Organizational Change Theory

What is Organizational Change Theory and how does it apply to crisis management?

key concepts

Change scale: the degree of change required to reach the desired outcome

  • Organizations need to identify where they are and where they want to be to enact change (Kotter 1996)

Change duration: the time over which a change takes place.

  • Setting a timeframe increases the probability of success (Chrusciel and Field, 2006)

Change methods: actions carried out by managers to deal with change.

  • Systematic Methods (involve defined processes)

  • Management Methods (more conceptual intervention strategies)

Change outcomes: the consequences of change on the organization.

  • Measures for success set up a cycle of change, keeping organizations resilient (Al-Haddad & Kotnour, 2015)

Perception matters!

People’s perception of ‘organizational readiness’ for change can affect the change success (Weber & Weber, 2001). A positive perception is one of the main determinants of an organization’s readiness for change (Rafferty et al. 2013)

  • Oldham (2009) defines large scale change as “a holistic alteration in processes and behaviors across a system that leads to a step change in outputs from that system” (p. 265)

    • It engages all stakeholders in the process, requiring strong collaboration and a visionary leader to succeed (Boga and Ensari, 2009; Oldham, 2009)

    • Strategy is key (Kotnour et al. 1998)

    • Requires high levels of organizational resources (Boga & Ensari, 2009)

  • Minor, less significant change taking place at an organization.

    • Easier to initiate and manage and does not require the same level of leadership as large scale change (Boga & Ensari, 2009)

    • Steady, small scale change can allow organizations to pilot, evaluate, modify, and tactfully implement policies (Boga & Ensari 2009)

    • Requires strong leadership that actively involves employees (Harrison, 2011, Rachele, 2012)

    • Participative action research can help get people involved and increases effectiveness (Rachele, 2012)

    • People’s involvement positively affects their attitudes towards change (Ogbonna & Harris 2003)

    • Often seen as more successful than long-term (Al-Haddad & Kotnour, 2015)

    • Organizations that can predict and respond quickly are more competitive (Al-Haddad & Kotnour, 2015)

    • Are part of an ongoing process (Boga & Ensari, 2009)

    • Al-Haddad, Serina, and Timothy Kotnour. “Integrating the Organizational Change Literature: a Model for Successful Change.” Journal of Organizational Change Management, vol. 28, no. 2, 2015, pp. 234–62, https://doi.org/10.1108/JOCM-11-2013-0215.

    • Boga, Ilir, and Nurcan Ensari. “The Role of Transformational Leadership and Organizational Change on Perceived Organizational Success.” The Psychologist Manager Journal, vol. 12, no. 4, 2009, pp. 235–51, https://doi.org/10.1080/10887150903316248.

    • Chrusciel, Don, and Dennis W. Field. “Success Factors in Dealing with Significant Change in an Organization.” Business Process Management Journal, vol. 12, no. 4, 2006, pp. 503–16, https://doi.org/10.1108/14637150610678096.

    • Kotnour, Tim, et al. “Understanding and Leading Large-Scale Change at the Kennedy Space Center.” Engineering Management Journal, vol. 10, no. 2, 1998, pp. 17–21, https://doi.org/10.1080/10429247.1998.11414980.

    • Lutz Allen, Stephanie, et al. “Leadership Style in Relation to Organizational Change and Organizational Creativity: Perceptions from Nonprofit Organizational Members: Leadership Style in Relation to Organizational Change.” Nonprofit Management & Leadership, vol. 24, no. 1, 2013, pp. 23–42, https://doi.org/10.1002/nml.21078.

    • Ogbonna, Emmanuel, and Lloyd C. Harris. “Innovative Organizational Structures and Performance: A Case Study of Structural Transformation to "Groovy Community Centers.” Journal of Organizational Change Management, vol. 16, no. 5, 2003, pp. 512–33, https://doi.org/10.1108/09534810310494919.

    • Oldham, John. “Achieving Large System Change in Health Care.” JAMA : the Journal of the American Medical Association, vol. 301, no. 9, 2009, pp. 965–66, https://doi.org/10.1001/jama.2009.228

    • Rachele, Jude Smith. “The Diversity Quality Cycle: Driving Culture Change through Innovative Governance.” AI & Society, vol. 27, no. 3, 2012, pp. 399–416, https://doi.org/10.1007/s00146-012-0381-7.

    • Rafferty, Alannah E., et al. “Change Readiness: A Multilevel Review.” Journal of Management, vol. 39, no. 1, 2013, pp. 110–35, https://doi.org/10.1177/0149206312457417.

    • Weber, Paula S., and James E. Weber. “Changes in Employee Perceptions During Organizational Change.” Leadership & Organization Development Journal, vol. 22, no. 6, 2001, pp. 291–300, https://doi.org/10.1108/01437730110403222.

method 1:

the top down approach

Argues that change is based in leadership, not necessarily organizations or communities. It’s affected and ultimately successful because of specific qualities a leader possesses to do so.

These models come about in for-profit workplaces starting during the Industrial Revolution. They were built and are discussed in terms of introducing organizational practices that allow employers to have greater control over their workforce to maximize profit.

This approach doesn’t always work for community-based nonprofits because it can ignore the needs of the community and organization by prioritizing the vision of one person.

  • Frederick Taylor (1911)

    • Organizations are governed by pragmatic rules and transactional relationships.

    • Employees play a passive role and only carry out instructions to receive fair wages.

    • A manager/leader acts as an agent of the shareholder to protect profits.

    • Change occurs in the interest of streamlining operations and maximizing output.

  • Elton Mayo (1933) & Chester Barnard (1938)

    • Highlights humans in the workplace as emotional rather than solely economic-rational beings. Emotional and social needs affect how workers behave.

    • Organizations are not mechanical in nature, they’re cooperative, social systems with both formal and informal structures (Barnard).

    • Industrial unrest stems from physiological flaws and is best resolved by addressing emotional rather than economic needs (Mayo).

    • Leaders therefore need the cooperation and partnership of workers to achieve stability (which is always the goal; change occurs only to move towards stability).

    • Both models pose an ethical problem for nonprofits; leaders are coercing workers to join the culture instead of giving them stake in a decision making process (Burnes 2009).

    • Scientific Management is neither scientific nor effective (Littler, 1978).

    • Scientific Management distills people into capitalistic robots, driven solely by economic incentives (Littler, 1978)

    • Human Relations Management is more about managing organizations at a steady state than change (Burnes 2009)

    • Human Relations Management is biased towards management and profit (Burnes, 2009)

    • Burnes, B. (2009) Reflections: Ethics and Organizational Change – Time for a Return to Lewinian Values, Journal of Change Management, 9:4, 359-381, DOI: 10.1080/14697010903360558

    • Fernández, Susana. “Re-Discovering Barnard: The Functions of the ... Leader?: Highlighting Chester Barnard’s Contributions for the Twenty-First Century Business Executive.” Journal of Management History (2006), vol. 16, no. 4, 2010, pp. 468–88, https://doi.org/10.1108/17511341011073951.

    • Littler, Craig R. “Understanding Taylorism.” The British Journal of Sociology, vol. 29, no. 2, 1978, pp. 185–202, https://doi.org/10.2307/589888.

    • Taylor, Frederick Winslow. The Principles of Scientific Management. Harper & brothers, 1911.

method 1a:

emergent change

1980s onwards; a broader model that encompasses many change theories, all unified by a few underlying principals:

  • Change is not a linear process and the end will justify the means.

  • Successful change is less dependent on detailed plans and projections than it is on a leader’s understanding of the intricacy of a situation.

  • Part of understanding the situation is understanding the role power and politics play in organizational culture (i.e., different agents are always competing to protect their own interests).

  • Exploiting those dynamics allows change to happen.

These models are more in tune with community-based organizations because they better acknowledge the complex systems of various stakeholders at play in any organization.

However, they pose an ethical threat if not used properly: power to change still rests on one person’s inherent ability to read and navigate the situation.

    • Promotes rapid, disruptive, continuous change.

    • Companies need to proactively respond and take advantage of how fast organizational circumstances change

    • Continuous leadership is only possible by creating uniqueness and active responses

    • Internal flexibility is paramount to success and can be achieved mainly through empowering people

  • Posits the Bold Stroke Approach (rapid overall change) and Long March Approach (incremental, long-term changes) (1992).

    This method starts with analyzing the situation, creating a plan and vision, implementing that plan through a visionary leader, and communicating and institutionalizing change to cement it.

    Then, in 2000 she identifies 7 key characteristics for change leaders:

    1. Ability to tune into the environment

    2. Ability to challenge prevailing organizational wisdom

    3. Ability to communicate a compelling aspiration

    4. Ability to build coalitions

    5. Ability to transfer ownership to a working team

    6. Ability to learn to preserve

    7. Ability to “make everyone a hero” (p. 34)

  • Argues that it takes a leadership coalition to resolve complex problems (i.e., a less hierarchical system). That coalition then must:

    1. Establish a sense of urgency

    2. Create a guiding coalition

    3. Develop a vision and strategy (a logic model)

    4. Communicate the change in vision

    5. Empower broad based action

    6. Generate short term wins (communicate process)

    7. Consolidate change and produce more gains

    8. Anchor new approaches in the culture

    Kotter’s process separates leadership from management.

    • Leadership encompasses a set of processes that create organizations or adapt them to changing circumstances.

    • Management encompasses a set of processes that keep a complicated system of people and technology running smoothly

    • Emergent change models view organizations as power systems and see change as a political process (Todnem By et al, 2008)

    • Proponents do not appear to consider the issue of ethics (Burnes, 2005)

    • Promotes a hierarchical view that’s inherent in organizations (Todnem By et al, 2008)

    • Burnes, Bernard. “Complexity Theories and Organizational Change.” International Journal of Management Reviews : IJMR, vol. 7, no. 2, 2005, pp. 73–90, https://doi.org/10.1111/j.1468-2370.2005.00107.x

    • Kanter, Rosabeth Moss, et al. The Challenge of Organizational Change : How Companies Experience It and Leaders Guide It. Free Press, 1992.

    • Kanter, Rosabeth Moss. “THE ENDURING SKILLS OF CHANGE LEADERS.” Ivey Business Journal, vol. 64, no. 5, 2000, p. 31–36.

    • Kotter, John P., and Leonard A. Schlesinger. “Choosing Strategies for Change.” Harvard Business Review, vol. 86, no. 7-8, Harvard Business School Publishing Corporation, 2008, pp. 130–62.

    • Todnem By, Rune, et al. “Getting Organizational Change Right in Public Services: The Case of European Higher Education.” Journal of Change Management, vol. 8, no. 1, 2008, pp. 21–35, https://doi.org/10.1080/14697010801937457.

method 2:

hybrid models

When leaders work with stakeholders to affect change.

These models define stakeholders as any agents of the organization, broadening the definition from the more transactional one seen in Industrial Revolution era models.

In hybrid models stakeholders are empowered to act, facilitating shared ownership and values systems.

Scholars have pointed to these models as a more ethical approach to change management, specifically for nonprofits, because they acknowledge the complex stakeholder systems present and then give various levels agency in enacting change.

  • Kurt Lewin (1890-1947)

    • Change is more about self/group discovery than goal achievement

    • Proposes a three step model for organizational change: a cycle of unfreezing, movement, and refreezing.

    • Anyone involved in change must be free to act of their own volition; there should be a more democratic process for change

    • Successful changes need a neutral facilitator (not just an inherently charming leader)

    • Leaders must understand human behavior when making organizational decisions

    *One of the first to theorize on the ethical implications of organizational change

  • This model builds on Lewin’s approach, but argues that his freeze-unfreeze cycle doesn’t work perfectly for organizations because they’re more fluid.

    • Leaders must understand the organization, its stakeholders, and how they all function together in order to affect change

    • Based in openness, transparency, collaboration, and the promotion of continuous learning for both leaders and stakeholders.

    In a survey of OD practitioners, Hurley et al. (1992) found these 5 values reflected:

    1. Empowering employees to act

    2. Creating openness in communications

    3. Facilitating ownership of the change process and its outcomes

    4. The promotion of a culture of collaboration

    5. The promotion of continuous learning

  • Both of these change models come with risks. Scholars have noted that particular drawbacks include:

    • A high probability of relapse (Weick, 2005)

    • Uneven diffusion of change among subsections (Weick, 2000)

    • Lags in implementation (Beer and Nohria, 2000)

    • Large short-term losses that are difficult to recover (Weick, 2000)

    • Adoption of practices that are suited for a broad not explicit problem (Kanter et al 1992)

    • Ignorance among top management regarding capabilities at all levels (Kanter et al 1992)

    • Lewinian Change assumes organizations live in a stable state (Burnes, 2004)

    • These models are top down approaches (Burnes, 2004)

    • Beer, M., and N. Nohria. “Cracking the Code of Change.” Harvard Business Review, vol. 78, no. 3, Harvard Business School Publishing Corporation, 2000, pp. 133–41, 216.

    • Burnes, B. (2009) Reflections: Ethics and Organizational Change – Time for a Return to Lewinian Values, Journal of Change Management, 9:4, 359-381, DOI: 10.1080/14697010903360558

    • Burnes, Bernard. “Kurt Lewin and the Planned Approach to Change: A Re-Appraisal.” Journal of Management Studies, vol. 41, no. 6, 2004, pp. 977–1002, https://doi.org/10.1111/j.1467-6486.2004.00463.x.Kanter, Rosabeth Moss, et al. The Challenge of Organizational Change : How Companies Experience It and Leaders Guide It. Free Press, 1992.

    • Caulfield, Jay L., and Elizabeth F. Brenner. “Resolving Complex Community Problems: Applying Collective Leadership and Kotter’s Change Model to Wicked Problems Within Social System Networks.” Nonprofit Management & Leadership, vol. 30, no. 3, 2020, pp. 509–24, https://doi.org/10.1002/nml.21399.

    • Kanter, Rosabeth Moss, et al. The Challenge of Organizational Change : How Companies Experience It and Leaders Guide It. Free Press, 1992.

    • Weick, Karl E., et al. “Organizing and the Process of Sensemaking.” Organization Science (Providence, R.I.), vol. 16, no. 4, 2005, pp. 409–21, https://doi.org/10.1287/orsc.1050.0133.