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Excessive Change: Coping Mechanisms and Consequences
Organizational Dynamics, Vol. 31, No. 3, pp. 296±312, 2002 ß 2002 Elsevier Science Inc. All rights reserved. www.organizational-dynamics.com
ISSN 0090-2616/02/$ ± see frontmatter PII S0090-2616(02)00115-8
Excessive Change:
Coping Mechanisms and Consequences INGER STENSAKER JOYCE FALKENBERG
Before we get the structure in place from one organizational development process, management comes with new ideas on how we should work. The new change replaces the previous. We sit and wait for the next major process to be implemented. We are masters of running without jumping. There is too much started that cannot be implemented . . . We have experienced being in the middle of one process when it was suddenly abandoned. This is a waste of time and money. When does change become excessive? What are the consequences of excessive change? These questions were posed to our research group by a middle manager who had experienced a succession of changes in his organization. Despite an abundance of company evidence of excessive change, there is little theoretical or empirical literature that could answer these questions. We therefore undertook an investigation that probed the issue of excessive change. Our research resulted in the development of a de®nition of excessive change based on individual perceptions. We then explored the consequences of excessive change for individuals and for the organization. Our ®ndings allow us to suggest ways organizations can avoid excessive change. 296 ORGANIZATIONAL DYNAMICS
CHRISTINE BENEDICHTE MEYER ANNE CATHRIN HAUENG
We contribute to the understanding of excessive change by exploring the concept empirically. Our de®nition of excessive change, based on perceptions of change at the individual level, adds to the earlier focus based on the change maker. In addition, our investigation recognizes positive as well as negative consequences of change. In the next section, we focus on the pervasiveness of change. This is followed by a description of the three cases used for the investigation. We then, based on the data, develop a de®nition of excessive change from the perspective of the change recipients. Finally, we report the responses to and consequences of excessive change. In the conclusion of the paper we propose suggestions for how organizations can avoid excessive change.
THE PERVASIVENESS OF CHANGE ``Change or perish'' has become a corporate mantra, according to Abrahamson. The ubiquity of change has given fertile ground for understanding how change is motivated, formulated and implemented. Investigation of unsuccessful change processes has led to an awareness of the many barriers to change, including resistance to change. The impression one is left with is that change
not only is necessary, but that there is value in change. One consequence of the pervasiveness of change is that many organizations carry out several change programs simultaneously or initiate an additional change program before the previous ones have been completed. Microsoft Corp. is changing its mission from a single focus on technology to improving the way the company handles relationships with customers and others in the technology industry. Managers are being asked to rethink every aspect of the way they do their jobs. Management processes have been incorporated to bridge the gap between sales and product development. Second-tier executives have been empowered. There has been a call for improved quality of products and services; and employees are being forced to do their jobs differently. This latest change follows an attempt to reorganize around different kinds of customers. Pettigrew and Whipp suggest that dealing with multiple changes is one of the main challenges in change management: ``. . . the ability to manage a series of interrelated and emergent changes (often in parallel and in sequence) is vital.'' We have found the term excessive change to be descriptive of these multiple change processes. This term has previously been used by Zajac, Kraatz, and Bresser in their work on the dynamics of strategic ®t. They presented three different situations that can result in excessive change from a strategy formulation or change-maker perspective: 1. The organization changes, although the environment and organizational contingencies do not suggest the need to change. 2. The organization rightly changes one element, but fails to change other organizational dimension accordingly. 3. The organization changes for change's sake. We extend the use of the term to include the point of view of the change recipients and focus on the consequences of excessive change. We are open to both positive and negative consequences of change, and in this way further develop the negative consequences that have been described under
Inger Stensaker has a PostDoc position at the Institute for Research in Economics and Business Administration (SNF). She will defend her Ph.D. in the fall of 2002 at the Norwegian School of Economics and Business Administration (NHH). Her research interests are within strategic change and implementation processes, particularly focusing on change recipients using cognitive and sense-making perspectives and qualitative methodology. She has also done some consulting in large Norwegian firms pursuing strategic changes.
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Christine Benedichte Meyer is a state secretary in the Ministry of Labour and Government Administration. She is currently on leave from her position as associate professor at the Norwegian School of Economics and Business Administration. Her research interests are mergers and acquisitions, corporate strategy and strategic change. She is currently working on reforming the Norwegian public sector. Before entering the state secretary position, Meyer did consulting for a number of firms, particularly in the field of mergers and acquisitions.
the term change fatigue. Change fatigue has been de®ned as the individual's response of becoming disorientated or dysfunctional as a result of too much stimulation. Abrahamson described change-fatigued middle managers as managers who resisted change both from senior management as well as from young movers in the organization. He suggested that change fatigue would result in initiative overload, organizational chaos and resistance to change. The concept of excessive change is beginning to gain some attention in the literature. This paper contributes to the growing awareness that more change may not be better. We contribute to the understanding of excessive change by exploring the concept empirically. In the next section, we discuss the three cases used for the investigation. We then, based on the data, develop a de®nition of excessive change from the perspective of the change recipients. Finally, we report the responses and consequences of excessive change. In the conclusion of the paper we propose suggestions for how organizations can avoid excessive change.
EXPLORING THE CONCEPT OF EXCESSIVE CHANGE Perceptions of excessive change were uncovered while analyzing strategy implementation issues in two major companies. The discovery of this same phenomenon in two different companies investigated by different researchers convinced us that the issue was highly relevant both for firms and for furthering our understanding of change. Two cases, one each from Teleco and Oilco, were used in the initial work that led to definition of the concept. These two cases were then supplemented with a third case from a different division in Oilco. Data from all three cases were used to further elaborate our preliminary findings, as well as to investigate the consequences of excessive change at the organizational level. We used an inductive approach, suitable to the purpose of studying how individuals 298 ORGANIZATIONAL DYNAMICS
perceived and dealt with excessive change. This approach allowed for an emerging design in which questions and categories were rede®ned as the study proceeded. Following the process outlined in grounded theory, we ®rst coded the data by initial categories to identify the properties of and responses of excessive change, and then explored the linkages between excessive change and the consequences. To aid us with the coding, we used the computer program NUDIST. All four researchers were involved in categorizing the de®nition and consequences of excessive change. Table 1 compares data collected from the three cases.
Strategic Change in Teleco and Oilco The case study of Teleco was designed to investigate the implementation of acquisitions made by a dominant national telecom company. The focus of other two case studies, Oilco 1 and Oilco 2, was to examine the implementation of major organizational changes facilitated by information technology (IT). Oilco is a major, national integrated oil and gas company.
Joyce Falkenberg received her Ph.D. from the University of Oregon and is presently an associate professor at the Norwegian School of Economics and Business Administration. Her research interests are in the area of strategic change and adaptation. Her most recent work in this area has been on implementing strategic changes. She has recently completed a major research project focusing on implementation of strategic changes in major companies. Falkenberg has taught in executive programs in many countries. In addition to earlier work experience in a non-profit organization in the United States and a major oil company in Norway, she has done consulting for Scandinavian companies.
Teleco. The study of Teleco was undertaken in a period when the organization was going through substantial changes and struggling to adapt to a rapidly changing environment. Teleco had a monopoly position in the highly regulated telecom sector. When the industry was deregulated, Teleco faced intensive rivalry. The increased competition arose not only from traditional telecom companies, but also from a range of IT companies that were investing heavily in the telecom sector. Furthermore, the leading actors in the market were constantly changing, making the competitive arena complex and unpredictable. Teleco chose to adapt to these changing conditions by diversifying into the IT sector. This was accomplished through acquisition of a number of market-leading companies. The company reorganized its existing businesses several times in an attempt to find a balance WINTER 2002 299
between adapting to changing market conditions and realizing synergies across business entities.
Anne Cathrin Haueng is a Ph.D. student at the Norwegian School of Economics and Business Administration (NHH). Her research interests are within strategic change and implementation processes. In her thesis she focuses on evaluation of changes during the implementation process and through a political perspective she seeks to explain the mechanisms that influence the measurement process. She has done consulting in large Norwegian firms pursuing strategic changes, and at present she is participating in a European research project that investigates the links between management development and firm performance. She holds a Master in International Business from NHH and has worked five years in a position within strategy and change processes for a large Norwegian public company.
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Oilco 1 and Oilco 2. The studies of Oilco 1 and Oilco 2 were undertaken to investigate the corporate-wide implementation of organizational changes facilitated by SAP, an integrated IT system (SAP: systems, applications and products). Oilco believed that the implementation of SAP, along with substantial organizational changes, was necessary to maintain competitiveness. Predictable changes in the environment included both an increased number of costefficient competitors as well as a reduction in oil reserves. Thus, the changes at Oilco were both proactive and non-urgent. Organizational changes during the implementation process included both a change of chief executive officer (CEO) and top management team and the development of a plan to privatize the organization.
Comparing and Contrasting Teleco and Oilco The description above focuses on the differences between Teleco and Oilco. In Table 2, we summarize the differences between the cases, focusing on both the contextual information and the changes being implemented. Table 2 indicates that Teleco was undergoing a relatively greater degree of strategic change than Oilco 1 and Oilco 2, when comparing the environment as well as the purpose of the change. Given these differences, one might incorrectly assume that the changes as Teleco would lead to excessive change, while those at Oilco would not. Surprisingly, analysis of the data indicated that perceptions of the change processes in all three cases had characteristics that could be interpreted as excessive change. Both organizations experienced many changes, set in motion simultaneously. Some of these changes were interrupted as other change programs were initiated. We explore these characteristics of excessive change in the following section.
TABLE 1
DATA COLLECTED
CASE
TELECO
IN THE
THREE CASES
OILCO 1
OILCO 2
Sampling time
Retrospective and real-time data at t1 and t2
Retrospective and real-time longitudinal data
Retrospective and real-time data at t1
Data collection
In-depth interviews
In-depth interviews
In-depth interviews
Number of interviews
19 t1 19 t2
10
37
Documents
Strategy and market plans
Strategy and Strategy and implementation plans implementation plans Division development plans Division development plans
Project reports from change programs Organizational climate surveys Internal newsletters Speeches Observation
Participated in seminar to map ``as is'' situation Attended management seminars
Division evaluation (AS-IS report) Project database
Division evaluation (AS-IS report)
Participated in weekly meetings with the ``improvement group'' Observed top management meetings
Attended management seminars
WHAT IS EXCESSIVE CHANGE? A definition of excessive change is required before we are able to start discussing the
TABLE 2 CASE
COMPARING
TELECO
consequences. The dictionary defines ``excessive'' as exceeding what is normal, proper or reasonable. Based on this definition, it would appear to be possible to objectively assess when change becomes excessive. But who THE
THREE CASES
OILCO 1
Type of change
Corporate wide Four acquisitions in the IT sector (t1) Reorganization of Teleco (t2) BPR type changes
Environment
Changing rivalries Changing environment deregulation Changing industry boundaries
OILCO 2 Corporate wide BPR type changes
Predictable Decreasing munificence
Predictable Decreasing munificence
Competitive arena Complex, unpredictable
Stable, predictable
Stable, predictable
Description of change
Reorganization Focus on efficiencies
Reorganization Focus on efficiencies
Diversifying into IT sector Restructuring through acquisitions Reorganizing existing business Balance: adaptation and realizing synergies
Simultaneous changes in IT Simultaneous changes in IT systems and in organization systems and organization structure, work processes, structure, work processes, and governance principles and governance principles First division to implement One of later divisions to implement changes change after pilot implementation
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should be the judge of when strategic change exceeds what is normal or reasonable? Outside observers, not directly involved, could be incorrect in their assumption of what was normal by either over-estimating or underestimating what appeared to them to be reasonable. For this reason, we determined that insiders, those involved in the change, were the correct judges of change that exceeds what is reasonable. We therefore developed our definition of excessive change analyzing the data on perceptions of excessive change. The following de®nitions of excessive change were developed from the data: Excessive change: (1) The organization pursues several, seemingly unrelated and sometimes con¯icting changes simultaneously. (2) The organization introduces new changes before the previous change is completed and evaluated, without allowing time for business as usual and reaping the bene®ts. The following statements are examples of the ®rst de®nition: A lot of balls are thrown into the air at any one time. (Oilco 1) We have too many changes that are unconnected. They are not linked together . . . (Oilco 2) There are too many changes. There's instability everywhere, and we didn't have to start everything at the same time. Nobody has control over it. (Oilco 2) The second definition was induced from statements such as these: When something new is introduced it has a starting point, but the different pieces are never in place, they are supposed to fall into place as we go along. But before they do, there is something new again. There is never anything that gets implemented. You get started and then you're cut off . . . (Teleco) 302 ORGANIZATIONAL DYNAMICS
(Change) processes are going on all of the time . . . Then they just disappear . . . It would be much easier for us if we could ®nish things off and see the results, but one process overtakes the other. (Oilco 2)
Different Perceptions at Different Levels Defining the term both in terms of several change programs being carried out within the same department simultaneously, or a new change program being introduced before the previous one has been completed, led to important insights in understanding excessive change at different levels in the organization. We found that not everyone in the same organization experienced the same set of changes as excessive. Whether or not change was viewed as excessive depended on whom we asked. An important implication of this finding is that, given this definition, it is not possible to determine objectively or in advance whether or not a given set of changes will become excessive. If some individuals in the organization experienced the changes as excessive while others did not, then who in the organization were most likely to experience the changes as excessive? Our data showed that top managers described strategic changes differently from middle managers or lower-level employees. Individuals in middle management and lower organizational positions often experienced strategic changes as excessive, while none of the statements describing excessive change came from top-level managers. On the contrary, these top managers typically described a comprehensive change process consisting of many components. At this level, the different components were seen as clearly connected and leading to the same overall goals. This change has become almost synonymous with another change process and that's good. (Top Manager, Oilco 2)
We don't think this is contrary to our previous change program . . . There is no con¯ict among the changes. (Top Manager, Oilco 1) While lower-level managers perceived many different changes, top managers described the same changes in a much more holistic manner. Middle managers and other employees experienced one change project taking over the next, before the former was completed and evaluated. Top managers saw different change initiatives as different phases or stages of a coherent whole. Some top managers even disagreed with the perception that there were overlapping changes and instead argued that previous changes had been completed and evaluated. In the next section, we use the de®nition developed here to discuss consequences of excessive change.
THE CONSEQUENCES OF EXCESSIVE CHANGE FOR THE INDIVIDUAL AND THE ORGANIZATION The cowboy culture at Home Depot Inc. has been traded for one of command and control; managers and merchants who previously wrote their own rules are now asked to report weekly on key performance indicators. These changes have resulted in a high degree of anxiety among the employees. Managers have used other coping mechanisms, with 24 of the 39 senior officers leaving the firm within the first year and half of the change. An investigation of managers at Lufthansa found many practiced what Bruch and Ghoshal called defensive avoidance, managers who convinced themselves that the problem doesn't exist. Consequences of excessive change encompass reactions at both individual level and the organizational level. At the individual level, we uncovered a diverse array of reactions and coping mechanisms. At the organizational level, the consequences were related to structural and performance issues.
We begin by reporting the ®ndings at the individual level.
How Do Individuals Cope with Excessive Change? The respondents who had perceived change to be excessive were very open in sharing their reactions. They talked about becoming frustrated and getting angry. Stress was mentioned often, and some reported health problems, either physical or psychological. They stated that they had become dissatisfied with their jobs and lacked motivation. There were also feelings of uncertainty about the situation, and about their jobs. They started questioning their own competency and adequacy. Typical statements were: You become stressed with new changes constantly needing to be implemented. (Oilco 2) Too many changes are implemented at the same time . . . we become angry, grumpy and withdrawn. (Oilco 2) In addition to uncovering individual level responses to excessive change, our indepth study allowed us to link these reactions to coping mechanisms employed by individuals. Individuals stated many different ways of coping with their reactions. We classi®ed these along two dimensions. One dimension was how active or passive the individuals were in responding to the change (active/passive). The other dimension concerned the likelihood that any changes would actually be implemented in the organization (change probable/improbable). We mapped the different coping mechanisms on these two dimensions (see Fig. 1). Passive/change improbable. Starting at the bottom left quadrant, we placed two ways of coping. BOHICA (bend over, here it comes again) was the most frequently mentioned coping method. Our data clearly showed how common it was to bend over and wait WINTER 2002 303
FIGURE 1
COPING MECHANISMS
until this wind of change had blown over. Many of the people who described this as a way of dealing with excessive change had been exposed to a number of change initiatives. This suggests that BOHICA is a strategy based on learning by experience. Viewed from the perspective of the organization, BOHICA is not entirely negative. Although the changes have a small chance of being implemented, since employees are somewhat indifferent to the changes, people did concentrate on their daily, operationally-oriented tasks. 304 ORGANIZATIONAL DYNAMICS
More detrimental to the organization were those individuals who became paralyzed by the changes. Paralysis was not a result of people being unwilling to change, rather they were unable to carry out the changes. This coping mechanism resulted in individuals being unable to carry out even simple and routine tasks that they had previously managed. Active/change improbable. Some middle managers and employees coped with excessive change by being active, but by
acting in ways that could be detrimental to the implementation of the changes. Two different modes of actions fit this category: exiting the organization or sabotaging the change initiative. Exiting the organization could be detrimental to the implementation of the change and to the organization as a whole, when those who choose to exit are the most competent employees. This is often the situation given that the most competent individuals are highly employable elsewhere. Sabotaging the change initiative is another active coping mechanism. Examples of sabotaging efforts which we found included: blaming the change initiative for everything that went wrong, playing down the importance of the change initiative, or even going so far as making fun of it, or punishing people who tried to implement the changes. In this way, employees and middle managers sabotaged the implementation of the change initiative. Their actions also affected others who were trying to carry out the changes. Active/change probable. Some individuals embraced the change, and took control of the situation. When they recognized that their managers were unable or unwilling to manage the change process, these individuals took initiatives to ensure that the changes were implemented. When individuals took control, the probability of change increased. However, management had less control over the direction of the change. Passive/change probable. Finally, there were some people who loyally followed orders in implementing the change initiative. They coped by working long hours, putting in a lot of overtime. In this way they were able to perform their normal job requirements as well as the work associated with the change itself. An unfortunate consequence was that individuals who were loyal often suffered burnout. Fig. 1 shows the placement of these coping mechanisms along the two continua. We have included citations from our interviews that are typical for each of the coping
mechanisms. The coping mechanisms described here focused on reactions at the individual level. In addition, the investigation allowed us to uncover organizational level consequences. What are the structural consequences at the organizational level? Nokia AB oyj is reorganizing its mobilephone unit into nine pro®t-and-loss centers, each of which will have its own product research and development (R&D) and marketing, while other activities, including a central research lab for basic technology and product design, will be centralized. Analysts suggest that this complex change could confuse employees, clients and investors. Home Depot's focus on inventory, payroll and overall costs may hamper sales growth. At Microsoft, there is concern that attention to management processes and performance measurement could sti¯e innovation. Excessive change had consequences for the organization as well as individuals within the organization. Similarly to the examples of Nokia, Home Depot and Microsoft, we found that in Teleco and Oilco, organizational level consequences were related to organizational structure and organizational performance. At the organizational level, we found a wide variety of consequences related to structural issues. To re¯ect differences among these, we found it useful to group the structural consequences into three categories: musical chairs, orchestrating without a conductor, and shaky foundations. Musical chairs. The first category, musical chairs, takes its name from the children's game. We find this title descriptive of the continuous shifting or elimination of middlelevel managers during the implementation process. Managers were frequently moved from one department or division of the organization to other departments or divisions. An extreme case of this was when one manager, after having been moved several times, ended up back in a position he had held previously. This WINTER 2002 305
constant movement had consequences for the organizations. Two of these conse- quences that appear to be most relevant for the implementation of the change initiatives were a perceived lack of continuity in the change process and managers' losing track of the different change initiatives. While many managers were rotated, some positions were eliminated. This resulted in a net loss in the number of positions available for managers. All of us who have played musical chairs know the feeling of being left without a chair. Turnover was not always intentional. When positions were continuously shuffled and layoffs expected, some key people who were attractive on the job market chose to leave. Thus, an important consequence of excessive change was the loss of good managers. We call it musical chairs. We change places and some have to leave. (Oilco 2) In the past six months we have had six managers, one manager twice. (Teleco) We also found evidence that excessive change allowed poor managers an opportunity to hide in the chaos. This resulted, over time, in maintaining poor management. It's easy to play hide and seek . . . They [poor managers] can surf on the waves. Nobody has time to follow them up. (Teleco) There is little continuity at the level that is supposed to implement the strategy. When you delegate the strategic responsibility to the level with the least continuity, well, then no one remembers the strategy. (Teleco) Orchestrating without a conductor. The second category of structural consequences, orchestrating without a conductor, describes the situation for employees when there is a nonfunctional middle management. Lower level 306 ORGANIZATIONAL DYNAMICS
employees often had to deal with middle managers who were incapable of managing the change process. The lack of leadership during implementation was reflected in employees' perceptions of inconsistencies in communication and in the way they were treated in the change process. The relationship between employees and managers became more loosely coupled. Employees described situations in which they sought advice and answers from colleagues and previous leaders rather than their manager. In general, employees involved in the change process did not perceive that their needs were being met. Rather, they felt they were left on their own to figure things out. I must admit this has been a hard time. The manager hasn't had time to take care of his own group of employees. (Teleco) The managers hardly know what we are doing. (Oilco 1) The CEO said one thing, and his subordinate said another. They were inconsistent, and we really began to wonder what was going on . . . (Teleco) I could have just as well used a secretary [instead of a manager]. If I need help I make a phone call or ask a colleague. (Oilco 2) Shaky foundations. We have termed the third category shaky foundations in order to describe the structural and organizational instabilities. These instabilities include the lack of overall structure and the lack of continuity in the change process. Employees who experienced excessive change described the organization as being in a state of chaos, with a high degree of turbulence. The organization was characterized as being in a transition modeÐwhere existing routines were not maintained, and new routines were not yet put into place. The lines of
responsibility were unclear and there was a lack of long-term continuity. The name of the game is the more change the better. Everything gets very turbulent. (Oilco 2) Everything has happened all at once. We have not had time to sit down and draw the map. We have had to go out and work in the terrain without any guidelines. I feel we have had an inhuman task to cope with. (Teleco) Lists have been lost and not even been handed to the pay of®ce. There is such a lack of routines and when this starts to show on peoples' paychecks, they really get upset. (Teleco)
What are the Performance Consequences? Excessive change affected organizational performance due to implementation failure and loss of effectiveness. Implementation failure refers to the failure of actually changing the organization. Change takes place on paper only, not in practice. Employees stated that their organization was excellent at planning, but failed to carry through the changes. They noted that nothing really had changed, and probably would not change for a long time. First there is unrest, and then we fall back into old working habits. (Oilco 2) You cannot turn 20,000 heads and hearts upside down in ®ve minutes. Most people will work along the same paths as beforeÐfor a long, long time. (Teleco) When we started, we experienced processes that were, to a large extent, being carried out and then suddenly abandoned. (Oilco 2) Loss of effectiveness was the result of the organization's attention being drawn away
from customers, markets and operational tasks. Customer relations suffered both because of the chaos in the organization, and also because customers were neglected when employees focused too much on the changes in the organization. Less time and fewer resources were dedicated to income deriving activities. The organization was under pressure to prioritize change projects at the expense of other objectives. This affected primary tasks, such as safety dimensions, as well as market-oriented projects. Our customers are very upset for the simple reason that they do not know where to call. They cannot tell the difference between our numerous entities. They expect us to connect them to the right people. (Teleco) By changing work routines you reduce effectiveness . . . temporarily. However, when things change frequently, then it [reduced effectiveness] is no longer temporary. (Oilco 2) Excessive change also resulted in lost effectiveness because of a loss of capabilities. The organization risked loosing well-functioning routines. In Oilco, the introduction of integrated teams (where electricians, automatics and mechanics worked together in teams) was seen as a major threat for professional development. Table 3 summarizes consequences of excessive change at the organizational level.
CONTRIBUTING TO OUR UNDERSTANDING OF STRATEGIC CHANGE PROCESSES Our analysis has allowed us to develop a definition of excessive change as well as to focus on the consequences of excessive change. Our contribution to understanding strategic change is discussed in this section as it relates to four important issues. (1) The contribution of excessive change to ways of WINTER 2002 307
TABLE 3 TYPE
OF
ORGANIZATIONAL CONSEQUENCES
CONSEQUENCES
Structural consequences
CATEGORIES Musical chairs Orchestrating without a conductor Shaky foundations
Consequences on performance
Implementation failure Loss of effectiveness
thinking about strategic change; (2) recognition of perceptual differences depending on level in the organization; (3) focusing on an array of coping mechanisms rather than a single focus on resistance to change; and (4) relating individual and organizational consequences.
Strategic Change and Excessive Change Strategic change is often characterized as being revolutionary or evolutionary. This study encompassed both types of change, and found evidence of excessive changes in both. The two organizations in the two research projects faced different environments and formulated different strategic changes. The environment for Teleco was less stable and less predictable; the changes they undertook were made in an effort to realign the firm with the changes in their environment. On the other hand, Oilco's environment was more stable and predictable. In Oilco, the changes were focused toward improving efficiencies in the organization. It was therefore unexpected, given the context of the two different organizations, to find such clear evidence of excessive change in both settings. This suggests that excessive change may be an important characteristic of change processes that is independent of the type of change being implemented. 308 ORGANIZATIONAL DYNAMICS
OF
EXCESSIVE CHANGE CHARACTERISTICS
Rotation of managers Voluntary and involuntary turn-over Employees lack direction due to non-functional and in-consistent middle management Lack of routines and unclear responsibilities Changes are not carried through Focus on changes steals attention from primary tasks such as customer orientation, safety, etc. Competencies and capabilities risk being lost because of focus on changes
A second contribution to our understanding of change is based in the development of the de®nition of excessive change. Determining whether change is excessive based on an objective assessment of the number and type of strategies formulated provides an important, but only partial de®nition. Focusing on what change recipients perceive as excessive has allowed us a more complete de®nition of the concept. Additionally, our investigation allows us an increased understanding of strategic change by questioning why excessive change occurs. As implied above, excessive change might be expected in Teleco because of the major environmental changes. Understanding excessive change in Oilco, where the environment was stable and the changes focused on internal ef®ciencies, requires additional explanation and further investigation. A possible explanation for our ®nding of perceptions of excessive change in Oilco is that historically the ®rm has had high performance. Perceptions of excessive change result, as suggested by Zajac, Kraatz, and Bresser, when the organization makes changes, but no changes are needed. In Oilco, the change recipients may believe that because of high performance no changes are needed. An additional explanation, also requiring further research, concerns a ®rm's capacity for change. What is capacity for change, and is it a resource that can be
developed? If it is developed, is the result a decrease in perceptions of excessive change? A third possible explanation for ®nding excessive change in all three cases is that although the changes in Oilco objectively seemed smaller than the changes in Teleco, the changes had profound effects on the individuals in the organization. The changes required organizational members to start thinking differently about how they performed their day-to-day activities. Investigation of these empirical issues is beyond this paper, but relevant to the development of our knowledge of excessive change and our understanding strategic change.
What You See Depends on Where You Sit The perceptions of excessive change varied among members in the organization. We found that top managers did not experience excessive change. Instead they viewed the changes in a more holistic manner. Middle managers and other employees experienced these same changes as excessive. Change is likely to be perceived as excessive at middle and lower organizational levels for several reasons. (1) This is the level where the change is to be implemented by employees who need to deal with the changes at the same time they need to make sure their day-to-day work is done. (2) Top-level managers often have more information and a more holistic perspective on strategic changes. They are better able to see the links connecting different elements within a change project or indeed connecting different change projects. (3) Top management is exposed to the changes earlier, which gives top managers relatively longer time to adjust to the changes than the rest of the organization. (4) Top managers ``let go'' of the changes earlier as they push the changes downward in the organization. Top managers seem to be operating within a different time frame compared with the rest of the organization. The following statement by one of the top managers underlines this:
It takes a long time for things to mature. What we [the top managers] have used years to absorb and understand, we expect others to understand in a couple of months. It's not that simple. (Oilco 2)
Not Just Resistance to Change Our findings of different coping mechanisms show that when employees and middle managers perceive change to be excessive, they not only react with resistance but also in other and more constructive ways, such as by taking control. By identifying these different ways of dealing with excessive change, we extend our understanding of resistance to change and question the general acceptance of this axiom. In this way our ®ndings contribute to recent work that is attempting to gain a better understanding of the concept of resistance to changeÐfor example, what is resisted and the conditions under which resistance occurs.
Linking Individual Coping Mechanisms and Organizational Level Consequences Finally, in addition to direct linkages between excessive change and organizational level consequences, we also found some evidence of relationships among the different outcomes in our data. Organizational consequences seem to trigger and reinforce some individual reactions; individual reactions triggered organizational consequences. Feelings of frustration and physical exhaustion among middle managers (individual reactions) reinforce perceptions of a non-functioning management (orchestrating without a conductor) in a period where the need for change management is at its greatest. Furthermore, non-functional management (orchestrating without a conductor), the lack of an organizational infrastructure, and a chaotic, turbulent environment (shaky foundations) are also likely to WINTER 2002 309
trigger or reinforce individual reactions such as stress and lack of motivation. We also found evidence that a circular relationship exists between coping mechanisms and implementation failure. The organization may enter into a negative spiral as employees choose to ignore change initiatives and react with BOHICA, which means that more and more projects fail to be implemented. Finally, there is evidence that organizational consequences result in both implementation failure and loss of effectiveness. While these relationships are interesting, our suggested causality is highly tentative. The promise suggested by these relationships would be an interesting area for further investigation.
HOW CAN ORGANIZATIONS AVOID EXCESSIVE CHANGE? The main contribution of this paper has been to explore the concept and consequences of excessive change. We have argued that excessive change is a phenomenon that is likely to be found at middle and lower organizational levels. We defined and explored consequences of excessive change. We found consequences of excessive change at both the individual and the organizational level. A relevant issue based on our ®ndings is how organizations can avoid excessive change. We suggest three ways for managers to avoid perceptions of excessive change at the middle and lower organizational levels. The most obvious way to reduce the probability that strategic change becomes excessive is to introduce fewer changes in the organization. However, this alternative is viable only if the organization ®nds it legitimate to reduce the number and scope of change processes in the organization. If the frequency and scope of necessary changes are more dif®cult to alter, then a second way of avoiding excessive change is to focus on how the changes are introduced, communicated and completed. Based on our ®nding that there is a difference in 310 ORGANIZATIONAL DYNAMICS
perception of excessive change depending on an individual's position, we propose that perceptions of excessive change can be minimized by communicating how each stage or phase of change ®ts with other change projects. United Parcel Service's CEO Jim Kelley recognized this as a major challenge as he attempted to change the mission of a company with 360,000 people operating in 200 countries from package delivery to enabling global commerce. ``People need a pretty good understanding of the company's strategy,'' he said, ``not just some super®cial phrases, if they're going to move together in the right direction'' (Harvard Business Review, November 2001, p. 119). It is also important that the need for change is made explicit to change recipients. This may be especially important for successful companies. Focusing on change completion, Abrahamson recommends that organizations need to be sensitive to timing, and make evaluations and results explicit. A period of ``business as usual'' before an additional change was initiated would allow for reaping the bene®ts of major changes. Judging from our data, employees in the organizations expect and prefer change processes that follow Lewin's change model of unfreeze, change, and refreeze, as this allows for a clear de®nition of the beginning, purpose, and end of change. This traditional perspective on change processes con¯icts with newer perspectives such as continuous learning, evolutionary changes and continuous improvement. We argue that the most important issue is not which perspectives on change processes an organization chooses, but rather to make explicit potential differences in perspectives within the organization, particularly across organizational levels. A third way to avoid perceptions of excessive change is to increase the employees' capacity for change. Managing the level at which change becomes excessive would reduce the number of people who experience excessive change, and, thus, minimize the consequences. Unfortunately, existing research provides limited insight into
how employees' capacity for change can be increased. To conclude, understanding the consequences arising from excessive change has relevance for understanding strategic change in general. While our focus has been on exploring the consequences of excessive change, recognizing that strategic changes may not be implemented, that perceptions
of the change may vary by level, and that individuals use different coping mechanisms which have consequences for the organization are all relevant for understanding strategic change.
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SELECTED BIBLIOGRAPHY The work cited in the section ``Pervasiveness of Change'' includes Eric Abrahamson's article ``Change Without Pain'' in Harvard Business Review (July±August 2000); Andrew Pettigrew and Richard Whipp's 1990 book, Managing Change for Competitive Success; and Zajac, Kraatz, and Bresser's 2000 article ``Modeling the Dynamics of Strategic Fit: A Normative Approach to Strategic Change,'' Strategic Management Journal, 21, 429±453. The axiom resistance to change has been challenged in several articles. For an overview, see Eric Dent and Susan Galloway's review challenging ``resistance to change'' in The Journal of Applied Behavioral Science, March 1999.
312 ORGANIZATIONAL DYNAMICS
The analysis of the cases has drawn on the work of Glaser and Strauss's 1967 book, The Discovery of Grounded Theory: Strategies for Qualitative Research; Creswell's book Qualitative Inquiry and Research Design. Choosing Among Five Traditions (Sage Publications, 1998); Hartley's chapter on case studies in Cassell and Symon's (eds.) 1994 book, Qualitative Methods in Organizational Research: A Practical Guide (London: Sage Publications) and Van de Ven and Huber's 1990 article ``Longitudinal Field Research Methods for Studying Processes of Organizational Change'' Organization Science, 1, 213±219.
ISSN 0090-2616/02/$ ± see frontmatter PII S0090-2616(02)00115-8
Excessive Change:
Coping Mechanisms and Consequences INGER STENSAKER JOYCE FALKENBERG
Before we get the structure in place from one organizational development process, management comes with new ideas on how we should work. The new change replaces the previous. We sit and wait for the next major process to be implemented. We are masters of running without jumping. There is too much started that cannot be implemented . . . We have experienced being in the middle of one process when it was suddenly abandoned. This is a waste of time and money. When does change become excessive? What are the consequences of excessive change? These questions were posed to our research group by a middle manager who had experienced a succession of changes in his organization. Despite an abundance of company evidence of excessive change, there is little theoretical or empirical literature that could answer these questions. We therefore undertook an investigation that probed the issue of excessive change. Our research resulted in the development of a de®nition of excessive change based on individual perceptions. We then explored the consequences of excessive change for individuals and for the organization. Our ®ndings allow us to suggest ways organizations can avoid excessive change. 296 ORGANIZATIONAL DYNAMICS
CHRISTINE BENEDICHTE MEYER ANNE CATHRIN HAUENG
We contribute to the understanding of excessive change by exploring the concept empirically. Our de®nition of excessive change, based on perceptions of change at the individual level, adds to the earlier focus based on the change maker. In addition, our investigation recognizes positive as well as negative consequences of change. In the next section, we focus on the pervasiveness of change. This is followed by a description of the three cases used for the investigation. We then, based on the data, develop a de®nition of excessive change from the perspective of the change recipients. Finally, we report the responses to and consequences of excessive change. In the conclusion of the paper we propose suggestions for how organizations can avoid excessive change.
THE PERVASIVENESS OF CHANGE ``Change or perish'' has become a corporate mantra, according to Abrahamson. The ubiquity of change has given fertile ground for understanding how change is motivated, formulated and implemented. Investigation of unsuccessful change processes has led to an awareness of the many barriers to change, including resistance to change. The impression one is left with is that change
not only is necessary, but that there is value in change. One consequence of the pervasiveness of change is that many organizations carry out several change programs simultaneously or initiate an additional change program before the previous ones have been completed. Microsoft Corp. is changing its mission from a single focus on technology to improving the way the company handles relationships with customers and others in the technology industry. Managers are being asked to rethink every aspect of the way they do their jobs. Management processes have been incorporated to bridge the gap between sales and product development. Second-tier executives have been empowered. There has been a call for improved quality of products and services; and employees are being forced to do their jobs differently. This latest change follows an attempt to reorganize around different kinds of customers. Pettigrew and Whipp suggest that dealing with multiple changes is one of the main challenges in change management: ``. . . the ability to manage a series of interrelated and emergent changes (often in parallel and in sequence) is vital.'' We have found the term excessive change to be descriptive of these multiple change processes. This term has previously been used by Zajac, Kraatz, and Bresser in their work on the dynamics of strategic ®t. They presented three different situations that can result in excessive change from a strategy formulation or change-maker perspective: 1. The organization changes, although the environment and organizational contingencies do not suggest the need to change. 2. The organization rightly changes one element, but fails to change other organizational dimension accordingly. 3. The organization changes for change's sake. We extend the use of the term to include the point of view of the change recipients and focus on the consequences of excessive change. We are open to both positive and negative consequences of change, and in this way further develop the negative consequences that have been described under
Inger Stensaker has a PostDoc position at the Institute for Research in Economics and Business Administration (SNF). She will defend her Ph.D. in the fall of 2002 at the Norwegian School of Economics and Business Administration (NHH). Her research interests are within strategic change and implementation processes, particularly focusing on change recipients using cognitive and sense-making perspectives and qualitative methodology. She has also done some consulting in large Norwegian firms pursuing strategic changes.
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Christine Benedichte Meyer is a state secretary in the Ministry of Labour and Government Administration. She is currently on leave from her position as associate professor at the Norwegian School of Economics and Business Administration. Her research interests are mergers and acquisitions, corporate strategy and strategic change. She is currently working on reforming the Norwegian public sector. Before entering the state secretary position, Meyer did consulting for a number of firms, particularly in the field of mergers and acquisitions.
the term change fatigue. Change fatigue has been de®ned as the individual's response of becoming disorientated or dysfunctional as a result of too much stimulation. Abrahamson described change-fatigued middle managers as managers who resisted change both from senior management as well as from young movers in the organization. He suggested that change fatigue would result in initiative overload, organizational chaos and resistance to change. The concept of excessive change is beginning to gain some attention in the literature. This paper contributes to the growing awareness that more change may not be better. We contribute to the understanding of excessive change by exploring the concept empirically. In the next section, we discuss the three cases used for the investigation. We then, based on the data, develop a de®nition of excessive change from the perspective of the change recipients. Finally, we report the responses and consequences of excessive change. In the conclusion of the paper we propose suggestions for how organizations can avoid excessive change.
EXPLORING THE CONCEPT OF EXCESSIVE CHANGE Perceptions of excessive change were uncovered while analyzing strategy implementation issues in two major companies. The discovery of this same phenomenon in two different companies investigated by different researchers convinced us that the issue was highly relevant both for firms and for furthering our understanding of change. Two cases, one each from Teleco and Oilco, were used in the initial work that led to definition of the concept. These two cases were then supplemented with a third case from a different division in Oilco. Data from all three cases were used to further elaborate our preliminary findings, as well as to investigate the consequences of excessive change at the organizational level. We used an inductive approach, suitable to the purpose of studying how individuals 298 ORGANIZATIONAL DYNAMICS
perceived and dealt with excessive change. This approach allowed for an emerging design in which questions and categories were rede®ned as the study proceeded. Following the process outlined in grounded theory, we ®rst coded the data by initial categories to identify the properties of and responses of excessive change, and then explored the linkages between excessive change and the consequences. To aid us with the coding, we used the computer program NUDIST. All four researchers were involved in categorizing the de®nition and consequences of excessive change. Table 1 compares data collected from the three cases.
Strategic Change in Teleco and Oilco The case study of Teleco was designed to investigate the implementation of acquisitions made by a dominant national telecom company. The focus of other two case studies, Oilco 1 and Oilco 2, was to examine the implementation of major organizational changes facilitated by information technology (IT). Oilco is a major, national integrated oil and gas company.
Joyce Falkenberg received her Ph.D. from the University of Oregon and is presently an associate professor at the Norwegian School of Economics and Business Administration. Her research interests are in the area of strategic change and adaptation. Her most recent work in this area has been on implementing strategic changes. She has recently completed a major research project focusing on implementation of strategic changes in major companies. Falkenberg has taught in executive programs in many countries. In addition to earlier work experience in a non-profit organization in the United States and a major oil company in Norway, she has done consulting for Scandinavian companies.
Teleco. The study of Teleco was undertaken in a period when the organization was going through substantial changes and struggling to adapt to a rapidly changing environment. Teleco had a monopoly position in the highly regulated telecom sector. When the industry was deregulated, Teleco faced intensive rivalry. The increased competition arose not only from traditional telecom companies, but also from a range of IT companies that were investing heavily in the telecom sector. Furthermore, the leading actors in the market were constantly changing, making the competitive arena complex and unpredictable. Teleco chose to adapt to these changing conditions by diversifying into the IT sector. This was accomplished through acquisition of a number of market-leading companies. The company reorganized its existing businesses several times in an attempt to find a balance WINTER 2002 299
between adapting to changing market conditions and realizing synergies across business entities.
Anne Cathrin Haueng is a Ph.D. student at the Norwegian School of Economics and Business Administration (NHH). Her research interests are within strategic change and implementation processes. In her thesis she focuses on evaluation of changes during the implementation process and through a political perspective she seeks to explain the mechanisms that influence the measurement process. She has done consulting in large Norwegian firms pursuing strategic changes, and at present she is participating in a European research project that investigates the links between management development and firm performance. She holds a Master in International Business from NHH and has worked five years in a position within strategy and change processes for a large Norwegian public company.
300 ORGANIZATIONAL DYNAMICS
Oilco 1 and Oilco 2. The studies of Oilco 1 and Oilco 2 were undertaken to investigate the corporate-wide implementation of organizational changes facilitated by SAP, an integrated IT system (SAP: systems, applications and products). Oilco believed that the implementation of SAP, along with substantial organizational changes, was necessary to maintain competitiveness. Predictable changes in the environment included both an increased number of costefficient competitors as well as a reduction in oil reserves. Thus, the changes at Oilco were both proactive and non-urgent. Organizational changes during the implementation process included both a change of chief executive officer (CEO) and top management team and the development of a plan to privatize the organization.
Comparing and Contrasting Teleco and Oilco The description above focuses on the differences between Teleco and Oilco. In Table 2, we summarize the differences between the cases, focusing on both the contextual information and the changes being implemented. Table 2 indicates that Teleco was undergoing a relatively greater degree of strategic change than Oilco 1 and Oilco 2, when comparing the environment as well as the purpose of the change. Given these differences, one might incorrectly assume that the changes as Teleco would lead to excessive change, while those at Oilco would not. Surprisingly, analysis of the data indicated that perceptions of the change processes in all three cases had characteristics that could be interpreted as excessive change. Both organizations experienced many changes, set in motion simultaneously. Some of these changes were interrupted as other change programs were initiated. We explore these characteristics of excessive change in the following section.
TABLE 1
DATA COLLECTED
CASE
TELECO
IN THE
THREE CASES
OILCO 1
OILCO 2
Sampling time
Retrospective and real-time data at t1 and t2
Retrospective and real-time longitudinal data
Retrospective and real-time data at t1
Data collection
In-depth interviews
In-depth interviews
In-depth interviews
Number of interviews
19 t1 19 t2
10
37
Documents
Strategy and market plans
Strategy and Strategy and implementation plans implementation plans Division development plans Division development plans
Project reports from change programs Organizational climate surveys Internal newsletters Speeches Observation
Participated in seminar to map ``as is'' situation Attended management seminars
Division evaluation (AS-IS report) Project database
Division evaluation (AS-IS report)
Participated in weekly meetings with the ``improvement group'' Observed top management meetings
Attended management seminars
WHAT IS EXCESSIVE CHANGE? A definition of excessive change is required before we are able to start discussing the
TABLE 2 CASE
COMPARING
TELECO
consequences. The dictionary defines ``excessive'' as exceeding what is normal, proper or reasonable. Based on this definition, it would appear to be possible to objectively assess when change becomes excessive. But who THE
THREE CASES
OILCO 1
Type of change
Corporate wide Four acquisitions in the IT sector (t1) Reorganization of Teleco (t2) BPR type changes
Environment
Changing rivalries Changing environment deregulation Changing industry boundaries
OILCO 2 Corporate wide BPR type changes
Predictable Decreasing munificence
Predictable Decreasing munificence
Competitive arena Complex, unpredictable
Stable, predictable
Stable, predictable
Description of change
Reorganization Focus on efficiencies
Reorganization Focus on efficiencies
Diversifying into IT sector Restructuring through acquisitions Reorganizing existing business Balance: adaptation and realizing synergies
Simultaneous changes in IT Simultaneous changes in IT systems and in organization systems and organization structure, work processes, structure, work processes, and governance principles and governance principles First division to implement One of later divisions to implement changes change after pilot implementation
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should be the judge of when strategic change exceeds what is normal or reasonable? Outside observers, not directly involved, could be incorrect in their assumption of what was normal by either over-estimating or underestimating what appeared to them to be reasonable. For this reason, we determined that insiders, those involved in the change, were the correct judges of change that exceeds what is reasonable. We therefore developed our definition of excessive change analyzing the data on perceptions of excessive change. The following de®nitions of excessive change were developed from the data: Excessive change: (1) The organization pursues several, seemingly unrelated and sometimes con¯icting changes simultaneously. (2) The organization introduces new changes before the previous change is completed and evaluated, without allowing time for business as usual and reaping the bene®ts. The following statements are examples of the ®rst de®nition: A lot of balls are thrown into the air at any one time. (Oilco 1) We have too many changes that are unconnected. They are not linked together . . . (Oilco 2) There are too many changes. There's instability everywhere, and we didn't have to start everything at the same time. Nobody has control over it. (Oilco 2) The second definition was induced from statements such as these: When something new is introduced it has a starting point, but the different pieces are never in place, they are supposed to fall into place as we go along. But before they do, there is something new again. There is never anything that gets implemented. You get started and then you're cut off . . . (Teleco) 302 ORGANIZATIONAL DYNAMICS
(Change) processes are going on all of the time . . . Then they just disappear . . . It would be much easier for us if we could ®nish things off and see the results, but one process overtakes the other. (Oilco 2)
Different Perceptions at Different Levels Defining the term both in terms of several change programs being carried out within the same department simultaneously, or a new change program being introduced before the previous one has been completed, led to important insights in understanding excessive change at different levels in the organization. We found that not everyone in the same organization experienced the same set of changes as excessive. Whether or not change was viewed as excessive depended on whom we asked. An important implication of this finding is that, given this definition, it is not possible to determine objectively or in advance whether or not a given set of changes will become excessive. If some individuals in the organization experienced the changes as excessive while others did not, then who in the organization were most likely to experience the changes as excessive? Our data showed that top managers described strategic changes differently from middle managers or lower-level employees. Individuals in middle management and lower organizational positions often experienced strategic changes as excessive, while none of the statements describing excessive change came from top-level managers. On the contrary, these top managers typically described a comprehensive change process consisting of many components. At this level, the different components were seen as clearly connected and leading to the same overall goals. This change has become almost synonymous with another change process and that's good. (Top Manager, Oilco 2)
We don't think this is contrary to our previous change program . . . There is no con¯ict among the changes. (Top Manager, Oilco 1) While lower-level managers perceived many different changes, top managers described the same changes in a much more holistic manner. Middle managers and other employees experienced one change project taking over the next, before the former was completed and evaluated. Top managers saw different change initiatives as different phases or stages of a coherent whole. Some top managers even disagreed with the perception that there were overlapping changes and instead argued that previous changes had been completed and evaluated. In the next section, we use the de®nition developed here to discuss consequences of excessive change.
THE CONSEQUENCES OF EXCESSIVE CHANGE FOR THE INDIVIDUAL AND THE ORGANIZATION The cowboy culture at Home Depot Inc. has been traded for one of command and control; managers and merchants who previously wrote their own rules are now asked to report weekly on key performance indicators. These changes have resulted in a high degree of anxiety among the employees. Managers have used other coping mechanisms, with 24 of the 39 senior officers leaving the firm within the first year and half of the change. An investigation of managers at Lufthansa found many practiced what Bruch and Ghoshal called defensive avoidance, managers who convinced themselves that the problem doesn't exist. Consequences of excessive change encompass reactions at both individual level and the organizational level. At the individual level, we uncovered a diverse array of reactions and coping mechanisms. At the organizational level, the consequences were related to structural and performance issues.
We begin by reporting the ®ndings at the individual level.
How Do Individuals Cope with Excessive Change? The respondents who had perceived change to be excessive were very open in sharing their reactions. They talked about becoming frustrated and getting angry. Stress was mentioned often, and some reported health problems, either physical or psychological. They stated that they had become dissatisfied with their jobs and lacked motivation. There were also feelings of uncertainty about the situation, and about their jobs. They started questioning their own competency and adequacy. Typical statements were: You become stressed with new changes constantly needing to be implemented. (Oilco 2) Too many changes are implemented at the same time . . . we become angry, grumpy and withdrawn. (Oilco 2) In addition to uncovering individual level responses to excessive change, our indepth study allowed us to link these reactions to coping mechanisms employed by individuals. Individuals stated many different ways of coping with their reactions. We classi®ed these along two dimensions. One dimension was how active or passive the individuals were in responding to the change (active/passive). The other dimension concerned the likelihood that any changes would actually be implemented in the organization (change probable/improbable). We mapped the different coping mechanisms on these two dimensions (see Fig. 1). Passive/change improbable. Starting at the bottom left quadrant, we placed two ways of coping. BOHICA (bend over, here it comes again) was the most frequently mentioned coping method. Our data clearly showed how common it was to bend over and wait WINTER 2002 303
FIGURE 1
COPING MECHANISMS
until this wind of change had blown over. Many of the people who described this as a way of dealing with excessive change had been exposed to a number of change initiatives. This suggests that BOHICA is a strategy based on learning by experience. Viewed from the perspective of the organization, BOHICA is not entirely negative. Although the changes have a small chance of being implemented, since employees are somewhat indifferent to the changes, people did concentrate on their daily, operationally-oriented tasks. 304 ORGANIZATIONAL DYNAMICS
More detrimental to the organization were those individuals who became paralyzed by the changes. Paralysis was not a result of people being unwilling to change, rather they were unable to carry out the changes. This coping mechanism resulted in individuals being unable to carry out even simple and routine tasks that they had previously managed. Active/change improbable. Some middle managers and employees coped with excessive change by being active, but by
acting in ways that could be detrimental to the implementation of the changes. Two different modes of actions fit this category: exiting the organization or sabotaging the change initiative. Exiting the organization could be detrimental to the implementation of the change and to the organization as a whole, when those who choose to exit are the most competent employees. This is often the situation given that the most competent individuals are highly employable elsewhere. Sabotaging the change initiative is another active coping mechanism. Examples of sabotaging efforts which we found included: blaming the change initiative for everything that went wrong, playing down the importance of the change initiative, or even going so far as making fun of it, or punishing people who tried to implement the changes. In this way, employees and middle managers sabotaged the implementation of the change initiative. Their actions also affected others who were trying to carry out the changes. Active/change probable. Some individuals embraced the change, and took control of the situation. When they recognized that their managers were unable or unwilling to manage the change process, these individuals took initiatives to ensure that the changes were implemented. When individuals took control, the probability of change increased. However, management had less control over the direction of the change. Passive/change probable. Finally, there were some people who loyally followed orders in implementing the change initiative. They coped by working long hours, putting in a lot of overtime. In this way they were able to perform their normal job requirements as well as the work associated with the change itself. An unfortunate consequence was that individuals who were loyal often suffered burnout. Fig. 1 shows the placement of these coping mechanisms along the two continua. We have included citations from our interviews that are typical for each of the coping
mechanisms. The coping mechanisms described here focused on reactions at the individual level. In addition, the investigation allowed us to uncover organizational level consequences. What are the structural consequences at the organizational level? Nokia AB oyj is reorganizing its mobilephone unit into nine pro®t-and-loss centers, each of which will have its own product research and development (R&D) and marketing, while other activities, including a central research lab for basic technology and product design, will be centralized. Analysts suggest that this complex change could confuse employees, clients and investors. Home Depot's focus on inventory, payroll and overall costs may hamper sales growth. At Microsoft, there is concern that attention to management processes and performance measurement could sti¯e innovation. Excessive change had consequences for the organization as well as individuals within the organization. Similarly to the examples of Nokia, Home Depot and Microsoft, we found that in Teleco and Oilco, organizational level consequences were related to organizational structure and organizational performance. At the organizational level, we found a wide variety of consequences related to structural issues. To re¯ect differences among these, we found it useful to group the structural consequences into three categories: musical chairs, orchestrating without a conductor, and shaky foundations. Musical chairs. The first category, musical chairs, takes its name from the children's game. We find this title descriptive of the continuous shifting or elimination of middlelevel managers during the implementation process. Managers were frequently moved from one department or division of the organization to other departments or divisions. An extreme case of this was when one manager, after having been moved several times, ended up back in a position he had held previously. This WINTER 2002 305
constant movement had consequences for the organizations. Two of these conse- quences that appear to be most relevant for the implementation of the change initiatives were a perceived lack of continuity in the change process and managers' losing track of the different change initiatives. While many managers were rotated, some positions were eliminated. This resulted in a net loss in the number of positions available for managers. All of us who have played musical chairs know the feeling of being left without a chair. Turnover was not always intentional. When positions were continuously shuffled and layoffs expected, some key people who were attractive on the job market chose to leave. Thus, an important consequence of excessive change was the loss of good managers. We call it musical chairs. We change places and some have to leave. (Oilco 2) In the past six months we have had six managers, one manager twice. (Teleco) We also found evidence that excessive change allowed poor managers an opportunity to hide in the chaos. This resulted, over time, in maintaining poor management. It's easy to play hide and seek . . . They [poor managers] can surf on the waves. Nobody has time to follow them up. (Teleco) There is little continuity at the level that is supposed to implement the strategy. When you delegate the strategic responsibility to the level with the least continuity, well, then no one remembers the strategy. (Teleco) Orchestrating without a conductor. The second category of structural consequences, orchestrating without a conductor, describes the situation for employees when there is a nonfunctional middle management. Lower level 306 ORGANIZATIONAL DYNAMICS
employees often had to deal with middle managers who were incapable of managing the change process. The lack of leadership during implementation was reflected in employees' perceptions of inconsistencies in communication and in the way they were treated in the change process. The relationship between employees and managers became more loosely coupled. Employees described situations in which they sought advice and answers from colleagues and previous leaders rather than their manager. In general, employees involved in the change process did not perceive that their needs were being met. Rather, they felt they were left on their own to figure things out. I must admit this has been a hard time. The manager hasn't had time to take care of his own group of employees. (Teleco) The managers hardly know what we are doing. (Oilco 1) The CEO said one thing, and his subordinate said another. They were inconsistent, and we really began to wonder what was going on . . . (Teleco) I could have just as well used a secretary [instead of a manager]. If I need help I make a phone call or ask a colleague. (Oilco 2) Shaky foundations. We have termed the third category shaky foundations in order to describe the structural and organizational instabilities. These instabilities include the lack of overall structure and the lack of continuity in the change process. Employees who experienced excessive change described the organization as being in a state of chaos, with a high degree of turbulence. The organization was characterized as being in a transition modeÐwhere existing routines were not maintained, and new routines were not yet put into place. The lines of
responsibility were unclear and there was a lack of long-term continuity. The name of the game is the more change the better. Everything gets very turbulent. (Oilco 2) Everything has happened all at once. We have not had time to sit down and draw the map. We have had to go out and work in the terrain without any guidelines. I feel we have had an inhuman task to cope with. (Teleco) Lists have been lost and not even been handed to the pay of®ce. There is such a lack of routines and when this starts to show on peoples' paychecks, they really get upset. (Teleco)
What are the Performance Consequences? Excessive change affected organizational performance due to implementation failure and loss of effectiveness. Implementation failure refers to the failure of actually changing the organization. Change takes place on paper only, not in practice. Employees stated that their organization was excellent at planning, but failed to carry through the changes. They noted that nothing really had changed, and probably would not change for a long time. First there is unrest, and then we fall back into old working habits. (Oilco 2) You cannot turn 20,000 heads and hearts upside down in ®ve minutes. Most people will work along the same paths as beforeÐfor a long, long time. (Teleco) When we started, we experienced processes that were, to a large extent, being carried out and then suddenly abandoned. (Oilco 2) Loss of effectiveness was the result of the organization's attention being drawn away
from customers, markets and operational tasks. Customer relations suffered both because of the chaos in the organization, and also because customers were neglected when employees focused too much on the changes in the organization. Less time and fewer resources were dedicated to income deriving activities. The organization was under pressure to prioritize change projects at the expense of other objectives. This affected primary tasks, such as safety dimensions, as well as market-oriented projects. Our customers are very upset for the simple reason that they do not know where to call. They cannot tell the difference between our numerous entities. They expect us to connect them to the right people. (Teleco) By changing work routines you reduce effectiveness . . . temporarily. However, when things change frequently, then it [reduced effectiveness] is no longer temporary. (Oilco 2) Excessive change also resulted in lost effectiveness because of a loss of capabilities. The organization risked loosing well-functioning routines. In Oilco, the introduction of integrated teams (where electricians, automatics and mechanics worked together in teams) was seen as a major threat for professional development. Table 3 summarizes consequences of excessive change at the organizational level.
CONTRIBUTING TO OUR UNDERSTANDING OF STRATEGIC CHANGE PROCESSES Our analysis has allowed us to develop a definition of excessive change as well as to focus on the consequences of excessive change. Our contribution to understanding strategic change is discussed in this section as it relates to four important issues. (1) The contribution of excessive change to ways of WINTER 2002 307
TABLE 3 TYPE
OF
ORGANIZATIONAL CONSEQUENCES
CONSEQUENCES
Structural consequences
CATEGORIES Musical chairs Orchestrating without a conductor Shaky foundations
Consequences on performance
Implementation failure Loss of effectiveness
thinking about strategic change; (2) recognition of perceptual differences depending on level in the organization; (3) focusing on an array of coping mechanisms rather than a single focus on resistance to change; and (4) relating individual and organizational consequences.
Strategic Change and Excessive Change Strategic change is often characterized as being revolutionary or evolutionary. This study encompassed both types of change, and found evidence of excessive changes in both. The two organizations in the two research projects faced different environments and formulated different strategic changes. The environment for Teleco was less stable and less predictable; the changes they undertook were made in an effort to realign the firm with the changes in their environment. On the other hand, Oilco's environment was more stable and predictable. In Oilco, the changes were focused toward improving efficiencies in the organization. It was therefore unexpected, given the context of the two different organizations, to find such clear evidence of excessive change in both settings. This suggests that excessive change may be an important characteristic of change processes that is independent of the type of change being implemented. 308 ORGANIZATIONAL DYNAMICS
OF
EXCESSIVE CHANGE CHARACTERISTICS
Rotation of managers Voluntary and involuntary turn-over Employees lack direction due to non-functional and in-consistent middle management Lack of routines and unclear responsibilities Changes are not carried through Focus on changes steals attention from primary tasks such as customer orientation, safety, etc. Competencies and capabilities risk being lost because of focus on changes
A second contribution to our understanding of change is based in the development of the de®nition of excessive change. Determining whether change is excessive based on an objective assessment of the number and type of strategies formulated provides an important, but only partial de®nition. Focusing on what change recipients perceive as excessive has allowed us a more complete de®nition of the concept. Additionally, our investigation allows us an increased understanding of strategic change by questioning why excessive change occurs. As implied above, excessive change might be expected in Teleco because of the major environmental changes. Understanding excessive change in Oilco, where the environment was stable and the changes focused on internal ef®ciencies, requires additional explanation and further investigation. A possible explanation for our ®nding of perceptions of excessive change in Oilco is that historically the ®rm has had high performance. Perceptions of excessive change result, as suggested by Zajac, Kraatz, and Bresser, when the organization makes changes, but no changes are needed. In Oilco, the change recipients may believe that because of high performance no changes are needed. An additional explanation, also requiring further research, concerns a ®rm's capacity for change. What is capacity for change, and is it a resource that can be
developed? If it is developed, is the result a decrease in perceptions of excessive change? A third possible explanation for ®nding excessive change in all three cases is that although the changes in Oilco objectively seemed smaller than the changes in Teleco, the changes had profound effects on the individuals in the organization. The changes required organizational members to start thinking differently about how they performed their day-to-day activities. Investigation of these empirical issues is beyond this paper, but relevant to the development of our knowledge of excessive change and our understanding strategic change.
What You See Depends on Where You Sit The perceptions of excessive change varied among members in the organization. We found that top managers did not experience excessive change. Instead they viewed the changes in a more holistic manner. Middle managers and other employees experienced these same changes as excessive. Change is likely to be perceived as excessive at middle and lower organizational levels for several reasons. (1) This is the level where the change is to be implemented by employees who need to deal with the changes at the same time they need to make sure their day-to-day work is done. (2) Top-level managers often have more information and a more holistic perspective on strategic changes. They are better able to see the links connecting different elements within a change project or indeed connecting different change projects. (3) Top management is exposed to the changes earlier, which gives top managers relatively longer time to adjust to the changes than the rest of the organization. (4) Top managers ``let go'' of the changes earlier as they push the changes downward in the organization. Top managers seem to be operating within a different time frame compared with the rest of the organization. The following statement by one of the top managers underlines this:
It takes a long time for things to mature. What we [the top managers] have used years to absorb and understand, we expect others to understand in a couple of months. It's not that simple. (Oilco 2)
Not Just Resistance to Change Our findings of different coping mechanisms show that when employees and middle managers perceive change to be excessive, they not only react with resistance but also in other and more constructive ways, such as by taking control. By identifying these different ways of dealing with excessive change, we extend our understanding of resistance to change and question the general acceptance of this axiom. In this way our ®ndings contribute to recent work that is attempting to gain a better understanding of the concept of resistance to changeÐfor example, what is resisted and the conditions under which resistance occurs.
Linking Individual Coping Mechanisms and Organizational Level Consequences Finally, in addition to direct linkages between excessive change and organizational level consequences, we also found some evidence of relationships among the different outcomes in our data. Organizational consequences seem to trigger and reinforce some individual reactions; individual reactions triggered organizational consequences. Feelings of frustration and physical exhaustion among middle managers (individual reactions) reinforce perceptions of a non-functioning management (orchestrating without a conductor) in a period where the need for change management is at its greatest. Furthermore, non-functional management (orchestrating without a conductor), the lack of an organizational infrastructure, and a chaotic, turbulent environment (shaky foundations) are also likely to WINTER 2002 309
trigger or reinforce individual reactions such as stress and lack of motivation. We also found evidence that a circular relationship exists between coping mechanisms and implementation failure. The organization may enter into a negative spiral as employees choose to ignore change initiatives and react with BOHICA, which means that more and more projects fail to be implemented. Finally, there is evidence that organizational consequences result in both implementation failure and loss of effectiveness. While these relationships are interesting, our suggested causality is highly tentative. The promise suggested by these relationships would be an interesting area for further investigation.
HOW CAN ORGANIZATIONS AVOID EXCESSIVE CHANGE? The main contribution of this paper has been to explore the concept and consequences of excessive change. We have argued that excessive change is a phenomenon that is likely to be found at middle and lower organizational levels. We defined and explored consequences of excessive change. We found consequences of excessive change at both the individual and the organizational level. A relevant issue based on our ®ndings is how organizations can avoid excessive change. We suggest three ways for managers to avoid perceptions of excessive change at the middle and lower organizational levels. The most obvious way to reduce the probability that strategic change becomes excessive is to introduce fewer changes in the organization. However, this alternative is viable only if the organization ®nds it legitimate to reduce the number and scope of change processes in the organization. If the frequency and scope of necessary changes are more dif®cult to alter, then a second way of avoiding excessive change is to focus on how the changes are introduced, communicated and completed. Based on our ®nding that there is a difference in 310 ORGANIZATIONAL DYNAMICS
perception of excessive change depending on an individual's position, we propose that perceptions of excessive change can be minimized by communicating how each stage or phase of change ®ts with other change projects. United Parcel Service's CEO Jim Kelley recognized this as a major challenge as he attempted to change the mission of a company with 360,000 people operating in 200 countries from package delivery to enabling global commerce. ``People need a pretty good understanding of the company's strategy,'' he said, ``not just some super®cial phrases, if they're going to move together in the right direction'' (Harvard Business Review, November 2001, p. 119). It is also important that the need for change is made explicit to change recipients. This may be especially important for successful companies. Focusing on change completion, Abrahamson recommends that organizations need to be sensitive to timing, and make evaluations and results explicit. A period of ``business as usual'' before an additional change was initiated would allow for reaping the bene®ts of major changes. Judging from our data, employees in the organizations expect and prefer change processes that follow Lewin's change model of unfreeze, change, and refreeze, as this allows for a clear de®nition of the beginning, purpose, and end of change. This traditional perspective on change processes con¯icts with newer perspectives such as continuous learning, evolutionary changes and continuous improvement. We argue that the most important issue is not which perspectives on change processes an organization chooses, but rather to make explicit potential differences in perspectives within the organization, particularly across organizational levels. A third way to avoid perceptions of excessive change is to increase the employees' capacity for change. Managing the level at which change becomes excessive would reduce the number of people who experience excessive change, and, thus, minimize the consequences. Unfortunately, existing research provides limited insight into
how employees' capacity for change can be increased. To conclude, understanding the consequences arising from excessive change has relevance for understanding strategic change in general. While our focus has been on exploring the consequences of excessive change, recognizing that strategic changes may not be implemented, that perceptions
of the change may vary by level, and that individuals use different coping mechanisms which have consequences for the organization are all relevant for understanding strategic change.
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SELECTED BIBLIOGRAPHY The work cited in the section ``Pervasiveness of Change'' includes Eric Abrahamson's article ``Change Without Pain'' in Harvard Business Review (July±August 2000); Andrew Pettigrew and Richard Whipp's 1990 book, Managing Change for Competitive Success; and Zajac, Kraatz, and Bresser's 2000 article ``Modeling the Dynamics of Strategic Fit: A Normative Approach to Strategic Change,'' Strategic Management Journal, 21, 429±453. The axiom resistance to change has been challenged in several articles. For an overview, see Eric Dent and Susan Galloway's review challenging ``resistance to change'' in The Journal of Applied Behavioral Science, March 1999.
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The analysis of the cases has drawn on the work of Glaser and Strauss's 1967 book, The Discovery of Grounded Theory: Strategies for Qualitative Research; Creswell's book Qualitative Inquiry and Research Design. Choosing Among Five Traditions (Sage Publications, 1998); Hartley's chapter on case studies in Cassell and Symon's (eds.) 1994 book, Qualitative Methods in Organizational Research: A Practical Guide (London: Sage Publications) and Van de Ven and Huber's 1990 article ``Longitudinal Field Research Methods for Studying Processes of Organizational Change'' Organization Science, 1, 213±219.