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   Source : Handbook of Strategy and Management   

Change Theories

Most organizational scholars would agree that change is a difference in form, quality, or state over time in an entity. The entity may be a strategy, an individual's job, a work group, a strategic business unit, the overall organization, or an industry. Change in any entity manifests itself in differences on a set of dimensions across time.

Much of the literature on organizational change focuses on the nature of these differences, what produced them, and the consequences. The literature offers several useful distinctions about change: planned or unplanned, incremental or radical, evolutionary or revolutionary, emergent or realized, induced or autonomous, recurrent or unprecedented, and more (cf. Burgelman, 1983; Mintzberg and Waters, 1985; Pettigrew, 1985; Tushman and Anderson, 1986). As is apparent from even this short list of distinctions, explaining how and why organizations change has been a central and enduring quest of management scholars and in other social science disciplines (see reviews in Sztompka, 1993; Van de Ven and Poole, 1995).

Van de Ven and Poole (1995) propose a typology of this literature by categorizing change processes along two dimensions: mode of change and unit of change. Mode of change distinguishes between change sequences that are constructed and emergent in contrast to change sequences that are prescribed a priori by either deterministic or probabilistic laws. Unit of change distinguishes between change processes that involve the development of a single organizational entity in contrast to processes that involve interactions between two or more entities.

By cross-classifying these two dimensions, Van de Ven and Poole identify four ideal theories that are often used to explain how and why organizational changes unfold - life cycle, teleology, dialectics, and evolution (Figure 10.1). We review these four theories here, for they represent fundamentally different bases for strategic change. Each theory focuses on a different set of change generating mechanisms and causal cycles to explain the processes that unfold.

Teleological Theory

Van de Ven and Poole (1995) describe a teleological theory as based on the assumption that change is guided by a goal or desired end-state. It assumes that the organization is populated by purposeful and adaptive individuals. By themselves, or in interaction with others, they construct an envisioned end-state, take action to reach it, and monitor their progress. This approach underlies many organizational theories of change, including functionalism, decision making, adaptive learning, and most models of strategic choice and goal setting.

Teleological theory views development as a cycle of goal formulation, implementation, evaluation, and modification of goals based on what was learned or intended. The theory can operate in a single individual or among a group of cooperating individuals or organizations who are sufficiently like-minded to act as a single collective entity. Since the individual or cooperating group have the freedom to set whatever goals they like, teleological theory inherently accommodates creativity; there are no necessary constraints or forms that mandate reproduction of the current entity or state.

Teleology does not presume a necessary sequence of events or specify which trajectory development will follow. However, it does imply a standard by which development can be judged - development is that which moves the entity toward its final state. There is no prefigured rule, logically necessary direction or set sequence of stages in a teleological process. Instead,  theories based on teleology focus on the prerequisites for attaining the goal or end-state: the functions that must be fulfilled, the accomplishments that must be achieved, or the components that must be built or obtained for the end-state to be realized. These prerequisites can be used to assess when an entity is developing; it is growing more complex, it is growing more integrated, or it is filling out a necessary set of functions. This assessment can be made because teleological theories posit an envisioned end-state or design for an entity and it is possible to observe movement toward the end-state vis-à-vis this standard.

While teleology stresses the purposiveness of the individual as the generating force for change, it also recognizes limits on action. The organization's environment and its resources of knowledge, time, money, etc. constrain what it can accomplish. Some of these constraints are embodied in the prerequisites, which are to some extent defined by institutions and other actors in the entity's environment. Individuals do not override natural laws or environmental constraints but make use of them in accomplishing their purposes.

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   Strategic Change Processes   

 Strategy process research is at a crossroads. We are bombarded by an ever-increasing number of strategy concepts and frameworks. Some of these concepts and frameworks are normative whereas others are descriptive. Some are anchored at the individual level of analysis whereas others recognize the collective and distributed nature of strategy and strategizing. It is easy to get lost in this complexity.

The proliferation of strategy concepts and frameworks is perhaps a reflection of key changes that are occurring in our environment. First, the pace at which products, technologies, organizations, industries, and economies are changing is increasing. In some cases, change has become so rapid that a new term has been coined - internet time. Second, interdependencies between economic and social agents are becoming increasingly complex. In many instances, boundaries between once distinct entities are blurring to such an extent that it is difficult to discern where one entity begins and another takes over (Davis and Meyer, 1998; Garud et al., 1998a).

Historically, strategy process has been viewed as a logic used to explain a causal relationship in a variance theory, or a category of concepts dealing with the actions of leaders or organizations (Van de Ven, 1992). These perspectives were sufficient for examining change as a discrete shift from one stable state to another. However, the increasing pace of change and complexity of operation leads us to recognize change as an ongoing dynamic journey, not a discrete event shifting from one unfrozen state to another frozen state (Van de Ven et al, 1999).

Under these conditions, it is more productive to view change as nested sequences of events that unfold over time in the development of individuals, organizations, and industries. In these settings, we are challenged to examine how different mutually dependent groups co-evolve in their efforts. No longer is it appropriate to view organizational change as produced solely by full-blown strategic plans in response to industry life cycle dynamics or as adaptations and partisan mutual adjustments amongst conflicting entities within an evolutionary process (Chakravarthy and Doz, 1992). Instead, organizational change is more appropriately characterized as a ‘duality’ (Giddens, 1979) wherein organizations are shaped by a continual flow of events that they, in turn, help to shape (Garud and Karne, 2001).

Our objective is to explicate this notion of organizational change as duality. To do so, we begin with a review of four basic process theories of change. Van de Ven and Poole (1995) point out that each theory has an implicit ‘motor’ driving change. An explication of these motors provides a way to systematically explore strategic change processes. In doing so, we can generalize insights between settings driven by similar motors. Moreover, scholars and practitioners can generate additional insights by combining motors to explore more complex processes.

 Source : Handbook of Strategy and Management

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