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    CULTURALLY SENSITIVE STRUCTURING: AN ACTION RESEARCH-BASED APPROACH TOORGANIZATION DEVELOPMENT AND DESIGNAuthor(s): PAUL BATE, RAZA KHAN and ANNIE J. PYLESource: Public Administration Quarterly, Vol. 23, No. 4 (WINTER, 2000), pp. 445-470Published by: SPAEFStable URL: .Accessed: 15/06/2014 13:11

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    PAUL BATE RAZAKHAN ANNIE J. PYLE University of Bath, England


    One reason for the sometimes-disappointing return from strategic change initiatives is an inability among managers to integrate STRUCTURAL change with more subtle changes in the SOCIAL AND CULTURAL dimensions of the organization. This article makes the case for a new approach to the management and leadership of change that addresses both spheres simultaneously. Drawing on a resent research study at a UK hospital, Bannerdown Trust, the article develops a "culturally sensi- tive" approach to organization redesign. A four-stage "working model" of the change process is presented in which organization design and organization development (OD) are fused together to transform the very essence of the organization.


    As large-scale strategic change has become a major preoccupa- tion in contemporary management, so too has the sense of disap- pointment and diminishing returns that all too often accompanies the change process. During the 1990s, organizations in the commer- cial, public, and not-for-profit sectors have experimented with and frequently failed to secure a sustainable benefit from a variety of strategic change initiatives. They have been restructuring, reengi- neering, and refocusing but never quite realizing the gains they must have expected from their (sometimes huge) human and financial investment in change.

    Organizational analysts have attributed this outcome, in part at least, to a failure in change management. Managers, consultants, and

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    researchers, we are told, need to develop new "social technologies" of change (Beer and Eisenstat, 1996) to rethink the processes and management methods by which changes are planned, designed, and implemented (Burke, 1994; Hambrick and Cannella, 1994; Kotter, 1995; Stace and Dunphy, 1994).

    This article takes the argument one step further. The authors draw attention to a common failure in strategic change initiatives to integrate changes in organizational structure (restructuring, reengi- neering, out-sourcing, etc.) with more subtle changes in organiza- tional culture. It is their contention that organizational structure and culture are inseparable in practice, linked together in a co- evolutionary relationship in which each shapes and is shaped by the other. Change initiatives, it follows, need to address both spheres simultaneously, coordinating and aligning "hard" strategic and "soft" cultural changes in line with the changing demands of a dynamic environment.

    This article makes the case for a new approach to the leadership and management of strategic change and for new methods of organ- ization design which can embrace the complexity and complementar- ity of the structure-culture matrix. Drawing on a recent action re- search study, the authors outline a "cultural sensitive" approach to organization design-or, more accurately, to the process of designing organizations. From this, they develop a four-stage "working model" of the change process in which organization design and organization development (OD) are fused together to transform the very essence of the organization.


    The idea that organizational change needs to be coordinated across a number of dimensions-of which structure and culture are perhaps the two most fundamental- is not in itself very new. Indeed, it has become very much the conventional wisdom in change circles since McKinsey published the globally-recognized "Seven S" frame- work (Peters and Waterman, 1982). The concept is a familiar one: successful strategic change rests on alignment and integration, on the fusion of structure, system, leadership, strategy, and culture into an integrated and synergistic competitive whole (Amburgey and Dacin, 1994; Batelaan, 1995; Kilmann, 1995; Miller, 1990; Trompe- naars, 1995; Schwartz and Davis, 1981).

    The alignment concept is an important theoretical development,

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    drawing attention to a fundamental issue: "soft" and "hard" are two sides of the same coin, existing in a state of symbiosis and interde- pendence. Yet, illuminating though it is as a theory, the concept has generally lacked a practical focus. Apart from a general appeal to change agents to somehow "make" all the elements connect, there has been little discussion around how this alignment might be achieved or what methods might be available to organizations attempting to realize such holistic, multidimensional change.

    There has been little critical reflection on the assumptions and tacit frameworks underlying the theory and practice of organization- al change. And yet, new forms and methods cannot develop without new concepts that question our basic notions and assumptions and challenge our habitual ways of thinking. In the following section, the authors reexamine the conventional wisdom around these basic and fundamental concepts is change management culture, structure, and leadership.


    "Culture" is no longer a novel concept in management. It is often viewed, however, in fairly simplistic terms as one of a number of simple variables susceptible to managerial manipulation and control. Put some training sessions and workshops in at one end, the logic runs, and wait for the "new culture" to emerge out of the other.

    Sociologists and anthropologists have long argued that culture is more dynamic, organic, and processful than this somewhat reifying conceptualization would suggest. Organizational cultures are "chang- ing" all the time, constructed and reconstructed in everyday human interaction. However, the scope and direction of this change is not always prone to management control (Bate and Khan, 1995; Knights and Willmott, 1995), emerging instead out of the complex interplay of social structure, organizational cognition, and human interaction.

    Another common misconception is to assume that management can set the direction of cultural change unilaterally. Cultures are "sticky" as well as dynamic: their most fundamental properties become "sedimented" over time and "institutionalized" into the very core of the organization's thought patterns, unconscious processes and behavioural dynamics (Scott, 1995; Zucker, 1991). The poor track record of "corporate culture change" programmes stands testament to this poor tack record. A few mission statements, workshops or training sessions might change senior management's

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    view of the organization. They are unlikely, however, to lead to any sustainable changes in the way organization members work, think, and relate to each other since they will neither speak directly to people's inner concerns nor raise either consciousness towards hidden or subtle issues nor change the external, structural contexts through which people enact their working lives (Anthony, 1990).


    Although the terms are often used interchangeably, "organization structure" is not the same as "organization design." The design-the "hard frame" of control systems, corporate policies, and organiza- tional forms-is merely a bare bones framework through which a more organic social structure develops as people interact, argue, play power, come together, and otherwise manage their day-to-day situa- tion (Egen, 1994; Krackhardt and Hanson. 1995; Nohria and Berk- ley, 1995). The working structure of the organization, in other words, is both social and functional, a "complex weave of instrumen- tal and expressive material and symbolic, programmable and non- programmable elements" (Gagliardi, 1991:5), a structure in construc- tion.

    Changing this structure implies developing more sensitive, micro- level interventions designed to open up, address, and reconstruct the "unmanaged organization" (Gabriel, 1995) of rational networks and informal structures that lie behind the formal design. Organization development and organization design, in other words, need to work in tandem to deliver meaningful organizational change.


    It has long been accepted that leadership is a critical factor in change, both in terms of visioning and steering the process (Boss and Golembiewski, 1995; Beckhard and Pritchard, 1992) and mobi- lizing power and legitimacy behind it (Greiner, and Schein, 1988; Hardy, 1996). The literature on change has, however, tended to concentrate on the role of key executives and change managers. There has been relatively little consideration of leadership as a process, the property of a system rather than a single person (Barnes and Kriger, 1986; Krantz, 1990). Hence, within the change literature, there is even less material that considers the question of "effecting change" at the grassroots level.

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    This is a serious omission and is precisely this "systemic" quality in leadership-the capacity for leadership roles to spread out across the organization as the change process unfolds-that can make the difference between transformation and failure (Kotter, 1995). Change is too complex and too subtle to be controlled completely from one place or by one small group of executive "leaders" (Mangham and Pye, 1991; Mohrman and Cummings, 1989).


    Taken together, these re-conceptualisations of culture, structure, and leadership open up new possibilities for thinking about and managing corporate reorganization. By challenging the way we think about organizations, they suggest new ways of changing them. Old habits, however, die hard. The conventional wisdom still holds sway and, when most executives and consultants think about change, they still turn instinctively to the organization chart (Nohria and Berkley, 1995).

    It is not uncommon to see executives engaged in what Bate (1990) describes as "empty restructuring, in which regular and re- peated restructuring takes precedence over the more challenging issue of realizing change in the management styles, organizational cultures, and corporate processes which define, circumscribe, and contextualize organizational life. Organizations downsize one year and upsize the next; they reengineer one year only to tear everything up and reorganize again "in a never-ending cycle of designs that are celebrated, adapted, and then discarded" (Nohria and Berkley, 1995:1). The results of these efforts are often bitterly disappointing (Hall, Rosenthal, and Wade, 1993; Hambrick and Cannella, 1994; Hammer and Stanton, 1995).

    Perhaps this should not occur as any great surprise. Relocating names and departments on the organization chart does not in itself address the cultural form of the organization, and its attendant mindsets, relations, and ways of working can remain stubbornly intact. After the brief shock of adjustment, the social process begins to drift back into its original pattern or into new, perverse, and unintended forms. Culture and structure become dichotomous or misaligned. Formal and informal systems come into conflict and strategy, innovation, communication, and operational efficiency begin to fall through the gaps that spring up between the way things are formally structured and the way they are really done.

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    The above is the great paradox of organization design. On the one hand, design creates nothing. By itself, design is an empty vessel waiting to be filled with people, meanings, and actions and is what George Simmel (1976:223) would have called a "dead form." Like a work of art, design captures some element of life but has no life of its own: "from the first moment of their existence [forms] are set apart from the febrile rhythm of life itself, its waxing and waning, its constant renewal" (Ibid.). On the other hand, an organization's design creates everything since it will have a fundamental framing effect on people's expectations and perceptions, setting the context for the "organizing activity"- the social construction of roles and relationships-through which the organization takes shape.

    For this reason, it is crucial that changes in the organization design are deeply rooted in the social realities of organizational life and imperative that changes in design are accompanied by OD initi- atives directed at changing the "hidden organization" that underpins the formal structure. Otherwise, these new forms become (Anthony, 1990:99):

    ... concrete as well as symbolic reminders that nothing real has changed ... Structures and the actual performance and behaviour they require, permit and proscribe, are statements of values in action and, if they are standing contradictions of the organization's management, the result is likely to be cynicism and personal or organizational breakdown.


    The theories and models developed in this article are grounded in the authors' work as "action researchers" participating in a major programme of strategic change at Bannerdown Trust, a National Health Service (NHS) hospital Trust located in the West of England. Below, the authors describe their intervention at the Trust and elaborate the research model they applied.

    Bannerdown is responsible for the delivery of acute care to a large rural and urban constituency and operates three sites: one large, central acute hospital and two smaller regional hospitals. Like all NHS Trusts, Bannerdown's services are purchased on a contrac- tual basis through an internal "quasi-market" for public funds, by fund-holding general practitioners, and a central regional purchasing authority. At the time of this study, the Trust was a major employer in the region with a turnover in excess of 68 million pounds. Among

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    its 3350 employees was a diverse mix of professional specialists such as clinical consultants, nurses, and therapists, together with allied professional groups such as radiographers and pathology technicians, ancillary support, and managerial staff.

    The authors became involved with Bannerdown during a particu- larly turbulent period in its history, during which the Trust was being pushed and pulled out of shape by a number of conflicting forces. The "push" came from a situation of deteriorating performance and increasingly embittered management-staff and senior-middle man- agement relations. The "pull" came from an ambitious plan to re- build the hospital and reengineer its facilities on a completely new greenfield site using private-sector partnership capital through the government's new PFI (Private Finance Initiative) scheme.1

    Expectations around the PFI were high. The hospital faced ever- lengthening waiting lists, depleted resources, and a position near the bottom of the national league table for performance. It was strug- gling to cope with a legacy of underperformance and non-delivery, "running to catch up because the backlog keeps growing even when we can't keep up with the demand today," as a staff nurse put it. Morale was plummeting, recorded stress levels were at an all-time high and professional relations were becoming increasingly strained, and adversarial. "We have lost our sense of purpose for being here," as a staff representative told the authors. "This is a sick organiza- tion."

    Given the very human face of these problems, the new facility had become more than "just" a new building. It was a chance for a new beginning, a symbol of cultural renewal. The strategy for change thus had to incorporate an element of cultural change, reevaluating the way people felt and thought about their work and their relations with others, and repairing the damaged psychological and emotional contract between the individual, the group, and the organization.

    In spirit, the authors' intervention resembled a classic socio- technical systems project (Miller, 1993). The idea was to create an integrated programme of structural, technical, and cultural devel- opment and so engineer a "fit" between the technical (plant, technol- ogy, business process, information systems) and social (group/team dynamics, structural configurations, corporate culture) dimensions of the "new" organization. Their initial role was to conduct an in-depth investigation of the organization and sketch out possible directions for change. As the project unfolded, they began interviewing more directly in the change leadership process, becoming influencers,

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    facilitators, mediators, advisors as well as observers. The research model was one of organization development-oriented action re- search (Boss, 1989; Burnes, 1992; Goldstein, 1992; Golembiewski, 1987; Shani and Pasmore, 1986), illustrated in Figures 1 and 2.

    The circular flow suggested in the diagram-from data-gathering to analysis to feedback and so on to implementation, review, and onto further research-did not always happen in sequence. Action research is an exploratory, opportunistic, and emergent process of "learning and changing" (Burke, 1994) and seldom unfolds in strict sequence. Different parts of the organization and different elements of the change programme will develop in different ways and to dif- fering time-scales. The diagram was useful, however, as a way of informing participants of the logic and rationale behind the project and inviting their active involvement in a process steeped in the traditions of "collaborative inquiry" (Reason, 1994) and joint prob- lem solving.

    The first phase of the project involved eight months of intensive immersion in the field as "ethnographers" observing the structures and patterns of daily life and charting the plurality of subcultures and voices competing and colliding in diverse, polyphonic (Bate, 1997) organization. The method incorporated participant observa- tions, one-to-one and focus group interviews with consultants, managers, nurses, and ancillary staff, documentary analysis and feedback sessions.

    Time was also spent simply "hanging around": "waiting after meetings to talk to people informally, generating impromptu inter- views out of coffee-break conversations, and following people into potentially interesting events" (Khan, 1998:42).

    As the involvement of the authors developed, they also became involved in strategy, planning, and organization development ses- sions. This role as "insider-outsiders" both observing and intervening in the process of change gave them a special vantage point. They were located in the space between managers, professionals, and staff mediating between the different interests and agenda of the Trust's key stakeholders. Their role was described by one hospital consult- ant as that of "enzymes" to the change process, free agents or cata- lysts in the change reaction. As the consultant commented:

    I never had a similar conversation with anybody. A review like this is very helpful to us. You as an external agent, a third party, have the strength that you have no axes to grind, you're seen as a tool of this or that.

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    When these researchers became involved with the Trust, the view from all sides was that Bannerdown "wasn't working" and that the organization was slipping into decline (clinical consultant comment):

    Up until five years ago, this was a hospital of which I could be proud, and when people criticised it at dinner parties, I would say to my colleagues, "That's not very good, is it?" But now if someone says it's crap, I say "Yes, that's right." That's a sadness but that's the situation

    At the time, Bannerdown had a fairly unremarkable organiza- tional design: six clinical directorates ("functional divisions") and central administrative support (HR. IT, medical records) overlaid onto a classically hierarchical management structure. This conserva- tive design had become largely superseded, however, by the informal political system of patronage, deal-making, brinkmanship, and competition which operated alongside it, as a project manager expressed:

    It's a political organization. It's all about who shouts the loudest, who wields the biggest stick. It's like a playground ... The real power is with the bullies and the empire-builders. And you're asking me about strate- gy? About coordination?

    Such politisation is not uncommon in public health care settings where power structures tend to be diffuse rather than concentrated (Khan, 1998). There are often difficulties in reaching agreement be- tween competing clinicians and between clinicians and management, and no single group or individual holds the balance of power suffi- ciently to set the direction of strategic change (Denis, Langley, and Cazale, 1996).

    The situation was particularly intense at Bannerdown where the executive team lacked credibility and legitimacy and was identified as the cause of, rather than the solution to, the Trust's problems. There was even talk at one stage of a clinical revolt and a vote of "no confi- dence" in the entire executive team. The clinicians felt excluded from strategic decision-making and chose instead to exercise their power in a negative, disruptive way-blocking initiatives, threatening to vote "no confidence," and running over budget.

    With management unwilling to bring the clinicians into the strategy

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    process and clinicians unwilling to let management lead from the centre, the organization was in cultural gridlock. A middle manager noted:

    You've got an old culture where doctors were gods, they are trying to hang onto that for grim death, but they can't so you've also got managers in posts who are scared because they realize that doctors do still have a lot of power ... So you've got this incredible situation where doctors won't cooperate because they're scared of losing power and you've got managers who can't make a decision because they're afraid if they do there'll be a vote of no confidence and they'll lose their job.

    In effect, the formal design had lost its "steering capacity." As a nurse manager explained: "To get the job done, people are working outside the structure." The "working structure" and formal design had begun to pull against each other with tangible and costly conse- quences, as a project manager concluded:

    Every small lack of cooperation, every small conflict, secret, communica- tion breakdown costs this Trust money. Take nursing for example. We all spend a fortune on agency and temps but we never actually share human resources and that represents an unnecessary waste equal to hundred of thousands a year.

    Weak lateral coordination, intense "turf politics," and "tribalism" were the dominant structural motifs. Departments and specialisms were fighting for resources, reducing the Trust's capacity to realize internal synergies and diffuse best practices. The informal political system of power, influence, and lobbying had taken over, leaving little room for strategic thinking on how money should be spent or revenue generated. Directorates had become "protectorates," insular clinical empires, and the fragmented whole was considerably less than the sum of its parts. In the words of a business manager:

    Directorates [departments] are trying to compete with each other to the extent that it is destabalising the overall organization. At a basic level, a ward running out of pumps because they're suddenly under a lot of pressure finds it is unable to borrow equipment from another director- ate, or there is a lack of willingness to loan equipment to one another or even share disposables and so on for the overall benefit of the Trust. We've lost our corporate identity.

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    Under pressure, management had adopted an "inward-looking mentality." Rather than looking outwards at the changing needs of the user population, their focus had shifted toward internal fire-fighting and damage limitation. And, like the proverbial rabbit caught in the headlights of the hunter's truck, the more pressure they came under to create change, the harder they found it to look beyond the limits of their existing cultural and cognitive frameworks to "break the frame" with new ideas, strategies, and directions. As one business manager put it, "No one knows where to start ... And this includes the CEO and the senior managers. They are the leadership and even they don't know where to start."

    Bannerdown's tired executive board was a long way from the sort of charismatic "go ahead" top team prevalent in the change litera- ture. They had neither the inspirational charisma nor the political support to lead from the front (Greiner and Schein, 1988) and their relationship with the rest of the organization was marked by an hostility and distrust that their every action seemed to feed into and amplify. Soon after the authors started their research, for example, the CEO presented the organization with a proposal for restructing. He claimed it was based on a "consensus view" of the desired organi- zational form.

    However, the clinical body saw it as an attempt to concentrate power and control in the centre and marginalise key clinical stakehold- ers. The proposal brought about a huge outcry and was ultimately rejected. The executive team became further isolated from the CEO, the clinicians' trust in management was undermined, and any chance of a "new deal" was forced further into the distance.


    As the above example demonstrates, the top-down "forced evolu- tion/dictatorial transformation" (Dunphy and Stace, 1988) approach to change did not work at Bannerdown Trust. The power structure was too diffuse, the informal system too well-developed. Creating change at Bannerdown required a subtler, more culturally sensitive approach. The duet in the title to this section refers to the ways the authors tried to get the Trust to play structure/design and cul- tural/development together, not necessarily in an even-handed way but in a piece which began with dissonance and progressed to something more harmonious and polyphonic.

    In order to overcome the organizational^ ingrained political and

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    psychological inertia, it was necessary to build a powerful lobby of support for change across the organization. This in turn required the development of a "vision" for change inspiring enough to grab peo- ple's attention yet flexible enough to keep the Trust's options open as it began learning from and implementing changes in real time (Bate, 1995; Beckhard and Pritchard, 1992)--a vision rooted in the "here and now," presenting a clear plan of action to address the Trust's immediate problems but fired in the imagination.

    It was clear that the key stakeholders would be able to develop a vision individually-everyone had their own axe to grind, cause to promote, corner to fight. What was less clear was whether the vision could be shaped into a collective sense of corporate purpose. The mission had to mean something to the staff and managers on the front line.

    With this in mind, the authors started working with a diverse set of staff groups in the hope of incorporating a far more varied, poly- phonic set of voices into the process than those represented in the corporate boardroom. In essence, they were asking people to answer the questions: "What changes do we need to make in the way we think about, act towards, and relate to one another"? and "How do we need to change our approach to organizational problems in order to turn this Trust around"? Although the word "culture" was not used explicitly, it was "the culture"--"the way we do things around here" (Kotter, 1995)-that the authors were dealing with in their sessions. The emphasis was less on issues of structure and design than on the "meta-structres" of social roles, relationships, meanings, and connec- tions that shaped the experience of working life at Bannerdown.

    The sessions provided a link between vision and execution, con- tributing to the creation of a new "working structure." As people reflected on their working relationships with others, they started experimenting with new forms of collaboration. New commitments and new "social contracts" began to emerge. The underlying patterns of processes and relationships began to change, creating a cultural, psychological, and political opening for radical reorganization and reform

    The social foundations on which the new design would rest were being laid down; the duet had begun. As the working structure began to change at grassroots, it was possible to start making more "solid" structural changes which would institutionalize and consolidate the informal changes taking place through the development process. Clearly, some dissonance remained: the strategic aspirations of the

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    organization's senior management and the concerns and practical insights of front-line managerial and professional staff were in ten- sion at times. But, by setting in train a process of negotiation and dialogue- underpinned by a common commitment to a shared vi- sion-cultural and structural changes could be brought into some kind of harmony, with changes in the informal system reflected, reinforced, and given shape by formal structural change.

    An interesting outcome was the creation of what became known as the "from/to chart," shown in Figure 3 describing the type of organization people wanted to create. In simple terms, the chart was little more than a collection of words and phrases but it carried an important message about the need to move toward a more flexible and adaptive structure, one which valued partnership and diversity and could realign itself toward the rapid development and imple- mentation of continuous, ongoing change.

    The chart also provided an "ethic" and a "discipline" for the management of change and was "owned" by all the stakeholders, framing their expectations and aspirations and evoking a wider organizational conscience. "This is what we all agreed to," it said. "This is the organization we said we needed, the culture we said we wanted to create." As a senior nurse told the authors:

    I've got that from/to pinned to my desk and it makes me think about what I'm doing and says "Hold on, is this what we want from the new culture?"- and it seems to touch on my staff and other departments I come into contact with as well. I mean, no one can deny it's the change we need-we all said it in the report.

    The chart had the advantage of simplicity, encapsulating the depth and breadth of a complex vision on a single page. And it was culturally driven, mapping out the "desired state" in cultural and behavioural rather than purely structural terms, reinforcing the idea that structural change would not by itself solve the organization's most deep-seated problems. As one consultant, a highly influential figure respected by managers and clinicians alike, noted in a memo to colleagues:

    We have just had a review of the organization by Bath University. They agree it is time for a new management structure, but wisely caution us that a new structure will not improve our ways of working by itself ... We will have to change the way we think of and treat each other if we really

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  • PAQ WINTER 2000 (461)

    wnat to change the culture of the organization.

    The time had been heard, the direction and signature picked up, and people had started to whistle along.


    Many of Bannerdown's problems were amplified by what was observed to be a complex lack of leadership at the executive level-as if the conductor was working to a different score. Bannerdown's executive team lacked the credibility, power, and legitimacy to drive and inspire change from the centre. None of the classical elements of change leadership were present at the Trust-no charismatic CEO able to lead the organization out of the wilderness, no dynamic go- ahead executive team, no network of natural "change integrators" on the ground. How would the change process be coordinated, brock- ered, negotiated, and led?

    When the authors asked people about the kind of leadership they wanted, their answers reflected the general cultural model expressed in the from-to chart. People spoke of partnership-oriented, negotia- tive leadership rooted in principles of collaboration and inclusion. Responsible autonomy, based on collaborative rather than com- mand-control decision-making, underpinned by a strong structure of accountability and responsibility was the underlying principle.

    Leadership was seen as the ability to "heal the move forward" (clinical consultant). To get people to work together to forge new solutions and compromises- with all the negotiation and brinkman- ship that this involved-but to do so within accepted parameters and to commit to the strategies they had agreed. In Barnard's (1938:283) words, still relevant sixty years after the first appeared, leadership was seen as:

    an indispensable social essence that gives common meaning to common purpose, that creates an incentive that makes other incentives effective, that infuses the subjective aspect countless decisions with consistency in a changing environment, that inspires personal conviction that produces the vital cohesiveness without which cooperation is impossible.

    In more contemporary, pragmatic terms this might be articulated as (Mangham and Pye, 1991:91):

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    ... both individual direction and team direction. A matter of the Chief Executive in Committee to be sure, but a Chief prepared to devolve some of his/her power and authority, prepared to trust his/her col- leagues, prepared to talk and listen, prepared to imagine and improve, prepared, that is, to join the dance and on occasion to direct it.

    Rather than having one person (or centre team) acting as con- ductor or band leader, these "processual" views of leadership are based on the concept of sharing the lead with others while playing to one's own strengths. The metaphor is more "jazz improvisation" than State Philarmonic: the music may not always be in perfect harmony or fit seamlessly to a set score but it "fits and works" nonetheless with an unmistakable integrity, discipline, and character.

    While recognising the limits inherent in any metaphor, this one did at least encourage some original thought and action in the field, A number of clinicians, for example, began taking on roles as spon- sors and champions of change, facilitating dialogue, mediating between managers and fellow clinicians, forging new alliances, and driving the change at the grassroots level. Management, in turn, began to adapt their own strategy towards the innovations and changes happening on the ground.

    The process was one of "collective sensemaking" (Daft and Weick, 1984; Weick. 1995) and complex negotiation in which people collectively made sense and negotiated action rather than sense being given to them and action imposed on them by senior manage- ment. As people began to engage with the process, they began to understand their interdependence upon each other, to strike new compromises between their short-term interests and the long-term interests of the Trust, and to appreciate the costs involved in not changing.


    Although the process described above places considerable de- mands on the personal facilitation, coordination, and brokerage skills of the change agents and OD specialists leading the redesign, some general lessons can be drawn from this research. The "cultural- ly sensitive" approach to organization design involves an identifiable (and replicable) four sequence process illustrated in Figure 4 and summarised below.

    1. Diagnosis and Cultural Framing

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    The process begins with a long, hard, and critical look at the organization, mapping out the informal networks that make up the "working structure." This involves asking not only "where we are?" as an organization but "what are the deeper, underlying factors which have made us what we are?" "what vision of the future can we agree to work towards?" and "how can we perform better?" These are questions that cannot be answered by senior management alone and this diagnostic stage involves reaching out across the organization and seeking the opinion and counsel of a wide range of stakeholders.

    The idea of this stage is to generate a robust, holistic diagnosis of the organization's problems and challenges-in cultural and social, as well as design terms-and to identify problems at their roots, rather than looking only at their tangible effects. The strategies for change developed at this stage are grounded in the empirical realities identi- fied in the diagnosis but left flexible enough to allow new innova- tions, directions, and initiatives to emerge as the process gathers momentum.

    2. Development and Experimentation

    Using the "intelligence" gathered in the diagnosis, the next stage involves changing the "working structure" of the organization and beginning to broker new relationships, make new connections, exper- iment with new collaborative agreements, and find new social syner- gies across the organization. The aim at this stage is to build up the organization's capacity to manage change, experimenting with pilot projects and transitional structures (Bate, Pye, and Khan, 1997) which allow people to step out of their daily routine and look at issues afresh. As Doz and Thanheiser (1993:304) argue"

    The key unfreezing step in the process of change is the creation of a "temporary system" that differs from the existing day-to-day functioning of the organization. Whether workshops, task teams, or other arrange- ments, these temporary systems create new settings and new networks that allow an alteration of organizational norms, interactions, and power arrangements.

    It is at this stage that the network of "change leaders" and champions begins to emerge and that a "guiding coalition" (Kotter, 1995) of people with the power, sensitivity, and credibility to lead the change at grassroots begins to take shape.

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    3. Design and Debate

    It is only once the first two stages are underway that the focus can begin to shift towards formal design issues.2 The idea in this third stage is to build on the earlier developmental work to create an "enabling structure" based "not on professionals [including manag- ers] being able to do what they want but on the key factors they regard as preconditions for the performance of their work" (Hadley and Clough, 19%: 184).

    The process of relationship-building and dialogue continues but with the aim of institutionalizing the emerging "working structure" into a new organizational design of formal accountability structures, reporting lines, business processes, matrix arrangements, etc. De- signing the new structure calls for close collaboration with managers, staff, and professionals at every level, identifying the factors they see as prerequisites of good practice and incorporating these elements into the design.

    4. Evaluation

    There is a tendency in organizational change to become commit- ted to a single course of action even after its assumptions and aspira- tions no longer reflect the organization's strategic needs. The change process, therefore, needs sufficient time inbuilt for assessment and evaluation. Change agents need to be reflective as well as proactive, taking a critical view on the direction of change and seeing how innovations emerging out of the process can be further developed and rolled out.

    The authors call the above process "culturally sensitive structur- ing" because it attempts to change the pattern of relationships within the organization in tandem with the formal organization design. The intention in following through these four stages is to develop a new design and to build up the cultural capacity of the organization as a whole to work within the new design simultaneously.

    Although described in sequential terms, the process itself is continuous and fluid with "stages" evolving into each other and often occurring simultaneously. Developmental and experimental activity, for example, should continue alongside more focused work on design as the new issues and opportunities, which are thrown up in this development work, are integrated into the emerging organiza- tion design. Evaluation, likewise, becomes an ongoing process of

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    checking, questioning, debating, and discussing whether all the smaller changes are "working" and how they can be taken forward.


    The authors' intervention at Bannerdown allowed them to collect a vast amount of data of which only a small selection has been presented here. There are, however, several important points that can be drawn out from the research described in this article.

    First, they found great value in the methods pursued as an active research approach. Action research facilitated the development of a change programme rooted in empirical reality but fired in the imagination. It provided a structure for collaborative planning, problem solving and action while allowing room for flexibility, exper- imentation, and the discovery of new themes. As Goldstein (1992:1) notes:

    The originators of action research conceived it as a flexible and evolving process depending on the organization's response to the research that was elicited. The methodology of action research doesn't emphasise prediction; it focuses instead on allowing what needs to happen, to happen.

    Second, the authors' work demonstrated the importance of simultaneous cultural and structural change in programmes of corporate renewal. "Restructuring" offers a tangible, easily concep- tuable way of creating change. But it is unlikely to have a sustained impact on organizational effectiveness and performance if it is not integrated with a cultural change in the thought patterns, relational systems, and "working structure" of the organization.

    Third, the work demonstrated the importance in strategic change of a "systemic" approach to leadership. At Bannerdown, the network of "change leaders" driving the programme expanded outwards as the process developed, forging new alliances, brokering new working relationships, and shaping the collective sensemaking process.

    The process described above takes organization development and design as closely interwoven processes. Organizations are social constructions created through human action, interaction, dialogue, and negotiation in which "structure" and "culture" are symbiotic, interdependent facets of a large social whole. It seems only right that changing the organization should be a holistic process, which fuses

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    development and design to create fundamental change.


    1. The Private Finance Initiative (PEI) is a scheme whereby hospital Trusts, seeking to redevelop their facilities, enter into a single contract with a private-sector partner (usually a consortium of companies) to raise capital. The private partner makes the initial capital investment and assumes the risk of future maintenance and property management. The private partners may also take on the contract to support services and facilities management- portering, cleaning, catering, etc. The Trust then leases back the building over a 20-30 year period and pays for addition- al support services on a contract basis.

    2. The authors have deliberately not offered a more detailed picture of the design itself because the concern in this article is with process and managerial issues around redesign than with design per se.


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    Article Contentsp. [445]p. 446p. 447p. 448p. 449p. 450p. 451p. 452p. 453p. 454p. 455p. 456p. 457p. 458p. 459p. 460p. 461p. 462p. 463p. 464p. 465p. 466p. 467p. 468p. 469p. 470


    SYMPOSIUM: Economic Modeling in the Public Sector (concluded)THE EFFECT OF GREEN TAXES AND CARBON TAX SHIFTING ON THE STATE OF MINNESOTA [pp. 517-534]

    Back Matter


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