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A hewlett-packard change story: managing a merger around 7 a.m. on

A Hewlett-Packard Change Story: Managing a Merger Around 7 a.m. on March 19, 2002, Hewlett-Packard’s CEO Carly Fiorina and CFO Bob Wayman were on the phone to Deutsche Bank trying to make one last ditch effort to convince them to vote yes. 1 The vote, scheduled for later that morning, was an important one. It would determine the future of the proposed Hewlett-Packard (HP) and Compaq Computer Corp. merger and the future of HP as a major player in the technology industry. 2 The months preceding the vote had been tumultuous. After the announcement of the proposed merger had taken place in September 2001, Walter Hewlett, the son of the co-founder of HP, had publicly opposed the proposition, which required shareholder approval. 3 Fiorina and her team faced serious and accumulating opposition to the merger, but there was also growing concern for HP’s future if the deal was rejected. A Merrill Lynch portfolio manager said at the time, “If the deal is voted down, I don’t know what I’m left with. I don’t know if the board will stay, if management will walk out the door, or what the strategy will be. Sometimes the devil you know is better than the devil you don’t.” 4 In the lead up to the vote, HP was confident that a yes vote by Deutsche Bank was a sure thing. Representatives of Deutsche Bank such as George D. Elling had been public supporters of the merger and had reportedly even given HP a $1 million contract to uncover the voting plans of other institutions. 5 Word of a change in Deutsche Bank’s thinking reached Wayman and, despite reassurances from his contacts that the merger would be supported, talk strongly suggested that they had, in fact, reversed their decision. On the morning of the vote, Fiorina and Wayman were given their first and only opportunity to pitch the deal to the investment team at Deutsche Bank. Fiorina, using her innate ability to impress, gave a compelling and persuasive argument questioning the company’s future if the merger did not go ahead. The Deutsche Bank team decided that a failure to continue with the merger would be more disastrous than the merger itself. 6 On March 19, 2002, the merger was approved by a shareholder vote 7 —a result that would have been more difficult had Deutsche Bank not supported the merger. 8 Premerger Back in 1999 when Fiorina joined HP, the company was in serious need of guidance. The personal computer division faced growing competition, the sales force needed better coordination, and the company was losing market share to rivals such as Dell and Sun Microsystems. 9 Fiorina joined the organization with aspirations, and external pressures, to change how it functioned. In her view, the culture of HP could be changed by “going back to the roots of the place.” 10 One of the ways she set out to achieve this was by working with a local ad agency and the head of Human Resources to create a set of “Rules from the Garage” that outlined what she hoped the culture at HP would become. “The customer defines a job well done” and “Invent different ways of working” became signifiers of the company’s direction and aspirations. 11 She decided to restructure the company. Customers such as Ford and Boeing were frustrated by the separate sales teams from HP that were constantly marketing individual products to them. They wanted a complete package that addressed the needs they had in their entirety. 12 In light of these uncommunicative operational units within HP, Fiorina reorganized the company into “quadrants,” creating two “front-end” sections that consisted of sales and marketing and two “back-end” functions where manufacturing and research occurred. 13 There was considerable, but subtle, employee resistance to the change. Fiorina’s vision of HP creating a new interface with customers may have been sound, but, as a radical change, it was not widely welcomed by many who were part of the HP “system.” 14 Post-Merger In the aftermath of the merger, and the ensuing lawsuit that opposed the merger and attempted to dissolve it, 15 Fiorina had a huge task ahead of her. The integration of the two corporate cultures was made more difficult by the strained relations Fiorina had with her own staff, many expressing serious concerns regarding the merits of the merger. 16 The transition was made slightly easier by the 65,000 new personnel who became a part of the HP community after the merger. They were more at ease with creating an organization in the way that Fiorina envisioned. According to Fiorina, the necessary cultural adjustment was simplified by this injection of “new DNA.” 17 Following the merger, Fiorina embarked on a series of technological symposiums and “coffee talks” with HP engineers. 18 Although the merger had already been undertaken by HP and Compaq, there were still many employees who were not convinced of the validity of HP’s riskiest move, some of whom faced being victims of the job cuts resulting from the merger. 19 To win over the 147,000 employees worldwide, Fiorina used a range of methods of communicating including the “management by walking around” style that Packard and Hewlett had originally advocated within the organization. A company employee commented on her style and interaction with all members of the company by saying that her actions and down-to-earth nature “earned her a lot of points” with transferees from Compaq. 20 The company faced challenges in the way of significant competition from both Dell in the PC business and IBM as a service provider. 21 Communicating a vision for the future of the company post-merger remained a key issue for Fiorina. 22 Three years later, in February 2005, Fiorina was ousted from HP and replaced by Mark Hurd. 23 In one of his first acts as the new CEO, Hurd undid some of the radical changes from his predecessor’s reign. 24 He cut jobs and engaged in a restructure, breaking down the four quadrants into product divisions because they were too “matrix” in design. 25 Some commentators, in referring to “the debacle of the Carly Fiorina years,” argue that many of the changes Hurd has made are “designed to unscramble the forced attempt at synergy attempted by his predecessor, instead handing back clearer responsibility to divisional managers for their own operations.” 26 Greater attention to becoming more efficient and getting better at execution appears to be producing results: in August 2007, Hurd announced HP’s best sales growth for seven years. 27 An IBM Change Story: Transformational Change from Below and Above Change from Below 28 Before using the Internet became as commonplace as watching television, David Grossman and John Patrick took on the mammoth task of convincing their superiors and co-workers at IBM that the Internet was even worth looking at. Their subsequent actions helped to revolutionize Big Blue and drastically change its path into the future. When David Grossman, a computer programmer, stumbled across a rogue Internet site for the 1994 Winter Olympics in Lillehammer, Norway, he was troubled. IBM had the official broadcast rights to the Games, but Sun Microsystems was taking the raw footage and making it available on the Internet under their logo. Although his position as a programmer did not require him to act on his findings, Grossman was deeply concerned about the implications of the branding of the Internet broadcast and the potential effects on IBM. He pursued the issue by contacting the IBM marketing team for the Olympics. The rogue site was eventually shut down, but the lesson had not been learned. IBM had not even begun to comprehend how the Internet could become an integral part of their business dealings. 30 Grossman’s persistence landed him a meeting with the head of marketing, Abby Kohnstamm, and some of her colleagues. It was here that Grossman was able to give a detailed explanation of the benefits of the Internet. He captivated one member of his audience wholeheartedly. John Patrick, a member of the strategy task force, attended the presentation that day and he immediately became Grossman’s ally in the Internet Revolution and an important link to the world of senior management. 31 As a team, Grossman and Patrick complemented each other. Grossman had the more developed technical know-how. 32 Patrick knew how to make the “boundaryless” culture at IBM work to his advantage. 33 Together they created an underground community of Web fans who shared technical information that ultimately helped IBM into the Internet era, albeit working, for the most part, unofficially. 34 The grassroots Web community infiltrated all corners of the company in a way that would have been difficult for an officially sanctioned, top-down group. It was through the advocacy of the lower-level personnel that the Internet message was spread through IBM’s culture. 35 Of course, the downside of being an unofficial part of an organization is the potential lack of financial backing for a group’s projects. However, when it came to finding money for IBM’s first-ever display at an Internet World trade convention in 1995, Patrick was not fazed. By coordinating the funds and the Web technology from various business units and becoming a “relentless campaigner” for the project, he gained support and expertise from multiple parts of the organization. 36 By sharing experienced personnel and resources from many departments, Patrick and Grossman were able to provide departments with more expertise and highly trained personnel when they were “returned” to the area from which they came. This strategy reinforced internal support for the change. 37 Over the years, Patrick and Grossman succeeded in creating a system that revolutionized the way in which IBM does business. Coupled with the leadership of Lou Gerstner, the period from 1993 to 2002 was one of reinvention and change. 38 IBM transformed from a computer manufacturer to a global service provider, focusing on e-business and the Internet. By the late 1990s, IBM’s trading in the e-business sector began to reflect in the bottom line, accounting for almost a quarter of its revenue. 39 Change from Above In 2002, Samuel Palmisano, a lifetime IBMer, took over leadership of the company from Gerstner. Palmisano’s focus changed to emphasize teamwork and collaboration. One of his first steps in demonstrating his new management style, to investors and employees alike, was a readjustment in executive compensation. 40 This involved a cut in the controversial CEO bonus that was redistributed within the top management team. Palmisano claimed that in order to function as a team, the gap between the CEO and his team must be reduced. 41 Insiders said that the amount pooled was $3 to $5 million, approximately half Palmisano’s personal bonus. 42 This was an effective way of communicating to the entire organization his intentions and commitment to his vision. In a BusinessWeek e-mail interview, Palmisano wrote that in planning for change, “I kept thinking about an approach that would energize all the good of the past and throw out all the bad: hierarchy and bureaucracy.” 43 To this end, he disbanded the executive management committee and created three teams with which he would work directly. These management teams—in the areas of strategy, technology, and operations—were composed of people from all over the company, not exclusively top management. 44 His aim in restructuring was to make IBM a flatter, more creative organization striving to meet consumer needs. 45 In addition to the restructure, Palmisano saw a lack of skills in IBM around the delivery of global services. In 2002, IBM acquired PwC Consulting as a way of bringing to it highly specific consulting skills and expertise to assist IBM in providing a full range of services to its clients, “from high-end technology consulting to low-end support.” 46 IBM also put in place other techniques to make sure that it listens closely to its people. For example, it introduced the concept of “jams,” which are online brainstorming sessions where any employee can share his or her ideas about management issues or new product development. Palmisano subsequently expanded the use of jams to include clients, consultants, and employees’ family members in order to share ideas and help the company innovate. 47 It is as a result of such changes from the top that IBM hopes to meet the challenges of the future. A Kodak Change Story: Provoking Reactions Could this be the beginning of one of the biggest turnarounds in American corporate history or one of the most public and embarrassing busts? After more than a century of producing traditional film cameras, Kodak announced in September 2003 that it would cut this line of production. In Western countries, this involves a complete move away from traditional products within the film industry and a full-scale launch into digital technology. 48 The move is slated “to generate… $20 billion by 2010.” 49 At an investor conference, CEO David A. Carp said: We are at the dawning of a new, more competitive Kodak, one that is growing, profitably, that has a more balanced earnings stream, and that will have a dramatically lower cost structure… To compete in digital markets, we must have a business model that lets us move even faster to take full advantage of the profitable growth that digital promises. 50 Implementing this change required Kodak to cut their dividend and raise capital for new technology purchases. 51 Further elaboration of this strategy occurred in January 2004 when it was announced that to reach the proposed savings of between $800 million and $1 billion by 2007, Kodak needed to make two physical changes to the organization. 52 First, there would be a reduction in the square footage of Kodak facilities worldwide by consolidating current operations and divesting unnecessary assets. Second, Kodak intended to reduce employment worldwide with up to 15,000 jobs to be cut by 2007. 53. Investor Reactions The announcement in September 2003 took many external experts by surprise. 54 At a series of post-announcement meetings with investor groups, their reactions were not overly supportive, 55 particularly to the news that their dividends would be severely cut. 56 They were conscious of promises to increase the company’s revenue that were not realized. 57 It was feared that this would become another “half-hearted transition” 58—as with the $1 billion launch into APS cameras in 1996 that ended in failure. 59 They also pointed to the risk in moving in this direction given the competitive market with rivals such as Hewlett-Packard, Canon Inc., and Seiko Epson Corp., which were already ahead in digital technology research and product development. 60 Carp’s response was to stand firmly by his decision to pursue digitalization of Kodak. 61 Staff Reactions For many of Kodak’s employees, the future looked bleak regardless of the success of the company in moving into digital technology. Employees were rightly concerned about losing their jobs in light of the proposed 20 percent worldwide cutback in employment. 62 Downsizing is not new at Kodak. From 1997 to 2003, the company reduced its workforce by 30,000. 63 As argued in The Wall Street Journal, this type of change “moves parallel [to] those at many companies whose comfortable business models have been threatened by rapid changes in information technology.” 64 As one union representative explained, the stress on workers in one Kodak production plant has been made worse than necessary because “management has not sought to reassure [Kodak employees] that they have got any long term future. When people have families to raise, financial commitments, that’s a very difficult environment to work in.” 65 Hence, along with having to convince investors that the path of change is the right one for Kodak, Carp also had to manage the adverse effects of an ongoing program of downsizing and restructuring. The Next Phase In June 2005, Antonio Perez replaced Carp as CEO. 66 He continued on the path of downsizing and eliminating plants. From 2004 to 2007, Kodak reduced its head count from 63,900 to 30,600 and offloaded a factory that it owned in Xiamen, China. 67 Perez is also engaging in a process of acquisitions in order to grow new businesses—with some concern from the financial community about the amount of debt that the company is accumulating. 68 As Guerrera argues, “For now, Kodak’s position illustrates the problems that many companies face mid-turnaround, when the tough choices have been made but the results are still unclear. Management, under intense pressure from investors and buy-out groups, faces a critical test of nerve.” 69 A McDonald’s Change Story: Responding to Pressure Imagine eating nothing but McDonald’s for a month. Morgan Spurlock, independent filmmaker, did just that, restricting his diet with the following limitations: • No food or drink other than McDonald’s menu items. • Meals supersized when given the option. • Every item on the menu had to be eaten at least once. 70 Spurlock spent one long month traveling across the United States interviewing various community groups about the implications of eating fast food and using himself as a guinea pig. 71 Before embarking on this journey, Spurlock underwent a full medical examination and was deemed to be a physically healthy man. One month later, the diagnosis had changed. 72 After three square McDonald’s meals a day for 30 days, Spurlock had gained 25 pounds, his cholesterol level had jumped from 168 to 230, 73 and his liver was in a state that an alcoholic would have envied. 74 The result of this personal experience was a documentary called Super Size Me, an entrant in the 2004 Sundance Film Festival. The aim? Spurlock claims his objective was to uncover the link between foods like McDonald’s and obesity, 75 a correlation that the company had long denied. 76 Nevertheless, the film’s release coincided with the launch of McDonald’s new Happy Meal for adults, comprised of a salad, a bottle of water, and a “stepometer.” Despite valiant attempts by McDonald’s to counteract the claims of the film, Super Size Me became one of the five biggest-grossing documentaries in American history. 77 Highlighting health issues related to fast food has only added to other worldwide pressures on McDonald’s operations. Externally these include an epidemic of mad cow disease, foot-and-mouth disease, the SARS epidemic in the Asia-Pacific region, a fall in economies leading to weaker foreign currencies, and high commodity costs. 78 Internally these problems were compounded by McDonald’s aggressive international expansion strategy that made future growth more difficult. 79 As the then-CEO, James Cantalupo, admitted, “we took our eyes off our fries and paid a price.” 80 The problems that the company faced went beyond superficial fluctuations in sales and revenue. The year 1996 was a turning point, with McDonald’s experiencing four consecutive quarters of declining sales and beginning to lose market share to competitors such as Wendy’s and Burger King. 81 Jack Greenberg, the former CEO, implemented the highly unsuccessful “Made for You” kitchens with disastrous results. 82 The result was slower service in contrast to its aim of flexibility with new menu items. 83 Franchisees became frustrated. Take Paul Saber. For 17 years, he was a McDonald’s franchisee, but in 2000 he recognized the lack of fit between the product offerings at McDonald’s and consumer tastes. “The McDonald’s-type fast food isn’t relevant to today’s consumer,” 84 he commented as he sold his 14 stores back to the company. Others stuck it out with McDonald’s. Richard Steinig remembers getting a 15 percent profit from the $80,000 sales at his two stores in the 1970s. 85 This was quite a comfortable income given that the minimum wage was less than $2 an hour. By 2003 he was struggling to make ends meet. Even the $1 menus advertised worldwide resulted in a loss for Steinig: as he said at the time, “we have become our own worse enemy.” 86 Getting Back to Basics In 2003 Cantalupo was brought in to rectify the declining state of the organization. 87 He previously held the position of vice chairman and headed McDonald’s international expansion. His vision for the organization’s future was in a “back to basics” 88 approach with organizational changes to refocus the organization on core values of quality and service. However, Cantalupo died in 2004 of a heart attack and his successor, Charlie Bell, left soon after (and subsequently died from cancer). In 2004 Jim Skinner took over as CEO. As part of the new strategy called “Plan to Win,” new store openings were cut back. 90 The aim was to increase sales from existing sites instead of growth through a rapid implementation of new stores. 91 For example, in 2004, 300 new stores were proposed, in comparison to 1995, when 1,100 new restaurants were opened. 92 There was also a complete overhaul of the advertising campaign. By introducing the “I’m lovin’ it” slogan and commercials featuring pop singer Justin Timberlake, 93 the hope was to reinvent the company’s image and connect it with the younger generation. 94 Another part of the revitalization of the McDonald’s business was the introduction of the new salads menu. 95 McDonald’s, in the past, had expressed little concern at the claims that its products are directly linked to obesity, but some critics saw the launch into the “fresh salads” menus as a sign that the unhealthy reputation of fast foods may have been identified internally as a threat to the organization. 96 This new menu has helped to draw in female customers who had previously been reluctant to dine at their restaurants 97 and increase the number of customers during the evening. 98 In the past, McDonald’s had tried creating low-fat menu options for their patrons with the McShaker salads and McLean Deluxe burger, but with limited success. 99 Now, responding to external pressures, customers are given healthier and tastier menu options. 100 One of McDonald’s newer goals is “loved by kids, approved by moms,” focusing their nutritional efforts on these two key customer groups. 101 Franchisees in Colorado, for example, have joined forces to introduce “Smart Meals”—actively promoting meal combinations that meet specific nutritional standards and include two Happy Meal options for children. 102 Other franchisees have revamped their PlayPlace, the traditional children’s play area, by introducing the R Gym, encouraging physical coordination and aerobic activity. 103 McDonald’s also implemented an online training program for all U.S.-based employees to address customer service issues. 104 The aim was to bring the company back on the road to providing the basic, speedy service and quality products that it became famous for so many years ago. Together, these changes reflect the company’s most recent “better, not just bigger” mantra to bring the company back in touch with its customers. 105 By 2007 this seemed to be working, with the company declaring some of “its strongest business results in 30 years.”


Hewlett-Packard Change Story • Different interests need to be recognized and addressed during an organizational change • These interests are likely to provoke different reactions to change • Organizational politics and lobbying are likely aspects of an organizational change that will need managing • Negotiation and persuasion are key communication skills • More successful communication strategies are likely to be those that “touch” the people to whom they are addressed • Communicating change often entails providing a vision of the future that is compelling • Pressures to change come from both outside and inside organizations • Restructuring is a common organizational change when confronted with problems • Any organizational change usually involves paying attention to organizational culture IBM Change Story • Innovative changes often emerge from below in organizations • Making change stick requires persistence over time and actions that need to be taken on multiple fronts • Change needs appropriately placed champions to gain support throughout the organization • The informal network of the organization is an important part of mobilizing and communicating organizational change • Change requires marshalling of appropriate resources • Some changes are incremental, others transformational • Some smaller change actions often convey powerful symbolic messages to help reinforce the sincerity and credibility that senior management attaches to the larger change Kodak Change Story • Organizational change involves handling reactions of both internal and external stakeholders • Communication strategies need to be designed for internal and external groups • Reactions to change are likely to be influenced by the success of previous changes and the extent to which there has been delivery on past promises • Change involves risk and uncertainty • The consequences of change cannot always be predicted • Managers of change need to address the question for staff of “How will I be affected?” McDonald’s Change Story • Organizational changes occur in a competitive, international business environment • This means that to prepare for the future, change may need to occur even when things still appear to be going well • Organizations face external pressures to change such as providing socially responsible products and services • Some changes fail to deliver on their intended outcomes • Change in and of itself is not necessarily good for a company; careful assessment is needed of the relevance and likely success of a proposed change



Chapter2 Images of Managing Change 1 Learning Objectives On completion of this chapter you should be able to: • Understand the importance of organizational images and mental models. • Identify different images of managing and of change outcomes. • Outline six different images of managing change. • Identify the theoretical underpinnings of these six change management images. • Understand the practical implications of the six images and how to use them. Writers and practitioners such as Gareth Morgan, Lee Bolman, Terrence Deal, and Mary Jo Hatch have been telling us for some time that the images we hold of organizations affect our interpretations of what we think is going on, what we think needs to happen, and how we think things should happen. 2 These images, sometimes referred to as metaphors, frames, or perspectives, are held by us often without our being aware either of their existence or of how they affect our thinking, perceptions, and actions. They act as mental models, pointing us in certain directions in order to make sense of things going on around us. For example, if we think of organizations as if they are machines, then we are likely to be more aware of potential “breakdowns,” seeing our role as maintaining them or fixing them. However, if we think of organizations as political arenas, we are likely to be constantly seeking out hidden agendas behind decisions and trying to identify who wins and who loses. We are also likely to see our role as building coalitions, gathering support for our causes, or even stimulating conflict in order to produce innovative outcomes. Alternatively, we may see our organizations as mini societies or cultures. In this case, we are likely to be constantly searching for “the way things get done around here” and thinking about how to encourage the organizational values that are best aligned to the type of work that we do. Providing vision and meaning to our staff so that their identity becomes closely associated with the organization is a further activity we are likely to pursue. Each frame orients us to a set of issues and, like a child with a hammer who sees everything around him or her as if it is a nail, 3 if we only draw upon one particular


Palmer, Ian; Dunford, Richard; Akin, Gib (2008-03-31). Managing Organizational Change:  A Multiple Perspectives Approach (Page 23). McGraw-Hill Education. Kindle Edition.

frame, then this will take us away from thinking about what is going on from an alternative perspective. In this book, we argue that the same situation applies to managers of change. The images, metaphors, or frames that we hold, both of managing and of change, influence our ideas of what we think managing change is all about. In this chapter, we outline six different images of managing change. We describe the underlying assumptions associated with each image and identify organization and change theories that support each image. Finally, we discuss how change managers are able to draw upon and utilize multiple perspectives and images of managing change. Images of Managing Change: Where they Come From As outlined in Table 2.1, there are two key images of managing (management as control versus management as shaping) and three key images of change outcomes (intended, partially intended, and unintended). As we shall see, depending on the combination of these images, this leads to one of six different images of managing organizational change: director, navigator, caretaker, coach, interpreter, and nurturer. Images of Managing Table 2.1 identifies two dominant images of management: management as control and management as shaping. Management as Control This has been a dominant image historically. It underlies the classic Fayol 4 characterization of management as involving activities such as planning, organizing, commanding, coordinating, and controlling. It is one that has been present in a number of influential management writers 5 and continues to be in use today. 6 It is associated with a top-down, hierarchical view of managing. Typically, the organization is treated as if it is a machine: It is up to managers to drive the machine in specific directions, people are told what their roles will be and departments and business units are allocated resources (inputs) so that the machine can perform efficiently and produce the necessary products or services in which it is engaged (outputs). Images of Managing Controlling… (activities) Shaping… (capabilities) Images of Change Outcomes Intended Image of managing change: Image of managing change: • DIRECTOR • COACH Partially intended Image of managing change: Image of managing change: • NAVIGATOR • INTERPRETER Unintended Image of managing change: Image of managing change: • CARETAKER • NURTURER


Palmer, Ian; Dunford, Richard; Akin, Gib (2008-03-31). Managing Organizational Change:  A Multiple Perspectives Approach (Page 24). McGraw-Hill Education. Kindle Edition.

Management as Shaping This image, which has more recent origins, is one that sees managing as being about shaping an organization and what happens in it. It is an image often associated with a participative style of managing in which people are encouraged to be involved in decisions and to help identify how things can be done better: Being closer to the action, the assumption is that they are likely to have a better knowledge of how things can be improved. Managing people is therefore about shaping their behavior in ways that encourage them to take actions of most benefit to the organization. The image anthropomorphizes the organization, that is, it treats it like a living, breathing organism or person. While it is possible to shape the organism or person in various ways, whether through rewards, through inculcating a particular set of values, by providing certain types of resources or information, or by providing some types of opportunities rather than others, the final behavior of the organism or person can only be shaped, not controlled. It is through such shaping actions that organizational capabilities are enhanced. Capabilities provide the organization with operational requirements to assist in its effective functioning, even in times of high uncertainty or ambiguity. Typical of this approach is the following view: Corporate capabilities are embedded in the fabric of the organization—in its practices, processes, systems, structures, culture, values, know-how and technologies. Importantly this is as true for reshaping capabilities as it is for operational ones. While personal capabilities leave the organization when their owner does, corporate capabilities tend to endure, despite the comings and goings of individuals. 7 In this approach, good management produces strong corporate capabilities that provide the organization with a firm platform from which to both respond to and shape the external changes and challenges it is likely to face. 8 Images of Change Outcomes Table 2.1 identifies three dominant images relating to whether intentional change outcomes can be achieved. Intended Change Outcomes In this image, the dominant assumption is that intended change outcomes can be achieved. This image of planned or intended outcomes is at the core of much of the change literature and is suggested to have dominated the practice of changing organizations for over 50 years. 9 Change is treated as the realization of prior intent through the action of change managers. One well-cited discussion of the planned, intentional approach is found in the work of Chin and Benne, who identify three broad strategies for producing intentional change. 10 • Empirical-rational strategies assume that people are rational and follow their own self-interest. Effective change occurs when a change can be demonstrated as desirable and aligned with the interests of the group affected by the change. Once this has been done, then intentional change will be achieved. 11 • Normative–re-educative strategies assume that changes occur when people dispense with their old, normative orientations and gain commitment to new ones. 12 Producing intentional change in this approach involves changes not just in their knowledge and information but in their attitudes and values.

Power-coercive strategies rely upon achieving intentional change by those with greater power gaining compliance in behavior from those with lesser power. Power may be exercised by legitimate authority or through other less legitimate, coercive means. 13 Common to each of these approaches is the view that intended change outcomes can be achieved, albeit through differing change strategies. Partially Intended Change Outcomes In this image, some, but not all, change intentions are achievable. Power, processes, interests, and the different skill levels of managers affect their ability to produce intentional change outcomes. As Mintzberg and Waters 14 note, the link between what is intended and what is the final outcome is not necessarily direct. 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 and factors may modify what was originally intended. For such reasons, systemwide change initiatives do not always achieve the many outcomes that were intended. 15 Unintended Change Outcomes Compared to the other two images of change outcomes, there is less attention paid to this image within the change literature although it is common to the mainstream organizational theory literature. This image implies that managers often have great difficulty in achieving intentional change outcomes. This is because there are a variety of forces that either lead to change outcomes that are not intended by managers (they are forced on to them) or inhibit the ability of managers to implement the changes that they desire. These forces may be internal or external to an organization. • Internally they may include departmental or interunit politics, the drag of past practices and routines that are difficult to dislodge, or the presence of deep-seated values and perceptions that are at odds with the desired change and difficult to budge. • Externally they may include a variety of factors such as a confrontational industrial relations environment (which brings desired management changes to a standstill), legislation that mandates various requirements if an organization is to continue to function (e.g., meeting taxation requirements or adhering to governance procedures), or even industrywide trends that impact all organizations operating in the same industry (e.g., imposition of trade sanctions, a run on the stock market, etc). These forces are typically viewed as being much more powerful than the influence wielded by individual change managers: In such circumstances, change managers and their intentions are swamped by these other forces. Occasionally outcomes and intentions may collide, but this is the result of the serendipity of events rather than the outcome of planned, intentional actions by change managers. Six Images of Managing Change Arising from Table 2.1 are six differing images of managing change, each of which is dependent on the images held of managing and of whether intentional change outcomes can be achieved. In what follows, we outline each image and discuss various theories that underpin and support them. Image 1: Change Manager as Director The director image is based on an image of management as control and of change outcomes as being achievable. It is therefore up to the change manager to direct the organization in particular ways in order to produce the required change. The assumption is that change is a strategic choice that managers make and the survival and general well-being of the organization depends on them. 16 So, for example, if a change manager decides that it is important to realign the organization to changes in the environment by introducing a new information technology system throughout the organization, then it is assumed that this can be done, that it will work well, and that the outcome will be a better-performing, better-aligned organization. Theoretical Underpinning of the Image As we will see in Chapter 8, there are a variety of what are sometimes referred to as “ n-step” models or theories of change that assume the image of the change manager as director. These n-step models outline a set of steps that change managers should use to implement whatever is the change. The models vary in the number of steps they propose and the order in which they should be taken. However, what unites them is an optimistic view that intentional change can be achieved—as long as the change manager follows the correct steps that need to be taken. Even writers such as Kotter who acknowledge that “successful change efforts are messy and full of surprises” 17 nevertheless remain optimistic and maintain that his eight-step change model will produce “a satisfying result” 18 as long as the change manager follows these steps. Similarly, Ghoshal and Bartlett 19 write that while change is often thought to be difficult and messy, there is nothing mystical about the process of achieving effective change as long as certain steps are followed. 20 As we will see in Chapter 8, contingency theories of change such as found in Stace and Dunphy 21 and Huy 22 share with n-step theories the assumption that change can be directed; they part company with n-step theories in arguing that the nature of this direction depends on (or is contingent upon) a range of organizational factors such as the scale of the change, the urgency of the change, and the receptivity of organizational members to engaging in the change. There will be different “best ways,” that is, different types of steps that change managers should take, depending upon the confluence of such factors. However, as long as they align the type of change with the style best suited to it, then intended change outcomes can be produced. Image 2: Change Manager as Navigator In the navigator image, control is still seen as at the heart of management action, although a variety of factors external to managers mean that while they may achieve some intended change outcomes, others will occur over which they have little control. 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 his or her business unit by putting cross-functional teams in place in order to assist product development across the different business functions. While a change manager may be able to formally establish teams (an intentional outcome), his or her ability to get them to work effectively may be minimal where there is a history of distrust, hoarding of information, and boundary protection by functional units. In this situation, functional managers may appoint people to the cross-functional teams who they know will keep the interests of their department uppermost and blocorganizational power (an unintended outcome of putting the teams in place). As Pendlebury et al. 23 point out, “Any sort of change is a leap in the dark.” For them, this does not mean that managing change is something that is not able to be controlled; rather “it is only partially controllable” with change managers navigating the process toward an outcome, not all of which will be intentional. 24 Theoretical Underpinning of the Image The contextualist or processual theories of change, which, Burnes 25 maintains, are associated with the work of writers such as Dawson 26 and Pettigrew and Whipp, 27 rely upon the navigator image. These theories share an assumption with contingency theory that change unfolds differently over time and according to the context in which the organization finds itself. However, they differ from contingency theory in assuming “that change should not be and cannot be solidified, or seen as a series of linear events within a given period of time; instead, it is viewed as a continuous process.” 28 Change is therefore “a process that unfolds through the interplay of multiple variables (context, political processes and consultation) within an organization.” 29 Directing is not an option as “there can be no simple prescription for managing transitions successfully.” 30 It is up to change managers to navigate their way through this complexity by identifying the range of options open to them, gathering and monitoring information, and availing themselves of appropriate resources. 31 Even so, change managers need to accept that there will be unanticipated disruptions so that even these options and resources will need to be reviewed and reevaluated. In so doing, change managers are urged to incorporate bottom-up involvement of staff in their approach to managing change so, for senior managers, “[i]nstead of directing and controlling change, their role becomes one of ensuring the organization’s members are receptive to, and have the necessary skills and motivation, to take charge of, the change process.” 32 In this approach, change managers are assumed to have “some scope for choice and maneuver.” 33 In keeping with the metaphor of the change manager as navigator, change courses may need to be plotted and then replotted as new information comes to light and variations are made. There is no guarantee that the final destination will be that which was initially envisaged (if there is, indeed, a final destination) and there is the ever-present likelihood that a variety of other, unanticipated destinations might eventuate, brought about by the shifting winds and currents underlying the change. I

Image 3: Change Manager as Caretaker In the caretaker image, the (ideal) image of management is still one of control, although the ability to exercise control is severely constrained by a variety of forces, both internally and externally driven, that propel change relatively independent of a manager’s intentions. For example, despite the change manager’s best intentions to implement activities to encourage entrepreneurial and innovative behavior, they may feel like this is a continually failing exercise as the organization grows, becomes more bureaucratic, and enacts strategic planning cycles, rules, regulations, and centralized practices. In this situation, inexorable growth and the issues associated with it are outside the control of any individual manager of change. In this rather pessimistic image, at best managers are caretakers, shepherding their organizations along as best they can. all this, managers have a limited role, helping to smooth the various transitions rather than controlling whether or not they occur. Population Ecology Theory Drawing on biology and neo-Darwinian logic, population ecologists focus on how the environment selects organizations for survival or extinction, 35 with whole populations of organizations changing as a result of ongoing cycles of variation, selection, and retention. • Organizational variation can occur as the result of random chance. • Organizational selection can occur when an environment selects organizations that are of best fit to its conditions. • Organizational retention consists of forces that retain various organizational forms and thereby serve as a counterinfluence to the forces of variation and selection. 36 Some population ecology theorists suggest that there are at least some limited actions that change managers may take to influence these forces. For example, some writers point to: • The ability of some organizations, or their key stakeholders, to interact with other organizations to lessen the effect of the environment. • The ability of an organization to reposition itself in a new market or environment. 37 In general, however, the implication of population ecology theory is that managers have little sway over change where whole populations of organizations are impacted upon by outside forces. One might point, for example, to how managers of many promising dot. com companies were unable to withstand the impact of the widespread dot.com crash in April 2000 that affected the whole population of dot.com organizations. Institutional Theory Institutional theory argues that change managers take similar actions across whole populations of organizations. This similarity in the actions that they take occurs through pressures associated with the interconnectedness of organizations within an industry or environment. 38 DiMaggio and Powell 39 identify three such pressures: • Coercive (including government-mandated changes). • Mimetic (where organizations imitate the structures and practices of other organizations in their field, usually ones that they consider as legitimate or successful). • Normative (where changes occur through the professionalizing of work such that managers in different organizations utilize similar values and modes of operating in their actions and decisions). While not all organizations succumb to these pressures—there are “deviant peers” 40 — the assumption is that these external forces are inexorable and individual managers have only limited ability to implement change outcomes that are at odds with these forces. At best, change managers are caretakers having little influence over the direction of change. Image 4: Change Manager as Coach In the coach image, the assumption is that change managers (or change consultants) are able to 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 able to succeed. Rather than dictating the exact.

state of each play as the director might attempt to do, the coach relies upon building in the right set of values, skills, and “drills” that are deemed to be the best ones that organizational members, as players, will be able to draw on adeptly in order to achieve desired organizational outcomes. Theoretical Underpinning of the Image The traditional organization development (OD) theory reinforces the change manager as coach image. As we will see in more detail in Chapter 7, underlying the traditional OD focus is the implementation of change that stresses the importance of humanism, democracy, and individual development to organizational life. 41 Hence, in the same way that sports coaches have their own views on the best skills needed, so too does the OD approach. The traditional OD change consultant acts as a coach by helping to “ structure activities to help the organization members solve their own problems and learn to do that better.” 42 As we shall see, as the OD field grew and focused not just on small-scale but on largerscale change, so was there a corresponding development of new techniques designed to get the whole organizational system into a room at one and the same time. 43 Retaining the value of drawing people into actions of their own making, proponents of these “coaching” techniques are glowing, sometimes almost evangelical, in outlining how they help to achieve their intended outcomes. For example, they are argued to produce results “with greater speed and increased commitment and greatly reduced resistance by the rest of the organization.” 44 Image 5: Change Manager as Interpreter The interpreter image to managing change places the change manager in the position of creating meaning for other organizational members, helping them to make sense of various organizational events and actions. It is these events and actions that, in and of themselves, constitute a changed organization. It is up to change managers to represent to their staff (and others) what these changes actually mean. However, it is likely that there will be competing meanings within the organization of the same events and actions, especially given that there are differing groups in organizations not all of which share the same interests and understandings. This suggests that only some meanings—and therefore change intentions—are likely to be realized; other meanings are likely to emerge from alternative interpretations and understandings held by other people engaged in, or affected by, the particular change. In this contested view of organizational change, managers as interpreters “need to be able to provide legitimate arguments and reasons for why their actions fit within the situation and should be viewed as legitimate.” 45 For example, in an organizational downsizing, there may exist competing meanings about the change: While change managers may endeavor to portray it as way of strengthening the organization and so enable better protection of the jobs of those who remain, other organizational members may tell different stories, interpreting it as inevitable, given the changed environment of the organization; alternatively, they may present the fact of downsizing as evidence of management’s incompetence, or as an underhanded way of getting rid of some politically troublesome individuals or even departments but in the name of making the organization more efficient. Better change managers, therefore, are those who see their role as interpreters and are able to dominate stories and understandings about the meaning of a specific change.

In this sense, they are like strategists who, as argued by Linda Smircich and Charles Stubbart, enact a view of the world by creating “imaginary lines between events, objects and situations so that events, objects and situations become meaningful for the members of an organizational world.” 46 Theoretical Underpinning of the Image The interpreter image is present in Karl Weick’s 47 sense-making theory of organizational change. He suggests that a central focus is needed on the structuring processes and flows through which organizational work occurs. Adopting the latter perspective leads one to see organizations as being in an ongoing state of accomplishment and re-accomplishment with organizational routines constantly undergoing adjustments to better fit changing circumstances. 48 In this constant movement are four drivers of organizational change that shape how capabilities are produced: • Through animation (whereby people remain in motion and may experiment, e.g., with job descriptions). • By direction (including being able to implement in novel ways direct strategies). • By paying attention and updating (such as updating knowledge of the environment and reviewing and rewriting organizational requirements). • Through respectful, candid interaction (which occurs when people are encouraged to speak out, particularly when things are not working well). 49 These sense-making drivers assist individuals in developing their capabilities for managing the ambiguity of organizational change. 50 At the same time, it is up to change managers to interpret how and why these adaptive emergent changes are occurring. 51 By providing meaning, and connecting the dots, the change manager as interpreter helps “to make sense of events that don’t fit together.” 52 From this perspective it is up to managers of change to author interpretations and labels that capture the patterns in those adaptive choices. Within the framework of sensemaking, management sees what the front line says and tells the world what it means. In a newer code, management doesn’t create change. It certifies change. 53 Image 6: Change Manager as Nurturer The nurturing image to managing change assumes that even small changes may have a large impact on organizations 54 and managers are not able to control the outcome of these changes. However, they may nurture their organizations, facilitating organizational qualities that enable positive self-organizing to occur. Like a parent’s relationship with a child, future outcomes are nurtured or shaped, but the ability to produce intended outcomes at the end of the day is severely limited because of the impact of much wider, sometimes chaotic forces and influences. Specific outcomes and directions of change cannot be intentionally produced but rather emerge and are shaped through the qualities and capabilities of the organization. Theoretical Underpinning of the Image Two organizational theories support the nurturer image: chaos and Confucian/Taoist. Chaos Theory This theory assumes that organizational change is nonlinear, is fundamental rather than incremental, and does not necessarily entail growth. 55 Drawing on complexity


Palmer, Ian; Dunford, Richard; Akin, Gib (2008-03-31). Managing Organizational Change:  A Multiple Perspectives Approach (Page 32). McGraw-Hill Education. Kindle Edition.



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