A case study in organisational change: implications for theory

Lindsay Nelson

Introduction
Organisation theory has developed through major epochs of classical, human relations and contingency approaches, all of which have contributed to the accumulation of knowledge about implementing change. The legacy of these approaches has been to regard organisational change as something of an aberration or a departure from the more usual static position of organisations. Hence, for example, Lewin's (1951) depiction of stability before and after a change intervention which, interestingly, assumes change to be endogenous. More recently focus has switched to examining fundamental aspects of change, developing ways of theorising about change and matters relating to its management. These developments in theory recognise the limitations of contingency approaches and the need to see it as a continuing phenomenon within an organisation's particular circumstances (Dawson,1994; Dunphy and Stace, 1990. One significant point recognised by recent studies is that static models are being displaced by dynamic models, reflecting the discontinuous nature of organisational change (Pettigrew, 1985; Fombrun, 1992; Greenwood and Hinings, 1988)[1]. Change cannot be relied upon to occur at a steady state, rather there are periods of incremental change sandwiched between more violent periods of change which have contributed to the illusion of stability once assumed to be the case. Moreover, the language and imagery of organisation theory in the past projected static or at least steady-state models. Strategies for dealing with uncertainty (Thompson, 1967) and the need for at least some bureaucratic uniformity in an organisation's procedures also provides imagery more reflective of static rather than dynamic organisations. Pettigrew (1992) argues for a processual approach to the study of management and eschews a static view in favour of one which pivots on temporal issues of action and sequences of events. From this viewpoint, even to maintain viability, organisations need to be incrementally changing in what Tushman et al. (1986) term convergent change. Here, convergent change is taken to mean fine tuning (Greenwood and Hinings, 1996; Stace and Dunphy, 1994). In particular, convergence is the ongoing process to achieve fit between strategy, structure, 18

The author Lindsay Nelson is Head of School of Management, University of Tasmania, Hobart, Tasmania, Australia. Keywords Organizational change, Modelling, Management attitudes Abstract Organisational change is typically conceptualised as moving from the status quo to a new, desired, configuration to better match the environment. Change could, therefore, be seen as a departure from the norm, or alternatively as normal and simply a natural response to environmental and internal conditions. Static models of organisations are being displaced by dynamic models, which reflect the discontinuous nature of organisational change. Developments in theory suggest limitations to contingency approaches, which carry the assumptions of static models of change. Analysis of this case at PowerCo in Australia reveals a number of issues related to changes aimed at achieving a more commercial, profit-oriented, focus. Points out that the contextualist approach is holistic, in which these aspects interact with each other as change unfolds temporally. A contextualist framework permits models of change to be visualised as dynamic rather than static, having a temporal setting which has multiple causes acting as loops rather than simple lines. This enables change to be understood as a discontinuous phenomenon having the benefits, without the limitations, of rational contingency models. Electronic access The Emerald Research Register for this journal is available at http://www.emeraldinsight.com/researchregister The current issue and full text archive of this journal is available at http://www.emeraldinsight.com/0969-6474.htm
The Learning Organization Volume 10 . Number 1 . 2003 . pp. 18-30 # MCB UP Limited . ISSN 0969-6474 DOI 10.1108/09696470310457478

A case study in organisational change: implications for theory

Lindsay Nelson

The Learning Organization Volume 10 . Number 1 . 2003 . 18-30

people and processes, which is never perfect (Tushman et al., 1986, p. 33). It is therefore a continuing process aimed at achieving improved strategic alignment. The imagery here is more akin to a duck in the middle of a flowing river; whilst seemingly inactive it never-the-less maintains equilibrium through a lot of activity below the surface. Leifer (1989) regards change as normal and simply a natural response to environmental and internal conditions. He argues that change is consistent with open systems in which learning occurs and goes on to describe the stable state as a myth. Learning here refers to change or adapation resulting from experience, and is conceptually similar to Katz and Kahn's (1978) account of dynamic homeostasis. On this basis all organisation theory, through the classical, human relations and contingency periods, is connected with change. This view is supported by Dunphy (1996) who regards these epochs as early attempts to understand change. The work of Mintzberg (1979, 1991), Ulrich and Lake (1991), and Senge (1990, 1993) also reflect the need for organisations to adopt forms which permit continuing adjustment and learning to take place. For these reasons it appears that a normal part of organisational life includes the capacity to change, particularly in the shift from a mechanistic to an organic paradigm (Daft, 1995), reflecting the need to embrace flexibility in less certain environments. For all these reasons, together with awareness of the impact of managerial actions, there is interest in what happens during the transition phase of change. This is not so much a focus on implementation, which tends to be normative, prescribing managerial actions needed to effect change, as an attempt to understand the problems and related issues in uprooting from one organisational arrangement to another arrangement. In other words, the interest is in issues related to the dynamics of changing, which represents a major shift in emphasis away from the content or substance of change. The acceptance of dynamic over static contingency models, however, has been a gradual and evolutionary process rather than a sudden and dramatic development. The following case study of change in an organisation within the electricity industry reveals problems associated with viewing 19

change as a static rather than dynamic phenomenon.

Research method
Taking as a starting point the criticisms of Pettigrew (1985) relating to organisational change literature, much of which is normative, the focus of the present study was on the dynamics of change in a contextually specific environment. Static models stress the content or substance of change, in which contingency approaches to implementing change dominate. Greenwood and Hinings (1988) draw attention to the need for more research into the pathways or ``tracks'' taken by organisations during the processes of change. Dawson (1994; 1996), Pettigrew (1987) and Pettigrew and Whipp (1991) reinforce this view by pointing out the importance of studying how change occurs. Thus, in addition to content, examination of the processes is crucial to understanding organisational change. Case study rationale A case study was selected because of its ability to take what Pettigrew (1990) describes as a holistic and multifaceted approach to change. Case studies comprise a single unit analysis based upon depth that is both holistic and exhaustive (Ball, 1996, pp. 75-6), which retains the meaningful characteristics of realistic events. Thus a case study is an empirical inquiry that, firstly, investigates a contemporary phenomenon within its real-life context; especially when, secondly, the boundaries between phenomenon and context are not clearly evident (Yin, 1994, p. 13). Miles and Huberman (1994) pick up Yin's second point, seeing as the critical issue the struggle to define case study boundaries. They employ a simple definition:
. . . we can define a case as a phenomenon of some sort occurring in a bounded context (Miles and Huberman, 1994, p. 25).

They speak in terms of the focus or heart of the study surrounded by an indeterminate edge of the case marking the boundary of what will not be studied. At the same time, case studies are opportunistic (Peshkin, 1993) and permit the investigation to pursue new directions as the need arises, thus re-drawing boundaries.

A case study in organisational change: implications for theory

Lindsay Nelson

The Learning Organization Volume 10 . Number 1 . 2003 . 18-30

Data for the case study A time-line of significant events relating to the organisation (Pettigrew, 1985) assisted in determining the most appropriate sources of information at the macro level. This was a top-down approach (Brand, 1996; 1997) in which significant variables were identified for subsequent detailed investigation at the micro level. Interviews of between 45 minutes and one hour were conducted with 35 persons who were employed in senior managerial positions by the organisation at the time of change. Of these, ten had executive responsibilities relating to the change processes. In addition, five outside consultants were interviewed who were contracted to work with the organisation's change teams. To gain insight into historical factors, four former senior managers including two CEOs, and a former head of the elected government were also interviewed. All interviews were audio-taped and, after transcription into text, analysed by computer using the NUDIST system (Richards and Richards, 1994). This software program was developed for qualitative research; it assists analysis by dividing text into chunks, attaches codes to the chunks, and has the capacity to then find and display all instances of coded chunks or combinations of coded chunks. It is specifically designed for coding, search and retrieval of data and for theory-building (Miles and Huberman, 1994). Supplementary data was obtained from public records, including annual reports along with other company records and files from within the organisation.

The organisation
The subject of this case was an electricity company (PowerCo) which was subjected to transformational change during the 1990s. PowerCo was founded in 1914 for the purpose of generating, transmitting and retailing electricity from hydro sources and subsequently built up a strong reputation and culture around civil engineering expertise. As an organisation it came to be dominated, however, by its civil engineers; electrical engineers appear not to have enjoyed quite the same status. This was due to the fact that the engineering problems were civil rather than electrical: dams to be constructed, 20

tunnels bored through rugged terrain, rivers diverted and canals built. In the process of becoming a strong, viable, organisation, proficient in producing hydro electricity, PowerCo developed a number of characteristics which eventually became its weakness. The expertise and high level of civil engineering professionalism prevented it from seeing other means of producing electricity at a time when these alternative technologies were increasingly cost-competitive. PowerCo became what Kellow (1996) described as a dam building organisation guilty of reverse adaptation. Crises over debt from borrowings to build dams and public protests over natural environment issues turned this strength into arrogance, which eventually became a weakness. That this situation could occur was attributed to a lack of accountability, bolstered by a strong culture and a belief in a vision of ``hydro-industrialisation'' which was intended to provide cheap electricity for industry. In addition, sympathetic politicians provided legislation allowing PowerCo to proceed unchecked, more or less as it saw fit (Davis, 1993; 1995). This was to be seen as organisational arrogance which was eventually challenged by a well organised environmental movement having widespread community support. The crisis in public support combined with large debts, doubtful demand forecasting and an oversupply of electricity added to the problems of PowerCo. By the late 1980s, at the macro level, government views about a regulated economy changed, resulting in a policy of market-driven competition rather than government controls. This, together with legislative reform to make PowerCo more accountable, wrought massive changes on the organisation. It was downsized and transfromed into an electricity retailing organisation, bereft of the sweeping powers it had enjoyed for over 80 years. The number of employees in the ten years from 1988 to 1998 fell from 4,153 to 1,633 (Nelson and Dowling, 1998), whilst legislation was enacted which corporatised PowerCo and removed its ability to set electricity prices and plan future energy needs (Nelson and Dowling, 1999). Thus the focus of PowerCo shifted from civil engineering projects of building dams and power stations, to that of a business entity charged with the responsibility of providing to the government, as nominal

A case study in organisational change: implications for theory

Lindsay Nelson

The Learning Organization Volume 10 . Number 1 . 2003 . 18-30

owner, a return on investment. The process of change was given the in-house label of ``commercialisation''. Finally, in 1998, PowerCo was disaggregated into three separate organisations, although privatisation has not, for the present, taken place.

Case analysis
When the interview data were submitted to computer analysis using NUDIST, a pattern of nodes emerged which appeared to relate to three principal groupings: context, substance (or content) and stewardship of change. Adapted from Pettigrew's (1985) work, context refers the internal and external environments, extended longitudinally into the past, present and future. The context, therefore, is the operational environment of the organisation, as it evolves temporally. The substance of change, refers to what changes were made, whether to the organisation's size or the way its activities were conducted. Substance also includes the size or scale of change. Stewardship (Donaldson and Davis, 1991; Davis et al., 1997) refers to facilitating the implementation of change, its leadership and an assessment of its progress and effects. Context Computer analysis of data revealed several persistent criticisms by participants in the commercialisation changes. The lack of a coherent overall strategy and tight co-ordinating control was expressed from both internal and external sources. The planning of commercialisation centred on a multi-pronged program delegated to several project teams. Significantly, the overall project leader also doubled as the leader of one of these programs. This appeared to deflect him from the important responsibility of ensuring continuing control and co-ordination of the whole change process. Commercialisation took hold at a leisurely pace and lacked a sense of urgency that would have existed had there been competition from other electricity suppliers. The absence of competition produced a surreal climate of merely preparing for a possibility rather than a reality. The slower pace of change should have allowed sufficient time for all aspects of commercialisation to be adequately controlled and co-ordinated. Whilst the redundancy program was well managed, 21

other matters were left to meander along independently. The inclusive strategy of participation by means of the various project teams developed into consultative processes that went unchecked and degenerated into extended discussion and negotiation. Employees did not have a sense of history relating to past controversies over the natural environment, or the massive debt crisis of the organisation and the manner in which they related to the sweeping changes imposed on PowerCo. This was a linear view, eschewing the relevance of historical contextual antecedents, rather than holistic and multifaceted (Pettigrew, 1990). Many employees, therefore, could not accept the need for change, preferring to hope for the continuance of past practices materialising as yet another dam construction project, which had been the case many times in the past. The need for massive change was never made explicitly clear to employees, not because leadership made a conscious decision to withhold such information, but simply that it regarded the historical background as irrelevant and therefore failed to communicate effectively for the purpose of ``unfreezing'' (Lewin, 1951) from the status quo. Senior managers, in particular, who were with PowerCo prior to commercialisation had great difficulty in accepting that the historical context impacted on the present. Interviewees questioned about the effect of past controversies on the present were unable to confront the reality of these linkages and preferred to focus entirely on the prospect of competition as the sole cause of change. Therefore, unable to break free of the past, organisational remnants such as one civil engineering enclave (the Consulting Unit) were allowed to continue, instead of being broken up and absorbed into the new structure. It was as though these units might one day form the nucleus of a restored PowerCo, and a resumption of the old ways. Considerable effort was put into an extensive communication program. Its focus, however, was on the changes to come, which omitted the historical context. The program was sophisticated; involving as it did newsletters, visits by the CEO, briefings for subordinate leaders and even a telephone hotline. There were critics, though, who pointed out that it was less than honest on occasions, such as when employees at the vehicle workshops were told that it would be

A case study in organisational change: implications for theory

Lindsay Nelson

The Learning Organization Volume 10 . Number 1 . 2003 . 18-30

retained, only to find later that the facility was to close. This type of incident eroded the confidence of employees that management could be relied upon to be truthful, at a time when the integrity of management was important. For its part, management believed that it was honest but there were times, such as the incident mentioned, when management felt that it was undesirable to reveal the whole truth. Another problem with communication concerned the unknown future. Employees wished to know, for example, whether the organisation would be disaggregated and privatised, but management was not in a position to provide satisfactory answers because these were political questions and necessarily in the hands of government. Unfortunately this produced uncertainty and gave support to rumour, which again impacted negatively upon management. The dilemma for management was whether, on the one hand, to admit to not knowing and thereby appearing not to be in control, or on the other hand to make statements which would later only add to the confusion and uncertainty. Management chose the latter. Linked to this issue was the inability to provide a new vision as a springboard for a future direction. Had the government or PowerCo developed a vision to replace that of hydro-industrialisation, a stronger focus may have resulted, giving a sense of purpose to the changes of commercialisation. It was remarkable that although staff and managers recognised the importance of a vision, there was no attempt at its development. What made this problem so obvious was the fact that hydro-industrialisation had become an entrenched part of organisational culture and folklore. Where previously employees were able to visualise their role and function as making a significant contribution to the wider community, under commercialisation this was removed, replaced with a vacuum. As a consequence, staff felt that merely giving government a return on investment was not new, since they already accepted that PowerCo should run at a profit. Substance Although many organisational change programs in other organisations concurrently involve both restructuring and the question of redundancies, in the case of PowerCo they were treated operationally as separate matters. After dam construction ceased, the 22

workforce was decimated, many were forced redundancies due to the winding-down of dam construction, but others left as a matter of choice. Under the volunteer redundancy program there was a failure to discriminate between employees on the basis of performance or organisational need. Although this was industrially a dispute-free achievement it left PowerCo in a precarious situation in some work areas through loss of expertise and corporate knowledge. Notwithstanding the voluntary program, many people who were not selected for the reorganised PowerCo left rather than face a diminished role with an uncertain future. Among the managerial class many were told that there was no position for them and they therefore elected to take a ``voluntary'' redundancy. The human resource management effort was put into achieving the massive and continuing reduction in numbers without industrial disputation, but at the cost of playing an insignificant role in the other changes. The human resource manger could have provided an important linkage between the change management teams and the organisation, but this did not happen. There appeared to be a division between the project teams and the rest of the organisation, particularly after the appointment of the business unit managers in the new, post commercialisation PowerCo, who often thwarted reform measures recommended by the change teams. This problem eventually manifested as frustration for team leaders when the business unit managers seemed to undermine their efforts to continue with change. Team leaders eventually also left the organisation, perceiving that PowerCo was no longer interested in reform. The activities of the change teams became traumatic for some members, whose deliberations could adversely affect their own employment security, as they progressively reorganised structures and functions. An unresolved question was the extent to which this influenced team members in carrying out their reforms, although they denied having a conflict of interest. Successive restructures confused and dismayed many employees, a number of whom decided to leave. It might be thought that the restructures were an attempt to make incremental adjustments to the ``new'' PowerCo but this was not the case. They

A case study in organisational change: implications for theory

Lindsay Nelson

The Learning Organization Volume 10 . Number 1 . 2003 . 18-30

reflected an attempt to draw back from the initial commercialisation structure, interpreted as a de facto, but premature, disaggregation. Added to the dysfunctional consequences of multiple restructuring was that the need to change work processes affected by restructuring was ignored. Any rearrangement of an organisation's formal structure impacted on hierarchical relationships and should have been reflected in changes to work processes. Inattention to this factor caused later problems and uncertainty over functions and duties. The predilection for imposing one structure after another was never satisfactorily explained and raised several issues. First, that restructuring was seen as necessary by both senior management and various consultants were brought in to assist, yet problems with the pre-existing structure were never clearly identified or articulated in a way that suggested how the organisation should be re-shaped. Second, attention focused on what was thought to be appropriate without reference to other models or specialist consultants in the power industry. Senior management played the most significant part in deciding each structural iteration, without drawing on expertise from HRM. Third, the restructuring was treated in isolation from work activities, so that processes were overlooked. These created anomalies such that employees engaged on similar work in the same location sometimes belonged to different divisions. These matters collectively related to the engineering culture, which was prominent during the period under investigation. The problem with the engineers and what Schein (1996) describes as other technocrats is that they share a common occupational culture:
If one examines the tacit shared assumptions of this broad community, one discovers that their preferred solutions are solutions without people. They prefer systems, machines, routines, and rules that are automatic (Schein, 1996, p. 5).

technical staff. This may explain the engineers' penchant for new structures and technical matters instead of looking to change work activities and processes. There was no concerted effort to change the organisation's culture, other than to replace redundant staff with people from a commercial background. Stewardship There was persistent criticism over the lack of leadership and co-ordination of commercialisation, which had been delegated to the project teams. In the midst of the turmoil of change, the CEO resigned, precipitating a period of unstable leadership. Subsequent CEOs, either appointed or acting, contributed to feelings of a lack of direction and leadership among subordinate staff. The task of providing confident and strong leadership was made difficult because questions over disaggregation and privatisation remained unanswered until late 1998. Due to this uncertainty regarding PowerCo's future and a lack of leadership, staff lacked confidence in the direction and stewardship of commercialisation. Any period of change produces uncertainty and the negative aspects of change were exacerbated by the perceived instability of leadership. This case appears to meet the criteria of corporate transformation in which the approach matched charismatic transformation which involved consultative processes as described by Dunphy and Stace (1990) and Stace and Dunphy (1994). Elements of charismatic transformation were detected, such as communication strategies using multimedia that were top-down and employed task forces. However, other characteristics described by Stace and Dunphy (1994, p. 163) such as an entrepreneurial vision, radical new role models and symbolically interactive leadership, combined with cultural renewal to radically challenge existing values, appeared to be absent. According to Stace and Dunphy (1994, p. 241) charismatic transformation is vulnerable because it is rare for all major stakeholders to support radical change, suitable leaders are rare and there is a problem of maintaining commitment when the charismatic leaders leave. All three of these characteristics appeared in this case study. First, some departmental heads were not enthusiastic about commercialisation while others were only mildly supportive. 23

These engineers need to do ``real engineering'' or basic design which drives them toward simplicity, elegance and routinised solutions that, according to Kunda (1992) and Thomas (1994), tend to ignore the social realities of the workplace. It was difficult to imagine an organisation less dominated by engineers and technocrats than PowerCo, which relied so much upon its civil and electrical engineers and their supporting

A case study in organisational change: implications for theory

Lindsay Nelson

The Learning Organization Volume 10 . Number 1 . 2003 . 18-30

second, the incoming CEO came from a conservative engineering background, albeit private sector, and appeared to be uncomfortable when delivering his commercialisation talks to large groups of employees and at times unable to deal with questions from the floor. Finally, when he left in the midst of the commercialisation project, and was replaced with an acting CEO, the change process clearly lost momentum, bearing out the aspect of vulnerability from Stace and Dunphy (1994).

Discussion
Linkage to theories of change This case shows clear signs of implementing a static model of change. Having set in place plans and appointed project teams, the change process was then left to itself to unfold as pre-determined activities. At a theoretical level, what appears to have been neglected is that as organisations set about to meet changing circumstances, they need to monitor and re-align change programs for two reasons. First, the external environment does not remain stationary during the period of implementing change and, second, internal re-configuration may impact upon the style and context of change being pursued by the organisation itself. Put more simply, by the time an organisation has achieved one stage of its program, circumstances and context have also moved on so that perhaps the original plan, made in good faith at the time, may be no longer wholly appropriate. It is not difficult to find examples in history of intentions and plans becoming boggeddown due to an inability to embrace flexibility. The Somme campaign in France during World War I is one such example, where General Haig stuck doggedly to his original battle plans in the face of unexpected defensive tactics of the Germans who retreated to well-prepared trench systems able to be easily defended. In addition, by insisting upon a uniform assault across his front, Haig's forces ignored opportunities to follow through on weaknesses in the enemy's defences discovered during the course of battle. On the other hand, the major successes of Hitler's Blitzkrieg tactics in World War II were due to the vigour with which combined land and airforces exploited weaknesses 24

detected in their opponent's defences. See Keegan (1998) and also Deighton (1993). Lewin's (1951) theory of change centred on the need for the driving forces of change to overcome the restraining forces, unfreezing from the old and refreezing on the new. At the macro level PowerCo had a history of strongly opposing change and it was only by the direct intervention of government to appoint a CEO from outside and to restrict its autonomy that the foundation was set for commercialisation. This can only be interpreted as coercion (Stace and Dunphy, 1994) at the highest level of management. At the micro level, the organisation expended considerable effort in communicating with employees, explaining the new commercial environment in which it operated and the consequential changes required for it to operate as a competitive business organisation. Establishing a new structure and calling for applications effectively negated overt resistance to change among the managerial class, while for those at lower organisational levels their roles remained substantially the same. However, even with a vigorous communication program, employee complaints still materialised about a lack of explanation on the need for change. Consequently they had difficulty in unfreezing, notwithstanding that there was also a desire to move forward and accept the government's new agenda. However, there was a dilemma for management in that PowerCo had moved through a damaging period of controversy over the natural environment and excessive reiteration of past problems could have had a negative impact on morale. Issues related to refreezing failed to arise because of the continuing state of flux after commercialisation and the rapid replacement of staff who left. It appears that Lewin's (1951) model may be more suited to micro aspects of change rather than massive transformation affecting the whole organisation. Among the restraining forces were political elements (Greenwood and Hinings, 1996; Dawson, 1994) which needed to be managed; in the confusion and uncertainty created by change some individuals appeared to make rapid advances up the hierarchical ladder, as occurred at PowerCo. A problem for management was to distinguish between those who genuinely embraced change and those who merely sought promotion,

A case study in organisational change: implications for theory

Lindsay Nelson

The Learning Organization Volume 10 . Number 1 . 2003 . 18-30

reminiscent of Luthan's (1988) ideas of successful vs effective managers. It was ironic that several people who strongly supported the change felt that they should leave following the elevation of other more conservative managers to senior positions. This was a signal that the establishment was only interested in superficial change. It could be interpreted that requiring executives to apply for positions in the ``new'' PowerCo was evidence of coercion (Dunphy and Stace, 1990; Stace and Dunphy, 1994); however, the strategy of wide participation from staff via the change teams appeared to counter this argument. However, even though there was a strategy of consultation and participation, individual examples emerged of staff feeling that, due to the end of building dams, a reduction in the workforce and doubt over a place for them in the ``new'' PowerCo, they had few options other than to leave. There was no evidence therefore of a clear and consistent management style in terms of the Dunphy and Stace (1990) model; generally there was consultation, but there were also strong feelings that the changes of commercialisation were forced on the organisation and that staff had few alternatives other than to accept their fate. The importance of providing a vision is critical to change for employees to clearly comprehend the future state and to allay fears of the unknown (McDermott and Sexton, 1998; Nadler, 1982) but, as already pointed out, this was perceived to be absent during commercialisation. This problem was exacerbated by uncertainty regarding such matters as disaggregation and privatisation, which were outside the control of the organisation. Given that environmental turbulence is normal it may not be feasible to create clear visionary images; however, Dunphy and Stace (1990, p. 154) emphasise the importance of creating the new vision for managers of transformational change. An interesting aspect of large-scale change concerns control and co-ordination. In this study, the lack of control was raised many times by interviewees. Dunphy (1996) and Daft (1989), for example, in arguing for managerial strategic control, and Morgan (1986), in several of his metaphors, assume that organisations have the ability and capacity to control all aspects of the change processes. This may not be entirely true, however. The large number of activities 25

involved with change compel management to enlist the services of others; in the present case several change management teams, including outside consultants, facilitated change processes. This may diffuse and dilute direct management control to the extent that processes may unfold in unintended ways. The metaphor here is the expanding pattern of shotgun pellets the further they travel from the gun's barrel after discharge; or the expanding universe following the big bang (Hawking, 1988). Without regrouping, the many aspects of commercialisation became diffused, uncontrolled and ineffective. Another variable is that as the context temporally unfolds certain plans and actions may need reassessing in the light of emergent external factors, such as happened when the change of government eliminated privatisation from the agenda. External environments, by their very definition are outside the influence and control of the organisation but yet still impact upon the organisation. This is another reason for moving away from static models of change in favour of dynamic models. Dynamic models of change It is argued that change should not be conceptualised as a linear exercise in moving from A to B. Given the need to recognise environmental turbulence, static, crosssectional models employed to implement new organisational systems become clumsy. It is as though the organisation operates as a closed system, isolated from events, which might impact on the change processes. Change is not seen as a series of events progressively unfolding, each impacting on the overall system. The point to be made is that this is not just a problem of bureaucratic systems being unable to adjust quickly enough to new environments. The issue is how to conceptualise change showing the modification of strategies necessary to keep pace with, and adapt to, the effects of a dynamic contextual environment so that future intentions may be realised. The framework for analysis is based upon Pettigrew (1985), which may be briefly contrasted with that of Dawson (1996) and Greenwood and Hinings (1988). These are shown below in Figures 1, 2 and 3. Pettigrew's (1985) components convey the idea of movement and variability, which precede outcomes. Here, progress from

A case study in organisational change: implications for theory

Lindsay Nelson

The Learning Organization Volume 10 . Number 1 . 2003 . 18-30

Figure 1 Components of analysis: context and process

Figure 2 Determinants of organisational change

Figure 3 The dynamics of organisational change

historical to present and future indicates the progressive movement of context and process through both inner and outer contexts. One difficulty with this model is the ambiguity over these contexts, which essentially refer to the internal and external environments. The framework by Dawson (1996) depicts his processual approach, emphasising the constituent bundles of the change components, which he calls determinants. However, a weakness of this depiction is that it overlooks the dynamic quality of change that Pettigrew successfully conveys. At first sight, this could well be a static model from which contextualists try to advance. Greenwood and Hinings (1988), however, directly address the issue of change dynamics in their discussion of design archetypes and tracks. Their view of the dynamics of change appears in Figure 3. This framework suggests that there is interdependency between the three areas, which together influence the central ``archetype'' or organisational configuration intended by the change processes. As with the framework of Dawson (1996), however, this model does not convey the idea of the dynamics of change over time. It is this temporal quality that is a feature of Pettigrew's (1985) framework and which therefore forms the basis of the present analysis. Drawing on the work of Dawson (1996), Greenwood and Hinings (1988) and the findings of this case study, the change components are shown as interdependent, a key contention of the present study, because a change in one requires one or both of the others to be modified. This interdependency is shown in Figure 4, in which stewardship replaces Dawson's (1996) determinant of politics of change. The term stewardship better reflects matters associated with control, co-ordination and leadership during the change process, found in this case study.
Figure 4 Depiction of the change process as an interdependent system

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A case study in organisational change: implications for theory

Lindsay Nelson

The Learning Organization Volume 10 . Number 1 . 2003 . 18-30

The sphere represents the process of change, within which the three determinants interact, so that the change process can be thought of as a function of the interdependency between substance, stewardship and context. Considered as a system, these components continue to impinge on the unfolding of change. Should just one of the components change then a re-configuration of the overall change process is implied. A change in either context, substance or stewardship should not, therefore be seen as an isolated event, since there is a consequential impact on the process, requiring a re-assessment of the change strategy. The failure to realise the effect of this interdependency led to a number of problems at PowerCo, for example, that a change in structure (substance), when put in place, required a different set of skills as a consequence (stewardship), or that a different government view (context) impacted on substance and stewardship. Another issue is that both of the models in Figures 2 and 3 ignore the temporal nature of change argued by Pettigrew (1985) to be an essential feature of the contextual model. Dawson (1996) also held that processual change takes place temporally. It was argued above that the change process needs to be monitored and strategies modified as various change activities take place. The change process therefore should not be thought of as a single event as implied by Figures 2 and 3, but as a series of events or activities temporally connected and modified on the basis of feedback data. This is shown in Figure 5 in which the change process is shown, requiring progressive reassessment and adjustment to the strategic elements of

substance, stewardship and context. This readjustment is made necessary as the unfolding change processes alter the context in which organisational change occurs. Without this, the process would lose focus and become unco-ordinated. In this model, historical events impact upon the present by shaping the planned process of change. The configuration of the change process consists of interdependent components or determinants, with the change strategies recognising the inherited antecedent conditions. The critical part of the model is the need to assess progress in the light of unfolding events and realign strategies so that the objective is attained. The point argued is that the change process needs to be conceptualised as taking place in a context that is continually changing; perhaps as a result of the change interventions initiated by the organisation, perhaps by the external contextual environment, but nevertheless in a constant state of flux. The idea of environmental uncertainty, change and movement, reflecting the discontinuous nature of organisational change is not new (Fombrun, 1992; Leifer, 1989; Greenwood and Hinings, 1988; Mintzberg, 1991; Pettigrew, 1992; Tichy, 1983; Tushman and Romanelli, 1985). However, the point of departure is the requirement for organisations to develop the capacity to monitor and adjust change strategies in the light of a changing context during the progress of those changes. The model suggested in Figure 5 is an important divergence from Dawson (1994, 1996) and theoretical models such as Greenwood and Hinings' (1988) idea of ``tracks'' and Barley and Tolbert's (1997)

Figure 5 A dynamic model of change suggested by this case study

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A case study in organisational change: implications for theory

Lindsay Nelson

The Learning Organization Volume 10 . Number 1 . 2003 . 18-30

``scripts'' which canvas issues related to unsuccessful change strategies, but overlook the interdependency of the components of change as argued in this thesis. In Pettigrew's (1985) account of change at ICI he successfully applies his contextual framework to the analysis of change but stops short of assessing the significance of his findings in respect of interdependency and the need for management to re-examine change strategies as change unfolds over time. Adjustment and modification of strategies during the progress of change poses a problem for organisations to achieve successfully without necessarily shifting the direction of their change program. PowerCo made a less than successful attempt at this when senior management realised that there were some dysfunctional consequences of the commercialisation structure of 1992. The attempt to ``reunite'' a prematurely disaggregated organisation, for example, only led to further difficulties and problems because staff felt that commercialisation was to some extent being unravelled. Arranging for suitable feedback is the starting point for assessing the progress of change strategies. Feedback is a feature of systems theory (Von Bertalanffy, 1950, 1967; Boulding, 1971) which may be applied to the process of change by requiring re-assessment of strategies as they begin to take effect and contextual variation over time becomes evident. This has similarities to action research, a process used for managinging change (Cunningham, 1993; Eden and Huxham, 1996; French and Bell, 1990; Shani and Pasmore, 1985) and is often associated with organisational development (Eden and Huxham, 1996). Action research involves a cyclic series of activities, moving through data gathering, analysis and planning, to the intervention, followed by reflection and evaluation to complete the cycle. It seems clear from this case that successful implementation of change involves the adjustment or re-configuration of strategies as change unfolds and, therefore, that models of change need to reflect this dynamic process. This point is not so much that contingency models are inappropriate, as that the management of change should incorporate regular review of progress and alteration to strategy as indicated by feedback. This can also be seen as an example of the learning organisation (Senge, 1990, 1993) applicable 28

during the processes of change. The problem to be faced is that management needs to accept the need to revise strategy as contingencies arise. Had PowerCo management, for example, not adhered so dogmatically to the rigid early retirement and redundancy plan, the loss of key staff could have been avoided. The subsequent re-hiring of former staff as consultants indicated dysfunctional consequences of rigid planning.

Conclusion
This case demonstrates the complexities of introducing organisation-wide change. Simple ideas of linear movement from A to B at the micro level disappear when moving to the macro level. The demands of maintaining momentum, controlling variables and adjusting strategies as the process of change progresses and also the context changes, were key aspects that contributed to frustration and dysfunctional consequences. Change teams were the focal point of commercialisation but enthusiasm faded as their work fell into disarray in some areas. Residual pockets of resistance, or at least wilful inaction, went unnoticed because nobody was given responsibility for monitoring change processes. Had there been a more forceful or coercive leadership style, this may have been avoided. However, having set up the change teams it was assumed that they would carry forward the desired changes without further assistance. The need to monitor progress and act on feedback information so that strategies can be altered accordingly should be a normal part on introducing change.

Note
1 Romanelli and Tushman (1994) develop this idea further in their punctuated equilibrium model of organisational transformation.

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