Stace & Dunphy Organizational Change Management

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Five dilemmas that have characterised decisions about organisational change:

Adaptive V rational strategy development
Cultural change V structural change
Continuous improvement V radical transformation
Empowerment V leadership and command.

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Economic V Social goals

Having discussed the five dilemmas, Dunphy and Stace (1996) differentiate them in terms of `soft' and `hard' approaches to managing change:

Soft approaches are characterised by: adaptive strategy, cultural change, continuous improvement and empowerment.

while hard approaches are characterised by: rational strategy, structural change, radical transformation and leadership and command.

Introduction to Cultural Change & Structural

Success in business is often determined by how effective an organization manages cultural change. That is success is not achieved by an executive's skills alone, nor by the visible features - the strategy, structure and reward system - of the organization. Every organization has an invisible quality - a certain style, a character, a way of doing things - that may be more powerful than the dictates of any one person or any formal system.

This invisible quality 'the corporate culture' dictates how effective the organization is in the marketplace. Achieving cultural change to maintain a prime market position has to be a key preoccupation of every chief executive. To understand the soul of the organization and the cultural change required necessitates us probing below the below what is visible, e.g., charts, rule books, machines and buildings and into the underground world of peoples feelings, beliefs, perceptions, attitudes, behaviors, only then can the corporate culture be defined and cultural change initiatives be identified.

To provide meaning, direction and mobilisation, i.e., the social energy that moves the corporation into either productive action or destruction requires constant cultural change to keep abreast of current management thinking and technology. Many organisations however simply do not recognise the need for cultural change and therefore this 'social energy' has barely been tapped; whether diffused in all directions or even deactivated, it is not mobilised to help the company. Most members seem apathetic or depressed about their jobs and no longer pressure one another to do well. Even cultural change pronouncements by top managers that they will improve the situation fall on the deaf ears of employees who have heard these promises before. Consequently, without cultural change being itself part of the culture, the soul of the organisation slowly dies. The crucial role of corporate cultural change in shaping behaviour, and the especially powerful effects of group norms, one way to turn around a maladaptive company is to effect cultural change by managing its norms. Even cultural norms that dictate behaviour, opinions style and attitudes, etc., can be brought to the surface, discussed and altered by cultural change initiatives.

Experience of corporate consulting work, has revealed it helpful to have all group members (generally in a cultural change workshop setting) list the actual norms that currently guide their behaviour and attitudes. This can be done for one or many cultural change groups, departments and divisions. Sometimes, it takes a little prodding and a few illustrations to get the process started, but once it begins, cultural change group members are quick to suggest many norms. In fact, they seem to delight in being able to articulate what was never written in any document and rarely mentioned even in casual conversation between themselves.

What is Structural Change

Structure is the place where culture grows. The structure of the organization, its physical structure, its work processes and systems support and create the behavior of the people who work there. Often organizations distribute new mission statements, beautiful posters with new values on them, but since the structure of the workplace does not support the mission or values, they are doomed to disappear. The networks of an organization function as culture maintainers - organization members who communicate in predictable ways about predictable things based on history. Fundamental and lasting change requires the transformation of the networks that are the foundation for communication and relationships within the organization. By changing the way people sit, the processes they use, the structure of relationships between departments - new networks form and old ones fade away.

The structural changes should be small, many and high leverage. The changes should be small so that small numbers of volunteers can implement them quickly. Changing many things at the same time destabilizes the old, out-dated systems and processes. High leverage changes have a profound impact on the whole system. New structure forces new behaviors, just as changing the position of a wall in a room, or taking it away all together, causes people in the room to move and to change their focus.

(Ref: Johnson Gerry and Scholes Kevan, (2002), "exploring corporate strategy", 6 e/d, Printice Hall, UK)

Structural change is enduring and difficult to undo. Once new walls, new systems and new processes are built to replace old structures, it is hard to return to the old way of doing things. Remember when the typewriter and the computer sat in side-by-side in the offices and how the people continued to use their typewriters? As soon as the typewriters were gone, people switched to computers. A test for structural change is an econometric test to determine whether the coefficients in a regression model are the same in separate subsamples. Often the subsamples come from different time periods.

CNN has picked up on a report by the New York Federal Reserve Bank that suggests that the recovery is jobless because there is a restructuring beginning to happen.

In a recent report, economists at the New York Fed suggest that what is happening is structural. In past recessions job losses were far more cyclical: The economy turned down, your company laid you off, but as soon as things got better you got hired back.

Let's discuss an issue on structural and cultural change on 'The causes of Poverty' in U.S. There are many competing theories about the causes of poverty in the United States with mountains of empirical evidence to justify support for each. The debate among theorists and policymakers is primarily divided between advocates who support cultural/behavioural arguments and those who support structural/economic arguments. This debate tends to manifest itself across political party lines with republicans supporting the cultural/behavioural thesis and democrats looking more to structural causes.

(Ref: http://www.canberra.edu.au)

Structural Causes

Supporters of the "structural" school of thought argue that most poverty can be traced back to structural factors inherent to either the economy and/or to several interrelated institutional environments that serve to favor certain groups over others, generally based on gender, class, or race. Of the various institutional environments that tend to sustain a multitude of economic barriers to different groups, it is discrimination based on race and gender that create the most insidious obstructions. The disproportionately high rate of poverty among women may be viewed as the consequence of a patriarchal society that continues to resist their inclusion in a part of society that has been historically dominated by men, and as a consequence, welfare programs have been designed in ways that stigmatize public support for women as opposed to marital support; both arrangements tend to reinforce patriarchy. In this regard, the rise in poverty among women is an important structural level variable to consider, but the lack of reliable data going back to 1947 makes testing difficult.

This view is in part analogous to "spatial mismatch" theory, which generally hypothesizes

that the location and relative access to jobs of the disadvantaged group is more operable

than race per se. In a comprehensive literature review, Holzer concludes that "spatial mismatch has a significant effect on Black employment" and is primarily due to the low availability of well-paying jobs in the inner-city; a situation brought on by job decentralization and increasing commute times to distant jobs. However, Holzer suggests that the root cause of higher unemployment among inner-city Blacks may not be clearly distinguishable between "...the characteristics of the people who reside in each place as opposed to the problems created by location per se.."

Structural economic factors include the level and variation in unemployment, median income, and measures of income inequality. The effects of unemployment and rises in median income are well documented and their relationship to poverty is intuitive. The rate of poverty tracks very closely with median income and in general, rises in median income has positive benefits for all classes, including the poor. Over the last half century, as median income has risen, the rate of poverty has decreased in close correlation. This relationship lends credibility to the argument that work is the best mechanism for lifting people out of poverty. Indeed, one of the clearest strategies for fighting poverty should be to focus on ensuring a strong and growing economy. However, for individuals to take full advantage of a strong and changing economy, they need education. Rises in income are positively correlated with educational attainment. Yet education is not equally accessible by all members of the population.

Since property taxes represent the largest share of local school funding, the quality of education will necessarily vary relative the economic wealth of the locality. Federal and State funding represent smaller shares and are meant to level the playing fields somewhat, but they do not. It is education that allows people to adapt to changes in the economy and by extension changes in the demand for labour. During the latter half of the 20th Century, the American economy shifted from one based on manufacturing to one based on services. The gains in wages and working conditions that were made in the manufacturing sector have been weakened by the service economy.

For example, Wal-Mart offers its employees one of the weakest wage/benefits packages of any corporation of its kind and continues to fend off unionization; it is now one the most powerful corporations with a huge market share and monopsony power over its suppliers. The gains in US GDP are in part due to the success of a consumer economy that rewards Wal-Mart and its cousin conglomerates, but at what cost to the Americans working low wage/benefit jobs. The barriers created by these trends are difficult for the poor to overcome. How is the poor parent supposed to take care of his/her family based on a near minimum wage job with poor and/or expensive health coverage and child care? A publication by the Institute of Women's Policy Research demonstrates that many among the poor rely on several sources of income in order to get by, including government assistance, income from other family members, child support, and job income. These multiple sources of income along with the stresses inherent to the pursuit of each would not be as needed if sufficient employment were available for livable wages and benefits.

Economic Vs Social goals

Some obstacles to the development of new forms of work organisation have been recently reported : low level of awareness, poor access to evidence-based resources, ountervailing trends, distribution of the relevant competencies. When thinking of the impact of industrial relations on organisational innovation, another sociological factor may be stressed: Whatever the necessary roles of the collective social actors in the work organisation, employees are now definitely the key actors in this respect. However, in many countries, the history of industrial relations systems, the actual balance of power between employers and employees in companies and the growing social insecurity based on flexibility, lead many employees to wonder about the aim and the effects of the new forms of work organisation.

They consider that companies are asking them for more efforts in their single interests (productivity, quality of product) without any evidence that it may improve employees' ones ( working conditions, job security, wages, industrial democracy). For them and for some of their unions, closing the gap with stakeholders is an illusion, and improving workers' involvement requires a real balance between economic and social goals in organisational innovation. Therefore, in some industrial relations systems, even more than technical tools, learning processes, used rhetorics or formal provisions, this balance is a basic precondition for most employees to implement and develop new forms of work organisation.

In order to meet this precondition, i.e. to ensure both economic and social goals in work organisation, a major tool is employee representatives' participation in the decision making, the monitoring and the evaluation of organisational changes at every regulatory level. Proposals are already on the table that actors should build coalitions or should have a proactive role in developing these changes. But in many countries, such proposals cannot be implemented if employers or managers remain the only decision makers in work organisation. Confirming this approach, the EPOC results (Employee Participation in Organisational Change, a programme including a survey on 5800 European companies) reported that, from most managers' point of views, the more employee representatives are involved in the regulation of direct participation, the more this participation is efficiently implemented, with a good impact on cost reduction, improvement of quality of product/service, absenteeism. In the same way, in France, reducing working time by law finally was, in many companies, the best way for actors to co-operate in changing work organisation.

The deal was clear, with advantages for both partners. Such a social actors' involvement in regulation of work organisation is now converging with a more general trend in industrial relations systems towards what may be called a "multilevel model of regulated autonomy", involving social partners in co-producing rules at most interlinked levels of work regulation, from the European level to the workplace one. Moreover, this model itself - between deregulation and old top-down regulation- is clearly aimed at introducing regulatory flexibility at local levels while common rules may be kept at upper levels. The Auroux Law was the first example in France of such a model. So, in order to establish balanced goals and advantages in organisational change, and more generally in order to co-produce work regulation, employees' representatives are or should be at the core of the system. But a major problem then appear. Their weakness in many countries, specially at company level, is often leading to unbalanced situations in which they don't have the power to play their roles of counterpower. In the long run, the results of the bargaining between unbalanced partners often look unbalanced and not satisfactory for workers, for instance about employment, precariousness or working conditions.

(Ref: Lynch Richard, (2000), "corporate strategy", 8 e/d, Prentice Hall, England.)

Empowerment & Leadership and command

Empowerment evaluation is part of the intellectual landscape of evaluation. It has been adopted in higher education, government, inner-city public education, nonprofit corporations, and foundations throughout the United States and abroad. A wide range of program and policy sectors use empowerment evaluation, including substance abuse prevention, HIV prevention, crime prevention, environmental protection, welfare reform, battered women's shelters, agriculture and rural development, adult probation, adolescent pregnancy prevention, tribal partnership for substance abuse, self-determination and individuals with disabilities, doctoral programs, and educational reform (the Accelerated Schools Project - a national educational reform movement). Descriptions of programs that use empowerment evaluation appear in Empowerment Evaluation: Knowledge and Tools for Self-assessment and Accountability (Fetterman, Kaftarian, and Wandersman 1996).

Foundations of Empowerment Evaluation presents a complete description about how to conduct an empowerment evaluation (Fetterman, 2001). "The definition of a leader is someone who has followers." To gain followers requires influence but doesn't exclude the lack of integrity in achieving this. Indeed, it can be argued that several of the world's greatest leaders have lacked integrity and have adopted values that would not be shared by many people today. Empowerment evaluation has three steps. The first step is establishing a mission or vision statement about the program. Some groups do not like the terms mission or vision and instead prefer to focus on results. They state the results they would like to see, based on the outcome of the implemented program and map backwards &endash;- specifying activities required to achieve those processes and outcomes. The second step, taking stock, involves identifying and prioritizing the most significant program activities. Then program staff members and participants rate how well the program is doing in each of those activities, typically on a 1 (low) to 10 (high) scale, and discuss the ratings. This helps to determine where the program stands, including strengths and weaknesses. The third step involves charting a course for the future.

The group states goals and strategies to achieve their dreams. Goals help program staff members and participants determine where they want to go in the future with an explicit emphasis on program improvement. Strategies help them accomplish program goals. These efforts are monitored using credible documentation. Empowerment evaluators help program staff members and participants identify the type of evidence required to document progress toward their goals. Evaluation becomes a part of the normal planning and management of the program, which is a means of institutionalizing and internalizing evaluation. Empowerment evaluation is fundamentally a democratic process. The entire group -- not a single individual, not the external evaluator or an internal manager -- is responsible for conducting the evaluation. The group thus can serve as a check on its own members, moderating the various biases and agendas of individual members. The evaluator is a co-equal in this endeavor, not a superior and not a servant; as a critical friend, the evaluator can question shared biases or "group think".

Conclusion on Dilemmas

While measurement issues remain, including the applicability of a national level analysis to various regions and cities each with potentially differentiated forms and causes of poverty, the final Model V of this analysis provides a useful framework for understanding the general causes of poverty at the national level. Contrary to the hypothesis of the paper, the cultural variables employed could not be integrated with the structural/political variables into a larger model that demonstrated the dynamic interrelation between the structural environment, cultural processes, and behavioral outcomes as theorized by Orlando Patterson

Empowerment evaluation has three steps. The first step is establishing a mission or vision statement about the program. Some groups do not like the terms mission or vision and instead prefer to focus on results. They state the results they would like to see, based on the outcome of the implemented program and map backwards &endash;- specifying activities required to achieve those processes and outcomes.

The second step, taking stock, involves identifying and prioritizing the most significant program activities. Then program staff members and participants rate how well the program is doing in each of those activities, typically on a 1 (low) to 10 (high) scale, and discuss the ratings. This helps to determine where the program stands, including strengths and weaknesses.

The third step involves charting a course for the future. The group states goals and strategies to achieve their dreams. Goals help program staff members and participants determine where they want to go in the future with an explicit emphasis on program improvement. Strategies help them accomplish program goals. These efforts are monitored using credible documentation. Empowerment evaluators help program staff members and participants identify the type of evidence required to document progress toward their goals. Evaluation becomes a part of the normal planning and management of the program, which is a means of institutionalizing and internalizing evaluation.

Empowerment evaluation is fundamentally a democratic process. The entire group -- not a single individual, not the external evaluator or an internal manager -- is responsible for conducting the evaluation. The group thus can serve as a check on its own members, moderating the various biases and agendas of individual members. The evaluator is a co-equal in this endeavor, not a superior and not a servant; as a critical friend, the evaluator can question shared biases or "group think".

As is the case in traditional evaluation, everyone is accountable in one fashion or another and thus has an interest or agenda to protect. A school district may have a five-year plan designed by the superintendent; a graduate school may have to satisfy requirements of an accreditation association; an outside evaluator may have an important but demanding sponsor pushing either timelines or results, or may be influenced by training to use one theoretical approach rather than another. Empowerment evaluations, like all other evaluations, exist within a context. However, the range of intermediate objectives linking what most people do in their daily routine and macro goals is almost infinite. People often feel empowered and self-determined when they can select intermediate objectives that are linked to larger, global goals. In addition, a self-evaluation is more meaningful when linked to external requirements and demands.

Empowerment evaluation also empowers external evaluators. Specifically, the external evaluator's role and productivity is enhanced by the presence of an empowerment or internal evaluation process. Most evaluators operate significantly below their capacity in an evaluation because the program lacks even rudimentary evaluation mechanisms and processes. The external evaluator routinely devotes time to the development and maintenance of elementary evaluation systems. Programs that already have a basic self-evaluation process in place enable external evaluators to begin operating at a much more sophisticated level.