MGMT625 — Midterm Summary (Lectures 1–22)

📘 Lecture 1 — Course Orientation

📖 Overview: This lecture serves as an introduction to the Change Management course (MGMT625), setting expectations, objectives, and the foundational framework for learning. It emphasizes the importance of mastering the subject's vocabulary, identifying credible reading materials, and developing critical analytical and writing skills to succeed in the course and apply change management concepts in real-world organizational contexts.

🗂️ Topics Covered

The lecture begins with norms setting and course expectations, requiring a solid grasp of prerequisite management subjects. It outlines the course objectives: to understand change management literature, analyze the phenomenon of change, and build analytical skills. It then details the subject's vocabulary, recommends key books and articles, and provides a criterion for identifying credible research. The lecture also covers the examination perspective, emphasizing the need for analysis, evaluation, and application over rote memory. It describes the subject's broad scope, from individual learning to organizational survival in a changing environment, and concludes by exploring the fundamental reasons for studying change management, citing leading experts and defining change through the dimensions of knowledge, skills, and attitude.

📝 Lecture Summary

Norms Setting & Course Expectations

The first sessions establish norms, including course expectations and scope. For this advanced course, a strong understanding of prerequisite subjects—Principles of Management, Human Resources Management, and Organization Behavior—is essential. Students are expected to be interactive, seeking clarification and providing regular feedback.

Course Objectives

The lecture outlines three core objectives:

1. To develop a significant understanding of change-management literature, including conceptual frameworks, theories, typologies, strategies, and techniques.
2. To understand the change-management phenomenon, especially how managers successfully manage change in an organization.
3. To build and develop students' analytical and applied management skills in the context of business organizations.

Learning the Subject's Vocabulary

Every discipline has its own vocabulary and terminology. As change management is more related to social behavior than fields like medicine or engineering, it is imperative to not only learn this vocabulary but also to develop the ability to express everyday phenomena using it.

Reading Material

The lecture recommends key books and articles for the course. Books:

• Understanding Organizations (1976) and Gods of Management (1995) by Charles Handy.
• Organization Culture and Leadership by Edgar Schein.
• Change Management: A Guide to Effective Implementation by Robert Paton & McCalman.

Articles: The lecture emphasizes relying on research articles over books and provides a criterion to identify credible material:

1. Know the author, their qualifications, and affiliation.
2. Assess the quality of the publication (journal reputation and impact, e.g., Academy of Management Review, Journal of Management Studies).
3. Check the citation of the article or its references.

💡 Why this matters: Students must learn to differentiate academically sound material from "junk." The Journal of Change Management is specifically recommended. A good starting point is Chapter 1 of Koontz's text on management, Chapter 17 of Robbins' Organizational Behaviour, and Frederick Luthan's book on managing diversity and organization culture. Other leading authors to consult include Chris Argyris, Edgar Schein, D. Schon, Peter Senge, Karl Weick, Peter Drucker, Hannan & Freeman, Quinn, James March, Herbert Simon, Michael Beer, and Nohria. The HEC's digital library (via J-Stor, Springer Link) provides access.

Examination & Assessment Perspective

Students must demonstrate four key skills:

1. Knowledge & Understanding: Of terms and definitions.
2. Analysis: Differentiating and distinguishing concepts, making valid generalizations and inferences.
3. Evaluation: Comprehending, evaluating, and synthesizing differing and competing ideas, models, and explanations.
4. Application: Applying generalizations and theories in specific organizational and national contexts. The skills most valued are analysis, application, and evaluation, not just memory. A key caution is to note the level of analysis (individual, group, business, organization, or nation) and the organization's type (public/corporate, small/medium/large). Students are also advised to develop four learning skills: Listening, Reading, Speaking, and Writing, with writing skills being of utmost value for exams. The recommended article for this is ‘Managing Oneself’ by Peter Drucker (HBR, March-April 1999).

Important Instruction

Students must read the original text or articles by the referred authors and not merely rely on video lectures and handouts. Reading original articles is mandatory, and repetition is essential for effective learning.

Scope of the Subject

Change management has an integrated nature, relating to Strategic Management, Organization Development, Training, Knowledge Management, and Organizational Learning. Its application is pervasive:

• Individual perspective: Learning means change in knowledge, skills, and attitude (KSA). Individuals must manage changes in their personal and professional lives.
• Organization perspective: The perpetual concern of management is to enhance productivity. This requires managing change at two levels:
  1. External environmental level: Managing change relations with government policies, technology, customer preferences, and societal expectations.
  2. Internal managerial level: Responding to extraneous changes, which may lead to restructuring, downsizing, decentralization, or developing new products and markets.

Why to Study Change Management?

The lecture uses quotes from leading experts to explain the importance of the subject.

🔑 Definition — Rate of Change (Alvin Toffler): The vastly accelerated pace of change that most people and organizations are unprepared for. 📐 Formula/Concept: Change = Rate/Pace + Quality/Quantity → impacts on Individuals and Organizations → leads to Unpreparedness.

🔑 Definition — Motivation Process (Charles Handy): The process by which individuals can be influenced and their behavior predicted by changing its components. 📐 Formula/Concept: Understand Motivation → Change Components → Influence Behavior → Control and Predict → Enhance Productivity. 📌 Example: The focus of management is how to control, predict, and motivate human behavior for productivity enhancement.

🔑 Definition — Learning for Change (Edgar Schein): Two types of learning: one creates stability and culture, and another enables organizations to innovate. Change takes place by reconciliation between internal and external forces. 📐 Formula/Concept: Learning in Stable Organizations ≠ Learning in Changing/Innovative Organizations. Change = Reconciliation between Internal Environment and External Environment.

🔑 Definition — Individual Change (KSA Model): Change at the individual level involves change in three dimensions: Knowledge, Skills, and Attitude. 📌 Example:

• Knowledge changes by reading an article or listening to a lecture.
• Skills are built through repetition and practice (e.g., mathematics, accounting, IT).
• Attitude is the most crucial dimension—transforming an unwilling person to a willing one, and transforming a group's behavior from non-willing to willing.

⭐ Key Takeaways

The lecture establishes that this is an advanced course requiring a strong foundation in core management subjects. A primary objective is to learn and apply the specialized vocabulary of change management to analyze and describe real-world phenomena. Students must prioritize credible research articles and develop higher-order skills of analysis, evaluation, and application over simple memorization for exams. The study of change management is critical because of the accelerating pace of change, and it is fundamentally about understanding and influencing individual and organizational behavior, defined through changes in knowledge, skills, and attitude.

🧠 Quick Revision Questions

1. What are the three prerequisite courses required for a good understanding of this Change Management course?
2. List the four key skills students are expected to demonstrate from an examination and assessment perspective.
3. What is the three-part criterion provided to identify credible and authentic research articles?
4. According to the lecture, what are the two levels at which an organization must manage change?
5. Explain the three dimensions of change at the individual level, and provide an example for each.

📘 Lecture 2 — Benefits and Significance of Change Management

📖 Overview: This lecture explores why change management is critically important for both individuals and organizations. It details the key benefits from an organizational perspective—understanding the environment, strategy formation, employee development, technology, and globalization—and establishes the relationship between traditional management, strategic management, and change management using frameworks like McKinsey’s 7-S Model and the five dimensions of organizational change.

🗂️ Topics Covered

The lecture begins by outlining five key benefits of change management for organizations, including understanding the external environment, strategy formulation, employee performance, technology integration, and globalization. It then explains the relationship of management with change management by examining traditional management functions (planning, organizing, directing, controlling), strategic management domains, and the McKinsey Seven S-Framework. Finally, it provides an overview of the subject through five organizational dimensions: strategy, process, structure, culture, and politics.

📝 Lecture Summary

Benefits and Significance

The subject of change management holds tremendous importance for both individuals and organizations. From the organization’s perspective, there are five major benefits:

1. Understanding environment (society, government, customers): Organizations must understand, assess, and gauge the dynamics of their external environment to establish appropriate relationships with actors like government, customers, and society. Managers who understand change management can better prepare for environmental shifts.

2. Objectives, strategy formulation & implementation (to develop competitive advantage): This is consequent upon knowing the impact of external change on internal dynamics. The foremost goal is objective setting and seeking competitive advantage.

3. Employees (trained, high performing work practices, reliable organisation): Employees are the recipients of change plans. A perpetual concern of senior managers is making the organization highly reliable, requiring employees to be trained and high-performing in today’s hyper-competitive world.

4. Technology Issues: Technology is the engine of growth. The greatest challenge for contemporary organizations is the acquisition and integration of technology into strategy, structure, and process. Top managers worry about avoiding obsolescence and coping with changing information and communication technologies that influence production and consumption behavior.

5. Globalization: The management of international economic and political forces—internationalisation and globalisation—is crucial. No organization or nation can stay independent of international events. Supra-national institutions (e.g., WTO, ISO) are becoming more assertive over nation states on political and social issues like child labor and gender issues, decisively influencing organizations in the developing world.

💡 Why this matters: These five benefits show that change management is not optional but essential for organizational survival and competitiveness in a rapidly evolving global environment.

The Relationship of Management with Change-Management

Change management is a subject with a cross-cutting theme, applicable across various traditional functional areas: marketing (new product/market development), production (new technology/skills), finance (budgetary allocations, revisions, cost-cutting), and HR (behavioural modification, knowledge, skills, and values).

Traditional management domain

Change can be viewed through traditional management functions (PODC techniques):

• Planning: Setting objectives, implementing policies, decision-making
• Organizing: Formal/informal organisation, departmentation, hierarchy, authority-responsibility relationship, span of control
• Directing: Leading, leadership styles, motivation theories
• Controlling: Direct & formal control, indirect & informal control

Strategic management domain

Within the strategic domain, there are two concerns:

1. Strategy formulation: Formulating mission, vision, and objectives after environmental assessment
2. Strategy implementation: Organisation structure, culture, and politics

The whole focus is the development and sustenance of competitive advantage at multiple levels: functional, business, corporate, and societal.

McKinsey Seven S-Framework

One of the leading management consultants widely quoted in literature has seven dimensions for change to make an organization highly productive:

1. Strategy – sustained competitive advantage
2. Structure – who reports to whom; how work is divided
3. System – operations & core processes
4. Style – leadership style
5. Staff – employees/human resources
6. Shared values – beliefs, mindsets
7. Skills – capabilities and competencies

Overview of the subject

Within the overall context of management, the subject can be understood by focusing on five organizational dimensions:

1. Strategy
2. Process
3. Structure
4. Culture
5. Politics

1. Organisation has an articulated purpose or objective There is constant questioning, verifying, changing, and re-defining of organization objectives through interaction with the environment. Once objectives are revised, they lead to modifications in structure and managerial processes. For example, when an organization survives the entrepreneurial problem, it must achieve growth by solving market development, engineering (producing at higher levels without compromising quality), and administrative problems (managing roles and relationships with more employees). Even larger organizations like MNCs engage in Strategic Renewal—defining and renegotiating their objectives.

2. Organisation process Process refers to the transformation of input to output (e.g., production converting raw material to finished goods). These processes are often technology-driven. There are two types of changes:

• Total Quality Management (TQM): Change on a continuous, gradual, incremental basis—working ‘with in the system’
• Business Process Restructuring (BPR): Drastic, structural, fundamental change—working ‘on the system’

Other organizational processes include decision making, objective setting, communicating, controlling, and coordinating.

3. Organisation structure Structure refers to how authority and responsibility are distributed across the organization. The authority pattern shows who reports to whom and who is accountable. Dimensions include:

• Departmentation or task grouping
• Hierarchy layers
• Span of control
• Extent of formalization (bureaucratic vs. participative)

Structural change may mean change in one or more of these dimensions. Modern organizations increasingly want flatter structures (instead of taller), decentralized, participative, and empowered, as these are considered more productive and creative.

4. Organisation Culture Culture includes:

• Values, beliefs, and mindset of a manager at work
• Cognitive style (thought process)
• Personality (MBTI)
• Behaviour

Hofstede Model of cultural dimensions:

• Individualism – Collectivism
• Masculinity – Feminism
• Power Distance – Low or High
• Uncertainty Avoidance – Low or High
• Time orientation – Low or High

5. Organisation Politics

• Changes have political consequences
• Change disturbs power-distribution in organisation
• Organisations are like governments
• Managers have interests and groupings

Therefore, power may enable or resist change.

⭐ Key Takeaways

1. Organizations must understand five key benefits of change management: environment, strategy, employees, technology, and globalization—all of which are critical for survival and competitive advantage.
2. Change management is a cross-cutting subject that integrates with all functional areas (marketing, production, finance, HR) and both traditional management (PODC) and strategic management domains.
3. The McKinsey 7-S Framework identifies seven interdependent dimensions (strategy, structure, systems, style, staff, shared values, skills) that must be aligned for successful organizational change.
4. Organizational change can be understood through five dimensions: strategy, process (TQM vs. BPR), structure (flatter, decentralized), culture (Hofstede’s model), and politics (power dynamics enable or resist change).
5. Change inherently involves political dynamics—it disturbs power distribution, and managers’ interests and groupings can either enable or resist transformation.

🧠 Quick Revision Questions

1. What are the five benefits of change management from an organizational perspective?
2. How does change management relate to each traditional management function (planning, organizing, directing, controlling)?
3. What are the seven components of McKinsey’s 7-S Framework, and why are they interdependent?
4. What is the difference between Total Quality Management (TQM) and Business Process Restructuring (BPR)?
5. According to Hofstede’s model, what are the five cultural dimensions that affect organizational change?

📘 Lecture 3 — Kurt Lewin Model: Assumptions and Implications

📖 Overview: This lecture explores Kurt Lewin's foundational model of planned change, focusing on its underlying assumptions about human motivation and conflict. It explains the three-stage process of Unfreeze, Change, and Refreeze, detailing how each stage functions at individual, organizational, and societal levels. Understanding this model is critical because it provides a framework for diagnosing why many change efforts fail and how to systematically manage transitions.

🗂️ Topics Covered

The lecture begins with the core assumptions of Lewin's model, including the tendency for performance to regress and the concept of "force field" analysis. It then outlines three fundamental types of conflict individuals face. The main body of the lecture is devoted to explaining the three stages of change: Unfreeze (with its attributes and Schein's characteristics), Change (including identification and internalization mechanisms), and Refreeze (focusing on institutionalization and reinforcement). Finally, the lecture applies the model to societal, organizational, and individual levels of analysis.

📝 Lecture Summary

LESSON # 3 — KURT LEWIN MODEL: ASSUMPTIONS AND IMPLICATIONS

Theories and models are always based on some set of assumptions. This model too has some basic assumptions which are as under:

1. An Individual or group performance is prone to regression unless some measures are taken to institutionalise the improved performance level.
2. There is a tension in person whenever a psychological need or intent exists, and the tension is released when the need or intention is fulfilled.
3. This tension may be positive or negative, and under conflict situation this is identified as "force field". Hence the term is known as force field analysis so as to evaluate the tension between positive or facilitating forces and negative or constraining forces the given change plan.

Further to him there are three fundamental types of conflict.

1. Approach-Approach Conflict: Individuals stand mid-way between two positive goals of approximately equal strengths; for e.g. individual has to choose between two good systems, so which one to buy.
2. Avoidance-Avoidance Conflict: Individuals find themselves between two approximately equal negative goals; for e.g. if an individual has to make a choice between two things which he dislikes, that is a choice of lesser evil.
3. Approach-Avoidance Conflict: Individuals are equally exposed to opposing positive and negative forces.

These assumptions about motivation process and conflict typology in human nature lead Lewin to propose three staged model of a planned change management process.

1. Unfreeze
2. Change
3. Refreeze

Stage 1: Unfreeze the current equilibrium

Before going for change in first stage we have to create tension amongst the recipient of change that some thing is not good in the on-going system. This is to create emotional stir up which is to break the shell of complacency and self righteousness amongst the subject of change. The reason is to break the personal defences and group norms psychologically before actually going for change.

In the words of Edgar Schein this stage consists of the following attributes:

1. The physical removal of the individuals being changed from the accustomed routines, sources of information and social relationships
2. The undermining and destruction of all social support.
3. Demeaning and humiliating experience to help individual. Being changed to see their old attitude or behaviour as unworthy and thus motivated to change. The lecture gives an example of ragging of new entrants from military training, where new entrants are deliberately targeted for their existing behaviour, norms and identity to acquire new ways of thinking.
4. The consistent linking of reward with willingness to change and of punishment with unwillingness to change. Old behaviour is punished and new or desired behaviour is to be rewarded. There would not be any meaningful change if the change targets perceive no linkage of reward and the desired behaviour, or if the old behaviour and norms are continued to be rewarded.

For Schein, the Unfreeze stage must be simultaneously coupled with the following characteristics:

1. Disconfirmation of expectation
2. Induction of learning anxiety if the disconfirming data are accepted as valid and relevant. If one thinks he has already perfect knowledge and stays confident, no need for change is felt. This is also known as mind blockage when people refuse to accept new or changed reality.
3. Provision of psychological safety that converts anxiety into motivation to change. If anxiety gets converted into fear, it will create resistance for change. Therefore anxiety should be strong enough to be a source of motivation for change.

💡 Why this matters: This point is critical because if we admit something with ourselves as wrong we will lose effectiveness, self efficacy, self-esteem or even our identity. Therefore, in order to learn one has to be humble. Learning will be lower for individuals with higher self esteem and vice versa.

Two types of change:

1. Action level or Symbolic
2. Belief or Cognitive

Comparatively speaking, change in beliefs or belief system (cognitive restructuring) brings in more sustainable and meaningful change than symbolic and action type of change. Shock therapy in psychology is one such technique for changing belief of a patient. The concept of punishment is also a kind of shock therapeutic technique for behavioural modification. In management, if an organization is going into deficit, the fear or shock of close down or job-cuts may motivate individuals and groups to change. While action level or symbolic change is short lived and reflects mere compliance in outward actions.

In order to unfreeze mental programming is good for reducing resistance. A very simple and powerful technique for motivating for change is to induce reward for performer and no reward or punishment for non-performer. This is perhaps one very good reason for change efforts to meet failure in a typical public sector organisation because senior executives fail to cultivate or make people perceive such linkage to exist. In public sector organizations, all managers (good or bad) get same increment, promotion or other benefits based on seniority.

2. Change Movement

This means a movement from existing to the desired form. It is a state of transition or transformation which depicts neither an old state nor a new state of affairs. This is very critical stage as it may either go backward (in case of failure) or forward. According to one author the time or stage in transition is known as "crazy period". Generally in this phase individuals and organizations try to cope up simultaneously both systems: existing and the desired one. The transition process is usually not very smooth, neat and clean process rather entails upheavals.

Important thing is to follow the desired objectives or system consistently. Ambiguity and parallel work of old and new has to be tolerated. Initial productivity of new system is considered to be lower than the previous system.

The process occurs through two mechanisms:

i) Identification – When role models are there in the environment, for e.g. individuals who can easily follow the footsteps of role model. In context of organisation the popular term is benchmarking – following the best practices of the industry leaders. Nations also tend to identify other nations as their model for economic or socio-political development.

ii) Internalisation – Knowledge exists most of the time at external level. The most critical aspect is how to internalise knowledge. Here internalisation refers to the behavioural aspect of the recipient. According to one version, only that is considered to be knowledge which is part of one's behaviour (reflected in action). Therefore knowledge of good practices is not enough unless good practices are practiced. Movement from one stage to another stage is initiated by trigger event and manager's personalisation of trigger.

3. Refreeze

Once the new objective or desired state of affairs has been achieved, the problem with this phase is to institutionalise the new system so that people might not revert back to the older ways of doing things. The purpose in this phase is to stabilise new learning. This can be done through behavioural reinforcement. In this stage again the effectiveness of performance–reward linkage is considered to be the part of enabling environment. New behaviour is to be internalised.

Important note: Effects of many training programmes and lectures are short lived when a person returns to the environment that does not reinforce. Hence continuous and intermittent reinforcement is needed. An example from real life is that Pakistanis are known as highly productive abroad but back in their own society they are known as work shruggers – the difference is on account of enabling environment. Therefore in order to refreeze the new behaviour, system or equilibrium we have to provide enabling environment.

Application

The model can be applied to all three levels to explain change management phenomenon: societal, organizational and individual.

At societal level: Our society in overall analysis is in transition phase. Older things, system and traditions have been unfrozen, but we have yet to learn the dynamics of new systems as the productivity of newly learned behaviour is at lower level than the traditional system. The society is in transition from agrarian to industrial, rural to urban and traditional to modern. Members of such a society face a situation of role overload and role conflict.

At organizational level: Example of organization undergoing automation programme. First thing is to unfreeze the mindset of managers by creating dissatisfaction about the existing system. Creating discomfort about lower level of productivity, creating sense of urgency and instilling fear of lagging behind in competition are various techniques for unfreezing. During the second phase, automation leads to multiple problems of learning, training, jobs and position displacements, hiring of computer technologist, budgetary allocations etc. At this stage it seems that previous system was better. Key to successful transformation lies in staying consistent, learning from mistake and tolerating ambiguity. Finally in refreeze stage, people get accustomed to newer system as learners and performers are rewarded.

At individual level: Individuals undergo through the same stages when they have to learn new knowledge, skills or values. First in unfreezing stage resolving intra-individual conflict or tension, envisioning the desired state and dissatisfaction with existing levels of knowledge, skills or values. Second is to take actual steps and moving into crazy period or transition phase which is demanding. Once success is achieved, individuals need to programme, internalise or refreeze the newly learnt values.

⭐ Key Takeaways

The most critical concept from this lecture is that change is a three-stage process, not a single event, and failure at any stage—especially the first—can doom the entire effort. The Unfreeze stage requires creating genuine dissatisfaction with the status quo, breaking psychological defenses, and establishing a clear performance-reward linkage, which is why public sector organizations often fail at change. The Change stage is a chaotic "crazy period" where productivity drops, requiring tolerance of ambiguity and the use of identification (role models/benchmarking) and internalization (making knowledge part of behaviour) mechanisms. The Refreeze stage is about institutionalizing new behaviours through continuous reinforcement and creating an enabling environment, without which learning is quickly lost. Finally, the model is universally applicable at individual, organizational, and societal levels, with societies in transition experiencing the same "crazy period" dynamics as organizations undergoing automation.

🧠 Quick Revision Questions

1. What are the three fundamental types of conflict according to Kurt Lewin, and can you give a management example for each?
2. Explain Schein's four attributes of the Unfreeze stage and why the performance-reward linkage is considered critical in this stage.
3. What is the "crazy period" in the Change Movement stage, and why is initial productivity of a new system typically lower than the previous system?
4. What is the difference between "Identification" and "Internalization" as mechanisms for change, and why is internalization considered more sustainable?
5. Why does the lecture argue that training programmes are often short-lived, and what does the example of Pakistanis' productivity at home versus abroad illustrate about the Refreeze stage?

📘 Lecture 4 — Implications of Kurt Lewin Model

📖 Overview: This lecture examines the six key implications of Kurt Lewin's change model, explaining how change can be managed and directed, why resistance is inevitable, and how context shapes behaviour. It also provides a critical evaluation of the model's limitations and compares it with other change management frameworks.

🗂️ Topics Covered

The lecture covers six implications of Kurt Lewin's model: change as a directed and managed process, recognition that change will be resisted, overcoming resistance through leadership, the importance of sequence in change, the relationship between attitude and behaviour change, and how context influences behaviour through the formula B = f(P × E). It then presents a critical look at five assumptions of the model (linearity, progressive state, mechanistic, goal, and separateness) and concludes with comparisons to other change management models.

📝 Lecture Summary

Implications of Kurt Lewin Model

1. Change can be directed, managed and controlled (Learning is a choice behaviour) Not everything is pre-ordained or predetermined. The modern scientific approach assumes that tools and methods used for creating scientific knowledge can also be applied to social domains. Therefore, abstract social disciplines such as entrepreneurship, leadership, management, and organizational culture can be taught and learned from a scientific approach. Learning is now considered not a function of gene or inheritance but a matter of aptitude and interest. Hence, social behaviour can be managed like a thermostat or control valve to achieve desired outcomes, using financial and non-financial techniques to motivate individuals and groups.

2. Explicit recognition that change will be resisted There are significant benefits to categorical acceptance, admission, or recognition of variables under research. Research involves identifying critical variables that play influential roles in causing phenomena. Once we recognise that resistance to change is a distinct phenomenon for study, we can also study how to overcome this resistance. This reflects the Western academic technique of bifurcating and focusing in a specialised manner to create new subjects and disciplines—essentially, division of labour in academics.

💡 Why this matters: Recognising resistance as a separate, study-worthy phenomenon allows change managers to develop targeted strategies to address it, rather than treating it as an unexpected obstacle.

3. The resistance can be overcome through management and good leadership Knowing that resistance is a critical variable makes it imperative to understand what type of leadership and management style will overcome what type of resistance. Consequently, change management literature largely focuses on participative decision making, employee involvement, delegation, decentralization, and team building for managing organizational transformation and strategic management programmes.

4. Sequence of event also matters The model depicts that the change management process has a sequence. To manage planned change, we must know what should come first, which stage follows another, and how to identify which change management stage we are in—similar to a life cycle approach.

5. Change attitude – behaviour will follow There is a distinction between attitude and behaviour. Attitude is more comprehensive than behaviour, including cognitive and action orientation, while behaviour is defined only in action perspective. According to this approach, to achieve meaningful change we must first change attitude—change in cognition leads to behavioural change. An alternate approach is to change action first, which eventually leads to attitudinal change. The former method is democratic in spirit, while the latter is autocratic in nature.

From a methodological perspective, the dominant paradigm of Western social sciences targets action as the source of data and evidence because intent cannot be measured. From an Islamic perspective, intent (Niyyat) matters most, not action (Amal), as the hadith states: "Actions depend upon intents." This is closer to the recently researched concept of equi-finality, meaning different actions can be taken or multiple practices can exist to reach the same intent effectively.

6. Change the context – behaviour will follow [B = f (P × E)] Environmental forces play a decisive role in shaping behaviour. Change in behaviour is due to a particular context or situation. This relies on the contingency school of management, which holds that organizational efficiency and effectiveness are contingent upon environmental factors—different for different organizations. These factors include size, type of industry, technology, etc.

🔑 Definition — Contingency School of Management: The approach that organizational efficiency and effectiveness depend on (are contingent upon) environmental factors, meaning no single management approach works for all organizations.

If environmental or contextual factors are so powerful and decisive in explaining change or stability, does that mean the individual organization has little or no role, priority, discretion, or strategy in deciding for change? This leads to debates between fatalism vs. determinism, the role of individual vs. institution, and the universal vs. cultural perspectives of management. Context comprises multiple facets: Historical, Social, Political, Geographical, and Cultural context.

A Critical Look

No human knowledge is foolproof. Though Kurt Lewin's model is widely quoted and respected, it has attracted criticism.

1. Linearity assumption Change is assumed to be linear, while in real life it is seldom linear. Reality is often non-linear or curvilinear. There may be ups and downs, and change management is not as neat and sequential as described in the model, directly progressing toward goals or an end state.

2. Progressive state assumption Change makes a direct progression, meaning the future state is always better than the present state. This assumption may not hold valid, especially according to human, organizational, and national life cycle theory-based explanations.

3. Mechanistic assumption This is based on cause and effect relationships among factors considered stimuli for change. It is excessively deterministic in its implications, meaning there is little or no role for unforeseen and emergent events.

4. Goal assumption Change movement is directed toward a specific end-state, while in real life it may be haphazard. People are not always purposive and task-oriented for every movement. People may value leisure, relationship, spiritual and cultural being, or they may like change for the sake of change—due to lifestyle or social pressure, not need-specific reasons. Similarly, people may want to change because emotional or psychological aspects are dominant.

5. Separateness assumption Change movement is planned and managed by people who stay apart from the system, while real life operates in relative terms—diagnosis and implementation occur by remaining within the system. There are biases and ethnocentrism involved in all stages of the change management process.

📐 Formula (for comparison): Beckhard & Harris (1977) Three Stages: Current State → Transition State → Future State 📐 Formula: Kanter et al. Three Phases: Change Strategists → Change Implementers → Change Recipients 📐 Formula: Grimley & Prochaska et al. Four Stages: Pre-contemplation → Contemplation → Action → Maintenance 📐 Formula: Lynn A. Isabella’s Model: Anticipation → Confirmation → Culmination → Aftermath

⭐ Key Takeaways

The most critical aspects to remember from this lecture are the six implications of Lewin's model: change can be directed and managed, resistance is inevitable and must be explicitly recognised, resistance can be overcome through participative leadership, sequence in change processes matters, changing attitude leads to behavioural change (though the alternative also works), and behaviour is a function of person and environment (B = f[P × E]). Additionally, students must remember the five criticisms of the model—linearity, progressive state, mechanistic, goal, and separateness assumptions—and understand that despite these weaknesses, the model has had seminal influence on change management literature, with subsequent models by Beckhard & Harris, Kanter, Prochaska, and Isabella all verifying similar three or four-stage progression patterns.

🧠 Quick Revision Questions

1. What is the difference between changing attitude first versus changing behaviour first, and which approach is democratic versus autocratic?
2. What does the formula B = f(P × E) mean, and what debate does it lead to regarding individual agency versus environmental determinism?
3. List and explain the five assumptions of Kurt Lewin's model that have been criticised.
4. How does the Islamic concept of intent (Niyyat) relate to the Western focus on action in measuring change?
5. Compare the stages of change in Lewin's model with those proposed by Beckhard & Harris, Kanter at al., and Prochaska et al.

📘 Lecture 5 — Some Basic Concepts and Definitions

📖 Overview: This lecture introduces foundational concepts in change management, focusing on organizational learning, learning organizations, and various types of change. It provides essential definitions and frameworks that help managers understand how organizations adapt, learn, and transform in response to internal and external pressures.

🗂️ Topics Covered

The lecture covers Organizational Learning (OL) including single and double loop learning, the Learning Organisation (LO) with Peter Senge's five disciplines, the learning cycle and unlearning concepts, strategic change versus process change, adaptive versus generative change, Schein's typology of change (natural evolutionary, planned & managed, unplanned revolutionary), and logical incrementalism as a change management approach.

📝 Lecture Summary

Organizational Learning (OL)

This refers to the continuous improvement of existing approaches and processes of adaptation to change, leading to new goals and/or approaches. In other words, Organizational Learning can be viewed as the organization's detection and correction of error, where error is mismatch between the organization’s intentions and what really happened (Argyris 1989).

Single loop learning is defined as the organization’s ability to perceive deviation from performance and to “fix” them (refers to diagnostic management control system). This is something pre-programmed and content specific.

Double loop learning (more sophisticated) emphasises that organization must review the underlying assumption that created the problem to be “fixed” in the first place, and seek and adapt a better assumptions for future performance. This entails questioning and adjustment of policies and objectives, and is process-oriented.

🔑 Definition — Single loop learning: The organization's ability to detect deviations from performance and correct them without questioning underlying assumptions. 🔑 Definition — Double loop learning: A more sophisticated learning process where organizations review and change the underlying assumptions that created the problem in the first place. 📌 Example: In single loop learning, if sales targets are missed, the organization might increase advertising spending. In double loop learning, the organization would question whether the sales target itself is realistic or whether the product strategy needs fundamental rethinking.

Learning Organisation (LO)

Peter Senge, the author of Fifth Discipline gave the concept which essentially means that just like individuals, Organizations also tend to learn. A Learning Organisation is one where people continually expand their capacity to create the results they truly desire, where new and expansive patterns of thinking are nurtured, where collective aspiration is set free, and where people are continually learning how to learn together.

The five disciplines are:

1. Systems thinking
2. Personal mastery - skills, values and competence
3. Mental models - are deeply ingrained assumptions, or even pictures or images that influence how we understand the world and how we take action
4. Shared vision – common aspiration/objective
5. Team Learning – dialogue and thinking together

🔑 Definition — Learning Organisation: An organization where people continually expand their capacity to create results they desire, where new thinking patterns are nurtured, and people learn how to learn together.

💡 Why this matters: Senge's five disciplines provide a comprehensive framework for building organizations that can adapt and thrive in changing environments, rather than merely reacting to problems.

Learning Cycle

Includes the following stages: planning, execution of plans, assessment of progress, revision of plans.

Un-learn

Schein believes in unlearning for change to occur: the organisation must unlearn previous beliefs, be open to new inputs, and re-learn new assumptions and behaviour.

🔑 Definition — Unlearning: The process of discarding previous beliefs, assumptions, and behaviors to make way for new learning and adaptation.

Strategic Change

The concept is broader in its scope; Strategic Change is change that is driven by “strategy” and “environmental forces”, and is tied closely to the organization’s ability to achieve its goals. For e.g. merger, acquisition, down-sizing, acquisition, joint venture. Or in other words it is the role and impact of environmental forces like government, societal, technological or political changes is decisive which an organization has to bear and incorporate in its strategic output.

🔑 Definition — Strategic Change: Broad-scope change driven by strategy and environmental forces, tied to the organization's ability to achieve its goals.

Process Change

The focus is within organization changes, narrower in scope, and is confined to a particular unit, division or function of the organisation. Process Change relates to basically an examination and adjustment of organizational or managerial processes. Nadler & Tushman identified this as “Tuning” meant to increase efficiency.

🔑 Definition — Process Change: Narrower-scope change focused on internal organizational or managerial processes within a specific unit, division, or function.

Adaptive Change

Adaptive changes are incremental and evolutionary in nature, analogous to the concept of “working in the system” – more directed towards changes and management on day-to-day organizational transactions.

🔑 Definition — Adaptive Change: Incremental, evolutionary changes that work within the existing system to manage day-to-day organizational transactions.

Generative Change

Generative Changes which likely entail a quantum break through, generates essentially new ways of doing things. Revolutionary in nature and also referred as transformation “Working on the system.”

🔑 Definition — Generative Change: Revolutionary, quantum breakthrough changes that create fundamentally new ways of doing things; also known as transformation.

💡 Why this matters: The distinction between adaptive and generative change helps managers understand when incremental adjustments are sufficient versus when fundamental transformation is required for organizational survival.

Schein’s Typology

1. Natural Evolutionary: Something which is all the time going on in an organization. This is known as learning process occurring in organization taking place knowingly and unknowingly. This refers to environmental adaptation, synonymous with evolutionary change, may be progressive leading to growth and development or regressive or degenerating one leading to organization illness or death.

2. Planned & Managed Change: As the name suggests, this type of change means one can control the direction of change and learning. Learning can be controlled. Managers can stabilize the processes that need to be stabilised, even organization culture can be changed and managed. So one can change and stabilize some ways of working.

3. Unplanned Revolutionary Change: Refers to impact of turbulent and unstable environment which creates disequilibrium and high uncertainty for organizations’ strategy and structure.

🔑 Definition — Natural Evolutionary Change: Ongoing learning process occurring knowingly and unknowingly in organizations; environmental adaptation that can be progressive or regressive. 🔑 Definition — Planned & Managed Change: Change where managers can control direction, stabilize processes, and even change organizational culture. 🔑 Definition — Unplanned Revolutionary Change: Change resulting from turbulent, unstable environments causing disequilibrium and high uncertainty.

Logical Incrementalism

A concept which gained wide currency in designing and managing change, articulated by J. B. Quinn. Logical Incrementalism acknowledges that change management is complex and time-consuming where internal and external forces exert significant pressures to resist change. Keeping this in view, the logical incrementalism process focuses on the evolution of the change as broad goals are more narrowly defined and adapted.

The process comprises of the following stages:

1. Change is considered as a general concern – a vaguely felt awareness of an issue or opportunity
2. Broadcasting of a general idea without details – the idea is floated for reactions pro and con, and for refinements of change plan or idea.
3. Formal development of a change plan
4. Use of a crisis or opportunity to stimulate implementation of the change plan. For example, retirement of a senior manager or a sudden loss of market share can facilitate rapid acceptance and implementation of the change plan
5. Adaptation of the plan as implementation progresses.

This approach has its advocates and critics. Many top level managers consider it appropriate to bring successful change in organization by floating an idea early on, a leader can improve the quality of information generated before decisions are made and can overcome emotional and political barriers. While the critics of logical incrementalism see this as disjointed, garbage-can approach, or as managerial muddling. These complaints are valid if change plans are unclear or poorly formulated.

🔑 Definition — Logical Incrementalism: A change management approach where broad goals are progressively narrowed and adapted through a series of stages, allowing for evolution of the change plan.

💡 Why this matters: Logical incrementalism provides a practical middle ground between rigid top-down planning and chaotic unplanned change, allowing managers to test ideas and build consensus gradually.

⭐ Key Takeaways

Students must remember the distinction between single loop learning (fixing errors without questioning assumptions) and double loop learning (changing underlying assumptions). Senge's five disciplines of a learning organisation—systems thinking, personal mastery, mental models, shared vision, and team learning—form a complete framework. The three types of change in Schein's typology—natural evolutionary, planned & managed, and unplanned revolutionary—explain different change contexts. Strategic change differs from process change in scope and focus. Logical incrementalism involves five stages from vague awareness to adaptation, and while it has critics who see it as muddling, many managers find it effective for overcoming resistance.

🧠 Quick Revision Questions

1. What is the key difference between single loop learning and double loop learning?
2. Name Peter Senge's five disciplines of a learning organisation.
3. According to Schein, what must occur before new learning can take place in an organization?
4. How does strategic change differ from process change in terms of scope?
5. What are the five stages of the logical incrementalism process as articulated by J.B. Quinn?

📘 Lecture 6 — Transactional vs. Transformational Leadership

📖 Overview: This lecture distinguishes between transactional and transformational leadership approaches, exploring how organizations operate differently under each model. It further examines various types of organizational change (first-order, second-order, middle-order, micro, and mega changes), the concepts of human and social capital, four types of organizational culture, organization development (OD), and the idea of the organizational meme. Understanding these distinctions is crucial for managing change effectively in different organizational contexts.

🗂️ Topics Covered

The lecture begins by contrasting transactional (bureaucratic, contract-based) and transformational (inspirational, role-model based) leadership styles. It then defines continuous (first-order) and discontinuous (second-order) change, introduces middle-order change, and distinguishes between micro-changes and mega-changes. The concepts of human capital (individual knowledge and skills) and social capital (linkages and networks) are explained. Four types of organizational culture (power, role, task/achievement, person/support) are described. Finally, Organization Development (OD) is introduced as a system-wide change process, and the concept of the organizational meme (imitative learning) is defined.

📝 Lecture Summary

Transactional

This refers to an approach based strictly on legal contract or agreement and job-description, with no concern for employees or managers beyond these contractual terms. It is considered a bureaucratic or mechanistic way of organizational life, a fragmented approach followed by most developed world states, whose societies are known as litigious societies.

Transformational

In this approach, organizational life goes beyond legality and bureaucratic values. Effective organizations have inspirational leadership, where leaders are role models and focus on learning and grooming followers. Individuals feel involved because of the humane concern of their leaders and become more productive. Unlike the transactional style, this is considered an organic, holistic, and more comprehensive approach. Asiatic management is considered transformational, while Western management is more transactional. 📌 Example: A teacher's role should not be bound merely by a legal contract limited to the classroom; he should be an overall role model, inspiring leadership and ethical values.

Continuous or First-order change

This is change that occurs in a stable system that itself remains unchanged. These variations are necessary for business to grow and thrive in a competitive environment. Evolution theories describe these first-order changes. The natural selection mechanism views the entry and exit of firms as the primary method of evolution. In other words, this refers to gradual changes, such as refining existing processes and procedures within a particular stage of the organizational life cycle. 💡 Why this matters: This change is incremental and does not alter the core structure of the organization.

Discontinuous or second-order change

This is change that occurs when fundamental properties or the system itself has changed. Examples include the fall of communism or revolutionary changes in technology, competition, and socio-economic conditions in sectors like telecommunication, banking, and electronics. This change leads to the restructuring of industries and changes the bases of competition. A change of stage on the organizational life cycle is a discontinuous change. Quantum change is perceived as better for making organizations a High Performing Organization (HPO).

Middle order change

This is defined as a compromise between first and second-order change. The magnitude of change is greater than first-order, yet it neither affects the critical success factors nor is strategic in nature.

Micro-changes

This classification refers to differences in degree, such as modifications, improvements, enhancements, and upgrades.

Mega-changes

These refer to differences in kind—a structural change, for example, when implementing a new system.

Human Capital

This concept asks whether learning (knowledge creation) is a personal/individual phenomenon or a social/collective phenomenon. Human capital refers to the full range of knowledge, skills, and abilities an individual can use to produce a given set of outcomes. At the upper echelon, managers can scan the environment, solve problems, and seize opportunities. 🔑 Definition — Firm-specific human capital: Knowledge of one’s own operation, strengths, weaknesses, tacit knowledge, operational personnel, and communication styles. 🔑 Definition — General human capital: Knowledge of and about the larger environment, competitors, suppliers, customers, stakeholders, and dealing with human capital.

Social capital

This refers to the linkages between social actors, the strengths of those linkages, and the resources that flow from them (networking). The key dimensions include: 🔑 Definition — Structural: Relationship pattern among actors. 🔑 Definition — Relational: Trust, norms, obligations, ethics that flow through the relationship. 🔑 Definition — Cognitive: Shared beliefs and languages. 💡 Why this matters: This includes linkages between upper echelon and the Board of Directors (BOD) for information, advice, and trust. A key question is: what if an organization has human capital minus social capital, or vice-versa?

Four types of organisational change

1. Power culture: Individuals are told what to do. Power is exercised by leaders to change behaviour. Extraneous pressures to perform a role and extrinsic motivation are focussed.

2. Role culture: Individuals act within the limits of their job-description. 📌 Example: Stenographers in the public sector refuse to learn or do a job like fax or e-mail as it is not in their job-description, a narrower interpretation of a job.

3. Task/ achievement culture: Individuals act in a suitable way to complete tasks. People are motivated intrinsically (by autonomy and a sense of satisfaction).

4. Person/Support culture: Individuals use their own initiative.

Organisation Development

OD is a system-wide process of data collection, diagnosis, action planning, intervention, and evaluation aimed at:

1. Enhancing congruence between organisation structure, process, strategy, people, and culture.
2. Developing new and creative organizational solutions.
3. Developing the organization's self-renewal capacity.

The difference between OD and change management is overlapping. However, OD essentially deals with internal aspects of an organization, while change management is broader in scope, concerning both internal and external aspects.

Organisational meme

🔑 Definition — Organisational meme: Any of the core elements of organisational culture (like basic assumptions, norms, standards, symbolic systems) that can be transferred by imitation from one human mind to the next. It is the replicating or copying behaviour, a fundamental way of learning from child psychology. 📌 Example: Students getting admissions in popular subjects (medical, engineering, IT) just because of imitating behaviour. This is also known as the band wagon effect or mass movement. In consumer behaviour, it is known as lifestyle or fashion. Benchmarking at the organisational level represents mimicry, especially when an industry leader does something new and others follow. Even states follow other states' successful economic policies like export promotion, FDI, or trade-liberalisation. Scholars have differing opinions; some believe in its efficacy, while others argue the process could be imperfect, leading to genetic distortion in transferring knowledge.

⭐ Key Takeaways

The lecture draws a sharp contrast between transactional (bureaucratic, contract-driven) and transformational (inspirational, holistic) leadership, emphasizing that effective change requires the latter. It is critical to distinguish between continuous (first-order) change, which refines existing systems, and discontinuous (second-order) change, which fundamentally alters the system itself. For exam purposes, remember that human capital is individual knowledge and skills, while social capital consists of the relationships and networks that enable resource flow. Finally, the four types of organizational culture (power, role, task, person) and the concept of the organizational meme as imitative learning are essential frameworks for understanding how change is received and propagated within organizations.

🧠 Quick Revision Questions

1. Compare and contrast transactional and transformational leadership styles.
2. Define and provide an original example for both first-order (continuous) and second-order (discontinuous) change.
3. What is the difference between human capital and social capital? Why must an organization have both?
4. Name and describe the four types of organizational culture as presented in the lecture.
5. What is an "organizational meme"? Provide an example of how it manifests in an organizational context (e.g., through benchmarking).

📘 Lecture 21 — Theories of Change in Organisations

📖 Overview: This lecture introduces the concept of theoretical pluralism in management and presents Van de Ven & Poole's influential framework of four fundamental theories of organizational change. Understanding these theories is crucial because organizations are complex systems where multiple forces interact, and no single theory can fully explain how and why change occurs.

🗂️ Topics Covered

The lecture begins by explaining theoretical pluralism and the "management theory jungle" before presenting four distinct theories of organizational change: life cycle, teleological, dialectical, and evolutionary theories. These theories collectively provide a comprehensive framework for understanding the different mechanisms and motors of change in organizations, serving both normative and inductive research functions.

📝 Lecture Summary

Theoretical Pluralism

Before discussing theories of change, we must first understand theoretical pluralism — a term widely popular in western society meaning to satisfy differing interests and needs of a cross-section of society. In management, pluralism refers to the simultaneous acceptance of differing and multiple explanations of reality. Koontz referred to this situation as the management theory jungle, where there is a problem of too much conflicting, overlapping, alternative, and varying theories of a single phenomenon in management literature related to motivation, leadership, decision-making, and MBO (Management by Objectives). This leads to fragmentation and compartmentalisation of perspectives, resulting in the persistence of the problem of theoretical divide — whether these theories exist as isolated lines of research, nullify each other, support each other, or reinforce each other. Therefore, we must understand the different explanatory theories stated below.

🔑 Definition — Theoretical Pluralism: The simultaneous acceptance of differing and multiple explanations of reality in management theory. 🔑 Definition — Management Theory Jungle: Koontz's term describing the problematic situation of too many conflicting, overlapping, alternative, and varying theories for a single management phenomenon.

Four Theories of Organizational Change (Van de Ven & Poole)

These theories, narrated by Van de Ven & Poole in their article published in the Academy of Management Review, attempt to give a comprehensive picture of various theories on organization change — ranging from child development to evolutionary biology, incorporating various concepts, as organisation life is a complex phenomenon with interplay and juxtaposition of multiple contrasting forces. They categorised various theories into a set of four theories which are:

1. Life cycle theories
2. Teleological theories
3. Dialectical theories
4. Evolutionary theories

This is a significant framework that gives a parsimonious and prudent explanation of organization change. The framework serves a normative function and provides useful standards to evaluate the form, completeness and tightness of specific developmental theories. The framework supports inductive research by identifying characteristics of the four motors and the conditions under which they operate.

🔑 Definition — Life Cycle Theories: Theories that explain change as an immanent process following a prescribed sequence of stages or phases. 🔑 Definition — Teleological Theories: Theories that explain change as a purposeful movement toward a desired end state or goal. 🔑 Definition — Dialectical Theories: Theories that explain change as emerging from the confrontation between opposing forces or viewpoints. 🔑 Definition — Evolutionary Theories: Theories that explain change as a cumulative process of variation, selection, and retention.

⭐ Key Takeaways

The most critical point is that organizational change cannot be explained by a single theory because organizational life is complex with interplay and juxtaposition of multiple contrasting forces. Van de Ven & Poole's framework of four theories — life cycle, teleological, dialectical, and evolutionary — provides a parsimonious and prudent explanation of organization change. This framework serves both a normative function (evaluating the form and completeness of developmental theories) and supports inductive research (identifying conditions under which each motor operates). Students must remember that theoretical pluralism leads to the management theory jungle, making it essential to understand how different theories relate to each other rather than treating them as isolated explanations.

🧠 Quick Revision Questions

1. What is theoretical pluralism, and how does it relate to what Koontz called the "management theory jungle"?
2. What are the four theories of organizational change identified by Van de Ven & Poole?
3. What function does Van de Ven & Poole's framework serve in evaluating developmental theories?
4. How does the framework support inductive research according to the lecture?
5. Why does the lecture emphasize that no single theory can fully explain organizational change?

📘 Lecture 8 — Life Cycle Theory

📖 Overview: Life cycle theory is one of the most common explanatory frameworks in change management, using the metaphor of organic growth to describe organizational development from initiation to termination. This lecture explains how organizations, like living organisms, progress through predictable stages of birth, growth, maturity, decline, and death, and explores the practical applications of this theory in organizational contexts, particularly in Pakistan.

🗂️ Topics Covered

The lecture covers the foundational concepts of life cycle theory including its definition from Van de Ven and Poole, characteristics of life cycle progression, prescribed versus constructive modes of change, Hollman's three-phase model of organizational change (Missionary, Modification, Maturity), Miller & Freisen's four-stage model, Baird & Meshoulam's four stages of international organizational life cycle (Organization Initiation, Functional Growth, Controlled Growth, Strategic Integration), and the concept of organizational death or extinction.

📝 Lecture Summary

Life Cycle Theory

Life cycle theory is one of the most common explanation theories in change management literature. It uses a metaphor of organic growth to explain organizational development in an entity from its initiation to its termination. The entity may mean an individual's job, a work group, a programme, strategy, product, or the overall organization. Like individuals, organizations also have a life, mean age and stage, and associated characteristics like birth, growth, maturity, decline and death – exhibiting certain traits at a particular stage of their life. In the context of Pakistani organizations, multinationals have evolved as excellent high performing organizations because they have a perpetual life and have overcome Product Life Cycle (PLC) or Organization Life Cycle (OLC).

According to this theory, "Change is imminent; that is the developing entity has within it an underlying form, logic, program or code that regulates the process of change and moves the entity from a given point of departure toward a subsequent end that is prefigured in the present state." Similarly, according to Van de Ven and Poole, "External environmental events and processes can influence how the entity expresses itself, but are always mediated by the immanent logic, rules, or programs that govern the entity's development."

🔑 Definition — Life Cycle Theory: A change management theory that uses the metaphor of organic growth to explain organizational development through predictable, sequential stages from initiation to termination, governed by an internal program or code.

Characteristics of a Life Cycle Theory

1. The progression (order + sequence) of change events in this model is a unitary sequence (follows a single sequence of stages or phases) and is cumulative (earlier stage traits are retained in later stages).

2. There is such a progression to the final end state which is pre-figured and requires a specific historical sequence of events.

3. Each of these events contributes a piece to the final product, occurs in a prescribed order, and sets the stage for the next. Each stage of development is seen as a necessary precursor of succeeding stages.

The author referred to Nisbet who worked on the philosophy of developmentalism, stating, "Organization development is driven by some genetic code or pre-figured program within the developing entity." Rogers is quoted as positing five stages of innovation: need recognition, research on problem, development of idea into useful form, commercialisation, and diffusion and adoption.

Unit of Change and Mode of Change

Life cycle theories explain development in terms of institutional rules or programs that require developmental activities to progress in a prescribed sequence. For example, in International Business, the specific application in context of product development and marketing is known as International Product Life Cycle (IPLC). This depicts how a product having birth in a Western country like USA receives growth, goes international, reaches maturity, and eventually declines in the form of importing the same product from external economies.

Unit of Change: Life cycle theories operate on a single entity, where development is a function of potentials immanent within the entity – environment and other entities are considered secondary.

Mode of change: It is important to know the sequence of change events is prescribed by either probabilistic or deterministic laws. There are two modes of change: prescribed mode and constructive mode.

🔑 Definition — Prescribed Mode: A mode of change that channels the development of entities in a pre-specified direction. Watzlawick termed this as first-order change, routinized or pre-established programme. Variation is first-order change.

🔑 Definition — Constructive Mode: A constructive mode of change generates unprecedented novel forms, often discontinuous and unpredictable departures from the past. Watzlawick termed this as second-order change, as it breaks with the past basic assumption or framework.

💡 Why this matters: Life cycle (and evolutionary) theory operates in a prescribed modality, meaning change follows predictable, pre-programmed patterns rather than creating entirely novel forms.

Hollman's Three-Phase Model of Organizational Change

According to Hollman, organizational change such as MBO (Management by Objectives) can be best understood by viewing change as systematically moving through distinct developmental stages rather than as either an evolutionary or revolutionary process. This developmental process consists of three phases or life cycles: Missionary, Modification, and Maturity.

Missionary phase: When an organizational member goes through MBO training programme, reads a book or article, or is in a business education programme and tries to introduce the same in his own organization with at least one high-level sponsor in the organization (may be politically driven to seek legitimacy and credibility).

Modification Phase: After birth, the problem of acceptance arises primarily from three sources:

• Interpersonal (lack of support, hostility, learning new terminology, skills and values, altering superior-subordinate relationships)
• Organizational (authority-responsibility pattern, budgetary allocations, training/procedural revision needed)
• Environmental (government regulation or competitive pressure)

Out of such pressures, a customized version emerges through negotiating and bargaining amongst multiple forces.

Maturity phase: When the change introduced becomes organizational routine, or when the new programme gets merged with the existing organization processes and loses its unique and special status as a management tool in organizational processes like budgetary allocation or compensation mechanism. This is considered the death phase of change in one sense. Failure can occur, and death can occur at any stage on the missionary-maturity continuum.

Applications and Additional Models

Applications of Life Cycle Theory:

1. Viable time-oriented framework used by organizations to diagnose, evaluate, and adjust new programmes (like MBO)
2. Evolution of MNCs: How MNCs evolve themselves (Sales agent, regular export, franchise/license, Wholly Owned subsidiary)
3. Though many consider OLC as static and deterministic, some consider strategic choices at each stage can affect (shorten or prolong) the development, rate, and direction of OLC stage
4. Introduction of new technology or application of new managerial concepts in an organization (e.g., MBO can be examined in terms of its introduction, growth, and effectiveness)

Miller & Freisen (1984) came up with a similar four-stage model:

1. Birth
2. Growth
3. Maturity
4. Revival

Baird & Meshoulam's Four Stages of International OLC

It is important to note that OLC for a domestic firm is distinct from OLC for an international firm.

Stage 1: Organization Initiation A typical start-up organization survives on the basis of strong entrepreneurship skills and values. Management and leadership are informal in nature, and managed on the basis of convenience. The organization at this stage offers a limited range of highly specialized products to restricted markets. Management culture remains ethnocentric, and the objective is short-term survival within the domestic market.

Stage 2: Functional Growth Once the organization maintains its existence, it starts to look for diversification. The firm looks for new export markets. Informal ways of management are replaced by formalisation by focusing on functional and technical specialization and production efficiency. Managerial confidence of the firm begins to increase owing to dynamic growth.

Stage 3: Controlled Growth The firm's overseas market moves into the maturity phase, with its focus on efficient structure and management practices. The firm now wants to control its overseas market through tight operations so as to achieve economies of scale in production and other functional areas.

Stage 4: Strategic Integration The firm now seeks greater integration with local markets through localisation and adaptation of resources. Moreover, synergy is sought to optimise operations through network and interdependencies of resources and responsibilities across subsidiaries. Ethnocentrism is replaced by polycentrism and geocentrism, resulting in increasing influence of foreigners and evolution of a universal management character.

Organizational Death or Extinction

Organizational death occurs when an organization values stability too much and avoids uncertainty and risk-taking. This means the organization is unable to innovate and has an incapacity to appraise its own performance. It believes in stable programming and is reluctant to deviate. All this happens when executives have a narrow and parochial view of external reality, and resistance to change is very high. Therefore, either the organization's inability for adaptation or the hostility of the environment leads the organization to extinction. For example, sick units in the textile sector boom under government support and collapse with the withdrawal of concessions and subsidies.

🔑 Definition — Organizational Death/Extinction: The termination of an organization that occurs when it values stability excessively, avoids uncertainty and risk-taking, cannot innovate, and has a narrow view of external reality coupled with high resistance to change.

⭐ Key Takeaways

Students must remember that life cycle theory explains change as a pre-programmed, sequential progression through predictable stages from birth to death, governed by an internal code or logic within the entity itself. The two modes of change—prescribed mode (first-order, routinized) and constructive mode (second-order, novel)—are critical for understanding how organizations either follow predictable paths or break from past frameworks. Hollman's three phases (Missionary, Modification, Maturity) provide a practical framework for understanding how management tools like MBO are introduced, adapted, and eventually institutionalized or die. The distinction between domestic and international OLC models (especially Baird & Meshoulam's four stages) is essential for analyzing multinational corporations, where ethnocentrism gradually gives way to polycentrism and geocentrism. Finally, organizational death results from excessive stability orientation, risk avoidance, and parochial executive thinking, making adaptation and innovation essential for organizational survival.

🧠 Quick Revision Questions

1. What are the three main characteristics of life cycle theory's progression of change events?
2. What is the difference between prescribed mode (first-order change) and constructive mode (second-order change) as defined by Watzlawick?
3. According to Hollman, what are the three phases of organizational change using MBO as an example, and what happens in each phase?
4. Describe Baird & Meshoulam's four stages of international organizational life cycle and how ethnocentrism changes across these stages.
5. What factors lead to organizational death or extinction according to life cycle theory?

📘 Lecture 9 — Teleological Theories of Change

📖 Overview: This lecture explores teleological theories of change, which posit that human actions are purposive and directed toward goals. It explains how organizations and individuals set, implement, and revise objectives as the primary driver of change, and discusses the implications for management practices and organizational development.

🗂️ Topics Covered

Teleological theories emphasize purposive, goal-directed action as the final cause guiding organizational movement. The theory underlies functionalism, strategic planning, and adaptive learning. Key concepts include goal formulation, implementation, evaluation, and modification in a repetitive cycle. The lecture covers the unit and mode of change, applications in management systems, the importance of shared vision, and limitations related to subjectivity and mechanistic assumptions.

📝 Lecture Summary

Teleological theories of Change

According to this theory, human actions are purposive; goal is the final cause for guiding movement of an entity. This underlies other organization theories like functionalism, decision-making, adaptive learning & model of strategic planning and goal setting. By this theory, development of an organizational entity proceeds toward a goal or end state. The entity is purposeful and adaptive by itself or interaction with others. The entity constructs an envisioned state, takes action to reach it, and monitors the progress. Therefore development process entails the repetitive sequence of goal formulation, implementation, evaluation and modification of goals.

Individuals or organisations who are sufficiently like-minded strive to act as a single collective entity. Therefore, the question is why to have organisation in the first case? Its answers lie in the fact that it is the commonality and convergence of purpose which binds individuals and organizations. Hence task oriented-ness pre-dominates (technocratization). This is perhaps one such structural difference between managers in developed and developing countries. But unlike life-cycle theory, teleology doesn’t prescribe necessary sequence of events.

Some teleological models incorporate the systems theory assumption of equi-finality (multiple effective ways to achieve a goal). In this theory there is no prefigured rule, logically necessary direction or set sequence of stages. Teleology stresses the purposiveness of the actor and within organisation’s environment and resources constraints

Unit of change

Change processes go on at many organizational levels, including the individual, group, organisation, industry and on other population as well

Mode of Change

Teleological and dialectical motors incorporate a constructive mode of change and development (2nd order change). By this very nature teleological processes tend to diverge from the current order. Because goals can be changed at the will of an entity and can be attained in many ways, therefore this may result in unpredictability and discontinuity

Application:

New management system like MBO, ISO certification, introduction of new software, quality drives in organisations are all considered part of teleological approach to change management. Focus in this approach is on goals or objective setting process or phenomenon in an entity. So the case in point is how do we set goals? How do we arrive at our decisions? What our objectives or ends are? Are these in continuity or in discontinuity with the past objectives of an entity? All these dimensions relate with ends and means debate. Good and quality objectives with legitimate and effective means for an entity are always difficult to arrive at. Another issue with objective setting is whether goals are rationally formulated? Rationality, of course is bound by time and space, the concept of bounded rationality earlier propounded by Herbert Simon. Visionary is the one who can see things at distant, that is, he can give stretch to time and space. So when we say vision ought to be shared by members of the organization For example whether this vision is shared by senior executives and the managers in succession (change of CEO). Hence change of managers or CEO is meaningless if there is no meaningful qualitative change in objectives of organization. One can apply the same for developing nations like Pakistan. For instance take the context of history of Pakistan. A Pre-1947 objectives of colonisers was to extract revenue and control us through the design of strong bureaucratic institutions. After independence this objective ought to have been revised and replaced by the objectives of growth & development (Constitution is a written objective of a nation). This never happened as bureaucratic institutions remain oriented towards control and revenue like the objective of colonisers. Similarly objectives of governing elite whether or not get changed by the change in personalities, law, system or party change. Similarly in case of organisation we have to see mission, vision, objectives, plans, target, what is known as hierarchy of intent truly reflects organization performance or just a rhetoric. Therefore the need to have an organization is “to attain our goals” and for the attainment of goals organizations at time becomes autocratic in behaviour. For that matter, the very first goal being survival or “Self-preservation” all factor of generation-growth-maturity in organisms are considered to be in line with self-preserving. Therefore, behaviour in organisation becomes purposive.

Limitations:

Though the tautological theory has good explanatory power yet it is not without its limitations. Two such stand very obvious. One is that the element of subjectivity is ignored in this kind of explanation. Human behaviour is not as subjective as explains for all and sundry behaviour. Second this is considered too much mechanistic, ignoring the organic dynamism of nature.

⭐ Key Takeaways

Teleological theories of change center on the idea that organizations and individuals are goal-directed, with change emerging from the repetitive cycle of goal formulation, implementation, evaluation, and modification. Unlike life-cycle theories, teleology does not prescribe a fixed sequence of stages and allows for equi-finality—multiple paths to the same goal. The mode of change is constructive and tends toward second-order change, creating unpredictability and discontinuity. Applications include MBO, ISO certification, and quality drives, but the approach has limitations: it ignores subjectivity in human behavior and is considered too mechanistic, overlooking organic dynamism.

🧠 Quick Revision Questions

1. What is the central assumption of teleological theories of change regarding human actions?
2. How does teleological theory differ from life-cycle theory in terms of prescribed sequence?
3. What does the concept of "equi-finality" mean in the context of teleological change?
4. Name two management systems that are considered applications of the teleological approach to change management.
5. What are the two main limitations of teleological theory?

📘 Lecture 10 — Dialectical Theories of Change

📖 Overview: This lecture explores dialectical theories of change, which are rooted in ancient philosophy and explain organizational change through the clash of opposing forces. Understanding this theory is crucial for managers to analyze conflicts, power dynamics, and how organizations evolve through confrontation and synthesis of contradictory values.

🗂️ Topics Covered

The lecture first defines dialectical theory of change, explaining its philosophical origins and core assumptions about pluralistic worlds and colliding forces. It then describes the dialectical process through the thesis-antithesis-synthesis cycle, followed by the unit of change requiring multiple entities. The mode of change is identified as second-order constructive change. Finally, the lecture covers practical applications including Strategic Assumptions Analysis, group decision-making, and strategic planning.

📝 Lecture Summary

Dialectical theories of change

Dialectical theory is one of the oldest learning philosophies, used by Aristotle and Plato over 2000 years ago. In modern times, Hegel and Marx used this method to describe movements towards truth and change. According to Van de Ven, "Dialectical theory rests on the assumption that the organisational entity exist in a pluralistic world of colliding events, forces, or contradictory values that compete with each other for domination and control."

Three significant aspects stand out:

1. Pluralistic world of colliding forces
2. Values that compete, oppose, and are contradictory to each other
3. Domination and control is the purpose

Every phenomenon contains within it a contradiction, and this contradiction itself becomes a phenomenon over time. Opposing and balancing forces are internal to an organisational entity. An entity may have several conflicting goals or interest groups competing for priority. In a dialectical process, stability and change are explained by reference to the balance of power between opposing entities. Struggles and accommodations that maintain the status quo between oppositions produce stability. Change occurs when these opposing values, forces, or events gain sufficient power to confront and engage the status quo.

The dialectical process is identified as Thesis - Antithesis - Synthesis (New Thesis), also known as the dialectical cycle. The relative power of an antithesis may mobilise an organisational entity to a sufficient degree to challenge the current thesis and set the stage for producing a synthesis. The synthesis or new thesis is different from both thesis and antithesis. However, there is no assurance that dialectical conflicts produce creative synthesis. Sometimes antithesis is powerful enough to replace the thesis, or many organisations (thesis) persist by maintaining sufficient power to suppress and control the opposition (or antithesis).

Unit of Change

Dialectical theories operate on multiple entities, while OLC and teleological theories operate within a single entity. This theory requires at least two entities to fill the role of thesis and antithesis. For example, an individual and its environment, or an organisation and its environment engaged in dialectic. Here, four forces operate — two within the individual and two within the environment.

Mode of Change

Dialectical theory incorporates constructive mode of change (2nd-order / second-order change). Since by its very nature there is a struggle and confrontation between thesis and antithesis which may be resolved by diverging or breaking away from the current or existing system, the type of change is second order.

Application

Karl Marx applied dialectical theory to the history of economics, developing the concept of dialectical materialism. He showed how agrarian society, owing to its inherent conflicts, transformed to a capitalistic society and envisioned that in future it would be synthesised to a socialistic society. For Hegel, dialectics means the process of change, logic, and a method.

The lecture focuses on application in the context of organisations or corporations. First, this can be applied to corporate decision-making through Strategic Assumptions Analysis (SAA), a technique used for effective planning and generating strategies before a final strategy is chosen. For example, in creative problem solving, organisations use a plan (affirmative) and counter plan (negative proposition — to play devil's advocate) to look for solutions and counter solutions, quite analogous to thesis-antithesis-synthesis. The purpose is to deliberate the surfacing of assumptions and counter-assumptions, especially under complex, dynamic, and ambiguous phenomena and situations.

Second, this can be used as a tool for group decision-making, particularly to understand the reaction of group members. An organisation is generally composed of various groups — two common types are the ruling group and the ruled (opposition), just like a state system where one is government and the other is opposition party. Similarly, there are other formal and informal groups and pressure groups in organisations. Therefore, it is important for managers to know how various groups think about a given policy matter.

Strategic planning

Man lives by his imagination, and so does the organisation. Success or failure depends upon a particular set of beliefs or assumptions about the world, and on how close our belief or assumption is to the real world. Planning is nothing but systemic allocation of words and numbers to such assumptions. There are three components of planning:

1. Concerned with future state of the world and hence to predict about it
2. Preferred future status underlying value system
3. A choice among two or three behaviour patterns (plans) for the firm's activity (means)

Each of these items involves management's basic assumption about the planning problem it faces. Management and management science focus on well-structured problems, but the concern of strategic planning/management is to deal with ill-structured problems and issues. Hence the role of planning in organisation should be:

1. To expose the assumptions underlying a proposed plan
2. To develop relevant assumptions upon which the planning process can proceed

🔑 Definition — Dialectical Theory of Change: A theory that assumes an organisational entity exists in a pluralistic world of colliding events, forces, or contradictory values that compete with each other for domination and control.

🔑 Definition — Dialectical Cycle: The process of Thesis (current state) → Antithesis (opposing force) → Synthesis (new thesis that is different from both).

🔑 Definition — Strategic Assumptions Analysis (SAA): A technique using affirmative plan and counter plan (devil's advocate) to surface assumptions and counter-assumptions for effective planning and strategy generation.

💡 Why this matters: Understanding dialectical theory helps managers anticipate and manage conflicts by recognizing that change emerges from the confrontation of opposing forces rather than from simple linear progression.

⭐ Key Takeaways

Dialectical theory explains change as arising from the confrontation between thesis (current state) and antithesis (opposing forces), resulting in a synthesis that is different from both. The unit of change requires multiple entities (at least two), and the mode of change is second-order constructive change. Practical applications include Strategic Assumptions Analysis for corporate decision-making, group decision-making tools to understand stakeholder reactions, and strategic planning that focuses on exposing assumptions underlying proposed plans. Managers must recognize that organisations contain competing groups and contradictory values, and that stability is maintained through balance of power while change occurs when opposing forces gain sufficient strength to challenge the status quo. The three components of planning involve assumptions about the future state, preferred values, and behavioral choices.

🧠 Quick Revision Questions

1. What are the three significant aspects of dialectical theory according to Van de Ven?
2. Explain the dialectical cycle: What are thesis, antithesis, and synthesis, and how do they relate to organizational change?
3. How does the unit of change differ between dialectical theories and teleological theories?
4. What is Strategic Assumptions Analysis (SAA), and how does it apply the dialectical process to corporate decision-making?
5. What are the three components of planning, and why is it important for strategic planning to expose assumptions?

📘 Lecture 11 — A Dialectical Approach to Organisational Strategy and Planning

📖 Overview: This lecture introduces the dialectical approach to organisational strategy and planning, which examines situations from two different points of view. It contrasts the traditional expert planning approach with methods like devil's advocacy and dialectical inquiry to uncover hidden assumptions. Understanding this approach matters because it helps managers make more robust decisions by surfacing and testing fundamental assumptions behind plans.

🗂️ Topics Covered

The lecture defines the dialectical approach in organisational context, contrasting it with traditional expert planning that buries assumptions in jargon and statistics. It then explains two specific techniques: devil's advocacy, where managers criticise a plan without offering alternatives, and dialectical inquiry, where subgroups develop opposing assumptions and reach consensus. The steps of dialectical inquiry are detailed, and the key difference between devil's advocacy and dialectical inquiry is clarified regarding the role of the second subgroup.

📝 Lecture Summary

A Dialectical Approach to Organisational Strategy and Planning

The dialectical approach is defined as a system that examines a situation completely and logically from two different points of view. It begins by identifying the prevailing or recommended plan and the data used to derive it. The question posed is: “under what view of the world is this the optimal plan to follow?” To test the underlying assumption, a search is initiated to find another plausible and believable alternative — the counter plan. The principal theme is that management must learn about the fundamental assumptions of its planning problem and observe the conflict between plan and counter-plan and their related world-views.

In real life, the expert approach to planning is followed, wherein consultants and economists are employed who are too concerned with cost-benefit and efficiencies, promoting a technical view. These experts bury assumptions of their plan in trade jargon and statistics. This traditional approach is devoid of socio-psychological, cultural, and political implications. Corporate planners also operate on assumptions, but these are hidden assumptions in organisational data and the recommended plan; their method of presenting can conceal assumptions behind the plan.

🔑 Definition — Dialectical Approach: A system that examines a situation completely and logically from two different points of view. 🔑 Definition — Counter Plan: A plausible and believable alternative plan developed to test the assumptions underlying the prevailing or recommended plan.

💡 Why this matters: Traditional expert planning often ignores important human and contextual factors; the dialectical approach forces these hidden assumptions into the open.

Devils’ Advocate

In the devil's advocate technique (usually performed by internal consultants), managers play a deliberate role of devil's advocate while planners present their recommendations like experts. The focus is on what is wrong with the plan and why it should not be accepted. The underlying assumption is that a truly good plan will survive the opposition in the form of devil's advocacy. Managers playing devil's advocate do not develop a new world view; rather, they just criticise the plan massively. The role of managers' behaviour is destructive rather than constructive. This may psychologically demoralise planners and may result in planners developing a safe plan rather than a progressive one.

🔑 Definition — Devil's Advocate: A technique where managers deliberately criticise a plan to test its robustness, focusing on what is wrong and why it should not be accepted, without offering an alternative world view.

Dialectical Inquiry

In dialectical inquiry, each member/participant has unique information, knowledge, experience, or perspective that may be shared via discussion or interaction. The focus in this activity is consensus-seeking; therefore, unlike devil's advocacy, consensus-building behaviour is important by resolving decisional conflict in the group.

Steps in Dialectical Inquiry Process:

1. A decision-making group is divided into two sub-groups, each of which will be involved in the analysis and solution of the problem at hand.
2. One sub-group develops recommendations and supports them with all key assumptions, facts, and data — all of which are provided to the other sub-group.
3. In dialectical inquiry, the second sub-group develops plausible/alternate assumptions that negate those of the first, and then uses new assumptions to construct counter-recommendations.
4. The debate continues until they agree on a set of assumptions — and then they unite to develop recommendations.

This is different from devil's advocacy because in devil's advocacy, the second group comes up with a formal critique, expounding flaws as to why these recommendations should not be accepted, but offers no alternative. In devil's advocacy, the first group revises its assumption and recommendations to satisfy valid objections of the second group and then presents recommendations for a second round of critique. The process continues until both sub-groups accept the assumption and planning recommendations. Hence, the role of the second sub-group differs in each case. Nonetheless, whatever type of organisation proceeds with dialectical conflict, dialectical inquiry can be used as an effective tool to evolve corporate and strategic planning.

🔑 Definition — Dialectical Inquiry: A process where two sub-groups develop opposing sets of assumptions and recommendations, debate until consensus is reached on assumptions, and then unite to create final recommendations.

📌 Example Difference between Devil's Advocacy and Dialectical Inquiry: In Devil's Advocacy, Group A presents a plan. Group B criticises the plan (identifying flaws) but offers NO alternative. Group A revises its plan to address criticisms, and the cycle repeats until both groups accept the plan. In Dialectical Inquiry, Group A presents a plan with supporting assumptions. Group B develops alternative assumptions that negate Group A's assumptions and builds a counter-plan. Both groups debate assumptions, reach consensus on a set of assumptions, and then jointly develop a unified recommendation.

⭐ Key Takeaways

The dialectical approach examines planning situations from two opposing viewpoints to uncover hidden assumptions often buried by expert planners using technical jargon and statistics. Devil's advocacy involves destructive criticism of a plan without offering a new world view, which may demoralise planners and lead to safer plans. Dialectical inquiry is a constructive, consensus-seeking process where subgroups develop opposing assumptions and counter-plans, then debate until they agree on assumptions before creating unified recommendations. The core difference is that devil's advocacy critiques without offering alternatives, while dialectical inquiry actively builds a counter-plan based on alternative assumptions. Dialectical inquiry can be a powerful tool for evolving corporate and strategic planning by ensuring assumptions are explicitly tested and debated.

🧠 Quick Revision Questions

1. What is the fundamental difference between devil's advocacy and dialectical inquiry regarding the role of the second subgroup?
2. Why does the lecture argue that the traditional expert approach to planning is problematic?
3. What are the four steps in the dialectical inquiry process?
4. What is the potential negative psychological consequence of using devil's advocacy on planners?
5. Under the dialectical approach, what question is posed to test the assumptions underlying a recommended plan?

📘 Lecture 12 — Limitation of Dialectics; DA and DI

📖 Overview: This lecture addresses the risks and limitations of using dialectical inquiry (DI) and dialectical analysis (DA) in organizational decision-making. It explains how the process can damage group harmony and morale, outlines specific objections to the method, and describes the necessary conditions for its effective application. The lecture also provides an overview of where dialectics can be practically applied in business contexts.

🗂️ Topics Covered

The lecture covers the limitations of dialectical inquiry, including risks like damaged feelings and politicization, followed by four specific objections to the process. It then outlines the pre-requisites or conditions for exercising dialectics, and concludes with an overview of applications such as decision making, environmental assessment, business gaming, the Delphi Method, quality circles, and cross-cultural training.

📝 Lecture Summary

Limitation of Dialectics; DA and DI

Despite tremendous benefits, there is one such risk organizations may run into for employing the dialectical technique or process. The process may damage group members’ feelings, leading to feelings of rejection, depression, jealousy, and anger, and might even corrode morale and the working relationship. Therefore, the dilemma for management is to choose among (trade-off) quality decision and group harmony. In real life, such a type of trade-off often exists.

In overall analysis, the dialectical design in an organization is introduced to have better planning. The exercise leads to the formulation of a plan (thesis) and a counter-plan (anti-thesis) constructed on the same databank. This will lead to synthesis, which involves exposing hidden assumptions and a new conceptualization of the planning problem the organization faces.

🔑 Definition — Dialectical Inquiry (DI) / Dialectical Analysis (DA): A process where a plan (thesis) and a counter-plan (anti-thesis), built on the same data, are debated to produce a synthesis that reveals hidden assumptions.

There are several objections by which the process can prove to be counter-productive:

1. Dialectic inquiry does not identify the moving forces and causes behind the dialectical process and its realisation in strategic policy planning.
2. The source of thesis (plan) and anti-thesis (counter plan) is not clear.
3. It is not clear what governs the synthesis process and what determines the interpretation of various assumptions and strategies. As happens in real life, organization meetings are by their very nature supposed to be dialectic. The danger is that the process may be politicised. This may lead to the manufacturing of consent, or opposition may manifest for the sake of mere opposition in a narrowed and rigid perspective.
4. It is self-purposeful, partial, and incomplete: it only deals with the decision-making process for strategic planning – and neither with antecedents (past history) of planning nor with planning outcomes.

Conditions for exercising dialectics

All theories and models have advantages and disadvantages, and the applicability of theory is permitted under certain conditions. Certain conditions ought to exist before going for such kind of activity:

1. Management is unaware of assumptions, or is in doubt or in disagreement, and needs to choose appropriate assumptions and plans.
2. There are multiple and alternative interpretations on the same data bank.
3. In case of uncertainty (a constantly changing world), management tends to rely on a synthesised set of assumptions or on a synthesised view of reality.
4. The cost of developing plan, counter-plan, or management's involvement in the development of a synthesised world view is less than the cost of advisors' errors (error in assumption).

💡 Why this matters: These conditions ensure that the dialectical process is applied only when it can add value, preventing wasted resources and conflict.

Overview of application of dialectics

Primarily, dialectics can be utilized as a decision-making and environmental assessment technique for generating alternatives and scenarios. For example, a decision maker who is provided with conflicting policy recommendations may be involved in a dialectical process.

It is used for the production of systematic knowledge for the organization and can have utility for the following business and corporate functionalities:

• Inquiry system – dialectical conflict leads to dialectical inquiry
• Business gaming and simulation
• Dialectical Problem-Solving Technology (DPST)
• Nominal Group Training
• Delphi Method & control groups
• Quality circle
• Cross-cultural training

⭐ Key Takeaways

The dialectical process, while valuable for strategic planning, carries significant risks such as damaging group morale, feelings of rejection, and corrupting working relationships. There are four key objections: it fails to identify moving forces, the source of thesis/antithesis is unclear, the synthesis process can become politicized, and it is partial, ignoring antecedents and outcomes. For the process to work, specific conditions must exist, including management's doubt about assumptions, multiple interpretations of data, environmental uncertainty, and lower costs compared to advisor errors. The practical applications of dialectics extend beyond planning to include decision making, environmental assessment, business gaming, the Delphi Method, quality circles, and cross-cultural training.

🧠 Quick Revision Questions

1. What are the potential negative effects on group members when using the dialectical inquiry process?
2. List the four specific objections to the dialectical inquiry process as presented in the lecture.
3. What are the four conditions that must exist before exercising dialectics in an organization?
4. Explain the trade-off that management faces when employing dialectical inquiry.
5. Name at least three business functionalities where dialectics can be applied.

📘 Lecture 13 — THEORIES OF CHANGE IN ORGANISATIONS

📖 Overview: This lecture introduces the Evolutionary Theory of Change, which borrows the biological metaphor of natural evolution to explain organizational change. It posits that organizations, like living organisms, evolve through a continuous cycle of variation, selection, and retention, driven by environmental pressures. Understanding this theory is crucial as it explains why change is inevitable, how organizations adapt (or fail to), and why continuous learning and innovation are vital for long-term survival.

🗂️ Topics Covered

This lecture covers the core concepts of the Evolutionary Theory of Change, including the biological metaphor and the cycle of variation, selection, and retention. It then details the features of evolutionary thinking, the unit and mode of change, and differentiates between the Darwinian and Lamarckian approaches. Finally, it explores the application of this theory in functional areas like quality management and its implications for managerial focus in building an evolutionary organization.

📝 Lecture Summary

4. Evolutionary Theory of Change

This theory borrows the concept of organic evolution from biology to explain organizational change. Just as living organisms grow and shrink over time, organizations are seen as entities that evolve through a continuous cycle of variation, selection, and retention. The key question is whether organizations, like living organisms, follow principles of natural evolution. The metaphor is borrowed from biology, and as in biological evolution, change proceeds through a continuous cycle of these three mechanisms.

🔑 Definition — Variation: The creation of novel forms of organizations, often viewed to emerge by blind or random chance. Variation may be strategic, structural, or operational (e.g., innovation in functional areas). 🔑 Definition — Selection: The process where the environment chooses entities that best fit the resource base of an environmental niche. Some variants perform better as changes occur in the environment, while others die or become extinct. 🔑 Definition — Retention: The forces (including inertia and persistence) that perpetuate and maintain certain organizational forms, counteracting the self-reinforcing loop between selection and variation.

📌 Example: A growth opportunity in the industry (environment) leads to an organization setting a growth objective (increase in sales). This leads to an increase in manpower (HR), which then leads to a change in management form/practices (e.g., transformation from an autocratic style to a participative style of decision making). This illustrates how external change leads to change in strategy, which in turn culminates in a change of structure.

The lecture also describes evolutionary thinking as entailing six features: (1) All events are time bound; (2) No phenomenon is absolute; (3) Focus on historical particular for explaining causation; (4) Study of context is important; (5) The theory accounts for diversity; (6) Accounts for variations in organizational strategy and structure.

Evolution explains change as a recurrent, cumulative, and probabilistic progression of variation, selection, and retention. Organizational mutation, akin to biological mutation (change in genetic character), refers to random variations in innovation and management practices. These changes fall into two categories:

• Systemic Change: Addresses the issue of effectiveness.
• Operational Change: Concerned with efficiency improvement.

A key concept is the inverse relationship between control and growth. For higher-level growth, organizational control has to be relaxed and decentralized. This mirrors how small organizations cannot grow with a single constant management style; variation in structure is bound to occur. This thinking is linked to concurrent engineering, where a management audit evaluates which forms and practices are needed versus those that are redundant.

The lecture distinguishes two theoretical approaches within the evolutionary school:

1. Darwinian Approach: Believes organizational traits are inherited through inter-generational processes. It is a continuous and gradual process of evolution.
2. Lamarckian Approach: Argues that traits are acquired within a generation through learning and imitation. Most analysts believe this is more applicable to organizations, as it aligns with an organization's learning capability.

Unit of Change: Evolutionary theories operate on multiple entities (intra-organisational, organisational, population, communities), as opposed to single-entity theories. Evolutionary forces are defined by their impact on populations.

Mode of Change: Evolutionary theories incorporate a prescribed mode of change that is of a continuously evolving character, relying on the statistical accumulation of small individual events.

💡 Why this matters: Understanding whether change is inherited (Darwinian) or learned (Lamarckian) helps change managers decide whether to focus on long-term structural redesign or on fostering a culture of immediate learning and imitation.

APPLICATION OF EVOLUTIONARY THEORY

The theory has general application in various functional areas like production, marketing, finance, and quality management.

📌 Example: In the electronic or communication technology industry, a huge variety of products appears in quick succession. The success of any new technological product (a variation) is a matter of sheer chance. It is the environment (the market) which selects and decides the validity of an organization's form, process, and practices.

A major evidence is found in the Quality Management Movement (QMM). For instance, Total Quality Management (TQM) means continuous, marginal, or incremental changes on a day-to-day basis. Scholar Winter links QMM to evolutionary economic theory, highlighting three aspects:

1. Corporate knowledge resides in organisational capabilities embedded in organisational routines, which arise from a process of organisational learning and have a large tacit component.
2. There is no sharp distinction between the firm’s technical and organisational component.
3. The capabilities of a firm are idiosyncratic, being the unique outcome of the firm's evolving history.

Quality Management focuses more on the production process than on outcomes. A major benefit is that it forces the organisation to continue the evolution of its successful routines and avoid the danger of stagnation.

Managerial Focus: By default, organisations are control-oriented and autocratic. Building an evolutionary organisation means transforming this into a participative one where the flow of authority is upward. The evolutionary theorist, instead of relying on hierarchy, authority, and span of control, offers a knowledge-oriented organisation and focuses on discovery, application, and dissemination of knowledge.

🔑 Definition — Zero Defect Philosophy: A common example of focusing on continuous improvement in organizational processes, specifically in the context of production, aiming for no defects.

💡 Why this matters: The managerial focus of evolutionary theory directly challenges traditional bureaucratic models, advocating for a shift from top-down control to a system that empowers knowledge and learning from the bottom up.

⭐ Key Takeaways

The Evolutionary Theory of Change uses a biological metaphor to explain that organizations change through a continuous, probabilistic cycle of variation (random innovation), selection (by the environment), and retention (inertia and persistence). This theory operates on multiple entities (populations, not just single organizations) and prescribes a continuously evolving mode of change. It distinguishes between a gradual Darwinian view and a more applicable Lamarckian view, where traits can be learned and acquired within a single generation. Applied to management, it supports quality movements like TQM, which advocate for continuous incremental change and the evolution of successful routines, and it promotes a shift from autocratic, hierarchical control to a knowledge-oriented, participative organization.

🧠 Quick Revision Questions

1. What are the three core mechanisms in the evolutionary cycle of organizational change, and briefly define each?
2. According to the lecture, what are the six key features of "evolutionary thinking" as applied to organizations?
3. How do the Darwinian and Lamarckian approaches to evolution differ in their view of how organizational traits are acquired and the rate of change?
4. What is the key difference between the "unit of change" in evolutionary theory compared to theories like Organizational Life Cycle (OLC)?
5. How does the application of Evolutionary Theory support the principles of Total Quality Management (TQM)?

📘 Lecture 15 — Further Application of Evolutionary Theories

📖 Overview: This lecture explores how evolutionary theories apply to organizational change, particularly focusing on the strategy-structure debate and the contextualization of Western management knowledge in developing countries like Pakistan. It critically examines the limitations of universal management paradigms and discusses how adaptation, learning, and selection principles operate within organizations.

🗂️ Topics Covered

The lecture covers the strategy-structure debate and application of Western managerial knowledge in Pakistan, including the need for contextualization and synthesis. It discusses how public sector organizations in Pakistan fail to evolve their structure alongside strategy, and examines the traditional versus modern paradigm of management effectiveness across cultures. The lecture also explores large organizations as special cases of selection principles, the distinction between learning and adaptation, strategic management perspectives on internal versus external development, relationships with other change theories (teleological, life-cycle, dialectical), and criticisms of evolutionary theory.

📝 Lecture Summary

Strategy–Structure Debate and Western Knowledge in Pakistan

The knowledge around us is primarily developed in the West for their own purposes and objectives. What is crucial is developing skills to seek relevancy, relate, and appropriate this knowledge to our own contexts. We can already observe the limitations and inadequacies of Western managerial and theoretical knowledge like Hawthorne effect and Maslow's theory of motivation as too abstract and generalized to deal with distinct and differentiated cultural entities and societies of developing countries like Pakistan. Hence the need is to go for synthesis and selective application of the Western management paradigm.

The logic and spirit of contextualising also aligns with certain dimensions of evolution theory like selection and adaptation. In the context of public sector organizations in Pakistan, there is a kind of fixation with organization structure rather than strategy, resulting in failure to evolve a distinct organization structure and managerial culture on their own. For example, one reason for the failure of strategy was that the shift in government's strategy from import-substitution to export-promotion over time never brought with it a shift or adjustment in organization structure. With the same static set of institutions, bureaucratic structure, and values, different strategies were followed. Therefore, evolving strategy should be coupled with evolving structure.

💡 Why this matters: This demonstrates that organizations cannot succeed by changing strategy alone without corresponding structural changes, a core evolutionary principle.

Strategy-Structure Alignment

With respect to the strategy-structure debate, the typical controversy is which should come first — should strategy be formulated first and then structure organized along strategy dimensions, or is it the idealized and standardized structure which remains effective and can make any type of strategy effective? Further concerns include how organizations evolve their strategies and, more importantly, whether change in strategy is simultaneously followed or corresponded with structure. Going by the spirit of evolutionary thinking, it is the strategy–structure alignment and match which is required.

This was considered a traditional paradigm of management — that good managers were considered good managers everywhere irrespective of industry, technology, size, and place of organization. This old paradigm is not valid for today's world and has become irrelevant in today's highly specialized era with hi-tech hyper-changing world. According to the cultural school of thought (Comparative Management), managerial practices considered effective in USA or Europe may not be relevant and valid for developing countries like Pakistan. Therefore, the localisation of management by MNCs and other indigenous or local organizations is imperative going by the dynamics of evolutionary theory.

Large Organizations and Selection

Large organizations are complex and more vulnerable because of formalization of process and routinization. Managers focus too much on procedures and due-process of law. Organizations are divided into vertical columns (functional departments), therefore managers cease to look at organization from a holistic and integrated perspective. Organizations become rigid and refuse to learn owing to functional specialization and tend to become inflexible. For larger organizations, Quality Management (QM) should be more successful in large and complex organizations because they are vulnerable to organizational routines and stagnation. Large organizations operate as a special case of the selection principle as the organization moves from smaller to large. According to John D Rockefeller, "the growth of a large business is merely a survival of the fittest: it is merely the working out of a law of nature."

🔑 Definition — Selection principle: The process by which environmental forces favor certain organizational forms or practices over others, analogous to natural selection in biology.

Learning vs. Adaptation

Organization theorists use the term evolution in a variety of ways. One such concept is learning, which means change in knowledge, change in skills, and change in attitude of individual and/or organization as well. The question arises: are adaptation and learning synonymous with change? Sidney Winter uses the term adaptive problem-solving. Adaptation and evolution are used synonymously, but for some authors the two terms are not similar.

Levinthal distinguishes between learning and adaptation. To him, learning occurs when there is an incremental change in an organizational routine in response to feedback about outcome, while adaptation is defined as when an organization changes some of its core attributes to fit environmental contingency.

🔑 Definition — Learning (Levinthal): An incremental change in an organizational routine in response to feedback about outcome. 🔑 Definition — Adaptation (Levinthal): When an organization changes some of its core attributes to fit environmental contingency.

Strategic Management Perspective

A firm has a perpetual concern with strategy formulation, strategy implementation, and strategic evaluation, and has a choice which set of strategy to opt or formulate. The two sets of policy choices are internal development and external development, and both are considered opposite to each other.

The internal development strategy, in its traits, is slow, gradual, equity-based where one's own organization culture is considered very sacred. The external development strategy exhibits the characteristics of being fast, structural, and high growth oriented. Mergers, acquisitions, and joint ventures strategies explain the same mode. Internal refers to slow, gradualism, incrementalist, or evolutionary view, while external refers to revolutionary types of change.

📌 Example: Internal development = slow, gradual, equity-based, preserving organizational culture. External development = fast, structural, high growth through mergers, acquisitions, joint ventures.

Relationship With Other Theories of Change

This theory incorporates diversity and multiplicity of views and seems to be comprehensive compared to other theories. The Organizational Life Cycle (OLC) is again like parallel explanations of evolutionary theory — things tend to evolve in each stage of development, be competitive, and respond to environmental context. Teleological theory explains change in terms of purposive and cautious ways of objective setting, compatible with evolutionary theory through consistency in policies and objectives for stable evolution of organization. Within organizations we have dialectics and dialectical thinking — having to incorporate opposing viewpoints so as to come forth with effective policy outcome.

Criticism

This theory is not free from criticism. Natural selection favors the best of existing alternatives rather than the best possible design. Here in this theory, outcome is satisficing rather than optimising, which means it does not strive for the best possible objectives. Another point of concern is that the organization analogy is considered weak as organization is designed and managerial decisions are taken cautiously and purposively while evolutionary biology rests on random variation. Because of this deficiency in analogy, Mayr has termed this theory as an "inappropriate formulation."

🔑 Definition — Satisficing: Accepting an outcome that is good enough rather than striving for the optimal or best possible outcome.

⭐ Key Takeaways

The most critical takeaway is that Western managerial knowledge cannot be universally applied and must be contextualized for different cultural and organizational settings, particularly in developing countries like Pakistan. Strategy and structure must evolve together in alignment for organizational success. Large organizations face unique challenges due to formalization and routinization, making them vulnerable to stagnation. Learning and adaptation are distinct concepts — learning involves incremental routine changes from feedback, while adaptation involves changing core attributes to fit environmental demands. Finally, evolutionary theory faces valid criticism as organizational decisions are purposive and cautious, unlike the random variation in biological evolution, leading to satisficing rather than optimizing outcomes.

🧠 Quick Revision Questions

1. What is the main criticism of applying Western managerial knowledge (like Maslow's theory) to developing countries like Pakistan?
2. According to Levinthal, what is the difference between learning and adaptation?
3. Why did the shift from import-substitution to export-promotion strategy fail in Pakistan's public sector?
4. What are the key differences between internal development strategy and external development strategy?
5. What is Mayr's criticism of evolutionary theory when applied to organizations, and why does he call it an "inappropriate formulation"?

📘 Lecture 16 — Greiner’s Model of Organisational Evolution and Revolution

📖 Overview: This lecture introduces Greiner’s model, which explains why and how organizations fail to grow by focusing on internal dynamics rather than external market forces. It posits that an organization’s future success is determined more by its history and internal structure than by outside opportunities, challenging traditional strategy-structure perspectives. The model identifies five key dimensions that interact over time to create a dynamic picture of organizational growth, comprising alternating periods of evolution and revolution.

🗂️ Topics Covered

The lecture begins with the core assumptions of Greiner’s model, contrasting his emphasis on structure over strategy with Chandler’s strategy-structure perspective. It defines the key terms evolution and revolution as prolonged growth and substantial turmoil, respectively. The five essential dimensions for building a model of organization development are then introduced: age of the organisation, size of the organisation, stages of evolution, stages of revolution, and growth rate of the industry. Each dimension is explained, highlighting how problems and solutions change as organizations grow in size and age, with evolution as quiet growth and revolution as turbulent crisis periods.

📝 Lecture Summary

LESSON # 16 GREINER’S MODEL OF ORGANISATIONAL EVOLUTION AND REVOLUTION

The model explains why and how organizations are unable to grow, and suggests how organisations ought to grow. It is based on certain assumptions about the organization. The first assumption is that organisations are rigid, bureaucratic, control-centric, and centralised entities. Second, organisations fail to see that their future success lies within their own organisation and also fail to assess their evolving states of development. Therefore, the inability of a management to understand its organisation development problems can result in the organisation becoming frozen in its present stage of evolution (failure to evolve) regardless of market opportunities.

Greiner’s proposition is that the future of an organisation may be less determined by outside forces than by the organisation’s history. Therefore, to him, internal dynamics of organisation structure play a critical and decisive role in shaping organisation strategy. This view comes closer to the recently popular management paradigm of Resource Based View (RBV) of strategy formulation. According to this view, each firm has a unique combination and configuration of its resources which leads to inimitable competitive advantage.

This position confronts Alfred Chandler, who gave the concept of strategy and structure perspective in business management. Chandler proposed that outside market opportunities determine an organisation’s strategy, which in turn determines company’s structure. So Greiner emphasises structure over strategy while Chandler focuses strategy over structure. Greiner seems also influenced by European psychologists, for whom individual behaviour is determined primarily by previous events and experiences. Hence the analogy of individual development is coined with organisational development.

Before discussing the model, two terms are defined: evolution and revolution. Evolution is used to describe a prolonged period of growth where no major upheaval occurs in organisation practices. Revolution is used to describe those periods of substantial turmoil in organisational life. Each evolutionary period creates its own revolution as the organisation progresses through developmental phases. For instance, centralised practices eventually lead to demand for decentralisation. Moreover, the nature of management’s solution to each evolutionary period determines whether the organisation will move forward into the next stage of evolutionary growth.

According to Greiner, five key dimensions emerge as essential for building a model of organisation development:

• Age of the organisation
• Size of the organisation
• Stages of Evolution
• Stages of Revolution
• Growth rate of the industry

Each dimension influences the other over time; when all five elements begin to interact, a more comprehensive and dynamic picture of organisational growth emerges.

🔑 Definition — Evolution: A prolonged period of growth where no major upheaval occurs in organisation practices. 🔑 Definition — Revolution: Periods of substantial turmoil in organisational life. 🔑 Definition — Resource Based View (RBV): A strategy formulation paradigm where each firm has a unique combination and configuration of its resources which leads to inimitable competitive advantage.

💡 Why this matters: Greiner’s model directly challenges the dominant strategy-structure view by arguing that internal historical dynamics—not external opportunities—primarily determine organizational growth and survival.

1. Age of the organisation

It is the foremost and essential dimension of organisation development. It is clear that the same organisation practices are not maintained throughout a long span of time. The most basic point is that management problems and practices are rooted in time. MBO (Management by Objectives) a decade back had different meanings than today. The passage of time also contributes to the institutionalisation of managerial attitude. As a result, employee behaviour becomes not only more predictable but also more difficult to change when attitudes are outdated. For example, Parkinson’s law of expansion means work tends to expand over time.

🔑 Definition — Parkinson’s law of expansion: Work tends to expand over time.

2. Size of the organisation

Organisation’s problems and solutions to such problems tend to change markedly as the number of employees and sales volume increases. Thus time is not the only determinant of structure; in fact, organisations that do not grow in size can retain many of the same management issues and practices over lengthy periods. Very typical problems of increased size are problems of coordination and communication, emergence of new functions, levels in the management hierarchy, and jobs becoming inter-related.

3. Stage of Evolution

The term seems to describe a quieter period in organisation history with modest adjustments necessary for maintaining growth under the overall same pattern of management. With the increase in size and time, a phenomenon becomes evident which is “prolonged growth”. Evolution is equated with continuous and prolonged growth. According to Greiner, most growing organisations do not expand two years and then retreat for one year; rather, those that survive crises usually enjoy four to eight years of continuous growth without a major setback or severe internal disruption.

4. Stages of Revolution

Smooth evolution is not inevitable for long. In other words, organisation growth cannot be assumed linear. For example, many case histories of Fortune 500 listed companies reveal that companies had periods of substantial turbulence spaced between periods of evolution. Turbulent times leading to severe upheaval of management practices means revolution or period of revolution.

Traditional management practices appropriate for smaller size and earlier times are brought under scrutiny by frustrated top managers and disillusioned lower-level managers. Many organisations fail during such a crisis—unable to abandon past practices, they have to wind-up or compromise to lower levels of growth.

The critical task for management in each revolutionary period is to find a new set of organisation practices that will become the basis for managing the next period of evolutionary growth. Interestingly, the new practices sow their own seeds of decay and lead to another revolution.

Therefore, management sees something a solution in one time period becomes a major problem later. For example, at individual level, the same situation can be identified as a success trap, meaning success has its own trap which generates single-variable-mindedness type of thinking in individuals.

🔑 Definition — Success trap: A situation where success generates single-variable-mindedness type of thinking in individuals, meaning what was once a solution becomes a major problem later.

⭐ Key Takeaways

Greiner’s model emphasizes that an organization’s internal structure and history—not just external market forces—determine its growth trajectory, directly challenging Chandler’s strategy-structure view. Organizations experience alternating phases of evolution (4–8 years of quiet, prolonged growth) and revolution (periods of substantial turmoil), and the management’s solution to each revolutionary crisis determines whether the organization progresses to the next evolutionary stage. Five key dimensions—age, size, stages of evolution, stages of revolution, and industry growth rate—interact dynamically to shape organizational development. A critical insight is that solutions adopted in one phase sow the seeds of future crises (the success trap), meaning traditional practices that worked for smaller/younger organizations become major problems later. The model is rooted in the Resource Based View, focusing on internal resources as the source of inimitable competitive advantage.

🧠 Quick Revision Questions

1. What are the two key assumptions underlying Greiner’s model of organisational evolution and revolution?
2. How does Greiner’s view of structure vs. strategy differ from Alfred Chandler’s perspective?
3. According to Greiner, how long do most growing organizations typically enjoy continuous growth without major setbacks?
4. What is the critical task for management in each revolutionary period, and why do new practices eventually lead to another revolution?
5. What is the “success trap” and how does it relate to Greiner’s model of organisational development?

📘 Lecture 17 — Growth Rate of the Industry

📖 Overview: This lecture explains how an organization's growth is tied to its industry's market environment, with faster-growing industries experiencing more rapid phases of evolution and revolution. It introduces Greiner's five phases of growth, where each evolutionary period is defined by a dominant management style, and each revolutionary period by a crisis that must be resolved for continued growth. Understanding these phases helps managers anticipate challenges and adapt their leadership style to sustain organizational development.

🗂️ Topics Covered

The lecture begins by explaining how the growth rate of an industry influences the speed at which organizations experience phases of evolution and revolution. It then introduces Greiner's five phases of growth, noting that each phase is both an effect of the previous phase and a cause for the next. The lecture details Phase 1: Creativity, including the Leadership Crisis; Phase 2: Direction, including the Autonomy Crisis; and Phase 3: Delegation, including the Control Crisis. Each phase is described with its characteristic management style, organizational traits, and the specific revolutionary crisis that triggers the next phase.

📝 Lecture Summary

GROWTH RATE OF THE INDUSTRY

The speed at which an organization experiences phases of evolution and revolution is closely related to the market environment of its industry. Different industries (e.g., computers, automobiles, banking) have different growth rates. Evolution can be prolonged, and revolutions can be delayed. Revolution seems much more severe and difficult to resolve when the market environment is poor or declining. Marginal organizations seem to do better when the market environment is good or improving.

💡 Why this matters: The industry's growth rate directly determines how quickly a company will encounter each phase of growth and crisis, affecting strategic planning and managerial responses.

Greiner identified five phases of growth – each phase of growth is marked by evolutionary progress and a revolutionary period (or crisis). Each evolutionary period is characterized by the dominant management style used to achieve growth, while each revolutionary period is characterized by the dominant management problem. Companies in faster-growing industries tend to experience all five phases more rapidly, while those in slower-growing industries encounter only two or three phases over many years.

It is also important to note that each phase is both an effect of the previous phase and a cause for the next phase. For example, a directive management style in one phase may lead to an autonomy crisis (revolution) and eventually be followed by delegation.

The principal implication of each phase is that management actions are narrowly prescribed if growth is to occur. So an organization experiencing a crisis of autonomy cannot return to a directive management style for a solution – it must adopt a new style of delegation in order to move ahead.

PHASE 1: CREATIVITY

At the birth stage, emphasis is on creating both a product and a market. The characteristics of the period of creative evolution are:

• Founders are usually technically or entrepreneurially driven and disdain management activities.
• Communication is frequent and informal.
• Long hours of work are rewarded by modest salaries.
• Control comes from market feedback; management acts quickly as the customer reacts.
• A leadership crisis occurs as individualistic and creative activities help the organization to take off.

1. Leadership Crisis

As the company grows, it needs larger production, specialized knowledge about efficiencies of manufacturing, marketing, finance, or capital, and therefore an increased number of professional people in all functional areas. All this cannot be managed at an informal level. Formalization, proceduralism, and bureaucratization come into play for better financial and managerial control. Founders find themselves with unwanted managerial responsibilities. They still try to act in the past ways. Owners enter into conflict with managers. This issue is cited as agency theory in corporate governance and strategic management courses. At this point, a crisis of leadership occurs – the first revolution. Founders often hate to step aside even though they are probably temperamentally unsuited to be managers. The developmental choice for the founder is to choose a strong manager and step aside for perpetual growth, or select a weak manager and compromise on growth.

🔑 Definition — Agency Theory: The conflict of interest that arises between owners (principals) and managers (agents) as organizations grow and require professional management. 📌 Example: A founder who built a company through creative, hands-on work now faces conflicts with professional managers who want to introduce formal systems, budgets, and hierarchical structures. The founder must choose between hiring a strong CEO to lead growth or keeping weak managers and limiting the company's expansion.

PHASE 2: DIRECTION

Those who survive by installing strong and capable managers usually embark on a period of sustained growth under able and directive leadership. The traits of this evolutionary period are:

• Functional organizational structure – specialization and division of labour.
• Systems and sub-systems get developed – accounting for inventory and purchasing.
• Budgets and work & job standards are adopted.
• Communication becomes more formal and impersonal as a hierarchy of title and position builds.
• Lower and upper level conflict becomes obvious as the organization grows and has more layers of hierarchy.
• Lower level employees feel restricted by cumbersome procedures and a centralized hierarchy.
• Lower level managers have more direct knowledge of the market and machinery than do the leaders at the top (who govern through paperwork from the office).

2. Autonomy Crisis

Thus the second revolution is imminent as a crisis develops from the demand for greater autonomy on the part of lower-level managers. Yet it is difficult for top managers who were so successful in developing systems, being directive, and staying responsible to give up authority. Moreover, lower level managers are not accustomed to making decisions for themselves. As a result, numerous companies flounder during this revolutionary period by adhering to centralized methods while lower level managers become disenchanted and leave the organization (turnover rate increases).

🔑 Definition — Autonomy Crisis: The revolutionary period where lower-level managers demand greater decision-making freedom, creating conflict with top managers who are reluctant to delegate authority. 📌 Example: A growing company with a centralized hierarchy and formal procedures finds that its plant managers and regional sales managers, who have direct customer and market knowledge, feel stifled by top-down directives. These managers begin leaving the company, causing high turnover, because top executives refuse to grant them autonomy.

PHASE 3: DELEGATION

The next era of growth evolves from the successful application of a decentralized organizational structure, which exhibits the following characteristics:

• More responsibility is given to the managers of plants and market territories.
• Profit centres, incentives, and bonuses are used to motivate managers.
• Top executives at headquarters restrain themselves to managing by exception based on periodic reports from the field.
• Management now focuses on making new acquisitions which can be added to the corporation as decentralized units.
• Communication from the top is infrequent, usually by correspondence, telephone, or brief field visits.

Of course, now IT has made this communication fast, easier, and effective. The delegation proves useful for gaining expansion through motivation of lower level managers, by giving them authority and incentives, to penetrate larger markets, respond faster to customers, and develop newer and effective managerial practices.

3. Control Crisis

Top executives sense they are losing control over a highly diversified field of operations (owing to power-politics, upward mobility of lower level managers, fear of replacement, etc.). Autonomous managers prefer to run their own shows without coordinating plans, resources, technology, and manpower. The revolution becomes obvious when top management seeks to regain control over the total company. One solution is re-centralization, which usually fails because the company's operations have become too diverse and vast. The other solution is to evolve special coordination techniques.

🔑 Definition — Control Crisis: The revolutionary period where top management feels they are losing control over diverse, autonomous field operations, and autonomous managers resist coordination. 🔑 Definition — Managing by Exception: A management practice where top executives only intervene when performance reports show significant deviations from planned targets. 📌 Example: A company that successfully decentralized into profit centres now finds that regional managers refuse to share resources, coordinate plans, or standardize technology across units. Top management's attempt to re-centralize fails because the business is too large and complex. The solution must involve new coordination mechanisms rather than reverting to central control.

⭐ Key Takeaways

The speed at which organizations evolve and face revolutions is directly tied to their industry's growth rate, with faster-growing industries moving through all five phases more rapidly. Each of Greiner's phases consists of an evolutionary period (defined by a dominant management style) followed by a revolutionary crisis (defined by a dominant management problem). The three phases covered in this lecture are Creativity (leading to a Leadership Crisis), Direction (leading to an Autonomy Crisis), and Delegation (leading to a Control Crisis). A critical lesson is that management cannot solve a revolutionary crisis by reverting to the previous phase's management style; instead, it must adopt the next phase's approach to achieve continued growth. The key crises to remember are: the Leadership Crisis (founders must step aside for professional managers), the Autonomy Crisis (top managers must delegate to lower-level managers), and the Control Crisis (top management must develop coordination techniques rather than re-centralize).

🧠 Quick Revision Questions

1. What is the relationship between an industry's growth rate and the speed at which an organization experiences Greiner's phases?
2. Describe the characteristics of the evolutionary period in Phase 1 (Creativity). What triggers the first revolutionary crisis?
3. Explain the Autonomy Crisis. Why is it difficult for both top managers and lower-level managers to resolve?
4. What management style characterizes Phase 3 (Delegation)? What specific organizational structures and practices support this phase?
5. Why does re-centralization typically fail as a solution to the Control Crisis, and what alternative approach must management adopt?

📘 Lecture 18 — Phase 4: Coordination

📖 Overview: This lecture continues the exploration of Greiner's model of organizational growth, detailing Phase 4 (Coordination) and Phase 5 (Collaboration). It explains how organizations use formal systems to achieve greater coordination, the resulting "Red Tape Crisis," and how collaboration through teams and interpersonal skills can overcome this crisis. This matters because it maps the predictable patterns of organizational evolution and revolution that managers must navigate for sustainable growth.

🗂️ Topics Covered

The lecture covers Phase 4 (Coordination), characterized by formal systems, product-group mergers, and staff managers; the "Red Tape Crisis," where procedures overshadow problem-solving and differentiation exceeds integration; Phase 5 (Collaboration), which emphasizes spontaneity, team-based action, and social control; the crisis of this phase for mature multinationals; and the perpetual cycle of evolution and revolution.

📝 Lecture Summary

PHASE 4: COORDINATION

This evolutionary phase is characterized by the use of formal systems for achieving greater coordination, with top executives taking responsibility for initiating and administering new systems. For example, decentralized units are merged into product groups, formal planning procedures are established and intensely reviewed. Other features include: numerous staff managers hired at headquarters (HQ) to initiate company-wide programs of control and review for line managers; capital expenditure decisions are carefully made; each product group is treated as an investment centre where return on investment (ROI) is an important criterion for funds allocation; stock options and profit-sharing schemes are used to encourage identity with the firm as a whole. HQ-subsidiary dynamics (HQ-branch relationship) come to play as a factor in organization growth or performance.

🔑 Definition — Staff Managers: Managers hired at headquarters to initiate company-wide programs of control and review for line managers. 📐 Formula: ROI (Return on Investment) = (Net Profit / Investment Cost) × 100 → Used to evaluate the profitability of an investment centre. 📌 Example: A product group is treated as an investment centre; if it generates a net profit of $200,000 on an investment of $1,000,000, the ROI is 20%, influencing funds allocation decisions.

💡 Why this matters: Coordination phase systems can become rigid, leading to the next crisis.

4. Red Tape Crisis

The Red Tape Crisis arises from a lack of confidence and trust between line and staff, and between HQ and field. Systems, programs, and procedures go beyond their utility and become ends in themselves. Line managers resent heavy direction by staffs who are unaware of local conditions. Staffs, on the other hand, complain about uncooperative and uninformed line managers. Therefore, procedure takes precedence over problem solving, and innovation is dampened.

Lawrence & Lorsch highlighted this in their study as the problem of differentiation and integration. As organizations become large, vertical and horizontal differentiation becomes pronounced. The problem at this stage is: the higher the differentiation, the higher will be the need for integration.

🔑 Definition — Differentiation and Integration: Differentiation is the division of an organization into specialized units (vertical and horizontal). Integration is the coordination required to unite these units. The crisis occurs when differentiation outpaces the organization's capacity for integration.

PHASE 5: COLLABORATION

To overcome the crisis of red tape, strong interpersonal collaboration is suggested in this phase. The difference between Phase 4 (Coordination) and Phase 5 (Collaboration) is that the Coordination phase was managed more through formal systems and institutional procedures, while Phase 5 (Collaboration) emphasizes greater spontaneity in managerial actions through teams and the skilful confrontation of interpersonal differences.

Social control and self-discipline take over from formal control. This transition is very difficult for those who create and believe in formal methods of report and answers. This phase evolution builds a more flexible and behavioural approach to management. Features include: focus on problem-solving quickly through team-thinking and team-actions; teams are combined across functions; HQ staff experts are reduced in numbers and combined in cross-functional teams to consult (not to direct) field units; formal systems and procedures are simplified to focus on tasks; conferences of key managers are held on major organizational issues; reliance on educational and training programs for conflict-resolution and better teamwork; real-time information systems are integrated into daily decision-making; rewards are geared more towards team performance than individual achievement; experiments with new practices are tolerated and encouraged.

🔑 Definition — Social Control and Self-Discipline: A form of control where employees regulate their own behavior based on shared values, norms, and team expectations, replacing external, formal controls.

The Crisis

What will be the revolution in this stage of evolution? Many large and mature multinationals (MNCs) are in this phase. Whatever the answer is, the sole focus is that each evolutionary period culminates into a revolutionary period, which is short, spasmodic, and transformative for the existing managerial system, and the processes are never-ending and perpetual.

⭐ Key Takeaways

The critical concepts from this lecture are: (1) Phase 4 (Coordination) relies on formal systems, staff managers, and investment centres with ROI criteria, but it inevitably leads to the "Red Tape Crisis" where procedures stifle innovation. (2) The Red Tape Crisis is rooted in the problem of differentiation and integration—as organizations become more specialized, the need for effective coordination increases. (3) Phase 5 (Collaboration) overcomes this crisis by shifting from formal control to social control and self-discipline, emphasizing team-based problem-solving and cross-functional collaboration. (4) The transition from formal to behavioral management is difficult but essential for continued growth. (5) The cycle of evolution (gradual growth) followed by revolution (transformative crisis) is perpetual, and each phase contains the seeds of its own crisis.

🧠 Quick Revision Questions

1. What are the key features of Phase 4 (Coordination), and what crisis does it typically lead to?
2. Explain the problem of "differentiation and integration" as identified by Lawrence & Lorsch in the context of the Red Tape Crisis.
3. What is the fundamental difference between Phase 4 (Coordination) and Phase 5 (Collaboration) in how they manage organizational activities?
4. What replaces formal control in Phase 5 (Collaboration), and what makes this transition difficult?
5. What is the ultimate message of Greiner's model regarding the relationship between evolutionary and revolutionary periods in organizations?

📘 Lecture 19 — Organisation Ecology

📖 Overview: This lecture introduces the population ecology school of thought in change management, which argues that environmental selection rather than internal adaptation primarily determines organizational survival. It explores the critical role of structural inertia in constraining organizational change and examines the debate between adaptation and selection perspectives in organization theory.

🗂️ Topics Covered

The lecture covers the population ecology model of change management, focusing on three central issues: the role of structural inertia in constraining adaptation, the classification of organizational species, and the salience of the environment in determining organizational survival. It examines internal structural arrangements and external factors that generate inertial pressures, including sunk costs, communication barriers, internal politics, institutional norms, government and industry barriers, bounded rationality, and social legitimacy. The lecture also discusses the paradox of population ecology research methodology and the relationship between organizational size and structural inertia.

📝 Lecture Summary

Leading Proponents and Core Concepts

Leading proponents of the organization ecology school of thought are Glenn and Carroll, and Hannan and Freeman. In this theory, the population of organizations is taken as a unit of analysis rather than a single organization. The dominant theme of population ecology is that the effects of an organization's environment are critical in the organization's survival and performance, believing that forces internal to the organization are less important. Principally, population ecologists think that organizations do not change and adapt; they consider that each time a new organization is born after a significant level of change. Pfeffer and Salancik published their work as "The external control of organizations," leading to the analogy of natural selection processes as determining some aspects of organization. Miller and Mintzberg referred to "the survival of organizational forms as being encouraged by Darwinian forces" (e.g., Weberian organization dominance of functional structure).

Three issues are considered central in the population ecology model of change management:

1. Role of structural inertia in constraining adaptation
2. The classification of organizational species
3. The salience of the environment in determining organizational survival

1. Structural Inertia

Population ecology models of organization-environment relationship are considered alternative to the dominant adaptation perspective. Though there are a variety of ecological perspectives, they all focus on the selection phenomenon. The attribute patterns in nature are attributed to the action processes. Astley and Van de Ven highlighted this adaptation versus selection as a central debate in organization theory (OT). Selection of new or changed organization forms occurs as a result of environmental constraints, and inertia is referred to as an explanation for the lack of adaptive change. Therefore, structural inertia limits the ability of an organization to change. Hanna and Freeman identified a number of processes that generate inertial pressures both from internal structural arrangements and from environmental constraints.

A. Internal Structural Arrangements

One of the biggest inhibiting factors for organizational change is sunk cost. Sunk cost of the firm, which means broadly any amount of time, money, and efforts (plant & equipment or cost of R&D and trained personnel), develops a restraining force within an entity to freely look for alternative options. Structural arrangements refer to the rules and resources which an organization deploys manifesting its commitment levels. A communication structure in an organization like barriers and misperception amongst various players at vertical and horizontal levels also facilitates inertial process. Internal politics for vested interests amongst organizational members acts as a restraining force. The existing institutional norms — rules and regulations — remain status quo oriented to inhibit organizational change.

🔑 Definition — Sunk Cost: Any amount of time, money, and efforts (such as plant & equipment or cost of R&D and trained personnel) that develops a restraining force within an entity to freely look for alternative options.

B. External Factors

Not only internal factors inhibit change, but at times external factors like government and industry create barriers in smooth and consistent change management process. For instance, there may be a very high cost associated with a firm's decision to enter or exit any particular industry or market. Bounded rationality, a concept given by Herbert Simon, means managers are rationalizing not rational, meaning thereby that decisions on the part of managers are always bounded by constraints like time, space, cost, and information. Therefore, the choice of decision makers to go for alternative options is extremely limited. Another relevant concept is of social legitimacy, which imposes restriction in the decision outcome for change or status quo. Managers will go for such decisions which are considered legitimate and acceptable by society or by the members of the organization socially. Most of the time, society is slow to recognize and accept change, and more often it is conservative to accept change. So what happens practically is that organizations try to initiate change but then do not intend to go for complete transformation. Miller and Freisen identified this kind of response to environmental changes as sluggish adaptation. Miller also used the term adaptive rigidities caused by the avoidance of uncertainties, and the fragmentation of the political coalition and its goals cushion organizations from the need for adaptation. All these issues of structural inertia (and in a way with organization adaptation phenomenon as well) explain the relative superiority of natural selection process over adaptation in the survival of organization.

🔑 Definition — Bounded Rationality: A concept given by Herbert Simon meaning managers are rationalizing not rational, meaning decisions are always bounded by constraints like time, space, cost, and information. 🔑 Definition — Social Legitimacy: A restriction in the decision outcome for change or status quo where managers will go for decisions considered legitimate and acceptable by society or by organizational members socially. 🔑 Definition — Adaptive Rigidities: A term used by Miller caused by the avoidance of uncertainties, and the fragmentation of the political coalition and its goals that cushion organizations from the need for adaptation.

Environmental Selection and Its Implications

Therefore, population ecologists believe that environmental selection replaces adaptation as the vehicle of change. Hannan and Freeman formulated a theory well supported by empirical evidence that "stronger the inertial pressures, lower the adaptive flexibility and the more likely that the logic of environmental selection is appropriate." Hence the proposition is that the survival of organizations is determined by environmental variations.

💡 Why this matters: This perspective directly challenges the traditional view of management's role in organizational success. If environmental selection is dominant, then management practices, governance, and organizational structure have significantly less impact on survival than previously thought.

By implications, we see population ecologists maintain a lesser role for management, wise governance, organization structure, and benchmarked managerial practices. There is a paradox in this thinking. The paradox with population ecology is that methodologically, the study deals with small organizations with simple organization structures which were free from issues of sunk cost and politics (non-chain small restaurant in 18 cities of California State). External constraints were not strong either. The paradox is that inertia is, somewhat, largely a phenomenon associated with the complex department structures of large organizations.

To Astley and van de Ven, "Natural selection model fits small, powerless organizations operating in environment with dispersed resources better than large well connected organizations operating in environment with concentrated resources." For Aldrich, the structural inertia depends on the size of organizations. The larger an organization, the greater the structural inertia and the more control the organization can exercise over the environment (in real life, large organizations seem quite powerful to shape or influence environment). Another scholar empirically says "the few organizations that survive infancy owe their above average longevity to wise governance."

📌 Example: The population ecology study focused on non-chain small restaurants in 18 cities of California State — organizations with simple structures, free from issues of sunk cost and politics, with weak external constraints.

⭐ Key Takeaways

The population ecology perspective fundamentally challenges adaptation-based change management by arguing that environmental selection, not managerial adaptation, primarily determines organizational survival. Structural inertia, generated by both internal factors (sunk costs, communication barriers, internal politics, institutional norms) and external factors (government barriers, bounded rationality, social legitimacy), severely constrains an organization's ability to change. However, a critical paradox exists: population ecology research was conducted on small, simple organizations that lack the complex inertia of large organizations, yet the theory's conclusions are often applied broadly. The structural inertia actually depends on organizational size — larger organizations exhibit greater inertia but also possess more power to shape their environment. The central debate remains whether natural selection or strategic adaptation better explains organizational survival and change.

🧠 Quick Revision Questions

1. What are the three central issues in the population ecology model of change management?
2. Explain how sunk costs and internal politics create structural inertia in organizations.
3. Define bounded rationality and explain how it limits managers' decision-making options for change.
4. What is the paradox of population ecology research regarding organizational size and structural inertia?
5. According to population ecologists, why does environmental selection replace adaptation as the vehicle of organizational change?

📘 Lecture 20 — Classification of Organizational Species

📖 Overview: This lecture explores the population ecology perspective on organizations, drawing analogies from biology to understand how organizational forms emerge, survive, or die. It examines how environments differentially affect various organizational species, the relationship between adaptation and selection, and the determinants of organizational founding and mortality rates.

🗂️ Topics Covered

The lecture covers classification of organizational species by examining what characterizes an organizational form (specie) through formal structure, activity patterns, and normative order. It explores the extent of environmental selection, emphasizing that environments are subjectively perceived by different organizations. The relationship between adaptation and selection is discussed, along with determinants of vital rates including competition, institutional constraints, government roles, and social embeddedness.

📝 Lecture Summary

Classification of Organizational Species

Like biology, organizational ecology emphasizes population within a species as the unit of analysis. The key question is what characterizes an organizational form (specie). Hannan and Freeman state, "An organization form is a blue print for organizational action, for transforming inputs into outputs." This blueprint can be inferred by examining:

• Formal structure — written rules of operations
• Pattern of activity — what actually gets done by whom
• Normative order — ways of organizing defined as right and proper by members and relevant environmental sectors

Ulrich defines form as a "legally defined entity" with a population of firms consisting of similar competencies, structures, and strategies. Organization form can also be determined according to criteria such as technology, industry grouping, and product.

🔑 Definition — Organizational form (specie): A blueprint for organizational action that transforms inputs into outputs, inferred through formal structure, activity patterns, and normative order.

Extent of Environmental Selection

The population ecology model stresses that the environment determines the distribution and form of organizations through selection. The environment in a biological sense is not an objective phenomenon. Biologists refer to the environmental niche — the environment perceived by an ANT is clearly different from that perceived by an ELEPHANT. Minor changes may spell the demise of a population of ANTS but go unnoticed by an ELEPHANT.

Similarly, the environmental niches inhabited by SMALL and LARGE organizations are subjectively different. Different species (organizations) perceive and experience the environment differently. Environments are multidimensional and complex, not similar for all types of organizations. While the ecological approach suggests focusing on common fate with respect to environmental variation, the reality is that environment differs for different organizations.

💡 Why this matters: This subjective perception of environment means a change that devastates small businesses may barely affect large corporations, and vice versa — managers must understand their organization's specific niche.

The key question is: What is the effect of changes in environment on the mortality of population? Individual organization mortality may occur from accident, incompetence, or rational choice. Distinction should be made when owners arbitrarily decide to close down for personal or economic reasons. Owners also set the tone for level of growth and profitability.

Another scholar discussed vital rates of founding and mortality (entries and exit) and the process of founding and mortality. The thrust of organizational ecology should investigate how social environment shapes:

• Rates of creation and death of organizational forms
• Rates of organizational founding and mortality
• Rates of change in organization forms

What is more important for further research is the relationship between adaptation and selection, and determinants of vital rates.

🔑 Definition — Environmental niche: The specific environment as perceived and experienced by a particular organizational species, which differs subjectively between small and large organizations.

🔑 Definition — Vital rates: The rates of founding (entry) and mortality (exit) of organizations within a population.

Relationship between Adaptation and Selection

An empirical study by Carroll found that the timing of executive succession was an important factor in organizational survival. In a biological sense, adaptability is an individual behavioral phenomenon. Penning stressed the role of adaptation: "Organization will maneuver themselves in their environment, so as to acquire optimum external control and will shift their disposition whenever environmental conditions dictate."

To Penning, the entrepreneur is a "volitional individual" who enters an environment and makes strategic choices that ensure the best transactions with the environment.

Determinants of Vital Rates

Vital rates means death rates and founding rates of an organization. This leads to the study of both large organizations and entrepreneurship and small businesses. Possible determinants of organizational death and inception include:

• Role of competition
• Institutional constraints
• Role of government (e.g., subsidy, tax exemption given by US government to Chrysler automobiles thrice in its history)
• Type of product or industry becoming obsolete

What causes death of an organization? The immediate factor could be attributed to consistent sales decline or poor financial performance as the most obvious indicator. However, going deeper reveals these indicators as symptoms, not problems.

Consider organizations that are socially embedded and inter-linked through alliances and networks. Examples include:

• Keiretsu in Japan
• Chaebol in Korea
• Big family-based conglomerates in countries like Pakistan

In these contexts, social identities and ties are more important than technically or transaction-driven relationships. When social ties (death of a network) cease to be effective, it hastens the death of an organization. Similarly, if a central or lynchpin organization is forcibly closed, reorganized, or dissolved, constituent organizations will face a drift.

The big issue in ecology school is: Are diversified organizations (un-related diversification) or huge conglomerates that dominate international business equally affected by environment or laws of natural selection?

🔑 Definition — Social embeddedness: The inter-linking of organizations through social ties, alliances, and networks where social identities matter more than purely technical or transactional relationships.

⭐ Key Takeaways

This lecture establishes that organizations can be classified as species based on their formal structure, activity patterns, and normative order. The environment is subjectively perceived — small and large organizations inhabit different environmental niches and are affected differently by environmental changes. The population ecology approach focuses on vital rates (founding and mortality) and how social environment shapes these rates. The relationship between adaptation (strategic choice by entrepreneurs) and selection (environmental forces) remains a critical area for research. Social embeddedness through networks and alliances can significantly influence organizational survival, with the death of key network organizations hastening the demise of connected organizations.

🧠 Quick Revision Questions

1. According to Hannan and Freeman, what three elements can reveal an organization's "blueprint" (form)?
2. How does the concept of "environmental niche" explain why small and large organizations perceive environmental changes differently?
3. What are the three dimensions of organization that social environment shapes according to the population ecology model?
4. Name at least four determinants of organizational death and inception discussed in the lecture.
5. Why might indicators like sales decline or poor financial performance be symptoms rather than root causes of organizational death, particularly in socially embedded business contexts like Keiretsu or Chaebol?

📘 Lecture 21 — Footnotes to Organisational Change

📖 Overview: This lecture explores James March's influential "footnotes to organizational change," which emphasize the prosaic, routine nature of most organizational change rather than dramatic transformations. It explains why change is both continual and difficult to control, and introduces six basic perspectives for interpreting organizational action as routine adaptive systems.

🗂️ Topics Covered

This lecture presents James March's five footnotes on organizational change, which highlight the relationship between change and adaptive behavior and the prosaic nature of change. It then discusses stable processes of change, explaining that organizations are remarkably adaptive rather than rigid, and that most change results from routine processes. The lecture concludes by introducing six basic perspectives for interpreting organizational action: rule following, problem solving, learning, conflict, contagion, and regeneration.

📝 Lecture Summary

Foot Notes to Organisational Change

The leading management scholar James March's study dealt with the leading attribute of organizational change. He suggested five footnotes on organization change as they emphasize the relation between change and adaptive behavior which highlights the prosaic nature of change.

Footnote 1: Organizations are continually changing, routinely, easily and responsively, but change within them cannot be controlled arbitrarily. Organizations rarely do exactly what they are told to do.

Footnote 2: Changes in organizations depend on a few stable processes. Theories of change emphasize either the stability of the processes or the changes they produce, but serious understandings of organizations require attention to both.

Footnote 3: Different theories of change are in fact different ways to depict different theories of action. Most changes in organization reflect simple responses to demographic, economic, social and political forces. What we identify as PEST analyses are connected with different parts of environment.

Footnote 4: Although organizational response to environmental events is broadly adaptive and mostly routine-based, the response takes place in a confusing world. As a result, prosaic (characterless) processes sometimes have surprising outcomes.

Footnote 5: Adaptation to changing environment involves an interplay of rationality and foolishness. Organization foolishness is not maintained as conscious strategy, but embedded in such organizational anomalies as slack, managerial incentives, symbolic action, ambiguity and loose coupling.

Stable Processes of Change

One view is that change fails not because organizations are rigid and inflexible but they are impressively imaginative. According to Aldrich, in most organizations failure occurs early in life when organizations are small and flexible, not later. There is considerable level of stability in organization and organizations are remarkably adaptive as enduring institutions, respond to volatile environments easily, though not optimally.

💡 Why this matters: We are inclined to look for the most dramatic explanations for change, which is our common mistake. Most changes in organizations result neither from organizational processes or forces, nor from uncommon imagination but from relatively stable, routine processes that relate organization to their environments. Many of the most stable procedures in an organization are procedures for responding to economic, social and political contexts. The routine processes of organizational adaptation are little complex, and a theory of change must take into account how these processes can produce unusual patterns of action. Therefore, theory of organization change should not be different from a theory of ordinary action.

Research on organization as routine adaptive systems emphasizes six (06) basic perspectives for interpreting organization action:

1. Rule Following

Application of standard operating procedures (SOPs), duties, obligation, roles, rules, and criteria evolve through competition and survival, and those followed by organizations that survive, grow and multiply come to dominate the pool of procedures.

🔑 Definition — Rule Following: The perspective that organizational action stems from the application of standard operating procedures, duties, roles, and rules that have evolved through competition and survival.

2. Problem Solving

Action can be seen as problem solving. The underlying process involves choosing among alternatives by using some decision rule that compares alternatives in terms of their expected consequences. It is the rational actor model which prevails in organizations. Managers make rational choice under certain conditions of risk and cost-benefit analyses.

🔑 Definition — Problem Solving: The rational actor model where organizational action involves choosing among alternatives by comparing their expected consequences using decision rules, risk assessment, and cost-benefit analysis.

3. Learning

Action can be seen as stemming from past learning. The underlying process is one in which an organization is conditioned through trial and error to repeat behaviour that has been successful in the past, and to avoid that has been unsuccessful. Learning is what can be identified as experiential in nature.

🔑 Definition — Learning: The perspective that organizational action results from past experiential learning, where organizations repeat successful behaviors and avoid unsuccessful ones through trial and error.

4. Conflict

Action can be seen as resulting from conflicting among individuals or groups representing diverse interests. The underlying process is one of confrontation, bargaining and coalition, in which outcomes depend on the initial preferences of actors weighted by their power. Edgar Schein talked of negotiated order to exist in context of organization. Changes result from shifts in the mobilization or in the resources managers' control. This change is again a negotiated one by different members of organization who want to adjust policies as per their understanding view and influence in organization. This model is the one based on politics. Members of organization interact in a political manner and change results in a politically negotiated settlement amongst them. Another view relates to the pecking order in organization – explains the existence of hierarchical or top down order in organizations.

🔑 Definition — Conflict: The political perspective where organizational action results from confrontation, bargaining, and coalition among individuals or groups with diverse interests, with outcomes depending on preferences weighted by power, leading to a negotiated order.

5. Contagion

Action can be seen as spreading from one organization to another. The underlying process is one in which variations in contact among organizations and in the attractiveness of the behaviour or beliefs being imitated affect the rate and pattern of spread.

🔑 Definition — Contagion: The perspective that organizational action spreads from one organization to another through imitation, influenced by contact among organizations and the attractiveness of the behavior or beliefs being imitated.

6. Regeneration

Action can be seen as resulting from the intentions and competencies of organization actors. Turnover in organization introduces new members with different attitudes, abilities and goals. This resembles organization life cycle approach and is quite like birth, growth, maturity and decline.

🔑 Definition — Regeneration: The perspective that organizational action results from the intentions and competencies of actors, with turnover introducing new members who bring different attitudes, abilities and goals, resembling an organizational life cycle of birth, growth, maturity, and decline.

An organization uses rules, problem-solving, learning, conflict, contagion, and regeneration to cope with its environment and actively adapt to it. The processes are conservative — that is, they tend to maintain stable relations, sustain existing rules, and reduce differences among organizations. The above six processes are neither esoteric (mysterious), complicated nor mutually exclusive.

⭐ Key Takeaways

The most critical takeaway from this lecture is that organizational change is fundamentally prosaic and routine-based, not dramatic or revolutionary — organizations change continually and easily but cannot be controlled arbitrarily. Students must remember James March's five footnotes, especially that change depends on stable processes and that routine procedures for responding to the environment are the real drivers of change. The six perspectives for interpreting organizational action (rule following, problem solving, learning, conflict, contagion, and regeneration) are neither esoteric nor mutually exclusive, but represent different ways organizations routinely adapt. A key insight is that our common mistake is looking for dramatic explanations when most change results from ordinary, stable processes. Finally, adaptation involves both rationality and foolishness, where organizational anomalies like slack, ambiguity, and loose coupling play important roles.

🧠 Quick Revision Questions

1. According to James March, what is the "prosaic nature" of organizational change, and why is it important to understand this?

2. What does March mean when he says "organizations rarely do exactly what they are told to do" in Footnote 1?

3. How does Aldrich's view about organizational failure (occurring early in life when organizations are small and flexible) challenge common assumptions about change?

4. Explain how the "Conflict" perspective differs from the "Problem Solving" perspective in interpreting organizational action. What does Edgar Schein's concept of "negotiated order" add?

5. What does March mean by "organization foolishness" in Footnote 5, and how do slack, managerial incentives, symbolic action, ambiguity, and loose coupling contribute to adaptation?

📘 Lecture 22 — SOME COMPLEXITIES OF CHANGE

📖 Overview: This lecture explores the inherent complexities that make organizational change difficult in real-life settings. It moves beyond simple change models to examine five key phenomena that create unanticipated outcomes and complications in change processes, helping students understand why change often fails or produces unexpected results.

🗂️ Topics Covered

The lecture examines five major complexities of organizational change: unanticipated consequences of ordinary action including competency multiplier effects and superstitious learning; solution-driven problems where organizations seek solutions before fully understanding problems; the tendency for both innovations and organizations to be transformed during the innovation process; the endogenous nature of created environment where organizations influence their own environment; and the interaction among system requirements of individuals, organizations, and environments.

📝 Lecture Summary

SOME COMPLEXITIES OF CHANGE

The lecture presents six factors that are closer to real-life organizational dynamics and demonstrate the complexities of routines. The interaction amongst these five phenomena makes change complex:

1. Unanticipated Consequences of Ordinary Action
2. Solution Driven Problems
3. The Tendency for Innovation - And Organizations to Be Transformed During the Process of Innovation
4. The Endogenous Nature of Created Environment
5. The Interaction amongst System Requirements of Individuals, Organizations and Environments

1. Unanticipated Consequences of Ordinary Action

First, the rate of adaptation may be inconsistent with the rate of change of environment. Unless an environment is perfectly stable, an organization cannot learn appropriately. This means organizations always lag behind environment. Where an environment changes quickly relative to the rate of organization adaptation, the process of adaptation can easily lose its sense to be sensible and relevant. At times organizations anticipate ahead of time. An example is a sugar firm in Pakistan that launched a product as liquid sugar — the idea seemed too fine and advanced but failed miserably given the cultural context of Pakistani society. Similarly, some products that are technologically too advanced are also liable to fail because they are ahead of time.

Therefore, it is possible for an anticipatory process (problem-solving) to result in changes that outrun the environment and thereby become unintelligent. Second, the causal structure (cause and effect as seems obvious to us externally) may be different from that implicit in the process. While changing through following and imitating, we tend to focus external effects and ignore causal links which are benign or hidden. Since we have an incomplete picture or false model of causality, eventually change can result in unanticipated outcomes. Third, concurrent or parallel processes (changes at times stay parallel) that appear to carry sense may combine to produce joint outcomes that are not intended by any one, and counter the interests motivating the individual action. For example, the retention of a manual system besides going for the automated (new) one.

Examples – Competency Multiplier

Organizations have procedures to involve relevant people in processes such as decision-making, planning, budgeting or the like. Individuals vary in their knowledge, skills and interests about a problem. Initial participation rates vary and participating individuals turn out to be slightly more competent than others. This induces them to become even more competent. Before long, the de facto composition of the group can change dramatically (than initially conceived). More generally, organizations learn from experience, repeating actions that are successful. As a result they gain greater experience in areas of success than in areas of failures. The sensibleness of such specialization depends on the learning rate and rate of change in environment. The process can easily lead to misplaced specialization if there are infrequent, major shifts in the environment (increased specialization leads to increased dependence and hence organization is vulnerable to change).

Another example of unexpected outcome from organizational routines is related with satisficing behavior of individuals and organizations. According to March and Simon, organizations seek alternatives that will satisfy target goals rather than look for the alternative with the highest possible value. Satisficing organizations can be viewed as organizations that try to maximize the probability of achieving targets. But it is not necessary to assume that satisficing organizations will follow decision rules that are risk-avoiding in good times and risk-seeking in bad times. For example, organizations facing bad times will follow riskier means and riskier strategies, thus simultaneously increasing the chances of their survival through the present crisis and reducing their life expectancy simultaneously.

As a result, organization efforts to survive in fact speed up the process of failure. Risk-seeking behavior transformation needs some qualification, experience and mindset to manage risk which was never cultivated earlier in organizations. Second, most of the time organizations exhibit risk-avoiding behavior by their very nature. Because if organization goals vary with organization performance and performance of comparable organizations, then most organizations will be termed reasonably good most of the time.

Another example identified is of performance criteria. An organization measures the performance of its participants. Common criteria for business firms are to reward their managers on the basis of calculation of profits earned by different parts of the organization. The performance-reward linkage is to be made precise and visible for organizational control purposes as well. However this practice may lead to ignoring long-term consequences for organization since it is more efficient in short term because efforts are devoted to accounts rather than to performance. This may lead the participants to manipulation and maneuvering in organization.

Superstitious Learning

Organizations learn from their experience, repeating actions associated with good outcomes and avoiding actions associated with bad outcomes (learning by association phenomenon or conditioning). This is successful in a stable world. But the world is not so simple and stable all the time — experiential learning can result in superstitious learning. An example reported is of pilots. The trainers reward pilots who make good landings and punish pilots who make bad ones. They observe that pilots who are punished generally improve on subsequent landings, while pilots who are praised generally do worse. Thus they learn that negative reinforcement works better than positive one. The learning is natural but the experience is a confounded one. Students who perform better in preliminary examinations and get rewarded well will tend to perform mediocre in subsequent examinations as against those who perform average in preliminary examinations and improve more in subsequent examinations. These examples illustrate the variation in behavior generated by adaptive processes in typical organization conditions which can lead to surprising outcomes.

2. Solution Driven Problems

Good examples for solution driven problems exist in our society. For instance, go to a doctor and you will find a long, comprehensive multi-dimensional prescription at hand. The solution is already with him without even listening appropriately to his patient. If you go to a computer technologist for problem solving with software or system, the solution presented will be to reconfigure the whole system/window. In office meetings, bosses or heads of departments or organizations frequently come up with statements starting with "you all". All such scenarios refer to the tendency to have a generalized solution in advance.

According to Cyert and March, "There is ample evidence that when organization performance fails to meet objectives, it searches for new solutions, that is new ways of doing things — changes often seem to be driven less by problems than by solutions." Why is this so? Because organizations face a large number of problems of about equal importance, but only a few solutions. Thus the chance of a solution to a particular or unique problem is small. Consequently organizations scan for solutions rather than problems, and match any solution found with some relevant problem.

Second reason is that the linkage between individual solutions and individual problems is often difficult to make unambiguously, especially when causality and technology are ambiguous. Therefore what we observe will be predicted by knowledge of solutions than by knowledge of problems. Imperatively, professionals change their procedures and introduce new technologies because they have knowledge of it. An organization that is modern adopts new things because that is what being modern means. When a major stimulus for change comes from a sense of competence, problems are created in order to solve them, and solutions and opportunities stimulate awareness of previously un-salient or unnoticed problems or preferences.

3. The Tendency for Innovation - And Organisations to Be Transformed During the Process of Innovation

It is observed that both innovations and organizations tend to be transformed during the process of innovation. Different and multiple meanings exist for the intended change in the organization, and hence the standardization of meanings of change is a problem owing to inappropriate strategy or poor analysis. It is also a common problem that change policy or program gets started with some intent and eventually ends up with something else because of the fundamental ways in which changes are transformed by the process of change. Organizations also get transformed in the process. Organizations develop and redefine goals while adapting to environmental pressure; minor changes can lead to larger ones, and initial intent can be entirely lost.

4. The Endogenous Nature of Created Environment

A general assumption is that organizations take action due to environmental pressure, and that environment is not influenced by organizational actions. But organizations create environment as well, and the resulting complications are significant. For example, action of one competitor becomes an environment of another, therefore each competitor determines its own environment. For example, an executive of a leading shoe firm revealed why their firm does not charge higher prices despite producing a quality product of international standards — because this will become an industry standard and other competitors will follow without delivering the same quality. This type of behavior is in line with corporate social responsibility.

Hence adaptation is not learning about a fixed environment but is to deal with continuously changing conditions. Therefore organizations are quite capable of influencing and creating their own environment by the way they interpret and act in a confusing world. So what happens practically is that small signals out of routine or adaptive processes get echoed back to organization (through environment) in an amplified manner, and hence may result in changing organization simultaneously and endogenously.

💡 Why this matters: This concept challenges the traditional view that organizations merely react to environmental changes. Instead, organizations actively shape their environments through their actions and interpretations, creating a dynamic feedback loop.

5. The Interaction amongst System Requirements of Individuals, Organizations and Environments

Though this is oversimplification, nonetheless, it is possible to see an organization as an intermeshing of three systems: individuals, collection of individuals (which is organization), and environment (which is collection of organizations). Conflicts might exist in the demands of these three. While classical literature focuses on making individual and organization demands compatible, in the analysis of organization change it seems that individuals in organization and organizations themselves have different requirements in the collection of organizations (which is environment). The question is how to place all three in equilibrium. Finally, organization is a complex combination of activities, purposes and meanings.

Even impressive integration of formal organization should not, however, obscure the many ways in which organization is loosely coupled. Behavior is loosely coupled with intentions, and intentions are loosely coupled with actions; actions in one part of the organization are loosely coupled with actions in another part; actions of today are loosely coupled with actions of tomorrow. Such loose coupling does not appear to be avoidable. These do not relate to theory but pertain to adaptive process of change.

🔑 Definition — Satisficing: Organizations seek alternatives that will satisfy target goals rather than look for the alternative with the highest possible value. (March and Simon) 🔑 Definition — Superstitious Learning: When experiential learning leads to incorrect cause-effect conclusions because the environment is not stable and simple, causing organizations to repeat actions that coincidentally followed good outcomes. 🔑 Definition — Solution Driven Problems: The tendency for organizations to search for solutions first and then match them with problems, rather than analyzing problems to find appropriate solutions. 🔑 Definition — Loose Coupling: The phenomenon where organizational elements (behavior with intentions, intentions with actions, actions in different parts, current actions with future actions) are not tightly connected.

⭐ Key Takeaways

The rate of organization adaptation is often inconsistent with the rate of environmental change, causing organizations to either lag behind or outrun their environments. Ordinary organizational routines — including competency development, satisficing behavior, performance measurement, and experiential learning — can produce unanticipated consequences, including superstitious learning where incorrect cause-effect conclusions are drawn. Organizations frequently exhibit solution-driven problem solving where generalized solutions are matched to problems rather than problems being thoroughly analyzed first. Both innovations and organizations are transformed during the change process, with initial intent often being lost. Organizations actively create their own environments through their actions, creating feedback loops, and the three systems of individual, organization, and environment have conflicting requirements that are loosely coupled rather than perfectly integrated.

🧠 Quick Revision Questions

1. What are the five phenomena that make organizational change complex according to this lecture?
2. What is the "competency multiplier" effect and how can it lead to misplaced specialization in organizations?
3. Explain superstitious learning using the pilots' landing example — why is the learning considered "superstitious"?
4. According to Cyert and March, why are organizational changes often driven more by solutions than by problems?
5. What does "endogenous nature of created environment" mean, and how does the shoe firm example illustrate this concept?