Organizational Change

Change has been considered the most reliable constant within organizations. Yet, although the phenomenon has been recognized as important for years, organizational change is one of the least understood aspects of organization life, evidenced by numerous failed initiatives. In spite of the books and articles written about managing change, perhaps the paradox between prevalence and failure lies in the difficulty organizations have in getting a handle on change itself.

Simply put, change is the process by which an organism goes from relative stability through a period of relative instability and then back to relative stability. This is commonly represented by Kurt Lewin’s three-stage model of change. The first stage is unfreezing. This initial stage includes the willingness of individuals to abandon the old and adopt the new and is best understood through the study of motivation. The second stage is the change itself where the new is put into place. This stage is associated with new routines requiring knowledge and skill acquisition. The third stage is called refreezing, which focuses on normalizing the new or moving from compliance to commitment. Although attention is generally placed on the second and third stages, many believe that most changes fail because the unfreeze stage is ineffective.

Because organizational change is fundamental to many important topics, it has not received dedicated attention sufficient to provide adequate understanding and practice. That is, change is endemic to innovation (implementing new and novel ideas); transformational leadership (taking people from point A to point B); Total Quality Management (continuous improvement); organizational development (preparing employees to identify and implement change); and, according to Peter Drucker, the basic purpose of the business enterprise itself (constantly changing to meet customers’ demands).

Addressing three aspects of organizational change should prove helpful to improve understanding of this complex organizational phenomenon. First is the emerging issue of levels of analysis. Second are the major themes typically associated with organizational change. Third is explicating new ways change can be viewed.

Levels of Organizational Change Analysis

Although organizational change has typically been viewed nominally (e.g., mergers, policy change, new technology), there is an emerging view of change as cascading events beginning with the organization’s external environment, down through the organizational level, to the work group level, and finally to the individual level. As such, change is characterized by different dimensions changing at different levels.

The environment consists of changes in the market, in government regulations, or in prevailing economic conditions. Organizational level change generally deals with modifications to some combination of strategy, culture, or structure. Although work groups also have structure and culture, generally focus is on goals, leadership, and work processes. Finally, individual level change typically involves the job and proximal working conditions. Therefore, understanding organizational change involves understanding how dimensions at each level affect performance at the corresponding level, and then how these dimensions affect change and performance at subsequent lower levels.

Additionally, an overlooked insight about change is that different work groups and different individuals within work groups do not experience a given organizational change in the same way. This is illustrated in the case of a jewelry company that expanded its product line to include high-end jewelry, causing a reorganization of its sales staff, a renovation of the showroom, and new skills for some employees. Thus a typical comment of employees participating in a change is “in the broad scheme of things, these were just minor adjustments to the company, but to those of us in the department, the changes were significant.” Failure to recognize change in this comprehensive way results in the oversimplification of important nuances or fragmented conclusions lacking broad application.

The Themes of Organizational Change

A review of studies of organizational change conducted in the 1990s revealed four major themes. These were content (the what of change), context (the what else of change), process (the how of change), and outcome (the so what of change).

The content of change includes variables of change such as dimensions at levels of analysis (mentioned earlier), as well as the sign and magnitude of change. For example, the full description of a specific reorganization may be expressed as an entirely new (magnitude) structure (dimension) of top management (level), which will create more opportunity for growth (favorable). Thus two different reorganizations should be considered different organizational changes when one or more of these four characteristics of what changed vary.

The context of change includes variables associated with what else is going on relative to the change that is outside the change itself but influences its outcome. One aspect of context deals with forces or factors that contribute to the reason for change or create significant barriers to change. Generally, these are external events of environmental influences on the organization, such as competition, government regulation, economic shifts, or geopolitical events. Another aspect of context deals with internal variables that may moderate how change is handled or experienced in the organization. This would include organizational characteristics such as climate for change, leadership style, and cultural barriers to change. A third aspect of context is the characteristics of individuals affected by organizational change. These characteristics range from distal traits, such as personality and age, to midrange states, such as general change efficacy or commitment to the organization, to change-specific individual differences in readiness for change and coping resources.

The process of change has typically been the major focus of organizational change. That is, how something is done is ultimately more important than what is done. Traditionally, change management has involved stage models or the proper steps to successful implementation. However, more recently change process has been viewed qualitatively. In this case, the how is usually characterized by the notion of procedural justice. That is, when change agents of an organization include the change participants in the process; give advanced notice and provide adequate explanations of changes; and offer an acceptable rationale for the change, those affected by the change respond more positively to the change. The process can also be characterized by the support management gives to the change. Support comes in the form of top management commitment to the change and a desire to provide adequate resources necessary for successful implementation of the change.

Finally, the outcomes of change are essentially attitudes, behavior, and performance assessed at various levels. When outcome is evaluated at the organizational or group level, typically the interest is in how the normal performance measures were affected (e.g., sales, profit, productivity). However, when individuals are the focus, there is a broad array of outcomes of interest. These outcomes could be either directly associated with the change itself, such as attitude toward the change, or a residual effect on the individual, such as stress, change in person-environment fit, job satisfaction, or organizational commitment.

Attitude toward the change has been one individual outcome of interest. It is important to note that recent research on attitude toward change has explored its multidimensional nature and the differences between it and other related constructs. Sandy Piderit posited that attitude toward the change is composed of three components: cognition, affect, and behavioral intent, none of which move in concert regarding a particular change. That is, behavioral intent to support the change would typically be more positive than beliefs about the change and emotional response to the change. This is evidenced by employees affected by a change who say, “Complaining is at an all-time high, yet work continues to be put out at an amazing pace.” Distinction has also been made between acceptance and resistance. These are considered two different constructs rather than opposite ends of one continuum. That is, low acceptance is the absence of support and high resistance is the presence of negatively directed effort.

The Nature of Organizational Change

In many areas of organizational behavior study, there are two different ways to approach a topic. One approach is to simply name a change phenomenon and build a body of knowledge around it. However, as mentioned earlier, this fragments understanding and restricts generalization. The other approach is to describe the phenomenon along one or more dimensions. That is, instead of studying reorganizations or entering new markets separately, it is possible to investigate amount of change in culture or structure occurring in either nominal change.

Pace, sequence, and linearity of change is another way to view an organizational change. Pace deals with whether there is early rapid change to overcome inertia or late rapid change following periods of softening up the organization, or whether change is gradual, building trust as change progresses. Sequence deals with order of importance or what needs to be changed before what else can be changed. Linearity recognizes that change may be nonlinear because of oscillations and delays caused by uncertainty and resistance.

Another issue regarding the nature of change has to do with whether change is episodic. Traditionally, change is viewed as a break in the status quo. This idea treats change as if it is a single disruption in an otherwise stable setting. A contrarian perspective views change more as simultaneous and cumulative, sometimes referred to as turbulence. This perspective posits that change does not occur in isolation of other changes, and in fact, organizations are basically in a state of flux where change is a natural state and managing change is a continual process. The success an organization ultimately has with managing change may depend on which of these two views of change applies.

Finally, an aspect that shapes how organizations view and approach change is the notion of the asymmetry of change. This involves the assumption that the motivation for and benefit of change is greater for the organization than for the individual. Although it is important for change to be a win-win experience, management cannot forget that the reality of rationale and valence of change is skewed to the organization.

References:

  1. Amis, J., Slack, T., & Hinings, C. R. (2004). The pace, sequence, and linearity of radical change. Academy of Management Journal, 47, 15-39.
  2. Armenakis, A. A., & Bedian, A. G. (1999). Organizational change: A review of theory and research in the 1990s. Journal of Management, 25, 293-315.
  3. Burke, W. (2002). Organization change: Theory and practice. Thousand Oaks, CA: Sage.
  4. McKinley, W., & Scherer, A. G. (2000). Some unanticipated consequences of organizational restructuring. Academy of Management Review, 25, 735-752.

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