Introduction
Organizations these days should match their strategy to environmental or organizational opportunities and threats to obtain or maintain competitive advantage, which is appointed as strategic fit by Zajac, Kraatz & Bresser (2002, p. 429). To acquire a strategic fit, strategic and organizational change is often necessary. Van de Ven & Poole (1995, p. 512) define organizational change as follows: “an empirical observation of difference in form, quality, or state over time in an organizational entity. The entity may be an individual’s job, a work group, an organizational strategy, a program, a product, or the overall organization.”
Although change is required and even recognized, organizations often cope with problems to adapt to change effectively. This paper will focus on effective organizational change by discussing every step in the process of organizational change. This process begins with the emergence of organizational change and its causes. Hereafter, four different ideal processes of change will be explained. These four ideal processes of change rarely occur in real situations due to the complexity of organizations and their environment, which will be extensively explained. Consequently, the issues and problems related to effective organizational change will be discussed. Subsequently, some solutions to overcome issues and problems and provide an effective organizational change are provided. These solutions for an effective organizational change will be clarified with the development of a theoretical model which is focussed on processes and mechanisms that enable effective organizational change.
Emergence of organizational change
Plowman, Baker, Beck, Kulkarni, Solansky & Travis (2007, p. 519) describe the emergence of unintentional change by using the complexity theory, which comprises of people or groups who are adapting to feedback about the behaviour of others and act in parallel without explicit coordination or central communication. Plowman et al. (2007) argue that an unintended small change becomes radical by the destabilization of conditions and the amplified actions to promote small changes. These ongoing interactions between independent agents create novelty situations and behaviours, which eventually lead to continuous radical change.
Tsoukas & Chia (2002) also argue that organizational change emerges without necessarily an intended action. They draw up on the human individuals that have an important role in organizational change, while they are continuously developing. And because organizations consist of continuously changing human actions, organizational change should not be seen as an expectation or occasional event, but as a continuous phenomenon according to Tsoukas & Chia (2002, p. 577).
Buchanan & Dawson (2007) have a more narrative approach about the process of organizational change. In their perspective, organizational change is viewed as a multi-story process
They argue for the need to accommodate competing narratives in conceptualizing organizational change as a multi-story process, and to synthesize insights from a narrative approach to processual and contextual analysis of change.
We therefore argue that a narrative approach should be used to inform research designs that adopt a contextual/ processual perspective as this can offer valuable insights in furthering our knowledge and understanding of organizational change processes.
Processes of change in organizations
Van de Ven & Poole (1995, p. 513) provide an explanation of the process of organizational change with the use four types of change process theories in their pure ideal type forms: life cycle theory, teleology theory, dialectic theory and evolution theory. According to the life cycle theory, issues are developed in linear and sequential steps, which ensures that a change can be expected (Van de Ven & Poole, p. 515). Although structure is very important in this process, another organization structure will be stimulated because every organization arrives in another phase over time, which consequently drives change. The teleology theory emphasizes on functionalism, while it argues that changes are caused by the purposes and goals of an organization (Van de Ven & Poole, p. 516). Change will be accepted when the desires and needs of people within an organization are included. The dialectical theory is based on the assumption that organizations exist in a pluralistic world of contradictory events, forces or values (Van de Ven & Poole, p. 517). Change occurs when opposing values, forces or events gain sufficient power to confront and engage the status quo. A synthesis will be created after opposing conflicts, which will eventually result in a new synthesis. At last, the evolution theory, where the statistical accumulation of changes in structural forms ensure a continuous cycle of variation, selection and retention.
Although these ideal types has its own internal logic, these pure forms rarely occur in real situations caused by the complexity of organizations and their environments which will be explained in the following paragraph (Van de Ven & Poole, 1995, p. 534).
Complex organizations and their environments
The importance of organizational change becomes clear out of the strategic fit examined by Zajac et al. (2002). There is a strategic fit when the strategy of an organization is in line with the environmental or organizational opportunities and threats the company is facing. Organizational change is often required to obtain a strategic fit. Organizations continuously face different environmental and organizational contingencies and the strategic fit therefore has a multivariate and dynamic character (Zajac et al., 2002).
Continuing on this strategic fit, D’Aunno, Succi & Alexander (2000) argue that organizational change is more likely desired when there is a lack of strategic or a strategic fit is hard to maintain. According to D’Aunno et al. (2000, p. 698), market factors seem to affect divergent change in two ways. At first, organizations are more likely to engage in divergent change when they are facing strong forces from the local market caused by the possession of similar products and services and organizations are limited by the geographically close-by resource-availability. Second, organizations are forced to move away from the status quo to new templates by strong heterogeneous institutional forces.
Zajac et al. (2000) and D’Aunno et al. (2000) show the importance of organizational change when facing environmental or organizational contingencies. However, these changes often fail because of multiple reasons. D’Aunno et al. (2000, p. 683) especially blames the anti-competitive regulation and legislation that provides resources to support current organizational templates that will inhibit divergent organization change. Despite the good intentions of an organization, a strategic misfit and a performance disadvantage will be generated (D’Aunno et al., 2000; Zajac et al., 2000). According to D’Aunno et al. (2000), companies that change their institutionalized templates drastically are more likely to generate a competitive advantage.
Tripsas & Gavetti (2000) continue on the failure of changes by arguing the incapability of organizations to adapt to change. According to Tripsas & Gavetti (2000), this incapability is influenced by managerial cognition such as beliefs, knowledge and reasoning on how to compete successfully. Consequently, this influence of managerial cognition can evolve in organizational inertia where search and development efforts are restricted and directed.
Concluding, organizations and their environment are complex, which makes the strategic fit organizationally and temporally unique. In order to stay fit as an organization, they should constantly adjust and eventually incorporate drastic changes to obtain or maintain a competitive advantage. Despite this knowledge, organizations often fail to change effectively due to multiple reasons. Possible problems emerging in the change process will be elaborated in the following paragraph.