Change is an inevitable element of organizational development. No matter how stable a company is and how sustainable its’ development can be, all entities are vulnerable to change, which is caused either by external or internal factors. Therefore, if companies cannot avoid change, they should be prepared to it and be able to adjust to all possible consequences smoothly and within a short period of time (Oreg &Berson 2011), although it is very hard to predict all the possible variables in the process of change, as well there are very limited possibilities of gaining full control over a change in an organization (Burke and Litwin 1992). In order to gain these abilities of comfortable adjustment to change it is essential for companies to understand the process of change and elements that might influence it.
While analyzing the change in the ABC company, this study focuses on two approaches to change management: Holistic and the Burke-Litwin causal model. Although there are some similarities between the two models of change management and its’ drivers, there are some major similarities not only in the understanding of the process of change, but also in the perception of organizations and their management. In order to provide a proper explanation of the two models, the main body of this analysis will be broken in two parts, with each one presenting one of the approaches to organizational change and the view of the ABC company change through the beliefs and perceptions presented in each of the models.
Burke-Litwin causal model
In the basis of the Burke-Litwin model there are two basic notions: the idea that all changes are primarily influenced by the external environment, and the two types of changes that should be distinguished in organizations – transactional and transformational (Burke and Litwin 1992). While transactional change is triggered by the factors within the organization, transformational one is stimulated by the changes in the external environment (Bass 1997). Therefore, while in the first type of change a leader (in the case of ABC it is the project manager) has to act within the existing rules and ;imitations of an organization, in the second case s/he has to make significant changes and re-shape the organizational structure, as well as other elements.
The diagram below presents all the drivers of change within the Burke-Litwin model (Martins & Coetzee 2009). The most important are located at the top. With the help of this diagram it is possible to analyze the changes happening in the ABC company. Taking into consideration the limited information provided on the case, this analysis focuses only on the four primary drivers of change noted by Burk and Litwin: external environment, leadership, mission and strategy, and organizational culture.
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In the presented model external environmental changes are presented as main triggers of change. In the case of the ABC company the external environment is presented in a form of a lacking communication between the predominantly-Chinese employees of the ABC and customers of the UAE. Therefore, external environment in this case no doubt was a main trigger for the future changes. The following changes in leadership and organizational structure have happened in the ABC only because they were stimulated by an external change. At the same time, if there was no problem of communication with the UAE customers the company would not come through the change of leadership and managerial structures.
In case of ABC mission was not the primary trigger for change, but still, the change in the company’s mission and strategy has led to the creation of new environment that caused changes in the organization. As soon as entering a new market became one of the key strategies of ABC, the first step to the organizational change was made. Leadership, which is seen as another extremely significant factor in the Burke-Litwin model played a truly notable role in the ABC company in two ways. Firstly, the project manager was the first one to realize the problem, and, secondly, he hired a non-Chinese sales manager who could improve the UAE company sales, which was a great success for both leaders. The success of the leadership is seen through the changed attitudes to the project manager. Lastly, although the case does not present any definite examples of change in the company’s organizational structure, there are signs of change both in the structural elements of ABC, and its’ organizational culture. New attitudes and methods introduced by the new project manager were with time accepted and appraised by the strategic management unit of the company. Therefore, the actions of the new leader have also changed the ABC’s organizational structure.
Holistic model of change management
The same as the Burke-Litwin model, the Holistic approach to the organizational management agrees that change is an unpredictable chaos. The innovative view of this approach is that Holistic perception of an organization sees it as similar to human body, which can function properly if all of its’ elements are accordingly aligned (Hay & Kashefi 2001). Therefore, in order to keep the whole organization running smoothly managers should realize that on one hand this general picture is clear to all the members, and on the other hand – that the organization fits perfectly within the given environment (Barrett 2007).
Peter Calvert, the author of Holistic approach to the organizational change presented four assumptions that lay in the background of the theory:
- we live in revolutionary times;
- only those organizations whose activities are in harmony with their environments can hope to prosper;
- organizations that successfully transform themselves require, and will have very different characteristics from those that stay the same;
- without knowledge, transformation can be neither implemented nor understood (cited in Adcroft, Willis & Hurst 2008, p. 42).
From the name of the approach itself it is clear that there are no separate triggers that have to be analyzed on order to understand the situation. On the contrary, as it can be seen in the diagram below, in the holistic model different parts of the process of change are perceived as separate elements of the process. The organizational change is therefore perceived in a form of stages, each of which involves the organization as a whole, without breaking it into pieces. Therefore, the ABC should be analyzed according to the four stages presented in the model.
Transformation event => Transformation program => Transformation outcome
Transformation event. The change in the ABC company was triggered by the new requirements of the external environment. The lack of success on the new market has led to the innovations introduced by the project manager. The main aim is to increase sales on the UAE market, become a competitor in the new country, and thus increase the company’s revenues.
The transformation program. The two main elements of the transformational program in the ABC company were the research conducted by the project manager, and the employment of a sales manager of the non-Chinese origin. The analysis conducted by the project manager shows the truthfulness of one of the background elements of the Holistic model – the significance of knowledge in the process of successful organizational change. If one takes into consideration the timing of the project it would be clear that problems appeared six years before the first approach of the project manager, which meant that one more year was used for the analysis of the case and introduction of the change (Diakoulakis et.al. 2004). Without the study conducted by the project manager ABC would still be unsuccessful on the UAE market. Secondly, the major decision that led to the organizational change and significant improvement of the ABC operations was the employment of a person with non-Chinese origin.
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The transformation outcome. The transformations that have happened in the ABC have led to the increased revenues of the company and its’ significant success on the UAE market. Although ABC wasn’t anymore a company comprised of Chinese employees, this change in organizational culture has led to the business success of the entity. Therefore, the change conducted by the project manager of ABC has led to the expected positive change in the company.
The transformation myth. The main part of the ABC’s transformational myth is the perception of the change introduced by the project manager by the company’s employees. It is clear that at first the new strategy of ABC got a negative response from many of the company’s leaders and especially – from the strategic business unit. This is not surprising, because a significant change in the company that influences the organization’s values and culture (in the case of ABC that was the cultural homogeneity of the company’s managerial staff) usually meets the resistance of the organization’s leadership (Taormina 2007). But, in the end, the transformational myth was created by the success of the new sales manager and thus the change left a positive impression on the ABC employees.
The two models that analyze transformations in organizations have very different approaches towards organizational change. While the Burke-Litwin causal model focuses on specific triggers that cause the change and influence its’ process, the Holistic approach has a more generalized point of view on the subject and analyses only the stages of changer that happen within the organization. Both approaches have their advantages and due to their differences can be simultaneously used in the study of one organizational change (as it happened in the case of ABC). While the causal model has shown the influence of external triggers, leadership, strategies and organizational culture on the process of change in the ABC company, the holistic view focused on the goals and outcomes of the change.
After the success of the change implemented in ABC by the new project manager it is clear that he will have more support from the managerial staff of ABC. Still, it would be essential to change some elements of the company’s culture to make the employees more open to the changes happening in the organization (Arnold et. al. 2007). It is clear that the resistance of strategic business unit and Chinese managers was caused by the stability of the belief that the ABC’s employees should be of Chinese origin and that the company’s success lies in the ethnic homogeneity of the managerial staff. The case of the recent change in ABC should be used as a positive example that should lead to the liberalization of the ABC’s corporate culture.
- Adcroft A, Willis R and Hurst J 2008, ‘A new model for managing change: the holistic view’, Journal of Business Strategy 29 (1), pp. 40-45.
- Arnold KA, Turner N, Barling J, Kelloway KE, & McKee MC 2007, ‘Transformational leadership and psychological well-being: the mediating role of meaningful work.’, Journal of Occupational Health Psychology, 12 (3), pp. 193-203.
- Barrett P 2007, ‘RevaluingConstruction: a holisticmodel’, Building Research & Information, 35(3), pp. 268-286.
- Bass, BM 1997, ‘Does the Transactional-Transformational Leadership Paradigm Transcend Organizational and National Boundaries?’, American Psychologist, 52 (2), pp. 130-139.
- Burke, WW & Litwin, GH 1992, ‘A Causal Model of Organizational Performance and Change’, Journal of Change Management, 18(3), pp.523-45.
- Diakoulakis IE, Georgopoulos NB, Koulouriotis DE and Emiris DM 2004, ‘Towards a holistic knowledge management model’, Journal of Knowledge Management, 8(1), pp. 32-46.
- Hay RK and Kashefi MT 2001, ‘A holistic management model for facing the new competitive world’, Advanced Management Journal, pp. 4-9.
- Martins N and Coetzee M 2009, ‘APPLYING THE BURKE–LITWIN MODEL AS A DIAGNOSTIC FRAMEWORK FOR ASSESSING ORGANISATIONAL EFFECTIVENESS’, South African Journal of Human Resource Management 7 (1), pp. 144-156.
- Oreg S and Berson Y 2011, ‘Leadership and employees’ reactions to change: the role of leaders’ personal attributes and transformational leadership style.’, Personnel Psychology, 64, pp. 627-659.
- Taormina, RJ 2007, ‘Interrelating leadership behaviors, organizational socialization, and organizational culture.’, Leadership & Organization Development Journal, 29 (1), pp. 85-102.
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