Managing Organizational Change: A Philosophies of Change Approach

Managing Organizational Change: A Philosophies of Change Approach

ABSTRACT

The underlying assumption of the classical, linear approach to organizational change is that it involves a series of predictable, reducible steps that enable senior management to establish a new work order and routines. This article confronts the conventional assumption that change is a finite, one-off phenomenon, representing the exception rather than the rule. Beginning with the rational change model as an exemplar, and subsequently by examining 10 organizational change philosophies, this article reviews the fundamental assumptions governing different change management approaches. In revealing the biases and uni-dimensional nature of theoretical philosophies of organizational change, this article argues for a multi-philosophy approach that applies an interactive mix of continuity and change. Managing the continuity-change continuum helps to guard against complacency and inertia, and underpins an organization’s capacity both to exploit and explore.

KEY WORDS: Continuity-change dilemma, complementary-competing, paradox, ambiguity, duality

Introduction

Traditional approaches to organizational change generally follow a linear, rational model in which the focus is on controllability under the stewardship of a strong leader or ‘guiding coalition’. The underlying assumption of this classical approach, ever popular among change consultants, is that organizational change involves a series of predictable, reducible steps that can be planned and managed (Collins, 1998). The evidence from case studies of failed change implementations indicates, however, that this uni-dimensional, rational focus is

Journal of Change Management

Vol. 10, No. 2, 135–154, June 2010

Correspondence Address: Fiona Graetz, Graduate School of Management, La Trobe University, Bundoora, VIC

3086 Australia. Tel.: + 61 3 9479 3109; Email: f.graetz@latrobe.edu.au

1469-7017 Print/1479-1811 Online/10/020135–20 # 2010 Taylor & Francis DOI: 10.1080/14697011003795602

limited because it treats change as a single, momentary disturbance that must be stabilized and controlled. Such a view fails not only to appreciate that change is a natural phenomenon which is intimately entwined with continuity but, also, that the change-continuity continuum is what defines organizations and their ability both to exploit and explore. Change and continuity represent competing but comp- lementary narratives, bringing in ambiguity and novelty to destabilize as well as validate existing organizational routines.

Our argument is that understanding change as part of a continuing work in pro- gress calls for a much broader canvas that seeks out competing voices, and works with the resulting ambiguities, contradictions and tensions of messy reality. We advocate a multi-philosophy approach because continuity depends on change as much as change depends on continuity. They are both essential for organizational growth and survival. Continuity underpins the search for new meaning and new understandings. As Evans (1992: 256–257) argued, ‘almost all qualities of an organization have a complementary opposite quality, and excessive focus on one pole of a duality ultimately leads an organization into stagnation and decline (undue continuity), while the corrective swing to the opposite pole leads to disruptive and discontinuous crisis (excessive change)’.

As an exemplar, this article looks firstly at the context for the traditional, rational approach to organizational change. It subsequently illustrates how rational change is depicted and deployed with reference to three different organizational cases on leadership and change. The following section explores a range of organ- izational change philosophies and considers how these might provide a broader frame of reference in understanding the change process and its undeniable, though sometimes tense, partnership with continuity. Based on this discussion, the conclusion considers how an appreciation of the philosophies of change may help to turn around the way organizations and, in particular, senior manage- ment, view the process of change. It, therefore, puts forward the case for a multi- perspectives approach in managing the continuity-change dilemma and offers advice for practitioners attempting to navigate the turbulent waters of organiz- ational change.

The Traditional Change Agenda

Recognizing changing forms of organizing as a ‘fuzzy, deeply ambiguous process’ (Collins, 2003: v) with no obvious ending calls into question the snake oil sales pitch used to promote popular change models. Consider, for example, Grundy’s (1992) ‘power tools for change’, Kanter et al.’s (1992) ‘Ten commandments’, Kotter’s (1995) ‘Eight steps to transforming your organization’, and Hammer and Champy’s (1993) ‘Business process re-engineering’. The nomenclature assigned to these popular 1990s offerings typifies a formulaic approach which pre- supposes that organizational change can and should be a controlled and orderly affair, a simple case of ‘unfreezing’, ‘moving’ and ‘refreezing’. Central to suc- cessful implementation is the key role the ‘magic’ leader plays (Nadler and Tushman, 1989; Kotter, 1990). The implication is that his or her charismatic qualities in communicating the new vision are all it takes to inspire and win over the masses. These factors expose a number of critical flaws in the purely

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rational perspective. Firstly, it begs the question as to whether organizations are ‘as amenable to control as a block of ice’ (Grey, 2003). Secondly, it ignores the not-so rational wild card – the human factor – treating individuals as automatons rather than active agents (Giddens, 1981: 224) in the change process. An inherent assumption in rational models is that organizational actors will respond enthusias- tically and uniformly to their leader’s call to arms. With stability and control the end goals, rational models represent a singular, partial story told by senior man- agement and consequently ignore the many other distinctive stories unfolding around them in the organizational narrative (Buchanan, 2003). As a result, the principal response is not to listen to, but to silence, dissident voices.

Despite the limitations of n-step (Collins, 1998), goal-directed models of change, the management penchant for these types of tools continues unsated. They are, of course, seductively simple and the labels attached (power tools, transforming, com- mandments, magic) imply that success is guaranteed if they are followed to the letter. In addition, n-step models ensure that the change process is controlled ‘from the top’. Management texts and business magazine ‘case studies’ tend to per- petuate and legitimize a rational, leader-centered model of organizational change. Take, for example, the report in AFRBoss (Hughes, 2008) on ‘turnaround’ change at the Reader’s Digest Association, instigated by incoming CEO, Mary Berner. Berner is variously referred to as the new ‘chief’, ‘straight shooting’, and, more sig- nificantly, ‘Cyclone Mary’. Propounding the notion that ‘turnover is actually good for an organization’, Berner undertook a massive cost-cutting exercise with the aim of creating ‘a new “FACE” (fast, accountable, candid and engaged)’. In presenting Berner’s story and her prescription for change, the article pays homage to the key elements of a rational perspective: the magic leader principle, the focus on account- ability and control, and the need to eliminate contradiction, dissent and uncertainty in order to move forward and ‘grow the business’.

Other change management cases in business magazines paint a more humanistic picture. Here, one sees the new twenty first century leader as a people person, adopting a more participatory, inclusive style. This observes a shift from autocrat to democrat, the leader who recognizes that organizational knowledge and exper- tise does not reside solely within the senior management cadre. The role of the twenty first century leader is to energize and revive the creativity lying dormant at all levels of the organization. The emphasis here is on teamwork, as highlighted in articles on Marius Kloppers, the head of BHP Billiton (Gray, 2008; Williams, 2008). Kloppers is described as a ‘detail person’ who actively seeks out infor- mation from people ‘conducting the nuts and bolts operations’. During an interview, Kloppers himself draws a parallel between organizational strategy-making and test cricket. What he likes about the game of cricket is the power of the captain and the team. It is not about an omniscient coach but about ‘11 men planning, performing and enduring as best they can themselves.’ Similarly, discussion of turnaround change at the Melbourne arm of advertising agency, Clemenger BBDO, under the direction of new chief, Peter Biggs, highlights his team-centric leadership style (Gettler, 2008). Through his open door, hands-on approach, Biggs sought to unlock creativity by ‘opening up’ the agency and encouraging people ‘to interact and show their personality.’ He wanted to transform the self-focused, individualistic culture into one which prized generosity and collegiality.

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These expressed aims are laudable and undoubtedly sincere. They demonstrate a clear desire among organizational leaders to challenge the status quo, increase risk-taking and creativity, and open up organizational boundaries through infor- mation sharing and collaborative teamwork. Yet the methods adopted to achieve these new ways of working and organizing remain, by and large, embedded in rational, analytical orthodoxy about organizational change and change leadership. And, the problem with rational orthodoxy is its inability to understand, let alone cope with, the centrality of paradox in organizations; that is, the ‘simultaneous existence of two inconsistent states’ (Eisenhardt, 2000: 703). Rational orthodoxy in contrast presupposes the importance of discipline, order and control. The possibility of implementing change by simultaneously maintaining divergent dual states does not enter the frame. Managerial decision-making is therefore based on either–or choices, or some sort of bland compromise between assumed opposites that define change and continuity, such as innovation and efficiency, collaboration and competition, freedom and account- ability, empowerment and leadership, or economic and social goals.

Both Kloppers (BHP Billiton) and Biggs (Clemenger) appear to have some sense of these continuity-change tensions. In Kloppers case, he combines an analytical mind and an eye for detail with the need for adaptive strategy- making to cope with sudden, unforeseen circumstances. He also looks to key players for information and ideas. Representing a blend of economic and social goals, the focus for Biggs is on increasing competition through a collaborative, collegial and ‘generous’ workplace. There is a clear leadership–commander ‘presence’ bound up with the aim to empower and foster creativity through the rank and file. Biggs’ advocacy of a ‘culture of discontent’ also implies a view of change as having no finite end, thereby rejecting the classical ‘unfreeze- move-refreeze’ model.

In the end, however, the indelible impression from all of these change cases is the classic model of top-down, change in the hands of a strong, forceful and char- ismatic leader. Kloppers is ‘the big South African’, and Clemenger BBDO is ‘born again’ under the guidance of Biggs. The predominant focus is on increasing competition through economic discipline and accountability under strong ‘take- no-prisoners’ leadership. While input and involvement are actively sought and encouraged, the underlying message is not about managing paradox but about maintaining control. There is an assumption that the leader’s vision is the right one or that everyone is on the same wavelength. Leana and Barry (2000) noted that while new forms of organizing are seen as less hierarchical and centralized, these new forms in fact enable senior managers to ‘consolidate power and control’ without the need for centralization. It is control by stealth as managers ‘set performance targets rather than impose direction’ (Leana and Barry, 2000: 754). In this environment there is little tolerance for ambiguity or dissent. At Clemenger, for example, Biggs recruited ‘six or seven core people that make the soul of the agency and keep it true to what its purpose is.’ The implication from Biggs’ statement is that existing employees were not appreciative of his vision for a new soul and it was necessary to bring in some proselytizing muscle to ‘guide’ employees to the light. At Readers Digest, Berner declared ‘It matters that people are aligned with what we are trying to do and people are

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paid for performance. There’s no more paying for trying’ (author emphasis in italics).

Lewin and Volberda (1999) counseled that progress requires combining and recombining multiple theoretical lenses to improve the integration of theories and avoid increasing fragmentation. They argued that change is neither an outcome of managerial adaptation nor of environmental selection, but rather is a co-evolutionary outcome of strategic intentionality and environmental impera- tives. For Lewin and Volberda, the management of change means accepting that adaptation and selection are interrelated rather than opposing forces. In prac- tice, their position emphasizes that a single, linear commitment to change theory will fail to account for the non-linear, recursive and multi-level nature of change reality. As Morgan (1997: 350) advised, ‘reality has a tendency to reveal itself in accordance with the perspectives through which it is engaged’. Therefore, tapping into a range of different perspectives provides the scope to understand a situation from many angles and create different modes of engagement (Morgan, 1997).

The following section of this article explores a range of organizational change philosophies and comments upon their impact on the tools and techniques typi- cally employed in change interventions. The complementary and competing insights they offer also demonstrate that complexity, ambiguity and uncertainty are part of the organizational dynamic and do not respond well to a rational, leader-centric approach bent on establishing certainty and control.

Change Philosophies

We note that a philosophy of change is a general way of looking at organizational change, or what might be considered a paradigm: a structured set of assumptions, premises and beliefs about the way change works in organizations. Philosophies of change are important because they reveal the deep suppositions that are being made about organizations and the ways that change operates within and around them. In the forthcoming section we take an in depth look at 10 philosophies, sum- marizing their methods and approach to change. A philosophy’s method for change is expressed in terms of its inferences about the mechanisms through which a change intervention can be brought about. Typically, these are expressed as theories, which in turn generate hypotheses and predictions about organiz- ational change. Any given philosophy may have generated numerous theories, but it is not always clear what they have to do with each other, and in some cases, what they have to do with theories emanating from other philosophies. Nevertheless, philosophies are advantageous because they offer both description and prescription. Regarding the former, philosophies provide a metaphorical and theoretical explanation of assumptions and, therefore, of methods for change. While the usefulness of metaphors for explaining change is well sup- ported (Palmer and Dunford, 1996; Oztel and Hinz, 2001; Wood, 2002), the way metaphors can offer prescriptive guidance is less well articulated. However, a general consensus would suggest that they are effective as change management heuristics under certain conditions because they liberate observers from entrenched thinking, encourage creativity by suggesting new interpretations of old circumstances, stimulate emotional engagement, and fuel action by probing

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the unconscious mind (Green and Ruhleder, 1995; Palmer and Dunford, 1996; Wood, 2002).

As with many complex aspects of organizational life, metaphors are useful in conveying the range of paradigms from which change can be viewed. Paradigms describe the fundamentally different event sequences and generative mechanisms, or what can be thought of as motors of change (Van de Ven and Poole, 1995). While it is not possible to consider every metaphor or paradigm conceived, we have re-conceptualized a range of divergent approaches for change into 10 the- matic philosophies. Each of the philosophies is explained in turn, with emphasis on their respective interpretations of change. We also comment on the influence each has upon the tools and techniques typically employed for change interven- tions. The aim is to show that the underpinning philosophical assumptions associ- ated with various change interventions not only help to map the terrain of change options, but also reveal why change is so difficult to introduce successfully when a single approach is overlaid upon a complex and ambiguous organizational scenario.

The Biological Philosophy

The most long held change philosophy has been commandeered from biology. In fact, biology has been used in several different ways as a metaphor for organiz- ational change (Witt, 2004). The first is appropriated from evolution itself. It refers to the adaptations experienced by a species – or in this case, a population of organizations – during its evolution. This application of biology, pioneered by Hannan and Freeman (1977) under the terminology of population ecology, focuses on incremental change within industries rather than individual organizations. Population ecologists (McKelvey and Aldrich, 1983) subsequently began to take a biological view of industrial behavior. They suggested that change comes about as a consequence of Darwinian-like natural selection where industries gradually evolve to match the constraints of their environmental context. Ulti- mately, population ecologists seek to determine why there are so many different kinds of organizations within a population when the biological imperative for effi- ciency and a best fit would suggest that there should be an ideal configuration that has evolved into dominance (Van de Ven and Poole, 1995).

The second biological sub-philosophy refers to the individual experiences of members of a species (organizations within an industry) and is summarized by reference to its life cycle. The contrast is, therefore, between the Darwinian concept of natural selection and the developmental life cycle of individual organ- izations. Life cycle theory (Van de Ven and Poole, 1995; Kezar, 2000) explains change in organizations from start-up to divestment. Birth, growth, maturity, decline and death are all natural parts of an organization’s development (Levy and Merry, 1986). The philosophy is developmental in nature, comparing the ongoing stages of progress and change in organizations to organic processes of growth and reproduction. These can be analogous to child, human, organic, moral, or even financial development. The life cycle philosophy implicitly assumes that change is imminent and progressive. The biological philosophy can get confusing because it is not uncommon for theorists to write about

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organizations seeking to adapt to their respective environments (Chakravarthy, 1982). While correct in practical application, this is a technically inaccurate view of evolution which is concerned with species (industries), not individual organisms (organizations).

Change from a biological perspective must be viewed as dynamic. In addition, the evolutionary and life cycle sub-philosophies, as opposed to punctuated- equilibrium, reflect a slow and incremental pace of change, moderately affected by the environment, moderately controllable, and tending toward certainty.

The Rational Philosophy

The rational philosophy (also referred to as strategic) concerns the alignment between an organization’s composition, competencies and state over time, and its environmental context (Van de Ven and Poole, 1995). Sometimes also known as teleological theories (because the final destination of the organization is its guiding logic) or planned change, the rational philosophy assumes that organizations are purposeful and adaptive (Van de Ven and Poole, 1995; Kezar, 2000). As highlighted in an earlier discussion of the rational perspective, change occurs simply because senior managers and other change agents deem it necessary. The process for change is rational and linear, like in evolutionary and life cycle approaches, but with managers as the pivotal instigators of change (Carnall, 1995; Carr et al., 1996).

Strategic choice theorists (Child, 1972; Smith and Berg, 1987) belong to the rational philosophy and maintain that leaders and managers have ultimate control of their organizations. The proliferation of management ‘gurus’ such as Kotter (1995), Huber and Glick (1995) and Kanter et al. (1992), who each propose their own ‘holy grail’ of change interventions, fit into this conceptual classification. They argue that any events outside the organization are exogenous; successful change is firmly in the hands of managers. The corollary of this argu- ment, of course, is that unsuccessful change is also the responsibility of managers, although sometimes there is the acceptance that the actors cannot override the environment and resource limitations. In other words, when change goes well it is because leaders and managers were insightful and prescient, but when change goes badly it is because something happened that could never have been foreseen.

The rational philosophy assumes that change can be brought about at any pace and on any scale deemed suitable. Similarly, change is internally directed, controlled and certain. Approaches consistent with the rational philosophy give precedence to strategic decision-making and careful planning towards organizational goals. It is therefore the most popular philosophy for leaders seeking to impose a direction upon an organization.

The Institutional Philosophy

The institutional philosophy makes some fundamentally evolutionary assump- tions, but does so in the context of a strong belief in the sensitivity of organizations to the external environments in which they are placed. Like population ecologists, institutionalists expect organizations to increase homogeneity within their

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industrial sector over time, but view the shaping mechanism to be the pressure of the institutional environment rather than competition for resources. It is less the strategy in place or even the competition for scarce resources that stimulates organizational change, but rather the pressures in the wider institutional context. These might come in the form of new regulatory, financial or legal conditions (DiMaggio and Powell, 1983, 1991). Irrespective of the specific forces, change is largely a function of a shifting industrial landscape. The implication is that suc- cessful organizations are successful because their set-up neatly accommodates the industrial pressures to which they are obligated to respond. The key to this philo- sophical standpoint is that organizations are coerced into change by pressures from within their institutional environment. Clever strategy cannot out-manoeuvre the rules set by an institutional context. Since organizational form is instrumental to the institutional philosophy, it remains essential to study how similarities are driven by external forces that coerce companies into set patterns and structures (Meyer and Rowan, 2006).

One of the strengths of the institutional philosophy is that it explains similarities between organizations and stability of organizational arrangements within an industry. For example, institutional advocates would point to legal firms as an exemplar of institutional compliance where most are configured in the same way simply because they have hit on the best approach for success. Institutional theory is, therefore, valuable in explaining the way in which social, economic and legal pressures influence organizational structures and practices, and how an organization’s ability to adapt to these play a part in determining organizational survival and prosperity. On the other hand, the institutional philosophy tends to downplay internal forces and the impact that organizational actors can have on their own predicament.

The institutional philosophy tends to view change as slow and small in scale, although institutional pressures can encourage a more rapid pace and magnitude of change. The stimulus for change is external, control is mostly undirected, and certainty is moderate.

The Resource Philosophy

An instructive starting point is to contrast the resource philosophy with the insti- tutional philosophy. Where the latter explains the industry-specific pressures encouraging organizations to conform, or at least move toward some greater orga- nizing homogeneity, the resource philosophy helps to explain deviance. Accord- ing to what is typically called the resource-dependence theory, any given organization does not possess all the resources it needs in a competitive environ- ment. Acquisition of these resources is therefore the critical activity for both survival and prosperity (Pfeffer and Salancik, 1978). Thus, successful organi- zations over time are the ones which are the best at acquiring, developing and deploying scarce resources and skills. Moreover, the most valuable resources to acquire are either unique in themselves or in the ways in which they can be combined with other assets (Connor, 2002).

From a resource philosophy standpoint, organizational change begins by iden- tifying needed resources, which can be traced back to sources of availability and

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evaluated in terms of criticality and scarcity. Understanding that a dependence on resources increases uncertainty for organizations, is particularly useful to change attempts because it encourages an awareness of critical threats and obstacles to performance. While resource dependency creates uncertainty, theorists note that the direction of uncertainty is generally predictable even if its magnitude is not.

As core competencies are seen as assets that will generate an ongoing set of new products and services, the focus of organizational change from a resource perspec- tive is on the strategic capabilities of the organization, rather than on its fit with the environment. In this sense, the only limitation to an organization’s success is its management of resources. Change can, therefore, be fast or slow as well as small or large. The stimulus for change comes principally from within – as organ- izations seek the resources they require – while control is directed and compara- tively certain.

The Contingency Perspective

The contingency philosophy is based on the proposition that organizational per- formance is a consequence of the fit between two or more factors, such as an organization’s environment, use of technology, strategy, structure, systems, style or culture (Pfeffer, 1982). However, variables such as inertia, inflexibility, resource immobility and industry pressure make the fit between factors difficult to predict. This fact explains why researchers have noted different levels of organ- izational performance, with performance reflecting degree of fit (Van de Ven and Drazin, 1985). Contingency philosophy advocates suggest that over the long-term, managers in competitive markets are forced to adjust their practices and their organization’s configurations so that they are consistent with efficiency demands (McLoughlin and Clark, 1988; Alder, 1992). However, the search for best fit is limited by the impossibility of modeling all the contingent variables and the difficulty of predicting their connections and causal relations.

The strength of the contingency philosophy is that it explains organizational change from a behavioral viewpoint where managers should make decisions that account for specific circumstances, focusing on those which are the most directly relevant, and intervening with the most appropriate actions. The best actions to initiate change come back to two words: ‘it depends’. In fact, the best course of action is one that is fundamentally situational, matched to the needs of the circumstances. For example, although introducing change in the mili- tary might typically be autocratic, whereas change in a small business might typi- cally be consultative, there could be times when the reverse is the most effective solution. There are no formulas or guiding principles to organizational change. The focus of management in organizational change is on achieving alignment and ‘good fits’ to ensure stability and control.

The flexible nature of the contingency perspective means that change can be fast or slow, small or large, loosely or tightly controlled, be driven by internal or exter- nal stimuli, and deal with varying levels of certainty. It just depends on the situation.

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The Psychological Philosophy

The psychological philosophy is based on the assumption that the most important dimension of change is found in personal and individual experience. In the tradition of applied social psychology pioneered by Lewin (1947), the psycho- logical perspective focuses on the experiences that individuals have within organi- zations. It is concerned with the human side of change (Iacavini, 1993; Stuart, 1995) and has clear links with human relations, human development and organi- zational development approaches, which emerged in response to the overly mechanistic methods of scientific management. Since the psychological philo- sophy assumes that individuals are the most important unit in organizational change, it also has strong links with behavioral science as well.

Two of the most prominent approaches to change that are based on assumptions implicit to the psychological philosophy are known as ‘organizational develop- ment’ and ‘change transitions’. Organizational development is an approach to change based on applied behavioral science, and founded on the action research approach (Burke, 2002). Data are collected about problems and then actions taken accordingly. Change management is, therefore, the process of collecting the right information about the impediments to change and removing them by assuaging organizational members’ fears and uncertainties. Change transitions, as a sub-philosophy of the psychological model, is even more focused on the psychological status of organizational members. Like Kubler-Ross’ (1973) stages of death and dying, from denial to acceptance, the process of organizational change is primarily about how people cope with the often traumatic psychological transitions that accompany change (Bridges, 1980, 1992; Jick, 1990). Accord- ingly, personal feelings, emotions and learning are seen as amongst the most important contributors to the management of change transitions. These assump- tions all imply that emotions are learned aspects of behavior, are culturally mediated, and can be managed.

By its nature, psychological change is slow and undertaken on a small scale. That is not to say that organizational change itself is necessarily slow and small, but it does imply that individuals cannot accommodate fast and large-scale change without discomfort. Personal psychological adjustment to change is also an internal process, rather than one imposed by the environment, and it is undirected and uncertain, at least partly because every individual is different.

The Political Philosophy

Originating from the sociological work of Marx and Hegel, the political philos- ophy explains change as the result of clashing ideology or belief systems (Morgan, 1986). Conflict is seen as not only an inherent attribute of human inter- action, but also as the most important one driving change. As a result, the political philosophy assumes that it is the clashing of opposing political forces that produce change. When one group with a political agenda gradually gains power, they chal- lenge the status quo in the hope of shifting the organization toward their own inter- ests. This conflict approach means that change processes inevitably revolve

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around activities such as bargaining, consciousness-raising, persuasion, influence and power, and social movements (Bolman and Deal, 1991).

Organizations are viewed as political systems which employ a system of rules, and where day-to-day activity is filled with ‘wheeling and dealing’, or finding ways to make the system work to one’s advantage. Given the political nature of organizations, it may be assumed that they are composed of numerous coalitions and alliances which work together both overtly and covertly to secure power and influence. In this respect, change is a function of the movement of power from one coalition to another because each seeks the introduction of new philosophies, approaches or ideas. The political philosophy focuses attention on how things get done through political activity and because coalitions have competing agendas and each are seeking to acquire more power, conflict lies at the heart of the political philosophy. Change managers would be advised to focus on culti- vating the political support of strong coalitions, as well as securing the resources that confer power, such as leadership positions and financial support. The strength of the political philosophy is that it reveals the importance of clashing ideological imperatives in organizations, as well as the inescapable axiom that without power change is futile. However, the political philosophy also has the tendency to over- look the impetus for change that comes from the environment or from power bases external to the organization. It is dangerous to get distracted by internal political adversaries when in reality the real competition lies outside an organization.

As ideology is the catalyst for dissatisfaction with the status quo, the stages leading up to change can be lengthy in order to cultivate a group of sufficient power to take overt steps and risk censure. However, although the development process can be slow, actual change can spring quickly, on a large scale, and some- times quite unexpectedly. The stimuli for change (conflict) can come from an external or internal party or parties. In addition, control is largely undirected and the change process is uncertain.

The Cultural Philosophy

The cultural philosophy owes its emergence to the field of anthropology where the concept of organizational culture emerged, first translated to an organizational setting by Pettigrew (1979). In the cultural philosophy, change is normal in that it is a response to changes in the human environment (Morgan, 1986). The diffi- culty is that this process is natural, leading to the construction of firm ways of thinking about how things should be done. As a result, imposing change means fighting entrenched sets of values and beliefs shared by organizational members.

Culture, like many of the philosophies addressed in this section, is fragmented and subject to controversy and inconsistency. The most cited cultural researcher, Schein (1979, 1984, 1993, 1997), takes a psycho-dynamic view in which culture is seen as an unconscious phenomenon, and the source of the most basic human assumptions and beliefs shared by organization members. Schein considers organ- izational members’ behaviors and spoken attitudes to be the artifacts and symbolic representations of these deeper unconscious assumptions. While there are simi- larities between the cultural and psychological philosophies, a key difference between the two can be found in their assumptions about the most important

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unit of change to manage. The psychological philosophy is concerned with indi- vidual experiences of change (which is both individually and socially determined), whereas the cultural perspective is exclusively concerned with collective experi- ences of change, and the shared values that guide them.

The cultural philosophy assumes that the change process will be long-term, slow and small-scale (Schein, 1985). Unlike natural cultural change, which is an ongoing reflection of incremental adjustments to the environment, imposed cul- tural change is internally-driven. However, cultural change can be brought about through radical environmental change as well. If internal in stimulus, control of cultural change can be directed with some certainty, although the process is troublesome.

The Systems Philosophy

Encouraged by Kuhn (1974), the systems philosophy emerged from ‘systems thinking’ and general systems theory developed originally from viewing organiz- ations as complex machines, later as open systems, and most recently as entities capable of self-organization (Gharajedaghi, 1999). The systems philosophy looks beyond simplistic causal views of management and the constituent parts of organizations. It developed with the intention of acknowledging the importance of holistic analysis rather than focusing on compartments of organizations. Thus, organizations were seen as the sum of their parts rather than as a collection of reduced units. The key to change for systems theorists is to first appreciate that any imposed change has numerous and sometimes multiplied effects across an organization, and consequently, in order for change management to be successful, it must be introduced across the range of organizational units and sub-systems.

Systems are typically considered to be sets of objects or entities that interrelate with each other to form a whole. These can be physical, mental or natural (Laszlo, 1972). In looking at change with a systems view, it is typically assumed that organizations are rational and non-political entities. It is generally the systemic approaches which take best-practice viewpoints by prescribing steps and linear solutions. It is a holistic, integrated approach to the continuous improvement of all aspects of an organization’s operations, which when effectively linked together can be expected to lead to high performance (Australian Manufacturing Council, 1994; Rimmer et al., 1996). The claim that a set of best practices is universally applicable may, however, unrealistically lead us to ignore the powerful and highly significant changes occurring outside an organization, such as those in tech- nology, employment and society. Critics argue that the search for sets of best prac- tices may be important, but so is the search for where and when they might be best applied, like the contingency philosophy advocates.

If organizations are perceived to be systems – interrelated parts that affect each other and depend upon the whole to function properly (Hatch, 1997) – then organ- izational change is effective only when interventions are leveled throughout the entire system. In fact, the presumption of critical interrelationships between parts is the unique contribution of the systems philosophy. Every system may be characterized by two diverse forces: differentiation and integration. Organiz- ational systems are differentiated into specialist functions (in the human body,

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for example, the lungs, heart and liver are all distinct functions), like divisions and departments for human resources, finance, operations and marketing. At the same time, in order to maintain unity amongst the differentiated parts and to form a complete whole, every system has a process of integration. In organizations, inte- gration is typically achieved through coordinating devices such as levels of hier- archy, direct supervision, and rules, procedures and policies. Every system therefore requires differentiation to identify its sub-parts and integration to ensure that the system does not break down into separate elements.

The systems philosophy assumes that change can be relatively fast and large scale. This is because it implicitly requires all sub-systems in an organization to be changed at once. Of course, this means that change is internally driven, control- lable and certain.

The Postmodern Philosophy

The postmodern philosophy challenges singular or grand theories about organiz- ational change, instead insisting that change is a function of socially constructed views of reality contributed by multiple players (Buchanan, 2003). The postmo- dern change philosophy is probably best described as one which is comfortable with ephemerality, fragmentation, discontinuity and chaos, but also seeks to take action rationally toward ongoing improvement (White and Jacques, 1995). The notion of postmodernism accompanied the transition from industrial to post-industrial society; from manufacturing and materials to knowledge and infor- mation. The postmodern analysis of change finds that words, symbols and signs are increasingly divorced from direct, real-world experience (Fox, 1996). It is a juxtaposition of the old and new, characterized by a change management approach that emphasizes diffusion, empowerment, flexibility, trust and market responsive- ness (Clegg, 1992).

The postmodern philosophy views reality as multiplicitous, fragmented and contradictory. The rational philosophy approach to change will be restricted in its success because no one unified view of an organization’s future reality can be communicated. Postmodernism is also deeply suspicious of the rational impo- sition of change because it holds a particular sensitivity to power and its appli- cation. Power is typically viewed as a mechanism for exploitation rather than a reasonable means to achieve common goals. Embedded in the postmodern philos- ophy is the idea that power and knowledge are intrinsically connected. This has led to a more textured presentation of the postmodern philosophy known as discourse analysis, heavily influenced by the work of Foucault (1980). Change is seen as a product of ‘discourse’ within organizations and its application is the subject of sig- nificant debate and contention (Alvesson and Karreman, 2000; Hardy et al., 2000). Discursive analysis is concerned with the way in which language helps to reveal social phenomena (Grant et al., 2004; Clegg et al., 2006). Discursive analysis recognizes that language (what is written, spoken, heard and read) plays an active role in creating our social worlds. Discourse analysis suggests that our systems of representation help to create our social worlds where ‘reality’ itself is a social construction. This means that the world appears different to everyone. There is no universal way to see things, or one universal reality that all people

A Philosophies of Change Approach 147

subscribe to. For most practically-minded managers, however, the postmodern philosophy ventures too far into the abstract and is difficult to wield without relin- quishing the very power needed to instantiate change.

Unlike the systems perspective that encourages best practice thinking, a post- modern analysis precludes the use of an overarching theoretical approach. As a result, change can occur at any pace, scale, stimulus, control and level of certainty. In fact, since there is no universal ‘truth’ or reality about anything, the mere attempt to categorize the postmodern philosophy is inappropriate and flawed.

Dualities: Competing and Complementary Insights

The first part of this article highlighted the limitations of adopting a singular, rational philosophy when managing the process of change, while the previous section demonstrated that the other prominent philosophies about how change works in organizations are similarly rigid or subject to the limitations of their prin- ciple assumptions. At one end of the spectrum, formal, rational logic may be valu- able in articulating a clear course of action, and in providing structure and process to the complex task of strategy making, yet its scope is limited because inconsis- tency and ambiguity are beyond its repertoire. At the other end, postmodern, discursive philosophies preference individual experience and power, but are more ambiguous when it comes to specifying practical change interventions without falling into the power trap it eschews or encouraging anarchy. Somewhere in the middle, the contingency philosophy has a bet each way, while on either side theorists are inclined either towards systemic views or speak of culture as the key. Others still suggest that acquiring resources is the crucial step for successful change, and at the same time further commentators declare that acquiring power is the most critical success factor to change.

How then do we turn around the way organizations, and in particular senior management, view the process of change? Given that change is neither simple nor straightforward, and unlikely to conform to an n-step formula, this article has argued that a paradigmatically different sort of philosophy is needed that cap- tures the complexities and dynamics of organizations and actively seeks out the accumulated knowledge, skills, experience and learning of the different commu- nities interacting in them. While reason and logic have their place, without any counter-weight, the tendency from such a limited perspective is to pursue change with a scientific, clinical resolve that overrides the ‘complex, emotive and fluid character of changing’ (Badham, 2003). The latter point underlines the true nature of organizations as dynamic, evolving entities that must be continually changing, organizing, strategizing.

This perspective is reflective of the wider strategy-as-practice trend in strategic management, which is concerned with how managers ‘do strategy’, or strategize (Whittington, 1996, 2003; Hendry, 2000; Johnson et al., 2003). The view that organization or structure is subservient to agency or strategy may be considered an artifact of Chandlerian (Chandler, 1962) thinking, which demanded a sharp dis- tinction between the two as different properties and processes (Whittington and Melin, 2003). However, Whittington and Melin (2003) concluded that strategy and organization are not distinct states. They underlined the importance of

148 F. Graetz & A.C.T. Smith

considering the two as a single merged duality. The assumption is that a change to organizing is a strategic change (Paroutis and Pettigrew, 2005). In addition, the use of the terms ‘organizing’ and ‘strategizing’ is central to this proposition. As verbs, the terms impart the importance of continuous rather than static change pro- cesses. Organization and strategy therefore become organizing and strategizing, wherein the former is a type of the latter and change in both is ongoing. Strategiz- ing and organizing are neither linear nor sequential activities, but are actually iterative and reciprocal in action (Dijksterhuis et al., 2003).

The challenge for future research is to understand and explain how organiz- ations manage the dynamic relationship between competing philosophies of change. Modular and ambidextrous forms of organization, which embrace hetero- geneity, for example, might provide a sound theoretical platform. Modularity the- orists would propose adding to or reconfiguring strategic components (Baldwin and Clark, 2000; Galunic and Eisenhardt, 2001; Schilling and Steensma, 2001; Pil and Cohen, 2006;). Pil and Cohen define modular systems as ‘elements or, “modules”, that independently perform distinctive functions’ (Pil and Cohen, 2006: 997). As these are able to evolve autonomously, they do not impinge on the system’s overall structure. Modular systems are, therefore, more resilient and better able to manage environmental flux and uncertainty than their more tightly coupled counterparts (Pil and Cohen, 2006). Modularity thus confers flexi- bility as organizing components can be reconfigured, such as the selective repla- cement of hierarchical structures with more loosely coupled forms, using tactics such as sub-contracting, alternative work arrangements or alliances. The impor- tant strategic decisions come in the choice of which aspect of structure should be reconfigured and, with greater heterogeneity within the firm, more options become available (Smith and Graetz, 2006).

Innovating organizations have also adopted ‘ambidextrous’ (O’Reilly and Tushman, 2004) strategies where networks have been developed alongside hierar- chies, horizontal integration has been supported while promoting upwards per- formance accountability, and central control of strategy-making has been maintained during decentralized operations (Sanchez-Runde and Pettigrew, 2003). Similarly, Stark (2001), proposed that adaptability is enhanced by the organization of diversity within an enterprise. That is, diversity is organized into an enterprise, creating a strategic orientation that is characterized by minimal hierarchy and maximum heterogeneity. Naming this mixture a heterarchy, Stark considered it a response to complexity in an organization’s environment. Although institutional homogeneity can lead to adaptation in the short-term, it can stifle diversity inside a firm, diminishing its adaptability in the longer term (Smith and Graetz, 2006). Kraatz and Zajac’s (2001)) data indicated that firms possessing high levels of historically valuable resources were less likely to undertake adaptive strategic change. Thus, ostensibly efficient strategies that copy institutional norms may restrict options for change in the medium- to long-term (March, 1991). For example, diversity can lead to innovation while also offering greater scope for re-deploying firm capabilities toward new targets (Teece et al., 2004).

As Cameron and Quinn (1988: 14) argued over 20 years ago, traditional models and theories of organization assume consistency and symmetry, yet studies

A Philosophies of Change Approach 149

suggest that ‘disconfirmation, contradiction and nonlinearity are inherent in all organizations.’ Traditional frameworks represent change as a programmatic, step-by-step process with a clear beginning, middle and end, largely choreo- graphed and controlled by a transformational leader. Change within this context is about establishing a new order. It is about setting new boundaries and putting in place new structures, systems, processes, and often new people who personify the new ideology. This focus on re-establishing order and stability therefore side- steps the concept of change as a naturally occurring, ongoing phenomenon which serves to nourish and affirm continuity. Traditional frameworks thus ignore the complexities and contradictory nature of organizations, as well as the diverse range of people working in them. Such a linear, simplistic approach inevitably leads to one-dimensional thinking and, as Eisenhardt pointed out, ‘simplicity is elegant but often untrue’ (Eisenhardt, 2000: 704). From this standpoint, ambiguity and uncertainty are anathema. Rather than attempting to recognize and understand the nexus between the dual perspectives as encapsulated in the change dilemmas, traditional models concentrate on one perspective at the expense of the competing perspective (accountability versus freedom, leadership versus empowerment, economic versus social goals, or vice versa). Davis and Lawrence (1977: xi) high- lighted this in their study of the centralization–decentralization debate, noting that ‘the more you realized the benefits of the one, the less you got the benefits of the other. The dilemma of organization was the dilemma of an either-or world.’

Conclusion

By outlining the 10 philosophies, we have attempted to illustrate the distinctive assumptions each makes into a particular situation or set of events. As Morgan (1997) argued, this has important implications for managing organizations because it creates different modes of engagement and provides a richer under- standing of situations that need to be addressed, suggesting actions that otherwise might not be considered. These different philosophies also bring into focus the complementary and competing forces that organizations face in managing the tension between continuity and change and how to deal with perennial issues such as certainty/uncertainty, tight/loose control, large-/small-scale change, slow/fast change, and external/internal stimuli.

Perhaps organizations may best be described in Swanson’s (1991) language, as based on complementary but disjoint structures. A multi-philosophy approach therefore recognizes the centrality of paradox in organizations, and that it is not only possible but also desirable for two ‘inconsistent states’ to exist simul- taneously (Eisenhardt, 2000: 703). Our argument is that rather than concentrating on one theoretical or philosophical perspective at the expense of competing per- spectives, the value to practice is in developing an understanding of the nexus between multiple philosophical perspectives, their differences and commonalities. As Hedberg et al. (1976) argued over 30 years ago, a degree of ambiguity, contra- diction, and incoherence provides the catalyst for organizational learning, diver- sity and renewal. The plea here, therefore, is for organizations to put in place systems that can cope with ambiguity, ambivalence and contradiction. This suggests that organizations must learn to manage the paradoxical tensions

150 F. Graetz & A.C.T. Smith

between continuity and change. For example, nurturing innovation alongside rigorous financial and operational systems; fostering empowerment through strong and supportive leadership; considering the impact of economic realities on social goals; and balancing formalized, central controls and policies with decentralized decision-making that would support more flexible forms of organiz- ing. As Lewis (2000: 760) argued, paradox offers a ‘powerful framework for examining the impacts of plurality and change’, because paradox assists ‘under- standings of divergent perspectives and disruptive experiences.’

Managers cannot control organizations the same way that an operator can control a machine made of moving, but inanimate parts. The multi-philosophy approach reinforces the need to discard assumptions about opposing values, instead replacing them with an appreciation of complementary concepts. The change-stability and order-flexibility paradoxes do not need to be interpreted as uni-dimensional choices. Flexibility might be essential in a turbulent environment in order to find new paths to innovation, but order is also necessary to ensure that innovation is focused and relevant.

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