| Local Rule Theory: An Ecological Model of Organizational Stability and Change. |
| | Haslett, Tim | Monash U. | Tim.Haslett@BusEco.monash.edu.au | (613) 9903 2998 |
| | Osborne, Charles | Monash U. | Charles.Osborne@Sci.monash.edu.au | (613) 9905 3690 |
| | Theories of organizational change processes must necessarily be predicated on theories of organizational stability. This paper develops local rule theory which suggests that patterns of behaviour, generated at an individual or group level, are a major determinant of organizational stability. Local rule theory further suggests that human behaviour should be viewed from an ecological perspective where two key determinants of behaviour are competition and co-evolution. The central metaphor in this context is a fitness landscape where adaptive behaviours create peaks, which constitute increasing optimization of payoffs, for individuals and groups. Such adaptive behaviours are responses to the immediate and local demands of the environment. In this respect, local rule theory suggests that locally determined behaviour may be a significant determinant of organizational performance and stability. The organizing principle in the development of local rules is a bottom-up process of emergence where successful local rules will spread to wide localities and where the interaction between sets of local rules remains stable over time. Evidence from two organizations is cited in support of local rule theory. The first uses a catastrophe model to demonstrate the nonlinearities underlying stable patterns of behaviour arising from local rules and the second uses a System Dynamics computer simulation to demonstrate the effects that a set of local rules has on organizational performance. The paper concludes with some suggestions of the dynamic nature of the interaction between domains of local rules based an ecological model.
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| | Keywords: Local rules; adaptative behaviours; nonlinear change |
| Organizational Portfolio Theory: Performance-Driven Organizational Change |
| | Donaldson, Lex | The University of New South Wales | lexd@agsm.edu.au | 61-(2)-9931-9352 |
| | Existing theory and research suggest that organizations needing to make an adaptive change often fail to do so until they
experience a crisis of low performance. The present paper seeks to build on this insight by constructing a formal theory
of organizational performance as a cause of organizational change. The focus is upon understanding the way in which
fluctuations in organizational performance, due to various factors, cause, or prevent, organizational change.
The theoretical analysis is pursued by borrowing concepts from financial economics such as risk and portfolio effects.
The organization is conceived as a portfolio of factors that cause organizational performance, which interact to determine
whether the organization will change. Each factor has a certain degree of risk, that is, variance over time, and correlation
with other factors. Portfolio effects are identified whereby the decrease in organizational performance due to one factor may
be offset by the increase in another factor. The paper also draws on the idea of business cycles from macroeconomics. Low
organizational performance is held to trigger adaptive organizational change, while medium to high performance enhances
organizational growth.
Four factors are identified that promote organizational change: the business cycle, competition, debt and divisional risk.
Four other factors are identified that prevent organizational change: diversification, multidivisional structure, divestment
and non-executive directors. The effects of these eight factors are combined into a theoretical model that is intended as
a guide for future empirical research.
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| | Keywords: change; organization; performance |
| Explaining the likelihood of organizational change: A cognitive-behavioral theory perspective |
| | Haleblian, Jerayr | U. of California, Riverside | john.haleblian@ucr.edu | (909) 787-3908 |
| | Rajagopalan, Nandini | U. of Southern California | [nrajagopalan@marshall.usc.edu] | [(213)-740-0750)] |
| | Drawing on cognitive and behavioral theories in psychology, we present a framework that integrates disparate deterministic and voluntaritic perspectives of
organization change. From a behavioral (deterministic) perspective, we propose that an organization's current environmental context and past performance jointly effect the
likelihood of organizational change. From a cognitive (voluntaristic) perspective, we argue that the managerial interpretations of past performance and environmental conditions
moderate their effects on the likelihood of change. We then develop testable research propostitions, compare this framework with other key theories of organizational change, and identify
theorectical and methodilogical extensions for future research. |
| | Keywords: organizational change; managerial interpretations; behavioral theory |
| Managerial Action and Personal Control in the Implementation of Planned Change |
| | Partington, David | Cranfield U. | d.partington@cranfield.ac.uk | +44 (0) 1234 751122 |
| | This paper proposes relationships between managers’ personal control beliefs and their choices of action in the implementation of planned change. A grounded field-based study in four contrasting settings develops propositions relating control beliefs to six categories of action: (1) use of external agents, (2) use of formal plans and controls, (3) changes of pace, (4) use of a participative approach, (5) justifications for change and rationalizations of non-achievement, (6) definition of change manager roles. A case study of a failed attempt to implement a major programme of change in an electrical appliance assembly factory is taken from the broader study to illustrate grounded theorizing about the control beliefs and actions of a top management team. The example traces managers’ control beliefs and their expression in action through three stages: (1) the pursuit of anticipated control, (2) the exercise of possessed control, and (3) the renouncement of lost control. Implications for management practice and for further research are discussed. |
| | Keywords: personal control; planned change |