Bianca van Elp
Organizational Change January 2015
Environmental Forces for Change Types of Change
Balogun
Ansoff Tushman Dunphy &
Strebel Stacey & Hope Grundy Stacey
& McDonell et al. Stace
(1996) (1996) Hailey (1993) (1996)
(1990) (1988) (1993)
(2004)
Paths:
Turbulence Complex Envirm.
Change Model of Scales of nature of Varieties
(predictable (hard -> turbulen
force org. life change change of change
+avail. time) soft) ce
+scale
Converging
Close to Fine-tuning Smooth
Predictable Weak (fine- Adaption Closed
certainty (collaborat.) incremental
tuning)
Forecastable Converging Incremental
Close to Smooth
by Moderate (in- adjustment Evolution
certainty incremental
extrapolation cremental) (consultat.)
Predictable
Close to Recon- Bumpy
threats and Contained
certainty struction incremental
opportunities
(Radical: Modular
Partially
Far from trans-
predictable Strong
certainty
Frame- formation
Revolution
opportunities breaking) (directive)
Dis- Corporate
Unpredictable Far from continuous trans- Dis- Open
Revolution
surprises certainty or frame- formation continuous ended
breaking (coercive)
Part One: The Context and Meaning of Change
Chapter 1 Organizations and their Changing Environments
A View of Organizations, the Historical Context for Change and an Uncertain Future
Organization: social entity with a purpose, boundary and patterns the activities of participants into a
recognizable structure (Daft).
The organization as a system; input: materials, resources. Formal subsystem: management, strategy,
goals, structure, operations, technology. Informal subsystem: culture, politics, leadership. Output: org.
goal achievement, employee satisfaction (figure 1.1, p. 5).
Market factors impacting on operations of Western organizations: from suppliers’ market to buyers’
market --> task-oriented time, product/ service design time, systems/ process-oriented time, value-
oriented time (figure 1.2, p. 8). Value-oriented time: differentiate by adding value: identifying potential
customer expectations and exceed them, introduce new products, constant innovation (product,
production techniques, quality, relationship marketing).
Business is becoming ever more uncertain as the pace of change quickens and the future becomes more
unpredictable --> symphony orchestras: creativity, relationship between trust and control (information-
based org.). Environmental triggers of change: near meltdown of the banking and financial structures in
western developed economies and election of Obama as president of the USA.
Environmental Triggers of Change and an Analytical Framework
Organizations operate in 3 types of environment (= operating environment):
1. Temporal environment; historical developments bringing changes over time with focused
intelligence: ability to acquire and apply knowledge and know-how. This environment influences
through the cycles of industry-based innovation and through the life cycle of the org. itself.
1
, Bianca van Elp
2. PEST framework
PESTLE; political, economic, socio-cultural, technological, legal, ecological (figure 1.3, p. 15).
Political: government, rights, wars, regulations, taxation, trade unions. Economic: competitors,
suppliers, rates, policies, ownership.
Four key economic indicators: economic growth, healthy balance of payments (export > import),
low inflation, low unemployment. Socio-cultural: trends, changes, skills, attitudes, issues,
environment, ethics. Technological: information, internet, computerization, transport. Another
trigger; power of big ideas --> internal triggers for change: recognize union, new CEO, operating
structures, redesign of jobs + working relationships, redesign of factory/ office layout, adoption
of new technology, new marketing strategy, sell/ acquire buss. unit, cut in overtime working,
labor shortages/ surpluses.
3. Internal environment; consists of those org. changes that are the first-line responses to changes in
the external and temporal environment.
Organizational Responses to Change
Environmental turbulence by Ansoff & McDonell: a firm’s performance is optimized when its
aggressiveness and responsiveness match its environment. 5 levels of envir. turbulence (figure 1.4, p. 24):
1. Predictable: stability of markets, repeating challenges, ability to adapt, predicted future.
2. Forecastable by extrapolation: complexity increases, extrapolate from the past and forecast with
confidence.
3. Predictable threats and opportunities: complexity increases further than ability to respond, future
can be predicted with some degree of confidence.
4. Partially predictable opportunities: turbulence increases with addition of global and socio-
political changes, future is only partly predictable.
5. Unpredictable surprises: turbulence increases further with unexpected events and situations
occurring more quickly than the organization can respond.
Environmental turbulence by Stacey. 3 levels of envir. turbulence (illustration 1.7, p. 25):
1. Closed change: looking back at history for sequences of events, ability to explain everything,
knowing that sequence of events will continue affect the future course of the business.
2. Contained change: sequences of events are less clear-cut, only what and why it happened and its
consequences, the impact has similarly to be qualified by probability statements.
3. Open-ended change: sequences of events arising from the past and continuing to impact on the
future where explanations do not command anything like widespread acceptance.
Stacey’s concepts of ‘close to certainty’ and ‘far from certainty’:
Close to certainty: a situation where organizational members face closed and contained change,
or A&M levels 1 to 3.
Far from certainty: these changing situations have significant implications for the actions of
managers as they attempt to choose appropriate strategies to deal with them. Org. members face
open-ended change, or A&M level 4 to level 5.
Strebel; Strong change force: one causing a substantial decline or a substantial improvement in
performance. Moderate force: one causing only a minor impact on performance. Weak force: nature and
direction are difficult to discern. The stronger the force the more probable it is that the environment is
moving to A&M’s level 5.
Conclusions
Schein; organizations have continually to achieve external adaption and internal integration, work with
the environment and try to manage them, being quick on their feet, anticipate where possible,
opportunities and threats and react with knowledge to the unpredictable surprises (A&M). Albright; if
managed effectively and applied progressively a continuous process of identifying, collecting and
translating progressive information about external influences will benefit from strategic decisions making
towards establishing a preparatory stance to environmental forces.
2
Organizational Change January 2015
Environmental Forces for Change Types of Change
Balogun
Ansoff Tushman Dunphy &
Strebel Stacey & Hope Grundy Stacey
& McDonell et al. Stace
(1996) (1996) Hailey (1993) (1996)
(1990) (1988) (1993)
(2004)
Paths:
Turbulence Complex Envirm.
Change Model of Scales of nature of Varieties
(predictable (hard -> turbulen
force org. life change change of change
+avail. time) soft) ce
+scale
Converging
Close to Fine-tuning Smooth
Predictable Weak (fine- Adaption Closed
certainty (collaborat.) incremental
tuning)
Forecastable Converging Incremental
Close to Smooth
by Moderate (in- adjustment Evolution
certainty incremental
extrapolation cremental) (consultat.)
Predictable
Close to Recon- Bumpy
threats and Contained
certainty struction incremental
opportunities
(Radical: Modular
Partially
Far from trans-
predictable Strong
certainty
Frame- formation
Revolution
opportunities breaking) (directive)
Dis- Corporate
Unpredictable Far from continuous trans- Dis- Open
Revolution
surprises certainty or frame- formation continuous ended
breaking (coercive)
Part One: The Context and Meaning of Change
Chapter 1 Organizations and their Changing Environments
A View of Organizations, the Historical Context for Change and an Uncertain Future
Organization: social entity with a purpose, boundary and patterns the activities of participants into a
recognizable structure (Daft).
The organization as a system; input: materials, resources. Formal subsystem: management, strategy,
goals, structure, operations, technology. Informal subsystem: culture, politics, leadership. Output: org.
goal achievement, employee satisfaction (figure 1.1, p. 5).
Market factors impacting on operations of Western organizations: from suppliers’ market to buyers’
market --> task-oriented time, product/ service design time, systems/ process-oriented time, value-
oriented time (figure 1.2, p. 8). Value-oriented time: differentiate by adding value: identifying potential
customer expectations and exceed them, introduce new products, constant innovation (product,
production techniques, quality, relationship marketing).
Business is becoming ever more uncertain as the pace of change quickens and the future becomes more
unpredictable --> symphony orchestras: creativity, relationship between trust and control (information-
based org.). Environmental triggers of change: near meltdown of the banking and financial structures in
western developed economies and election of Obama as president of the USA.
Environmental Triggers of Change and an Analytical Framework
Organizations operate in 3 types of environment (= operating environment):
1. Temporal environment; historical developments bringing changes over time with focused
intelligence: ability to acquire and apply knowledge and know-how. This environment influences
through the cycles of industry-based innovation and through the life cycle of the org. itself.
1
, Bianca van Elp
2. PEST framework
PESTLE; political, economic, socio-cultural, technological, legal, ecological (figure 1.3, p. 15).
Political: government, rights, wars, regulations, taxation, trade unions. Economic: competitors,
suppliers, rates, policies, ownership.
Four key economic indicators: economic growth, healthy balance of payments (export > import),
low inflation, low unemployment. Socio-cultural: trends, changes, skills, attitudes, issues,
environment, ethics. Technological: information, internet, computerization, transport. Another
trigger; power of big ideas --> internal triggers for change: recognize union, new CEO, operating
structures, redesign of jobs + working relationships, redesign of factory/ office layout, adoption
of new technology, new marketing strategy, sell/ acquire buss. unit, cut in overtime working,
labor shortages/ surpluses.
3. Internal environment; consists of those org. changes that are the first-line responses to changes in
the external and temporal environment.
Organizational Responses to Change
Environmental turbulence by Ansoff & McDonell: a firm’s performance is optimized when its
aggressiveness and responsiveness match its environment. 5 levels of envir. turbulence (figure 1.4, p. 24):
1. Predictable: stability of markets, repeating challenges, ability to adapt, predicted future.
2. Forecastable by extrapolation: complexity increases, extrapolate from the past and forecast with
confidence.
3. Predictable threats and opportunities: complexity increases further than ability to respond, future
can be predicted with some degree of confidence.
4. Partially predictable opportunities: turbulence increases with addition of global and socio-
political changes, future is only partly predictable.
5. Unpredictable surprises: turbulence increases further with unexpected events and situations
occurring more quickly than the organization can respond.
Environmental turbulence by Stacey. 3 levels of envir. turbulence (illustration 1.7, p. 25):
1. Closed change: looking back at history for sequences of events, ability to explain everything,
knowing that sequence of events will continue affect the future course of the business.
2. Contained change: sequences of events are less clear-cut, only what and why it happened and its
consequences, the impact has similarly to be qualified by probability statements.
3. Open-ended change: sequences of events arising from the past and continuing to impact on the
future where explanations do not command anything like widespread acceptance.
Stacey’s concepts of ‘close to certainty’ and ‘far from certainty’:
Close to certainty: a situation where organizational members face closed and contained change,
or A&M levels 1 to 3.
Far from certainty: these changing situations have significant implications for the actions of
managers as they attempt to choose appropriate strategies to deal with them. Org. members face
open-ended change, or A&M level 4 to level 5.
Strebel; Strong change force: one causing a substantial decline or a substantial improvement in
performance. Moderate force: one causing only a minor impact on performance. Weak force: nature and
direction are difficult to discern. The stronger the force the more probable it is that the environment is
moving to A&M’s level 5.
Conclusions
Schein; organizations have continually to achieve external adaption and internal integration, work with
the environment and try to manage them, being quick on their feet, anticipate where possible,
opportunities and threats and react with knowledge to the unpredictable surprises (A&M). Albright; if
managed effectively and applied progressively a continuous process of identifying, collecting and
translating progressive information about external influences will benefit from strategic decisions making
towards establishing a preparatory stance to environmental forces.
2
