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   Source : Handbook of Strategy and Management 9   

Strategic Change Issues Associated with Dialectical Tension

Since Barnard (1938), organization and management theorists have largely accepted the premise that cooperation and consensus among organizational members are prerequisites for achieving organizational goals. This ‘consensus orientation’ views conflict between organizational constituents and disagreement about organizational direction as counterproductive activities that divert organizational resources from the coordinated and efficient attainment of commonly accepted goals. Proponents of a consensus orientation cite empirical research demonstrating that organizational performance is facilitated by executive consensus on means (Bourgeois, 1980), consensus regarding both means and ends (Dess, 1987), and that cognitive diversity inhibits comprehensive and thorough long-range planning (Miller et al, 1998).

An alternative perspective suggests that unity and consensus among organizational members is only effective in stable environments and for unambiguous or routine organizational tasks (Nehmeth and Staw, 1989; Jehn, 1995). According to this alternative perspective, disagreement about goals and direction may be a critical organizational dynamic leading to innovation, change, and renewal (Coser, 1957). Organizations that squelch disagreements and foster consensus become rigid and myopic, unable to adapt to changing circumstances or respond to competitive threats. In the words of Dahrendorf (1959: 170), a consensus orientation can answer the question ‘What holds organizations together?’ but only an orientation that includes conflict and disagreement can answer the question ‘What drives organizations on?’.

Dialectical change processes are becoming increasingly relevant as organizations become complex and pluralistic. Dialectical processes are generated as actors with different bases of power and from different cultures interact with one another to influence organizational directions and compete with one another for scarce organizational resources. In a multicultural context, a change effort may produce counter reactions that affect the balance of power and associated social structures. Consequently, change itself spawns dialectical reactions in its wake.

Dialectical tensions between people with different values and preferences automatically increase as an organization opens up to change and pluralism. Opening up a firm to multiple constituencies raises a fundamental question -'In whose interest should a firm be run?' Pursuing such a question takes us to a stakeholder view of the firm (Cyert and March, 1963; Freeman, 1984; Dunbar and Ahlstrom, 1995; Garud and Shapira, 1997; see the AMJ issue on stakeholders, social responsibility and performance edited by Harrison and Freeman, 1999). In such a view, a firm consists of multiple constituencies, each with different interests and values. Organizational actors act in their self-interest, and in doing so, may be in opposition to one another (Pfeffer and Salancik, 1978). An organized entity, then, is not necessarily a unitary actor with an unified purpose. Instead, it consists of many actors with different value systems and preferences who act in their best self-interests.

From this perspective, a firm is a forum for facilitating processes that generate superordi-nate goals from the meaningful representation of different stakeholders. However, such a synthesis is not always assured. Sometimes one group may gather sufficient power to suppress and prevent the mobilization of opposition groups. Those in authority and power can address conflict in two ways. First, they can use the ‘hierarchy’ to address conflicts at one level through command and control exercised at a higher level. Or, they can use ‘time’ to address conflicts through the sequential attention to goals (March and Simon, 1958).

A different set of issues surface as one considers the oppositions that firms encounter as they pursue courses of actions that collide with those pursued by other firms (Van de Ven and Garud, 1993a, b; Garud and Rappa, 1994). For instance, the directions that any firm may pursue along a technological trajectory may be in opposition to those pursued by rivals. Each technological trajectory trades off one dimension of merit for another, thereby generating multiple and conflicting cues.

The presence of multiple and conflicting cues generates ambiguity (Daft and Lengel, 1986). In the presence of resources such ambiguity generates ‘action persistence’ (Brunsson, 1982; Garud and Van de Ven, 1992; Starbuck, 1983). Researchers developing cochlear implants encountered these conditions in the 1980s (Garud and Van de Ven, 1992). Their response was to close themselves from feedback. Metaphorically it was akin to saying ‘damn the torpedoes, full steam ahead’. Indeed, where future states may be enacted in a self-fulfilling manner, such action persistence may be appropriate.

However, as was the case with cochlear implants, these dynamics can result in an escalation of commitment (Staw, 1976). To avoid this eventuality, proactive firms may institute checks and balance to reduce the possibilities of needless escalation of commitments. For instance, Intel has put into place internal mechanisms to engage in critical inquiry (Argyris et al., 1985). Not only do they have mechanisms in place to discuss contrarian inputs from their employees, but their CEO also engages in ‘discrediting’ (Weick, 1979) by being ‘paranoid’ (Grove, 1996).

A broader principle implicit in Intel's practices is that ambiguous, uncertain, and changing situations require a more pluralistic leadership structure that encourages the requisite variety of perspectives needed for learning by discovery (Hedberg et al, 1976; Van de Ven and Grazman, 1997; Van de Ven et al, 1999). The value of conflict and disagreement in organizations is based on the assumption that the consideration of multiple perspectives is a critical requirement for effective decision making. Organizations and groups that foster multiple points of view are less likely to overlook critical competitive contingencies that affect their ability to accomplish goals and are more likely to anticipate the need for changes in organizational strategy and structure (Bantel and Jackson, 1989; Lant et al., 1992; Wiersema and Bantel, 1992). They are also more likely to develop creative ‘syntheses’ (Bartunek, 1993) and less likely to suffer from problems like groupthink (Janis, 1972).

In this regard, Van de Ven et al. (1999) offer insights on the virtues of fostering pluralistic leadership processes. They suggest that the roles of sponsors and champions be countered by a critics' role. It is through the dynamic interplay between these different leadership roles that strategy is forged over time.

However, internal diversity is difficult to maintain. Depending upon the nature of diversity and how it is managed, ‘vicious’ cycles may emerge (Raghuram and Garud, 1995). Perhaps this is why organizations with executive teams that value contradictory perspectives and keep them in balance are seldom observed. However, studies of these exemplary outliers provide some useful clues. First, Levinthal (1997) discusses structural mechanisms for maintaining diversity within the firm by establishing multiple sources of resources and bases of legitimate authority that promote multiple communities of practice or learning groups (Brown and Duguid, 1991). Second, Bartunek (1993) points out that achieving balanced internal diversity requires strong institutional leadership to tolerate the ambiguity of holding multiple perspectives, to be able to truly balance the power between managers with different perspectives, and to enable their interaction toward a creative outcome.