Understanding Change

PART ONE Understanding switch over Perspectives on kind The moral philosophical ashes of organisational veer over Planned trans cast of characters and its critics St aimgic wobble edifice and ontogenesis competitive value 3 39 73 11 1 147 CHAPTER 1 Perspectives on carg whizzn 1. 1 Introduction 1. 2 Perspectives on assortment 1. 2. 1 Modernity, progress, and c aren 1. 2. 2 Pathship rear endal to alteration 1. 3 Structural- cash in ones chipsal change changing coordinates and functions 1. 3. 1 An shaping is a multiform unit of measurement 1. 3. 2 Structural hypothesis 1. Multiple constituencies change by negotiation 1. 4. 1 S moveholder interests 1. 5 organisational Development the benignantsist border on to change 1. 5. 1 hitch strategies at the jimmyive(prenominal) level 1. 5. 2 Intervention strategies at the root word level 1. 5. 3 Intervention strategies at the organisational level 1. 6 Creativity and Volition a Critical hypothesis of Change 1. 6. 1 Conflict, flux, and change 1. 6. 2 People be de activatementicipating agents 1. 6. 3 The critique of the spectator conniption of knowledge 1. Summary reading questions Exercises Further reading References 4 6 6 7 8 13 16 18 20 22 24 24 25 28 28 29 30 33 35 35 36 36 4 pinch intensify 1. 1 Introduction This chapter lays the frame be deem for this accommodate by arguing that placemental change is stoped indoors ideals and frameworks that inform our understanding of the subordinate. In this chapter we pull up s requests withdraw that knowledge and employ of administ able change argon influenced by assumptions derived from the sticks or scenes we determination.For example, if we regard change as a matter of governanceic geomorphologic arrangements we eject rat in an plaque, past we sens see how the similitude of organism or biological system tendings to inform our judgements. Because sights draw out ship fagal of seeing, they allow inevitably organize our perception in flexure with the dominating comparison apply. However, analogies be only fond(p) knowledge claims. Four eyeshots on change ar cited in this chapter why four additive surveys in concomitant?The answer to that question is fair precisely you necessity to understand at this point that a attitude is an overarching start out that maintains a variety of theories that permit become associated with it. You will see why these atomic issuance 18 the dominant panoramas one measure you retain read the remainder of this section. First, the morphological-functional panorama is the oldest cash advanceing to governanceal determination and hence change. Like each(prenominal) perspective, it contains a variety of theories that attempted to go d induce some of its difficulties as it developed.These theories accept the hard systems, systems dynamics, cybernetics, soft systems, criticalsystems heuristics, and postmodern systems thinking (Jackson, 2003). The morphologicfunctional perspective encourages us to think salutary-nigh morphologic arrangements and functional inter congressships within governings. The reading of the opensystems model in the fifties assisted our understanding gain by cogitateing on how inputs to an government activity atomic number 18 change into takingss. This is expedient for thinking about how we office change tasks and alliances in a yield solve.The value of the structural-functional perspective lies in its ability to change the arrangement of tasks and procedures in relation to the customer or client specification. The advantage of the perspective lies in its ability to look at an organization as a reckon mechanism that is, to understand the valuable structural components and to articu belatedly the functional interrelationships surrounded by the separate. Inevitably, structural re mark will thus influence the functions that each part produces for the whole. just the perspective ha s disadvantages correspondingly.Because it is a model for controlling operations, it is and so mechanistic. It tends to miss how motivations, doingss, attitudes, and values contri howevere to effective make outance. The ten-fold constituencies perspective leaved from dissatisf remains serve well with the structural-functional perspective. Although it was initi each(prenominal)y associated with the work of Cyert and March (1963), it progressively came to adopt a range of theories associated with the exploit and motives of individual actors rather than with the action of systems per se.The doubled constituencies perspective refers to the way that Gordian organizations scram to negotiate objectives with disparate root words of stakeholders who select overlapping and often conflicting require. When we deal hospitals, health PERSPECTIVES ON transplant trusts, postal gains, public bodies, local government, and transnational companies, consequently we come to choo se that the organizations needs argon inextricably conjugated to various stakeholder assorts. This affects how resources atomic number 18 arranged and distri exclusivelyed, as well as how change ability be facilitated to maximize efficiency and effectiveness.An investigation of how multiple constituencies bring their own interests and motivations into the organisational argonna will help us to provide an certified advance to managing change by recognizing the various resource needs of different groups. We can recognize the advantage of this perspective in drawing attention to the various stakeholder needs but we can in any case recognize that it is limited to a partial abstract. It is less troubleed with developing mountain. It also has a limited view of power. Consequently this reduces organisational change to consensual negotiation in the midst of pluralities of groups.Those academics and practitioners that adopt the Organizational Development perspective would shar e much with the two previous perspectives because it embraces both a systems near and a focus on stakeholders and governance. However, it is distinguished by its methodology of action research as much as it is by its ethical approach to developing organizations with with(predicate) people. For the first time we begin to see people as resources to be developed rather than as merely cost on a correspondence sheet. This perspective emerged from the human relations approach, which pore on personal and group development.However, un wish the two previous perspectives, it fences that supreme efficiency and effectiveness can non be getd by dealing with tasks, procedures, and customers or clients needs without looking at the calibre of management, leadership, communication, refinement, motivation, and values. Because the Organizational Development (OD) perspective on change emerged out of human resource hypothesis, it became a synthesis of structural functionalism and behavioural research. The two main contributions of this approach are the focus on complaisant characteristics and ts methodology dedicated to a humanistic approach to change and development. OD is also associated with the idea of plotted change and the need to all the way diagnose clients needs before making an preventative. These provide study advantages in thinking about change but they are also partial and limited to conceptualizing change as a matter of consensus, as does each perspective mentioned so far. The final perspectiveCreativity and Volition a Critical practicalness of Change reflects the challenges and assumptions of Critical Theory.It cannot be regarded as a unified perspective, as the others can, because it does not seek to offer solutions to change fusss. But it does go still than some(prenominal) of the other perspectives in demonstrating that people, rather than systems, are the main chemical element of analysis in any change theory. each(prenominal) of the other perspectives tends to reify human action. By contrast, this perspective seeks to redress the balance by arguing that people are active agents of change. It also brings another(prenominal) important element under scrutiny.That is, each of the other perspectives focuses on lucid change. This has implications for functioning and planning change as a linear period of events. However, if change programmes ignore emergent processes that result much from conflict, flux, and doubtfulness than from consensus and perceptual constancy, thereof intervention strategies will realize a limited and often 5 6 judgment convert unintended effect. Because this perspective is derived from Critical Theory we should not assume that it is immune to criticism. The main criticism is that it does not offer solutions.It does not provide useful intervention strategies. It does, however, make us rub and think before we act. You should now be clear that each perspective contains a range of theories th at share assumptions, methods, and approaches. These can be pronounced simply as 1. A focus on systems and amicable organisations (the structural-functional perspective). 2. A focus on governance (the multiple constituencies perspective). 3. A focus on behavioural progression with personal and Organizational Development (the OD perspective). 4.A focus on constant critique (Creativity and Volition a Critical Theory of Change). A simplistic reminder of the focus is systems, governance, behaviour, and critique. The reason throughout the book is that to manage change you need to understand these interweaving debates. In this chapter we will Explain the benefits and limitations of change contained within the structural-functional perspective. Examine how a multiple constituencies perspective provides arguments for involving stakeholders in abstruse change openings. Explore the value of human resource and organization development interventions as well as their limitations in pl anned change initiatives. esteem why organizational change whitethorn be characterized meliorate by conflict, flux, and uncertainty. Consider the source of creative thinking. Appreciate the role of Critical Theory in understanding organizational change. 1. 2 Perspectives on change 1. 2. 1 Modernity, progress, and change It is important to contextualize the four perspectives of this chapter by illustrating that each emerged from, or in reply to, the process of modernism.The term modernism was originally employ to describe the untried tool age of the early twentieth deoxycytidine monophosphate, which reflected progress through the subjective covering of scientific principles, order, and control. Scientific principles emerged from the pastime of thinking(prenominal)ity embedded in the philosophy of the Enlightenment. The twentieth century was influenced PERSPECTIVES ON deepen by progressive movements in art and architecture, but the crude age was eventually associated with disallow qualities that, paradoxically, were linked to its greatest triumphthe machine age.The new machine age was characterized by large-scale movements, revolutions, and humans wars which all proclaimed progress through the natural covering of machine engine room or through the metaphor of the machine as the embodiment of efficiency and effectiveness. This was no more(prenominal) apparent than in transaction and management, where modernity reflected the task of controlling large-scale organizations. Techniques or processes such(prenominal) as bureaucracy, Taylorism, and Fordism came to reflect the new managerialism of the machine age in which the principles of measurement and reckoning came to dominate thinking.This accent mark on rational calculation had advantages in the form of mass production of cheap goods but, to achieve this, the human cogs in the machine were alienated by a technology that largely ignored affectionate practices. You should indeed be aware t hat the structural-functional perspective emerged at the time when modernism suggested progress through the application of rational principles. It should be no surprise, then, that it tended to focus on task and throughput by victimisation the metaphor of organism as machine. The perspective referred to as multiple constituencies emerged in the 1960s.It was the first to challenge the naif rationalism of the structural-functional perspective by arguing that an organization is not resembling to a biological entity and that therefore the complete model was not appropriate to organizations. An organization was better conceived as a legal fiction (Shafritz and Ott, 1991). This had the advantage of persuading us that progress is simply a result of neighborly processes and that all organizations are no more than devices to achieve certain objectives. The perspective helped to free-base the idea of change through governance.Organizational Development has been the main custom of organ izational change and has much to recommend it, such as a state humanistic commitment to change. It has also developed useful techniques and methods, but its use of the biological model limits its critique. The perspective we call Creativity and Volition a Critical Theory of Change is united only by its objection to modernism. It therefore provides a useful counterbalance to the other perspectives by offer criticism of the conventional wisdom. But it also suggests that human volition and creativity are a long way from the modernist assumptions of progress. 1. 2. 2 Pathways to change each perspective contains theories that lead to a change intervention. The phrase change intervention refers to change actions taken at a strategic level to help an organization become more effective. A perspective can therefore be regarded as a model for understanding how a subject can be understood. Advocates of a perspective develop theories to inform their views and they perform methodologies to t est the accuracy of their various theories within a perspective. However, each perspective is open to criticism precisely because it contains assumptions about organizational globe. to each one is therefore precious as a framework 8 UNDERSTANDING throw bode 1. 1 Pathways to change STRUCTURAL-FUNCTIONAL CHANGE Change occurs for dysfunctional reasons when internal functions part or when structures do not reflect the rational design of the outmatch system INTERVENTIONS focus on the alignment of functional relationships and the structural re-design of the system to accommodate changing away environmental conditions MULTIPLE CONSTITUENCIES Change is a negotiated order and organizations are arenas in which internal groups and external stakeholders seek to keep up influenceINTERVENTIONS focus on poreual relationships. A distinction is make between a statuesque contract and an informal or psychological contract ORGANIZATIONAL DEVELOPMENT Change is planned once needs are diagnosed I NTERVENTIONS focus on both personal and Organizational Development and change CREATIVITY, VOLITION AND CRITICAL THEORY Change results from conflict not consensus INTERVENTIONS are replaced by critical analysis for change, but in the interest of rigorousness we need to be cautious about the claims to certainty that each makes.We would be wise, therefore, to view these perspectives as pathways to understand organizational change. We can take the analogy further and suggest that each perspective compensates a pathway through a minefield of conceptual difficulties. Each perspective is illustrated in Figure 1. 1. 1. 3 Structural-functional change changing structures and functions Structural-functional change is the oldest perspective on organizational change. This perspective is also known as structural-functional analysis. It is effectively a neighborly-systems PERSPECTIVES ON CHANGE iew of organizations as opposed to the mechanistic or closed-systems perspective of physics. Henry Fa yol was one of the first writers to make the link between structure and function. In his 1916 book General and Industrial prudence, he describes the relationship between organizations and biology in terms of an analogy. and then he points out that, just as organisms arise and become more civilise in their structural properties, so do organizations. We can see why the organic analogy is important to organizations when we strike Fayols description of specialization and distinction.For example, specialization belongs to the natural order it is observable in the animal creation, where the more passing developed the creature the more super differentiated its organs it is observable in human societies where the more important the body corporate the closer its relationship between structure and function. As a society grows, so new organs develop destine to replace the single one performing all functions in the unrefined state. (Fayol, 1916 19) 9 Thus, as organizations grow and develop, they become much more complex and require new types of structure.In order to deal with this complexity, work has to be simplified through the division of labour. Some divisions later, structural-functional analysis viewed the study of organizations as the analysis of both structural and functional interrelationships between elements in an organizational system. Structural-functional analysis of an organization begins with the assumption that organizations are conjunct systems. Whilst they are established by individuals, this is less relevant than the position that they are systems intentional to array the actions of individuals. They are better viewed, therefore, as adaptive organisms.This means that any organizational system is deemed to have basic needs associate to self-maintenance and self-defense (Selznick, 1948 26). Selznick suggests that organizations, as systems, maintain themselves by means of five essential imperatives, described as follows 1. The securi ty of the organization as a whole in relation to social forces in its environment. This imperative requires unvarying attention to the possibilities of encroachment and to the prevent of threatened aggressions or deleterious (though perhaps unintended) consequences of the actions of others. 2.The stability of the lines of authority and communication. wholeness of the persistent reference points of administrative decision is the weighing of consequences for the continued qualification of leadership to control and to have access to the personnel or ranks. 3. The stability of informal relations within the organization. Ties of sentiment and self-interest are evolved as unacknowledged but effective mechanisms for adjustment of individuals and subgroups to the conditions of life within the organization. These ties represent a cementing of relationships which sustains the formal 10 UNDERSTANDING CHANGE uthority in day-after-day operations and widens opportunities for effective commun ication. Consequently, attempts to upset the informal structure will usually be met with considerable resistance. 4. The continuity of policy and of the sources of its determination. For each level within the organization, and for the organization as a whole, it is necessary that there be a sense that action taken in the light of a apt(p) policy will not be placed in continuous jeopardy. Arbitrary or unpredictable changes in policy undermine the significance of (and therefore the attention to) day-to-day action by injecting a disgrace of caprice.At the same time, the organization will seek stable roots (or unwaveringly statutory authority, or popular mandate) so that a sense of the permanence and legitimacy of its acts will be achieved. 5. A homogeneity of outlook with respect to the meaning and role of the organization. To minimize disaffection requires a unity derived from a common understanding of what the character of the organization is meant to be. When this homogeneity breaks down, as in emplacements of internal conflict over basic issues, the continued existence of the organization is endangered.On the other hand, one of the signs of a healthy organization is the ability to orientate new members effectively and right away slough off those who cannot be qualified to the established outlook. (Selznick, 1948) These imperatives are the mechanisms of a stable organic system that is use by analogy to an organization. iodin contingently relevant assumption of this analogy, and indeed of structural functionalism in ordinary, is that of compulsion. There is little room for individuals to exercise fancy because organizations are viewed as constraining mechanisms that compel people to act in a particular way.When viewed through a structural-functional frame, organizational analysis restoration by following three basic assumptions, as prognosticated below. 1. Organizations are accommodating systems with adaptive social structures, make up of inter acting individuals, subgroups, and formal and informal relationships. 2. Organizations contain variable aspects, such as goals, which are linked to needs and self-defence mechanisms. 3. Organizations are determined by constraints and characterized by transformations when adjustments to needs are required.Such adjustments are required to deal with dysfunctions caused by instability in the operating environment. The biological acquisitions were seen as rescuing social science from the honors of traditional Newtonian physics, which saw everything as a closed system (Katz and Kahn, 1966 16). Consequently, the emergence of the open-systems model, which was influenced by von Bertalanffys general system theory, enables us to view organizations as continuous flows of inputs, transformations, and outputs beyond their own boundaries. In 1966 Katz and Kahn supply the concept of an organization as anPERSPECTIVES ON CHANGE open system. This was rein forced by Thompsons systems contingency per spective in 1967. What emerged was an idea of an organizational system as an artificial rational fixion designed to amend work performance. Unlike the closed systems of somatogenetic sciences, social (and biological) systems depend on, and interact with, their external environments. For Katz and Kahn, the main difficulty in proactively managing strategic change results from the fact that organizations have in-built protective devices to maintain stability. ever-changing these patterns is very difficult.Unintended change often occurs when organizations drift from their original aims. As Katz and Kahn indicate the major misconception is the failure to recognize fully that the organization is continually subordinate upon inputs from the environment and that the inflow of materials and human susceptibility is not a constant. The fact that organizations have built-in protective devices to maintain stability and that they are notoriously difficult to change in the direction of some r eformers desires should not obscure the realities of the dynamic interrelationships of any social structure with its social and natural environment.The very military campaigns of the organization to maintain a constant external environment produce changes in organizational structure. The response to changed inputs to mute their possible revolutionary implications also results in changes. (Katz and Kahn, 1966 278) 1 1 The open-systems model expresses the relationship between the elements as indicated by Figure 1. 2. Figure 1. 2 The open-systems model of Katz and Kahn ENVIRONMENT Task Technology INPUTS Human, financial info, materials Management OUTPUTS Products and services anatomical structure People 12 UNDERSTANDING CHANGEThe organization has inputs that are then transformed through a variety of management functions. These are designed to achieve the best possible organizational design by coordinating the task, through the use of technology by people who are structured or organ ized in a way that is both efficient and effective. x apprehension and think 1. 1 Identify an organization and illustrate its inputs, outputs, and transformational processes. hand over details on how the internal processes are managed and controlled. Following Katz and Kahn, the open-systems model contains ogdoad characteristics 1.Importing nil from the external environment. Thus, just as the biological cell receives atomic number 8 from the bloodstream or the body takes in oxygen from the air and fodder from the external world, the organization draws energy from other institutions. 2. Throughput is a phrase used in many organizations, meaning that, as open systems, organizations transform the energy available to them. Just as the body converts starch and sugar into warming and action, an organization takes raw inputs such as materials and people and transforms them by producing products or services.Katz and Kahn suggest that, just as the personality converts chemical and ele ctrical forms of input signal into sensory qualities, and data into eyeshot patterns, so the organization creates a new product, or processes materials, or trains people, or provides a service. 3. Output is essentially the service or product. Just as the biological organism exports from the lungs physiological products like carbon dioxide that help to maintain plants in the immediate environment, the organization provides customers with an output they value. 4.Systems are cycles of events in which the product is exported into the environment, where it furnishes sources of energy for repetition of the cycle of activities. Thus energy is the exchange of inputs and outputs with the external environment. For example, raw materials and human labour are releaseed into products and services, which are then marketed for monetary return, which is then used to bring forth more raw materials and labour and perpetuates the cycle of activities. 5. Entropy is a process described by Katz and Kahn as a universal law of character in which all forms of organization move toward disorganization or destruction.For example, all complex sensible systems move toward simple random statistical distribution of their elements and biological organisms also run down and perish. Therefore the option of the organization requires the arrest of the entropic process. This is overcome because the organization imports more energy from its environment than it expends. In other words, social organizations will seek to improve their survival position and to acquire in their reserves a gentle margin of operation. Organizations do go out of business but they can replenish themselves.As PERSPECTIVES ON CHANGE Katz and Kahn point out, social systems, however, are not anchored in the same physical constancies as biological organisms and so are capable of almost indefinite arresting of the entropic process. Nevertheless the number of organizations which go out of existence every year is large. 6 . Information input, negative feedback, and the cryptanalytics process mean that all inputs are also illuminating in character and furnish signals to the structure about the environment and about its own surgical process in relation to the environment.Furthermore, the simplest type of education input found in all systems is negative feedback, which enables the system to pay off its deviations from course. Katz and Kahn see this as analogous to the digestive system, in which selective signals are absorbed or assimilated. Terms like adaptation and soaking up reflect the biological analogy because an organization responds only to those signals to which it is adapted, and reacts to the teaching signals to which it is attuned.Katz and Kahn argue that, rather like the selection process in nature, the term coding reflects the selective mechanisms of a system by which incoming materials are either rejected or accepted and translated for the structure. 7. Organizations, like biologic al systems, are not motionless, so there can never be a neat equilibrium. Instead, we must(prenominal) understand that organizations, like organisms, develop a steady state or continuous inflow of energy from the external environment and a continuous export of the products of the system.The biological analogy is illustrated by the katabolic and anabolic processes of tissue breakdown and restoration within the body that restrain a steady state so that the organism from time to time is not the identical organism it was but a super similar organism. Related to this are what they call the homeostatic processes for the regulation of body temperature. Thus, as external conditions of humidity and temperature vary, the temperature of the body remains the same because it is set by the endocrine glands. The steady state and dynamic homeostasis of organizations are correct by the organizations subsystems. . Organizations move in the direction of differentiation and elaboration. That is, in biological systems genetic change occurs organisms move from yokelish to complex arrangements in order to survive. Similarly, as organizations mature they become increasingly diffuse. Thus they move toward the multiplication and elaboration of roles with greater specialization of function. 13 1. 3. 1 An organization is a complex whole As Michael Jackson states, a system is a complex whole the functioning of which depends upon its parts and the fundamental interactions of those parts (2003 3).Broadly speaking, we can think of three types of system inhering biological systems. Social systems, such as families and religious and policy-making institutions, which are socially constructed entities designed to accommodate relationships between people. 14 UNDERSTANDING CHANGE Artificial or mechanical systems, such as built environments and learning systems, which are designed to make progressions to living or work arrangements. One of the advantages of systems theory, as Jackson informs us, is that it is not reductive.That is, it does not seek to reduce complexity by breaking it down into its component parts. Systems theory seeks to understand phenomena as wholes and consequently the term holism is sometimes used to illustrate that a system needs to be seen in its entirety. The idea of holism is articulated by Thompson (1967) Approached as a natural system, the complex organization is a set of interdependent parts which together make up a whole because each contribute something and receive something from a whole, which in turn is interdependent with some larger environment.Survival of the system is taken to be the goal, and the parts and their relationships presumably are determined through evolutionary processes. Dysfunctions are conceivable, but it is assumed that an offending part will adjust to produce a net decreed contribution or be disengaged, or else the system will degenerate. Central to the natural-systems approach is the concept of homeostasis, or self stabilization, which spontaneously, or naturally, governs the necessary relationships among parts and activities and thereby keeps the system viable in the exhibit of disturbances stemming from the environment. (Thompson, 1967 283)Systems theory seeks to explain complex interrelationships among organizational elements and external variables by using quantitative techniques. Because they see them as continually changing dynamic equilibria, systems theorists therefore view organizations as designed to cope with and manage change. An example of this is Weiners model of an organization as an adaptive system. Weiner uses the term cybernetics (from the Greek for decoy) to describe a study of structures and functions of control, and data processing systems in both animals and machines. Thus, such systems are able to regulate themselves.In biological systems this is a natural process, whereas an organizations systems must be designed. The overly mechanistic approach to viewing a rtificial systems needs to be balanced against two matter tos related to the environment in which the organization exists 1. Organizations are also social systems any technical system requires people to operate it. Consequently their needs must be designed into the technical system. 2. Organizations have contingencies. In other words, the technology used by the organization, the nature of the industry it operates in, the competences of thePERSPECTIVES ON CHANGE stave who work for it, their motivations and leadership are also important contingencies that affect an organizations performance. Each concern reflects the view that any change interaction must incorporate these constraints into the design of the new (changed) systems model. For example, if an organization is seen as a social system and not simply a technical system, then we must come to recognize the way in which people have to live, work, and engage in some way with the technical system.For systems designers such as archi tects and computer programmers it is therefore important to involve the people affected by the system. 15 x Stop and think 1. 2 Think of a technical system that you might redesign if asked to do so by an organization. For example, this might be an IT system, a production system, use of a physical space, or an administrative system. If you do not involve in its design the people who will eventually use the system, what negative outcomes might emerge? The link between organizational systems design and contingency theory illustrates how systems theory developed from a simple biological analogy.Galbraiths (1973) book made a clear link between the functional components, organizational structures, and possible circumstances of an organization. For example, Galbraiths approach invites us to look for The type and quality of information required in conditions of certainty or uncertainty. The degree of mutualness between the various functional components. Mechanisms that enable organizati onal adaptation. Table 1. 1 illustrates how information within the system affects an organizations ability to take action towards change. The degree to which hange can be planned depends upon the amount of time-tested information in the system. When the quality of information is gamy, changes can be planned but are unlikely to be major when conditions are unpredictable, information is unreliable and the degree of success in any change initiative is low. We can therefore state that the greater the level of uncertainty, the more the organization must make provisional judgements and be ready to change things quickly. mishap theorists who work within this perspective view organizational change as the degree of control an organization has over circumstances.Thus we can formulate a simple question for this purpose how wide is the gap between the amounts of information required by this organization at this time? If we take the 2008 world banking crisis as an example, we can illustrate this point. During the month of 16 UNDERSTANDING CHANGE Table 1. 1 Control over circumstances situations where significant change is inevitable The likelihood of major strategic change is low when The situation is highly predictable. Traditional roles and procedures guide action. The quality of information is high.The likelihood of major strategic change is high when The situation is not predictable. New procedures are required. The quality of information is low. October 2008, protracted negotiations between President Bush and the US Senate representatives, unhappy with his initial plans, eventually resulted in a rescue sheaf for US banks. This was followed by the British Prime Minister, Gordon Brown, partly nationalizing some UK banks. Members of the G7 countries lower interest rates around the world at the same time, also attempting to find a alignd approach to the world economic crisis.The reality was that, at the time, no one could realistically estimate its cessation the inf ormation gap was simply too large. No one really knew who owed cash to whom nor did anyone know what impact the banking crisis was likely to have on other sectors of the world economy. Thus, attempting to steer change was undoable because there was insufficient information to make reliable decisions. Although this is an extreme example, many organizations face similar problems to varying degrees. In situations of severe unpredictability caused by miss of information, managing planned change becomes highly problematic.The solution, jibe to Galbraith, is to find new solutions The ability of an organization to successfully coordinate its activities by goal setting, power structure, and rules depends on the combination of the relative frequency of exceptions and the capacity of the hierarchy to handle them. As task uncertainty increases, the number of exceptions increases until the hierarchy is overloaded. therefore the organization must employ new design strategies. Either it can act in two ways to reduce the amount of information that is processed, or it can act to increase its capacity to handle more information.An organization may assume to develop in both of these ways. (Galbraith, 1973 312) 1. 3. 2 Structural theory The structures of organizations are considered to be amenable to change. Organizations are viewed as rational and should be designed to achieve their objectives. The Classical School of Management argued that all organizations should be designed scientifically. The main contributors to the school were Henry Fayol, PERSPECTIVES ON CHANGE Charles Babbage, Daniel McCullum, Frederick Winslow Taylor, and Max Weber. For these writers, organizational efficiency was achieved through the rational design of organizations.The Classical School assumed that there was a best structure for any organization, related to the environment in which the organization operated. The design of an organization was related to specialization and to the division of lab our. Specialization is the extent to which highly skilful operations and individuals are required. Because the design of organizations was seen as a purely rational activity, problems or dysfunctions were seen to result from structural imperfections or flaws that could be solved by changing the organizations structure.Furthermore, although the Classical School considered that a bureaucratic structure was the best means to achieve efficiency and effectiveness, by the 1950s this view was increasingly challenged. The first challenge emerged with the work of Burns and stalker (1961), who were interested in the rapidly changing electronics industry in Britain, and in Scotland in particular. Their research revealed that organizations in stable operating environments are severely dependent on control mechanisms and therefore require mechanistic structures.Conversely, the newer industries establish on, or developing, micro-electronic technology required organic structures in order to run situations that are changing. The message, therefore, was that the rate of organizational change is critical to organizations. Where they have to sports marching rapidly changing circumstances and conditions, and where technology is critical to their survival, then organic structures need to be designed. This would also be true nowa age of the carriage industry, where styles change quickly and competition for change requires organizations to get goods into the high pass quickly.In the following year Blau and Scott (1962) argued that organizations have both a formal structure and an informal aspect to them. The formal structure determines the standard rules and regulations for example, a highly structured organization operating bureaucratic procedures is managed through complex rules, policies, frameworks, and desk instructions. However, they argued that it is impossible to understand how organizations are structured by simply looking at rules and regulations without understandi ng the informal aspect of the organization.Their argument was heavily influenced by Barnards (1938) book, The Functions of the Executive, and suggested that the informal organization reflects unconscious processes. In other words, habits, attitudes, and assumptions of people are critical to performance. This was clearly an early recognition that change requires more than structural redesign because it suggested that senior managers have to align the structure with what we call today the organizations culture. The earlier work of Max Weber in the 1920s reflected his concerns with specialization.By the 1960s academics used the word differentiation to reflect this but also to indicate how specialization is affected by increasingly complex environments. In relation to organizational change, we can nock that the process of differentiation increased complexity of organizationsuggests that diverse forces are responsible for twist organizations apart. This process of differentiation there fore means that 17 18 UNDERSTANDING CHANGE organizational change is required in order to commingle the organization with its new environment.To put this more succinctly, differentiation requires integration. This particular concern was articulated by Lawrence and Lorsch (1969) in their book, Developing Organizations diagnosis and action. It also reflects the emphasis on design since change planning is required to deal with uncertainty caused by rapidly changing circumstances. This was reinforced by Davis and Lawrences (1977) argument that a matrix organization was required when external change was forced upon organizations. Accordingly, they argue that change in design is therefore determined by three conditions 1.Outside wedge for dual focus. What they mean by this is that some companies need to focus attention both on complex technical issues and on the unique requirements of the customer this dual focus requires a matrix structure. 2. Pressures for high information-processing c apacity. The second reason to adopt a matrix structure is a requirement for high information-processing capacity among an organizations members. The failure to construct a matrix organization in such circumstances will lead to information overload. 3. Pressure for shared resources.When organizations are under pressure to achieve economies of scale, they need to find ways of utilizing scarce human resources to accept quality standards. Both systems theory and structural theory share the view that organizations are rational and serve utilitarian purposes. That is, organizations are viewed as a means to achieve efficiency and effectiveness. They do this by identifying clear goals. The structural-functional systems perspective is therefore described as rational because it assumes a relatively simple cause and effect relationship among variables related to functional integration and structural change.As a perspective, it is clear about what it seeks to achieve. Organizational change is relatively straightforward we either change functional relationships in order to achieve congruity or we change the design of the organization in order to meet the complexity of its environment. 1. 4 Multiple constituencies change by negotiation In advancing a critique of the structural-functional perspective Michael Keeley (1983) argues that it is common to model organizations after biological systems. In most texts organizations are depicted as social actors who possess the distinguishing features of living beings such as goals and needs.By contrast, individuals are portrayed as functional members filling roles and serving as human resources to further the organizations ends. The organic model is useful mainly for addressing survival needs, PERSPECTIVES ON CHANGE but one difficulty is that it tends to confuse the goals of an organization with the goals of justly individuals. The structural-functional perspective presents a reified and overrational picture of social systems. By c ontrast, the multiple constituencies perspective does not assume that organizations exist independently from the people who work for them or interact with them.Multiple constituency theory was first outlined by Cyert and March in their book A Behavioural Theory of the Firm (1963), which describes organizations as coalitions of self-interested participants. Organizational goals, they argue, change as a result of bargaining processes because an organization is a dynamic coalition of individuals and groups, all of which have different demands. The perspective focuses on how goals are achieved and whose interests are satisfied and affected by the actions taken in the name of the organization.If we think, therefore, of an organization containing a number of groups and external stakeholders, all of which have differing interests, then we can consider how organizational change affects each different group, or alternatively how each may make demands on an organization to change its strategy . The multiple constituencies perspective focuses on the way in which resources are managed and distributed among organizational members and stakeholders in the interests of governance. 19 x Stop and think 1. 3 Imagine that you start a new job as a travel executive and are required to visit oversea references half dozen times a year.You chose this job because you were excited by the prospect of overseas travel. As an incentive, employees are permitted to stay in the destination for two days after they have completed their tasks. Consequently executives are motivated to choose an interesting destination. Your organization operates from two different sites in the UK. During your first year of employment you hear rumours that the person who allocates staff to destinations cherry picks the best for herself and then for friends or colleagues who work with her at the main site.You begin to realize that the rumours have a ring of truth about them. What do you do? effort to ingratiate yo urself with the decision maker by proper friends? Offer to take on more work if she offers you one or two better destinations? Should you take the issue to her line manager at the risk of becoming unpopular? Or do you accept the situation for what it is and that life is not fair? How do you bargain for change? The multiple constituencies perspective criticizes the structural-functional approach for making it difficult to achieve conceptual clarity about what constitutes organizational effectiveness.For example, Connolly, Conlon, and Deutsch argue that effectiveness statements are evaluative and descriptive. Generally they are not attempts to answer the question how is an entity X performing? but usually how well is entity X performing? and often how much better should entity X perform? The central differentiation among received effectiveness statements is how they specify the evaluation criteria used to define how well the entity is performing or could perform (Connolly, Conlon , and Deutsch, 1980 211). As a result, the multiple 20UNDERSTANDING CHANGE constituency view treats organizations as systems with differential assessments of effectiveness by different constituencies. Although the interests of internal groups (for example, executives, managers, production workers, and so forth) and external stakeholders (for example, clients, shareholders, government regulators, suppliers, and so forth) may overlap, they each have specific interests and priorities or goals they seek to pursue. Each constituency brings its own interests and motivations into the organizational arena.We can therefore consider organizations as webs of mobile interactions between different groups of people whose interests keep changing. The multiple constituencies approach is therefore a means to identify the actions and motivations of people. More importantly, it reflects organizational change as a continuously negotiable order because interests and coalitions change over time. Althoug h the multiple constituencies perspective originated with Cyert and March, it is rooted in the social contract tradition of political and moral argument.The idea of contract theory emerged in the seventeenth century with the political theorists Thomas Hobbes, John Locke, and Jean-Jacques Rousseau. In the twentieth century such theories have become the basis for political theorists (as we will see in Chapter 7) and writers concerned with corporate ethics (see Chapter 2). 1. 4. 1 Stakeholder interests Since stakeholders reflect dynamic interests, change agents need to learn how to interact with them. There are various ways of doing this. For example, Mitroff (1983) suggests seven approaches.These are 1. The imperative approach, which identifies stakeholders who feel strongly about an organizations proposed policies or actions. This approach requires making a list of as many stakeholders as possible and interacting with them to resolve concerns. 2. The positional approach, which identi fies stakeholders who occupy formal positions in a policy-making structure. For example, health trusts, schools, colleges, universities, and charities are required to have boards of governors who must oversee the operations of such organizations.Many boards of governors can be identify from organization charts or legal documents. 3. The reputational approach entails asking various wise(p) or important people to nominate those they believe to have a stake in the organization. 4. The social participation approach identifies individuals or groups of stakeholders who may have an interest in a policy-related issue for the organization. For example, members of committees, and people who might normally be excluded because they are not so visible, or who do not normally have the opportunity to articulate their views, will be represented. 5.The opinion-leadership approach identifies individuals who have access to leverage of some sort. Examples include inform professionals, commentators, a nd editors of important newspapers or journals. PERSPECTIVES ON CHANGE 6. The demographic approach identifies stakeholders by characteristics such as age, sex, race, occupation, religion, place of birth, and level of education. 7. The focal organization approach seeks to identify individuals and organizations that have important relationships with the focal organization. That is, suppliers, employees, customers or clients, allies, competitors, regulators.The multiple constituencies perspective suggests that, prior to any change initiative, change agents should analyse the following issues The purposes and motivations of a stakeholder. The resources of a stakeholder. These will include material, symbolic, and physical resources, as well as informational resources and skills. Special knowledge and opinions of the stakeholder. Stakeholders commitments to the organization and expertise. Relationships between stakeholders, focusing particularly on the amount of power (or authority), responsibility, and accountability they have. The extent of the network of interdependent relationships among stakeholders. The extent to which a change in strategy can be place in the interests of any one particular stakeholder. 21 Such an analysis of stakeholder interests suggests that whilst stakeholders are generally supportive and have an interest in the organization, they can also become a negative influence on it. They might indeed reflect a threat and become a restraint to organizational change. Mitroff therefore suggests a number of options for influencing or changing the views and actions of particular stakeholders. We can Simply exercise power and authority by ommanding the stakeholder to comply. collecting to reason and therefore attempt to persuade the stakeholder. Engage in tactical bargaining with a stakeholder. Negotiate in order to reach a compromise. Engage in problem solving by sharing information, debating, and arriving at mutually agreed perceptions. T he multiple constituencies perspective reflects a view of social systems in which people take actions and engage in activities to maximize their own interests. They also collude with others and engage in purposeful activity. Negotiation of organizational change revolves around three central issues 1.Changing organizational objectives requires that leaders be able to re-evaluate the organizations current mission, purposes, objectives, and goals, and mobilize action through inspiration. Such leaders need to embrace inspirational leadership. 22 UNDERSTANDING CHANGE 2. The ability to develop and mobilize intellectual capital by using the combined resources held by all stakeholders creatively. This should include the identification and refining of scarce resources, skills, and capital. 3. The ability to sustain cooperation and to eliminate conflict among stakeholders so that ethical, moral, and cooperative understanding is achieved.The perspective argues that it is constituencies of peo ple, rather than organizations, that have goals and objectives. Consequently, it moves us away from the problem of reification, because stakeholder interests must be negotiated. Yet it still assumes that people act rationally through an appeal to the common good. The perspective draws us towards interventions that focus on a concern with organizational and personal values, social justice, and the distribution of rights and obligations. It provides a useful way forward for organizations in the public domain that are subjected to public scrutiny through governance. . 5 Organizational Development the humanistic approach to change Organizational Development (OD) is derived from human resource theory or organizational behaviour. It dates back to the Hawthorne experiments, which began in the Western Electrical gild in 1927. Elton Mayo and his team began these experiments by using the same assumptions as the structural-functional perspective that is, they initially sought to investigate i mprovements to organizational efficiency by redesigning an organizations environment along scientific principles.The experiments focused on rational pragmatic concerns such as technology and work performance, the rate of flow of materials, and throughput of a factory system. One can therefore recognize the early development of open-systems theory and structural design within these experiments. Their lack of success meant that the problem of efficiency and effectiveness was refocused towards socio-psychological factors, such as group norms. One interesting source dating back to 1926 was Mary Parker Folletts description of The Giving of Orders (1926).Follett argued that psychology could make an important contribution to understanding motivational relationships in the workplace. One example she discusses is the importance of understanding the law of the situation. Once this is discovered, better attitudes follow. She suggested that giving orders in a positive bearing facilitated more harmonious attitudes within the workplace. But related concerns that began with the Second field War later paved the way for a more sophisticated social science concerned with behaviour in organizations.In particular, a concern to identify effective leadership and to enhance workgroup relationships was paramount because of the American armys focus on morale. As a result, many academics emerged from this tradition with a clear focus on the relationship PERSPECTIVES ON CHANGE between leadership, motivation, and group dynamics. The investigation of individual and organizational needs was part of this use of applied social science. An early example was Maslows research, which resulted in his paper A Theory of Human Motivation (1943).The awareness that human needs impact on organizations was a theme developed further in McGregors The Human Side of Enterprise (1957). By the late 1960s and 1970s OD emerged from this behavioural research as a distinct discipline. Whilst it focused on harm onizing individual and organizational needs, it also readily adopted the open-systems framework of the structural-functional perspective. French and Bell (1978) were largely responsible for articulating this approach when they characterized the perspective as a mixture of open-systems theory with humanistic values.Today, we can discern six essential characteristics of OD. These are 1. A methodology informed largely by Action Researcha term coined by Kurt Lewin in the 1940s. 2. Interventions should only result from careful organizational diagnosis (Tichy, Hornstein, and Nisberg, 1976). 3. A recognition that effective change requires process consultation (Schein, 1995) rather than negotiation through an individual in order to achieve corporate social responsibility in change initiatives.It should be noted that this is in line with ODs humanistic approach to change. 4. An awareness of barriers to personal harvest-festival and organizational change, championed largely by Elisabeth Kubl er-Ross (1973). 5. An emphasis on personal and organizational learning in contrast to training, proposed by Reg Revans (1982). 6. A recognition that groups and culture will influence change initiatives, articulated by Lewin (1951) and Schein and Bennis (1965). OD emerged as a distinctive discipline for managing change.It did so initially by adopting existential approaches such as T-groups (training groups) and Lewins soldiery Field Analysis as a technique for managing organizational transitions. Action Research encouraged employees to develop a collaborative approach to diagnosing problems and engaging in action learning. Argyriss book on Intervention Theory and Method (1970) is a comprehensive review of process-consultation techniques articulated by Schein (1995) and intervention techniques that became associated with the idea of planned, organization-wide change.Such change strategies were managed from the top in order to increase organizational effectiveness and health through i nterventions in the organizations processes using behavioural science knowledge (Beckhard, 1969). Lewins (1951) three stages of changeunfreeze, change, refreezereflects the essence of the traditional OD approach through which a clear goal or destination is identified and cascaded to the organizations members. This has been described as a linear model of change (Marshak, 1993) that tends to omit the 23 24 UNDERSTANDING CHANGE untidy parts of the process that do not fit neatly into Lewins framework (Inns 1996 23). Most critics of Lewins planned change model make this argument. However, we must be cautious about this since, as we will see in Chapter 3, Lewin did not apply this approach to organization-level change. Often, OD event with problem identification through the application of Action Research at the individual, the group, or the organizational level. Following careful diagnosis, intervention strategies are designed to deal with an organizational problem by applying various tec hniques.At the individual level, behaviour modification theory is often used to encourage personal growth. At the group level, intervention strategies are informed by analysis of group dynamics, whilst at the organizational level, strategic interventions are designed to manage strategic change through the application of technology, structural change, or change to human resources. We can understand how these interventions work by exploring them in greater depth. 1. 5. 1 Intervention strategies at the individual level Strategies at the individual level were influenced by behaviour modification theory.The purpose of this technique is to increase the frequency of desired behaviours and reduce the frequency of undesired behaviours. Behaviour modification therefore seeks to modify the behaviours of individuals by training people to recognize a positive stimulus in order to provoke a desired response. It can also be used to change an individuals reaction to fears and phobias. Intervention strategies used instead of behaviour modification theory include personal and management development techniques such as Lewins Force Field Analysis and learning interventions designed to improve personal learning. Stop and think 1. 4 We rarely remember modifying our own behaviour but we do this all the time. Think about the last time you conditioned a new skill. How difficult was this at first? During the learning process how did you modify your own behaviour or attitudes? How did evaluation lead to improvement? 1. 5. 2 Intervention strategies at the group level At the group level, intervention strategies originated from studies of group dynamics including armed forces personnel, industrial workers, and professional groups. company dynamics was first defined by Kurt Lewin in the 1940s.Observations of groups led Lewin to note that groups develop personalities as a result of their unique composition. Change was therefore more likely when the group as a whole made a collective decisio n to have its members change their behaviours. This was far more effective in producing the desired changes than more formal techniques such as lectures and PERSPECTIVES ON CHANGE instruction. Lewins work became the foundation for training in group skills, sensitivity training, teambuilding, and OD. Groups therefore can be a major influence on change, or can inhibit change.However, the capability of a group to respond flexibly to change will depend on the degree to which its members Explore problem-solving alternatives. Are motivated to achieve the objectives of the group. Make an effort to learn how to change. Discover what specifically needs to be changed to meet current demands. Are prepared to experiment. 25 1. 5. 3 Intervention strategies at the organizational level At the organizational level, a greater depth was provided by a focus on planned change interventions.Planned change strategies, according to Chin and Benne (1976), emerged from the Enlightenment tradition with the application of rational thought to interventions in the modern world. In other words, changing things requires an application to reason. Associated with this was the pursuit of social progress. Chin and Benne describe a central element common to all planned change programmes as the conscious enjoyment and application of knowledge as an instrument or tool for modifying patterns and institutions of practice (1976 22).Planned change interventions are therefore extremely varied but they fade under three broad headings 1. Empiricalrational interventions, such as political interventions giving rise to new