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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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