Organization Change by W. Warner Burke
Chapter 1 – Sources for Understanding Organization Change
The change that occurs in organizations is, for the most part, unplanned and gradual. Planned
organization change, especially on a large scale affecting the entire system, is unusual. Most organization
change is evolutionary. Revolutionary change (a major overhaul of the organization resulting in a
modified or entirely new mission, a change in strategy, leadership, and culture) is also rare.
> The emphasis is more on planned and revolutionary change because the external environment now
changes much more rapidly than organizations do.
Another distinction is important. Organizations are created and developed on an assumption of continuity,
to continue surviving and to last. The external environment, is not continuous in the same sense that
organizations are. Forces in the external environment can cause destruction but can cause creativity as
well. This is the continuous-discontinuous theme.
Although not exclusively, many sources for help in writing the book had to come from the nontraditional
literature:
1. Models of organizations that come from the organization change literature. Models are important
because they help link theory with practice.
2. Trade literatur: professional books written by consultants and experienced practitioners.
> The problem is that by using popular, actual organization cases as the base from which to derive
principles, sooner or later the organizations studied and showcased no longer illustrate the principles,
because things have changed.
John Kotter: leading change consists of an eight-stage process:
1. Establishing a sense of urgency
2. Creating the guiding coalition
3. Developing a vision and strategy
4. Communicating the change vision
5. Empowering employees for broad-based action
6. Generating short-term wins
7. Consolidating gains and producing more change
8. Anchoring new approaches in the culture
The book’s popularity is due in part to (a) Kotter’s status and reputation in the field, (b) his ability to distill
into eight stages a mass of case examples and (c) the face validity of the eight stages; they sound plausible
and relevant.
This form of trade book, based on author experience and wisdom, can be helpful to the reader but
nevertheless is problematic; remember that the wisdom is based on individuals’ experience and
knowledge.
3. ‘Story’books that have a clear and usually simple maxim to teach. These books tell a story, perhaps
based on a metaphor or in allegorical form. The authors want us to remember the maxim, principle, and a
story is a fine way to do it. Unfortunately, they tend to oversimplify the themes they are addressing.
Regardless of how charming the story might be, organization change is far too complex for a simple story
to teach us what we ultimately need to know.
- For the person in a change leadership role it is important to be as clear as possible about the future and
what it would take to get there but in particular not to come across as defensive, to respond to questions
as factually as possible and to be patient.
- It is also important for the change leaders to acknowledge that in the short run there would be
frustration, perhaps even anger and resentment. Maybe productivity would suffer for a period of time, but
with a focus on the long term and what would be gained as a result, the whole effort would be worthwhile
> ‘short-term pain for long-term gain’.
,Principles regarding the organization change process:
o External environment: we typically begin an organization change effort by considering what is
happening in the organization’s external environment. We need to be aware of the evidence that the
external environment is changing more rapidly than ever before, making it tougher and tougher for
organizations to change themselves rapidly enough to keep up and stay competitive. The reconstruction
project is a response to this ever-changing, complex environment;
o Expressing the need: organizational members must see the need for change to be willing to embrace it.
There are two actions required, which can be described as (a) creating a sense of urgency and (b)
providing a vision for the future;
o Consequences: we plan change in a linear fashion but quickly realize that the change itself is nonlinear.
There are unintended consequences that we didn’t anticipate. The change will be experienced as messy if
not chaotic;
o Resistance: while not everyone is likely to be resistant to change, some if not many will be. There are
individual differences regarding resistance, and all resistances are not the same;
o Change leader role: change, certainly planned change, is not likely to occur without leadership. The
change leader needs to be transparent, nondefensive and persistent yet patient.
An organization is an open system influenced by its environment and context.
Chapter 2 – Rethinking Organization Change
Change significantly: to turn the organization in another direction, to fundamentally modify the ‘way we
do things’, to overhaul the structure (the design of the organization for decision making and
accountability) and to provide organizational members with a whole new vision for the future.
To survive, especially for the long term, organizations must change and adapt to their environments, but
typical changes consists of fine-tuning: installing a new system for sales management; initiating a program
to improve the quality of products or services; or changing the structure to improve decision making
without first changing organizational strategy, which is, after all, the basis for decision making.
Most organizational change is not significant or successful. Organizational improvements do occur, even
frequently, and do work, but large-scale, fundamental organization change that works is rare:
> Deep organization change, especially attempting to change the culture of an organization, is
very difficult;
> It is often hard to make a case for change, particularly when the organization appears to be
doing well. A paradox of organization change is that the peak of success is the time to worry and
to plan for and bring about significant change;
> Our knowledge for how to plan and implement organization change is limited.
The paradox of planned organization change
When planning organization change, the process is usually linear. Although an attempt is made in the
implementation of change to follow these steps or phases, what actually occurs is anything but linear. The
implementation process is messy; unanticipated consequences occur.
Provided the change goals are clear and change leaders are willing to stay the course, over time, the
process may end up being somewhat linear, or at least a pattern may emerge. No pattern will emerge
unless there is a clear change goal or goals. The end in mind is what ‘pulls’ or establishes a pattern, but
linearity is not what anyone experiences during the implementation process itself.
Changing corporations
The first Forbes top 100 companies list was formed in 1917. Forbes published its original list again in
1987; 61 of the original 100 no longer existed. And of the remaining 39 companies, only 18 remained in
the top 100. Next, the Standard & Poor’s 500. Comparing the 500 in 1957 with those in 1998, only 74
remained on the list. How can it be that so many companies do not survive and those that do survive, with
few exceptions, perform below average? Part of the answer rests with the pace-of-change phenomenon
that Foster and Kaplan (2001) address. In 1917, the pace of change was indeed much slower than it is
,today. During that time, the turnover rate of companies in the S&P rankings averaged 1.5% a year. A new
company making the list then could expect to remain for about 65 years. In those days change was not a
major concern. Continuity was the goal and the way of operating. Vertical integration was the name of the
game; owning as much of the production chain as possible, from raw materials to distribution to the
customer. But in 1998, the turnover rate in the S&P 500 was close to 10%, implying an average lifetime on
the list of 10 years, not 65. Times have changed and we are living in the age of discontinuity for
corporations, not continuity.
The larger answer to the question about corporate survival and performance can be found in a
corporation’s external environment. One of the most powerful factors or forces for businesses, especially
those that are publicly owned, is the capital market. Capital markets consist of buyers, sellers, and others
who interact for the purpose of economic change. Although not acting in concert, these people decide
whether your business, your company and your vision for the future of your organization is worthy of
investment. This informal aggregation of buyers and sellers forms a powerful force in the organization’s
environment, determining in part the long-term survival and success of a company.
Capital markets change far more rapidly than do corporations; are based on an assumption of
discontinuity, not continuity; weed out poor performers; reward creativity and innovation; and encourage
new business entries into the marketplace.
The primary point made by Foster and Kaplan (2001), is that capital markets outpace corporations, the
rate of change is considerably different and the basic assumptions of the two for long-term survival are
opposites: discontinuity for the capital markets and continuity for corporations. For corporate survival
and success, Foster and Kaplan argue that companies must abandon the assumption of continuity;
corporations must understand and mitigate.
The most critical point of all: in the end, it is the consumer, the customer out there in the organization’s
external environment, who determines the fate of any business.
‘Cultural lock-in’, the inability to change the corporate culture even in the face of clear
market threats – this explains why corporations find it difficult to respond to the
messages of the marketplace.
Summary
It is all about changing corporations and the critical nature of organizations’ external environment and
their dependence on it for survival. Organizations of all kinds have to deal with environments that are
changing more rapidly than the organizations themselves.
The primary purpose has been to make the case for the need for a much greater depth of understanding
about organization change across all major sectors of organizations. With the rate of change becoming
faster and faster and the demands on organizations to adapt and change themselves becoming greater and
greater, our learning curve is steep.
Another purpose of changing organizations and their interactions with their external environments is to
introduce a particular point of view about organization change: that the process begins (and ends, for that
matter) with the external environment.
The metaphor of choice
We can understand an organization through a variety of metaphors, such as a machine, a brain, a psychic
prison or an organism. There is a warning about metaphors: that although they are a way of seeing, at the
same time they are a way of not seeing. Metaphors can help but can also limit our perspective and
ultimate understanding.
The metaphor of choice for this writing effort is the organism. A major strength of this metaphor is the
emphasis on the interactions between an organization and its external environment. An organization is
not a closed system, a fact that encourages viewing it as an open and flexible entity. A second strength is
the emphasis on survival; certain needs must be satisfied for the organization to survive.
One of the limitations of this metaphor is the fact that an organism is concrete; it is a fundamental of
nature, with material properties that can be seen and touched. An organization, on the other hand, is
socially constructed, a product of someone’s ideas, vision and beliefs. Although there may be buildings,
, land owned or leased, machines and money, an organization depends on the actions of human beings for
survival. It does not maintain itself through an autonomic process.
This view suggests that organizations are totally dependent on their environments for survival,
overlooking the fact that organizations interact with the external world: being influenced, but influencing
outwardly as well.
Another limitation of the metaphor is functional unity. Organisms have highly interdependent parts and
each element supports other elements; operating together to preserve the whole. Organizations rarely
operate this way. Ideally they should, with interdependence and harmony and all elements working for
the good of the whole. Yet we know that creativity often stems from conflict and debate and that these
kinds of actions by organization members may contribute more to the organization’s survival than
harmony would.
The final limitation is the danger that the metaphor might become an ideology: that organizations should
be harmonious, that interdependence is always a good thing, or that individuals should get their needs met
on the job.
Bearing in mind these limitations, the strengths of the organism metaphor support the points of view
more than any other metaphor.
The theories of choice (more: chapter 4)
The primary choice is the open-system theory, derived from biology. The point of view established in this
book is that the life sciences, with their theoretical foundations, are more relevant to understanding
organizations and change than are the physical sciences.
Types of organizational change (more: chapter 5)
Evolution versus revolution, a gradual continuous process of change in contrast to a sudden event. That
sudden event might precipitate massive turmoil, resistance and planned change that could lead to
eventual organization change.
o Revolutionary versus evolutionary
o Discontinuous versus continuous
o Episodic versus continuous flow
o Transformational versus transactional
o Strategic versus operational
o Total system versus local option
> This is for purposes of clarity and understanding, not to suggest that the conditions they describe are
mutually exclusive.
Revolutionary change or transformation requires different tools and techniques for bringing about
successful organization change than do methods for evolutionary or continuous change. The former
requires total system events, such as (2) an initial activity that calls attention to the clear need for a
dramatic modification of mission and strategy due to changes that have occurred in technology or (2)
new, unforeseen forays by a significant competitor.
The latter requires improvement measures in how a product is designed, how a service is delivered, etc.
A transformation requires the immediate attention of all organizational members, whereas a continuous
improvement action may require the attention of only a certain segment of the organizational population.
Levels of organization change (more: chapter 6)
It is very important to understand the various effects of organization change across the primary levels of
any social system. These primary levels are the individual, the group or work unit and the total system. In
many large corporations today there is an additional level; a business unit. A business unit is responsible
for a significant piece of the overall corporation’s business. The group level encompasses local work units
and may also include the larger business unit. In any case, the point here is that the way organization
change affects the individual differs from the way groups are affected and from the way the total system is
affected. Furthermore, the major focus for change differs as a function of the level; components of the
organization that will be affected sooner or later by the initial activity.
