Module 3
Images of Change Management, Why Change, What to Change, What Changes
a. What’s in a Name: Change Agents, Managers, or Leaders?
The use of terms in this field has become confused, and we first need to address
this problem. Do the terms change agent, change manager, and change leader refer to
different roles in relation to organizational change? Or are these labels interchangeable?
For most of the twentieth century, the term change agent typically referred to an external
expert management consultant who was paid to work out what was going wrong in an
organization and to implement change to put things right. This model is still in use. In the
United Kingdom, if your hospital is in financial difficulties, the national regulator,
Monitor, will appoint a “turnaround director” (external expert change agent with a fancy
job title) to sit on your board of directors and tell you how to cut costs and restore
financial balance. External change agents do not all work like that. Many adopt the
“process consultation” approach popularized by Edgar Schein (1999). Here, the role of
the “expert” is to help members of the organization to understand and solve their own
problems.
Today, a change agent is just as likely to be a member of the organization as an
external consultant. The term is now often used more loosely, to refer to anyone who has
a role in change implementation, regardless of job title or seniority. Given the scale and
scope of changes that many organizations face, a significant number of internal change
agents may be a valuable—perhaps necessary—resource. Internal change agents usually
have a better understanding than outsiders of the changes that would lead to
improvements. In short, when you see the term “change agent,” it is important to check
the meaning that is intended, unless that is obvious from the context. When we use the
term change agent in this book, we will always indicate clearly to whom this applies.
Conventional wisdom says that, with regard to the other terms in our section
heading, management and leadership are different roles, and that this is an important
distinction. One of the main advocates of this distinction is John Kotter (2012). For him,
change management refers to the basic tools and structures with which smaller-scale
changes are controlled. Change leadership, in contrast, marshals the driving forces and
visions that produce large-scale transformations. His main point, of course, is that we
need more change leadership.
For example, Cíara Moore and David Buchanan (2013) report a change initiative
called “Sweat the Small Stuff.” Staff in one clinical service in an acute hospital were
asked to identify small, annoying problems that had not been fixed for some time. These
included broken equipment and faulty administrative processes. The five problems were
addressed by a three-person team including an “animateur” who set up and coordinated
the project, a clinical champion who engaged medical colleagues, and a “who knows who
knows what” person whose administrative background and networks helped the team to
identify shortcuts, “workarounds,” and “the right people” to solve these problems
quickly. All five problems were solved within five days. The total costs came to £89 for a
piece of equipment, and the 40 minutes that the animateur spent in conversations. The
benefits were “financial (US$35,000 income generation), processual (safer patient
allocation), temporal (tasks performed more quickly, less waiting time), emotional (less
annoyance, boredom, frustration), and relational (improved inter-professional relations)”.
The profound impact of attending to the minutiae, often referred to as "sweating
the small stuff," extends beyond immediate improvements. In the context of
organizational change, one overarching benefit is the cultivation of improved
management-medical relationships. This emphasis on refining day-to-day operational
details not only brings about immediate enhancements but also serves as a foundation for
broader and more substantial improvements, not only in medical relations but across
various organizational facets.
The practice of "sweating the small stuff" is a strategic choice that acknowledges
the interconnectedness of organizational dynamics. By focusing on seemingly minor
details within operations, such as streamlining processes, enhancing communication
protocols, or optimizing workflow, the organization fosters an environment conducive to
collaboration and mutual understanding. In the realm of medical relationships, this
approach can lead to improved communication between management and medical staff,
breaking down silos and creating a shared sense of purpose.
The key takeaway here is that addressing the small stuff is not merely a
standalone endeavor; it becomes a precursor for future major changes. By attending to the
intricacies of daily operations, organizations lay the groundwork for a culture of
continuous improvement and adaptability. The improvements in management-medical
relationships, for instance, may set the stage for more profound transformations in
healthcare delivery, patient outcomes, and overall organizational resilience.
Now, turning to the animateur, whose official title was "operations manager," the
nuanced question arises: Was she primarily a change manager or a change leader? The
distinction between these roles lies in the nature of their contributions to the change
process. A change manager is typically associated with the tactical aspects of
implementing change initiatives. They focus on planning, organizing, and executing
specific changes, ensuring that they align with organizational goals and objectives.
On the other hand, a change leader embodies a more strategic and visionary role.
Change leaders inspire and motivate others, guiding the organization through a cultural
shift and fostering a shared vision for the future. They often play a crucial role in shaping
the overall direction of change efforts and are instrumental in creating a culture that
embraces and adapts to change.
In the case of the animateur with the title "operations manager," her role suggests
a primary focus on the tactical aspects of change management. However, the narrative
might reveal a broader scope, where her efforts extend beyond mere operational tweaks.
If her initiatives involved shaping the organizational culture, fostering collaboration, and
laying the groundwork for future major changes, she might embody characteristics of a
change leader.
In essence, her title may suggest a specific function within the change
management spectrum, but her impact and approach could transcend traditional
managerial roles. Understanding her actual contributions, the scope of her influence, and
the extent to which she guided the organization toward a culture of continuous
improvement would provide a more comprehensive answer to whether she primarily
operated as a change manager, a change leader, or a nuanced blend of both
The second flaw in the argument concerns the belief that the contrasting
definitions of these management and leadership concepts will survive contact with
practice. They do not. While it may be possible to define clear categories in theory, in
practice these roles are overlapping and indistinguishable. The general distinction
between management and leadership is challenged by Henry Mintzberg (2009, pp. 8–9),
who argues, “I don’t understand what this distinction means in the everyday life of
organizations. Sure, we can separate leading and managing conceptually. But can we
separate them in practice? Or, more to the point, should we even try?” He asks, how
would you like to be managed by someone who doesn’t lead, or led by someone who
doesn’t manage? “We should be seeing managers as leaders, and leadership as
management practiced well.”
The dichotomy between management and leadership has been a subject of
extensive debate within organizational literature, and scholars have offered various
perspectives on their distinctions. However, the ongoing discourse suggests that engaging
in arguments over a rigid separation between the two may be counterproductive. Instead,
a more nuanced understanding recognizes that the roles of manager and leader can exist
on a spectrum, with individuals often embodying elements of both based on personal
proclivities and contextual demands.
In this book, we adopt a pragmatic and inclusive stance, acknowledging that the
terms change management and change leadership, as well as their respective practitioners
(manager and leader), are often used interchangeably. Rather than getting bogged down
in semantic debates, we recognize the fluidity and dynamism inherent in organizational
roles. Individuals tasked with guiding organizations through change may exhibit traits
associated with both management and leadership, adapting their approaches based on the
unique demands of the situation.
By approaching these terms synonymously, we aim to underscore the holistic
nature of change initiatives. Change managers and change leaders, in their various
capacities, contribute to the overall success of organizational transformation. This
inclusive perspective acknowledges that effective change stewardship involves a blend of
strategic vision, tactical execution, and the ability to navigate the complexities of human
dynamics within an organization.
However, we remain attuned to the potential nuances that might necessitate
differentiation between change management and change leadership. Instances where a
distinction becomes relevant will be thoughtfully addressed and explained. This
flexibility allows us to cater to the diverse ways in which these roles manifest across
different organizational contexts, industries, and phases of the change process.
Furthermore, we recognize that personal and contextual preferences play a pivotal
role in shaping the approach individuals adopt in managing or leading change. Some may
naturally gravitate towards a more structured and process-oriented managerial style,
while others may embrace a visionary and inspirational leadership approach. The
contextual demands of a particular change initiative, organizational culture, and the
nature of the challenges faced can also influence the manifestation of management and
leadership roles.
In essence, our exploration of change dynamics will embrace the multifaceted
nature of managerial and leadership functions. This approach aligns with the
contemporary understanding that effective change agents draw from a diverse toolkit,
seamlessly integrating management and leadership qualities as they navigate the intricate
landscape of organizational transformation. As we delve into the intricacies of change
processes, we will remain attentive to the richness of these roles and the ways in which
they converge and diverge within the tapestry of organizational change.
b. Images, Mental Models, Frames, Perspectives
More important than the terminology, the internal mental images that we have of
our organizations influence our expectations and our interpretations of what is happening,
and of what we think needs to change, and how. We typically hold these images,
metaphors, frames of reference, or perspectives without being conscious of how they
color our thinking, perceptions, and actions. These images, which can also be described
as mental models, help us to make sense of the world around us, by focusing our attention
in particular directions. The key point is that, while an image or mental model is a way of
seeing things, a standpoint drawing our attention to particular issues and features, it is
also a way of not seeing things, shifting our attention away from other factors, which may
or may not be significant.
For example, if we have a mental image of organizations as machines, then we
will be more aware of potential component “breakdowns” and see our role in terms of
maintenance and repair. In contrast, if we think of organizations as political arenas, we
are more likely to be aware of the hidden agendas behind decisions and try to identify the
winners and losers. We are also likely to see our role, not as maintaining parts of a
smooth-running machine, but as building coalitions, gathering support for our causes, and
stimulating conflict to generate innovation. Shifting the lens again, we may see our
organizations as small societies or “microcultures.” With this image, we are more likely
to focus on “the way things get done around here,” and on how to encourage the values
that are best aligned to the type of work that we do. A microculture image highlights the
importance of providing vision and meaning so that staff identity becomes more closely
associated with the work of the organization. Each frame thus orients us to a different set
of issues.
There are no “right” and “wrong” images here. These are just different lenses
through which the world in general, and organizations in particular, can be seen and
understood. The images or lenses that we each use reflect our backgrounds, education,
life experiences, and personal preferences. There are some problems for which a
“machine” image may be more appropriate, and other problems where a “microculture”
image is relevant. Some problems may best be understood if they are approached using
two or three images or lenses at a time.
Those who are responsible for driving and implementing change also have their
own images of organizations—and more importantly, images of their role as change
manager. Those images clearly influence the ways in which change managers approach
the change process, the issues that they believe are important, and the change
management style that they will adopt. Like the child with a hammer who treats every
problem as if it were a nail, the change manager is handicapped in drawing on only one
particular image of that role. It is therefore important, first, to understand one’s personal
preferences—perhaps biases—in this regard. It is also important, second, to be able to
switch from one image of the role to another, according to circumstances. This ability to
work with multiple perspectives, images, or frames concerning the change management
role is, we will argue, central to the personal effectiveness of the change manager and
also to the effectiveness of the change process.
Embarking on our exploration of managing change, we delve into six distinct
"ideal type" images that encapsulate various perspectives and approaches to
organizational change. Each of these images is underpinned by specific assumptions and
theoretical viewpoints, offering a comprehensive framework for understanding the
diverse philosophies that guide change management. As we navigate through these
images, we will unravel the theoretical foundations that support each perspective,
shedding light on the intricacies of managing change in organizations.
As we unfold these diverse images, our exploration will extend beyond theoretical
frameworks. We will delve into practical implications, illustrating how change managers
can draw from and leverage these multiple perspectives. The recognition of the
complexity and multifaceted nature of organizational change positions these ideal types
as lenses through which change initiatives can be understood and navigated.
By acknowledging and integrating these diverse images, change managers gain a
more nuanced and adaptive toolkit. The interplay of rationality, adaptability, systems
thinking, social dynamics, political acumen, and cultural awareness collectively enriches
the repertoire of change management strategies. In subsequent discussions, we will delve
into practical applications, showcasing how a holistic understanding of these images can
empower change managers to navigate the intricate landscape of organizational
transformation with greater efficacy and foresight.
c. The Six-Image Framework
How are our images or mental models of organization and change formed? To
answer this question, Ian Palmer and Richard Dunford (2002) first identify two broad
images of the task of managing, which can be seen as either a controlling or as a shaping
activity. They then identify three broad images of change outcomes, which can be seen as
intended, partially intended, or unintended. Why focus on change outcomes and not on
the change process in this approach? The outcomes of change do not always depend
entirely on the decisions and actions of those who are implementing change. Change
outcomes are often affected by events and developments outside the organization, and
which are beyond the direct control of individual change managers, whose intentions may
be swamped by those external factors. How change managers see those outcomes is
therefore a significant component of their image of the change management role.
The image of management as a controlling function has deep historical roots,
based on the work of Henri Fayol (1916, 1949) and his contemporaries (Gulick and
Urwick, 1937) who described what managers do, captured by the clumsy acronym
POSDCoRB. This stands for planning, organizing supervising, directing, coordinating,
reporting, and budgeting—activities that the change manager, as well as the general
manager, may be expected to carry out. This reflects a “top-down,” hierarchical view of
managing, associated with the image of organization as machine. The manager’s job is to
drive the machine in a particular direction. Staff are given defined roles. Resources
(inputs) are allocated to departments to produce efficiently the required products and/or
services (outputs). This image is today reflected in the work of Henry Mintzberg (2009),
who describes contemporary management roles in terms of deciding, focusing,
scheduling, communicating, controlling, leading, networking, building coalitions, and
getting things done. Harold Sirkin et al. (2005) argue that “soft” factors such as culture,
leadership, and motivation do not significantly affect the success of organizational
change, and that change managers should concentrate on the “hard” factors instead—
controlling, communicating, scheduling, monitoring.
This image of management as a shaping function, enhancing both individual and
organizational capabilities, also has deep roots, based on the “human relations” school of
management from the 1930s (Roethlisberger and Dickson, 1939; Mayo, 1945). It has also
been influenced by the organization development movement (Bennis, 1969; Burke,
1987). This image is associated with a participative management style that encourages
involvement in decision making in general, and in deciding the content and process of
change in particular. Employee involvement in change is based on two assumptions.
First, that those who are closest to the action will have a better understanding of how
things can be improved. Second, that staff are more likely to be committed to making
changes work if they have contributed to the design of those changes. Managing people is
thus concerned with shaping (and not directly controlling) behavior in ways that benefit
the organization. The contemporary concern with “employee engagement” is another
manifestation of this image. From a global survey of over 2,500 executives carried out by
McKinsey, a management consultancy, Keller et al. argue that the success of
transformational change depends on “engaging employees collaboratively throughout the
company and throughout the transformation journey,” and on “building capabilities—
particularly leadership capabilities.”
The central tenet of the "Rational Image" of managing change is anchored in the
prevailing assumption that intended change outcomes can be systematically and precisely
achieved as planned. This foundational belief has wielded significant influence, not only
shaping the discourse on organizational change but also permeating management
practices for an extensive period, spanning over half a century, as underscored by Burnes
(2014). Within this paradigm, change is perceived as the concrete realization of
predetermined goals through the orchestrated actions of change managers.
The "Rational Image" encapsulates a perspective deeply entrenched in classical
management theories that emphasize a rational and systematic approach to organizational
change. In this framework, change is conceptualized as a linear and predictable process,
wherein change managers meticulously design interventions and strategies with the
explicit aim of achieving predefined objectives. The assumption here is that a clear
understanding of the organization's current state, coupled with a well-crafted plan, can
lead to the precise realization of desired future states.
This image operates on the belief that change can be carefully engineered through
logical decision-making, comprehensive planning, and methodical implementation. The
role of change managers within this context is akin to architects or engineers,
meticulously crafting blueprints and overseeing the construction of organizational change
initiatives. The emphasis on intentionality, foresight, and control characterizes the
essence of this rational perspective.
While the "Rational Image" has been a dominant force in guiding change
management practices, it is not without its critiques. Critics argue that this perspective
tends to oversimplify the complex and dynamic nature of organizational ecosystems. The
assumption that change outcomes can be precisely predicted and controlled may overlook
the inherent unpredictability and emergent nature of organizational life.
In an extended exploration of the "Rational Image," it becomes imperative to
scrutinize both its strengths and limitations. On the one hand, the structured and plan-
driven approach provides a sense of clarity and direction, instilling confidence in
stakeholders. On the other hand, the potential mismatch between planned outcomes and
the evolving reality of organizations raises questions about the adaptability and
responsiveness of this paradigm in the face of dynamic and unforeseen challenges.
As we delve further into the nuances of the "Rational Image" in subsequent
discussions, we will unpack the practical implications of this perspective, examining its
application in different organizational contexts and exploring how change managers can
navigate the complexities of implementing change with a rational lens. The ongoing
discourse surrounding this image invites a critical examination of its assumptions,
contributing to a broader and more nuanced understanding of managing change in
contemporary organizational landscapes.
In this image, it is assumed that some, but not all, planned change outcomes are
achievable. Power, processes, interests, and the different skill levels of managers affect
their ability to produce intended outcomes. As Mintzberg and Waters (1985) note, the
link between initial intent and final outcome is not necessarily a direct one. This is due to
the fact that both intended and unintended consequences may emerge from the actions of
change managers; intended outcomes may be adapted along the way, or externally
imposed forces may modify what was originally intended. For these reasons, change
initiatives do not always deliver the outcomes that were planned.
Less attention has been paid to this image in commentary on change management,
but this is a common theme in mainstream organization theory. This image recognizes
that managers often have great difficulty in achieving the change outcomes that were
intended. This difficulty stems from the variety of internal and external forces that can
push change in unplanned directions. Internal forces can include interdepartmental
politics, long-established working practices that are difficult to dislodge, and deep-seated
perceptions and values that are inconsistent with desired changes. External forces can
include confrontational industrial relations (which can bring management-inspired
changes to a standstill), legislative requirements (tax demands, regulatory procedures), or
industry-wide trends affecting an entire sector (trade sanctions, run on the stock market).
These internal and external forces typically override the influence of individual change
managers, whose intentions can be easily swamped. On occasion, of course, intentions
and outcomes may coincide, but this is often the result of chance rather than the outcome
of planned, intentional change management actions.
d. Six Images of Change Management
The director image views management as controlling and change outcomes as
being achievable as planned. The change manager’s role here, as the title indicates, is to
steer the organization toward the desired outcomes. This assumes that change involves a
strategic management choice upon which the well-being and survival of the organization
depends. Let us assume that an organization is “out of alignment” with its external
environment, say, with regard to the information demands of a changing regulatory
system and the more effective responses of competitors. The change management
response could involve a new corporate IT system, to capture more efficiently and to
analyze larger volumes of data. The director image assumes that this can be mandated,
that the new system can be implemented following that command and that it will work
well, leading to a high-performing organization that is more closely aligned to its external
environment.
What theoretical support does this image have? there are a number of “n-step”
models, guidelines, or “recipes” for change implementation that are based on the image
of the change manager as director. The change manager is advised to follow the steps
indicated (the number of steps varies from model to model), more or less in the correct
sequence, and regardless of the nature of the change, in order to ensure successful
outcomes. These models are united by the optimistic view that the intended outcomes of
change can be achieved, as long as change managers follow the model. One of the best
known “n-step” models was developed by John Kotter (1995), who advocates a careful
planning process, working through the eight steps in his approach more or less in
sequence, and not missing or rushing any of them. Even Kotter acknowledges that change
is usually a messy, iterative process. Nevertheless, he remains confident that, if followed
correctly, his “recipe” will increase the probability of a successful outcome.
In the navigator image, control is still at the heart of management action, although
a variety of external factors mean that, although change managers may achieve some
intended change outcomes, they may have little control over other results. Outcomes are
at least partly emergent rather than completely planned, and result from a variety of
influences, competing interests, and processes. For example, a change manager may wish
to restructure a business unit by introducing cross-functional teams to assist product
development. While a change manager may be able to establish teams (an intentional
outcome), getting them to work effectively may be challenging if there is a history of
distrust, information hoarding, and boundary protection by the business units. In this
situation, functional managers may appoint to the cross-functional teams people who they
know will keep the interests of their department uppermost and block any decisions that
might decrease their organizational power (an unintended outcome of putting the teams in
place).
Exploring why change initiatives stall, Eric Beaudan (2006, p. 6) notes, “No
amount of advance thinking, planning and communication guarantees success. That’s
because change is by nature unpredictable and unwieldy. The military have a great way
to put this: ‘no plan survives contact with the enemy.’” He also argues that “leaders need
to recognize that the initial change platform they create is only valid for a short time.
They need to conserve their energy to confront the problematic issues that will stem from
passive resistance and from the unpredictable side effects that change itself creates”
(Beaudan, 2006, p. 6). Change may be only partially controllable, with change managers
navigating the process toward a set of outcomes, not all of which may have been
intended.
What theoretical support does this image have? Processual theories argue that
organizational changes unfold over time in a messy and iterative manner, and thus rely on
the image of change manager as navigator (Langley et al., 2013; Dawson and
Andriopoulos, 2014). In this perspective, the outcomes of change are shaped by a
combination of factors including the past, present, and future context in which the
organization functions, including external and internal factors; the substance of the
change, which could be new technology, process redesign, a new payment system, or
changes to organization structure and culture; the implementation process (tasks,
decisions, timing); political behavior, inside and outside the organization; and the
interactions between these factors. The role of the change manager is not to direct, but to
identify options, accumulate resources, monitor progress, and navigate a way through the
complexity.
Change managers must accept that there will be unanticipated disruptions, and
that options and resources need to be reviewed. Change navigators are also advised to
encourage staff involvement. For senior management, rather than directing and
controlling the process, the priority is to ensure receptivity to change and that those
involved have the skills and motivation to contribute. However, given the untidy,
nonlinear nature of change processes, navigators—consistent with the metaphor—have
room to maneuver; the course of change may need to be plotted and replotted in response
to new information and developments. There is no guarantee that the final destination
will be that which was initially intended. In some instances, change may be ongoing, with
no clear end point.
In the caretaker image, the (ideal) management role is still one of control,
although the ability to exercise that control is severely constrained by a range of internal
and external forces that propel change relatively independent of management intentions.
For example, despite the change manager’s desire to encourage entrepreneurial and
innovative behavior, this may become a failing exercise as the organization grows,
becomes more bureaucratic, and enacts strategic planning cycles, rules, regulations, and
centralized practices. In this situation, the issues linked to inexorable growth are outside
the control of an individual change manager. In this rather pessimistic image, at best
managers are caretakers, shepherding their organizations along to the best of their ability.
Theoretical support for the caretaker image can be drawn from three organizational
theories: life-cycle, population ecology, and institutional theory.
Life-cycle theory views organizations passing through welldefined stages from
birth to growth, maturity, and then decline or death. These stages are part of a natural
developmental cycle. There is an underlying logic or trajectory, and the stages are
sequential © Jeff DeWeerd/Getty Images (Van de Ven and Poole, 1995). There is little
that managers can do to prevent this natural development; at best they are caretakers of
the organization as it passes through the various stages. Harrison and Shirom (1999)
identify the caretaker activities associated with the main stages in the organizational life
cycle, and these are summarized. Change managers thus have a limited role, smoothing
the various transitions rather than controlling whether or not they occur.
In the coach image, the assumption is that change managers (or change
consultants) can intentionally shape the organization’s capabilities in particular ways.
Like a sports coach, the change manager shapes the organization’s or the team’s
capabilities to ensure that, in a competitive situation, it will be more likely to succeed.
Rather than dictating the state of each play as the director might do, the coach relies on
establishing the right values, skills, and “drills” so that the organization’s members can
achieve the desired outcomes.
What theoretical support does this image have? Organization development (OD)
theory reinforces the image of the change manager as coach, by stressing the importance
of values such as humanism, democracy, and individual development. OD
“interventions” are designed to develop appropriate skills, reduce interpersonal and
interdivisional conflict, and to structure activities in ways that help the organization’s
members better understand, define, and solve their own problems. As the OD movement
evolved, the emphasis shifted from team-based and other small-scale interventions to
organizationwide programs, designed to “get the whole system in the room” (Weisbord,
1987, p. 19; Burnes and Cook, 2012). As a movement underpinned by values, OD
advocates can be evangelical about the advantages of helping organization members
develop their own skills in problem solving to achieve their intended outcomes, claiming
not only that the approach works but that it produces results with less resistance, greater
speed, and higher commitment (Axelrod, 1992).
e. Environmental Pressures for Change
Managers are faced with a paradox. On the one hand, organizations are advised to
change rapidly, or perish (Kotter, 2012). On the other, management is advised to avoid
the risks of implementing too much change too quickly (Bruch and Menges, 2010). As
noted, evidence suggests that the failure rate of planned change programs is high. One
survey of senior executives found a success rate of only 30 percent (Keller and Aiken,
2008). Another, more optimistic study found that less than 60 percent of reorganizations
are successful (CIPD, 2014).
As failures of organizational change appear to be widespread, and widely
acknowledged, what drives managers to embark on such risky ventures? One answer is
based on an economic perspective, and is aligned to “management as control” images and
assumptions: In competitive economies, firm survival depends on satisfying shareholders.
Failure to do this will lead investors either to move their capital to other companies, or to
use their influence to replace senior management. Managers thus introduce change to
improve organizational performance in terms of profitability and higher company share
prices.
To understand why managers embark on apparently risky change ventures, this
begins by exploring the environmental pressures—some will argue imperatives—for
organizational change. We then consider why some managers do not respond to such
pressures. We take that discussion into an exploration of why “remedial” change often
does not happen where it would be expected, following accidents, disasters, and other
crises. Finally, we explore the numerous internal organizational pressures for change. It is
important to recognize that there are many triggers of organizational change, and that
those that are discussed here do not represent a comprehensive list.
Environmental pressures are explanations for change. These pressures take many
forms, and include opportunities (e.g., new technologies, products, and markets) as well
as threats (e.g., falling market share, tighter regulation, bad investments). At the extreme,
change may be necessary to avoid going out of business altogether. Here, we will explore
six sets of external environmental pressures that can lead to change. Change may come
about as a response to fashion; demographic trends; external mandate; globalization and
related geopolitical developments; “hypercompetition”; and threats to corporate
credibility and reputation. An organization and its management rarely have the luxury of
facing only one of these external environmental pressures at any given time. For many
organizations in developed economies, most, if not all, of these pressures are constantly
active, and all may be considered to be high priority.
In 2001 Boeing, the well-known aircraft manufacturing company, initiated a
series of changes under the direction of its chief executive, Philip M. Condit (Holmes et
al., 2001). Condit was frustrated by the slow pace of change in the company, and
concerned about slow growth in sales of commercial jet aircraft. His changes were
similar to those introduced by Jack Welch at General Electric (GE), a multinational
conglomerate that was widely recognized for its successful transformational changes.
Eric Abrahamson (1996) points out that, while appearing to be novel and
valuable, many fads lack the systemic research that would legitimate their claims to
enhance performance. The “fashion setters,” including consulting firms, management
gurus, business publications, and business school academics, do not necessarily profit
from the critical assessment of these ideas. Some fads do benefit some organizations, but
Abrahamson also argues that some fads—downsizing, for example—can have
devastating implications for organizations and their employees. One reason for the failure
of fads to deliver their promise is that most new methods, approaches, and techniques
have to be tailored to the circumstances of each new setting. It is rarely possible to copy
exactly what another organization has done and expect to achieve the same benefits over
the same period of time.
It is unlikely that managers will succumb continually to pressures to implement
fashionable changes that have limited benefits. Market forces and customer preferences
propel organizations in some directions, and not in others. Fads go through cycles. An
innovative idea first attracts the attention of journalists, academics, and consultants, and
this is valuable in terms of codifying and publicizing new working practices. However,
one result of this attention is to heighten expectations, which can then be dashed as
further applications fail to deliver as promised. Enthusiasm can then be replaced by
skepticism, and organizations start hunting for “the next big thing.”
Demographic changes, affecting workforce composition and motivation, pose
some of the greatest challenges for organizational change management in the twenty-first
century. In all industrialized economies, the workforce is ageing, as we live longer and
have fewer children. In 2010, the average (median) age of Americans rose to 37.2. In
2000, it was 35.3. The proportion of the population who have retired from employment is
growing relative to the proportion still in work. This is an accelerating global
phenomenon. In the United States, the percentage of the population aged 65 or over is
expected to double, from only 10 percent in 1970 to 20 percent in 2050.
Baby Boomers have been described as a silver tsunami sweeping across affected
countries (The Economist, 2010). This ageing population has social consequences.
Boomers who were born after the Second World War (which ended in 1945) started
celebrating their 60th birthdays from around 2006. In 2014, the global population of
those aged 65 or more was 600 million; it was predicted that, by 2034, that population
would almost double, to 1.1 billion (The Economist, 2014, p. 11). Boomsday, by
Christopher Buckley (2007), is a fictional account of the anger of younger generations
whose taxes pay for the pensions, health, and welfare of those Boomers in their old age.
Governments have tried to raise retirement ages to reduce the drain on welfare,
healthcare, and pension budgets.
In the context of managing organizational change, and given these demographic
trends, the contributions of vision and communications are likely to be central to
engaging the commitment and motivation of those who are going to be involved. Human
resource management policy and practice will need to emphasize teamwork,
collaboration, flexible working, flexible retirement, project work, short-term assignments,
opportunities to support external causes, and eco-friendly work environments. Another
valuable practice may involve intergenerational mentoring; Boomers often welcome the
chance to mentor and support Gen Ys, who can share their potentially better
understanding of social networking technologies.
Generation C is the label given to those born after 1990. “C” stands for
“connected, communicating, content-centric, computerized, community oriented, always
clicking” (Friedrich et al., 2011, p. 3). This is the first generation to have grown up with
the Internet, social media, and mobile handheld computing, for whom 24/7 mobile and
Internet connectivity are taken for granted and freedom of expression is the norm. These
technologies encourage more flexible forms of working, and less hierarchical
organizations, and they are blurring the boundaries between work and personal life.
By 2020, Gen C will make up over 40 percent of the population in America,
Europe, and the BRIC countries (Friedrich et al., 2011). Gen C will be “on the grid 24/7”:
being connected around the clock is normal. The number of mobile phone users in the
world is expected to grow from 4.6 billion in 2012 to 6 billion in 2020. Over the same
period, the number of Internet users will increase from 1.7 billion to 4.7 billion. Gen C
will thus have a wide range of personal relationships driven by social networks, voice
channels, online groups, blogs, and electronic messaging. These facilities will create fast-
moving business and political pressures as information and ideas spread more widely,
more quickly. Most Gen C employees will bring their own computers to work rather than
use corporate resources. There will probably be more work done by virtual project
groups, with fewer face-to-face meetings, and less frequent travel. Organizations will
probably have to change working conditions and practices to accommodate those
preferences, and to exploit the opportunities.
In 1996, ChevronTexaco (then Texaco) settled a racial discrimination lawsuit for
$176 million. The suit was filed by the company’s African-American staff, who alleged
that managers and employees were involved in racist acts. They claimed that racism was
institutionalized in the company’s culture and practices to such an extent that it “caused
Texaco to be branded the worst of corporate rogues” (Labich, 1999). The settlement
followed other companies such as Shoney’s, which in 1992 paid $133 million to settle a
discrimination suit on behalf of 20,000 people, and Denny’s, which in 1994 paid $54
million to settle two cases in which customers claimed the restaurant had not served or
seated them (Faircloth, 1998). In 2000 Coca-Cola settled a case for $192 million (Salter,
2003).
The settlement agreements for ChevronTexaco and Coca-Cola included
organizational changes, to establish external diversity task forces and to monitor
company practices and ensure fair treatment for minorities (Salter, 2003). Both
companies were under court orders to improve their record on diversity management.
This led to other changes in corporate policies and cultural practices. For example, at
ChevronTexaco, staff had to attend diversity training, managers attended communication
courses, minorities were targeted for new hires, and key executive appointments were
made to symbolize the shift in culture. New change programs were implemented to
eliminate racism from hiring, retention, and promotion decisions (Labich, 1999). In
September 2002, the fifth report of ChevronTexaco’s Equity and Fairness Task Force
outlined the changes made in the 1996 settlement; there were still some problems to be
solved, but the company culture had changed for the better.
It is now widely accepted that organizations should support a range of
environmental as well as social causes. The economist Milton Friedman (1970) once
argued, “The business of business is business.” His view is now unfashionable. The
corporate social responsibility (CSR) movement expects companies to promote
environmental or “green” issues as well as social policies. This has become a major
source of pressure for change. Many organizations are addressing these issues, to
strengthen their reputations as “responsible corporate citizens.” The importance of this
viewpoint has been highlighted in the twenty-first century by the corporate scandals at
Enron, WorldCom, and the Japanese company livedoor, where executives were accused
of fraudulent transactions that benefitted them personally. These cases led to new
regulations affecting corporate governance in America—the infamous Sarbanes-Oxley
Act of 2002. Expensive and cumbersome to implement, that legislation was designed to
restore public confidence by improving corporate accounting controls.
In the twenty-first century, developed Western economies see both threats and
opportunities in the economic growth of countries such as Brazil, Russia, India, and
China— the so-called BRIC economies. Those economies have lower labor costs and
have become attractive locations for manufacturing operations and for customer service
call centers. There is a widespread perception that “outsourcing” manufacturing and
service operations in this way is happening at the expense of jobs in North America and
Europe. Collectively, these trends and developments have been captured by the label
globalization—the intensification of worldwide social and business relationships that link
localities in such a way that local conditions are shaped by distant events.
Natural disasters in one part of the world can have global consequences. In March
2011, one of the strongest earthquakes ever recorded occurred off the northeast coast of
Japan. The earthquake triggered a cascading event sequence that included a tsunami
followed by containment failures at the Fukushima nuclear power plant. These events led
to considerable loss of life, damage to property, disruption to business, damage to the
Japanese economy, and censure for government ministers and power company managers
for regulatory failures contributing to the power plant problems (Kingston, 2012). The
quake and tsunami closed key ports and airports and disrupted the global supply chain for
semiconductor products (of which Japan produces 20 percent). Honda, Mitsubishi,
Nissan, Suzuki, and Toyota suspended their car manufacturing operations, and Nissan
considered moving a production line to the United States. Component supplies to Boeing
and Sony were also disrupted. The terrorist attacks on New York on September 11, 2001,
and the outbreak of severe acute respiratory syndrome (SARS) were radically different
crises that also had global implications for a range of organizations, and not just airlines
and related businesses.
In the face of such events, companies may need to review supply chains, joint
ventures, the locations of their facilities, and other investment decisions. Many types of
geopolitical event can have consequences for organizations that trade with and/or have
investments in affected regions. Examples include civil war (e.g., Syria, since 2011),
political instability (e.g., Egypt, since 2011), and other international geopolitical tensions
(e.g., Russia and Ukraine, since 2014). Organizations may simply withdraw facilities and
discontinue relationships with regions and organizations perceived to represent physical
or financial risks. In 2001, faced with escalating violence from separatist Aceh rebels,
Exxon suspended gas production at its Arun facility in Indonesia and evacuated its staff.
In 1998 Gateway, the personal computer company, faced fierce competition,
overshadowed by Dell, its direct-sales rival. Gateway founder and chief executive Ted
Waitt took the company through a major restructuring, hiring 10 new top managers and
changing the way the company went about doing business, including its name, products,
alliances, and business strategy (Kirkpatrick, 1999). In 2008, the California-based battery
and electric powertrain maker Tesla launched its first all-electric sports car, the Roadster.
Tesla was not previously considered to be in the automotive manufacturing sector.
Rejecting the traditional automotive dealership model, Tesla sold its cars directly to
customers through “galleries” located in shopping malls. The first driverless cars are
likely to have been developed by Google, an Internet services company. The Internet and
smartphones have also generated innovative business models, such as the “freemium,”
where customers get the basic product free and pay a premium, usually a subscription, for
more powerful functions. Examples include LinkedIn, Dropbox, Spotify, and
NYTimes.com (Kumar, 2014). In 2013, the U.S. Central Intelligence Agency awarded a
$600 million contract for a data center, not to IBM or another computer company, but to
Amazon, an online retailer.
f. Why Do Organizations Not Change in Response to Enviromental Pressures?
Not all organizations adapt when faced with external pressures. In the 1990s, Walt
Disney did not rectify its corporate governance until prompted by other similar scandals.
Nike was slow to respond to criticism for having products made offshore in exploitative
working conditions. It is not clear, therefore, whether environmental pressures facilitate
or inhibit adaptation and innovative organizational change. Organizational learning
theorists argue that environmental pressures do lead to change, as managers learn from
problems and try to close the gap between performance and aspirations. Threat-rigidity
theory, however, argues that pressures inhibit change, as management decisions become
constrained when faced with threatening problems.
Clark Gilbert (2005, 2006) considers the case of an organization facing
discontinuous change, triggered by fundamental shifts in its operating environment. One
example is the development of digital media, which have affected traditional “hard copy”
newspaper (and textbook) print products. Gilbert argues that change results from
performance gaps. These gaps may be threat-based, such as a decline in sales and profit.
Gaps may also be opportunity-based, such as developing new products. Threats,
however, can trigger rigid behavioral responses, restricting information flow,
constraining decisions, and emphasizing control over existing resources. Opportunity-
based responses, on the other hand, may suggest new, flexible ways of working, but
because current capabilities and practices remain successful, commitment to change may
be lacking.
Gilbert argues that this paradox occurs because “it is not that one set of
capabilities suddenly becomes obsolete, to be replaced with another. Rather, it stems
from the fact that the path from one capability to the other is not continuous. In such
settings, the previous position may continue to evidence residual fit, even while the new
position expands and develops” (Gilbert, 2006, p. 151). IBM continued to develop its
mainframe products for 20 years, despite the emergence of the minicomputer market that
fundamentally changed the industry. The paradox suggests that companies in this
situation need to be able to have coexisting frames that focus on both threats and
opportunities, one frame protecting current business and the other helping to move the
company into new arenas. This can be achieved, for example, through structural
differentiation, with separate organizational units dominated by different cognitive
frames. Senior management must be able to integrate these competing frames, ensuring
that the company takes appropriate, timely actions across its operations.
“Trapped by success” is another reason why organizations can fail to respond to
pressures for change. Sull (1999) argues that successful companies may be trapped by
their “winning formula” when conditions change. Arrogance founded on success can lead
to the assumption that market dominance will continue unchallenged. Cognitive frames
thus become blinkered by success; operating routines become embedded as correct;
relationships with stakeholders inhibit the exploration of new ventures; shared beliefs
become company dogma. Organizations can thus become “learning disabled” and not
respond appropriately to pressures for change. Some commentators argue that Nestlé was
slow to respond to the impact of the Internet because of the long-term market success of
its brands. That success linked a risk-averse culture to a bureaucratic structure. Similarly,
one interpretation of Dell’s declining fortunes in 2006 is that it “succumbed to
complacency in the belief that its business model would always keep it far ahead of the
pack” (Byrnes et al., 2007).
It is tempting to think of the environment, “the world out there,” as a physical
presence generating pressures to which management then has to respond. That notion has
been challenged by the strategic choice perspective, which argues that organizations
make or “enact” their own environments by deciding the sectors and markets in which
they will operate. Those decisions are typically based on the personal preferences of
powerful senior managers (Child, 1972, 1997). The strategic choice perspective
challenged the view that an organization’s internal structure and processes were largely
determined by external contingencies and that managers were therefore limited to
ensuring that the organization was appropriately adapted to its context.
Advocating the “enacted environment” perspective, Linda Smircich and Charles
Stubbart (1985) also argue that “the outside world” is a construction based on individual
perceptions. Even within a single organization, managers are likely to interpret
differently what is happening in the external environment and to reach different
conclusions with regard to changes that may or may not be desirable. William Bogner
and Pamela Barr (2000) take this position further, arguing that managers’ sense-making
contributes to the perpetuation of hypercompetitive environments. They suggest that
managers’ cognitive frameworks influence what they notice, how they interpret events,
and the resultant actions.
g. Why Do Organizations Not Change after Crises?
Why would organizations not implement change following accidents, crises, and
disasters, in order to prevent further similar events? This is a situation in which it might
be assumed that change would be welcome, automatic, straightforward. Expectations and
receptiveness should be high, resistance low. The evidence shows, however, that these
assumptions are often incorrect. Victoria Climbié, an eight-year-old girl, was killed by
her guardians in the London borough of Haringey in 2000. The public inquiry into her
death, chaired by Lord Laming (2003), blamed systemic failures among the agencies
responsible for monitoring vulnerable children: local authority, social services, National
Health Service, police. The inquiry made 108 recommendations. In 2007, also in
Haringey, 17-month-old Peter Connelly was killed by his mother and her boyfriend,
while under the supervision of the same agencies that had failed Victoria (Care Quality
Commission, 2009; Laming, 2009).
These cases attracted significant press and media coverage in the United
Kingdom. Interviewed in January 2008, Laming observed that many child protection
agencies had ignored his recommendations (BBC, 2008). Asked how he felt about similar
cases of child abuse since his report in 2003, Laming replied, “I despair about the
organizations that have not put in place the recommendations which I judged to be little
more than good basic practice. I reject the notion that any of this is rocket science. I
believe this is about day by day good practice, and I am disappointed if there are
organizations that took several years to put in place recommendations that I judged could
be put in place within a matter of months.” Victoria and Peter suffered appalling abuse.
Press coverage included graphic images of their injuries. How could a similar tragedy
occur in the same setting? Why were Laming’s (2003) recommendations not all
implemented if they were “good practice”?
This is a recurring narrative that applies to many different kinds of event. Another
iconic example concerns the losses of the NASA space shuttles Challenger (1986) and
Columbia (2003), the causes of which displayed striking similarities (Vaughan, 1996;
Columbia Accident Investigation Board, 2003; Mahler and Casamayou, 2009). The
NASA shuttle losses were complex incidents, and they have been subjected to exhaustive
analysis, but two conclusions are significant. First, although the immediate causes of
these disasters were technical (O-ring failure; foam insulation damaged a wing), the main
contributory causes were organizational: budget pressures, launch program expectations,
management style, subcontractor relationships. Second, there were failures in
organizational learning offer an interesting analysis of what NASA learned from the
Challenger disaster, what was not learned from that event, and what was learned but
subsequently forgotten—leading ultimately to the Columbia disaster.
In explaining why organizations do not change following crises, Amy Edmondson
(2011, p. 49) notes the effort that goes into after-action reviews, postmortems, and
investigations: “Time after time I saw that these painstaking efforts led to no real
change.” The problem, Edmondson argues, is that most managers think that failures are
bad (some are), and that learning from these events is straightforward (ask people what
went wrong and tell them to avoid similar mistakes in future). Both of those views, she
argues, are incorrect. Failure is not always bad, and learning from organizational failures
is complex; it is almost always necessary to look further than “procedures weren’t
followed.” That involves what she calls “first-order reasoning,” looking at immediate
causal factors such as the failed O-ring. She argues that it is also necessary to understand
the second- and third-order reasons. That is challenging because complex failures
typically involve combinations of many events across different parts of an organization
over time.
The context following an extreme event may itself be nonroutine, rendering
conventional change guidance (participation, communication) difficult to apply.
Receptiveness may be low if the incident is seen as atypical, and recommended changes
may be seen as a costly overreaction. In cases of mistake or misconduct, controls
imposed to deter “the guilty” also apply to “the innocent,” fostering resentment. The
membership of an investigating team influences both the nature and credibility of
recommendations. Different stakeholders and advocacy groups may disagree with each
other’s opinions and may use the incident to pursue other agendas (Smith and Elliott,
2007). Externally imposed change, by an inquiry or regulatory body, may not be seen as
legitimate. Introducing changes while emotions are running high may increase anxiety
and resistance (Bowers et al., 2006); change under “normal” conditions is often stressful,
without the complication of an extreme event.
Buchanan (2011) also argues that implementing a defensive change agenda may
be less appealing for the change manager. The main indicator of the success of that
agenda is the nonoccurrence of the next event. That may be less exciting than the
development of something new (products, systems, business models), which in career
terms is also likely to be more rewarding. It may be helpful therefore, in a post-incident
context, to design a change agenda that marries progressive and developmental
components with defensive, preventive elements.
h. Organizational Models
With regard to organizational change, what is the problem? Can we improve our
understanding of the context and nature of the problem? And can this diagnostic
approach help us to solve the problem, or problems, that we find? In short—what has to
change? This introduces a number of diagnostic frameworks and tools. Some diagnostic
models consider the operation of the organization as a whole, such as the “7-S Model.”
Others, such as “scenario planning,” start with strategy. Some are designed to explore
specific aspects of the change process, such as organizational and individual readiness for
change. The “built-to-change” model argues that organizations can be designed in a way
that makes “change management” diagnostic tools redundant.
Who does the diagnosing? This is an important question, and answers vary. Some
perspectives see this as a senior management prerogative, perhaps also involving external
consultants and advisers. Those consultants may use their diagnostic expertise to help
their clients to manage the change process, rather than to determine the content of the
changes. However, other perspectives emphasize the need to involve at the diagnostic
stage those who will be affected by change; involvement can strengthen commitment to
the change process, and thus increase the probability of success. Some organization
development (OD) consultants explicitly reject the role of “diagnostician,” arguing that
their role is to help the organization’s members to do this for themselves.
Marvin Weisbord (1976, p. 431) developed one of the first organizational
diagnostics, which he described as “my efforts to combine bits of data, theories, research,
and hunches into a working tool that anyone can use.” In the context of our discussion of
implicit and explicit models, it is interesting to note that Weisbord subtitled his article,
“Six Places to Look for Trouble With or Without a Theory.” As a change diagnostic,
therefore, this model has two main applications. First, in providing a small set of
categories that simplify (perhaps oversimplify) the complexity of an organization, this
facilitates the process of deciding which factors or sets of factors are generating
problems, and which therefore require attention. Second, it reminds the change manager
to consider the wider systemic implications of actions that address only one or two of
those categories or boxes.
The 7-S framework was developed by Robert Waterman, Tom Peters, and Julien
Phillips (1980) while they were working as management consultants with McKinsey &
Company. They argue that organizational effectiveness is influenced by many factors,
and that successful change depends on the relationships between those factors.
The star model of organizational design, developed by Jay Galbraith et al. (2002),
argues that, for an organization to be effective, its strategy, structure, processes, rewards,
and people practices have to be in alignment. This model thus overlaps with the
McKinsey 7-S framework. Strategy in this model plays a dominant role, because if the
strategy is not clear, then there is no basis for making other design decisions. Structure is
defined as the formal authority relationships and grouping of activities, as shown on an
organization chart.
Lee Bolman and Terry Deal (2013) explain four different frames or lenses, each
providing a different perspective on how an organization functions. Their aim is to
promote the value of “multiframe thinking,” which means seeing the same situation in
different ways. Problems arise, they argue, when we become locked into our one favored
way of seeing the world—and our organization—and then fail to see other critical aspects
or issues. We met frames before, in our discussion of mental models; same thing. The
structural frame in this model concerns the organization of groups and teams. The human
resource frame concerns how the organization is tailored to satisfy human needs and
build effective interpersonal relationships and teamwork. The political frame concerns
how power and conflict are dealt with, and how coalitions are formed. The symbolic
frame relates to how the organization builds a culture that gives purpose and meaning to
work and builds team cohesion.
i. Organization Strategy and Change
hese are general questions that almost always elicit a response—from staff at all
levels in an organization—and they are therefore a good basis for discussion. A key issue
concerns the degree of consensus in the responses of those who are asked. If everyone
agrees, then action may be rapid. However, if rapid action is not necessary in the
circumstances, it can be useful to deliberately orchestrate a challenge to the consensus.
That challenge could reinforce the consensus view, or it could prompt a reconsideration
of “taken for granted” assumptions. A low degree of consensus prompts further attention
to the organization’s goals, on the grounds that commitment to action should have a
reasonably broad base of agreement, at least concerning the first two questions.
Agreement on the third question may be desirable but is not necessary as long as there is
commitment to support the formal decision on the course of action to be taken.
Gap analysis is flexible with regard to focus and timescale. The first question can
relate to the organization as a whole, or to one or more divisions. If appropriate, it can
address a range of other specific issues: where are we now with regard to staff
engagement, updating our information systems, developing new product lines,
streamlining our procurement processes, and so on. The second question may ask, where
do we want to get to in six months, or two years, or five years, and so on. The simplicity
and flexibility of this tool make it both easy to use and powerful.
As a change diagnostic, this can be a helpful way of establishing a change agenda
(what do we need to do in order to get there?) that has been explored in depth and that is
understood by those involved. Through open discussion, the resultant agenda can gain a
high degree of consensus, but the disagreements that have been aired will also be known
and understood. One problem with gap analysis is that it often suggests a felt need for
deep, transformational change, which immediately generates an overwhelming and
potentially resource-intensive agenda.
PESTLE is an environmental scanning tool, which provides a structured method
for organizing and understanding complex trends and developments across the political,
economic, social, technological, legal, and ecological factors that can affect an
organization. This is an illustration, and is not comprehensive. The tidy categories in the
figure can overlap in practice; legislative changes may be politically motivated, and
ecological concerns reflect changing social values and preferences. The point of the
analysis, however, is to identify the environmental factors that may affect the
organization now and in the future.
Scenario planning involves the imaginative development of one or more likely
pictures of the characteristics of the possible futures for an organization sometimes, but
not necessarily, considering “best-case/worst-case” possibilities. The organization can
then plan an appropriate response to those futures (Verity, 2003). Recent concerns with
regard to geopolitical risks have made scenario planning more popular (see “Scenario
Planning in a High-Risk World, to 2018”). The results of a PESTLE analysis can of
course contribute to scenario development. The Royal Dutch/Shell Company was
responsible for developing scenario planning in the 1970s, and this tool is thus also
known as the “Shell method.”
Strategy is often considered to be at the heart of change because it addresses the
basic issues with which an organization has to deal: what are we seeking to achieve, and
how? Strategy and change intersect because strategies can change (“change of strategy”)
and change may be necessary in order to realize a set strategy (“change for strategy”).
Donald Hambrick and James Fredrickson (2001) developed a framework that
characterizes organization strategy in terms of five mutually reinforcing elements: arenas,
vehicles, differentiators, staging, and economic logic. Misalignment of these elements
indicates a potential need for change.
Strategy is about the future, committing resources to activities based on
“assumptions, premises and beliefs about an organization’s environment (society and its
structure, the market, the customer, and the competition), its mission, and the core
competencies needed to accomplish that mission” (Picken and Dess, 1998, p. 35). These
assumptions, premises, and beliefs, often formed over time through experience, become a
“mental grid” through which new information is sifted and interpreted. To the extent that
this grid comprises assumptions and beliefs that accurately reflect the environment, the
quality of strategic decision making is enhanced. However, when assumptions fail to
reflect key elements of the business environment, they can lead to the adoption of
inappropriate strategies, a phenomenon known as “strategic drift.”
