Managing Organizationsl Change

Palmer−Dunford−Akin: Managing Organizational Change: A Multiple Perspectives Approach, Second Edition

3. Why Organizations Change

Text

© The McGraw−Hill Companies, 2009

Chapter

3

Why Organizations Change

Learning objectives

On completion of this chapter you should be able to: • Understand environmental pressures propelling organizations towards change. • Articulate arguments about why not all organizations are affected equally by such pressures. • Outline a range of issues internal to organizations that push them towards change. • Gain an awareness of the interaction between forces for stability and forces for change. • Relate differing images of managing change to pressures for change.

Managers are faced with a paradox. They are told to change their organizations or risk them perishing; at the same time, they are told that their organizations are at risk of perishing because of the disruptive impact of change.1 Up to 84 percent of U.S. firms are involved in a major organizational change, although many are deemed not successful.2 Ghoshal and Bartlett3 argue that for “every successful corporate transformation, there is at least one equally prominent failure.” They contrast the successes of GE and ABB with the problems experienced by Westinghouse and Hitachi. Other writers estimate that up to 70 percent of large-scale changes fail and that “a conspiracy of silence”4 accompanies these failures, with most companies not being willing to discuss them publicly. Kotter5 argues that the result has been “carnage . . . with wasted resources and burned-out, scared, or frustrated employees.” All this raises the question of why managers participate in change if it is such a risky activity. This issue has come under scrutiny in recent times.6 One position is based on an economic perspective of organizational change. It is one that is closely aligned to images of organizational change that adopt a “management as control” assumption and assumes that: • In...