Conceptual model

Based on the influential forces described above, the author has developed a “major forces behind strategic change – model” and a “capacity for organizational change—model” to explain an organization’s capacity for change (Figure 2.2 & Figure 2.3).

Figure 2.2 Major forces behind strategic change--model

2.4.1 Major forces behind strategic change -- model

It is necessary to elaborate each element of the model so as to make sense the figure and make the readers comprehend it. The argumentation of the intended and realized degree of change combining with the influential forces will be stated as follows:

Organizational change has been defined by numerous scholars and categorized in several ways. One way to look upon this work is to asses the level of consensus between initial state, end state and the intention those in between. Organizational change can be characterized as a continuous adaptation or a radical change process (Nadler & Tushman, 1989; Melin & Hellgren, 1994), or according to Mintzberg and Westley (1992) as a system of moving cycles. Davenport (1993) chooses to examine change using the pace of change as one dimension. Periods where the pace of change is high Davenport refers to as process innovation, whereas periods with a lower pace of change are referred to as process improvements.

A model that captures the capacity for change as a process will hence find it difficult to define the initial and end point of a particular change process. As a solution, the suggested model introduces two reference points, the intended and the realized degree of change, which in retrospective can be considered as start and end of a set of organizational change processes. The model advocates that the realized degree of change is dependent on the organization’s capacity for change under influence of external and internal factors. It also argues that the congruence between the intended and realized degree of change will be an indicator for the capacity for change of the organization. The term degree of change refers to the direction and the extent of the change concerning the organization and its counterparts. High congruence, i.e. a high similarity in direction and extent of intended and realized change, is interpreted as a sufficient capacity for change. Low congruence, i.e. a low similarity in direction and extent of intended and realized change, is interpreted as insufficient capacity for change.

The outcome of the totality of the change process is then related to the initial intent and becomes the realized change, determined and influenced by the capacity for change.

As already argued, the amount of congruence is influenced by external and internal factors, which were described in more detail in chapter 2.3. The Major forces behind strategic change - model (Figure 2.2) takes into account four internal and two external forces that represent driving and restraining forces, which are exerted upon and in the

interplay with the organization, of the capacity for change. All factors are interrelated and affect each other in direct or indirect ways. For instance, leadership might be affected by management fashion but management fashion might also be affected by outstanding leadership which in turn might affect the environment. The internal factors;

resources, leadership, structure and culture will to a varying degree increase the organization’s acceptance for change and affect the strategic change process while management fashion and environment will to a varying degree act as external stimuli for change and influence organization’s strategic change process as well. The capacity for change will depend on how they interplay.

2.4.2 Capacity for Organizational Change—model

Strategic change should not be perceived as a simple, linear and static process, but rather an ambiguous, iterative interplay between internal and external forces of varying strength both enabling and constraining the change. Even though this view makes it more difficult for both researchers and practitioners to isolate and understand the effect of individual forces, the simplification of the real phenomena cannot be made to a degree where one looses sight of reality.

To assess the capacity for organizational change we need to determine how the influential forces influence the capability. In order to explicitly explain the capacity for organizational change and to be clear about the underlying perspectives and beliefs, the author proposes a “capacity for organizational change—model” (Figure 2.3), which is a two dimensional typology describing the linkage of intended and realized change, and incremental and strategic change.

Figure 2.3 The Capacity for Organizational Change -- model

The first dimension of the typology presented, reflects upon the degree or level of change. The previous discussion on different types of changes explained by Nadler &

Tushman (1989) is here integrated and two types of organizational change, strategic and incremental, are distinguished. The authors encourage the readers to keep in mind that a strategic change refers to a change affecting the company in a fundamental way, whilst an incremental change satisfies with concerning specific parts or subsystems.

The second dimension of the typology regards the congruence of the intended and the realized change of the company. The congruence refers to the extent of resemblance and correspondence between the degree of intended change, strategic or incremental, and the actual outcome, the degree of realized change. The mathematical meaning of congruence is hence not demanded, a softer interpretation is to be undertaken. The congruence of intended and realized is determined primarily by the interplaying of the influential external/internal forces i.e. resources, the culture, the leadership, the environment and management fashion. The reasoning is as follows:

If competitive advantage will depend on the current resources they will constitute an enabling factor, but if the strategic change will change the basis for competitive advantage and new resources and capabilities need to be developed, resources might act

as a constrain for change. The culture has to be “in-line” with the change effort, meaning that values, norms and beliefs should not be threatened by change in order for the culture to be an enabling factor. Clearly, the more radical a change effort is, the larger the risk of culture being a constraining factor. Leadership might be a strongly constraining or enabling factor. As the leaders way of thinking has shown consistency over time and strong influence over resources, culture and strategic action, the capacity for change will be highly influenced by leadership. When both management fashion and the environment encourage change, the external stimuli are obviously high. This will often occur in the late stage of any change process, when the need for change is evident.

However, management fashion might be lagging behind environment and thus act as a constraining force for change.

The author’s typology results in four views on the capacity for change when the two dimensions are combined. The upper-left corner symbolizes an organization that manages to fulfill or even extend the initially intended degree of change. This implies that the corporation through effectively identifying, taking into account the influential forces and acting upon them reaches the aspired end state of the cyclical processes of change.

The capacity of change is hence high. The upper-right corner is the result of an intended strategic change where the resulted degree of change is lower than it was initially expected to be. In this case the corporation has failed in responding and interacting with the influential forces. As a result, the capacity for change is insufficient for the intended strategic change. Moving on to the lower-left corner the intended organizational change is of an incremental character and the realized degree of change is equal or higher than the intended incremental change. This implies that the capacity for change of the organization is at least sufficient for the change in question. The capacity can thereby also exceed the change demanded by the corporation. The fourth result, namely the lower-right corner, symbolizes a situation which no company would see as advantageous to be in. It represents an organization that is so stable and unable to respond to dynamics of the environment and the industry, which the capacity for change is even so low that an incremental change cannot be carried out. Thus, it is an understatement to say other than the capacity for change is low.

As a concluding part of the presentation of the Capacity for Organizational Change –model, the readers have been presented with the intention and extension of the suggested model. As emphasized previously, it is all a question about continuous processes affected by influential external/internal forces, which either drive or restrain the organizational change.