Challenge In An Organization

Challenge In An Organization



Challenge In An Organization

1.0. Introduction

It's a familiar scenario where, say, the latest change management theory is adopted by the management with a big fanfare, employees are trained accordingly, only for the benefits to be deemed negligible after a short while, and when the program stutters to a halt the bosses turn their attention to a new management theory.

There are a whole raft of business management theories for bosses to follow, such as Total Quality Management, Six Sigma, kaizen, etc. However, there is a flaw in any strategic management theory: there is no singular route to success.

If you are looking for ready made change management theories or human resource management theories that will turn a failing business into a successful one, then you will find the answer will remain elusive and your quest will end in disappointment.

However, a flexible approach and combining old and new management theories can be far more effective than relying on one panacea.

This paper is based on the punctuated equilibrium model of organizational change. We argue that there are multiple ways in which organizational change takes place. More in particular, by looking at the interaction between the two types of organizational change (radical and incremental), we identify two shapes of organizational change. We illustrate this by means of a case study of a large, Dutch beer-brewing company. The study focuses on a major change in the distribution system of beer and a period of structural inertia, caused by long CEO tenure. The problems associated with the subsequent CEO succession and the different levels of management that interact in these change processes are also discussed. This leads to the identification of a number of drivers and determinants of shapes of organizational change.

The punctuated equilibrium model

As stated in the introduction, the punctuated equilibrium model of organizational change proposes an interaction between radical and incremental change. The punctuated equilibrium model was developed by Tushman and Romanelli (1985). They argue that organizations progress through convergent periods punctuated by reorientations which demark and set bearings for the next convergent period. Convergent periods are relatively long time spans of incremental change and adaptation, whereas reorientations are relatively short periods of radical, discontinuous change.

Change is theorized to occur on five domains of organizational activity:

(1) organizational culture;

(2) strategy;

(3) structure;

(4) power distributions; and

(5) control systems (Romanelli and Tushman, 1994).

These five activity domains have been selected because they are important to organizational survival and central to organizational activities (Romanelli and Tushman, 1994). They constitute a firm's so called “strategic orientation”.

The activity domains individually and as they interrelate with one another result in differing levels of performance and inertia which are, in turn, basic factors affecting organizational change. Inconsistent or inappropriate activities, within any of the activity domains, will be associated with lower performance and/or failure. Furthermore, activities must also be consistent or coupled with each other to achieve high performance. So, performance is a consequence both of appropriate activities and of achieving consistencies in and among organization activities (Tushman ...