change process: The emergent perspective rejects both simple taxonomies of change and approaches such as TQM and BPR, which promise success through following a series of laid-down steps and stages. However, it does not seem to provide a further explanation of what it does like. The role of managers: Carnall proposes four core managerial competences that are essential in effective management of change: decision making, coalition building, achieving action, and maintaining momentum and effort. Stace and Dunphy take a more contextual view. Their Change matrix identifies a spectrum o change situations and matches those to styles of management, ranging from collaborative to consultative to directive to coercive. The scales of change range from fine-tuning to incremental adjustment to modular transformation to corporate transformation. Contingency: To be effective in creating sustainable change, managers need an extensive and systemic understanding of their environment. Thus, advocates of Emergent change tend to adopt a contingency perspective, arguing that approaches to change need to be tailored to the specific situation of a company. For advocates of Emergent change, it is the uncertainty of the environment that makes planned change inappropriate. However, there is a reciprocal relationship between an organization and its environment which has implications for how organizations conceptualize and manage change. To maintain with the complications and uncertainties of constantly scanning the environment Pettigrew and Whipp maintain that organizations need to become open learning systems, with strategy development and change emerging from the way the company acquires and interprets information about its environment. Bottom-up, not top-down: Consequently, organizations have to make decisions over how and when to respond. In doing so, it is best to take a bottom-up approach, as there is little point in encouraging staff to identify change opportunities unless they are also encouraged to implemented them. In many ways, this is the crux of the Emergent argument – top-down, senior-management-imposed change does not waork. Employees have to have the authority to be able to shape and reshpe their part of the organization to deal with threats and opportunities. Thus, rather than to control people, managers have to empower their employees. The complexity approach: The concept of self-organization is very similar to the concept of emergent change, especially in terms of the link between the need for greater organizational democracy. The Emergent approach to successful change Though the proponents of the Emergent approach reject the concept of universally applicable rules for change, the guidance they do provide tends to stress five features of organizations that either promote or obstruct success. Organisational structure: This is seen as playing a crucial role in determining where power lies, in defining how people relate to each other and in influencing the momentum for change. Morgan notes that there are only four basic forms of structure which range from very rigid to the very flexible: bureaucracy, matrix, project, and loosely coupled organic network. Dynamic environments require organizations to adopt more flexible, less hierarchical structures. An organization with more delegation, which means a flat hierarchy, is superior. Brown and Eisenahrdt call for semistructures that are sufficiently rigid for change to be organized and not so rigid that it cannot occur. Another option is using network organizations that manage the diverse, complex and dynamic relationships among multiple organizations or units, each specializing in a particular business function or task. A major benefit is that the semi/autonomous nature of each part of a network reduces the need for and erodes the power of centrally managed bureaucracies, which leads to change being driven from the bottom up rather than top-down. A final point which needs to be recognized is that structures do not stand in isolation from the other elements of an organization, it should be matched with an appropriate culture for it to be effective. Organizational culture: Johnson argued that the strategic management of change is essentially a cultural and cognitive phenomenon. The essence of sustainable change is to understand the culture of the organization that is to be changed. Both Peters and Senior argue that the most effective way to promote change is by placing people in a new organizational context which imposes new roles and to break down existing hierarchical structures. Organizational learning: For the emergent approach, learning plays a key role in preparing people for and allowing them cope with change. Whatever the spur for change, staff is unlikely to recognize the need for change unless managers create mechanisms which allow them to become familiar with the current situation and the need to change. Collective learning ensures that the full implications of an organization’s view of its environment can then inform subsequent actions over the long term and the way in which future shift in the environment are tackled. Clarke and Nadler suggest that both individual and collective learning stem from effective top-down communication and the promotion of self-development and confidence. People need to be involved in the diagnosis and development of solutions. Managerial behavior: Emergent change requires a radical change in the role of managements. Managers are expected to operate as facilitators and coaches who can bring together and empower teams and groups to identify the need for, and achieve, change. Crucial, according to Kotter, is for managers to develop leadership skills. Key here is managers own behavior. If they are to gain commitment of other s to change, they must be prepared to challenge their own assumptions, attitudes and mindsets. All in all, an organization’s ability to gather, disseminate, analyze and discuss information is crucial for successful change from the perspective of the Emergent approach. However, proponents of complexity take a different view. They reject both small and large scale changes and argue there is an in-between. Power and politics: A wide range of authors claim that power and politics is important in Emergent change, although they do so from different perspectives. Recipes for Emergent change There are no universal rules with regard to leading change; rather it involves linking action by people at all levels of the business. However, this has not prevented most of the advocates of Emergent change from suggesting sequences of actions which organizations should follow. For example, Pettigrew and Whipp suggested a model that involves five interrelated factors for successfully managing change: environmental assessment, leading change, linking strategic and operational change, human resources as assets and liability, and coherence of purpose. Though more authors come up with steps, the problem with much of the advice is that it tends to be too general or cursory in nature and thus difficult to apply. Examples of this are Kanter’s ten commandments and Kotter’s 8 errors (allowing too much complacency, failing to create a powerful coalition, underestimating the power of vision, under communicating the vision, permitting obstacles to block the vision, failing to create short-term wins, declaring victory too soon, and neglecting to anchor changes in the culture). In exchange, Kotter presented eight steps to successful change: establishing a sense of urgency, creating a guiding coalition, developing a vision and strategy, communicating the change vision, empowering broad-based action, generating short-term wins, consolidating and producing more change, and anchoring new approaches n the culture. Kotter stresses that his stages are a process and that one should go through all stages. However, both Kanter and Kotter neglect the role of the change agent. The role of the change agent Change has to be managed, regardless on your perspective. There is usually one person who bears the responsibility of being the agent. However, views of the role of the change agent differ. One of the strengths of the planned approach is that is gives a blueprint for the behavior and attributes of change agents. The emergent approach takes the view that change is not a specialist activity driven by an expert, by an increasingly important part of every managers role. Buchanan and Boddy suggest a model of the exerptice of the change agent and picture the change agent as a highly skilled and well-trained political operator who has not only an in-depth knowledge of change processes and tools, but also the personal qualities and experience to use them both in the open and behind the scenes. The planned approach sees the change agent more as a public performance activitiy. Under the emergent approach, the change agent is not a neutral facilitator but an active manager of the change process with his or her own agenda which they seek to promote or impose. The argument of many in the Emergent school is that the multifaceted and multi-level nature of change mean that it cannot be left to a few experts or a few managers but is the responsibility of everyone in the organization. Even so, the more complex the change process, the more difficult it is to achieve, the greater the need to utilize the skills and experience of a specialist change agent. The conclusion they draw from this is that there is a one best type of change agent. However, Caldwell calls for a contingency model of change agency which recognizes that different change situations require different types of change agents. Emergent change: summary and criticism Proponents of Emergent change seem more united by their skepticism regarding Planned change than a focus on an alternative. Even so, there are some central tenets of Emergent change: organizational change is not a linear process or an isolated event, but is continuous, open-ended, cumulative, and unpredictable; change is best achieved through an interwoven pattern of small to medium scale continual changes; change is a multi-level cross-roganization process that unfolds in an iterative process; change is not an analytical-rational process; managers should shape the long-term process of change by creating an organizational structure and climate which encourages and sustains experimentation, learning, and risk-taking; managers have the responsibility for developing a collective vision; and the key organizational activities that allow these elements to operate successfully are information gathering, communication, and learning. However, when looking at the history, there have been many disruptive events which required rapid, major responses by organizations which could not be coped with or anticipated by the emergent approach. Thus, although one may accept that the preferred environmental state for Emergent change is one that is amenable to being dealt with by Emergent change, it is difficult to accept that this is necessarily the natural state of affairs. Different organizations experience different degrees of turbulence. Thus, for some, emergent change may be appropriate, for others, the planned approach may be more appropriate. Furthermore, the emergent change approach is prone to similar criticism as the CE approach, as a great deal of emphasis is placed on the need for appropriate cultures. In addition, whilst managers generally start out by attempting to learn all they can, over time, they gain experience which limits their search for new information and knowledge. As such, experience may actually be a barrier to learning. There are three further criticisms that are equally serious. First, when looking at Dawson, Kotter, and Pettigrew, they do speak of change as a transition process with a beginning, middle and end. Second, the management of change has become overfocused on the political aspects of change. Third, the Emergent approach does not appear to be universally applicable as its advocates imply. Conclusion Thus, the emergent approach has some significant shortcoming and even when combined with the planned approach, may not cover or be applicable to all change situations. #13 – Burnes (2009), Ch.10; A framework for change Introduction Over the last decade or so, the public sector has put much effort into developing its own approaches to innovation and change which suit the particular circumstances and many challenges it faces. Therefore, the notion that the private sector is always the leader and the other sectors always the followers when it comes to managing and changing organizations is something of a misconception. The lesson here is that whilst different sectors and different organizations can learn from each other, they can also face widely differing challenges and consequently, a one-size-fits-all approach is unlikely to work. The past two chapters showed that even taken together neither the planned nor emergent approach covers the spectrum of change events that organizations encounter. The dominance of these two approaches neglected other approaches, which will be the focus of this chapter. Varieties of change Types of change can be categorized as to whether their primary focus applies to individuals, groups, or systems and sub-systems. As far as models of change are concerns, the three main ones are the incremental model, the punctuated equilibrium model, and the continuous transformation model. However, there are other types such as smooth incremental (slow systematic evolutionary change), bumpy incremental (period where change accelerates), and discontinuous change (similar to punctuated equilibrium model). The contributions of many change authors is discussed next. - - - - - In addressing the issue of transformational change, it can be achieved by either a bold stroke approach (rapid overall change) or a long march approach (incremental change over a long period)(Kanter). In a similar vein, Beer and Nohria identify the archetypes of theory E (bold stroke) and theory ). Theory E can achieve short-term financial gains at the cost of denuding an organization of human capabilities necessary for long-term survival, whereas theory O focuses on people and culture, hereby not concentrating on core activities. Cummings and Worley identify a continuum ranging from incremental change to quantum changes. In a similar vein, Stace and Dunphy identify a four-stage continuum comprising developmental transitions, task-focused transitions, charismatic transformations, and turnarounds. For Peters, rapid disruptive and continues change is the only appropriate form of change, while Quinn differentiates between incremental (slow death) and radical change. Pettigrew looks at the scale and importance of change, going from operational change to strategic change. Buchanan and Boddy’s classification is almost the same, using incremental change to radical change and changes that are of central importance to the organization to those that are peripheral to its purpose. (Boils down to issue of project size, all small projects are peripheral) Kotter argues that organizations need to be continuously transforming themselves through a series of large and small interlinked change projects. Regardless of differences in perceiving change, the overall view is that change can be seen as running along a continuum from small-scale incremental change to large-scale transformational change. Implicit is the view that planned change stands at the left-hand end of this spectrum and emergent change at the right-hand, and what separates them is the nature of the environment. Following Lewin, planned change is more appropriate for changing the behavior of groups, whereas emergent change is better suited to more turbulent organization-wide organizations. Stace and Dunphy identify four approaches to change based on the involvement of employees: collaborative, consultative, directive, and coercive (covers most of the managerial approaches). Kotter takes a different view, seeing the overall direction of change as being decided by senior managers. Davenport expands on these issues by constructing a list of five principal factors that influence how a project will be managed: the scale, level of uncertainty, breadth of change, magnitude of change, and timescale for implementation (most useful in categorizing change). Story takes a different view and begins by identifying two key dimensions: the degree of collaboration between the parties and the form that change takes. From these two dimensions, storey constructs a fourfold typology of change: (1) top-down systemic change, (2) piecemeal initiatives, (3) bargaining for change, and (4) systemic jointism. A framework for change When summarizing the above, another continuum is created with slow change (behavioral and cultural) on one side and rapid change (major changes in structures and processes) on the other. The top half represents situations where organizations need to make large-scale organization-wide changes to either their culture or structure as their current status is inappropriate for the turbulent environment in which it finds itself operating. The bottom half represents situations where organizations need to make small-scale adjustments and as these changes must be sustained, it is crucial to ensure that the post-change environment is stable. In addition, the-hand side is focused on the human side of the organization which need a slow, participative approach.. The right-hand side represents situations where the primary focus is on achieving changes to the ‘hard’ side of the organization. Finally, it has to be noted that there is a strong relationship between organizational structures and cultures , and changes in one may require corresponding change in the other. Burnes concludes that when considering major change projects, one should not see them as being managed solely in a cooperative fashion or solely in a coercive fashion, instead, they may have elements of both but at different levels, at different times and managed by different people. A framework for employee involvement Employee involvement is crucial to successful change, especially in situations that require attitudinal and cultural change. The implication of this is that rapid organizational transformations can only be successful if they focus on structural as opposed to cultural change. However, sometimes, cultural change can be relatively swift and employee involvement relatively low. To understand this, it is necessary to examine the three theories underpinning arguments for employee involvement. - - - #1: The Depth of Intervention: Schmuck and Miles argue that the level of involvement required in any change project is dependent on the impact of the change on the people concerned. Huse continued on this work, creating a continuum ranging from the shallow level to the deepest level. #2: Cognitive Dissonance: Burnes and James states that people try to be consistent in both their attitudes and behavior. When they sense an inconsistency, people experience dissonance: that is, they feel frustrated and uncomfortable with the situation, sometimes extremely so. Therefore, individuals will seek a stable state where there is minimum dissonance. Where the issues involved are perceived to be significant, the presence of dissonance will motivate the person concerned to try to reduce it by changing either their attitudes or behavior to bring them into line. In addition, people will actively avoid situations and information that would be likely to increase the dissonance. Connecting this to change, a project that is out of step with the attitudes of those concerned will meet resistance unless those concerned change their attitudes. Therefore, the level and type of involvement should be geared to the level of dissonance that any proposed changes may provoke. However, change can reduce dissonance as people are aware of a crisis or potential crisis. #3: The Psychological Contract: The notion of a psychological contract implies that there is an unwritten set of expectations operating at all times between members of the organization and the various managers and others in that organization. This concept is focused on the implicit expectations that an individual may have. All in all, it is concluded that approaches to change, including the level of employee involvement, have to be tailored to the change context rather than being applied in an unthinking fashion. A framework for choice The model above implies a contingency model, but what about choice? This question revolves around two issues. The first issue concerns the extent to which an organization can influence the forces driving it to change in one direction or another. Choice will relate to the extent that organization can influence, manipulate or recreate their environment to suit their preferred way of working (do they have time to do this?). The second issues concerns the extent and for how long an organization can operate with structures, practices and cultures that are out of line with its environment. Related to this, the concept of equifinality means that different sorts of internal arrangements are perfectly compatible with identical environmental states. Thus, alignment is not always necessary and the duration for which this non-alignment is sustainable will vary with the circumstance of the specific organization. In summary, the debate between planned and emergent change is too narrow as other approaches may also be applicable. In particular, it tends to ignore the more coercive and directive approaches and assumes that change is unidirectional (driven by environment). Organizations do have the opportunity to make choices about what to change, how to change, and when to change. Conclusions The model proposed in this chapter is an contingency model and hence open to the same criticism as contingency theory. However, when the environment is seen as open to manipulation, many of these criticisms can be answered. It is important to recognize that there is a dispute between the realists and postmodernists as to what can be manipulated and the extent to which choice exists, though both acknowledge the existence of choice. #14 – Burnes (2009), Ch.11; Organisational change and managerial choice Introduction Central to the change process is the choice process – what to change, when to change, how to change. The need to match types of change with appropriate approaches to managing change is not as prominent in the literature as one might expect. Many of those arguing for their own favoured approach to strategy and change do so either explicitly or implicitly on the basis of their perception of the nature of the environment in which organizations operate. Furthermore, most authers seem to assume that the key role of managers and the objective of strategy and change is to align or realign an organization with its environment. However, rather than accepting this view, managers can and do exercise a considerable degree of choice. The scope and nature of the choices managers face are constrained by a range of external factors and internal organizational characteristics. However, despite what postmodernists may claim, there are some constraints that appear beyond the scope of individual organizations to change. All in all, change management need not be seen as a mechanism for achieving a specified and predicted outcome, nor need it be conceived of as continuing process of aligning and realining. Instead, orgasniations can open up a much wider spectrum of options. The Choice Management-Change Management model Organisational change can be viewed as the product of three interdependent organizational processes: The choice process, which is concerned with the nature, scope and focus of organizational decision making. The choice process comprises three elements: organizational context, focus of choice, and organizational trajectory. The trajectory process, which relates to an organization’s past and future direction and is seen as the outcome of its vision, purpose and future objectives. The trajectory process comprises the elements of organizational vision, organizational strategy, and organizational change. The change process, which covers approaches to, mechanisms for achieving, and outcomes of change. The change process comprises objectives and outcomes, planning the change, and people. Within each of these processes there are a group elements, or forces, which interact, clash with and influence each other in subtle and complex way. It is this interaction of elements or forces which prevents decision-making and change management from being a rational process. The Choice process: Organizational context: Many organizations only start to investigate their own strengths and weaknesses, their customers’ needs, and the nature of the environment in which they operate when they are in trouble. Although not easy, many simple tools for benchmarking or datagathering exists, such as the SWOT and PESTEL frameworks. These tool can promote openness and reduce political behavior and conflict. However, despite those rather rational tools, managers will rarely adopt changes which adversely affect them. When faced with a mismatch, some will seek to achieve realignment by influencing the environment rather than pursuing an internal upheaval that may involve changes in management style and personnel. However, despite extensive data collection and analysis, there will always be an element of subjectivity in the process, which is where sensemaking comes in. Focus of choice: One of the characteristics of successful sensemaking is that it limits the alternatives available and focuses managers’ attention on a narrow range of short, medium, and long-term issues. The company may decide upon which issues to focus and whether this is done in a concerted way or in a way that allows groups and individuals to pursue their own agenda. Organisational trajectory: An organization’s trajectory or direction is shaped by its past actions and future objectives and strategies. As such, it provides a guide or framework within which to judge the acceptability, relevance or urgency of issues, concerns and proposed actions. This trajectory process encompasses the interplay between an organisation’s vision, strategies, and approach to change. It can be seen as a blend of, or clash between, the deliberate and emergent elements of its strategy. The outcome depends on the quality of its sensemaking and partly on the degree of control it can exert over events. It is the interplay between interpretation of past actions and future intent coupled to the ability of organizations to shape developing events to their advantage that makes decisionmaking so complex. The three elements of the choice process, context, focus and trajectory interact with each other in an intricate and unpredictable way. The trajectory can influence both the focus of its decision-making and the context within which the organization operates. Likewise, the context provides a framework within which the trajectory is developed. Furthermore, the focus of choice will influence which aspect of the organizations context its trajectory will be directed towards. Rollison maintains that decisions can be classed on a spectrum running from bounded to unbounded. Bounded decisions are usually small, have easily defined parameters, and tend to be separable from the environment or context in which they arise. Unbounded decisions usually concern large and important issues with difficult-to-define parameters. They are ambiguous and intertwined with other issues and factors in the environment or context in which they arise (e.g., strategic decisions) Only by an exhaustive analysis of the issue concerned and the options available is the most appropriate decision likely to be arrived at. Following the ringi system, a strong corporate vision makes it easier to identify which decisions and actions are appropriate. The result is that Japanese companies do not have to explore all possibilities when taking decisions, which reduces the uncertainty in their environment. All in all, this shows that whilst the choice process is uncertain, complex, and time-consuming, there are approaches that do reduce these factors and can make the process more transparent and effective. The Trajectory process: Organisational vision: Many organizations use scenario-building and visioning techniques in order to generate different organizational futures or realities, in order to select the one that seems most appropriate. Though not all visions prove successful, the concept of organizations driving themselves forward by creating an ambitious vision of where they wish to be in the long term has become increasingly influential over the last 20 years, though it also generated increasing cynicism. Visions comprise four elements: mission, valued outcomes, valued conditions, and mid-point goals. The creation of visions should be an iterative process whereby options are identified, an initial vision is created, and the gap between this and the present circumstance is identified. Organizational Strategy: Strategy can be defined as a coherent or consistent stream of actions which an organization takes or has taken to move towards its vision. This stream of actions can be centrally planned and driven, can be delegated and distributed through the organization, and can be conscious or emergent. An organization’s strategy tends to be a combination of a mixture of formal and informal plans and planned and unplanned actions. In pursuit of its vision, an organization can have a central strategy and a number of sub-strategies. From this perspective, one way of viewing strategy is to see it as a series of links in a chain which stretch from the present to the indeterminate future where the vision lies. The links are continually having to be forged and reforged over time as events develop and circumstance change. The conclusion is that organizations do not need to be able to see all the links in the strategic chain; merely those that will guide them over the next few years. They need to establish a climate of understanding and a general willingness to pursue certain courses of action. Organizational Change: Though visions and strategies can be crucial in shaping the life of organizations, it is only when some facet of the organization is changed or changes that visions and strategies advance from being mere possibilities to become reality. On the one hand, visions and strategies shape and direct change. They indicate what needs to change and where and create the conditions and climate within which the change takes place. On the other hand, it is these changes, these actions, which shape visions and strategies. The trajectory process, whilst playing a key role in shaping choice, is also itself a complex process comprising vision, strategy and change. The extent to which they are held in common or are consistent with each other is related to the circumstances of the situation. The Change process Change can be viewed as a one-off event, but can also be seen as a continuous process that forms part of the day-to-day activities. When seen as exception, organizations tend to have difficulty in choosing the most appropriate approach and there tends to be no structured procedure to learn from the change project, which is the norm when change is perceived as continuous. Objectives and outcomes: Change often affects the distribution of power and resources in an organization and is an inherently political process which can be undermined by sectional interests rather than driven by organizational needs. Hence, Burnes (1988) suggested an approach to assessing the need for and type of change that attempts to make the process of establishing objectives and outcomes more rigorous and open, an approach with four elements: The trigger: Organisations should only investigate change for one of the following reasons: (1) current strategy highlights the need for change, (2) current performance indicates problems, or (3) suggestions or opportunities arise that may offer benefits to the organization. The remit: the remit should clearly state the reasons for the assessment, its objectives and timescale, and who should be involved and consulted. Organisations should be clear in who draws up this remit. There must be clarity and agreement about who has the responsibility and authority to initiate change before an assessment begins. The assessment team: this is the body that will assess the need for change. This should be a multi-disciplinary team consisting of representatives from the area affected and where appropriate, a change specialist. The assessment: The first task of the assessment team is to review and if necessary clarify or amend its remit. Assessment comprises four steps: (1) Clarification of the problem or opportunity, (2) investigate alternative solutions. A wide range of possible solutions should be examined and tested against an agreed list of criteria covering costs and benefits. However, it should be recognized that not all changes can be assessed on financial criteria. Thus, companies should find ways to assess nonmonetary benefits. (3) Feedback. The definition of the problem or opportunity and the range of possible solutions should be discussed with interested or affected parties, particularly those from whom information was collected in the first place. This helps countering the tendency to fit solutions to problems and helps to prepare the people for any changes that do take place. In addition, this can provide an important source of information on the advantages and disadvantages of the possible solutions on offer. (4) Recommendations and decision. The team should present their recommendations in a form that clearly defines the problem or opportunity, identifies the range of solutions, establishes the criteria for selection and makes recommendations. Planning: Once it is necessary that change should take place, it is then necessary to plan how this will be achieved and then to implement the plan. The following six interrelated activities make up the planning and change process: 1. Establishing a change management team. To maintain continuity, the team should include some of those responsible for the original assessment of the need for change. Change specialists should be involved whose primary input is their experience in managerial change (backstaging). It is necessary to have the right blend of skills for the change being undertaken, including the ability to deal with the unexpected. 2. Management structures: In larger projects, existing control and reporting systems are unlikely to be adequate for managing them. Hence, effective reporting and management structures need to be put in place in advance in order to provide direction, support, resources, and where necessary decisive interventions. 3. Activity planning. ‘Getting from here to there’, the activity plan is the road map for the change effort. It involves constructing a schedule for the change programme, citing the main activities and events that must occur. However, not all programmes can be planned in detail in advance. 4. Commitment planning: This activity involves identifying key people and groups whose commitment is needed and deciding how to gain their support. There are three types of commitment, being let it happen ( do not obstruct), help it happen (participate), and make it happen (drive the change). 5. Audits and post-audits: It is important to monitor progress and see to what extent objectives are being met, as this allows plans to be modified in the light of experience and for opportunities to improve on the original objective to be identified or created. A post-audit should be carried out to establish that the objectives have really been met and to ascertain what lessons can be learned for future projects. 6. Training and development: New skills and competences may be necessary. Training may aim to give staff the skills to undertake change themselves. Training can also contribute to other objectives, such as cultural change. A training programme should be started before implementation that shows who needs training, the form of the training, and when it will take place. Thus, although change is often seen as a technical exercise involved with time tabling and resource allocation, it is also very much a people issue. The success of any change effort is always likely to hinge on an organisation’s ability to involve and motivate the people concerned and those whose support is necessary. People: Increasingly, the objective of change is to modify the attitudes and behaviors of individuals and groups, sometimes radically so. There are three people related activities that need to be undertaken for change to be successful: Creating a willingness for change: Even where change is purely of a technical or structural form, there has to be willingness amongst those concerned to change to accept the new arrangements. Stressing the positive aspects of any change may have much less impact than companies may imagine. The status quo needs to be destabilized before old behavior can be discarded. Making proposed changes seem attractive has less effect than making the current situation less attractive. Increasing urgency thus is crucial to gaining needed cooperation. To do so, four steps need to be taken: 1. Make people aware of the pressures for change. The organization should inform employees on a continuous basis of its plans for the future, the competitive and market pressures it faces, customer requirements and the performance of its key competitors. 2. Give regular feedback on the performance of individual processes and areas of activity within the organization. This draws attention to discrepancies between actual performance desired performance. The feedback has to be in a form that people can relate to and act on and in a timely fashion. 3. Understand people’s fears and concerns. One of the major mistakes companies make is to fail to recognize and deal with the real and legitimate fears of the managers and staff. 4. Publicize successful change. In order to reduce fears and create a positive attitude towards change, companies should publicise the projects that are seen as models of how to undertake change and the positive effects change can have for employees. involving people: The more a change challenges a person or group’s existing norms of behavior, beliefs or assumptions, the more resistance it is likely to meet. Following Beckhard & Harris (1987), the critical mass of people necessary to bring about the change should be gained for support. There are two main activities that help secure and maintain a high level of involvement, being communication and getting people involved. The purpose of communication is not just to inform staff that change is being considered, but by drawing them into discussions and debates. Communication should be a regular rather than a one-off exercise, nor should it be pursued through one or two channels. Anything from management has to be stated at least six times in six different ways before people start giving it credence. Getting people involved is imperative. It is important to identify those who are essential to making the change happen and select these people to be involved. Sustaining the momentum. It sometimes happens that initial enthusiasm and momentum for change wanes and progress becomes slower and can grind to a halt. Thus, organizations need to consider how to build and sustain momentum. Organizations should provide resources for the change, give support to the change agents, develop new competences and skills, and reinforce desired behavior. Finally, both in planning a project and evaluating its outcomes, it is necessary to identify the openendedness of it, and the degree to which the final outcome will require a continuous improvement approach or a continuing change approach. Conclusions One of the fundamental differences of the planned/emergent approaches and the choice management-change management model asserted here is that this model recognizes that managers are active players rather than passive spectators in the development of their own organizations. Not only can managers choose to align their organization with the external conditions and constraints it faces, but they can also do the reverse and align these external conditions and constraints to their preferred way of structuring and running their organization. The choice management – change management mode, in conjunction with the framework for change presented in ch. 10, potentially at least, resolves the dispute between proponents of Ploanned and Emergent approaches to strategy development and change. It also raises fundamental questions about what managers can do and what they do do in terms of running and shaping their organizations. #15 – Burnes (2009), Ch.12; Management – roles and responsibilities Introduction Managers will need to recognize that in the future, as in the past, regardless of the particular issues involved, the environment in which their companies operate will continue to change and that their decisions will be judged by a wider set of criteria and a wider range o stakeholders tan in the past. Managers play a crucial role in determining whether the outcome of change is success or failure. Therefore, it is only right that we look at how well or not managers are equipped or can be equipped for the task. Globalization and the challenge of change Arguably, the biggest challenging managers today is globalization. Allied to this are three other challenges: how to achieve sustainability in a world with limited natural resources, how to manage an increasingly diverse workforce, and how to manage ethically? Reich identifies four main definitions of globalization: an historical epoch, a confluence of economic phenomena, the hegemony of American values, and a technological and social revolution. Drivers for globalization are the intensification of international competition, the fall of communism, economic liberalization, the removal of trade barriers, and the advent of new communication technologies. Sustainability The result of economic growth and consumption is the dwindling and depredation of natural resources, increasing levels of pollution and rapid global warming. Governments are unable to reach an agreement over action and even if they can, we know that organizations, driven by market forces, will have a major influence on how such actions are formulated and will have the major responsibility for their implementation. Therefore, managers cannot divorce their action from the wider impact they have on society, which present a major challenge to managers. They will have to change either incrementally or transformational to deal with this challenge. Workforce diversity Globalization is intensifying workforce diversity in three ways. The first is that the growth of the transnational organization means that companies are being owned and managed by people from different countries and cultures. The second effect concerns the migration and recruitment of workers from other countries. The third effect has been to increase the participation of woman and minority groups in the workforce. Managers should be aware that approaches to manage workers from a certain background may differ in its outcome from workers with another background. Only by attracting, retaining, and motivating workers effectively, including recognizing and promoting the benefits of diversity, can organizations expect to prosper or even survive in an increasingly competitive global economy. This means that managers have to achieve the difficult but essential task of treating workers differently because of their diversity but treating them all fairly. Business ethics In an increasingly complex, diverse and competitive world, applying an ethical approach to business is not straightforward. This is why many companies and governments have difficulty bridging the gap between rhetoric and reality. In public, there are two aspects of business ethics that business leaders agree upon: all business should have them, and all business have difficulty abiding by them. The real challenge for organizations it to change managerial behavior so that business ethics become business practices. The manager’s role The first attempt to define the role of managers became by Fayol, who stated that the key functions of managers were: forecasting and planning, organizing, commanding, coordinating and controlling. Peter Drucker argued that the manager’s role is the task of creating a true whole that is larger than the sum of its parts. Duncan argues that the manager is mainly concerned with the effects of the actions and reactions of other individuals and groups within the wider economic and social context within which the organization is set. Position in the hierarchy, formally at least, is likely to exert the greatest influence on the role given to and expected of a manager. Three main hierarchical levels are top management, middle management, and first-level or supervisory management. These level seems to mirror Duncan’s three levels of management activities, being philosophical (goal formation), scientific (goal accomplishment and evaluation) and art (implementation of decisions). However, every hierarchical level of management can encompass all of his activities, though not necessarily to the same extent. Mintzberg concluded as follows: although much managerial work is unprogrammed, managers do have regular, ordinary duties to perform. Moreover, rather than being systematic, reflective thinkers and planners, managers simply respond to the pressure or demands of their jobs. Finally, managerial activities are characterized by brevity, variety and discontinuity. Yukl confirms Mintzberg’s findings that managers’ jobs are remarkably similar and that their work can best be described in terms of ten very important roles that could be categorized under three headings: interpersonal (figurehead, liaison, and leader), informational (monitor, disseminator, spokesperson), and decision-making (entrepreneur, disturbance-handler, resource-allocator, and negotiatior). Thought these roles are common to most managerial jobs, the emphasis and importance of the roles varies between managers and organizational characteristics. However, all in all, there appears to be a discrepancy between what the literature says managers should to and what the managers actually do. Management and leadership There is a controversy about the difference between leadership and management. Managers are people who do things right and leaders are people who do the right thing. Managers Leaders Focus on the present Focus on the future Maintain status quo and stability Create change Implements policies and procedures Create a culture based on shared values Remain aloof to maintain objectivity Establish an emotional link with followers Use the power of their position Use personal power However, managers can and do possess both managerial and leadership skills, which they swap between depending on the situation. The trait approach to leadership maintains that leaders are effective or ineffective owing to their personal characteristics. Some people are natural or born leaders who possess unique personal qualities or personality traits. Fleishman identified two separate classes of behavior as important in determining effective leadership: consideration and initiating structure. Another dimension that received a lot of attention was participation – whether it was democratic (HR/Planned change) or autocratic. Literature showed that democratic leadership provided the best results, due to its empowerment, facilitating group decision-making, and its potential for maximizing participation and involvement in group members. Perhaps the best known of universal theories on leadership is Blake and Mouton’s managerial grid. The grid has two dimensions: concern for people and concern for production. By examining how these two dimension interact, B&M identified five different styles of management: team management, country club management, middle-of-the-road management, task management, and impoverished management. In response to the inability to make a case for a one best way approach to leadership, attention began to focus on when leaders were effective. In particular, researchers began to examine subordinates behavior and how a leader’s behavior varies from subordinate to subordinate: the leader-follower approach. The basic premise is that a leader develops a different relationship with each subordinate and that this will be based on the behavior of each party. Three variables influence the kind of relationship: subordinate considerations, superior considerations, and task considerations. The most influential situational theory of leadership has been Fiedler Least Preferred Co-worker model. He argued that leaders have stable personal characteristics. Instead of changing behavior, both managers and their subordinates have to learn to live the leader’s behavior. Fiedler found three aspects of a work situation that together determine the effectiveness of particular leadership: the leader-follower relationship, the task structure, and the leader’s formal position and power. However, his theory lacks empirical support, fails to explain how leadership behavior affects subordinates performance, and its measures are arbitrary and lack empirical rationale. The contextual approach to effective leadership claims that a good manager in one organization does not have to be a good manager in another. Leaders can and do change their behavior from situation to situation. Vroom and Jago identified five styles of leader decision-making, ranging from autocratic to democratic. One of the most influential authors was James Burns. He identifies two basic organization states – convergent and divergent – and two matching management-leadership style, being transactional management (maintaining status quo) and transformational leadership (changing). A convergent state occurs when an organization is operating under stable conditions and the most appropriate style here is transactional. On the other hand, a divergent state occurs when environmental changes challenge the efficiency and appropriateness of an organization’s established goals. Here, a transformational leadership is more applicable. This compatibility between organizational state and leadership style is seen as essential for successful leadership. However, rather than being mutually exclusive, leaders may also need both transformational and transactional tools in their armories. Kanter also maintains that good leaders need to incorporate both transactional and transformational characteristics. Kanter argues that there are seven skills and sensibilities that a heroic type of leader needs to possess, arguing that all effective leaders need to possess these skills and that they can be applied in every situation. The skills are: (1) learn to operate without the might of the hierarchy, (2) compete in a way that enhances rather than undercuts cooperation, () operate with the highest ethical standards, (4) have a dose of humility, (5) develop a process focus, (6) be multifaceted and ambidextrous, and (7) gain satisfaction from results. This is based on his argument that all organizations operate in the same turbulent context and face the same challenges. One major factors needs to be rememberd when considering approaches to management: most research and writing on leadership is Western and based on male managers. Davies, for example, found significant differences between masculine and feminine approaches to management. The masculine approach valued self-esteem, abstract thinking, control and loyalty to supervisors, whereas the feminine approach valued selflessness, contextual thinking, experience and accommodation. This could imply that women prefer to use a more transformational style whilst men are more transactionally oriented. These preferences however, may differ per country. Management Development The arguments put forward here imply that managers can and do adopt both the planned and emergent approaches to change management either alternatively or simultaneously as the situation requires. One of the main findings from the contextual perspective on leadership is the need for managers not only to adapt their style to the particular situation, but also to adopt transactional and transformational approaches at the same time. However, this runs counter to literature on managerial learning that argued that as maangers gain experiences, they form quite definite opinion of what works and why. However, under certain conditions, managers are capable of changing their mental models. Management development programmes are increasingly seeking to change managerial behavior, especially to promote leadership and creativity and to align managers’ behavior with the longer-term strategic objectives of their organizations and with society’s wider social and ethical considerations. As a result, management education and development are taken seriously in most advanced countries and entry into a managerial job requires formal, university-level qualifications. These programs are initiated by the company and hence, the content differs per company. In terms of challenging and changing managerial attitudes and behaviors, the use of Action Learning is interesting. This is based on small groups of managers tackling a set problem or case study. The aim is not only that managers learn how to approach problems together, but also that they learn about themselves and challenge the appropriateness of their own attitudes and behaviors. This can be seen as a derivation of Lewin’s action research. All in all, seven factors can be discerned as important in the ability of managers to operate effectively: (1) the manager’s past experience and whether this has reinforced their beliefs or led them to question their appropriateness, (2) the level of creativity, (3) his cognitive style: are they adopters or innovators? (4) the manager’s ability to perceive the whole picture, (5) the organizational context, (6) the organization’s management team, and (7) the organization’s management development process. Management, leadership and change This attempt to make sense of management and the literature on management has shown the following: the incredible variety and complexity of the role of people who hold the title manager; the wide range of factors that impinge on managerial effectiveness, including managers’ own personalities, those of their followers, superiors and peers, and the wider organizational context and objectives in which they operate; the ability or potential of managers to increase their level of creativity and change their style of management from transactional to transformational and vice versa, as the situation requires; and the recognition that management development has a key role to play not only in developing individual creativity but also in changing the ethical behavior of management as a group in organizations. Furthermore, there does seem to be some agreement as to the differences between management and leadership. In addition, management and leadership focus on different types of change with management focusing on small-scale localized changes and leadership on more radical, organization-wide changes. These can be added to the framework for change. Summary and conclusions The way an organization is managed and led can have profound implications not only for the organization and its members but for society as a whole. Most managers have to rely on their business knowledge, skills, creativity, and experience rather than their personality. Furthermore, despite the view of some writers, there can never be any general recipes or formulas for organizational success as the vast variety of organizations, each with its own differing constraints and pressures, makes that impossible. Organizations face many challenges and choices and the room for maneuver may be constrained. It is the role of managers and leaders to ensure that all options are identified and that they take into account the wishes of all their stakeholders. The worst managers may not be those who make poor choices, they may be those who fail to recognize that there are choices to be made. #16 – Smith & Sutherland/Graetz (2011), Ch. 11; Conclusion. The dualities philosophy: ‘changing tensions’ Introduction This is pretty much a summary of the whole book so far Connecting philosophies of organizational change Evidence from case after case of failed change implementations indicate that rather than change involving a series of predictable steps, reality defies simple, planned responses. Managing change demands balancing and conciliating what often appear as conflicting dilemmas, That is, merging (1) rational strategic planning with adaptive strategic thinking, (2) cultural renewal in the form of surfacing and challenging the core values, beliefs and assumptions, (3) empowerment with strong leadership, (4) continual incremental adaptation with radical transformation, and (5) social goals with economic goals. The stability-change dilemma The intersection of stability and change, what complexity theory advocates refer to as the edge of chaos, reveals where opportunities for organizational development lie. One should come to terms with simultaneous change and stability. Duality theory proposes that the tension or ‘dynamic synthesis’ between contradictory forces within organizations provides a catalyst for self-renewal. Exploring the links between opposing dimensions and exploiting the tensions that arise from paradox provides scope for rich insights into the complexities, ambiguities and nuances of the change management process. The resulting shift in focus from organization similarity to plurality may introduce a more nuanced understanding of institutional dynamics. Change managers benefit when they find comfort with paradox management, entailing ‘exploring rather than suppressing’ the dual tensions that exist. The first step is to recognize merits in opposing elements. Change managers have to find a balance between order and disorder. All in all, drawing on diverse philosophical perspectives offers different, albeit partial, interpretations, enabling researchers and managers to accommodate the contradictory nature of change. Change dualities Traditional approaches see change management as an exception, a passing irritation to be overcome quickly before returning to stability. While stability bolsters organizational effectiveness, the irony remains that performance can be paradoxical because it demands the presence of dual attributes that appear to be simultaneously contradictory, including, stability-change, control-flexibility, and efficiency-creativity. To be effective means appreciating how such dualistic forces shape change. Duality theory suggests that what appear to be opposing dimensions should be seen as essential complements that must co-exist in order to account for the nuanced and textured management of change. Thus, theorists who employ duality theory ‘can maintain conceptual distinctions without being committed to a rigid antagonism or separation of the two elements being distinguished’. But how can they do both change and continuity at the same time? Understanding dualities: a dualities aware perspective Part of answering this question lies in allowing a state of tension to emerge. However, dualities are not simply alternatives. The problem arises when an organization chooses to focus on one of the poles at the expense of the other, thus making it difficult to enact both ends of the continuum simultaneously. A paradox represents a range of contradictory yet interrelated elements such as perspectives, feelings, messages, identities, interests or practices. As constructed entities, they explain the efforts made by change managers to simplify and make sense of the complexities and uncertainties in the work environment; attempting to resolve rather than embrace contradictory elements. Dualities characteristics The term characteristic is used to describe a prominent aspect or a definable, differentiating and universal feature, trait or property. Understanding the characteristics of dualities reveals the implications of change management interventions and subsequent choices in support systems. It helps to perceive duality characteristics as escalating. Thresholds change with contextual pressure, so for dualities to endure they must also possess a dynamic property. Hinging on the importance of considering duality characteristics as a unit that operates in collaboration, the following discussion identifies and describes five duality characteristics± Simultaneity: the foundation duality characteristic is simultaneity. Dualities represent the simultaneous presence of what conventionally have been considered contradictory if not mutually exclusive elements. The tension or dynamic synthesis between contradictory opposites provides the catalyst for long-term organizational effectiveness and self-renewal. Relational: The bi-modal nature of dualities, integral to simultaneity, also manifests in its relational, interdependent nature. Bi-directional relationships involve not only simultaneous, but also mutual feedback: when these relationships are symmetrical, we are in the presence of a synthesis – a synthesis that emerges in the relationship between the two opposite poles. This relationship becomes most important when considering the fundamentally different logics of exploration and exploitation that create tensions between the simultaneous need to explore new possibilities while exploiting old certainties. The relational characteristic illustrates that organizations are not independent of the other practices they house. A change to one can affect all of the others as well. Minimal threshold: Dualities need a minimal threshold. A certain level at each pole creates the tension necessary to stimulate a duality. A minimal consensus ensures that the status quo is not implacable and unchallenged. A degree of ambiguity, contradiction and incoherence provides the catalyst for organizational learning, diversity, and renewal. Dynamism: The duality characteristic of dynamism underlines the bi-modal interactive nature of dualities relationships. Energy and feedback are pivotal to competing but simultaneous criteria. In essence, organizations never reach a state of balanced equilibrium, primarily because the simultaneous need for freedom and order within social systems means that these two poles often act against each other. The tension between the two opposing poles needs to be managed on a continuous basis to ensure an ongoing interaction between constraining and enabling forces. The dynamism characteristic works with its counterparts – simultaneity, relation and minimal threshold – to maintain a constructive tension. That is, a state where there is sufficient tension to mobilize change and action, but not so much as to engender politicization or perverse, unintended consequences. Improvisation: The dynamic and symbiotic properties of dualities suggest the centrality of improvisation, representing a fusion of intended and emergent action that manifests as a mix of control with innovation, exploitation with exploration, and routine with non-routine. Improvisation illustrates the value of a bi-directional relationship between two opposing poles by encouraging activities that alter, revise, create and discover rather than simply shift, switch or add. Continuity and change: competing and complementary forces Taking action enabling the five characteristics requires an almost paradigmatic mind-shift. However, the characteristics do suggest boundary principles that can be placed around management activity which encourage dualities. For example, simple heuristics can work effectively as guidelines around which minimal thresholds can be safely established. When a CEO deliberately fails to provide senior management with any plans other than a broad vision in the hope that it would stimulate their own strategic imagination, he is providing a boundary heuristic. Boundary heuristics can amplify the properties of a duality. Conclusion While organizations may view stability as the antidote to risk, it really presents an Achilles heel, which may lead to blindness when new insights and opportunities arise because they contradict or threaten to destabilize the existing steady state. The potential for self-renewal and long-term sustainability lies in responding positively and constructively to the dynamic tension between opposites. The dualities philosophy represents a paradox management means of dealing with change. The management of continuity and change intricately aligns with finding a balance between order and disorder. All in all, paradox and ambiguity are revealed as healthy sites for innovation and change.