See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/235259678

Strategic organizational change: The role of leadership, learning, motivation

and productivity

Article in Management Decision · June 1998

DOI: 10.1108/00251749810220496

CITATIONS READS

109 7,901

3 authors, including:

Steven Appelbaum
Concordia University Montreal
158 PUBLICATIONS 4,450 CITATIONS

SEE PROFILE

Some of the authors of this publication are also working on these related projects:

Ffactors that impact the success of an organizational change: a case study analysis View project

All content following this page was uploaded by Steven Appelbaum on 04 February 2014.

The user has requested enhancement of the downloaded file.

Strategic organizational change: the role of
leadership, learning, motivation and productivity

Steven H. Appelbaum
Faculty of Commerce and Administration, Concordia University, Montreal,
Quebec, Canada
Normand St-Pierre
Canadian Imperial Bank of Commerce, Montreal, Quebec, Canada
William Glavas
Pratt and Whitney Canada, Montreal, Quebec, Canada

Presents an overview of strate-

gic organizational change Introduction Critical determinants of
(SOC) and its managerial For centuries philosophers have struggled
organizational success and failure
impact on leadership, learn- with definitions of “change”, …To the The features of organizations that make for
ing, motivation and productiv- ancient Greeks… tampering with the basic
ity. Theoretical and empirical success are not always the same ones that
character of things – was, if not actually lead to failure. Based on reports generated by
data presented are: the blasphemy, a sure path to disaster … In
sources and determinants of professional consultants, it is possible to
modern Western culture, “change” is a
strategic organizational identify the specific factors that contribute
more malleable notion, a means to bend
change; the management most to success and failure. It is also possible
fate to one’s ends… (Kanter et al., 1992).
implications of SOC; organiza- to classify these factors as primarily environ-
tional leadership within the In today’s turbulent environment of organi- mental, structural, or management-oriented
context of SOC; learning zations, change has become synonymous (Vecchio and Appelbaum, 1995).
aspects of SOC; the impact of
with standard business practices as long- Although a successful organization need
SOC on organizational and
individual productivity; a term organizational ends have to be refor- not possess all of the positive attributes, most
model that explains the rela- mulated on an ongoing basis. With this in successful organizations show more positive
tionships between SOC, lead- mind, this article will present a conceptual than negative attributes. Successful organiza-
ership, learning, motivation framework of the various elements of organi- tions tend to focus on customers and their
and productivity. Depicts zational change in order to obtain a better needs. They invest in ways to improve sales
strategic organizational understanding of the management of organi- and provide superior service to clients, and
change as an integrative zations. As such, the purpose of this article they do not forget that their customers and
process with all organizational
is to present an overview of strategic organi- their customers’ needs underlie their organi-
elements such as human
resources, systems and tech- zational change (SOC) and its managerial zation’s existence.
nologies being considered for impact upon leadership, learning, motiva- Successful organizations also adapt their
successful change to occur. tion and productivity. structures to the needs of their missions. At
The proposed model for The remainder of this article will be the department level, controls may be simul-
strategic organizational divided in six parts: the sources and deter- taneously loose, in that managers have
change is an attempt to link minants of strategic organizational change; autonomy, and tight, insofar as specific
the software and hardware a discussion of the management implica- performance goals may be set. Highly suc-
components of organizations.
tions of SOC will be undertaken; organiza- cessful organizations often maintain a sim-
In view of the pressures being
expected from the external tional leadership will be addressed within ple but appropriate structure that employs
environment and the critical the context of SOC; learning aspects of SOC an adequate number of staff; they avoid
vision of organizations, will be described; the impact of SOC on orga- empire building and padding with surplus
research suggests that top nizational and individual productivity will staff. Also, entrepreneurship is encouraged
management needs to estab- be highlighted; finally, an attempt to develop within the divisions of the organization by
lish a flexible and adaptive a model that explains the relationships rewarding successful innovation and encour-
infrastructure that should lead between SOC, leadership, learning, motiva- aging risk taking (Vecchio and Appelbaum,
contemporary and complex
tion and productivity will be presented. The 1995).
organizations to optimum
levels of performance. The discussion on strategic organizational A major management feature that can lead
largest barrier to “change” is change will be concluded by suggesting a to success is a deliberate bias toward imple-
not changes to technologies need to develop more comprehensive models menting solutions to problems. Management
and work processes but to study the impact of change on organiza- discourages “paralysis through analysis” of
changes involving people. tions. alternatives, and, instead, emphasizes satis-
The following section of the article will ficing action that ensures goal attainment.
identify the critical determinants of organi- Another management feature in successful
Management Decision zational success and failure which are signif- firms is a commitment to the organization’s
36/5 [1998] 289–301 icant in understanding how strategic organi- original arena of expertise. This is called
© MCB University Press zational change may be managed more effec- “sticking to one’s knitting”. It involves stay-
[ISSN 0025-1747] tively, thus avoiding potential pitfalls. ing close to what the organization knows how
[ 289 ]
Steven H. Appelbaum, to do best and not being led down different The need for professional managers to aid, or
Normand St-Pierre and paths in pursuit of attractive but uncertain replace, the founding group may go unrecog-
William Glavas alternative product lines. nized, and the importance of hiring new tal-
Strategic organizational Successful organizations also tend to stress ent to revitalize the innovative process may
change: the role of leadership,
learning, motivation and
a single value, such as delivering a quality be ignored.
productivity product, reducing the cost of services to cus- Conflict can lead to serious dysfunction if it
Management Decision tomers, or concern for each customer’s is not well managed. Conflicting groups often
36/5 [1998] 289–301 unique need. By emphasizing a single domi- suboptimize or set their own goals for politi-
nant value in its promotional materials and cal and personal gain ahead of organizational
in its training of employees, the organization goals. For this reason, conflict should be man-
establishes a useful, distinct reputation for aged to ensure that it remains in desired
excellence in a specific area. forms and at desired levels.
Finally managers in successful companies Success and failure factors are not evenly
often try to improve performance by achiev- distributed across the three major sources.
ing the agreement or consensus of employees. For example, more environmental factors
Thus, managers and workers may work may contribute to failure than to success.
together to set mutually agreeable perfor- Conversely, more structural factors are
mance goals. Employee suggestions are potential sources of success than of failure.
actively sought and a positive work-group And an almost equal number of management
spirit, which will serve as a basis for factors seem to lead to both success and fail-
enhanced motivation, is encouraged (Vecchio ure. This analysis, albeit simplistic, suggests
and Appelbaum, 1995). a useful insight: Environmental factors are
Different factors in an organization’s envi- more likely to pose potential threats to an
ronment, structure, and management may organization’s well-being, while structural
also lead to its failure. factors are an organization’s major means of
Among the environmental factors, change achieving success or, at least, coping with
in technology are a major cause of organiza- threats. It almost goes without saying that
tional failure. Technological innovations by management-related factors are potential
competitors, as well as innovations that can- sources of both organizational success and
not be implemented within the organization organizational failure (Vecchio and Appel-
itself, can lead to lost business. baum, 1995). The origins of strategic organi-
Two forms of dependency – dependency on zational change will be the next focus of this
suppliers and dependency on a single cus- article.
tomer – can also create problems. Difficulties
in obtaining raw materials and financing
from other institutions can prove fatal for an Conceptual framework of
organization in a competitive environment. strategic organizational change
In addition, a customer who realizes that In order to define organizational change, one
another organization is highly dependent on has to be able to appreciate the historical
its business may use its resulting power to antecedents that brought about the current
drive down prices or extract greater conces- environment with which business firms have
sions by threatening to take its business else- to negotiate.
where. After the Second World War, there was a
In terms of structure, inadequate control drive to improve efficiency. Organizational
mechanisms may contribute to failure. For theorists followed into the footsteps of
example, an organization may lack devices Frederick Taylor in their attempts to define
for sensing when changes occur that need to organizational effectiveness in terms of a
be corrected. As a result, product quality may scientific approach to the management of
suffer or change in employee or customer organizations. “This closed system approach
satisfaction levels may be ignored (Vecchio (where the environment was ignored)
and Appelbaum, 1995). resulted in control-oriented organizations
Management factors may also contribute to with complex structures and simple, routine,
failure. Courageous and decisive leadership monotonous tasks” (Volberda, 1992).
can inspire an organization to overcome diffi- This approach to the management of orga-
cult situations or take quick action. In con- nizations dehumanized the nature of work
trast, a tendency to overanalyze data or to take and subsequently favored the emergence of
a “wait-and-see” attitude may cause a firm to the human relations approach to the manage-
lose ground to competitors and may exacer- ment of organizations. As Adam Smith and
bate internal problems. The kinds of expertise Karl Marx pointed out the “…simplification
that enable a young organization to thrive may of work processes beyond a certain point
become outdated as an organization matures. could have diminishing returns and produce

[ 290 ]
Steven H. Appelbaum, feelings of alienation of workers” (Vecchio can either originate from the external envi-
Normand St-Pierre and and Appelbaum, 1995). ronment such as changes in competitors’
William Glavas In the 1970s the market place demanded actions, government regulations, economic
Strategic organizational
quality in products and services. Organiza- conditions and technological advances. Orga-
change: the role of leadership,
learning, motivation and tions had to distinguish themselves from nizations … take inputs from the environ-
productivity their competition through excellence as ment (e.g. suppliers), transforms some of
Management Decision markets opened up and competition became these inputs, and send them back into the
36/5 [1998] 289–301 fierce. environment as outputs ( e.g. products)
In today’s environment, the ability of orga- (Johns, 1983). Change can also originate from
nizations to respond to micromarkets’ within an organization. These changes could
demands, where choice to the consumer is be new corporate vision and mission, the
preponderant, will depend on their ability to purchase of new technology, mergers and
be flexible. “The transitory nature of … acquisitions and the decline in the morale of
market demands is an important reason that the company. Consequently, among the most
[change and] flexibility … ought to be a common and influential forces of organiza-
defining characteristic of organizational tional change are the emergence of new com-
effectiveness” (Volberda, 1992). Therefore, petitors, innovations in technology, new
from an organizational perspective flexibil- company leadership, and evolving attitudes
ity can be defined as the ability to react to towards work (Vecchio and Appelbaum,
change. 1995).
This section will also address conceptual Strategic organizational change could be
origins and framework of change, internal undertaken in either a reactive or proactive
and external determinants of change and manner. In other words, management could
directed/non-directed change. either foresee the necessity for change and
Like the ancient Greek philosophers, con- undertake the necessary steps to adjust their
temporary theoreticians do not agree on what organization to meet the impending pres-
“is” change. Instead of defining change as a sures of the environment. Or, management
transformation from one state to another, could resist change and be forced into an
which would be logically circuitous, this organizational transformation in order to
article is intended to depict the characteris- survive. Directed change is intentional and
tics of its manifestations in order to develop a consciously initiated, managed, and evalu-
framework for further discussion. ated in relation to (organizations’) current
Strategic organizational change will be and strategic objectives (Felkins et al., 1993).
referred to as a flexible strategic planning Other authors have suggested that organiza-
process as opposed to a static form of strate- tional change can be a continuous and evolv-
gic planning. Because organizational change ing process encompassing: “approaches
has become an integral part of the planning which view organizational change as an
and formulation of organizational strategies, emergent phenomenon and the result of the
the classical strategic planning model just interplay of history, economics, politics,
presented where planning came before for- business sector characteristics” (Wilson,
mulation does not apply anymore: 1992).
In a turbulent environment strategic pro-
grams are insufficient and have to be com-
plemented with strategic issue (or change) Strategic organizational change
management or even contingency planning. and its management implications
(…) If these programs and issues have to be
revised too often, contingency [change] In light of all the different approaches to
planning is more suitable (Volberda, 1992). organizational change, we would like to
It can therefore be suggested that strategic point out a common thread that runs across
organizational change encompass ongoing all of them. In doing so, it is necessary to
initiatives that are directed from the top to draw a parallel to the work of Frederick
the bottom of the organization and has a Taylor in the early 1900s and the emerging
profound effect on the depth of the change theories being espoused by contemporary
effort. Examples of SOCs could involve orga- theoreticians and practitioners of these SOC
nizational transformations from mass pro- efforts:
The apparent re-emergence of certainty,
duction to lean production, the adoption of
and the process of management as a sci-
advance manufacturing technologies and the ence, reminiscent of Taylor’s (1911) “one
implementation of total quality management best way” of organizing. Today this cer-
systems. tainty has arisen in a different guise from
Strategic organizational change can the original studies of scientific manage-
emanate from two different sources: change ment. In place of Taylor’s various

[ 291 ]
Steven H. Appelbaum,
efficiency-based routines, the “one best management may impede the change process
Normand St-Pierre and way” now proposed lies along more struc- (Felkins et al., 1993).
William Glavas tural and cultural lines. The favored model Others have proposed that strategic
Strategic organizational propounded by many business schools as change and goal setting will be influenced by
change: the role of leadership, practiced in many large companies is that
learning, motivation and how a decision maker perceives issues
of the decentralized structure coupled with
productivity related to the change strategy … Through
a task or project based culture. This
Management Decision requires managers to work increasingly in the combined effects of perceived attributes
36/5 [1998] 289–301 multi-disciplinary teams; to become gener- of an issue (magnitude, abstractiveness,
alists as well as functional specialists; and simplicity, immediacy) and the political
to develop a set of competencies as skills foundation of an issue (personal stake), goal
(Wilson, 1992). setting will become part of an agenda-build-
ing process that will foster organizational
The above proposition does provide a serious
change (Dutton, 1988). Leadership will affect
warning to today’s managers of organiza-
how decision makers will pursue this
tional transformations: There is no “best”
agenda building process as discussed in the
approach to strategic organizational change
leadership section of this article.
and effort should be undertaken to
develop contingency or adaptive strategic
Organizational design and technology
planning models to organizational change.
Organizational design consists of the deci-
Whether one adopts a proactive or a reac-
sions about … formal structures, processes,
tive approach to strategic organizational
systems, roles and relationships (Walton and
change, critical managerial variables have
Nadler, 1994). More specifically, the character-
to be assessed in order to implement the
istics which will be affected by a change in
proposed change. It has been suggested that
the organization’s mission and strategy will
some key management change variables
encompass the organizational form (func-
should include goals and strategies, tech-
tional, divisional, matrix), the grouping of
nologies, job design, organizational struc-
business units (function, product/service,
ture, and people (Johns, 1983). Other authors
target market), hierarchical levels (many,
have argued that the management variables
few), planning and control systems, job spe-
to be changed fall into so-called intervention
cialization, training and education programs,
strategies that assist the manager to imple-
degree of centralization, delegation and par-
ment the appropriate organizational change
ticipation (Volberda, 1992).
(Robbins, 1983). These strategies will be
The degree to which the above organiza-
described in the “strategic organizational
tional design variables are responsive to the
change process” section of this article. This
change of an organization’s strategic objec-
section will illuminate vision, design/tech-
tives will reflect the flexibility of the struc-
nology, management practices and organiza-
tural design. For the management of organiza-
tion culture, the SOC process and resistance
tions,
to SOC. the success of organizational change …
depends on the extent to which every aspect
Organizational vision: goals and strategies of the system (design) – formal structure,
Although there is much talk about vision, information flows, rewards, recruitment,
mission, goals, and so on in most organiza- etc. – support the new definition of what the
tions, in too many those issues are not ade- organization is to be and how it is to operate
quately articulated. An organization needs to (Kanter et al., 1992).
understand the strength of its internal capa-
A new organizational design needs to be sup-
bilities to properly communicate a vision and
ported by appropriate technologies. A change
mission to its employees. The evolution of an
readiness assessment should illuminate the
organization’s leadership skills (e.g. techno- factors that affect on an every day basis and
cratic versus “intrapreneurial”), training how people use the technology in their job
programs and investment capabilities will (Trahant and Burke, 1996). The change readi-
determine how the latter will set its goals and ness assessment will highlight the extent to
strategies. which people in the organization are ready to
The degree to which management sets adopt and use the new technology and will
goals and strategies to change the organiza- determine the magnitude of the change
tion is contingent upon the organization’s efforts needed. According to other
historical goal setting process success in researchers:
implementing changes (i.e. learning from productivity benefits derived from the incor-
past mistakes). Unrealized past goals, poor poration of routine tasks into advance man-
communication to lower levels of manage- ufacturing technologies … effectively inten-
ment, lack of commitment from top sifies the complexity in the remaining jobs

[ 292 ]
Steven H. Appelbaum, because the production hardware, its soft- (discipline, socialization, tolerance for ambi-
Normand St-Pierre and ware, and their maintenance impose more guity) and its external orientation (focus,
William Glavas complex technical requirements than most planning attitude – from short-term to long-
Strategic organizational earlier production technologies… term) (Volberda, 1992). The extent to which
change: the role of leadership, (Zammuto and O’Conner, 1992).
learning, motivation and these organizational cultural elements can
productivity Therefore, the change readiness assessment assist managers in implementing strategic
Management Decision may help identify people who lack necessary organizational change will explain their
36/5 [1998] 289–301 skills to evolve in the new organization. potential to contribute to the organization’s
By technology we are referring to: success. It has been suggested that organiza-
(1) hardware (like machinery and equip- tions try to establish a link between the above
ment) and the software (knowledge, tech- cultural elements and some critical success
niques and skills) used in the transforma- factors such as continuous improvement,
tion of material or informational inputs into customer service orientation, cost conscious-
various outputs (either goods or services) as ness, quality, teamwork and people oriented
well as (2) the configuration of the hardware (Rogers and Byham, 1994).
and software (Volberda, 1992).

The extent to which a given technology pro-

motes or impedes strategic organizational The strategic organizational
change will depend on how managers will change process
succeed at optimizing the relationship Organizational development (OD) is a dis-
between the social (people) and technical tinct area within the field of organizational
systems of an organization (Beekin, 1989). Of science that focuses on the planned and con-
particular interest is how the knowledge of trolled change of organizations in desired
work procedures (software) are synchro- directions. In general, outside consultants
nized with the mode of production (e.g. small rather than organizational members are
batch process), the physical layout of the usually responsible for managing the devel-
facilities (e.g. line activities versus station opment process. In essence, OD attempts to
layout) and means of transformation (e.g. change an organization as a totality by chang-
specialized versus multipurpose) (Volberda, ing the organization’s structure, technology,
1992). people, and/or tasks. In reality, any facet of an
organization is a legitimate target of OD. In
Management practices and organizational this article, the focus will be primarily on
culture change efforts that are directed at people
Strategic organizational change must also rather than at tasks, structure, or technology.
foster new management practices that are A popular definition of OD, which can be used
conducive to the achievement of the organi- for discussing the people side of planned
zation’s new mission and strategy. Manage- change, has been offered by French and Bell
ment practices could involve new job (Vecchio and Appelbaum, 1995). For these
designs, interconnection between people and authors, OD is a “long-range effort to improve
organizational processes, and the rules and an organization’s problem-solving and
principles (or culture) that govern how peo- renewal process … through a more effective
ple do their work. When people are not moti- … management of organization culture…
vated to do their jobs or do not understand with the assistance of a change agent … and
how their job fits in with the larger goals of the use of the theory and technology of
the organization, there is a “system discon- applied behavioral science (French and Bell,
nect” that needs to be addressed if the organi- 1978).
zation is to be successful in moving forward Strategic changes impose a pressure or
with change initiatives (Trahant and Burke, force on the organization. Two popular
1996). schools of thought have developed models to
In job design, as an example, one suggested assist management in the understanding and
approach is to make certain that the individ- implementation of change. Organizational
ual workers in the organization have some development (OD) models are founded upon
authority and accountability built-in into the principle of achieving consensus and
their jobs and that these elements are congru- participation between individuals in an orga-
ent with the new organizational strategies nization. One model uses Lewin’s force field
(Rogers and Byham,1994). analysis framework to help individual man-
The rules governing the organization or its agers analyze change, predict the likely con-
culture might include its beliefs and the val- sequences and handle resistance and block-
ues (e.g. conservative to innovative), its lead- ages along the way (Wilson, 1992). Lewin’s
ership approach (e.g. instructive, consulta- model assumes that one must strike a bal-
tive, participative), unwritten rules ance between the sources of changes and
[ 293 ]
Steven H. Appelbaum, forces that resist change. According to some suggested that senior management needs to
Normand St-Pierre and authors (Robbins, 1983) implicit in the articulate a crisis situation in order to
William Glavas unfreezing-changing-refreezing process is lessen the resistance to organizational
Strategic organizational the recognition the mere introduction for change. To succeed, senior managers need
change: the role of leadership,
learning, motivation and
change does not ensure the elimination of the to communicate a sense of urgency, or as
productivity prechange condition or the fact that the some have stated they must build a burning
Management Decision
change will prove to be enduring. Therefore, platform for change (Van Buren and Werner,
36/5 [1998] 289–301 from an SOC perspective, management has to 1996). Furthermore, to support this point,
determine how the organization will resist the resistance of middle managers and first-
change and either increase the driving forces line supervisors is frequently identified as a
or decrease the resisting forces to have a major implementation barrier (Van Buren
lasting effect. and Werner, 1996). Middle managers feel
The behavior modification (BM) interven- threatened due to the fear of losing their
tion is the normative essence of the wider jobs and also due to the pressure that is
concepts of motivation, reward, learning and applied by senior management in order to
organizational culture (Wilson, 1992). This redefine their role from directing to coach-
second school of thought has its roots in the ing and counseling.
practices of behavior modification and is an A method to minimize the resistance to
attempt to understand and reduce complex change, may best be introduced piecemeal:
change processes in the organization to The fewer the number of employees affected
explicit rules, procedures, and strategic from the outset, the less the resistance to
actions to deal with all possible contingencies change and the greater the overall effective-
(Felkins et al., 1993). The following is the ness of the intervention (Beekin, 1989).
process by which one can make changes to
the organization.
First, managers articulate a vision of which Leadership and strategic
kind of organization culture they want organizational change
(based upon available models of culture and
upon the assumed strategic consequences of As pointed out earlier in this article, the
a specific culture – environmental fit). Sec- articulation of an organizational vision is
ond, the process of change is one which vital. This will be covered in this section as
individuals in the organization are per- well as leadership dimensions and technol-
suaded to “buy in” to the desired culture. … ogy, culture and middle management perspec-
Third, the technique of BM is put in place to tives. According to Hitt, senior management
achieve the change process. Based upon must articulate a clear vision of the future
Skinnerian psychological theories of learn-
“ideal” organization in order to successfully
ing (Felkins et al., 1993).
implement SOC. Once the vision is estab-
Management often uses techniques such as lished, senior management must establish
modeling and also rewarding the appropriate and create understanding and commitment
behaviors in order to implement change. The among organization members to share the
modeling and the rewarding process has to vision of the ideal identity – and the actions
be constant throughout the organization. that are necessary to achieve it (Hitt et al.,
Management should avoid giving mixed 1996). Other authors are in agreement that
signals to the organization by promoting the actual transformation of a system occurs
managers who do not support the change as a consequence of a “vision” of the corpora-
effort. This is an important consideration. A tion’s future and the will to achieve it. It has
discussion of the viability of OD will be forth- also been suggested that organization leaders
coming in the concluding section of this have roles to play in order to implement a
article. clear vision: separate from the past, create a
According to Beer and Eisenstat (1996), sense of urgency, develop enabling structures,
organizations tend to resist change unless communicate, involve people and be honest,
the change is critical to the organizations’ reinforce and institutionalize change (Kanter
existence. The resistance usually manifests et al., 1992).
itself as a result of the organizations’ poli-
tics and defensive routines. Ideas that chal- Leadership dimensions and technology
lenge accepted assumptions, values, and Two leadership dimensions (transactional
norms regarding business strategy and and transformational) have been advanced to
management practice cannot be discussed explain the impact the leaders of organiza-
openly among key actors. Lacking the capac- tions have on the technological change
ity for open discussion, top team cannot process. First, transactional leadership sees
arrive at a shared diagnosis (Beer and technological change as needing primarily
Eisenstat, 1996). Other authors have technical solving skills, with little attention

[ 294 ]
Steven H. Appelbaum, given to people problem solving (Beatty et al., change effort “lies in changing the people
Normand St-Pierre and 1992). Under this leadership dimension, the system – the skills and behavior of hundreds
William Glavas manager lacks the skills required to influ- of employees. It relies on the ability and atti-
Strategic organizational tude of mid-level and front line managers’
ence the perception of organizational mem-
change: the role of leadership,
learning, motivation and bers exhibiting resistance to the change. initiative (Katzenbach, 1996) to take on the
productivity Therefore, technical managers handling leadership role to implement the SOC initia-
Management Decision projects incorporating organizational tive.
36/5 [1998] 289–301 change need to take time to hear out the Katzenbach (1996) further confirms that a
protests and problems of others caught up in leader must connect with the minds and
the change and listen to the views of subordi- hearts of their people, find the simple words
nates who are likely to understand the impli- that calm the anxiety and instill courage, and
cations of the new technology (Beatty et al., maintain the trust needed to bring about
1992). lasting change. If one looks again from the
The second approach, transformational perspective of SOC, it is important to realize it
leadership, views technological change as is critical that middle management be
needing a combination of technical and involved in the leadership activities that are
human relations aspects. This dimension required to move towards the ideal organiza-
contends that managers are given the role in tion.
translating top management’s vision through
exercising skills of pathfinding (give direc-
tion), problem solving, and implementing to Learning and strategic
introduce technological change (Beatty et al., organizational change
1992). This section of the article will examine learn-
ing to change, learning the new organiza-
Leadership culture and middle tional vision and goals, organizational design
management and technology and organizational culture.
In general, there is no agreement as to the The initial challenge will be to explore how
characteristics or character traits of leaders organizations learn to change.
resulting in the explanation of leadership The implementation of a new vision and
from its behavioral aspects. According to strategy via the involvement of senior and
Vecchio and Appelbaum (1995), leadership is middle management will depend very much
a process through which a person tries to get on how the individual players and the organi-
others in the organization to do what he or zation itself are motivated to learn. When
she wants. Sleeth et al. (1996) expand on this people have the right attitudes and commit-
by stating the actions that link people and ment, learning automatically follows
tasks to accomplish work is what leadership (Argyris, 1991). Organizations themselves
is all about. will also need to be part of the process as they
It is through leadership that organiza- try to learn to reformulate strategy and
tional members are able to achieve senior realign their organizations continuously, if
management’s “ideal” vision of the future they are to survive in an increasingly turbu-
organization. The extent of the gap between lent environment (Beer and Eisenstat, 1996).
the current organization and the ideal orga- At the organizational level, it has been
nization can have an impact on the success argued that ideas which challenge the core
of the SOC initiatives. If the gap is elements of an organization’s culture and its
sufficiently large, change efforts are likely to accepted management practices are rarely
be frustrating and potentially devastating, openly discussed among key managers (Beer
because members will perceive the change and Eisenstat, 1996). This may be one of the
either too threatening or impossible to core elements in identifying critical problems
achieve (Hitt et al., 1996). Therefore, it is in need of solutions.
senior management’s responsibility to Among the reasons identified as being
“manage” the SOC effort by ensuring that organizational barriers to learning are poor
the gap between the “as is” and the “to be” interfunctional coordination, poor vertical
vision is wide enough to challenge the orga- communication, unclear strategic priorities
nization and not too wide to demoralize the and poor teamwork (Beer and Eisenstat,
change effort. 1996).
According to Katzenbach (1996), the ideal At the individual level, workers can be
vision of the organization encompasses a motivated to actively learn if the organization
conceptualization of the change effort, a defi- teaches how to break down their defenses
nition of the core processes and even a defini- that block learning: people must learn to
tion of the appropriate team at the top of the identify what individuals and groups do to
organization. The most difficult aspect of the create organizational defenses and how these
[ 295 ]
Steven H. Appelbaum, defenses contribute to organizational prob- In order to motivate people to learn a new
Normand St-Pierre and lems (Argyris, 1991). technology, we must empower them with the
William Glavas right knowledge, technique and skills to
Strategic organizational Learning the new organizational vision and implement the new technology. The current
change: the role of leadership,
learning, motivation and goals era of flexible manufacturing technologies
productivity The motivation to pursue a new organiza- requires that individual workers develop
Management Decision tional vision by top management is closely benchmarks (e.g. zero defects, total quality
36/5 [1998] 289–301 linked to how managers perceive (self effi- management, activity-based costing, etc.)
cacy) they can influence corporate strategic and create evolving standards that will mea-
objectives and goals. The degree of control sure their ability to implement strategic
that managers have over internal corporate organizational change throughout the orga-
factors such as sale, cost, marketing nization.
programs objectives will determine how
committed they will become to organizational
Learning and organizational culture
The impact of learning on management prac-
change. Approaches that use objective mea-
tices and the culture of the organization are
sures of performance are better motivators
reflective of a transitional process between
than those that use subjective measures
two learning modes.
(Lawler, 1994).
The first learning mode is referred to as
Concerns for motivating individuals to
single-loop learning and consists of learning
learn new skills can help to reduce the to detect and correct errors based on existing
defenses that block learning: instead of being organizational norms and values. The entire
rewarded for moving up in the hierarchy, learning mechanism is derived from the
people are rewarded for increasing their organization’s previous experiences through
skills while adapting them to change in orga- repetitive reinforcement to detect casualties
nizational goals. and correct the deviative pattern emerging
thereof (Argyris, 1991). An example of a sin-
Learning, organizational design and gle-loop learning would be the traditional
technology budgetary process that most organizations go
The role of the organization at this stage in through every year.
the learning process is to create new train- The second learning mode is referred to as
ing and education programs that will be in double-loop learning. As the name implies, a
line with the new strategic vision. Strategic double-loop is formed as one tries to identify
organizational changes that are not sup- the organizational processes that deviate
ported by rigorous training and educational from established values and standards, and
initiatives will become harder if not impossi- second (i.e. second loop), questions the stan-
ble to implement and will result in failure. dards and the values themselves on which
According to Rummler (1996), successful organizational processes are based (Argyris,
training can only take place if we emphasize 1991). A typical example of double-loop learn-
the importance of developing behavioral ing would be the utilization by an organiza-
tion of a “zero-based” budgeting system.
objectives before deploying instruction. Now
In the context of strategic organizational
the key to performance (becomes) behav-
change, when the fundamental norms and
ioral analysis and task analysis (Rummler,
values are no longer appropriate, single-loop
1996).
learning and the resulting use of standard
The idea for training and education in the
operating procedures introduce significant
corporate world is best exemplified by response delays into organizations’ decision
Motorola’s commitment in the late 1980s to systems (Volberda, 1992). As for double-loop
invest $120 million annually in training and learning, a potential is created for perpetual
education by creating “Motorola University”. organizational change and flexibility.
In the words of Motorola’s corporate vice-
president for training and education at that
time: Motivation, productivity and
…Our commitment is not buildings or a strategic organizational change
bureaucracy but to creating an environment
for learning, a continuing openness to new This final section of the article will discuss
ideas. We do teach vocational subject, but we vision, performance management systems
also teach supervocational subjects – func- and technology and the linkage between
tional skills … We not only teach skills, we motivation, performance and culture.
try to breathe the very spirit of creativity To implement a new organizational vision
and flexibility into manufacturing and and strategic organizational change, it has
management (Wiggenhorn, 1990). been suggested that organizations should

[ 296 ]
Steven H. Appelbaum, undergo transformational change. By trans- Motivation, performance and
Normand St-Pierre and formational (change) we mean areas in which organizational culture
William Glavas alteration is likely caused by interaction with The rules and principles governing how peo-
Strategic organizational
environmental forces and will require ple accomplish their jobs in an organization
change: the role of leadership,
learning, motivation and entirely new behavior sets from organiza- can have profound impact on the latter’s
productivity tional members (Burke and Litwin, 1992). For ability to introduce any type of strategic orga-
Management Decision senior teams of organizations, it will require nizational change. As was stated earlier, the
36/5 [1998] 289–301 the following of decision strategies that will biggest challenge for management is to have
lead to superior organizational performance. their change initiatives supported by the
Such strategies might involve creating value employees of the organization. These change
by introducing new products, penetrating initiatives are likely to encounter serious
new markets, introducing flexible manufac- resistance from various levels in the organi-
turing capabilities and implementing activ- zation, and especially middle management.
ity-based costing within a new management This has already been addressed in a prior
control system framework. discussion.
The basic idea behind strategic organiza- At the individual level, it has been argued
tional change is to provide a clear focus and that the organization members’ willingness
to help establish the gaps in performance and to buy into a culture of change can be facili-
the areas greatest concern and opportunity tated by applying the principles of behavior
for change management (Felkins et al., 1993). modification. These principles, derived from
The success of strategic organizational operant conditioning concepts, are not
change will in turn be measured by improv- applicable to all behavior modification
ing key strategic organizational variables attempts. In designing jobs, organizations
such as market shares, sales volume, earn- have to assess individuals’ capabilities to
ings per share, stock price, cost reduction and adapt to change. For example, it has been
stakeholders (i.e. suppliers, customers, public advanced that the degree to which individu-
at large, etc.) satisfaction. als will translate organizational change ini-
tiatives into higher performance achieve-
Performance management system and ment (BM) is related to their “locus” of con-
technology trol. Since internally oriented individuals
The importance of control systems in organi- (internal “locus”) believe that their own
zational design has been highlighted earlier actions determine outcomes, internals are
more likely to take an active posture with
in this article. As such, performance manage-
respect to their environment. Externals
ment systems are being introduced in order
(external locus), in contrast, may adopt a
to monitor the performance of implemented
passive role (Kren, 1992).
transformational activities in the organiza-
The ability of any organization to motivate
tion.
individuals, whether they have an external or
In a performance management system,
internal locus of control, to superior levels of
strategic initiatives (are) broken into clearly
performance is closely related to their reward
defined accountabilities and responsibilities
systems. Therefore, strategic organizational
and then integrated into the performance
change efforts must ascertain that different
objective of all employees who are responsi-
types of rewards are offered to employees who
ble for turning them into actions (Rogers and might have quite a different attitude set
Byham, 1994). For transformational change to towards organizational change.
occur, every employee in the organization Although it has been suggested that ideal
needs to know what his/her responsibilities organizational climate would provide oppor-
are, how his/her performance is to be evalu- tunities for independence, recognition, and
ated and how his/her performance will be responsibilities (Vecchio and Appelbaum,
monitored against a predetermined set of 1995), some employees’ performance under an
goals. organizational change environment might
At the organizational level, performance still be motivated by extrinsic job satisfaction
improvement will occur when management factors (e.g. pay, job security, fringe benefits,
provides the entire work force with all the working conditions, explicit working rules,
necessary training and technical infrastruc- etc).
ture to support the transformational change As pointed out earlier in this section, indi-
initiatives . All is needed for (strategic orga- viduals need control over the job attributes
nizational) change is to determine the right (intrinsic or extrinsic) that will determine
training program, technology (requirements) how successful they are at reaching their
and the appropriate incentives for each situa- performance objectives. A careful assess-
tions (Felkins et al., 1993). ment of an individual’s ability to control
[ 297 ]
Steven H. Appelbaum, short-versus long-term performance, risk an organizational development underpinning
Normand St-Pierre and taking versus risk aversion, division perfor- and outcome. In discussing organizational
William Glavas mance versus total (organizational) perfor- change and strategies to manage it effectively,
Strategic organizational mance, maximizing return on investment the success of organization development (OD)
change: the role of leadership,
learning, motivation and versus sales growth, and so on is requested needs to be re-addressed in order to fully
productivity (Lawler, 1994). comprehend and appreciate the proposed
Management Decision This article has examined and discussed model. A critical question to grapple with is
36/5 [1998] 289–301 the following: does OD work? Despite difficulty of measur-
• sources of strategic organizational change ing the effects of OD efforts, it is possible to
(SOC); draw some tentative conclusions about the
• SOC and management implications; general value of OD in enhancing organiza-
• leadership and SOC; tional effectiveness.
• learning and SOC; In their examination of 35 studies, Porras
• motivation, productivity and SOC. and Berg (1978) sorted the obtained results
into outcome variables and process variables.
At this juncture, the development of a pro-
Outcome variables refer to measures of pro-
posed SOC model will be presented for poten-
ductivity, efficiency, absenteeism, profits, and
tial application.
so on (relatively “hard” measures), while
process variables refer to measures of trust,
perceptions of leadership, motivation, and
Conclusion: a proposed model for
decision making (relatively “soft” measures).
strategic organizational change
In addition, they further divided their sample
The quest to develop a model of strategic of studies into categories based on whether
organizational change has resulted in the the OD efforts were directed at groups, orga-
selection of elements from Burke and nizations, individuals, or leaders. Their
Litwin’s (1992) “Causal model of organiza- analyses of these studies suggested that
tional change” and Robbins’ (1993) “Model of group outcome variables (e.g. group produc-
planned organizational change”. The Rob- tivity) were most likely to be enhanced follow-
bins’ model depicted the “how” of organiza- ing OD interventions. Individual process
tional change while Burke and Litwin’s variables also showed relatively positive
causal model presented the “what” of organi- improvement (e.g. individual job satisfaction
zational change elements. An objective is to increased in roughly 40 percent of the OD
represent vision and strategy as organiza- studies in which it was measured) (Porras
tional elements because of the importance and Berg, 1978).
that is placed on these in organizational A further analysis was made of these stud-
theory and practice. In addition, it was ies in terms of the impact of various OD pro-
decided not to represent the relationships cedures. By and large, Porras and Berg (1978)
between organizational elements in a matrix- observed that the most common OD tech-
like causal framework because similar to niques, such as team building and survey
Burke and Litwin, that reality is much more feedback, were reported to have positive
complex than most, if not all, models can effects, while T-groups were somewhat less
depict (Burke and Litwin, 1992). Further- effective.
more, it was also decided that a model is Porras and Berg (1978) also observed that
needed that was relatively easy to under- OD efforts that used four or more techniques
stand for people who are required to manage (the eclectic approach) were likely to produce
change. more meaningful change. This suggests that a
On the pages to follow, a description is multifaceted approach to achieving organiza-
made of how the external environmental tional change is most appropriate. In addi-
pressures and the vision of top management tion, they noted that interventions lasting at
initiate a change process which affects the least six days had superior results, with maxi-
goals of the organization, its design, technol- mum benefits being reported when the dura-
ogy, culture, management practices, task tion was between ten and twenty days. This
skills and resistance to change; all topics suggests that OD efforts should be neither too
covered in this article. Subsequently, the brief nor too extended.
change process interaction with organiza- Despite the methodological shortcomings
tional leadership and learning is presented of many of the studies that Porras and Berg
with the ultimate impact on individual and examined and the tendency of OD specialists
organizational performance. All of this is to report their results in the most positive
reflected in the model presented (Figure 1). light (OD failures are less frequently written
The strategic organizational change up), these results suggest that the efforts are
process was depicted earlier in this article as usually effective. As Porras and Berg’s (1978)

[ 298 ]
Steven H. Appelbaum, Figure 1
Normand St-Pierre and Strategic organizational change model
William Glavas
Strategic organizational
change: the role of leadership, Feedback External Environment Organization Vision & Determinants of
learning, motivation and Strategy Change
productivity
Management Decision
36/5 [1998] 289–301
SOC Initiative & Change
Feedback Agents Change agent(s)
& SOC initiatior
*Directed & undirected

Change Process Change Process

*Unfreeze/Change/Refreeze
*Organizational Behavior Process
(Behavior Modification)

*Organization Goals
*Organizational Design
*Technology
*Organizational Culture
*Management Practices
*Resistance to Change
*Training, Tasks & Skills

Leadership
Top and Middle Motivation
Learning
Management Inter-Networked
Organizational
Elements
Affected

Feedback Individual & Organizational Performance

Source: Adapted From Burke & Litwin (1992), Robbins (1993).

analysis suggests, the precise nature of OD’s inappropriate situations, OD cannot be

impact will depend on the type of technique, expected to succeed.
its duration, and the measure chosen to eval- Users may also be disappointed to find that
uate the intervention (Vecchio and Appel- OD often does not live up to its stated ideal as
baum, 1995). described in articles and texts, but the flaw
Although Porras and Berg’s review points may be traceable to the users’ approach. For
to many positive conclusions, the value of OD example, OD is often performed at the lower
as commonly conducted is often questioned levels of an organization, following top man-
by both managers and behavioral scientists. agement’s endorsement. The attitude that
Some of this criticism derives from a healthy OD is a task to be delegated to lower-level
skepticism on the part of managers and managers is likely to minimize the impact of
behavioral scientists. However, other factors most such programs. Yet high levels of par-
can partially account for this criticism. ticipation, support and concern for OD
First of all, OD is not a panacea for every efforts from top-level management are fairly
difficulty an organization may face. Its suc- rare.
cessful use requires skill and expertise, and it As discussed earlier, resistance to change is
is most applicable to interpersonal problems. a significant obstacle to OD efforts. While
When used by nonexperts and applied to resistance on the individual level may be
[ 299 ]
Steven H. Appelbaum, manageable, more difficult challenges arise References
Normand St-Pierre and when resistance stems from the total organi- Argyris, C. (1991), “Teaching smart people how to
William Glavas zational system and its need to cope with its learn”, Harvard Business Review, May-June,
Strategic organizational external environment. The external environ-
change: the role of leadership, pp. 99-109.
learning, motivation and ment, of course, cannot be meaningfully Beatty, C., Lee, A. and Gloria, L. (1992), “Leader-
productivity changed by most OD efforts – and OD efforts ship among middle managers – an exploration
Management Decision are rarely intended to make such changes. in the context of technological change”,
36/5 [1998] 289–301 Therefore, this larger constraint limits the Human Relations, Vol. 45 No. 9, pp. 957-90.
progress that is possible within the organiza- Beekin, R.I. (1989), “Assessing the effectiveness of
tion (Vecchio and Appelbaum, 1995). sociotechnical interventions: antidote or fad”,
In the future, organizations may need to Human Relations, Vol. 42, pp. 877-97.
rely more heavily on the services of OD spe- Beer, M. and Eisenstat, R.A. (1996), “Developing
cialists as they are forced to undergo an organization capable of implementing
planned change. This need for managed strategy and learning”, Human Relations,
change will result from a variety of emerg- Vol. 49 No. 5, pp. 597-617.
ing forces. Rapid changes in technology, for Burke, W. and Litwin, G.H. (1992), “A causal model
example, will require organizations to adjust of organizational performance and change”,
their structure and processes. Also, the envi- Journal of Management, Vol. 18 No. 3,
pp. 523-45.
ronment for many organizations will
Dutton, J.E. (1988), “Understanding strategic
become more turbulent and uncertain. Con-
agenda building and its implications for
tributing to this pressure will be an increas-
managing change”, in Pondy, L.R., Boland,
ingly global business environment and a
R.J. Jr and Thomas, H. (Eds), Managing
shrinking qualified labor pool (caused by
Ambiguity and Change, John Wiley and Sons,
both a “baby bust” and a struggling educa-
New York, NY, pp. 127-44.
tional system). All of these forces will Felkins, P.K., Chakiris, B.J. and Chakiris, K.N.
require organizations to be more flexible (1993), Change Management: A Model for
and responsive. The ability to effectively Effective Organizational Performance, Quality
implement planned change will be of great Resources, Chapters 1,3,8,10, White Plains,
importance in the years to come (Vecchio New York, NY.
and Appelbaum, 1995). French, W.L. and Bell, C.H. (1978), Organizational
In conclusion, it is critical to depict strate- Development: Behavioral Science Interventions
gic organizational change as an integrative for Organizational Improvement, 2nd edition,
process, and all organizational elements, the Prentice Hall, Englewood Cliffs, NJ, p. 14.
soft (human resources) and the hard (systems Hitt, M., Keats, B.A. and Nixon, R.D. (1996),
and technologies), need to be considered for “Rightsizing: building and maintaining
successful change to occur. The proposed strategic leadership and long-term competi-
model for strategic organizational change is tiveness”, Organizational Dynamics, pp. 18-32.
an attempt to link the software and hardware Johns, G. (1983), Organizational Behavior: Under-
components of organizations. standing Life at Work, Scott, Foresman and
In view of the pressures being expected Company, Glenview, IL, Chapter 17.
from the external environment and the criti- Kanter, R.M., Stein, B.A. and Jick, T.D. (1992), The
cal vision of organizations, top management Challenge of Organizational Change, The Free
needs to establish a flexible and adaptive Press, New York, NY, Chapter 6, 10.
Katzenbach, J.R. (1996), “Real change manage-
infrastructure that should lead tomorrow’s
ment”, The McKinsey Quarterly, No. 1,
organizations to higher levels of
pp. 148-63.
performance. The largest barrier to “change”
Kren, L. (1992), “The monitoring effects of locus of
is not changes to technologies, and work
control on performance incentives and partic-
processes but changes involving people. To
ipation”, Human Relations, Vol. 45 No. 9,
reach such level of performance, links
pp. 991-1012.
between the environment, the vision of the Lawler, E. (1994), “Effective rewards systems:
organization, its leadership and learning strategy diagnosis and design”, in Howard
processes are essential. and Associates (Eds), Diagnosis for Organiza-
Further research is needed to identify sys- tional Change, The Guilford Press, New York,
tematic integrative models of strategic orga- NY, pp. 210-38.
nizational change with predictive capabili- Porras, J.I. and Berg, P.O. (1978), “The impact of
ties. These models could be utilized both by organization development”, Academy of Man-
management and organizational researchers agement Review, No. 3, pp. 249-66.
in order to facilitate the implementation of Robbins, S. P. (1983), Organizational Theory, The
adaptive strategic change initiatives. This is Structure & Design of Organizations, Prentice-
the challenge. Hall, Englewood Cliffs, NJ, Chapter 15.

[ 300 ]
Steven H. Appelbaum, Rogers, W. R. and Byham, W.C. (1994), “Diagnosing Volberda, H.W. (1992), Organizational Flexibility
Normand St-Pierre and organizational cultures for realignment”, in Change and Preservation: A Flexibility Audit
William Glavas Howard and Associates (Eds), Diagnosis for & Redesign Model, Wolters - Noordhoff,
Strategic organizational Organizational Change, The Guilford Press, Chapter 3, 4, 6.
change: the role of leadership,
New York, pp. 179-209. Walton, E. and Nadler, D. (1994), “Diagnosis for
learning, motivation and
productivity Rummler, G. (1996), “In search of the holy”, Train- organization design”, in Howard and Associ-
ing & Development, pp. 26-32. ates (Eds), Diagnosis for Organizational
Management Decision
36/5 [1998] 289–301 Sleeth, R., Johnston, G. and Wallace, R. (1996), Change, The Guilford Press, New York, NY,
“The effective leader as a link between tasks pp. 85-105.
and people”, SAM Advanced Management
Wiggenhorn, W. (1990), “Motorola U: when train-
Journal, pp. 16-21.
ing becomes an education”, Harvard Business
Trahant, W. and Burke, W. (1996), “Creating a
Review, No. 4, pp. 71-83.
change reaction: how understanding organi-
Wilson, D. (1992), A Strategy of Change: Concepts
zational dynamics can ease re-engineering”,
National Productivity Review, Vol. 15 No. 4, and Controversies in the Management of
pp. 37-46. Change, Routledge, New York, NY,
Van Buren, M.E. and Werner, J.M. (1996), “High Chapters 1-4.
performance work systems”, Business and Zammuto, R. and O’Conner, E.J. (1992), “Gaining
Economic Review, Vol. 43 No. 1, pp. 15-23. advanced manufacturing technologies’ bene-
Vecchio, R.P. and Appelbaum, S.H. (1995), Manag- fits: the role of organizational design and
ing Organizational Behaviour, Dryden, culture”, Academy of Management Review,
Toronto, Chapters 10, 19. Vol. 17 No. 4, pp. 701-28.

Application questions
1 Would you agree with the author that the 2 If planned change is the key to organiza-
largest barrier to change is people, not tion success, should people hold a defined
technology and work processes? change planning role?

[ 301 ]

View publication stats