Influence of participation BY 03Jtasky Journal of Change Management, vol. 4, NO. 3, 193-215, september 2004 Influence of participation in strategic change: resistance, organizational commitment and change goal achievement RUNE LINES Norwegian School of Economics and Business Administration, Norway ABSTRACT Participation in strategic change processes is frequently assumed to have a number of positive consequences for decision quality, affective responses to change and success of strategic change implementation.
To date little research has successfully established the validity of these claims. The fact that results from research into the effects of participation in other contexts are inconclusive is adding to the ambiguity concerning participation’s efficacy in a strategic change context. This article uses data from a major strategic reorientation of a national telecommunications firm in order to assess the outcomes of participation in strategic change.
Findings indicate a strong positive relationship between participation and goal achievement and organizational commitment, and a strong negative relationship with resistance. The results also suggest that the effects of participation are oderated by the changes’ compatibility with organizational culture and the personal goals of change recipients.
KEY WORDS: Strategic change, participation, implementation of change Introduction This article studies the influence of participation on a set of dimensions related to the success of the implementation of deliberate strategic change (Mintzberg and Waters, 1985). Participation is believed to have a number of positive effects on the strategy process. Most notably, it is assumed that involvement of those affected by a change in strategy will reduce organizational resistance and to create a higher level f psychological commitment among employees towards the proposed changes.
Also, participation has been argued to lead to qualitatively better strategic decisions (Kim and Mauborgne, 1998), One reason for this being that a broader array of relevant skills, competencies and information is brought to bear Correspondence address: Department of Strategy and Management, Norwegian School of Economics and Business Administration, Breiviksveien 40, N 5045 Bergen, Norway; Email; 1469-7017 pnnt/1479-1811 online/04/030193-23 2004 Taylor & Francis Ltd, DO’; 10,1080/1469701042000221696 194 on each stage in the strategic decision process.
Participation is further believed to make the political realities of the organization more salient and thus lead to choices that are based on political as well as socio-technical considerations. In sum, these and other putative effects are believed to lead to successful implementation of strategic change.
Up to this point, very little empirical evidence has been provided to support the assumed effects of participation in strategic change. Some sceptics hold that an individual’s reaction to a proposed change is more dependent on the relationship between their own personal goals and the outcomes of change than on the processes sed for formulating and implementing change (Guth and MacMillan, 1986; Gaertner, 1989).
Procedural Justice theorists, on the other hand, argue that the design and execution of strategy processes are the main determinants of individual reactions to change (Korsgaard et al. , 1995). Extant research on participation has mostly been carded out in contexts that differ substantially from strategic change processes; cuasing transference of generalizations of any effects to this setting dubious.
Strategic change processes have been characterized as being highly complex, politically laden, affecting large arts of the organization and driven by upper level managers (Hambdck and Mason, 1984; Hardy, 1995), Research into participation, on the other hand, has most frequently been carried out at much lower levels in the organization. Further, existing studies have concentrated on the effect of participation in fairly simple structures and processes the consequences of which are confined to one organizational subunit.
The possibility that outcomes of participation depend on the content in which the decisions involved are taken is acknowledged in the participation literature eg, Locke and Schweiger, 1979), This view is empirically supported by Sagle and Kolowsky (1994) who found that subordinate participation in tactical decisions as opposed to strategic decisions was a better predictor of an increase in change acceptance, work satisfaction, effectiveness and time allotted to work. Also, some of the dependent variables of interest may be different when studying effects of participation on outcomes of intended strategic change.
Research into the effects of participation in other settings has often focused on Job satisfaction and productivity. Other outcomes such as the content and rate of learning, acceptance to change and the achievement of change objectives may be more pertinent as dependent variables when studying effects of participation in the context of strategic change. Most importantly, findings from research on participation in other settings are largely inconclusive. As shown in recent reviews, the average effects of participation on attitudinal outcome variables such as Job satisfaction and commitment are modest (Cotton et al. 1988; Wagner, 1994), The average effect of participation on group and rganization level outcomes, such as productivity, is virtually zero (Locke and Schweiger, 1979), Such research has also revealed that participation is a much more phenomenon. Participation has been found to have different forms, and the appropriateness of a given form depends on which outcomes are sought as well as the context in which participation is to be implemented (Miller and Monge, 1986; Cotton et al. , 1988), This article attempts to address the knowledge gap related to participation in strategic change by focusing on two interrelated research questions.
First, it 195 Influence of participation in strategic change investigates the relationship between two forms of participation, consultative participation and the right to veto a decision, on change goal achievement, resistance to change, and post change organizational commitment. The two forms correspond to the distinction frequently made in the literature between process control and decision control, where the former corresponds to consultative participation and the latter to the term veto used here (Thibaut and Walker, 1975; Early and Lind, 1987).
I have chosen to include the right to veto a proposed change because it could capture ituations in which changes that are optimal from an organizational perspective are foregone because they are unacceptable from a change recipient perspective. Rather than focusing on one outcome of participation, I have chosen a set of three effect variables. Together these variables represent outcomes that together allow for a rather more complete assessment of whether an implementation process is successful or not. Second, I try to establish if and to what degree the effects of participation depend on the context in which the approach is applied.
To investigate his question, I focus on the following aspects of the change to be implemented: the degree to which the change is compatible with the organization’s culture; the degree to which the change is intended to lower costs; and to what extent the change will lead to more or less Job variety. In order to explore these research questions empirically, I use data from a set of change projects drawn from an integrated change programme designed in order to transform a telecommunication company into a customer driven, cost effective provider of telecommunication services.
Theoretical background and model development Participation Participation has been defined in several ways. In this research we will use the definition of Glew etal (1995:402) as a theoretical point of departure: the essence of participation is a conscious and intended effort by individuals at a higher level in an organization to provide visible extra role or role-expanding opportunities for individuals or groups at a lower level in the organization to have a greater voice in one or more areas of organizational performance. Efforts to involve employees at lower levels have taken a variety of forms; among such are participation in decisions irectly related to how work is performed (Trist et al. , 1977); consultative participation in decisions on work issues (where employees do not have a veto or complete and representative participation (Martin et al, 1995). Researchers have found it useful to develop a set of dimensions to describe theoretically important distinctions between forms of participation. Locke and Schweiger (1979) and Cotton et al. 1988) use three properties to develop a classification scheme that reflects the conceptual distinction of different forms of participation: degree of formalization; direct versus indirect (i. e. epresentative or ‘vicarious’) participation (Strauss and Rosenstein, 1970); and the breadth and depth of employee access to decision-making processes and issues. A fourth dimension that has received attention is the degree of influence. This dimension is meant to reflect the notion that participation does not influence equally and that people can R.
Lines 196 participate in a wide array of processes without having much influence on those processes or their outcomes. Thus, several theorists have made distinctions between autocratic decisions with no direct participation or influence, Joint decisions where he superordinate has no more influence than subordinates, and delegationin which a subordinate or a group of subordinates is given the authority and responsibility for making the decision (Heller and Yukl, 1969; Strauss, 1977).
Outcomes of Participation Participation in the workplace has been presumed to lead to a number of positive outcomes. The general belief has been that employees tend to react positively to increases in the level of involvement in existing and new areas of organizational performance. One important theoretical underpinning for this belief comes from the psychological literature on perceived control (Blumberg, 1969). According to this perspective, people’s desire for increased participation at the workplace reflects a more generalized need for control.
The need for control acts as a strong motivational driver. This implies that states of higher perceived control are preferred over states with less control (White, 1992). A slightly different model leading to a prediction of the same general positive affective response holds that people value increased control because is ensures that it will be a reliable relationship between effort and outcome (e. g. Bandura, 1986). Argyris (1957) took an even broader view and argued that articipative practices were valued because they filled very general needs of normal, healthy adults.
These needs are, according to Argyris, to develop from passive infants into active adults, to move from dependent to independence in relationships, to increase one’s range of effective behaviours, to understand complex problems and opportunities and to see them as challenges, to develop a long-term time perspective, to move from a position of subordinancy to equality and to gain autonomy over one’s behaviour (Pasmore and Fagans, 1992).
Finally, it has been argued that participation is valued because it is more compatible with general emocratic values than more centralized or autocratic decision-making styles (Arendt, 1958). The hypothesized positive valence accorded to participation by employees has led to the assumption of a set of more specific, second-order behavioural, and have been conceptualized at individual, group and organizational levels. Although employee satisfaction and productivity are the most frequently used outcome variables in research on participation, several other variables have received some attention.
Among the attitudinal outcomes that have received most attention are Job satisfaction, organizational commitment, involvement, fairness perceptions, otivation, expectancies and emotional distress (Spector, 1986). Behavioural outcome variables used in participation research include absenteeism, industrial conflict, turnover and grievances and organizational innovativeness. Contextual Influences on Participation Outcomes It has been argued that the effects of participation??”if any??”would not be stable across all possible conditions in which it is implemented.
A number of contextual 197 factors have been hypothesized to moderate the relationships between participation and its outcomes. Locke and Schweiger (1979) made a distinction between individual ontextual factors and organizational contextual factors. Glew et al. (1995) subdivided individual contextual factors into two subgroups, one related to differences in subordinates, such as personality, ability, demographic profile and willingness to participate, the other consists of factors related to personality traits and characteristics of managers.
One of the more common variables examined as a moderator in organizational research is the company’s culture. The general hypothesis guiding this research is that participation will work better in cultural contexts which are compatible with a participative style. Representative of this research is Miller (1988) who found that the relationship between participation and turnover was stronger (negatively) in companies with a collectively oriented culture than in those with a more individually oriented culture.
According to Conger and Kanugo (1988) bureaucratic organizations may embrace rules and regulations that limit autonomy and self-expression, leading to a blocking of even the potential for participation. Neumann (1989) proposed that the degree of centralization would limit the effectiveness of participation for achieving valued outcomes. Research hypotheses Participation and Post Change Organizational Commitment As shown above, the effects of participation on attitudinal and behavioural outcomes so far have been elusive.
However, the hypothesized relationships between participation and positive attitudes have proved somewhat more robust than the relationship between participation and more behaviourally related outcomes such as productivity. Among the attitudinal consequences of participation, organizational commitment is particularly interesting because the positive effects of a change in the content of an organization’s strategy can easily be offset if the change and its mplementation produce a negative shift in organizational commitment.
This is organizational citizen behavior (VanYpere et al. , 1999) and other behaviours that promote organizational effectiveness (Mayer and Schoorman, 1992; O’Reilly and Chatman, 1986). Organizational commitment is characterized by an individual’s: (1) belief in and acceptance of organizational goals and values; (2) willingness to exert effort toward organizational goal accomplishment; and (3) strong desire to maintain organizational membership (Porter et al. 1974). All three dimensions are relevant for Judging the performance of a strategic change rocess because they tend to be positively related to organizational efficiency and effectiveness by contributing to resource transformations, innovativeness and adaptability (Williams and Anderson, 1991). According to procedural Justice theory, members’ commitment to an organization is heavily influenced by their perception of to what degree they receive fair treatment.
Procedural Justice leads to organizational commitment because fair procedures make people feel that their interests are protected in the long run, and that the 198 decision makers values them and affirms their status within the organization. Perceived fairness in the context of strategic change is likely to depend on whether those affected by the change are invited to voice their opinions (Folger, 1977) and in other ways have an influence on assumptions underlying the need for change, development of the change content and the processes chosen for implementing the change (Korsgaard et al, 1995).
The opportunity to merely voice an opinion, however, does not seem to lead directly to the perception of procedural fairness (Leung and Li, 1990). The impact of voice seems to depend on whether people believe that decision makers consider their input. Thus, a process in which affected members are invited to participate in the development of assumptions, change and implementation plans is likely to be perceived as more Just than a process where people are merely invited to give their opinions on decisions made by others.
Based on this discussion, we expect that: HI: Tiiere is a positive relationship between participation in strategy processes and post change organizational commitment. Resistance towards Change Resistance towards change emcompasses behaviours that are acted out by change recipients in order to slow down or terminate an intended organizational change. Several researchers have reported that attempts to implement strategic changes sometimes are met with resistance from those affected by the change. In their study of employees’ reactions to change in organizational structure.
Valley and Thompson (1998) made a distinction between resistance due to attitudes towards the change itself, and due to the extent to which a person’s Job after the change includes new task demands. According to expectancy theory (Vroom, 1964) people consciously consequence of their desires to enhance pleasure and avoid pain. Building on early formulations. Porter and Lawler (1968) suggested that the expenditure of an individual’s effort is determined by expectations that an outcome may be attained and the degree of value placed on the outcome in the person’s mind.
Thus, a person’s attitude towards the change and subsequent behaviour stem from a process by which the perceived outcomes of a change are compared with the individual’s goals and values. Expectance theory predicts that resistance will result if any of the following conditions hold: (1) the individual has expectancies that the relationship between a change in behavior and performance is uncertain; (2) that the ink between performance and outcome is uncertain; and (3) the outcomes have negative value to the individual (Hope and Pate, 1988).
Participation can lead to lower resistance through its influence of all three of the above conditions. First, participative processes provide management with an arena for explaining and presenting the arguments for a proposed change. During this process, motives for change and the necessity of change can be made explicit, and counter-arguments made by subordinates can be voiced, discussed and incorporated into the content and process of change.
Also, participation can grant subordinates direct influence on he content of change, scheduling of subprocesses and how to handle politically difficult issues such as replacement and of 199 employees and layoffs. Together this would change the expectancies of relationship between individual behaviour and performance, the perceived relationships between performance and outcome dimensions relevant to the individual as well as the perception of outcome valence.
Based on these arguments, we propose; H2: Tiiere is a negative reiationsiiip between participation and resistance towards change. Achievement of Change Objectives Although empirical support for relationships between participation and behaviour so ar has been mixed, there are several theoretical reasons for believing that participation will have a positive impact on the achievement of objectives associated with a particular change.
First, by involving those affected by the change, it is likely that relevant factors related to socio-technical as well as political realities impinging on the implementation are considered (Hardy, 1995). Effective implementation of change is dependent on a detailed understanding of work processes, relationships between organizational structure and functioning and informal distribution of power in the units affected by the change.
Second, participation has been argued to have a positive impact on employees’ attitudes towards the change itself. Participation has been found to be positively linked to attitudinal variables such as commitment to change. As change often demand extra efforts from those affected, processes desired outcomes because they most likely reduce resistance towards change and increase the level of effort spent by those involved in the implementation of the change. Thus; H3: Participation is positively related to the achievement of change objectives.
A commonly held assumption is that changes which in their content are compatible ith salient organizational norms and values are more easily accepted than changes that are highly incompatible with organizational culture (Marchington et al. , 1994; Glew et al. , 1995). Thus, changes that contain elements in conflict with dominating norms and values are more likely to be resisted unless the process by which they are conceived and implemented is capable of reducing this resistance.
For example, changes that involve a tightening of control is likely to be more resisted in organizations where the culture emphasize autonomy than in organizations where control is part of the accepted norms. Changes that are compatible with the organization’s culture would be more readily accepted, and thus there is less need for explicit processual elements to sell the change, adapt the change or to influence change-value compatibility through sensemaking and sensegiving activities.
So we expect the effects of participation to be stronger for changes that are less compatible with organizational culture than for changes that are more compatible with organizational culture. Stated formally; H4: The effects of participation are negatively moderated by the compatibility of the change with the organizational culture. Change recipients’ reactions to a proposed change are also likely to be affected by its impact on the level of Job variety (Hackman and Oldham, 1980) and to what 200 degree the main goal of the change is on cost savings.
Both change dimensions are here assumed to affect the alignment between change content and individual goals of change recipients. According to Job characteristics theory, individuals prefer Jobs with high levels of variety to repetitive, monotonous tasks that involve little or no challenges. Jobs with low levels of variety are less preferred because they provide small opportunities for personal growth. Sometimes organizations feel forced to implement such changes in order to meet the challenges of less benign environments.
Changes involving reductions in Job variety are likely to be evaluated negatively by change recipients, whereas changes not affecting or leading to an increase in Job variety will lead to a neutral or positive evaluation of the change. Negative outcomes such as less Job variety can be partly mitigated by fair processes, such as processes involving high levels of participation. For changes involving no effect or a positive effect on Job variety, there is less need to compensate for loss by ncreasing the level of procedural fairness.
In the same vein, changes for which the main objective is to reduce costs are assumed to be evaluated more negatively by because cost reductions most often are accompanied with tighter control, thus less autonomy: H5: The effects of participation are negatively moderated by the change’s coinpatibility with the change recipients’ goals. Methods Research Setting The organizational setting for this research was a large (approximately 17 000 employees), national full service providing telecommunication company.
Prior to the trategic changes taking place at the time of the research, the company has had a long history spanning over a period of several decades as a monopolist with exclusive right to provide telecommunication services to the population of an European country. The external impetus for strategic reorientation was the announcement of complete deregulation of European telecommunication markets by 1 January 1998. Deregulation was perceived to have several rather dramatic consequences for the task environment of the company.
It was assumed that a series of new actors would enter the market either as start-ups or as a consequence of geographical iversification from established national, international and global telecommunication players. By 1 January 1998 more than 20 new entrants were registered in this sector. In response to the threat of deregulation a major integrated change programme was launched. The vision for the initiative was to ‘develop an integrated master change programme to transform the company into a cost efficient provider of world class customer driven products and services in a national and international telecom market. The first phase of the programme had the character of a comprehensive sensemaking rocess whereby a set of internal and external strategic issues were identified. Important activities in this phase included the development of a set of scenarios in areas such as industry structure, possible positioning of key 201 competitors, merge between IT and telecommunications industries, new developments in service content and emergence of new technologies (e. g. roadband cables, new IT platforms, satellite and mobile communication technologies). Another important area of activity was the assessment of the internal functioning and output of the organization. Across areas of assessment, the organization was benchmarked against a total of more than 50 organizations both from within and outside the global telecommunications industry. This phase revealed a number of weaknesses regarding the organization’s performance compared with the envisioned end state of the programme.
Among these were poor level of perceived customer service, slow and inefficient product development processes, the existence of cross subsidies between geographical areas, segments and divisions, inefficient delivery processes and between divisions. Based on this initial assessment a set of six programme areas ere defined starting with an area for strategic reorientation which included both corporate level (selection of business areas, focus and degree of corporate involvement vis-a-vis the line organization) and business level strategy.
The five other areas were customer orientation, supply chain management, support processes, IT and change management. The sub-programme for change management was later dropped from the programme. The sub-programmes were broken further down into a population of change projects each of which was staffed with a given mix of organizational members and external consultants. Then followed a prolonged period of more detailed analyses within each of these areas as well as the development of solutions with measure parameters and financial benefit estimates attached to each proposition for change.
Finally, attempts were made to implement the changes. At the time of data collection, a majority of these initiatives were completed or abandoned. The level of participation used varied substantially across change projects. In some of the projects, a centralized task force analysed the need for change, developed solutions to the problems that were identified, chose the preferred solution and also eveloped procedures for its implementation.
In these cases, a complete change including a plan for its implementation were handed over to the relevant part of the organization. At the other extreme, there were changes that were totally developed and implemented by those directly affected by the change. Between these extremes, central task forces staffed with in-house specialists and external consultants developed the change using different forms of cooperative arrangements. In some cases, the line organization was the leading change agent in other cases the process was dominated by the central task force.
Data Collection The respondents for this study were managers drawn from a larger population of managers in the company described above. We used a stratified sampling procedure in order to achieve respondents from staff units as well as line units, from different functional areas and from several of the seven divisions in the company. A total of 250 prospective respondents were contacted by telephone, and their agreement to participate was solicited. Of the 250, 96% (AA = 241) of the 202 subjects agreed to take part in tbe study.
The respondents were asked to base their nswers on experiences from one particular cbange project in wbicb they bad taken part as cbange agents, formally responsible for the cbange and its outcomes or as affected by tbe cbange. Tbe screening criteron used was tbat tbe cbange project was perceived as part of tbe implementation of tbe company’s strategic reorientation. We used an oversampling strategy in order to avoid receiving data only for successful change projects. Half of the respondents were asked to base tbeir answers on ‘fairly successful’ change processes while the other half based their answers on ‘fairly