5 pages Leadership paper due Monday 4pm pst

FROM SUPPORT TO MUTINY: SHIFTING LEGITIMACY JUDGMENTS AND EMOTIONAL REACTIONS IMPACTING THE

IMPLEMENTATION OF RADICAL CHANGE

QUY NGUYEN HUY INSEAD

KEVIN G. CORLEY Arizona State University

MATTHEW S. KRAATZ University of Illinois

Based on a three-year inductive study of one organization’s implementation of radical organizational change, we examine the critical role played by middle managers’ judgments of the legitimacy of their top managers as change agents. Our analysis revealed middle managers’ shifting judgments of the change agents’ legitimacy that arose with their emotional reactions and produced rising resistance to the change effort. Our inductive model illustrates the dynamic, relational, and iterative relation- ships among change recipients’ legitimacy judgments of change agents and arising emotional reactions in various phases of planned change, which explain recipients’ emergent resistance to the change effort. Our model allows us to contribute to theory on radical organizational change, resistance to change, and legitimacy judgments.

Organizational scholars have long recognized the severe challenges involved in organizational trans- formation efforts and the necessary role that indi- vidual agents play within them (Amis, Slack, & Hinings, 2004; Hinings & Greenwood, 1996; Huy, 2002; Singh, House, & Tucker, 1986). Planned rad- ical organizational change (PROC), which funda- mentally alters the power structure, culture, rou- tines, and strategy of the entire organization, often appears to be the only option available in dire circumstances (Miller & Friesen, 1980; Tushman & Romanelli, 1985). As such, scholars have generally treated radical change as an inherently volitional phenomenon and placed change agents at the cen- ter of their theories and empirical research (Bar- tunek, 1984; Pettigrew, 1985). These agents can, in

principle, emerge from anywhere inside the organ- ization (e.g., Plowman, Baker, Beck, Kulkarni, So- lansky, & Travis, 2007); however, top managers (TMs) have been the conventional focus—and for un- derstandable reasons. These actors play a readily vis- ible and public role in many change initiatives and are often hired for the express purpose of transform- ing failing organizations. In addition, they appear to possess many of the resources that are most necessary for this task, such as formal decision authority, con- trol over resources, and centrality (e.g., Denis, Lang- ley, & Cazale, 1996; Romanelli & Tushman, 1994).

Over the last two decades, scholars have exam- ined many different instances of radical change and presented ample evidence that supports an agentic view of the process. They have also provided many useful insights about change agents’ role within this process and some prescribed requirements for success in the job (e.g., Tushman & Romanelli, 1985; Wiersema & Bantel, 1992). Despite its many important contributions, a closer examination of this literature reveals at least one fairly systematic and seemingly significant oversight: existing theory and research seem to have mainly focused on the early stages of the radical change process and given insufficient attention to the challenges that change

This research was funded by the Social Science and Human Research Council of Canada and INSEAD Re- search. We would like to thank Alex Bitektine, Christiane Demers, Ann Langley, Henry Mintzberg, Leigh Tost, Frances Westley, Spencer Harrison, as well as audiences at Harvard Business School, Wharton Business School, IE Business School, and IESE for helpful comments on previous versions of this article. We would also like to acknowledge the exemplary editorial guidance we re- ceived from Jason Colquitt.

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agents face during its later stages—especially im- plementation. This striking imbalance is likely due in part to the opacity and complexity of implemen- tation processes, especially in light of the difficulty researchers have in gaining deep access into organ- izations to study the PROC process closely and longitudinally (Van de Ven, 1992; Ford, Ford, & D’Amelio, 2008). It may also reflect, however, a more basic misunderstanding about the nature of these laborious processes, or, even, a bias toward an overly strategic perspective of them.

Regardless of the causes, though, there does seem to be a clear need (and opportunity) for research and theory that delve into the implementation of radical change and illuminate the role that change agents play therein. This need becomes all the more apparent when one considers implementation as a critical dimension within the larger process of rad- ical change and the inherently agentic nature of this process itself. Radical change efforts frequently fail as a result of implementation problems (Beer & Nohria, 2000; Nag, Corley, & Gioia, 2007), yet there is no logical reason to believe that change agents should suddenly lose their ability to facilitate the process as it passes into this critical stage. This paper reports a study designed to examine this puzzle and meet the need (and opportunity) for more theory in this area.

Our qualitative, inductive study followed a rad- ical change initiative undertaken at “Tekco,” a large and historically successful company that fell into a deep performance crisis in the wake of de- regulation and associated changes in its competi- tive and technological environments. Given our general interest in implementation and executive change agents, we followed Tekco’s change effort over its full three-year course and conducted mul- tiple waves of interviews with its new top manage- ment team (TMT) (which had been recently hired from outside), as well as with a large number of the company’s middle managers (MMs). We ap- proached these MMs as if they were the “lieuten- ants” who would execute the TMT’s orders, and the “lynchpins” of the larger radical change process (two metaphors common in the literature—e.g., Ba- logun & Johnson, 2004; Huy, 2002).

Over the course of our time at Tekco, we ob- served a fairly remarkable turn of events. Within a short time after their arrival, the company’s new TMT successfully formulated a plan for change and rallied substantial internal support. This plan soon lost momentum, however, and ultimately failed during its implementation phase. This overall pat-

tern of events clearly affirmed our orienting beliefs about the critical importance of implementation, and, as we will later suggest, represents a contribution in its own right. Its main function, however, was to provide a foundation for our inductive analyses to explain this critical stage of the process and develop a grounded theory about the aspects that change agents (continuously) influence within it. Our data revealed that MMs frequently seemed to analyze their superiors’ statements and actions as if they were look- ing for clues about their motivations, intentions, and capabilities—that is, engaging in continuous judg- ment of Tekco’s senior change agents. These judg- ments were interlaced with emotional reactions that often influenced their action–response to those judg- ments. Over time, these perceptions seemed to co- alesce into more holistic, person-centered judg- ments—ones that had important implications for the larger change process. Specifically, we found that MMs’ beliefs about their bosses were closely associ- ated with their beliefs about the larger change effort and the nature of their participation therein. The ex- istence of this relationship became most apparent in the final days of Tekco’s radical change initiative, when a final affront from the TMT caused MMs’ emotions to boil over and to stage an open revolt that collectively rejected the authority of their bosses. This led to the TMT’s rapid departure and brought an abrupt end to the change effort.

These findings were not easily interpretable through the lens of existing theory on PROC. In addition to under-examining implementation, rad- ical change scholars have not investigated deeply enough the more general problem of change agents obtaining and maintaining support from change participants. We came to realize that our findings could be explained with a clearer focus when we turned to the large, multidisciplinary literature on legitimacy. Scholars dating back to Max Weber have recognized that power stands in constant need of legitimation, and also emphasized that the for- mer is apt to quickly disappear in the wake of the latter (as with political uprisings and mutinies). Legitimacy scholars have also assembled a large body of theory and evidence that illuminate the various sources of legitimacy and hypothesize about the process through which it is amassed— and depleted (e.g., Suchman, 1995; Tost, 2011; Ty- ler, 2006). The inductively generated theory of change agent legitimacy that we present in this paper emerged as we delved into this literature and brought its various insights to bear on our qualita- tive data about Tekco’s PROC efforts.

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Our study’s main theoretical contribution is to highlight the importance of change agent legiti- macy within the process of PROC, which ulti- mately provides a relatively detailed mechanism to explain shifting resistance to change via evolving legitimacy judgments. A key theoretical insight concerns the multiple and shifting bases of change agent legitimacy. Drawing from the legitimacy lit- erature and our data, we identify several aspects of legitimacy judgment content and explain why they are apt to shift over the course of a PROC effort. Evolving judgments of change agent legitimacy pro- vide a much-needed theoretical mechanism to sup- port a dynamic (rather than static) and pluralistic (rather than single-sided) explanation of shifting re- sistance to change (Ford et al., 2008). Another impor- tant insight concerns the holistic and actor-centered nature of these judgments. Though judgments of change agents may involve various types of content, we posit that these typically congeal into a summary judgment of legitimacy that has significant influence on change participants’ behaviors.

Additionally, our emergent insights add empirical texture to emerging conceptual work on legitimacy judgments (Bitektine, 2011; Tost, 2011). Specifically, we empirically demonstrate that legitimacy judg- ments of human agents exist and can change rap- idly, in part because they can be highly emotion- laden (in contrast to legitimacy judgments of more impersonal forms and structures that tend to be slow-changing and unemotional). Emotional reac- tions can trigger fast and abrupt changes in legiti- macy judgments and influence the information that becomes noticeable to evaluators. These insights extend the nascent literature on legitimacy judg- ment (which is dominantly cognitive) with an af- fective dimension, showing how both cognition and emotion can co-arise and influence evaluators’ subsequent interpretation and behaviors. Our study thus bridges several key literatures—radical organ- izational change, resistance to change, institution- alism, and emotional reactions to change—with a pluralistic and relational perspective to provide deep insight into the implementation of PROC.

THEORETICAL GROUNDING

Planned Radical Organizational Change

The PROC process is generally characterized by sudden and intense change actions that fundamen- tally disturb various groups’ roles, identities, and interests that have co-existed for a long time (Bar-

tunek, 1984; Pettigrew, 1985). While agents of PROC can, in principle, emerge from many places in and around organizations (Battilana, 2006; Plow- man et al., 2007), TMs often appear to be the most suitable candidates for the job. These individuals occupy positions that provide many of the material and symbolic resources most necessary to the task of radical transformation, including the formal au- thority to alter structure, reallocate capital, hire and fire personnel, and publicly proselytize for cultural change (Finkelstein & Hambrick, 1996; Tushman & Romanelli, 1985; Wiersema & Bantel, 1992). It is not surprising, then, that a significant portion of the large and theoretically diverse literature on PROC has focused on the role that top management change agents play in initiating and directing it (Battilana, Leca, & Boxenbaum, 2009; Kraatz & Moore, 2002; Miller, 1991; Pettigrew, 1987; Ro- manelli & Tushman, 1994).

Nearly all forms of major change pose implemen- tation challenges and require some degree of sup- port and participation at lower levels (Sonenshein, 2010). These challenges are particularly severe in the case of PROC, which involves simultaneous change in multiple core organizational elements. Moreover, external constituencies such as inves- tors, regulatory agencies, and customers hold high expectations for rapid performance improvement (e.g., Amis et al., 2004; Romanelli & Tushman, 1994). All these factors impose severe constraints on change agents facing both high time pressure and reduced resources to address challenging ten- sions (e.g., Huy, 2002; Sastry, 1997); failure to ad- dress these tensions could exacerbate organization- al decline and even cause organizational mortality (Singh et al., 1986).

Intriguingly enough, the PROC literature has tended to assume that TMs’ authority to lead change is largely unproblematic and that they typ- ically perform a beneficial change agent role. Tush- man and Romanelli (1985: 173–180), for instance, contend that “only executive leadership can medi- ate between forces for convergence and forces for change” and “implement the set of discontinuous changes” inherent in radical change efforts. Even though the literature on MMs has documented their active contribution to innovation in incremental or continuous change contexts (Kanter, 1983; Floyd & Wooldridge, 1992), the PROC literature tends to de-emphasize the role of MMs and to portray them in a self-effacing role (for an exception, see Huy, 2002). Likewise, most normative models of strategy tend to accord MMs a supporting role at best

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(Shrivastava, 1986); executives are advised to re- duce equivocality and establish control systems (Simons, 1994) so that MMs can comply with and act on executives’ clear directives.

Coincidentally, the resistance to change litera- ture has tended to assume a favorable view of TM change agents and treats resistance to change by lower-level employees as dysfunctional (Ford et al., 2008). In fact, resistance to change is often seen as problematic to PROC (Hinings & Greenwood, 1996). Thus, this stream of research tends to focus on what change agents can do to overcome resis- tance. Relatedly, resistors tend to be construed as individuals with constrained psychological or so- cial attributes, or motivated by narrow self-interests that inhibit them from seeing and accepting the reasons for and benefits of the proposed change. Implicit in this literature is a largely static, one- sided (agent-centric) and judgmental view of resis- tance to change.

Likewise, the prescriptive PROC literature has suggested relatively simple, generic prescriptions to aid change agents, such as creating a sense of urgency and a compelling vision, performing pro- cedural and interactional justice, participation and cooptation of lower levels, and project leader cred- ibility and trustworthiness to overcome resistance to change (e.g., Bartunek, Balogun, & Do, 2011; Kotter, 1995). As intuitively commonsensical as these prescriptions may appear, empirical research has underexplored and even questioned how feasi- ble or realistic it is for change agents to act success- fully on these prescriptions, particularly in the con- text of PROC (Furst & Cable, 2008).

Because of challenges inherent to PROC, success often depends in part on employees voluntarily cooperating with TMs to realize radical change. Adherence to the spirit of the change goals, rather than just the letter, is necessary to overcome un- foreseen complications (Huy, 1999). Since discre- tionary cooperation, rather than mechanical com- pliance, is necessary to creatively address difficulties that emerge during the implementation process (Amason, 1996), even a modest amount of resistance or passive apathy can harm the success of PROC. Studies have shown that MMs often func- tion as “linking pins” who play a critical role in interpreting and implementing top-down changes and fostering discretionary cooperation (e.g., Floyd & Wooldridge, 1992; Huy, 2002). Thus, MMs can serve as a decisive force in “making or breaking” radical change efforts. Unfortunately, few empiri- cal studies have taken an in-depth look at the exe-

cution challenges faced by TMs in enacting these seeming straightforward prescriptions, and, more importantly, their interactions with and depen- dence on MMs for assistance in implementing rad- ical change.

Resistance to Change

In light of the complexities of PROC and the fertile conditions for the emergence of resistance to PROC (e.g., Bartunek, 1984; Ford et al., 2008; Furst & Cable, 2008), it should not be surprising that research on resistance to change has blossomed over the years. This literature has explored various strategies that managers can use to reduce em- ployee resistance to organizational change, such as sanction, persuasion, participation, or communica- tion (e.g., Kotter & Schlesinger, 1979; Nutt, 1986). Unfortunately, after decades of research, findings about their effectiveness remain inconclusive (see Bartunek et al., 2011; Furst & Cable, 2008). For instance, inviting employees to participate in plan- ning a change has been found to increase employee support for change (e.g., Coyle-Shapiro, 1999) and to reduce support for change (e.g., Bruhn, Zajac, & Al-Kazemi, 2001). Similarly, using sanctions and edicts to force employee support for a change has been effective in some cases (Poole, Gioia, & Gray, 1989) and ineffective in others (e.g., Nutt, 1986).

As many scholars reviewing this literature have noted (Bartunek et al., 2011; Ford et al., 2008; Pid- erit, 2000), research on resistance to change has tended to take (a) a favorable view of change and change agents and (b) a dominantly individualistic and cognitive view of change resistors. Indeed, this literature has tended to take the unquestioned stance that change is good and resistance to change is bad (Huy & Mintzberg, 2003), and, thus, that change agents occupy a legitimate and beneficial organizational role. Consequently, this stream of research takes the implicit stance that resistance to change is dysfunctional and explores what change agents can do to overcome it. Second, and relat- edly, resistors tend to be construed as individuals with constrained psychological or social attributes. Thus, they resist change because of personal cog- nitive and social limitations such as cognitive ri- gidity, conflicting schemas, low openness to change, risk aversion, and protection of self-inter- ests (see Ford et al., 2008, and Piderit, 2000, for overviews).

Ford et al. (2008) have challenged this traditional line of thinking and argued for a relational perspec-

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tive on resistance to change (see Bartunek, Rous- seau, Rudolph, & DePalma, 2006), one that advan- tages neither change agent nor change recipient, but, instead, focuses on their interactions. In this view, the presence of resistance to change is neither inherently good nor bad, nor is it solely to be blamed on either change recipients or agents. The key is to understand how the reciprocal actions of both agents and recipients work together to foster or inhibit resistance to change. Employees may re- spond differently to similar managerial actions de- pending on how they interpret the change agents’ motives. Thus, some scholars have started examin- ing how the quality of interpersonal manager–em- ployee relationships could influence whether em- ployees judge the information conveyed by their manager as supportive and credible, or as manipu- lative and selfish (e.g., Ferris & Judge, 1991; Furst & Cable, 2008). How employees make positive or neg- ative attributions about leaders’ motives, or experi- ence positive or negative emotional reactions to- ward their bosses, could impact their behaviors toward the proposed changes, irrespective of whether these proposals are intrinsically beneficial or harmful. The resistance to change literature has tended to confound resistance to the change con- tent (what is to be changed) with resistance to change agency (leaders or agents of change) (see Ford et al., 2008). Thus, there is a need to distin- guish resistance to the change agent from resistance to the proposed change content. Whether employ- ees accept a controversial change might depend on the extent to which they evaluate the change con- tent and/or the change agent as legitimate or not.

Legitimacy

Legitimacy is widely recognized as a critical so- cial phenomenon, and scholars across the social sciences have evinced a longstanding concern with understanding its nature, origins, and conse- quences (Beetham, 1991; Jost & Major, 2001; John- son, Dowd & Ridgeway, 2006; Deephouse & Such- man, 2008). Integrating the vast institutional and psychological literatures on the topic (e.g., Such- man, 1995; Tyler, 1997), Tost (2011: 688) defines legitimacy as “the judgment that an entity is appro- priate for its context.”1 One critical outcome of

such judgments is the decision to accept existing power structures and obey managerial directives. When people believe that their superiors are enti- tled to their positions, they will also generally feel obligated to follow their orders and requests (Sel- znick, 1969; Tyler, 1997; Weber, 1978).

Recent conceptual advances in the literature on legitimacy judgments (Bitektine, 2011; Tost, 2011) have stressed the importance of looking at the con- tent of legitimacy judgments; that is, “the substan- tive perceptions and beliefs that underlie the judg- ment of an entity as legitimate or illegitimate” (Tost, 2011: 687). Synthesizing the large and frag- mented literature on legitimacy content, Tost (2011: 693–694) argues that there are three main dimensions of content underlying active or “eval- uative” legitimacy judgments: (1) instrumental, (2) relational, and (3) moral. Instrumental legitimacy is present when the entity (in our study, the TM change agent) is “perceived to facilitate the indi- vidual’s or group’s attempts to reach self-defined or internalized goals or outcomes” such as “percep- tions related to the effectiveness, efficiency, or util- ity of the entity.” Relational legitimacy exists when the entity is “perceived to affirm the social identity and self-worth of individuals or social groups and to ensure that individuals or social groups are treated with dignity and respect and receive out- comes commensurate with their entitlements,” such as perceptions of “fairness, benevolence, or communality.” Finally, “an entity is perceived as legitimate on moral grounds when it is perceived to be consistent with the evaluator’s moral and ethical values.” She also notes that these three dimensions

1 In the fragmented literature on organizational change, we note concepts that are close to “legitimacy,” such as credibility, trustworthiness, or fairness. For ex-

ample, “credibility” has been defined as the quality of being believable or trustworthy. This concept has re- ceived very little scholarly attention relative to legiti- macy. Because legitimacy also portrays dimensions of believability or trustworthiness, we thus focus on the more encompassing legitimacy concept. Moreover, a few studies have looked at how top teams experience de- clined credibility due to their inability to achieve polit- ical support or substantive change outcome, but in the eyes of constituencies who have power equal or superior to that of the top team, such as the board of directors, rather than subordinating MMs (see Denis, Lamothe, & Langley, 2001; Denis et al., 1996). As for “fairness,” Tost (2011: 690) argues against some scholars’ tendency to conflate legitimacy with fairness, which is only one di- mension of the content that underlies legitimacy judg- ments. Other dimensions of legitimacy exist, and fairness can be an antecedent or outcome of legitimacy judgment (see Tost, 2011).

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are not mutually exclusive, in that they may over- lap and that an entity could be evaluated simulta- neously on all three dimensions or some subset of the dimensions.

In addition to making active legitimacy judg- ments based on these three dimensions, Tost (2011: 695–696) also suggests that people often assess le- gitimacy in a more “passive mode.” These judg- ments occur through some combination of two other proposed cognitive processes. In the first, people use “validity cues” as cognitive shortcuts and base their own judgments entirely on the en- dorsements of other observers. In the second, they simply accept entities that display appropriate symbols and conform to cultural expectations. Be- cause people tend to approach judgment tasks in ways that minimize effortful cognitive processing, this more passive mode is expected to be operative much of the time (Lieberman, 2003). This form of legitimacy judgment is also present in situations where an entity is accepted merely because it be- longs to a generic category that is culturally “taken for granted” as good, familiar, or non-problematic (irrespective of its behaviors, outputs, or demon- strated competencies—Bitektine, 2011).

Legitimacy has long been recognized as a vital resource for power-holders looking to develop and maintain authority and extract high-quality com- pliance from their subordinates (Beetham, 1991; Tyler, 2006; Zelditch, 2001). In its absence, would-be authorities are unable to elicit voluntary cooperation from their subjects, and are, instead, forced to rely on costly and self-limiting coercive tactics. In more extreme circumstances, the loss of legitimacy can destabilize existing structures and lead to a wholesale loss of power itself (as in mu- tinies and political uprisings). Though previous theory and research on PROC has said very little about the legitimacy of radical change agents, its potential role within the radical change process is not difficult to recognize. Attention to change agent legitimacy seems all the more important given the significant problems that change agents are likely to face in gaining and maintaining it. Because these individuals must generally ask their subordinates to make significant and often disrup- tive changes in their identities and routines, and to accept significant sacrifices on behalf of the organ- ization, their legitimacy is likely to be rather prob- lematic and subject to ongoing scrutiny.

Another key benefit of bringing legitimacy theory to bear on PROC is that it provides a more encom- passing, nuanced, and ideologically balanced lens

through which to explore resistance to change and agent–recipient interactions. In particular, it opens a window into factors that are external to the or- ganization, and provides a way to integrate macro, institutional considerations alongside micro, social psychological insights (e.g., Tost, 2011). It also avoids the managerial bias that is evident in much of the prior research on resistance to change (Ford et al., 2008). When the relationship between change agents and change recipients is approached from a legiti- macy perspective, managers are not inevitably the “good guys” and resisting employees are not neces- sarily irrational, selfish, or obstructionist (Bitektine, 2011; Tost, 2011). Finally, the legitimacy framing also invites needed attention to the role of interpersonal dynamics and emotional reactions (both of which have received insufficient attention in the extant PROC literature—Huy, 1999; Lazarus, 1991).

Emotional Reactions

Emotion refers to a feeling state with an identi- fied cause or target that can be expressed verbally or non-verbally (Elfenbein, 2007). The question of what is an emotion and what is a “borderline” emotion is still debated by emotion scholars through various terms such as anger, excitement, hope, compassion, frustration, disappointment, or surprise (for an elaborate discussion, please see Lazarus, 1991: 82–83); thus, we use the term “emo- tional reactions” to include both emotions and bor- derline emotions. Lazarus’s (1991, 1993) emotion theory suggests that people typically experience emotional reactions as they evaluate the signifi- cance of an event in relation to their own goals and concerns. If they appraise the consequence as ben- eficial, pleasant feelings arise. They experience un- pleasant feelings if they appraise the consequence as (potentially) harmful. Thus, to the extent that people appraise the legitimacy of their superiors who have an important say about the nature of their jobs or who lead change that is potentially impor- tant to the realization of people’s important goals and values, engaging in legitimacy judgment can arouse strong emotional reactions.

Emotional reactions often generate a change in readiness to act that prepares people to take action (Frijda, 1996). People determine a potential action response as they evaluate their own abilities to deal with the event. If they determine they have ade- quate resources to deal with the event, they are more likely to respond actively. Otherwise, they may adopt a passive/avoidance approach, which

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could be interpreted as a form of resistance to change. As emotional reactions can impact both thinking and behavior (Elfenbein, 2007), they could influence subsequent legitimacy judgments and re- sistance to change. Research has under-explored how exactly emotional reactions emerge during the implementation of PROC, or how they interact with legitimacy judgments and resistance to change to help steer the course of PROC implementation. Our inductive study seeks to explore these critical gaps in our understanding.

METHODS

Research Setting

Our data collection efforts focused on radical change at “Tekco,” a large information technology (IT) company that enjoyed a dominant market po- sition for more than 50 years.2 Starting as a small venture more than a century ago, by the 1990s, Tekco had become a large provider of IT and com- munication services, with more than 50,000 full- time employees and a market value of more than $12 billion dollars. Over time, its growing market power attracted the attention of governmental reg- ulatory agencies that required the quasi-monopoly to provide universal and affordable service in the mar- kets it dominated. The company’s strength relied on a highly skilled engineering staff that provided com- plex, reliable, and state-of-the-art services. The com- pany enjoyed decades of revenue and profit growth, and could thus provide employees with generous company benefits, life job security, and well-estab- lished career development paths.

While the company had been historically profit- able and stable, it faced an increasingly threatening competitive, technological, and institutional envi- ronment in the years leading up to our study. By the late 1990s, advancements in computing power and IT posed a severe threat to Tekco’s established business model and suggested a need for funda-

mental change. The government, acting in response to changes in technology and the political environ- ment, also made a decision to deregulate the indus- try. This deregulation paralleled changes that took place in many other industries and countries dur- ing the 1980s and 1990s as market logics gained increasing influence. As a result of these converg- ing technological and ideological changes, Tekco faced more new competitors, including both de novo firms and foreign technology companies.

These contextual changes also exerted pressure on Tekco’s established culture. The company had historically been engineering dominated and in- ward focused. A number of government officials and major customers felt that Tekco had not been responsive enough in terms of innovation and pric- ing, while some of its executives were becoming too arrogant, yet risk averse. These new pressures manifested themselves in the company’s declining market share and profits, and also subjected it to harsher criticism and scrutiny from investors and securities analysts.

In response, the board of directors appointed a new CEO from outside of the company—John Max- well, who had held several senior management po- sitions with high-technology firms—and directed him to turn Tekco around. Maxwell began by mak- ing sweeping changes to the TMT, splitting the monolithic bureaucratic structure into multiple business units with profit-and-loss accountability, changing the company’s incentive system, reduc- ing its cost structure by shedding 25% of the work- force, and recruiting large numbers of new manag- ers to quickly develop new sales and marketing skills for competitive markets (see Table 1 for a timeline of Tekco’s change efforts).

To enact these changes, the new TMT enlisted an initial group of about 40 veteran senior MMs in the formulation of radical change plans to generate what specifically should be changed to restore prof- its. MMs are generally important in organizational transformation processes (e.g., Balogun & Johnson, 2004; Huy, 2002), and occupy a particularly impor- tant role in the case of Tekco. At the request of these MMs, TMs contracted a prestigious external consulting firm, “Binary,” famous for quantitative analysis. Binary consultants helped MMs perform extensive quantitative analyses and bring external benchmarking information to them, so as to deter- mine the best areas for work reengineering. This initial group of championing MMs then enlisted more than 500 other MMs across a wide array of work units—selected because of their work experi-

2 The names of the organization and its members, eth- nic origins, geographical locations, and specific technol- ogies have been disguised to protect the confidentiality of this publicly traded organization. The exact names of change programs have also been modified, although we tried to convey the spirit of the disguised names. In the same spirit, some numbers and calendar dates have been altered. These adjustments in the presentation of the data do not affect how the data have been interpreted to ex- plain the proposed theoretical concepts.

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ence and high influence with their respective peer groups. The goal was to propose various change initiatives that would allow the company to in- crease revenues and cut costs quickly, with a target economic payback of three years as a key criterion for obtaining funding. MMs suggested about 250 change projects to improve Tekco’s operations and profit, of which about 150 were funded. These proj- ects were collectively referred to as the Corporate Transformation (CT) program and involved reengi- neering work processes and the heavy use of IT (for more details on these CT projects, see Huy, 2002, 2011). To fund these projects, the company set aside $1.2 billion of restructuring costs over the next three years, with a goal to achieve a pre-tax annual cash flow of $700 million by December 31, 2006.

Data Collection

As part of a three-year research project examin- ing Tekco’s three-year radical change, which in-

cluded the first author having unfettered access to observe meetings and interact with employees, we conducted both formal and informal conversations with employees at all levels of the company. For- mal interviews consisted of semi-structured discus- sions about the general change effort and instances of change management specific to the informant; interviews lasted for about an hour. Following the tenets of purposeful sampling (Lincoln & Guba, 1985), these interviews often ended with suggestions for at least two other employees considered influen- tial in one or several aspects of the change effort. Of particular interest were those who might have a dif- ferent viewpoint, so as to help maximize diversity and depth of perspectives, although our techniques also sought confirmatory data (Charmaz, 2006). Perspectives were included in our analysis when provided by at least two informants (Laumann & Pappi, 1976).

This process resulted in the first author inter- viewing the incumbent CEO 3 times, the two pre- vious CEOs once each, 12 executives 26 times, and 114 MMs3 192 times, in addition to many lower- level employees and union officials. About half of MMs interviewed belonged to the change champi- oning group, and the other half belonged to the change recipient group (although this categoriza- tion is a rough one in practice, because a MM could be a change agent of a particular change project while being the recipient of another change proj- ect). To get a more general perspective, we typically interviewed senior MMs who supervised other ju- nior MMs. As Eisenhardt and Graebner (2007) sug- gest, interviewing informants from diverse groups and perspectives reduces the risk that all these informants would engage in biased, convergent ret- rospective sensemaking and/or impression man- agement. The real-time data collection used in this study also mitigated rationalization biases. Re- search in real time is recommended for longitudi- nal research because it allows researchers to see events in a way that is closer to that actually expe- rienced by the participants, and that is sensitive to current activity and concerns.

In addition to these formal interviews, the first author conducted informal conversations with

3 MMs are two levels below the CEO and one level above first-line supervisors. There are many levels of middle management at Tekco, so one senior MM in the line groups could be in charge of 2,000–5,000 frontline workers. TMs include the CEO and the level of execu- tives above MMs.

TABLE 1 Key Events in Tekco’s CT Program

Year 1 Market share: 76% January ● John Maxwell becomes CEO and starts replacing

senior executive team. March Strategy formulation phase begins.

● Select group of MMs and consulting firm to analyze and quantify proposed change projects.

December ● Complete new senior executive team in place. Year 2 Market share: 70% January [Data collection begins.] March Strategy implementation phase begins.

● Announcement of CT plan to reduce workforce by 13,000 in parallel with 150 change projects championed by MMs.

June ● Announcement of terms of voluntary separation program and support mechanisms. Downsizing begins.

Year 3 Market share: 64% June ● Major decline in customer service known

throughout the company. December ● Implementation challenges have caused

concerns about major delays and underperformance of various major change projects, in turn causing concerns that financial and customer service improvement targets might not be met.

Year 4 Market share: 59% August Change evaluation phase begins.

● Implementation challenges continue to surface, causing concerns that originally forecasted financial targets will not be met. TMT then decrees involuntary layoff of 3,000 people.

September ● CEO Maxwell resigns. TMT dissolved. New CEO appointed.

2014 1657Huy, Corley, and Kraatz

close to 200 employees. These informal discussions were useful in corroborating what he saw and heard in the formal interviews and observations, as well as in triangulating various processes of change. The informal conversations also allowed him to screen potential new informants for addi- tional formal interviews who had been suggested by previous informants; those informal conversa- tions that raised new insights, or potentially diver- gent viewpoints led to requests for formal, recorded interviews. Finally, the first author also gathered internal documents related to change project status, employee surveys, and internal HR efforts. These secondary data sources, as well as the results of observations and the perusal of confidential archi- val data, allowed the triangulation of findings from diverse sources to build stronger interpretations (Charmaz, 2006).

Data Analysis

Initially, narratives of the change effort were de- veloped from the perspective of both TMs and MMs. Key dates and milestones were placed into flow diagrams so that the dynamics of TM and MM actions and interactions could be better modeled (Langley, 1999; Pentland, 1999). Initially, these di- agrams looked very complex, because we tried not to discard too prematurely any factor that might turn out to be consequential and that might be repeated across narratives (pattern matching). Two consistent themes that began to emerge from the MM change narratives were (1) the waning accep- tance and support for the TMT over time and (2) a corresponding increase in descriptions of resis- tance to change. As we delved into the literature to understand these emerging themes, it became ap- parent that, while scholars understand each phe- nomenon individually, we have almost no theory on their interrelationship.

We then began “open coding” (Corbin & Strauss, 1990) individual interviews for perceptions of le- gitimacy and resistance to change on the basis of “in vivo” descriptions—or those offered by the in- formants—as the basis for establishing first-order codes (see Van Maanen, 1979). Legitimacy judg- ments of the change agents are manifest in what respondents said (expressing their thoughts and feelings) when they evaluated TMs’ actions and non-actions; resistance to change is coded in terms of what respondents said (expressing their thoughts and feelings) and what they did (or did not do) in regards to acceptance or support of the change

agent or the change effort. Building from these first- order codes, we then coded for similarities and differences within and across our informant groups to detect conceptual patterns (Glaser & Strauss, 1967), as well as with the extant literature to ensure that themes previously discussed in the literature were correctly attributed (e.g., legitimacy—Tost, 2011; resistance to change—Ford et al., 2008; emo- tional reactions to change—Huy, 2002) and new themes were properly specified.

One of those new themes was the presence of various emotional reactions to the change and ac- tions of the top team. Following prior empirical examinations of emotional reactions to change (e.g., Huy, 2002), we initially relied on the “cir- cumplex” model of emotions (Larsen & Diener, 1992) to explore the wide range of emotional reac- tions people can experience during change. Ac- cording to this model, emotions share two basic dimensions: one dimension reflects the hedonic valence (pleasant–unpleasant) while the second re- fers to the intensity of arousal (high versus low intensity). Together, the four dimensions capture almost the full range of emotional reactions (Bartel & Saavedra, 2000). Thus, the hybrid category of pleasant, high-intensity emotional reactions in- cludes enthusiasm and excitement, while pleasant, low-intensity emotional reactions include calm and comfort. Unpleasant, high-intensity emotional reactions include anger, anxiety, and fear, while unpleasant, low-intensity emotional reactions in- clude disappointment, shame, or dejection.

Beyond noting explicit emotion terms such as “afraid” or “excited” for coding emotional reac- tions, we also identified implicit emotional reac- tions by relying on Lazarus’ (1991) core relational themes and cognitive appraisal theory of emotion (e.g., Smith & Ellsworth, 1985). These scholars ar- gue that the experiences of specific emotions (e.g., anger, disappointment) are reliably associated with particular core relational themes (Lazarus, 1991) or appraisals (e.g., Smith & Ellsworth, 1985). For ex- ample, when people feel disappointed (unpleasant, low intensity), they tend to report thinking that the situation is unpleasant, that results are below ex- pectations, and that they are certain about what is happening (e.g., outcomes). When people report perceiving the situation as harmful, they perceive having some control over others who intend to cause harm, anger (unpleasant, high intensity) could be inferred (Roseman, 1991; Tiedens & Lin- ton, 2001). Ultimately, though, we aggregated these emotional reactions into higher-order constructs,

1658 DecemberAcademy of Management Journal

positive and negative emotional reactions, which are sufficient to explain the key elements of our inductive model.

With a rich set of emergent themes in hand, we went back to our initial narratives and began map- ping those themes on to the dynamics we had un- covered in the TM and MM descriptions of the change effort (Langley, 1999). This mapping af- forded us the opportunity to compare dynamics such as legitimacy judgments, emotional reactions, and resistance to change behaviors across different time periods or stages of planned change, as well as contextual factors (e.g., cultural norms, staff changes, unexpected internal events, external po- litical and economic developments) surrounding these dynamics. Ultimately, this allowed us to be- gin establishing the boundaries of a longitudinal model for how legitimacy of change agents, emo- tional reactions, and resistance to change interre- lated over time. Figure 1 represents our emergent data structure of MM responses to the change effort, illustrating the first-order concepts, second-order themes, and aggregate dimensions that serve as the foundation for our theorizing (Gioia, Corley, & Hamilton, 2013). In this way, Figure 1 provides a structured illustration of the links between our raw data and the emergent theorizing that forms the cornerstone of our theoretical contribution. The fol- lowing sections detail those themes and dimen- sions, and begin tying them together into a coherent understanding of how judgments of change agent legitimacy judgments, emotional reactions, and re- sistance to change interrelate in PROC.

FINDINGS

As Tekco’s change effort unfolded, it became in- creasingly evident to us that the initial acceptance of the change effort and positive regard the new leaders enjoyed in the first months of their tenure (during the change formulation phase) would not last. Near the end of Tekco’s self-declared imple- mentation phase, our data provided such a clear picture of growing resistance to the change program that a single empirical question stood out for us: What happened to alter the initial acceptance of radical change into resistance to change among the MMs in this organization? We attempted to empir- ically answer this question by tracking the status of three emergent dimensions (legitimacy judgments, emotional reactions, and resistance to change) over the course of Tekco’s PROC effort. As our data revealed, MMs evolved in the extent to which they

judged TMs as legitimate change agents. Our cod- ing revealed, for each phase of PROC (formulation, implementation, evaluation), shifts in MMs’ legiti- macy judgments that coincided with (a) shifts in the emotional reactions MMs had toward TMs and the change program and (b) a growing resis- tance to the change that culminated in open defi- ance of the TMs’ directives.

Figure 2 represents a summary of how the key aspects of our emergent data story interrelated dur- ing each phase, and thus provides a structure for our telling the story of Tekco’s PROC effort. For each phase, we list TMs’ attributes and/or actions and change outcomes (descriptive aspects of our case), along with MMs’ judgments and emotional reactions to TMs and the resulting shifts in their acceptance/resistance to the change (from our induc- tive analysis). We begin with a brief, albeit important, examination of the formulation phase to establish the high level of legitimacy and low levels of resistance that existed early in the PROC effort. We then spend considerably more time examining the interrelated dynamics found in the implementation phase, and conclude our data story with the dissolution of the PROC effort in the evaluation phase.

Change Formulation: Favorable Legitimacy Judgments and Low Resistance

Our informants marked the beginning of the change formulation phase with Maxwell’s pro- nouncement of the need for a radical change. Max- well and his new team not only had to sell the need for change, but also the need for change quickly, due to fast-declining market share (from close to 90% only three years earlier down to 75% and dropping) and profits (a projected decline of approx- imately 70% the following year). As one executive explained, “The financial markets were clamoring for blood.” As a result, time scarcity underpinned MMs’ felt urgency to improve the company’s financial sit- uation and reduce its cost structure, as well as the decision to forego lengthy detailed strategic planning to achieve major restructuring quickly in three years. Table 2 provides data examples for this phase (as a way to save space for the theoretically more interest- ing implementation phase).

Legitimacy judgments: Dominantly cognitive. As the quotes in Table 2 illustrate, MMs assessed their new leaders as desirable, legitimate agents of PROC dominantly on the basis that new TMs be- longed to a generic category of people who are presumed to be appropriate for leading radical

2014 1659Huy, Corley, and Kraatz

F IG

U R

E 1

D at

a S

tr u

ct u

re of

C h

an ge

R ec

ip ie

n t

R es

p on

se s

to C

h an

ge E

ff or

t

change. This category can be described by several attributes: as newcomers, they were not tied to the old regime and they had experience in relevant industry sectors. These attributes were seen by MMs as conforming to cultural expectations set by external consultants and industry analysts, thus suggesting cognitive legitimacy judgment. Many veteran MMs noted disruptive changes occurring in the broader environment and conceded that radical change was unavoidable, and that it was more ap- propriate for outsiders to lead radical change than incumbent executives. The “old guard” suffered a severe and precipitous loss in status while outsid- ers, in contrast, were taken for granted to be desir- able leaders of radical change and were presumed to have skills to fight competition successfully. MMs’ cognitive legitimacy judgment was also aligned with the thinking of Maxwell himself; in his first year alone, he replaced about half of the

company’s top 27 executives, in effect establishing a new symbolic basis of authority within Tekco.

In addition to MMs forming cognitive legitimacy judgments, they also actively interpreted the in- strumental and relational legitimacy of specific ac- tions taken by TMs. Newcomer TMs also performed several additional symbolic actions (Pfeffer, 1981; Zott & Huy, 2007) that reinforced MMs’ prior pos- itive judgment. These actions included involving MMs in defining the content of the CT program changes (which can be interpreted as enhancing TMs’ relational legitimacy). Additionally, the top team was seen as effectively handling the first planned layoff in the long history of Tekco, a pro- posed downsizing of 13,000 positions that repre- sented around 25% of the workforce. It was feared the consequences would be devastating to employ- ees who had what amounted to lifetime job secu- rity. Yet, this proposed change won the acceptance

FIGURE 2 Interactions between TMs and MMs through Three Phases of Planned Radical Change

2014 1661Huy, Corley, and Kraatz

T A

B L

E 2

D at

a E

xa m

p le

s fo

r F

or m

u la

ti on

P h

as e

L eg

it im

ac y

Ju d

gm en

ts E

m ot

io n

al R

ea ct

io n

s R

es is

ta n

ce to

C h

an ge

C og

n it

iv e

ju d

gm en

t ●

“M os

t m

an ag

em en

t gu

ru s

h av

e af

fi rm

ed th

at th

e m

aj or

it y

of se

n io

r m

an ag

er s

in p

ro te

ct ed

fi rm

s li

ke ou

rs w

er e

u n

ab le

to m

an ag

e in

th e

n ew

co m

p et

it iv

e co

n te

xt an

d sh

ou ld

be re

p la

ce d

. .

. M

an y

ve te

ra n

ex ec

u ti

ve s

w il

l be

re p

la ce

d ,

bu t

th is

is O

K .”

● “[

P ri

or ex

ec u

ti ve

s’ ]

ye ar

s of

ex p

er ie

n ce

w er

e al

l u

n d

er on

e se

t of

ru le

s w

it h

on e

se t

of or

ie n

ta ti

on an

d ,

fr an

kl y,

a ve

ry n

ar ro

w vi

ew of

th e

w or

ld .

S o

it w

as ra

th er

[n ew

] ex

p er

ie n

ce th

at w

e w

en t

to bu

y in

th e

m ar

ke tp

la ce

.” ●

“I f

yo u

be li

ev e

th e

ex p

er ts

on co

rp or

at e

tr an

sf or

m at

io n

, m

os t

w ou

ld af

fi rm

th at

in cu

m be

n t

ex ec

u ti

ve s

w ou

ld be

u n

li ke

ly to

m ak

e th

e tr

an si

ti on

, so

th e

on ly

vi ab

le so

lu ti

on is

to re

p la

ce th

em .”

● “I

be li

ev e

th at

ex p

er ts

w h

o ca

n te

ac h

u s

h ow

to be

co m

e m

or e

co m

p et

it iv

e d

o n

ot co

m e

fr om

th e

in si

d e.

” ●

“W e

w an

te d

to ch

an ge

th e

ol d

T ek

co m

on op

ol is

ti c

cu lt

u re

. .

. M

os t

of th

e n

ew ex

ec u

ti ve

s w

h o

ca m

e in

d id

n ot

co m

e fr

om m

on op

ol ie

s, so

th at

’s go

od .

M os

t of

th em

ca m

e fr

om fr

ee m

ar ke

t, fr

ee en

te rp

ri se

in d

u st

ri es

li ke

G E

an d

IB M

.”

R el

at io

n al

ju d

gm en

t ●

“I tr

u ly

be li

ev e

th e

w ay

T ek

co d

ow n

si ze

d [s

h ow

s th

e or

ga n

iz at

io n

] h

as be

en a

ve ry

go od

co rp

or at

e ci

ti ze

n .

If yo

u lo

ok ar

ou n

d ,

th ei

r te

rm in

at io

n p

ac ka

ge s

ar e

as go

od as

an yb

od y’

s. ”

● “I

li ke

ve ry

m u

ch th

at to

p m

an ag

er s

h av

e gi

ve n

m e

th e

op p

or tu

n it

y to

sh ow

w h

at I

am ca

p ab

le of

, th

is is

ve ry

ex ci

ti n

g an

d I

w as

re co

gn iz

ed by

m y

co ll

ea gu

es .

I re

al ly

li ke

d th

e fa

ct th

at I

am va

lu ed

by th

e co

m p

an y,

by m

y bo

ss es

, so

I am

ve ry

ex ci

te d

an d

m ot

iv at

ed to

d ri

ve th

is ch

an ge

” [a

ls o:

im p

li ci

t p

os it

iv e

h ig

h ac

ti va

ti on

em ot

io n

in fe

rr ed

th ro

u gh

ap p

ra is

al of

p er

so n

al w

el fa

re ,

be n

ef it

s fr

om be

in g

va lu

ed by

su p

er io

rs ]

● “T

h e

n ew

C E

O h

as d

on e

h im

se lf

so m

e re

al ly

go od

se rv

ic e

by ge

tt in

g ou

t p

u bl

ic ly

,s h

ow in

g p

eo p

le w

h o

h e

is as

p re

si d

en t

of T

ek co

.. .H

e al

so vi

si te

d so

m e

lo ca

ti on

s an

d m

et li

n e

em p

lo ye

es .

. .

P eo

p le

li ke

d h

im an

d tr

u st

th at

h e’

s go

in g

to d

o th

e ri

gh t

th in

g” [a

ls o:

im p

li ci

t p

os it

iv e

em ot

io n

in fe

rr ed

th ro

u gh

ap p

ra is

al of

p ot

en ti

al be

n ef

it fo

r th

e fi

rm w

it h

a li

ka bl

e an

d tr

u st

w or

th y

C E

O ]

● “I

th in

k m

an y

of u

s h

er e

w er

e se

le ct

ed fo

r ou

r ab

il it

y .

. .

ou r

in te

re st

in m

ak in

g ch

an ge

s, an

d ac

h ie

vi n

g a

ch al

le n

ge an

d be

in g

ve ry

go al

fo cu

se d

. .

. W

e h

av e

se en

th e

im p

or ta

n ce

of th

es e

in it

ia ti

ve s

fo r

th e

fu tu

re ,

an d

w e

h av

e be

en re

co gn

iz ed

[b y

to p

m an

ag er

s] fo

r d

oi n

g th

at .

S o

th at

fe ed

s m

an y

of u

s .

. .

be ca

u se

w e

ar e

go al

fo cu

se d

an d

ac h

ie ve

m en

t or

ie n

te d

” [i

m p

li ci

t p

os it

iv e

em ot

io n

in fe

rr ed

th ro

u gh

ap p

ra is

al of

p er

so n

al be

n ef

it s

fr om

be in

g va

lu ed

by su

p er

io rs

] ●

“W e

ar e

ge tt

in g

in cr

ea si

n gl

y co

n fi

d en

t th

at w

e ca

n ov

er co

m e

m os

t th

in gs

th at

ca n

ge t

th ro

w n

at u

s. W

e h

av e

su ff

ic ie

n t

d et

er m

in at

io n

to d

ea l

w it

h it

” [i

m p

li ci

t p

os it

iv e

or n

eu tr

al em

ot io

n in

fe rr

ed th

ro u

gh ap

p ra

is al

of n

o p

er so

n al

h ar

m ,

an d

ev en

so m

e op

ti m

is ti

c co

n fi

d en

ce in

ta ki

n g

ri sk

an d

ov er

co m

in g

ch al

le n

ge s]

● “I

tr u

ly be

li ev

e th

e w

ay T

ek co

d ow

n si

ze d

[g iv

in g

co m

p et

it iv

e be

n ef

it s]

to be

a re

al tr

ib u

te to

a ca

ri n

g or

ga n

iz at

io n

” [i

m p

li ci

t p

os it

iv e

or n

eu tr

al em

ot io

n in

fe rr

ed th

ro u

gh ap

p ra

is al

of ca

ri n

g or

n o

h ar

m ]

● “P

eo p

le si

m p

ly tr

u st

th e

[n ew

] C

E O

th at

h e’

s go

in g

to d

o th

e ri

gh t

th in

g an

d w

il l

fo ll

ow h

im .”

● “W

e be

li ev

e w

e d

o h

av e

ex ce

ll en

t ch

an ge

in it

ia ti

ve s

h er

e, th

ey ar

e th

e ri

gh t

so lu

ti on

s to

im p

ro ve

ou r

op er

at io

n s.

W e

h av

e d

ev el

op ed

th em

an d

be li

ev e

in th

em .

T h

es e

ch an

ge s

ar e

go in

g to

m ak

e a

d if

fe re

n ce

[t o

th e

qu al

it y

of ou

r se

rv ic

e an

d re

d u

ce ou

r co

st ].

W e

w an

t to

m ak

e th

es e

ch an

ge s

h ap

p en

an d

se e

th em

th ro

u gh

.” ●

“I w

ou ld

h av

e th

ou gh

t th

at it

w ou

ld be

h ar

d er

to br

in g

p eo

p le

al on

g. B

u t,

to m

y gr

ea t

su rp

ri se

, I

se e

p eo

p le

go al

on g

w it

h ch

an ge

. I

th ou

gh t

th at

m om

en tu

m w

ou ld

be sl

ow at

th e

be gi

n n

in g,

on e

h ad

to sh

ow p

os it

iv e

re su

lt s

fo r

m om

en tu

m to

sl ow

ly p

ic k

u p

.” ●

“W e

ar e

ex tr

em el

y co

n vi

n ce

d ab

ou t

th e

n ee

d fo

r a

co m

p re

h en

si ve

tr an

sf or

m at

io n

of th

e co

m p

an y,

w e

u n

d er

st an

d ve

ry w

el l

ou r

[d ir

e] fi

n an

ci al

si tu

at io

n .”

● “W

e ar

e n

ow fa

ci n

g n

ew m

ar ke

t co

n d

it io

n s,

th e

en tr

y of

in te

rn at

io n

al co

m p

et it

or s,

n ew

cl ie

n t

ex p

ec ta

ti on

s, so

w e

d on

’t h

av e

m u

ch ch

oi ce

ab ou

t n

ot ch

an gi

n g

d ra

st ic

al ly

.” ●

“W e

fe el

th e

an xi

et y

an d

th e

u rg

en cy

fo r

ch an

ge in

th is

h ig

h ly

co m

p et

it iv

e en

vi ro

n m

en t.

W e

bo u

gh t

en ti

re ly

in to

th e

n ee

d fo

r ch

an ge

an d

w an

t to

h el

p it

su cc

ee d

.”

and support of MMs, thanks, in large part, to pro- mulgated symbolic principles by the CEO and his top team (again, see Table 2 for data examples). In addition to offering relatively generous compensa- tion to the victims of the downsizing, Maxwell also decreed: “We are going to remove the work before we remove the job.” This symbolic pronouncement also helped generate support among MMs, who were involved in designing their own cost-cutting projects based on promised new IT and believed that the CEO’s promise that work would be re- moved before people would not materially reduce the quality of customer service, a key component of Tekco’s identity to this point (which could be in- terpreted as enhancing instrumental legitimacy). An HR survey of employees reported that many affected employees viewed the downsizing rules to be “fair” and “kind,” even though the implicit psy- chological contract of lifetime job security had been violated (relational legitimacy). TMs’ additional symbolic actions thus conveyed various types of legitimacy in addition to the dominant cognitive legitimacy.

Emotional reactions. As could be expected in the wake of positive judgments, MMs’ emotional reactions toward TMs were largely positive to neu- tral. More specifically, for MMs who championed change projects, collective emotions were largely positive, including such emotions as excitement to realize new projects that they proposed and hope for a better future for their professional develop- ment and for the improved performance of the com- pany. Other MMs—in particular, those in the oper- ating line groups who would implement the changes proposed by their colleagues while trying to maintain the quality of customer service—dis- played calm (positive), resignation, and neutral emotions (neither positive nor negative) toward TMs. Overall, MMs’ emotional reactions toward TMs were positive or neutral, with very little neg- ative emotions toward TMs or the PROC effort.

Actions. Contrary to intuitive expectations and research about MMs resisting major change due to self-interest (e.g., Biggart, 1977; Tichy & Sherman, 1994), there was little discernible resistance to change, even from MMs who did not belong to the change formulation groups. A company study showed that more than 80% of the surveyed em- ployees agreed that Tekco’s financial performance had to improve if it was to survive in a competitive environment. A veteran senior MM in HR summa- rized the results of her company’s employee survey near the end of the formulation phase thus: “The

[new CEO] has done a very good job as our leader and external ambassador. He’s doing extremely well and employees in [Tekco] look to him as being their leader.”

Despite these positive judgments and actions from MMs, two critical commitments were made during this formulation phase that would prove problematic in later phases: (1) Maxwell’s very vis- ible pledge to remove work before removing jobs and (2) TMs’ promise to deliver to the board of directors (and shareholders) $700 million annual net income at the end of a three-year change effort. When asked why the three-year implementation period was chosen, CEO Maxwell explained:

Two years is too fast to go from implement and achieve; five years is too long. You had to be pres- sured by time schedule. You could only put in the window the period of time you could sell to your shareholders. So everybody accepted the three-year plan, and that becomes the base around which we measure ourselves to the outside world and to the shareholders and investment community.

Change Implementation: Shifting Legitimacy Judgments and Increasing Resistance

Ironically, many of the same factors that pro- duced high legitimacy and low resistance during the formulation phase came back to haunt execu- tive change agents in the implementation phase. Our analysis suggests that emerging and protracted challenges related to the implementation of various radical change projects led MMs to reassess their original legitimacy judgments in the face of mount- ing implementation problems and heightened neg- ative emotional reactions. Over the course of the implementation phase, these negative emotions and modified legitimacy judgments fueled a grow- ing resistance to the change that eventually led to the downfall of the PROC program.

Interim change outcomes. Despite positive feed- back from external analysts and an increase in stock price from $28 to $39 in less than a year, employees began to see cracks in Maxwell’s change plans: a random telephone survey of about 1,800 employees showed that only 38% of employees felt that the company had a sincere interest in their wellbeing, 61% rated their morale from fair to very poor, and only 34% believed that customer focus would be better off at the end of the three-year change effort. Underlying this internal concern was the realization among MMs that many CT projects were meeting delays or producing lower than ex-

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pected benefits. Recall that the design of the change projects was done very quickly and superficially during the formulation phase. MMs now blamed TMs for not giving them adequate face time and support to resolve these difficulties effectively and quickly.

As one operations MM championing a number of change projects reported:

My [senior executive] stayed at a very high level, wanted to manage the numbers, to understand some of the solutions, but really did not provide time to do that. It was very difficult . . . He would always tell us that he’s available anytime, but he was so busy that you’d get a half an hour here, and, two weeks later, you’d get an hour there . . . We sensed that he really didn’t understand, not because he wasn’t ca- pable of understanding, but that he wasn’t focusing on some of the more detailed [aspects].

Another operations MM added:

We did not succeed in getting our bosses to go out to rally our employees. Most of their communication was written, formal communication. We were think- ing of a training package to help them improve face- to-face communication.

Rapid launch of change projects that generated MMs’ favorable judgment of TMs as competent change agents during the formulation phase thus began to hinder the smooth implementation of var- ious change projects, foreshadowing real prospects of underperformance and threatening MMs’ sense of self-worth. MMs needed to regularly justify to other colleagues that their championed projects re- mained economically and operationally viable, and they blamed TMs for having created this undesir- able time scarcity and performance pressure envi- ronment. Rapid launch in the formulation phase— desirable in the eyes of both TMs and MMs—now became a source of disappointment and anxiety. “Failure in not an option” (a line from the movie Apollo 13) was often repeated in MMs’ project re- view meetings. As one MM in the control group observed:

When these targets were set, there was nothing left we could do except to try to make things work, to deliver these projects while we were locked in some kind of a time box, with unrealistic schedules and [financial] benefits. This immediately created much tension between the [recipient line] groups who must endorse these benefits and [the change agent groups who proposed these benefits].

Project MMs tried desperately to realize their change projects, and any suggestion to evaluate the

interim results in mid-course, to re-prioritize re- sources, or to re-adjust plans was unwelcome. As one manager, analyzing the evolution of the port- folio of change projects, said:

It’s like 155 lottery tickets all winning on December 31, 2006 . . . There’s now a huge organizational resistance to [re-adjustment]. We don’t like to go back and say we made a mistake. We’re going to waste valuable company time, dollars, and skills. People are dedicated to just doing their own proj- ects, and they worry about whether their initiative will get [enough resources to be] implemented, as opposed to [asking themselves], “Have I got the right initiative?”

This lack of engagement with MMs was also rec- ognized by TMs. After having initiated CT and putting a control structure in place, CEO Maxwell devoted most of his time on external stakeholders. He described his focus in a private interview as follows:

I expect that [people below] will deliver. My role now becomes one of managing from altitude the work, explaining to the public what Tekco is all about and where it’s going. Explaining to the gov- ernment, talking to investors, and trying to keep myself up to date with where the industry is going. That keeps me fairly well employed.

While Maxwell assumed that other senior exec- utives would spend much of their time champion- ing and selling the change efforts inside Tekco, this did not take place. These executives reported in private interviews that they were also over- whelmed with tasks similar to those of the CEO.

To make matters worse, the generous downsizing compensation terms planned in the formulation phase also generated unintended effects on the op- erations groups: 16,000 employees opted to leave, 3,000 more than planned. Remaining employees felt overly burdened, especially supervising line MMs who were responsible for customer service. Even though top executives were not directly re- sponsible for this unexpected event, MMs still held them responsible as heads of the company and for forcing them to cut employees and costs to meet the financial targets as per the initial time schedule. TMs’ promise “not to remove people before work” had not been respected. All this caused a growing change fatigue among employees from having to work so hard, so fast in such a compressed time frame. As one customer service representative la- mented on behalf of her colleagues: “There’s so much information that we’ve become saturated.

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We’ve become so saturated that we’ve become stu- pid. So very simple things become difficult.” A senior project manager in charge of many projects that required major IT development also noted the effect this fatigue had on the implementation effort:

There is a lot of fatigue, the problems are enormous, I don’t know many people who work less than 70 to 80 hours a week . . . People in [IT] Systems Devel- opment work very hard, for long hours, and many of them fell sick physically and mentally. Many de- pleted their energy because they could not sustain such an intense level for such a long time.

Some MMs in HR and operations knew the grav- ity of such actions and had been pleading with the top team to issue a public and honest explanation, but this did not take place (moral judgment).

Emotional reactions: Shifting to negative. These mounting implementation problems resulted in MM emotional reactions shifting from positive/ neutral to negative emotions such as disappoint- ment, anxiety, and frustration. There were subtle differences in MMs’ emotional reactions depending on the dominant role they performed, however. MMs as change project champions felt disap- pointed because they were not getting adequate interaction and support from TMs (relational judg- ment). MMs attributed their mounting difficulties in implementing their change projects to insuffi- cient TMs’ support. This anticipation of underper- formance, which could have negative identity and career consequences, also led to anxiety in dealing with TMs. One MM described the emotional reac- tions of the change group as follows:

People are so scared not to deliver. They are no longer asking the real questions, not only because they don’t know what they are, they’d rather not think about them . . . we are playing a little bit the ostriches . . . people will try to deliver at all costs.

In aggregate, there was mounting shared frustra- tion that their company was going in circles and wasting resources in the change process, especially in the wake of the top team’s inability to articulate a meaningful change goal for the organization after the first year’s learning grace period had elapsed. As an MM in operations voiced in frustration:

There’s a lack of understanding [about] what the future is going to hold, and how we’re going to deal with it. There’s a big void . . . People are frustrated. Like, are we just doomed?

Meanwhile, MMs in the role of pure change re- cipients—typically, in operations groups charged

with customer service—felt disappointed by TMs not keeping their promise of not removing employ- ees before work was first streamlined. These line operations MMs were under intense pressure to deliver good customer service while managing the collective anxiety and resentment of their line em- ployees who were learning new competencies while at the same time subject to downsizing. For instance, a business unit composed of about 3,500 customer service representatives had to go through a major downsizing and geographical consolidation effort. One MM in charge of about 800 of those representatives reported:

Our customer representatives are getting tired from all this long traveling [due to centralization of cus- tomer service centers in major metropolitan areas] and this situation will not be sustainable in the long run. Many are mothers with young children. As a result, sales revenues are going down: senior man- agement asked me to put the screws on them even more. I feel stuck . . . I have to sell this change to my employees but they don’t believe me.

As one line MM described her employees’ emo- tional reactions:

Employees told us to stop saying that change would be faster, we were making their lives more difficult by moving them around, yet they did exactly the same job as before, they answered the customers the same way as before, so nothing important in their work has changed . . . They only see that they have less resources, less time to devote to customers, less time for training . . . We had tremendous difficulty in delivering good service this year.

These employees’ emotional reactions clearly had an emotional effect on their supervising MMs. These MMs, who were emotionally neutral and accepted the need for radical change during the change formulation phase, became increasingly critical of both TMs and other MMs who promoted radical change. Their emotional reactions could be best described as resentment. As one MM said, “They say that the greatest priority is our custom- ers. Yet all the actions demonstrate that the highest priority is short-term financial results . . . People are not that naïve.”

Collective anxiety also prevailed among these recipient line MMs, as one MM made very clear: “Everybody right now is feeling highly insecure, they are wondering if they would continue to have a job in a year from now”; and, again: “This creates a very high level of stress. Some of us are stressed, de-energized, fed up . . . We are in hell.” Another

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senior HR MM validated this widely shared emo- tional reaction of MMs toward TMs: “I’m disap- pointed on a lot of counts. I’m disappointed be- cause the leadership of this company, at the very senior levels, has not delivered on its responsibili- ties.” These MMs’ negative judgments and emo- tions were validated by the CEO himself in a pri- vate interview toward the end of the second year of CT:

Over the last three months, I went out and began touching some of the people and I didn’t like what I was hearing. It showed me that the senior executives in this company didn’t stay in touch with the peo- ple. I didn’t stay focused enough with the senior executives . . . We left the employees on their own. I think that’s a huge mistake.

Emotional censorship. MMs’ moderately nega- tive emotional reactions were exacerbated by the top team’s deliberate and public banning of any expression of doubt and cynicism by MMs (as those negative emotions were deemed too high a risk for demoralizing lower-level workers). An executive memo was circulated to MMs decreeing that “Cyn- icism will not be tolerated; we are in a position of leadership and must project hope and confidence in difficult times.” This formal articulation of a norm that was already intuitively known by many MMs puzzled them, but effectively served to shut off any legitimate outlet for expressing negative emotions to the top team. At the lower-worker lev- els, the feeling of emotional censorship was less acute because many MMs organized venting ses- sions. However, such sessions were considered risky. Those who had managed to survive the lay- offs thus far dared not express their true feelings lest they be taken advantage of one day. As one MM in operations described, “You have to show enthu- siasm for a new idea even if you don’t believe in it, so you have to fake your enthusiasm.” This, in turn, reduced dialogue for understanding between the top team and MMs.

Legitimacy judgments: Dominantly relational and moral. The shift to more moderate negative emotional reactions fostered mounting unfavorable judgments about the top team’s legitimacy to lead change. For instance, disappointment about the progress of the change projects and anxiety about their underperformance caused MMs to start mak- ing negative attributions about TMs’ motives, such as when they expressed concerns that TMs were focused on “short-term mandates to make a lot of money” or acted as “mercenaries of change.” These

attributions were so prevalent that even the CEO became aware of them: he mentioned these phrases in a private interview. These attributions marked a shift in MM legitimacy judgments, from the domi- nantly cognitive base of the formulation phase to more of a concern with the relational and moral aspects of legitimacy.

Relational legitimacy. Judgments involving how a social entity communicates with others in a way that accords them respect, dignity, and status within their social milieu constitute the basis of relational legitimacy (Tyler & Lind, 1992). If people perceive that their self-worth and identity are en- hanced in this interaction, they will perceive rela- tional legitimacy to be high (Tost, 2011). MMs who were co-opted by top executives to design the con- tent of radical change felt well supported by their superiors during the formulation phase and thus had assumed this high level of support to continue during the implementation phase. But top execu- tives’ lack of engagement and implementation mis- cues reduced MMs’ sense of support and gradually impacted the sense of respect and status felt ac- corded to them by senior change agents. Disap- pointment with change project progress and per- ceived insufficient TMs’ support also led some MMs to make harsh attributions of the top team’s motives. One MM shared this negative appraisal: [Executives were] “jerking them around all the time,” and that, “they are here just for the short term . . . [they] appear ready to do anything to achieve short term results.” Relational and moral judgments can blend: If people feel they are treated with disrespect, they can make an additional judg- ment that the disrespectful person is low in moral character. Not fully aware that TMs were over- whelmed with external constituencies such as gov- ernment agencies and major customers, MMs tended to attribute insufficient two-way, authentic communication either to TMs’ personal reluctance for honest dialogue or to their under-appreciation of the importance of communicating about change. As one MM from HR conveyed harshly:

[Executives] will tell you over and over again, “You can’t communicate enough.” But, here they are, these champions of change, and, for whatever rea- sons, they don’t have the time to share their per- sonal thoughts with employees on the state of change. I think it’s defensive. Their fear of exposing themselves. It’s fascinating that over 70% of the employee body believes that they have enough in- formation, yet they still feel disconnected and say they don’t trust [senior management].

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Moral legitimacy. Judgments of moral legiti- macy involve the extent to which a social entity conforms to moral values and ethical principles (Scott, 2001). Early symbolic pronouncements that conferred high legitimacy to top executives during the change formulation phase would come back to constrain them in the subsequent implementation phase. The strongest example of this involved the principle “removing work before people,” a princi- ple heavily supported by change agents and recip- ients because it enabled recipient groups to accept cost cutting associated with downsizing on the as- sumption that customer service would not be sig- nificantly affected (“Tekco’s values revolve around the belief that the customer is king,” avowed one HR MM). While many change initiatives involved reengineering of work processes, in which tradi- tional routine work was first streamlined then au- tomated with the introduction of new IT systems (meaning less employees would be needed for the same quality of work output), several issues arose during implementation. Remember that the design of change projects was done quickly and superfi- cially during the formulation phase. High-level agreements made during the formulation phase be- came points of conflict during implementation. That is, when it came down to agreeing with each smaller unit manager on the specific employees to be cut in their units, disagreement surfaced about the number of employees and timing of their de- parture, resulting in lengthy negotiations as opera- tions unit managers were concerned about the im- pact of their employee cuts on customer service. To make matters worse, unexpected events occurred. For instance, the IT infrastructure on which many new productivity improvements were supposed to be implemented was found to have serious capacity problems and needed to be fundamentally rede- signed with unplanned investment of hundreds of millions of dollars and years of development. This discovery sent a chill throughout the operations groups, as this implied that employees would need to be cut to meet the scheduled cost-reduction ob- jectives while the customer service groups had no new IT technologies, as promised, to alleviate the work burden of remaining employees.

Under pressures of time scarcity and meeting interim financial targets on time, oftentimes coer- cion was ultimately used to arbitrarily cut a certain number of employees to meet the cost-cutting ob- jectives, whether the new IT system was in place or not. This increased the burden of work on the re- maining operations employees, de-energizing them

and causing decline in customer service. As one operations MM said, “The company had to force the customer service groups to accept a change initiative [and cut their personnel]. This is very difficult and creates a very high level of stress for many of us.” These coercive actions led to employ- ees complaining to their MMs that top executives’ initial promise of “removing work before people” had not been respected. The expression “do not walk the talk” often arose in interviews as a reason for the loss of the TMT’s credibility in the eyes of operations and HR MMs. As one senior MM in operations reported, “I received a lot of letters from employees that we were not walking the talk . . . We are saying that customer service is [our] number one priority while we are cutting [employees] and service is deteriorating.” Then he added, “The change program does not match the company’s mission statement. We are focused only on cost reduction, not on improving customer service. We are sending out conflicting signals to both [employ- ees and customers].”

Much of the top team’s rhetoric seemed well intended but not acted upon in the eyes of the subordinates, such as the CEO’s well-accepted ini- tial mission statement that emphasized customer service being followed by an almost exclusive focus on financial results by arbitrarily downsizing ser- vice employees. Another senior MM made the fol- lowing harsh judgment about TMs’ motivation in keeping words and actions aligned:

Because [executives] were being judged on the basis of their cost reduction, not on the basis of keeping their word. Nobody called them in for their perfor- mance appraisal and asked, “Have you kept your words in the last twelve months?” They were [mea- sured] on reducing headcount and cost. The other stuff is just noise.

A MM in charge of 300 customer service employ- ees summed up the views of many MMs we spoke with this way: “I think the top team has a short- term restructuring mandate. I have no confidence that they will make long-term decisions.”

When asked about this issue a year after it took place, the CEO claimed ignorance but seemed to realize its deleterious effect: “I should stand up and address that . . . you do lose credibility if that happens. I haven’t heard it before, by the way, because I am removed from the people who do the work right now.” However, neither he nor the top team ever publicly addressed the issue of why peo- ple were removed before work, which caused their

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legitimacy to decline even further. As one senior MM monitoring communication inside Tekco de- plored, “They should have conceded that they might have got it wrong, that some things have been done in zeal, inappropriately, and that they will be fixed. You’ve got to rekindle the trust.” Another top executive privately noted that, “It was a mistake for the CEO to have made this promise. Removing work before people would have never worked be- cause human beings by nature would create other work for themselves.” In this way, the top team’s legitimacy was damaged twice by the same deci- sion: first, for violating their espoused principle, and then again for failing to explain or even ac- knowledge the obvious inconsistency (despite sub- ordinates’ expressed concerns about it).

Emergence of instrumental legitimacy judg- ments. Negative relational and moral judgments and co-arising negative emotional reactions also made salient to MMs the protracted inability of the top team to produce a meaningful strategic vision, which exacerbated MMs’ judgments of the top team’s low change competence: judgment of instru- mental legitimacy started to emerge. Information that was not salient in prior MMs’ judgments of TMs suddenly became a major point of concern. As one HR MM described, “Employees feel that top executives don’t know what they are doing . . . [We don’t have] a sort of driving thrust that people can all sort of anchor themselves to.” In addition, dis- appointment with the progress of their change proj- ect and attributed insufficient TMs’ support (rela- tional legitimacy) made salient to MMs that the top team did not acquire sufficient operating knowl- edge as their tenure progressed. Such detailed op- erating knowledge, including the importance of customer service and what it takes to deliver it (instrumental legitimacy), could have been devel- oped by frequent interactions with MMs. Instead, the top team remaining invisible to a large majority in the organization increasingly bothered MMs. As one MM in operations complained, “They’re not listening to customers. They’re not listening to em- ployees who serve customers. How can they listen when they don’t even come out of their offices to meet with us and talk to us? How can they know anything?” As an HR MM reported: “Employees feel as if the executives are completely discon- nected from them and from the reality of the world of customers and employees.” Thus, negative emo- tional reactions co-arising with emerging negative relational and moral judgments prompted MMs to reevaluate their early positive cognitive judgment

of newcomers as more competent to lead radical change than incumbent executives, ironically fo- cusing on TMs not having an adequate operating knowledge of the company and not appreciating the company’s distinctive competence: customer service. Judgments of TMs’ instrumental legitimacy started to emerge, and to reach its peak in the next evaluation stage, as we will describe.

MMs’ growing unfavorable evaluation of TMs seemed to reflect the large-scale dissatisfaction of their employees about radical change and TMs. A random sample survey of about 2,000 employees (conducted by the company) reported that only 40% of employees felt that senior management was open and honest; only 22% felt that leadership was well known and visible; 46% felt valued as em- ployees; less than 25% of employees believed that the quality of customer service would improve at the end of the transformation program, and 47% believed it would be worse; and only 36% agreed that the changes made today would make the com- pany a better place to work in the future.

Actions: Growing resistance to change. Under the combined weight of all these factors (MMs’ shifting negative emotional reactions, unfavorable judgments of top executives’ actions and non-ac- tions, attribution of unfavorable motives—all of which could not be discussed openly due to emo- tional censorship), it is not surprising that subtle resistance to change began to surface. As an MM in corporate communications who monitored the sit- uation described, “Explicit resistance to change is hardly visible . . . People just take no initiative, they follow instructions to the letter, they are not real partners to change, they express no objection be- cause it is taboo in this new culture.” MMs were not just questioning the competence and mo- tives of the top team, and feeling disappointed about this situation; they were not actively comply- ing and supporting top executives in implementing their change directives. One MM reported foot- dragging by his colleagues:

One (newcomer) [TM] wanted a certain change to be implemented in the company, so all the [MMs] around the table said, “Yes, no problem.” [Several] months later, when he asked [“Why it is not done yet?”], they just told him, “Well, it’s not quite in place yet” . . . They privately chuckled, “We said ‘yes,’ but we did not promise when we will do it.”

Many MMs thus reduced their support and ac- ceptance of the top team by delaying implementa- tion of change directives they disagreed with. As

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one MM noted: “When people don’t agree with a directive, they just ignore it. It’s faster to ignore [than to argue with the decision].” The seeds of behavioral disobedience from the middle manage- ment rank had started to grow and contributed to a legitimacy deficit that ultimately proved insur- mountable for the top team.

Change Evaluation: Delegitimation and Intense Resistance to Change

The deadline for delivering economic and opera- tional benefits at the official end date of the three-year CT program made evaluation of con- crete outcomes of radical change imperative to both external (e.g., investors) and internal stake- holders (e.g., TMs and MMs). From the top exec- utives’ perspective, they had no choice but to put pressure on the organization to deliver the com- mitted profit and cost-reduction targets. A top executive explained:

If you don’t deliver the three-year plan, you lose credibility . . . Boards are willing to let you do things as long as you deliver your commitments. As long as you do that, they will give you the benefit of the doubt. If the board loses confidence in your ability to deliver, they will second-guess you constantly. They will stop you from doing things you want to do.

Change outcomes. Unfortunately, this unrelent- ing pressure to deliver on the financial goals with decreasing resources exacerbated a sense of change fatigue among employees, straining their ability to deliver quality customer service, as we described previously. In addition, the expected underperfor- mance of many change projects championed by MMs was ultimately reflected in the disappointing end results. Due to the imposed deadline of Decem- ber 31, 2006, the initial scope of many large reen- gineering projects had to be scaled down. As an executive change agent described:

The original cost estimate of each big project tended to start at $10 million and over. At each project review, costs increased by another $5 million. At some point in time, we said, “Enough is enough.” We started to remove features to meet the deadline and budget. So the scope was much reduced. The line recipients became dissatisfied; they said that, “You guys promised to deliver us a Cadillac and we got a Volkswagen.”

Another MM close to many IT projects expanded on the narrow behaviors adopted by this single focus on meeting the deadline:

The only thing that change agents really cared about was the delivery date, without defining what and why they wanted certain things, what they were going to change, and what benefits these changes were going to bring about. So we mobilized a lot of people to develop all kinds of scenarios, to develop critical path charts on detailed activities that re- mained to be defined. Once these were defined, they realized this was not exactly what they wanted, but we were still working toward the same date, and, because the date was the most important criterion, you redefine the end product in mid-course just to meet the date. Think about it for a minute: this is expensive, because you make all kinds of compro- mise just to meet the date!

The net effect is that, near the end of the offi- cial radical change program, an initial corporate forecast suggested that expected end-of-year profit objectives promised to shareholders would not be met: “The reality is that these $700 million won’t be attained. It’s going to be longer than three years . . . Time is a critical factor and we didn’t have a lot” (Senior executive). This led to the top team’s decision to quickly cut an additional 3,000 service employees to meet the promised fi- nancial targets. A top executive stated privately, “We went through a very quick fix that was driven by financial considerations predominantly, to get the cost down.”

Emotional reactions: Negative. Although the size of the additional layoff was relatively small in comparison to the 16,000 employees involved in the first downsizing, it produced dispropor- tionately strong negative collective emotional re- actions—“What felt like a cold shower to me and for all of our employees was the announcement of the additional cuts of 3,000 employees . . . my emotional state right now is utter disappoint- ment” (Operations manager). The main com- plaint of MMs who remained was that it was perceived as a panicky move by a top team that did not know where it was going (building on growing concerns about lack of a strategic vision in the implementation phase), and the affected groups of operations employees— customer ser- vice support—showed the top team’s lack of knowledge of the operating details of the busi- ness and disregard for the quality of customer service, which had been deteriorating. Execu- tives had thought these support groups were ad- ministrative overheads, while, in fact, they were directly supporting customer-serving employees. One senior HR MM who received the directive

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to implement this expeditious layoff described the reasons for this directive and his judgment of it:

Senior executives had taken any job title that sounded like it wasn’t a direct customer-facing job and concluded it was overhead and support. Many of the targeted employees either deal directly with customers or are right next to the people who deal with the customer . . . They had this condescend- ing attitude toward the service people, saying that these people don’t know how to manage competently.

Emotionally, it was the last straw for many: “Employees are very worried, they are fearful of another wave of downsizing and want to leave the company . . . this announcement created total panic in the company” (Operations manager).

Legitimacy judgments: Final shift to instrumen- tal criterion. Recall that instrumental legitimacy judgments are present when the entity is perceived to help others attain their goals, which can be linked to effectiveness or efficiency (Tost, 2011). TMs’ rushed layoff command showed operations MMs, who had hitherto given the top team the benefit of the doubt, that, when “push comes to shove, these guys are really short-term oriented and only share- holders’ interests really count” (Operations man- ager). This perception of declining trustworthiness further validated attributions of incompetent lead- ership of change (related to instrumental legitimacy judgments) that began to emerge in the prior imple- mentation stage: “All credibility and vision are gone” (HR manager). The perceived disorganized and abrupt manner in which the second layoff di- rective was issued proved a fatal blow to the legit- imacy of the top team:

It came like a flash to us that the top managers who initiated this action are completely disconnected from the customers and therefore are also discon- nected from the front-line employees. This action will kill customer service, and this company is go- ing to live or die on service.

(HR manager)

In essence, operations and HR MMs felt that this final action risked destroying what they believed was one of Tekco’s few remaining competitive ad- vantages: good customer service. Instrumental le- gitimacy judgments, based on evaluations of the entity’s material results (Tost, 2011), became dom- inant in this phase. MMs had been struggling to balance the reduction in customer service employ- ees with maintaining the quality of customer ser-

vice, even when the promised IT applications had not been delivered, and this rushed employee reduction was too much for them to absorb. As one HR MM reported, “By saying that there may be other actions like this [in the future] and this is going to be the new way to manage has removed all of our confidence [in the top team].”

Actions: Intense and explicit resistance to change. Following in the wake of these unfavor- able judgments of the top team’s legitimacy, collec- tive anger (negative emotional reaction) toward the top team began to develop. Anger is generally elic- ited when targets appraise intention to cause harm by the other party, they are certain about the unde- sirable situation, and that they have the means to deal with the harming entity (perceived control). Anger tends to prompt aggressive action tendencies (Ellsworth & Scherer, 2003), as was the case in Tekco as collective anger energized many MMs to resist TMs’ authority and the change effort itself more openly and intensely. HR MMs reported that many operations MMs delayed or refused to implement the layoff directive (a disobedience pattern that had started emerging toward the end of the implementation phase). Open, public defi- ance had set in—the TMT’s power to exact obe- dience was effectively neutralized, thus hamper- ing its ability to meet the year-end financial objectives that were committed to the board. Shortly after the firestorm that erupted in the wake of the additional 3,000 layoffs, CEO Max- well suddenly quit. The hastily appointed in- terim CEO retained only one previous senior ex- ecutive, effectively dissolving Maxwell’s top team. Operations MMs largely treated the news with relief—“It’s about time. He has done his time”—and resolution—“They had to make the unpopular but necessary moves, like the cuts, but it’s time for them to move on.” In sum, MMs’ resistance to top executives, which was mainly passive and covert in the implementation phase, became active and overt in the evaluation phase. This active and overt resistance was energized by highly charged neg- ative emotional reactions that hastened the final dele- gitimation of the TMT as radical change agents and their precipitous exit from the firm. Departing TMs acknowledged the mixed instrumental outcomes of the radical change effort and some of their causes, as one TM privately shared with us prior to his exit:

The company was completely focused on making its financial targets. So [the development of future capa- bilities] gets lost in the necessity to make the financial

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targets . . . CT helped us to get the costs down, but it’s not transforming the company . . . We’re now ac- knowledging the enemy and he is us . . . In the interest of stopping the bleeding, we went through a very quick fix . . . It was driven by financial consid- erations predominantly, to get the cost down . . . Tekco needs truly transformational programs and it needs them quickly.

EMERGENT THEORETICAL MODEL

Our analysis revealed a set of emergent themes across our MM and TM informants involving recip- rocal interactions between the attributes and ac- tions of the TM change agents and the legitimacy judgments and emotional reactions of MM change recipients. Our data uncovered a heretofore-un- theorized dynamism in how recipients’ legitimacy judgments and emotional reactions shifted during the radical change process and fueled mounting resistance to the change effort. As shown in Fig- ure 3, we propose an inductive model that links the emergent relationships of change recipients’ legiti- macy judgments with their co-arising emotional reactions toward the change agents, and how these in turn energize recipients’ behaviors that impinge on various interim change outcomes. The following

sections illustrate how Tekco progressed through this process model in each of the three phases of the change effort; although the model emerged from the data, we also cite relevant literatures wherever possible to enhance the plausibility of the relation- ships among various constructs proposed in our model (Eisenhardt & Graebner, 2007; Golden- Biddle & Locke, 1993).

Formulation Phase

During the initial phase, the new top team effec- tively communicated the need for radical change, and stressed their attributes, such as “outsiders” and “new blood,” as “validity cues” (Tost, 2011) and performed a number of symbolic actions that suggested their change competence. MMs’ initial sensemaking largely reflected a realization that rad- ical change was necessary and that the former top team was not a legitimate option to lead such a change. In this way, MMs relied on cognitive legit- imacy judgment of TMs’ attributes (e.g., not at- tached to old firm; relevant industry experience) as a form of heuristic processing to quickly evaluate newcomer TMs. Relying on these dominantly cog- nitive judgments (with other legitimacy criteria as

FIGURE 3 Emergent Process Model

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secondary factors—desirable but not necessary4), MMs judged the top team as having high legitimacy as radical change agents (link 1A in Figure 3).

Co-arising with these favorable legitimacy judg- ments, MMs’ emotional reactions toward the new top team and their proposed radical change were positive or neutral (links 1B and 2); as MMs ap- praised TMs as providing the resources necessary to implement the various change projects they championed (relational or instrumental legitimacy judgments), they experienced positive emotions to- ward TMs. Such positive affect in turn helped fa- cilitate global attributions of TMs’ trustworthiness, and energized behaviors of support and lowered resistance to radical change (link 3). At the end of this phase, the interim change outcome was the quick start of the implementation of radical change by MMs (link 4). Interestingly, much of the resis- tance to change literature cites early-stage resis- tance as the most critical to overcome (e.g., Sonen- shein, 2010); but our case shows how early, high change agent legitimacy can minimize that initial resistance.

Implementation Phase

As the change progressed from formulation to implementation, TMs began shifting their focus to external pressures. This led them to devote less time to MMs’ championed change projects and not following through on their early promises—thus violating expectations MMs had for their leaders at the beginning of implementation (link 1C in Fig- ure 3). Additionally, unforeseen (yet typical PROC) problems in implementation emerged and threat- ened the hoped-for success of MMs who promoted change, prompting reconsideration of TMs (link 5). These MMs began experiencing shifts in their emo- tional reactions, from positive in the formulation phase to negative (disappointment, anxiety, frustra- tion) in the implementation phase (link 7), and also began exhibiting shifting judgments of TMs’ com-

petence as change agents, relying on dominantly relational and moral judgments (link 6). Exacerbat- ing these shifts was a mutually influential relation- ship between MMs’ emotional reactions and legit- imacy judgments (link 2). Negative emotional reactions (e.g., disappointment) signal a problem- atic state of affairs and that more detailed cognitive processing and rapid remedial actions are required (Bless, 2000), thus activating process-based criteria focused on closer observation of TMs’ behaviors. Change championing MMs quickly attributed part of the causes of implementation difficulty to TMs. Also, hitherto-skeptical recipient MMs noticed concrete evidence that their initial doubt of TMs was justified, and thus also experienced mounting anxiety that customer service quality (Tekco’s per- ceived core competence) would be harmed by lead- ers whom they (increasingly) perceived as caring only about short-term finance. MMs saw TMs’ in- consistency not only as a sign of questionable cred- ibility, but also (and increasingly) as evidence of opportunism and dubious intent (recall, for in- stance, the expressed perception that the TMT were “mercenaries” operating with a strictly short-term orientation).

While there seemed to be some opportunity in the implementation phase for TMs to reverse the growing resistance to change (link 3), they unfortu- nately decreed a climate of emotional censorship instead, such that MMs who expressed negative emotional reactions about the progress of the change effort were viewed as unfit for leadership positions. Emotion-laden issues, thus, were bottled up and negative emotional reactions toward TMs accumulated and continued to elicit negative judg- ments of TMs (link 2). The combined perceptions of decreasing legitimacy and negative emotional reactions fueled a growing resistance among MMs, even if that resistance was not immediately visible to TMs (link 3). As resistance spread, underper- forming change outcomes (such as growing change fatigue, delayed projects, and reduced learning) be- gan to emerge with more frequency and effect (link 4), prompting further unfavorable judgments of the legitimacy of TM change agents (link 6) and nega- tive emotional reactions (links 7 and 2).

Evaluation Phase

Ultimately, accumulating negative change out- comes led to the ultimate radical change outcome that economic benefits were well below what was committed to shareholders. This led TMs to take

4 We argue these additional actions were more like “icing on the cake” (desirable but not necessary) in the sense that, had newcomer TMs used a more command- ing, coercive, and less generous approach in the begin- ning—actions that could be justified on the basis of Tek- co’s rapid decline of resources and the need to change quickly through a commanding approach (Huy, 2001)—it seems very likely that they would still be perceived as having high legitimacy because of dominant cognitive- based judgments discussed above.

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drastic actions to maintain their credibility with the board (link 5 in Figure 3), such that they de- creed another massive layoff in the final evaluation phase. This drastic action further violated MMs’ expectations (link 1C), creating both MMs’ unfavor- able legitimacy judgments (link 1A) and negative emotional reactions (link 1B) with both feeding each other (link 2). In the face of self-imposed tight deadlines and formal final evaluations, recipients’ legitimacy judgments shifted to largely instrumen- tal criterion. Combined, negative legitimacy judg- ments and emotional reactions fueled overt resis- tance to the change as change recipients lost all faith in the change agents (link 3), thus leading to the departure of the top team (link 4).

Contributions to Theory

We began our paper by noting we lack a granular theoretical and empirical understanding of how PROC is implemented and the role played by change agent legitimacy during that implementa- tion process. In making sense of what our data were illustrating as the PROC effort unfolded at Tekco, we were faced with a challenging empirical ques- tion: What happened to alter the initial acceptance of radical change into resistance to change among the MMs in this firm? Our empirical answer to that question is a dynamic model involving the reciprocal relationship between the cognitive legitimacy judg- ments and emotional reactions of MMs in response to the attributes and actions of TMs across the different phases of PROC. Thus, our study’s central contribu- tion is to show the mechanisms underlying the “gen- eralized” perceived legitimacy of the change agent as a function of dynamic judgments by change recipi- ents involving shifting content. These evolving judg- ments allow us to explain resistance to change as an emerging, situational phenomenon, rather than a static, initial, and predictable obstacle as often por- trayed in the resistance to change literature (Ford et al., 2008). By offering a pluralistic (rather than single- sided) account of resistance to change, we illuminate the heretofore-underexplored nature and sources of change agent legitimacy and reveal its significance within the larger process of PROC. These insights provide an empirical basis for modeling how the change agent–recipient relationship unfolds over time and the factors critical to that evolution (e.g., legitimacy judgments and emotional reactions). This emergent model (Figure 3) provides us the where- withal to theoretically contribute to several domains

of organizational study; most prominently, theory on PROC, resistance to change, and legitimacy.

Advancing our Understanding of PROC

We began this paper with the aim of examining the theoretically and practically important phe- nomenon of radical organizational change imple- mentation. As we noted, this literature has tended to focus on the initial, rather than later, phases of planned radical change, and to view the authority of TM change agents as largely unproblematic be- cause of the typically severe organizational under- performance that justifies a top-down, command- ing approach (Huy, 2001; Tushman & Romanelli, 1985). Our emergent model addresses the hereto- fore-under-theorized relationship between change agent legitimacy and change recipient resistance during the under-explored yet critical implementa- tion phase, and delivers a compelling answer to the question: “How do we explain why change recipi- ents accept or resist change agent efforts to effect radical change?”

Judgments of change agent legitimacy. Our findings bring to the forefront the important role of MM legitimacy judgments in the successful imple- mentation of PROC. While the uninformed view of what happened at Tekco is simply one of poor decision making and mismanagement of resistance to change, our emergent model suggests a more subtle yet compelling account of change agent ac- tions and change recipient legitimacy judgments and emotional reactions coalescing to create a dy- namic process playing out over the course of the entire change effort. The shifting bases of MM le- gitimacy judgments (heavily influenced by chang- ing emotional reactions) and their reciprocal rela- tionship with TM change efforts suggest that we must think differently about how radical change proceeds and how its path toward effective imple- mentation is more complex than previous theory explains (see Bartunek et al., 2011). At the heart of our theoretical contribution is the insight that the legitimacy of change agents is central to their abil- ity to lead change and that legitimacy can be con- strued as a sequence of interim accomplishments involving continuous social interactions (rather than just as an entity with stable characteristics— Suchman, 1995). Consistent with developing re- search into the psychology of legitimacy judgments (Jost & Major, 2001; Tost, 2011; Tyler, 2006), our emergent findings suggest that the bases underlying legitimacy assessments can be more or less stable

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during finite time periods, but that, over time, they shift in ways that provide for potential changes in the level of voluntary cooperation provided by sub- ordinates. Helpfully, our data demonstrate that these shifts in legitimacy bases emerge from shifts in the expectations that change recipients have for agents of change. That is, as radical change begins to unfold, there is an increasing expectation that change agents will grow in ability: people expect leaders to display increasingly specific knowledge of the company and how it operates. This comes in part from increasing dialogue with key stakehold- ers, such as employees (relational legitimacy), and acting in ways that are compatible with stakehold- ers’ norms of propriety (moral legitimacy). Further- more, as the change effort progresses, there is an increasing expectation for change agents to deliver results (instrumental legitimacy), perhaps most es- pecially when specific promises have been made (Gioia, Nag, & Corley, 2012).

While our description of the gradual delegitimation of Tekco’s executives might be enlightening, we do not believe that changing bases of legitimacy al- ways result in delegitimation, nor even a linear pro- gression of high-to-low legitimacy or vice versa. In- stead, what is important is that the underlying bases of legitimacy can and do shift over time (perhaps especially in times of radical organizational change) and that these shifting bases result in different per- ceptions of legitimacy at different points in time. Likewise, we do not claim, nor believe, that shifting bases of change agent legitimacy always result in failed attempts at organizational transformation. It is just as likely that shifts in change agent legitimacy can facilitate change efforts, such as when a new executive team begins without “cultural authoriza- tion” but subsequently gains legitimacy through the use of appropriate processes and demonstrated effec- tiveness (for illustration, see Huy, 2001).

Nonetheless, one upshot of our findings is that future theorizing about PROC should be cautious about the assumed unproblematic coercive power of TMs to lead PROC—even during times of crisis that justify this type of approach—and about the pre- sumed sustained submissive behavior of direct sub- ordinates. For instance, our research fundamentally questions the appropriateness of the well-worn metaphor of the “ice cube”—unfreeze–change–re- freeze (Lewin, 1947)—that pervades much of our scholarly thinking and teaching about managing change (see Kotter’s (1995) eight-step model as an example), and suggests that we should not construe change recipients as inanimate “ice cubes” that

skillful change agents can manipulate at will. Rather, theories of change in general, and PROC in particular, can be enriched by shifting our change metaphor to one of a teacher–student relationship. That is, in as much as teachers guide students and evaluate their learning, students also continuously monitor the effectiveness of their teachers and eval- uate them. Like Tekco’s MMs, students might ini- tially assume that teachers are qualified to teach them based on the school’s appointment (cognitive judgment). As the course progresses, students likely evaluate their teachers on what they have learned (instrumental judgment), but also on how the teachers engage them (relational judgment) as well as their ethical behaviors (moral judgment). Likewise, students’ emotional reactions (positive or negative) about their teachers, together with vari- ous types of judgment, likely aggregate in rating evaluations that, over time, determine the relative status of the teachers.

Emotional aspects of radical change. The liter- ature on PROC has also under-investigated how emotional factors influence implementation of rad- ical change. Save a few exceptions (e.g., Bartunek et al., 2006; Huy, 2002), there is still a dearth of em- pirical research that examines the role of emotion in organizational change, and almost nothing on how emotional reactions interact with legitimacy judgments to influence change implementation. Our study demonstrates how emotional reactions can trigger qualitative shifts in legitimacy judg- ment, priming from a positive evaluation (“glass is half full”) in the formulation phase to a negative one (“glass is half empty”) in the implementation phase. This fits with what we know about emotions and how people tend to use affect as an additional source of information under time scarcity (e.g., Fredrickson, 2001; Schwarz, 1990) when they face unfamiliar rather than familiar subjects, when other types of information are scarce, and when judgment is too complex for analytical processing (Loewenstein & Lerner, 2003). Our findings from Tekco’s implementation phase also show that emo- tional reactions can serve not only as a source of information, but also as facilitators and amplifiers of change in legitimacy judgment. Emerging disap- pointments about the progress of change projects facilitated MMs’ shifts from heuristic processing during the change formulation phase and suggested that initial positive judgments might need to be revised. In other words, MMs’ shifts in emotional reactions from positive to negative facilitated a marked shift from more heuristic to more detailed,

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analytical processing, and thus helped make salient certain aspects of TMs that had been considered irrelevant or unproblematic during the formulation phase (such as lack of an overarching strategic vi- sion, lack of detailed operating knowledge, not up- holding promises, and insufficient interaction time with MMs). As MMs experienced repeated disap- pointments and fears of potential failure of their championed change projects, attribution bias ten- dencies (Zuckerman, 1979) might have operated, in that MMs began attributing the slow progress of their projects partly to TMs’ now-salient limita- tions, which were amplified through repeated dis- appointments caused by implementation problems. These perceived limitations facilitated a shift in legitimacy judgment criteria from the cognitive to the relational and moral. Ultimately, mounting dis- appointments and collective anger about the per- ceived instrumentality of TMs’ arbitrary downsiz- ing command during the evaluation phase further facilitated and amplified MMs’ negative judgments of their bosses and culminated in overt disobedient actions. These insights advance our understanding of the implementation challenges of PROC by re- vealing how emotional reactions facilitate and am- plify changes in legitimacy criteria, which feeds a cycle of growing resistance to change. Although planned change scholars have noted it is an emo- tional-laden process that requires overseeing (e.g., Bartunek et al., 2011; Huy, 2002), the catalyzing (i.e., facilitating and amplifying) function of emo- tions in regard to legitimacy judgments enriches our understanding of the criticality of emotional reactions in PROC.

Temporal aspects of radical change. Further- more, even though time is integral to the nature of change itself, there is still insufficient empirical research that examines how temporal factors influ- ence the process and outcome of organizational change (for a review, see Klarner & Raisch, 2013). Our stage-based model reveals that both change agent’ and recipient’ actions, cognitions, and emo- tional reactions can vary significantly in different phases of planned change, and that recipients hold implicit expectations of progress in the change agent’s ability in accordance with the length of tenure in a given role and in a given organization. It is thus imperative that future research on planned change become more attentive to time-based expec- tations and variations in the constructs and rela- tionships of interest. For example, our data reveal that MMs expect TMs to show more knowledge and sensitivity to the internal matters of the organiza-

tion as their tenure within the organization in- creases, while they had low expectations about such ability when TMs just joined. Likewise, our data demonstrate how various types of legitimacy judgment become more salient than others in vari- ous stages of change.

Advancing our Understanding of Resistance to Change

In their recent article, Ford et al. (2008) suggest a much-needed reconceptualization of resistance to change as a dynamic phenomenon shaped by agent–recipient interactions. Our findings and emergent theorizing put some empirical meat on that conceptual bone by detailing the critical role played by recipient judgments of change agent le- gitimacy in helping to determine the emergence of resistance to change. As MMs (our change recipi- ents) progressed through their involvement in the change effort, they continually sought to make sense of their senior leaders’ (our change agents) actions; a significant part of that sensemaking in- volved judgments regarding the competence and trustworthiness of those leaders to enact change. Unlike much of the resistance to change literature, then, our study empirically captures the perspec- tives of both change agents and recipients. That is, as opposed to the strong agent-centric flavor to most resistance research (Bartunek et al., 2011; Ford et al., 2008; Furst & Cable, 2008), evidence for resistance in our study emerged directly from change recipient interviews (with corroboration from interviews with change agents) and was di- rectly linked with their perceptions of agents’ legit- imacy to lead the change. Thus, this interactive relationship between perceptions of agent legiti- macy and recipient resistance represents an impor- tant advancement of theory on resistance to change because it emerges directly from those experienc- ing the resistance phenomenon. Resistance to change scholars building on our research will need to take recipient perceptions into account and shun the traditional approach of studying resistance mainly from a change agent perspective.

Additionally, as Tekco MMs continued to see the need for major change to improve the company’s performance even as their judgments of the change agents’ legitimacy to lead that change worsened, it is important that scholars recognize that resistance to the actual change (i.e., change content: what is to be changed) should be distinguished from resis- tance to leaders of change (change agency). The two

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concepts are often confounded in the literature (see Ford et al., 2008); however, we believe our study provides convincing evidence that it is theoreti- cally and practically important to study accep- tance/resistance to change content and change agency as two separate constructs. Likewise, our findings suggest that scholars can no longer assume the dominance of cognitive factors in explaining resistance to change (e.g., Ford & Ford, 1995; Furst & Cable, 2008); instead, we should account for both the emotional and cognitive aspects of recipients’ experience, as well as their interactions with those leading the change.

Advancing our Understanding of Legitimacy

Our analysis also provides some important con- tributions to the legitimacy literature. Over the past few decades, institutionalists and social psycholo- gists have amassed a great deal of theory and evi- dence about the legitimacy of organizational prac- tices, structures, and other “social entities” (Deephouse & Suchman, 2008; Johnson et al., 2006; Scott, 2014; Tost, 2011). They have not, however, established an independent focus on the legitimacy of human actors (and often appear to assume that people judge one another using the same generic criteria that they use to evaluate various other cul- tural objects). Our study provides strong reason to question this premise. It also highlights a clear need for research that focuses specifically on actor- centered legitimacy judgments (which are likely to be consequential not only for change agents but for managers and other power-holders more generally).

In addition to revealing this general need, our study also provides some promising insights about the na- ture and foundations of these actor-focused judg- ments. First, they indicate that such judgments are strongly affected by the actor’s observed behaviors (in addition to his/her culturally valued attributes and position in the social structure, etc.). While the latter things are certainly important to initial judgments, they appear to fade into the background and to be insufficient for sustaining legitimacy over time. Sec- ond, and relatedly, our results also highlight the es- sentially relational character of this type of legiti- macy. Top management change agents and other elites clearly occupy preferred societal positions, and enjoy many critical advantages as a result. Neverthe- less, our findings underscore the fact that their legit- imacy ultimately rests on the consent of their subor- dinates (who retain the capacity to withdraw it at any time). Researchers studying PROC (and other forms of

change as well) must take this into consideration and not naturally assume the (ongoing) static presence of change agent legitimacy.

Third, our study demonstrates the critically im- portant role of attribution processes and emotional reactions. Tekco’s MMs showed a deep and persis- tent interest in discerning the intentions, values, and competencies of the new TMT, and reacted with obvious anger and indignation when their su- periors acted in ways that indicated a deficit of these vital but indirectly observable human quali- ties. While these emotion-laden attribution pro- cesses are more or less ubiquitous in interpersonal evaluations, they are unlikely to be directed at inert cultural objects (and are thus notably absent from most of the contemporary legitimacy literature).

Finally, and more generally, our study also reveals the need for a holistic and processual approach to understanding the legitimacy of human agents. Though subordinates’ perceptions of Tekco’s TMT were affected by many different factors, we found that these disparate influences ultimately congealed into more or less unified legitimacy judgments (of the “thumbs up vs. thumbs down” variety). We also found that the foundations of these gestalt judgments shifted fairly dramatically over time (moving from “who” to “how” to “what”). This particular evolu- tionary sequence may or may not unfold in other instances, and future research is clearly needed to evaluate its generalizability. However, the more basic need to view legitimacy as a processual phenomenon with (potentially) shifting foundations would appear much more clear.

CONCLUSIONS

Exploring the interplay of temporal phases, emo- tional factors, and shifting legitimacy criteria used by different groups over the course of radical change should continue to reveal new and impor- tant insights. In particular, although time is integral to the nature of change itself, there is still insuffi- cient empirical research that examines how tempo- ral factors influence the process and outcome of various types of organizational change (Klarner & Raisch, 2013). Our findings also reemphasize the need for more empirical research bridging the lit- erature on change recipient sensemaking and re- sponses to change (e.g., Balogun & Johnson, 2004; Gioia & Chittipeddi, 1991; Gioia, Thomas, Clark, & Chittipeddi, 1994; Isabella, 1990) with the litera- ture on resistance to change (e.g., Ford et al., 2008; Furst & Cable, 2008) by looking at a variety of

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reasons that cause recipients of change to evolve in their support of, or opposition to, change agents over time. Again, resistance to change is usefully construed as a processual, a priori, undetermined evolution rather than as a static snapshot largely determined by relatively stable recipient psycho- logical attributes, entrenched political interests, or predetermined content of the proposed change. Fu- ture research on resistance to change has much to gain by taking a longitudinal and more comprehen- sive and dynamic view of the interpretations, emo- tions, and behaviors of both change agents and change recipients.

Finally, our study also suggests a broader need for additional research and theory that is explicitly fo- cused on the legitimacy of human actors (as distinct from other types of generic social entities or ob- jects)—what might be called agentic legitimacy. Le- gitimacy has been described as “perhaps the most central concept in institutional research” (Colyvas & Powell, 2006). Institutional theorists increasingly highlight illegitimacy as a critical driver of institu- tional and organizational change (Greenwood, Hin- ings, & Suddaby, 2002; Suchman, 1995). Though we find much appeal in the idea of a general theory of legitimation (Tost, 2011), we believe that people are likely to apply a very different (or at least much more dynamic) set of evaluative criteria in judging the le- gitimacy of their fellow humans. Societal influences and taken-for-granted beliefs may be sufficient to en- sure the continued acceptance of many important social practices, structures, and forms. But, the indi- vidual people who populate and administer these social entities are likely to face a distinct (and ongo- ing) set of challenges in establishing and maintaining their own legitimacy.

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Quy Nguyen Huy ([email protected]) is an associate professor of strategic management at INSEAD. His research on the management of strategic change and entrepreneur- ship won multiple awards from the Academy of Manage- ment and was published in the Administrative Science Quarterly, the Academy of Management Review, Advances in Strategic Management, Harvard Business Review, MIT Sloan Management Review, Organization Science, Strate- gic Management Journal, and Strategic Organization. He explores the relations between social–emotional factors such as emotion and symbolic management and macro-strategic processes. He received his PhD from McGill University.

Kevin G. Corley ([email protected]) is a professor of man- agement at the W. P. Carey School of Business at Arizona State University. His research interests focus on sensemak- ing and organizing processes, especially as they pertain to organizational change. He has applied this focus to areas of organizational identity, image, identification, culture, and knowledge. His research has recently appeared in the Acad- emy of Management Review, the Academy of Manage- ment Journal, Administrative Science Quarterly, Organiza- tion Science, and the Academy of Management Annals. His 2004 Administrative Science Quarterly article with Gioia received the 2010 ASQ Award for Scholarly Contribu- tion. He received his PhD from the Smeal College of Busi- ness at the Pennsylvania State University.

Matthew S. Kraatz ([email protected]) is an associate professor in the Department of Business Administration at the University of Illinois. His scholarly interests in- clude organizational adaptation, learning, governance, identity, reputation, leadership, and other institutional processes. He received his PhD from the Kellogg Gradu- ate School of Management at Northwestern University.

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Assignment Resources/Is Change Management Obsolete.pdf

• Is change management obsolete?
• The ‘‘Old Normal’’
• Theories of change in the old normal
• Implementation theories in the old normal
• Conclusion
• The emergence of a ‘‘New Normal’’
• A new theory of changing
• Cambia Health Solutions
• Analysis of the Cambia change effort
• Conclusion
• SELECTED BIBLIOGRAPHY