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Human Relations
DOI: 10.1177/0018726708101980
Volume 62(4): 459499
Copyright 2009
The Tavistock Institute
SAGE Publications
Los Angeles, London, New Delhi,
Singapore and Washington DC
http://hum.sagepub.com
A B S T R AC T
K E Y WO R D S
The growing globalization of business has led to an increasing need to implement organizational strategies that transcend national boundaries. Issues
arising from different national contexts have been identified as a critical
stumbling block for international joint ventures (Brouthers & Bamossy,
2006), mergers and acquisitions (Antila, 2006; Napier et al., 1993), and
alliances (Jones, 2002). The rapid growth of developing economies also
makes it important that firms adapt to changes in these economies (Peng,
2003). The successful implementation of global strategic plans requires a
mastery of international organizational change.
459
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460
patterns as well as increases the methodological rigor of our study (Miles &
Huberman, 1994).
Our research contributes to the literature in several ways. First, it
advances our limited knowledge of the OC phenomenon in China. Second,
the limitations in the existing theories of OC that are revealed by our Chinese
case studies prompt us to suggest specific ways in which OC theories may
be modified in order to increase their geographic scope of applicability.
Organizational change
Our focus is on planned organizational change, which seeks to shift an
organization from an initial state to a different end state in order to achieve
one or more objectives. For example, decision-making may be decentralized
to front line workers, with the ultimate goal of increasing customer satisfaction. Planned OC has been researched extensively (Porras & Robertson,
1990), with Pettigrew (1990) suggesting that a comprehensive theory of OC
must address three fundamental dimensions: process, content, and context.
This suggestion has been widely accepted, with Armenakis and Bedeian
(1999) augmenting this list of dimensions to include the outcome(s) of
change.
Figure 1 illustrates the relationship between the various components of
a planned change initiative, and visually elaborates the implicit models of
Armenakis and Bedeian (1999) and Pettigrew (1990). This model provides
a basis for our review of current theories of OC and empirical findings, with
the objective of identifying topics and ideas important for international OC
research. Our review is organized around four key components of this
diagram: Change criteria, the outcomes (and objectives) of change; change
process, the means by which change is brought about; change content, the
Contextual
factors
Stimulus
Contextual
factors
Starting
system
OC process
Contextual
factors
Enacted
system
Feedback
Feedback
Figure 1
Performance
outcome(s)
461
462
substance of the change that occurs; and change context, internal and
external situational factors that influence the change initiative.
463
464
Change process
The change process component of OC research covers research focusing
upon the specific actions taken by the organization as a means of bringing
about the planned change. The process of change has been the primary focus
of the OC literature and the closely related organizational development (OD)
literature. Van de Ven and Poole (1995: 510) contend that change process
has been a central and enduring quest of scholars. Porras and Robertson
(1990) support this contention by finding that only four of 16 published OC
and OD theories discussed outcomes in addition to process. The emphasis
on process rather than enacted content or context is evident in both the OC
(Armenakis & Bedeian, 1999) and OD literatures (Porras & Robertson,
1990), and is sustained in more recent works (see Poole et al., 2000).
Process-based OC theories fall into two categories: change implementation theories and change process theories (Porras & Robertson, 1990).
Both categories examine the process by which change is brought about, and
tend to assume that using an appropriate change process is necessary and
sufficient to achieve a planned change. However, two key issues are
neglected: the matching of specific changes to specific outcomes; and the
influence of context upon the feasibility of the change.
The change implementation theories tend to be simple and prescriptive,
detailing the steps to take in order to achieve the intended outcomes. The
practical difficulties of applying a single list of sequential actions while maintaining congruence between the objectives, process, context, and content of
change ultimately limits the usefulness of change implementation theories.
The change process theories are less prescriptive than are the change
implementation theories, and explain the dynamics of OC in terms of
relationships between key variables to be manipulated in order to achieve a
desired outcome. However, change process theories typically fail to fully
specify the variables that can be manipulated (Porras & Robertson, 1990),
even though the content and process of change required to achieve specific
objectives depend on the context (Damanpour, 1991).
Time has been recognized as a critical aspect of the change process
(Huy, 2001), such as in Lewins (1947) model of unfreezing, moving, and
freezing. Armenakis et al. (1999) present several process-based change
models derived from Lewin (1947), and adapt social learning theory
(Bandura, 1986) to consider how change messages are conveyed and
received. However, as change implementation theories, all of these models
still suffer from the deficiencies identified by Porras and Robertson (1990).
Sustained interest in the process of change has produced a rich and
extensive body of literature. However, there are still topics of significance
that are under-represented in the change process research. Most importantly,
the matching of specific manipulations (such as changes in policies or practices) to the desired outcomes remains poorly specified, as is a clear understanding of how different change processes might be matched to various
change manipulations. These shortcomings are due to the fact that, in
contrast to our extensive knowledge of change process, our knowledge about
the content and context of change is much more limited, particularly with
regards to understanding how content and context might influence process.
Change content
The change content component of OC research is concerned with the specific
policies and practices that are implemented, and which represent a difference
from the previous state of affairs within the organization. The emphasis in
the OC literature on process has left the content of change largely unexamined (Armenakis & Bedeian, 1999; Huy, 2001). Consequently, little is
known about either the relationship of specific change elements to the objectives and context of change, or the effectiveness of those specific change
elements. Even the specification of change content remains poor. With the
earlier example of decentralized decision-making, the fundamental change is
decentralization. However, it is unclear whether the content should be
defined in terms of: changed administrative rules and procedures; changed
job duties; or the adoption of new values within the organization.
Rather than conceptualizing OC content in terms of any specific
characteristic, content has been commonly considered in terms of the
movement from a starting point using simple dichotomies. The content of
change is thus described using terms such as revolutionary/evolutionary
(Greiner, 1972), major/minor (T.Y. Choi, 1995), or transformational/
transactional (Burke & Litwin, 1992). These terms essentially equate the
content of change with a measure of difference. Using our example, we might
describe the change as the decentralization of decision-making, but the
enacted content of change would (by definition) depend upon the starting
system. Decentralization of decision-making in a highly autocratic organization represents a fundamentally different type of change than it would in
an organization already enjoying some levels of employee participation.
465
466
Thus, the same initiative would not represent the same change content across
different change contexts.
Burke and Litwin (1992) thus provide a useful way to characterize
content by distinguishing change as transformational, where organizational
values and worker attitudes must be modified, or as transactional, where it
merely requires modified work procedures. Thus, the manipulation that
decentralizes decision-making in a highly autocratic organization would be
a transformational change. The same initiative would be a transactional
change if the organization already had high levels of employee participation.
The complete description of the change content would include the specific
change manipulation (such as decentralization of decision-making) and the
starting position. Thus, to describe the content of a change, it is first necessary to be able to describe the context under which that change occurs.
Change context
Each OC initiative occurs within a specific context, comprising factors both
external and internal to the firm. This context influences all aspects of the
OC initiative. Pettigrew et al. (2001) point out that OC process is influenced
by multiple levels of context, ranging from that within the organization,
through industry/sector and national context, to the global competitive
context. Two aspects of the organizational context that require particular
attention are structural issues (such as prevailing practices and policies) and
cultural issues (such as prevailing values and beliefs).
The effects of structural changes have been examined by FoxWolfgramm et al. (1998) and Haveman (1992). These studies overcome the
problem of relegating context to undiscussed background (Pettigrew et al.,
2001), but may be limited by a common context the US. Fox-Wolfgramm
et al. (1998) employed a modified grounded theory approach, adopting
Strauss and Corbins (1990) method of using prior theory to guide case-based
research, justifying this qualitative approach by noting the weakness of prior
theorizing on how context affects OC initiatives.
Whereas Fox-Wolfgramm et al. (1998) start from a strategic change
perspective, other researchers have examined OC context from a culture and
values perspective. Amis et al. (2002) argue that OC research should follow
studies in other areas of management and focus on the influence of values.
As noted by Rokeach (1968), the preference for particular behaviors is influenced by values, and so values will influence OC initiatives.
Amis et al. (2002: 461) find that achieving the planned end state for
an OC initiative depends on how closely the values held by individuals
within an organization coincide with the changes being proposed. In
467
468
469
470
471
472
this type of OC. To address this issue, we review relevant findings about
Chinese business culture and management systems before examining the
emerging BPR phenomenon in China.
473
474
to descriptive accounts (see Sun, 2000) and micro-level analyses (see Tsang,
2003). Woodman (1989: 211) argued that we have plenty of theories that
address organizational change and development. However, this contention
does not apply internationally since the application of existing OC theories
to different national contexts has been very limited. Little is known about
the objectives, process or content of OC in China, nor about how appropriate it would be to apply existing theories of OC to this context. Consequently, there is a limited knowledge base for building international OC
theories. As a result, we sought to examine OC in a non-Western context in
order to strengthen the foundation for theorizing about international OC.
In order to achieve this, it is helpful to focus on a single type of OC,
such as BPR. The clearly defined objectives, process, and content of BPR are
helpful to draw conclusions about the influence of contextual variables on
various change characteristics. By examining OC in China, a context with
significant historical, structural, and cultural differences from the West (see
Hofstede & Bond, 1988), we sought to identify the implicit assumptions and
associated deficiencies of existing OC theories.
Research question: How can insights from examining OC in China
contribute to the development of more comprehensive and internationally applicable theories of OC?
By studying BPR in China, we sought to not only gain an understanding of
OC in China, but more critically, to enhance the development of OC theory
in general. This would enable us to provide a foundation for developing more
comprehensive and internationally applicable OC theories.
State enterprise 1
State enterprise 2
State enterprise 3
State enterprise 4
Township enterprise
Sino-foreign joint venture 1
Sino-foreign joint venture 2
Private domestic enterprise
a
Industry
Number of
employees
Location
People
interviewed
Manufacturing
Manufacturing
Manufacturing/processing
Distribution
Manufacturing/distribution
Manufacturing
Manufacturing
Retail
25,000
15,000
13,000
5000
4000
10,000
5000
1000
Chongqing
Guangdong
Beijing
Shanghai
Guangdong
Shanghai
Guangdong
Guangdong
6
4
6
5
4 + 1a
7
11
9 + 1a
A foreign consultant hired to guide the OC project was interviewed in two cases.
475
476
(Armenakis & Bedeian, 1999; Pettigrew, 1990). The use of multiple cases
enables step-wise refinement of our empirically grounded theory. We
collected data using interviews, simple questionnaires, work and methods
study, and document reviews, allowing triangulation to increase reliability
and avoid common source bias (Podsakoff et al., 2003). Semi-structured
interviews of between four and 11 people in each organization were based
on a pre-designed protocol. Explicit steps recommended by Miller et al.
(1997) were taken during the interviews to minimize the possibility of
attribution biases and memory lapses.
The informants for every case included at least one top management
team member and another manager lower in the hierarchy. Interviews with
non-management employees were conducted in all but two cases, where our
requests to conduct interviews were denied. We also interviewed an American
consultant who worked on the BPR projects for two of the organizations. In
addition, three of the managers that we interviewed had been involved previously with BPR projects in the US and/or Canada before coming/returning
to China. Data from these four people with North American experience in
BPR was helpful to provide a comparative perspective.
Our data collection, and specifically the interview questions, were
organized around the steps in BPR implementation, such as the business
needs analysis followed by designing the new processes. As such, our data
collection for each case proceeded in stages guided by viewing BPR as an
example of process implementation theory. We considered BPR projects in
terms of their sequential stages, typically including initiation, project
planning, process redesign, implementation of change, and completion/
consolidation of the enacted change. For each BPR initiative, we sought to
collect data about the objectives, process, content and context of change.
Each interviewee was asked probing questions (to establish or confirm
project details) and open-ended questions (to focus on the how and why of
each project) related to all or some of the following: 1) rationale for change
and the existing situation; 2) objectives of the change; 3) planned content of
change; 4) implementation process; 5) enacted content of change; and 6)
reasons for any differences between planned and enacted change.
The collected data were content coded based on the elements of the
OC model shown in Figure 1. Data were organized according to the four
dimensions of change before being analyzed and interpreted. Our data set
was checked to resolve ambiguities and discrepancies. We reviewed the
evidence assembled in each case to ensure that it was not only internally
consistent, but also that it reflected a logical flow of events. Each case was
treated as an independent experiment that helped to confirm or disconfirm
our implicit hypotheses about BPR in the Chinese business context. For
example, we examined the influence of political and social factors on the
objectives of change, the extent of employee involvement in the process of
change, and the degree of process formalization with both the planned and
enacted content of change. Comparisons across cases relied on methods
suggested by Eisenhardt (1989) and Miles and Huberman (1994). This literal
replication (Lee, 1999) enabled step-wise development and refinement of a
theoretical model (Yin, 1994).
In order to verify our interpretations, we used triangulation across our
various sources of evidence for each case (multiple interviews, observations,
and documents), which revealed a very high degree of consistency. The few
inconsistencies that did emerge were reconciled through verification by the
original informants or the collection of additional data. For example, we
went back to several informants and pointed out you said this, but they said
(or the documents indicate) that. Subsequently, each informant reviewed not
only our notes from their interview but also any reported findings that were
based upon their statements. These steps minimized the scope for subjective
judgment and thus help to assure the validity and accuracy of the findings
from our case studies (Yin, 1994).
477
478
Organizational
characteristics
Organizational change
characteristics
Reputation and flexibility are
more important than efficiency
Change
objectives
Adaptive
Centralized
Change
process
Interdependent
business networks
Figure 2
Change
content
Objectives
The cases demonstrate the importance of explicitly considering change objectives. In every case, the original intention was to implement textbook BPR.
However, the enacted change quickly diverged from the BPR normative
baseline. The change objectives initially selected were influenced by contextual elements, and evolved as the OC initiative progressed. The objectives
were modest, emphasized reputation, and lacked formal targets or evaluation
criteria. These characteristics were consistent across the cases, and reflect
business interdependence and a reactive/adaptive orientation.
Objectives adopted
The key objective of BPR is to improve efficiency. However, this objective
was seen as less critical in our Chinese cases than relationship and reputation
Case
Primary
stimulus
Improvement
objectives
Durations of
Management
planning (P) and comments on
implementation project outcomes
(I)
Competitiveness
reputation
P: 8 weeks
I: 18 months
satisfactory,
improved
productivity and
response
Competitiveness
reputation
Tech. transfer
P: 9 weeks
I: 12 months
acceptable,
improved
efficiency, better
image
Competitiveness
reputation
P: 4 weeks
I: 9 months
Competitiveness
reputation
P: 8 weeks
I: 13 months
quite successful,
faster response,
lower expenses
Township
enterprise
BPR seminar
and book
Competitiveness
legitimacy
P: 6 weeks
I: 8 months
acceptable, more
efficient, better
image
Sino-foreign JV 1
Suggested by
foreign partner
Competitiveness
reputation
P: 9 weeks
I: 9 months
satisfactory,
higher quality,
faster response
Sino-foreign JV 2
BPR seminar
Competitiveness
reputation
Tech. transfer
P: 8 weeks
I: 10 months
successful, good,
lower unit cost,
better quality,
tighter integration
Competitiveness
legitimacy
P: 3 weeks
I: 6 months
satisfactory
outcome, better
customer service
479
480
and the consultant agreeing that success was viewed in terms of better
business relations rather than higher productivity.
This tension between efficiency gains and reputation was evident in all
of our cases. To maximize efficiency gains, it would be necessary to undertake significant changes, yet the need for such changes was perceived as
damaging managers reputations. Employees in the case organizations told
us that the situation must be quite bad or worse than we thought if drastic
changes were needed, and they lost (some) respect for their bosses as a
result. Thus, while OC was initiated with the intention of following the BPR
baseline, the OC objectives ultimately emphasized reputation and legitimacy
rather than efficiency. Exceptions to this occurred only in the presence of
significant pressure from foreign business partners. A foreign manager in one
joint venture stated that keeping the business successful was the top priority.
This was a stark contrast to his Chinese counterparts focus upon avoiding
problems.
Formalization of criteria and evaluations
BPR calls for the formalization of objectives and planning. However, we
found that the OC implementations in China were marked by a low degree
of formalization. In part, this stems from a tradition of reactive and adaptive
management, rather than pro-active planning for the future. The consultant
noted that (they) pay little attention to long-term development. Even the
private enterprise managers indicated that they tend to wait for orders and
requests from customers and business partners rather than formulating their
own plans.
The evaluation of change effectiveness was also marked by a low
degree of formalization. While managers were satisfied with the outcome of
the change initiative, in only two cases were they able to offer quantitative
data to support their judgment. In another two cases, the adoption of specific
IT applications was used as a key indicator of success. These four cases
included the two joint ventures. The interviewees tended to agree that foreign
participation in these cases encouraged both the quantification of performance measurement and the application of information technology.
Contextual elements influencing objectives
A few critical contextual elements were repeatedly mentioned by our interviewees. First, maintaining harmony within the organization and building
strong relationships, both externally and internally, were viewed as critical
objectives. In addition, the importance of maintaining organizational
Process
Just as change objectives consistently diverged from the BPR baseline, so did
change processes. BPR prescribes the rapid implementation of a redesigned
business process model. Change in the Chinese organizations was implemented at a deliberate pace, with limited participation or input from
employees. With limited formalization in planning, the decision to commence
with change was quickly made, but the need to preserve harmony and
relationships limited the pace at which change could be implemented.
Little employee participation
The involvement of employees is a central element in the planning and design
stages of BPR. However, employees were not involved to a significant extent
in planning or designing any of the changes in China. Data collected from
various interviewees clearly indicated that employee participation was
resisted by both managers and employees. In all but one of the cases, top
managers admitted that they were reluctant to compromise their discretionary power by sharing critical information with employees. The lack
of information sharing limited the scope of employee participation.
Managers in all the cases agreed that their employees were reluctant to
become involved, with one manager stating that he experienced difficulty in
getting my work teams to accept responsibility for deciding what they would
do next.
In China, we found that the top executives typically decided to proceed
with OC, and then tell their subordinates what, when, and how to implement change. The consultant noted that elapsed time from initiation of
the BPR project to completing the process redesign was 20% to 40% less
than in the US. The time reduction was due largely to limited amount of
both formal analysis and discussion with employees. A strictly top-down
approach was used in every case, with employee participation being
discouraged by management. Although a sequential process was followed in
all the cases, more formalized implementation plans were developed in the
larger organizations. Our interviewees suggested that this incremental
481
482
formalization reflected the need for managers to direct and coordinate more
people and activities during the actual organizational change, rather than a
desire to enable employee input on the proposed plans for change.
Slow and continual change processes
The decisions to proceed with OC were made quickly in China. However,
the pace of implementing the change tended to be comparatively slow. Most
Chinese managers envisioned OC as an on-going process with ebbs and
flows, and ideally a gradual and incremental process. This was distinctly
different from the periodic but rapid change prescribed with BPR. Rather
than make fundamental change to core processes, the managers in our
cases preferred progressive refinements based on small trial-and-error
experiments, with the refinements occurring in order to adapt to changes in
the environment.
The prevailing conservatism of the Chinese managers was found to be
a key factor in hindering the acceptance of rapid and fundamental change.
A modest pace of change was considered useful to avoid problems and to
maintain relationships. The interdependence of stakeholders in the Chinese
business culture slowed the process of OC even when top management were
convinced that rapid and fundamental changes were needed. This need to
take into consideration other stakeholders, such as the suppliers of critical
materials and the providers of complementary services, resulted in barriers
to rapid change.
Contextual elements influencing processes
Two of the key influences on change objectives, namely business interdependence and an emphasis upon adaptability, also affected change
processes, and so did the centralized nature of Chinese organizations. As a
result, it was easy to proceed with OC, but difficult to fully implement the
planned change. In addition, the OC initiatives evolved to fit within the
prevailing business environment.
Content
BPR advocates radical changes to workflow processes in order to dramatically improve performance. In every one of the eight cases, the implemented
change deviated significantly from the BPR baseline. Prevailing characteristics of the business environment acted to constrain the appropriateness of
specific BPR recommendations. The BPR prescriptions ultimately represented
483
484
485
486
Underlying theory
Change objectives
Significantly improving
organizational efficiency
and effectiveness
Employees involved in
both planning and
implementation
Rapid
Objectives
Fundamental belief
Process
Involvement
Pace of change
Clean slate
Nature of change
Extent of change
Focus of change
Business processes
redesigning a formal
model
487
488
Contextual
factors
Stimulus
Contextual
factors
Current
(starting)
system
Change
objectives
(intended
outcomes)
Contextual
factors
Contextual
factors
OC process
Enacted
system
Feedback
Feedback
Figure 3
Realized
performance
outcome(s)
489
490
Hierarchical
China
US
Egalitarian
Figure 4
491
492
Conclusions
Existing theories of OC emphasize change processes grounded in OD values
(Tannenbaum & Davis, 1969) which are Western in nature (Jaeger, 1986)
and based upon contexts which are rarely considered explicitly (Pettigrew
et al., 2001). Our research of Chinese organizations that intended to
implement BPR, a specific type of change, found that these organizations ultimately diverged from the prescription for BPR in a highly uniform manner.
We conclude that these divergences are due to contextual elements. There
was a fundamental incompatibility between the values pre-existing within
the organization and those implicit within BPR. Our findings suggest that
the theories of OC are constrained by their grounding in the Western context,
and that the context influences the objectives, process, and content of change.
Several lessons may be drawn from our cases with respect to both OC in
China and the international applicability of current OC theories.
The primary lesson is the importance of values, both organizational
and societal, in OC initiatives. It must be recognized that specific types of
493
494
Acknowledgements
The preliminary results of this research project were first presented at the 2001
Academy of Management meeting and appeared in its Best Paper Proceedings.
The completed study was initially presented at the Organization Science conference hosted by Peking University (Beijing, China) in July 2002 and subsequently
at the City University of Hong Kong, the University of Melbourne, and the
University of Toronto. The authors gratefully acknowledge the data contributions of key stakeholders in each of the eight organizations that were studied
and the constructive comments made during the development and fine-tuning of
the manuscript by John Child, Chung-Ming Lau, Marshall Meyer, Anne Tsui,
Syed Akhtar, Aelita Brivins Martinsons, Robert Davison, Kwok Leung, Lynne
Markus, Neale OConnor, and many anonymous reviewers.
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