Predicting Organizational Change Success: Matching Organization Type, Change Type and Capabilities

Article excerpt

Executive Summary

The increasingly global world in which organizations operate has created an unstable environment that requires continuous change for most organizations. Burns and Stalker (1961) have argued that mechanistic organizations are not as suited to change as organic organizations. While mechanistic organizations have functional capabilities suited to operational efficiency, the formalized, and hierarchical nature of the organizations limits their ability to change. Organic organizations on the other hand, are thought to have capabilities which suit them to reshaping and reinventing themselves. A survey was used to study the implementation of major changes in 153 organizations. The results of the study indicate that mechanistic organizations were successful at implementing technical-structural change, but less successful at behavioral-social change. Organic organizations were equally successful at implementing both technical-structural and behavioral-social changes. These findings suggest that the argument that mechanistic firms cannot adapt to unstable environments is not correct. Mechanistic organizations may better cope with instability in the environment by identifying technical and structural change options rather than attempting to cope with instability through social and behavioral change. The results also indicate that managers understand the capabilities needed to implement behavioral-social change, and that deficits in these areas are related to the failure of change. That managers understand the capabilities needed for change, but are unable to develop them raises issues around the utility of prescriptive change recommendations.

The dynamic and increasingly global world in which organisations operate has created an unstable environment that requires continuous change for most organisations (Beer, Eisenstat & Spector, 1990; Beer & Walton, 1987; Dunphy & Stace, 1992; Tushman, Newman & Romanelli, 1986). Large organisations in particular, have been forced to undergo significant and profound change due to the increasingly competitive environment (Nadler & Tushman, 1989). Tushman et al. (1986) argue that while they may not always succeed, organisations which do not initiate change in response to changing environments will under-perform.

Within the management field, Burns and Stalker (1961) initiated a view which is seldom questioned. They argued that many mechanistic organizations are not as suited to change as organic organizations. Mechanistic firms are viewed as formalized, bureaucratic, and having structural and process characteristics that render them less capable of change than organic organizations. If correct, and competition is becoming increasingly dynamic, then the change efforts of mechanistic organizations should be failing to allow them to adapt to the unstable environment (Hitt, Keats and De Marie, 1998).

However, not all environmental instability and resultant changes are the same (D'Aveni, 1999; March, 1981). There exist potentially important differences in the types of changes that organizations undertake, and different organizational types may be suited to different types of change. Changes which rely on shifts in attitude, behavior and culture are qualitatively different from changes which involve the introduction of new technologies, processes and structures (Dunphy & Stace, 1992).

With strong communication and adaptive capabilities, organic organizations are well positioned for changes involving attitudes and behavior. However with strong functional capabilities, mechanistic organizations may be suited to the implementation of technical and structural changes. The difficulty mechanistic organizations may face in unstable environments could be restricted to change that is primarily attitudinal, behavioral or cultural.

Challenging Burns and Stalker's (1961) argument that only organic organizational types are appropriate for unstable environments, the current study investigates whether organic and mechanistic organizations are both equally capable of change, albeit of different types. …