This paper discusses concepts of organisational transformation. Specifically, it examines how the structure and cultures of the organisation can either facilitate or reduce its capability to transform. In doing this, the paper highlights six theories of organisational transformation.
It also highlights the various types of organisational change: planned, emergent and incremental. It later focuses on the impact of organisational culture and structure on the transformational ability of the organisation. It ends with a comprehensive conclusion of the issues discussed.
The dynamism that characterizes present day organisational environments makes it imperative for organisations to embrace change and transformation. According to Dawson (2003), organisational change is defined as the adoption of new approaches in organisational processes. Another definition for organisational change was given by Burnes (1996), who referred to organisational change as the understanding of alteration within an organisation both at broadcast levels – among individual employees – and collective levels –in the whole organisation. However, there are many instances where change is resisted. Reasons for this include fear of uncertainties and the fact that change changes disrupt certain habits. There are several factors that can either facilitate or inhibit the implementation of change within an organisation. Among these factors are organisational culture and organisational structures. Organisational culture is made up of collective behaviours and values of members of a given organisation, and the factors that determine their actions (Alvesson, 2012). Organisational structure, on the other hand, is defined as the hierarchy of authority, communication and responsibility within an organisation (Daft & Murphy, 2010). From these definitions, it is evident that these two organisational aspects have an influence on the implementation of organisational transformation. This report will critically evaluate the extent to which organisational culture and structure can affect the ability of organisations to transform themselves.
2.Theories of Organisational Change
Insights about organisational change can be better developed by understanding the theories that govern these changes. There are six main models of organisational change. These are dialectical, life cycle, evolutionary, social cognition teleological and cultural theories (Kezar, 2001). The evolutionary theory is based on the assumption that transformations in organisations take place in response to external situations, or other circumstantial variables that are faced by all organisations. The teleological model, also referred to as the planned change model, assumes that organisational transformation takes place when stakeholders see the need for change (Bouckenooghe, 2010). This model’s linear nature is comparable to that of evolutionary theory, but managers are more involved in the teleological model. The life cycle model conceptualises change as a developmental process of an organisation over time. The dialectical theory visualizes organisational change as a process that occurs because of differences in ideologies and beliefs of people within the organisation. The social cognition model assumes that change is connected to learning and changing of behaviours among people in the organisation (Burnes, 1996). The cultural approach to organisational change assumes that change takes place in a natural way to respond to the cultural transformations that are always taking place.
Understanding these theories aids in the assessment of change in the macro-levels of organizations. They give reasons as to why, when, how and what changes are bound to occur in organizations (Dawson, 2003). Furthermore, every model that has been explained above stands for a unique ideology that relates with its assumptions about different aspects of the organization. Some of these aspects include the ease of implementing change in the organization. In literature and practice, it has been established that the teleological and evolutionary models are the most prevalent (Kezar, 2001). The teleological model is synonymous with planned change while the evolutionary model is synonymous with incremental change. These types of change have been explained below.
3.Types of Organisational Change
There are three types of organisational change, planned, emergent and incremental (Myers et al., 2012, p.58). Planned organisational change is constructed on the assumption that an organisation operates in an environment that is stable. Thus, transformations are pre-meditated and executed systematically. Emergent change is a continuous open-ended process that is characterised by unpredictability and an emphasis on the bottom-up approach to management. Incremental transformation tries to synchronize the performance of an organisation with the situations that characterise its external environment (Daft & Murphy, 2010).
4.Effects of Organisational Culture on its Ability to Transform
Organisational culture, as aforementioned, is made up of values and beliefs which shape the behaviours and norms within an organisation. Thus, it has an influence on the way organisational processes take place. One attribute of organisational culture that can be used to gauge the extent of its impact on the ability of an organisation to change is its capacity for risk taking (Kezar, 2001; Curran, 2005). According to Curran (2005), research has suggested that risk cultures facilitate adaptability and innovativeness in organisations. When changes take place within an organisation, there is always an element of risk and uncertainty that accompanies it. Organisations that have cultivated a culture of risk enable their managers and employees to comfortably make choices different to those which they might otherwise have made, without being afraid that their choices fail. The social cognition model of organisational change also stresses the need for organisations to create a culture that supports risk, allowing change in organisational processes without fear of failure. According to Kezar (2001), organisations that are characterised by risky and flexible cultures have the ability to make quick responses to sudden issues and crises. In addition to this, they are able to successfully adapt their business techniques to new trends, regardless of the outcome. A culture that can be described as dynamic and flexible is the ‘adhocratic’ culture. This is exemplified by companies like Google, whose abilities to develop new services to capture markets have made them leaders in their industry. This is a typical display of the evolutionary model of organisational change (Curran, 2005).
There are also other aspects and types of organisational culture which slow down transformation. Transformation does not take place until it is planned (Ford et al., 2008). Cultures that fit this description are those that are stable, orderly and are in control. These types of organisational culture tend to be predictable and mechanistic. They tend to believe that it is better to stick to the known than embrace the unknown. The advantage of these cultures is that they are consistent and sustainable, and offer higher levels of job security. However this type of culture can limit the organisation’s ability to transform. Such cultures do not encourage innovativeness and creativity amongst employees, and are slow to respond to changes in the environment. This type of organisation tends to be well- established, having been in operation for a long time.
5.Effects of Organisational Structures on its Ability to Transform
Like organisational culture, the effects that organisational structures have on change are varied. Some structures that support change, others do not. Organisational structures can be defined in several ways, for example the formalization, departmentalization and centralization frameworks, or in terms of the hierarchy levels within the structure (Covin & Slevin, 1982). All these frameworks have aspects that facilitate organisational change and other aspects which suppress or limit the change.
The centralisation framework suggests that centralized organisational structures are characterized by decisions being made at higher levels of the hierarchy. On the other hand, decisions in decentralized structures are made by people who are closest to the issues at hand (Carpenter et al., 2010). Of the two, the decentralized structure is likely to be more suitable for facilitating change.
Formalization in organisational structures refers to the extent to which explicit articulation of rules, procedures and responsibilities exist within an organisation. Organisational structures with high levels of formalization have more written rules and regulations than those with lower levels. Because of this, innovativeness and creativity reduce as formalisation increases within the organisation (Juillerat, 2010). Thus, since innovation and creativity are synonymous with organisational transformation, lower levels of formality increase the transformation capability of organisations.
The departmentalisation framework is divided into functional and divisional structures. Functional structures have departments based on responsibilities to be carried out., for example the marketing department. On the other hand, a divisional structure creates departments based on unique products in the organisation. Within each department is a replication of functional departments (Carpenter et al., 2010). Divisional structures facilitate organisational change more than functional structures, because they have increased innovation and creativity and reduced response time.
Structures that are divided into many hierarchies between top and bottom (tall structures) slow down the decision making process within the organisation. On the other hand, organisations that have flat structures, with fewer hierarchies, have more equality between employees (Carpenter et al., 2010). Therefore, there is more flexibility, innovation and facilitation of change.
As shown in all the frameworks above, organisational structures that delegate decision making to the larger employee body as opposed to concentrating it amongst a few managers at the top increase the ability of organisations to transform.
This paper has highlighted the necessity of embracing change in the contemporary business world. It has also examined models and theories that define organisational change. Organisational structures and cultures are vital components of any organisation and are considered to play a large role in determining the ability of organisations to transform. More stable, orderly and controlling organisational cultures tend to inhibit organisational transformation. On the other hand, cultures that are flexible and dynamic increase the capability of organisations to transform. With reference to organisational structures, those that delegate decision-making to employees are better suited for transformation than those that give a few managers the responsibility for decision making.
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