In search of a practical communication based theory on transformational organisational change
Scott Michael Bourke
Australian Graduate School of Entrepreneurship
Dr. Neil E. Béchervaise
Managing Director Global Research Business
Key words: Transformational organisational change, transformational change, organisational change, communication, change management, human resource management, management, organisational communication
The distinction between "first order" and "second order" change (Watazlwick, Weakland & Fisch 1974), also referred to as "incremental" and "transformational" change (Nutt & Backoff 1997), continues to guide research inquiry in the field of organisational science (Weick & Quinn 1999). Van de Ven (1995:p367) defines transformational change as "radical (second-order) change, which creates novel forms that are discontinuous and unpredictable departures from the past". In contrast, "incremental (first-order) change channels an organisational entity in the direction of adapting its basic structure and maintaining its identity in a stable and predictable way" (Van de Ven 1995: p367).
The capacity of organisations to adapt in a transformational fashion - to continuously adapt to a radically dynamic and evolving competitive landscape - has assumed prominence in the discourse of academics and practitioners (Huff & Huff 2001). It is widely perceived to be a source of competitive advantage and a principal determinant of organisational survival (Hamel & Prahalad, 1994, Bohl & Slocum 1996, Greenwood and Hinings, 1996).
Although there is an expansive change literature (Nutt & Backoff 1997, Bartenuk 1993, Weick & Quinn 1999, Van de Ven 1995), there is little consensus on the process required to support transformation (Huff & Huff 2001, Bartenuk 1993, Weick & Quinn 1999, Wruck 2000). This lack of consensus has added weight to the concern that change research is not "developing as a cumulative and falsifiable body of knowledge" (Weick & Quinn 1999) that is of relevance in organisational practice. A number of explanatory thematics or general arguments that highlight perceived weaknesses in the extant literature are finding recognition within the inter-disciplinary literatures on change outside management and business school research. Three of these thematics are considered to be of particular interest in the context of the proposed research.
The first explanation relates to the complexity of change and the dangers of attempting simplification and abstraction in pursuit of the decision-making certainty and timeliness demanded by practitioners. The possibility exists that in seeking to understand the phenomenon of transformation, researchers failed to come to grips with its abstraction due to the complexity of the subject (Rumelt, Schendel & Teece 1994, cited in Huff & Huff 2001). In effect, researchers have been unable attend to "a number of the complex dynamics associated with change" (Bartenuk 1993) precisely because change is so complex and the variables so variable.
A second explanation advanced is that those philosophical persepectives employed by researchers in the conception and, in turn exploration, of organisations and their transformations have hindered and obscured rather than assisted the academic investigative research and practical learning processes (Ford 1995). Concerns here centre on the ontological and epistemological perspectives that dominate organisational science research and in turn restrict the ways in which the public firm can change (Ford 1999, Huff & Huff 2001).
These rhetorical philosophies define and bound our conception of organisation and the way its constituents behave (Seth & Thomas 1994 cited in Huff & Huff 2001) including the way transformations are affected (Beer & Nohria 2000). Each of these explanations identifies managerial inability or incomprehension as a root-cause for the high failure rate in transformational change implementation. In finding it difficult to imagine that so many managers should be so incapable of recognising what should be recognised as basic steps in change implementation, this paper proposes that there may be more complex issues awaiting identification.
A third explanation is that the philosophical perspectives [or underpinning beliefs] employed by researchers in the conception, and in turn exploration, of organisations and their transformations have hindered and obscured rather than assisted the research and learning process (Ford 1995). Concerns here centre on the ontological and epistemological perspectives that dominate organisational science research (Ford 1999, Huff & Huff 2001). Perspectives from which findings can be quantified, actions simply identified and from which linear links between cause and effect can be accurately ascribed to accessible and measurable data. These rhetorical philosophies, it is argued, define and bound our conception of organisation and the way its constituents behave and affect the way transformations are achieved (Beer & Nohria, 2000).
New theories of transformational change grounded in the disciplines of communication (Ford 1999, Faber 1999) and transformational leadership (Bass 1985, Sarros, Densten & Santora 1999) offer the potential to reinvigorate the debate surrounding transformational change. These new theories typically conceive of organisations as socially constructed realities (Czarniawska 1997) where the role of the leader is to "construct, de-construct and reconstruct existing realities so as to bring about different performances" (Ford 1999). Understanding mental models (Senge 1990) and the way in which organisational members - including leaders - experience, interpret, construct, respond to and make sense of (Weick 1996) a transformational change through their communication is central to these theories.
This paper explores the nature of transformational change from a communication perspective and progresses towards an integration of our theoretical and practical understanding of the phenomenon. As a work-in-progress, it seeks to respond to calls to extend our knowledge and understanding of organisations as "phenomena of language" (Ford 1999). As a basis for ongoing discussion, it provides an exploration of the ways in which managers enter the change cycle, how they conceptualise the role of communication concerning the change and how their communications are received through the organisation.
The study employs a case study approach (Yin, 1994) to investigate in a mid-sized Australian corporation how the reality of a proposed transformation, and the associated mental models of the organisational members, is constructed conceptualised by the central organisational actors. Data collection, which takes the form of semi-structured interviews, concentrates on capturing participant’s perceptions of the transformation as it unfolded in historical reflection and narrative. It is anticipated that the study will provide insight into actor’s conceptions and mental models of the transformation and inter alia the role of best practice communication creating and reinforcing mental models and generally in the transformation process.
The principal objective of this paper is to develop an improved practical understanding of organisational transformation by seeking to build on new theories that conceptualise transformation as a communication problematic (Ford 1999, Faber 1999, Lewis 1999). The research seeks to inform theory building by investigating the value
Our starting point is that the failure to produce a useful applied theoretical understanding of change (Gordon 2000, Weick & Quinn 1999, Huff & Huff 2001) cannot be explained by reference to the understanding produced by much of the extant literature. Instead, we argue the need for new and perhaps different theoretical perspectives that reflect the importance of language, communication and sense-making and the explication of relations of power in the context of leadership and management. Our focus is on explicating a number of explanatory thematics or perspectives that we feel are finding a voice within the various change literatures as sources of the failure of transformational organisational change. Three thematics are of particular interest in this context.
The first explanatory perspective relates to the complexity of change and the dangers of attempting its simplification and abstraction in pursuit of the decision-making certainty and timeliness demanded by practitioners. We suggest the possibility that in seeking to understand the phenomena of transformation, researchers failed to come to grips with its abstraction due to the complexity of the subject (Rumelt, Schendel & Teece 1994, cited in Huff & Huff 2001). In a sense researchers have yet to attend to "a number of the complex dynamics associated with change" (Bartenuk 1993).
A second explanatory perspective we explore relates to the philosophical approaches researchers have adopted in the conception and in turn exploration of change. Our concern here centres on epistemological perspectives dominant within organisational science (Mir & Watson 2001, Ford 1999, Huff & Huff 2001). They include the philosophy that defines and bounds our conception of the public firm (Seth & Thomas 1994 cited in Huff & Huff 2001)
A third explanatory perspective is that executive management, regarded in structuralist functionalist research as the "principal actor", has not absorbed, understood and/or been interested or capable of applying learning insights from the relevant literatures (Nutt & Backoff 1997, Reinsch 1996). This thematic raises questions about the role of management in the change process, managerial sub-cultures, transformational leadership (Bass 1985, Ford 1999) and the presentation form and content of academic research as practical theory (Reinsch 1997, Cronen 1995, Pearce & Pearce 2000). ). More problematically, it appears to blame the victim. It assumes that change is actually initiated by, and devolves, from senior management in an identifiable and linear cause-effect manner that can be tracked and measured because the paths have been clearly established from previous research.
In explicating these thematics, our research draws upon the contribution of interdisciplinary perspectives on change from a range of research fields. They include communication (Ford 1999, Lewis 1999, Lewis & Seibold 1998, Faber 1999), philosophy (Gergen and Thatchenkary1996) and industrial psychology (Weick 1979, 1996) that have hitherto not attracted great prominence in practitioner discourses.
We are constantly reminded that change in the business environment and, in turn, for organisations operating within it, is an objective fact (Taylor 1999). Much of the responsibility for dynamic societal and institutional change has been attributed to the pace of technological change (Tofler 1971) and globalisation (Bartlett & Goshal 1993). In a sense, advances in technology have had the effect of shortening time and reducing the space between people and places through rapid improvements in the efficiency and effectiveness of communication technologies such as the Internet and e-mail.
The concept of "thinking locally, acting globally" has become for many organisations a reality more than a necessity largely as the result of technologically supported developments. As Huff and Huff (2001) note, in drawing from and supporting the stance of Bartlett & Goshal (1993:), "a globalizing world is changing the nature and needs of organisations by requiring them to be more quickly responsive to evolving circumstances". In short the thesis implicit, if not explicit, in this research is that organizations must be more adaptable to change in order to survive in the contemporary business environment.
Change has been conceptualised as an important, necessary and inevitable result of the technologically wrought changes in organisational activity in a globally competitive environment in both the academic and public discourse (Chapman 1996). As Vibert (2000:p6) has observed, "few issues capture the attention of researchers, managers, and consultants as an awareness of the profound structural changes occurring around us and the need to organize effectively to deal with them". In seeking to respond to dynamic environmental change, there has been an increasing trend for organizations to "seek to continually learn and foster learning in both their employees and the methods by which they conduct their affairs" (Vibert 2000:p1).
The capacity to change - to adapt to a radically dynamic and evolving competitive landscape - has come to be regarded today as "a key determinant of competitive advantage and organizational survival" (Greenwood and Hinings 1996 citing D'Aveni 1994). In the "information" economy, there are grounds for arguing that an organisation’s communication abilities, reflected by the capacity to share knowledge (see Drucker 1999), will become an important source of competitive advantage (Bohl and Slocum 1996, Hamel & Prahalad 1994).
As Noel Tichy (1996:p45) puts it, "as we enter the latter half of the 1990s, it is clear that to be winners in the 21st century, companies must master revolutionary change with enthusiasm". Hamel & Prahalad (1994) and Bohl & Slocum (1996) posit that the capacity to transform and adapt to the dynamically changing competitive business environment will be an important determinant of an organisation's survival and enduring competitive advantage in the future.
Practitioner interest in organisational change, with particular reference to how organisational transformations (Bartenuk 1993, Nutt & Backoff 1997, Weick & Quinn 1999) "can be engineered", has grown in parallel with the academic attention afforded to change. The concern of practitioners, to understand and harness the power of change, have been influenced in part by the emergence of populist 'management gurus' and a management consulting industry (Mazza and Alvarez 2000, Micklethwait & Woolridge 1996).
Evidence that the popular change rhetoric of Hamel & Prahalad (1994) and notable others (Bohl & Slocum 1996, Brown & Eisenhardt 1997, 1998) has been influential in organisational thinking can be found in the pronouncements of organisational leaders (Huff & Huff 2001). It has also manifested itself in the trend to outsourcing of perceived non-core organisational activities.
In spite of academic and practitioner attention, the intra-organisational dynamics (Greenwood and Hinings 1996) and human behaviours that characterise organisational change remain confusingly problematic (Rajopaplan and Spreitzer 1999, Weick & Quinn 1999, Huff & Huff 2001). As Huff & Huff (2001:pvi) suggest, "there is convincing evidence that organisations do not change easily".
The failure of change initiatives
More often than not, organisational transformations fail (Cornett-deVito & Freeman 1994, Hodge 1998). They fail for a multiplicity of reasons that do not necessarily show consistency across studies or time (Huff and Huff 2001). They produce complex political dynamics (Cyert & March 1963, March & Simon 1958) and crises the resolution of which more often than not proves to be beyond the capacity of most organizations to resolve successfully.
Although the change research literature has become "theoretically richer and more descriptive" (Weick & Quinn 1999) over time, a conundrum of sorts exists. Whilst change is recognised as critically important to organisational survival and competitive advantage (Hamel & Prahalad 1994, Brown & Eisenhardt 1997, 1997, 1998) there remains little broad agreement on why successful and sustainable organisational change has proven so problematic (Wruck 2000).
The question that persists through both the research and its surrounding rhetoric is why "a cumulative and falsifiable body of knowledge" concerning organisational change has yet to emerge (Weick & Quinn 1999, p362) and better organisational outcomes. Importantly, practical theories that have relevance to practitioners are required (Cronen 1995).
The question as to why and how organisations pursue transformational change remains a central concern of researchers in the field (Nutt & Backoff 1997, Weick & Quinn 1999). Van de Ven (1995:p367) echoes similar sentiments when he comments that " [E]xplaining how and why organizations change is a central and enduring quest of scholars in management and many other social science disciplines". Van de Ven (1995) continues to affirm this position when he comments that the "processes or sequences of events that unfold in these changes are very difficult to explain, let alone to manage".
In the face of such concern, it seems reasonable to inquire, albeit timorously, whether the very academic inquiry processes being employed to discover ‘the answer’ might not be obscuring it from view. In the sense that academic research may only be applied within the constraints of its parent discipline, the construct validity of that discipline must inevitably constitute a source for potential misinterpretation.
Transactional and Transformational Change
What is regarded today as the modern, though not modernist, perspective on organisational change emerged out of the Organisational Development movement of the late 1960s and early 1970s (Bartenuk 1993). This movement initially drew much of its research direction from the social science discipline of social and industrial psychology. Beckhard's (1969) early definition of change, which represented a more conservative interpretation, nevertheless remains a useful starting point for an assessment of the conceptualisation of change (cited in Bartenuk 1993:p324):
...an effort (1) planned, (2) organisation wide, and (3) managed from the top, (4) to increase organisational effectiveness and health through (5) planned interventions in the organisations processes using behavioural science knowledge.
Van de Ven (1995:p366) has defined organisational change broadly as
a difference in form, quality, or state over time in an organizational entity". Weick and Quinn (1999) suggest that at its most general level, change is merely a phenomena or function of time. They comment that "change involves difference[s] in how an organization functions, who its members and leaders are, what form it takes, or how it allocates its resources (Huber et al 1993:216).
Organisational science has subsequently shifted in several diverse directions from its early concern with the interpersonal dynamics of change and their impact on organisational effectiveness (Bantenuk 1993). Contemporary research has pragmatically conceptualised change as "much more than the presence of new procedures, ideas, people, and machinery. It also often involves new organizational structures, new rules, new roles, new values, new rewards, and new ways of doing work" (Lewis 1999:p60).
The pragmatic concern with improving organisational effectiveness implicit in Beckhard’s early definition has progressed to reflect a more holistic perspective that recognises two different forms, being first and second-order change (Watzlawick, Weakland & Fisch 1974, Nutt and Backoff 1997, Bartenuk 1993). The distinction between the two modes has become so "pervasive and central [to] the conceptualisation of change" that it provides a useful framework around which to structure a review of the contemporary change literature (Weick and Quinn 1999:p361).
Second-order change, often referred to as organisational transformation, is concerned with something more than improvements in an organisation's efficiency and effectiveness (Nutt & Back0ff 1997). In contrast with incremental change that is typically associated with organisational effectiveness, transformation implies a fundamental and radical shift in "traditional practices and ways of doing business" (Nutt & Backoff 1997).
Researchers have used various terms to refer to two distinct modes, including incremental and transformational, episodic and continuous, convergent and radical change (Weick & Quinn 1999, Vibert 2000, Nutt and Backoff 1997). Van de Ven & Poole (1995) define the two modes of change as follows:
1. incremental (first-order) change which channels an organizational entity in the direction of adapting its basic structure and maintaining its identity in a stable and predictable way as it changes, and
2. radical (second-order) change, which creates novel forms that are discontinuous and unpredictable departures from the past (see review by Meyer, Brooks, and Goes, 1990).
Goodstein & Burke (1991) adopt a similar distinction between the two modes of change though they appear to value the change modes completely differently. They conceive of:
..fundamental, large-scale change in the organization's strategy and culture--a transformation, refocus, reorientation, or "bending the frame," as Nadler and Tushman have referred to the process and fine-tuning, fixing problems, making adjustments, modifying procedures, etc.; that is, implementing modest changes that improve the organization's performance yet do not fundamentally change the organization.
Van de Ven (1995: p366-7) defines transformational change as:
radical (second-order) change, which creates novel forms that are discontinuous and unpredictable departures from the past". In contrast, transactional or incremental (first-order) change channels an organisational entity in the direction of adapting its basic structure and maintaining its identity in a stable and predictable way.
In effective extension, Kilman and Covin (1988:pxii) define "corporate transformation"-- or organizational transformation, as:
... a process by which organizations examine what they were, what they are, what they will need to be, and how to make the necessary changes ...The term corporate is used to convey the comprehensive effort required, in contrast to a piecemeal or single-division effort. Transformation indicates the fundamental nature of the change, in contrast to a mere linear extrapolation from the past. Corporate transformation is serious, large-scale change that demands new ways of perceiving, thinking, and behaving by all members of the organization.
More recently, Nutt and Backoff (1997:p236), in their attempt to summarise the transformational change literature, conceptualised an organisational transformation as creating:
..a sustainable metamorphosis from a vision that produces radical changes in an organization's products/services, consumers/clients, market channels, skills, sources of margin, competitive advantage, and persona, integrating these changes with core competencies.
Although an agreed conception of transformational change remains problematic, it appears to require, at least:
- a radically different vision, strategy and culture;
- a process of not dissimilar to Lewin’s (1952) three phase model of change;
- the wholehearted support and commitment of executive management; and
- broad-based organisational participation in all critical aspects of the process.
Managers charged with the implementation of radical shifts in organisational policy, structure and operation, however, remain sceptical of apparently impractical academic solutions. Instead, in an effort to remove the ‘change-monkey’ from their backs, they incline to the ‘quick-fix’ operationally focused solutions offered by the gurus of the management consultancy industry (Dulmanis, 2002). The hope here is that they will be delivered into "a fundamentally new and different organisation from that which once was" (Nutt and Backoff, 1997:p236). The 'reality', reflected in the research on the success of transformational change initiatives that embrace this philosophical approach, unfortunately suggests otherwise.
Modernist and postmodernist conceptions of the organisation