Developing International Organizational Change Theory Using Cases From China

7/25/2019 Developing International Organizational Change Theory Using Cases From China

1/42

http://hum.sagepub.com/Human Relations

http://hum.sagepub.com/content/62/4/459

The online version of this article can be foundat:

DOI: 10.1177/00187267081019802009 62: 459Human Relations

Paul S. Hempel and Maris G. MartinsonsChina

Developing international organizational change theory using cases from

Published by:

http://www.sagepublications.com

On behalf of:

The Tavistock Institute

can be found at:Human RelationsAdditional services and information for

http://hum.sagepub.com/cgi/alertsEmail Alerts:

http://hum.sagepub.com/subscriptionsSubscriptions:

http://www.sagepub.com/journalsReprints.navReprints:

http://www.sagepub.com/journalsPermissions.navPermissions:

http://hum.sagepub.com/content/62/4/459.refs.htmlCitations:

What is This?

- Mar 19, 2009Version of Record>>

at University of Hull on June 3, 2012hum.sagepub.comDownloaded from
http://hum.sagepub.com/http://hum.sagepub.com/http://hum.sagepub.com/http://hum.sagepub.com/content/62/4/459http://hum.sagepub.com/content/62/4/459http://www.sagepublications.com/http://www.tavinstitute.org/index.phphttp://hum.sagepub.com/cgi/alertshttp://hum.sagepub.com/subscriptionshttp://hum.sagepub.com/subscriptionshttp://www.sagepub.com/journalsReprints.navhttp://www.sagepub.com/journalsReprints.navhttp://www.sagepub.com/journalsPermissions.navhttp://hum.sagepub.com/content/62/4/459.refs.htmlhttp://hum.sagepub.com/content/62/4/459.refs.htmlhttp://online.sagepub.com/site/sphelp/vorhelp.xhtmlhttp://online.sagepub.com/site/sphelp/vorhelp.xhtmlhttp://hum.sagepub.com/content/62/4/459.full.pdfhttp://hum.sagepub.com/content/62/4/459.full.pdfhttp://hum.sagepub.com/http://hum.sagepub.com/http://hum.sagepub.com/http://online.sagepub.com/site/sphelp/vorhelp.xhtmlhttp://hum.sagepub.com/content/62/4/459.full.pdfhttp://hum.sagepub.com/content/62/4/459.refs.htmlhttp://www.sagepub.com/journalsPermissions.navhttp://www.sagepub.com/journalsReprints.navhttp://hum.sagepub.com/subscriptionshttp://hum.sagepub.com/cgi/alertshttp://www.tavinstitute.org/index.phphttp://www.sagepublications.com/http://hum.sagepub.com/content/62/4/459http://hum.sagepub.com/


2/42

Developing international organizationalchange theory using cases from China

Paul S. Hempel and Maris G. Martinsons

A B S TRA C T This article contributes to international theory development by

examining organizational change (OC) in mainland China. Eight case

studies of a single type of OC, business process re-engineering

(BPR), reveal that Chinese organizations diverged consistently from

initially planned changes. Change context is found to influence not

only the process of change, but also the content and even the

objectives of change. Since specific practices carry implicit values,

the congruence with existing values influences OC implementation

significantly. Multinational organizations must recognize that a

specific practice or policy can represent very different changes in

different contexts.

KE YW ORD S

case studies

Chinese management

comparativemanagement institutional theory organizational change

The growing globalization of business has led to an increasing need to im-

plement organizational strategies that transcend national boundaries. Issues

arising from different national contexts have been identified as a critical

stumbling block for international joint ventures (Brouthers & Bamossy,

2006), mergers and acquisitions (Antila, 2006; Napier et al., 1993), and

alliances (Jones, 2002). The rapid growth of developing economies alsomakes it important that firms adapt to changes in these economies (Peng,

2003). The successful implementation of global strategic plans requires a

mastery of international organizational change.

4 5 9

Human Relations

DOI: 10.1177/0018726708101980

Volume 62(4): 459499

Copyright 2009

The Tavistock Institute

SAGE Publications

Los Angeles, London, New Delhi,

Singapore and Washington DC

http://hum.sagepub.com

http://hum.sagepub.com/http://hum.sagepub.com/http://hum.sagepub.com/http://hum.sagepub.com/


3/42


4/42

patterns as well as increases the methodological rigor of our study (Miles &

Huberman, 1994).

Our research contributes to the literature in several ways. First, it

advances our limited knowledge of the OC phenomenon in China. Second,

the limitations in the existing theories of OC that are revealed by our Chinese

case studies prompt us to suggest specific ways in which OC theories may

be modified in order to increase their geographic scope of applicability.

Organizational change

Our focus is on planned organizational change, which seeks to shift anorganization from an initial state to a different end state in order to achieve

one or more objectives. For example, decision-making may be decentralized

to front line workers, with the ultimate goal of increasing customer satis-

faction. Planned OC has been researched extensively (Porras & Robertson,

1990), with Pettigrew (1990) suggesting that a comprehensive theory of OC

must address three fundamental dimensions: process, content, and context.

This suggestion has been widely accepted, with Armenakis and Bedeian

(1999) augmenting this list of dimensions to include the outcome(s) of

change.Figure 1 illustrates the relationship between the various components of

a planned change initiative, and visually elaborates the implicit models of

Armenakis and Bedeian (1999) and Pettigrew (1990). This model provides

a basis for our review of current theories of OC and empirical findings, with

the objective of identifying topics and ideas important for international OC

research. Our review is organized around four key components of this

diagram: Change criteria, the outcomes (and objectives) of change; change

process, the means by which change is brought about; change content, the

Hempel & Martinsons Developing international organizational change theory 4 6 1

Startingsystem

Enactedsystem

OC process Performanceoutcome(s)

Stimulus

Contextualfactors

Contextualfactors

Contextualfactors

Feedback

Feedback

Figure 1 Fundamental components oforganizational change



5/42

substance of the change that occurs; and change context, internal and

external situational factors that influence the change initiative.

Change criteria: Objectives and outcomes

Armenakis and Bedeian (1999) point out the problems in measuring change

outcomes, and argue that it is important to consider change criteria in

addition to process, content, and context. A planned organizational change

will typically have one or more objectives or intended outcomes at the

organizational level (such as improvements in financial or efficiency

measures) and/or individual level (such as behavioral or psychological

responses). The earliest theories of OC, such as that presented by House(1967), tend to focus upon organizational outcomes. Individual level

outcomes received more attention after behavioral change became recognized

as a prerequisite for changing organizational outcomes. For example,

Goodman and Dean (1982) discovered that behavioral change at the indi-

vidual level acts as a mediator for changes at the organizational level. More

recently, Armenakis and Bedeian (1999) have identified a trend away from

individual behavioral outcomes towards psychological variables, such as

commitment and loyalty.

The choice of change criteria against which change outcomes areassessed has influenced the development of OC theory. The shift in OC

theories from organizational outcomes towards behavioral outcomes and

then to psychological variables was prompted by a desire to better under-

stand the processes by which change occurred. However, in contrast to the

advances made in understanding individual responses to OC, the relation-

ship between specific OC characteristics and the resulting performance

outcomes remains poorly understood. Pettigrew et al. (2001) attribute this

deficiency to both an emphasis on change process and a problem in definingOC success.

Despite the growing emphasis upon change criteria in OC theory, it is

unclear whether an initiative is successful whenever the planned change is

implemented, or only if the intended outcome is achieved. Returning to our

hypothetical example, if decision-making was decentralized but customer

satisfaction did not improve, would this OC initiative be successful? We

argue that judging or evaluating the success of an OC initiative must start

by considering its initial objectives. The selection of organizational level

objectives has received little attention in the OC literature, with the changecriteria against which OC success is considered being treated as exogenously

given.

Human Relations 62(4)4 6 2



6/42

While the OC literature has not addressed the question of how

change criteria (objectives) are selected, this has been considered extensively

in the strategic management literature (see Porter, 1980). Drawing upon the

strategic management literature, Barringer and Milkovich (1998) examine

how the determination of objectives drives the adoption of particular

management innovations. They identify four theories (institutional, resource

dependence, agency, and transaction cost) that suggest differences in desired

organizational objectives, and examine similarities and differences in the

objectives predicted by these theories. All four theoretical perspectives agree

that managerial selection of objectives is influenced by environmental

conditions, but emphasize different sources of influence. Under the insti-

tutional perspective, managers are influenced primarily by institutionsexternal to the organization. Both the agency and transaction cost perspec-

tives emphasize internal conditions related to the nature of work. Resource

dependence is the only theoretical perspective that explicitly considers forces

both internal and external to the firm.

There are also fundamental differences between these four theories in

terms of how the organization responds to environmental constraints. The

resource dependence, agency, and transaction cost models all assume that

organizations will actively manage environmental constraints, while under

the institutional perspective, the organization reacts to conform with theenvironment. These contrasting perspectives lead to significant differences in

change objectives. The resource dependence, agency, and transaction cost

theories each focus on organizational efficiency or effectiveness, while insti-

tutional theory focuses upon objectives that gain or enhance legitimacy. All

of these theoretical perspectives highlight the role of the organizational

context, both internal and external, in explaining the way in which

objectives are set.

These theories represent complementary (rather than competing)perspectives of how change objectives are set (Barringer & Milkovich, 1998).

The question is not about which theoretical perspective is the rightone, but

rather a question of under what conditions these perspectives gain primacy

in influencing which change objectives are selected. Measuring change

implementation progress against the change objectives is an important tool

in change implementation (Armenakis et al., 1999; Galpin, 1996), yet at

present the selection of OC objectives remains unstudied.

This importance of considering OC objectives and effectiveness from

multiple perspectives is highlighted by Damanpours (1991) meta-analysiswhich shows that organizational effectiveness depends upon the congruence

between context, content, and process. This idea of congruence implies that




7/42

an OC initiative should be planned according to its objectives, and so the

setting of change objectives is the starting point for any OC initiative.

Ultimate success requires that, given a particular set of change objectives, the

OC initiative be adapted to the environment (both external and internal) of

the organization in order to be effective.

Change process

The change process component of OC research covers research focusing

upon the specific actions taken by the organization as a means of bringing

about the planned change. The process of change has been the primary focus

of the OC literature and the closely related organizational development (OD)literature. Van de Ven and Poole (1995: 510) contend that change process

has been a central and enduring quest of scholars. Porras and Robertson

(1990) support this contention by finding that only four of 16 published OC

and OD theories discussed outcomes in addition to process. The emphasis

on process rather than enacted content or context is evident in both the OC

(Armenakis & Bedeian, 1999) and OD literatures (Porras & Robertson,

1990), and is sustained in more recent works (see Poole et al., 2000).

Process-based OC theories fall into two categories: change implemen-

tation theories and change process theories (Porras & Robertson, 1990).Both categories examine the process by which change is brought about, and

tend to assume that using an appropriate change process is necessary and

sufficient to achieve a planned change. However, two key issues are

neglected: the matching of specific changes to specific outcomes; and the

influence of context upon the feasibility of the change.

The change implementation theories tend to be simple and prescriptive,

detailing the steps to take in order to achieve the intended outcomes. The

practical difficulties of applying a single list of sequential actions while main-taining congruence between the objectives, process, context, and content of

change ultimately limits the usefulness of change implementation theories.

The change process theories are less prescriptive than are the change

implementation theories, and explain the dynamics of OC in terms of

relationships between key variables to be manipulated in order to achieve a

desired outcome. However, change process theories typically fail to fully

specify the variables that can be manipulated (Porras & Robertson, 1990),

even though the content and process of change required to achieve specific

objectives depend on the context (Damanpour, 1991).Time has been recognized as a critical aspect of the change process

(Huy, 2001), such as in Lewins (1947) model of unfreezing, moving, and

freezing. Armenakis et al. (1999) present several process-based change




8/42

models derived from Lewin (1947), and adapt social learning theory

(Bandura, 1986) to consider how change messages are conveyed and

received. However, as change implementation theories, all of these models

still suffer from the deficiencies identified by Porras and Robertson (1990).

Sustained interest in the process of change has produced a rich and

extensive body of literature. However, there are still topics of significance

that are under-represented in the change process research. Most importantly,

the matching of specific manipulations (such as changes in policies or prac-

tices) to the desired outcomes remains poorly specified, as is a clear under-

standing of how different change processes might be matched to various

change manipulations. These shortcomings are due to the fact that, in

contrast to our extensive knowledge of change process, our knowledge aboutthe content and context of change is much more limited, particularly with

regards to understanding how content and context might influence process.

Change content

The change content component of OC research is concerned with the specific

policies and practices that are implemented, and which represent a difference

from the previous state of affairs within the organization. The emphasis in

the OC literature on process has left the content of change largely un-examined (Armenakis & Bedeian, 1999; Huy, 2001). Consequently, little is

known about either the relationship of specific change elements to the objec-

tives and context of change, or the effectiveness of those specific change

elements. Even the specification of change content remains poor. With the

earlier example of decentralized decision-making, the fundamental change is

decentralization. However, it is unclear whether the content should be

defined in terms of: changed administrative rules and procedures; changed

job duties; or the adoption of new values within the organization.Rather than conceptualizing OC content in terms of any specific

characteristic, content has been commonly considered in terms of the

movement from a starting point using simple dichotomies. The content of

change is thus described using terms such as revolutionary/evolutionary

(Greiner, 1972), major/minor (T.Y. Choi, 1995), or transformational/

transactional (Burke & Litwin, 1992). These terms essentially equate the

content of change with a measure of difference. Using our example, we might

describe the change as the decentralization of decision-making, but the

enacted content of change would (by definition) depend upon the startingsystem. Decentralization of decision-making in a highly autocratic organiz-

ation represents a fundamentally different type of change than it would in

an organization already enjoying some levels of employee participation.




9/42


10/42

particular, when a planned change is inconsistent with the prevailing values,

the enacted change falls short of the planned change. Detert et al. (2000)

adopt a similar view in their theory that total quality management (TQM)

success depends upon the adoption of a set of TQM values.

The effects of the national context upon OC had remained largely

unexplored in the past (Pettigrew et al., 2001), but researchers recently have

begun to focus on this relationship. Studies of national context tend to fall

into two broad categories: one emphasizing the role of institutions, and

another concentrating on the influence of national culture. Most research has

emphasized cultural explanations when examining the effect of national

context upon OC, with a particular emphasis upon how prevailing national

values influence change processes. Jaeger (1986) concludes that the culturalvalues of many nations, as found by Hofstede (1980), are in conflict with

Tannenbaum and Daviss (1969) OD value scales. Similarly, Burke and

Litwin (1992) predict that national cultural differences will influence both

the process and content of OC. Empirical studies have examined cultures

influence on OC implementations. Lau (1996) argues that the OC process

must be adapted to the specific cultural environment, while DiBella (1996)

suggests that certain types of change are resisted on cultural grounds due to

the content of the change. Taplin (2006) provides case examples of funda-

mental strategic change which suggest that some forms of institutionalizedcontrol are necessary in order to successfully implement global change.

Research on the influence of institutional forces upon OC in countries

other than the US remains rare. Lau et al. (2002) examine both institutional

forces and organizational culture in China, and find that managerial change

schemas are influenced by organizational culture, ownership type, and local

development levels. However, they focus on the schemas and attitudes of

managers rather than specific change initiatives. Zhou et al. (2006) examine

factors both external and internal to the organization that influence thedecision to undertake OC initiatives in China. The decision to implement

change, as well as the decision to implement either technical or adminis-

trative change, is driven by motivation, opportunity, and capability. Since the

emphasis upon these driving factors varies with national context, it is clear

that OC initiatives will differ across national borders.

Lau and Ngo (2001) suggest that the type of OD initiative to be

implemented will be influenced by cultural values, while the effectiveness of

its implementation will depend upon institutional factors. This highlights the

complexity and interdependent influence of institutional and cultural forcesupon OC and OD. Zhou et al. (2006) echo Pengs (2003) call for further

study of how firms adapt to changes in emerging economies. Since adap-

tations occur through the mechanism of OC, these findings suggest a need




11/42

to further examine the implementation of OC, with a particular emphasis

upon understanding how organizations respond to their internal and

external environments.

Using differences in national context to advance theory

The emphasis of the OC literature upon process, and the use of primarily

American samples, has limited OC theory in (at least) four ways: First, the

effect of change objectives upon the content, process, and effectiveness of

change is poorly understood. While theories have been offered to explain

the basis for setting objectives, the connection between OC objectives and

initiative implementation remains mostly unspecified. Second, the relation-ship between change manipulation and change content depends upon the

change context, but studies of change rarely adopt the contextual approach

needed to promote greater understanding in this area. Third, national

context is believed to influence OC, yet there is no systematic understanding

of how current theories of OC remain bound to the Western (and mainly

American) context. Finally, studies of OC content and international OC both

emphasize either the importance of values and beliefs, or the importance of

institutional structure, yet they do not provide a comprehensive model of

how institutions, values, and beliefs influence OC.The implicit acceptance of the Western (and American) values and

business practices has resulted in theories of OC that may not apply in

different national contexts (Lau, 1996; Lau et al., 2002). The direct and

unchanged application of management theory generated in one national

context to foreign contexts is problematic (Peppard & Fitzgerald, 1997).

This is a particularly acute concern in China with its historical and social

differences from the West (Child & Tse, 2001). The development and

changes that are occurring in China together with the countrys growing rolein the global economy make it increasingly important to understand OC in

the Chinese business context.

Child and Tse (2001) suggest that international studies will be helpful

to identify and address many deficiencies of existing theories. In addition to

the obvious cultural differences between China and the West, Child and Tse

(2001) identify several characteristics that make China a good location for

examining management theories. China has strongly developed and unique

institutions, it is large in size with significant internal variation, and as a tran-

sitional economy is experiencing significant growth and environmentalchanges. These factors all combine to make China a challenging location to

apply existing Western theories, and represent significant differences which

place contextualization in the forefront of research (Child & Tse, 2001).




12/42

Theories of OC should therefore be expanded to account for different

national contexts, but currently we lack the empirical knowledge to do this.

Researchers attention has focused upon national values, but it is becoming

clear that institutional forces are also critical. In general, while there is a

growing consensus that the national context influences OC, there is no clear

idea of the way in which national context influences change objectives,

process, or content. Just as Fox-Wolfgramm et al. (1998) relied on quali-

tative techniques to examine thoroughly the effect of the US context, we

believe that qualitative methods are appropriate to understand how a differ-

ent national context affects the current US-centric theories of OC.

International research tends to introduce theoretical and empirical

complexities that can be difficult to handle (Child, 2000). To reduce the levelof complexity it is helpful to study a specific type of OC. Business process

re-engineering (BPR) is a specific type of radical approach to OC with a clear

set of normative guidelines (Martinsons, 1995). Studying BPR in a non-

American context, and identifying systematic variations from the normative

baseline, can be helpful to understand how the national context influences

the objectives, process, and content of OC.

Business process re-engineering as organizational change

BPR is typically viewed from a workflow engineering perspective, rather

than from a traditional OC perspective. The leading advocates of BPR

(Davenport, 1993a; Hammer, 1990; Hammer & Champy, 1993) have

elaborated a normative baseline that sets out the objectives of BPR, and

recommends both what types of changes should be made, and how they

should be implemented.

BPR change objectives

BPR initiatives commonly seek to lower costs, improve outputs, and/or

reduce cycle times (Davenport, 1993a; Hammer & Champy, 1993). These

objectives are consistent with the paramount focus on efficiency of both the

agency perspective (Ross, 1973) and the transaction cost perspective

(Williamson, 1981).

BPR change process

BPR is an example of a change implementation theory (Porras & Robertson,

1990). The BPR process involves a clear sequence of steps (e.g. Davenport,




13/42

1993a), including: conduct a rational analysis; design a new business process

model; then implement changes rapidly rather than gradually. The BPR

literature also provides specific guidance for implementing each step, such as

involving employees in the design and implementation of the change

(Hammer & Champy, 1993).

BPR change content

A defining element of BPR is Hammers (1990) call to obliterate existing

processes, rather than simply automate them. BPR is thus an example of

what Greiner (1972) identifies as revolutionary change. In order to achieve

this, the BPR canon contains a number of specific recommendations that donot directly address content, but are actually specific OC manipulations.

These manipulations, such as adopting a business process (workflow)

orientation rather than a functional orientation, follow naturally from the

objective(s) of reducing various transaction costs.

Detert et al. (2000) contend that Total Quality Management (TQM),

another form of OC with a strong normative baseline, is congruent with a

specific set of organizational values. Similarly, we suggest that BPR is

grounded in a specific set of values that prevail in the United States. The

prevailing American culture encourages progressive change and individualinitiative. There is also a strong belief that people can and should control the

environment in order to reduce uncertainty (Hofstede & Bond, 1988;

Martinsons & Hempel, 1995). These values are consistent with the pro-

active, rapid, and discontinuous changes prescribed by BPR. The re-

engineering ideology is also consistent with the prevailing tendency of US

business managers to focus on inductive thinking, rational problem-solving,

and scientific models and principles (see Martinsons & Westwood, 1997).

The alignment of BPR and American cultural values is reinforcedrhetorically by the following: Hammer and Champy (1993) assert that BPR

fits Americas penchant for innovation, change, and focusing on tomorrow

rather than yesterday (p. 223); Davenport (1993b) conceptualizes BPR as

an American adaptation of the Japanese focus on process management; and

Grint (1994) views BPR as an American response to TQM.

BPR was subject to significant hyperbole in the early 1990s as a result

of provocative journal articles (Hammer, 1990) and best-selling books

(Davenport, 1993a; Hammer & Champy, 1993). BPR has been variously

criticized, for ignoring human factors (Cooper & Markus, 1995), producinglayoffs (Jarrar & Aspinwall, 1999), being insensitive to context (Buchanan,

1997), and even being a tool of American imperialism (Grint, 1994).




14/42


15/42

this type of OC. To address this issue, we review relevant findings about

Chinese business culture and management systems before examining the

emerging BPR phenomenon in China.

BPR and the Chinese business context

The values underlying the normative BPR baseline contrast starkly with those

prevailing in China. This difference begins with the change objectives. BPR

initiatives commonly seek to increase operating efficiency and output quality

(Hammer & Champy, 1993). These objectives reflect a Western rationality

that may be more appropriate in a developed economy than in Chinas

transitional socio-economic environment. Business in China remains verypersonalistic, relying less upon formal institutional rules and legal

contracts than upon trust-based personal relationships (Boisot & Child,

1996; Martinsons, 2008; Xin & Pearce, 1996). As a result, Chinese business

success has depended critically on building and sustaining relationships

(Martinsons, 2000; Peng & Luo, 2000).

Studies of new business development in China (Ahlstrom & Bruton,

2001; Martinsons, 2008) have also highlighted the importance of gaining

and sustaining organizational legitimacy. This implies that financial or

economic objectives must be supplemented by social or political consider-ations. As a result, we expect that developing and maintaining or enhancing

the reputation or legitimacy of the organization will be a key objective of

change. This suggests an externally-oriented institutional perspective in

contrast to the BPR focus on internal efficiency. Indeed, the Chinese reliance

on business networks and personal relationships (Martinsons, 2008; Peng &

Tan, 1998) as well as the role of business alliances as Chinese businesses

internationalize (Li, 2007), has been essentially ignored in the BPR literature,

which rather naively calls for radical alterations to internal processes.Prevailing Chinese values also conflict with many BPR process charac-

teristics. BPR is envisioned to be driven by rational analysis and the develop-

ment of a formal business process model. However, high levels of analysis and

formality are inconsistent with typical business practice and management

systems of Chinese organizations (Martinsons & Hempel, 1995). The Chinese

tend to adapt to their environment rather than attempting to control it (Boisot

& Child, 1999). Their external locus of control or fatalism encourages a type

of dynamic flexibility with continual and incremental types of organizational

changes rather than episodic and dramatic organizational changes that areelaborately planned and designed to achieve an optimal level of static

efficiency. They tend to respond quickly and effectively without developing

detailed forecasts or plans (Peng & Tan, 1998). Chinese businesses can thus




16/42

be seen as a product of their external environment, being comparatively good

at handling emerging developments but remaining comparatively inefficient

on a global basis (Martinsons, 2000).

BPR applies information technology to standardize core processes

(Hammer, 1990). However, IT applications in Chinese businesses tend to

focus more on monitoring and vertical data flows, and less on coordination

and horizontal data flows, compared to US businesses (Martinsons &

Westwood, 1997). The highly contextual nature of Chinese communications

and the largely tacit nature of Chinese business knowledge make it difficult

to fully formalize them using computer-based information systems (see

Burrows et al., 2005). With information being fundamentally a personal

asset rather than an organizational resource in the Chinese business context(Martinsons & Westwood, 1997: 222), the potential value of IT is further

reduced by an inclination to hoard rather than share information and knowl-

edge (Burrows et al., 2005).

BPR also prescribes discrete and rapid implementations relying upon

a high degree of employee empowerment and information sharing. However,

employee engagement in decision-making and knowledge sharing may be

limited by the hierarchical and authoritarian nature of Chinese businesses

(Martinsons & Hempel, 1995). In Germany, industrial democracy slowed

down the planning and design stages, but enabled rapid implementation(Peppard & Fitzgerald, 1997). In contrast, authoritarian executives in China

could initiate change rapidly, but Chinese employee resistance, which is often

manifested in passive forms, can be expected to hinder implementation.

Both the planned and enacted content of change may also be influenced

by the Chinese cultural context. BPR starts with a clean slate and leads to

radical changes. However, the Chinese reliance upon relationships and

business networks may inhibit a truly radical redesign, while an inherent

conservatism would favor enacting incremental and evolutionary change.The Chinese preference for adapting to environmental changes will also

encourage OC initiatives that maintain or enhance organizational adapt-

ability rather than those rigidly specifying an intended end-state. For the

same reasons that the formalization of both process and communications are

resisted, the content of change may lack formalization and be only partially

articulated.

Towards an international theory of organizational change

The rapidly evolving economy of China makes managing change a funda-

mental challenge to business, yet previous studies of OC in China are limited




17/42

to descriptive accounts (see Sun, 2000) and micro-level analyses (see Tsang,

2003). Woodman (1989: 211) argued that we have plenty of theories that

address organizational change and development. However, this contention

does not apply internationally since the application of existing OC theories

to different national contexts has been very limited. Little is known about

the objectives, process or content of OC in China, nor about how appropri-

ate it would be to apply existing theories of OC to this context. Conse-

quently, there is a limited knowledge base for building international OC

theories. As a result, we sought to examine OC in a non-Western context in

order to strengthen the foundation for theorizing about international OC.

In order to achieve this, it is helpful to focus on a single type of OC,

such as BPR. The clearly defined objectives, process, and content of BPR arehelpful to draw conclusions about the influence of contextual variables on

various change characteristics. By examining OC in China, a context with

significant historical, structural, and cultural differences from the West (see

Hofstede & Bond, 1988), we sought to identify the implicit assumptions and

associated deficiencies of existing OC theories.

Research question: How can insights from examining OC in China

contribute to the development of more comprehensive and inter-

nationally applicable theories of OC?

By studying BPR in China, we sought to not only gain an understanding of

OC in China, but more critically, to enhance the development of OC theory

in general. This would enable us to provide a foundation for developing more

comprehensive and internationally applicable OC theories.

Research design and methods

Our literature review suggests that the straightforward transfer of OC

initiatives from the US to non-US locations will face contextual obstacles.

Given our research aim of developing internationally generalizable theories

of OC, the distinctive socio-economic context of mainland China provides

an opportunity to identify areas where current theories are constrained

(Child & Tse, 2001), while examining a single form of OC is helpful to

minimize undesired variation in our data.

We have investigated BPR efforts in mainland China since 1996using the case study methodology to examine an emerging phenomenon

(Yin, 1994). Our design uses multiple cases to enable replication logic (Yin,

1994). Each case relies on multiple data sources and perspectives. This




18/42

expands upon the traditional approach to grounded theory by enabling a

higher degree of generalization and opens up the proverbial black box

between inputs and outcomes (Van de Ven & Huber, 1995: ix).

Our eight cases represented a cross-section of the Chinese economy, as

profiled in Table 1. We studied state-owned, collective, and private enter-

prises engaged in manufacturing, distribution, retailing, and service

provision to both corporations and consumers. Rather than being selected

deliberately or randomly, the cases resulted from a convenience sample of

Chinese organizations that initiated BPR efforts between 1996 and 1999. We

have followed all these change initiatives through to their conclusion, which

ranged from six months to six years. Both the case study methodology and

convenience sampling have been used commonly and justified previously forstudies of organizational phenomena that are newly emerging or emerging

in new contexts (see Eisenhardt, 1989; Pettigrew, 1990). To the best of our

knowledge, the organizations represented in our eight cases were among the

first 20 to initiate BPR in mainland China.

Top managers from three of our eight case-studied organizations

attended a BPR seminar conducted in Guangzhou by a leading authority,

while access to the other five organizations was the result of relationships

that were developed during previous research and consulting projects.

We collected data that could be compared against our theorized expec-tations using analytic induction [see pp. 148790 in Yan & Gray (1994) for

a detailed description and a contrast with enumerative induction]. Each case

was treated as an independent experiment that helped to confirm or dis-

confirm our implicit hypothesis that BPR in the Chinese business context

can be analyzed using the context-objectives-process-content framework


Table 1 Profile ofthe eight Chinese organizations

Industry Number of Location People

employees interviewed

State enterprise 1 Manufacturing 25,000 Chongqing 6

State enterprise 2 Manufacturing 15,000 Guangdong 4

State enterprise 3 Manufacturing/processing 13,000 Beijing 6

State enterprise 4 Distribution 5000 Shanghai 5

Township enterprise Manufacturing/distribution 4000 Guangdong 4 + 1a

Sino-foreign joint venture 1 Manufacturing 10,000 Shanghai 7

Sino-foreign joint venture 2 Manufacturing 5000 Guangdong 11Private domestic enterprise Retail 1000 Guangdong 9 + 1a

a A foreign consultant hired to guide the OC project was interviewed in two cases.



19/42


20/42

our implicit hypotheses about BPR in the Chinese business context. For

example, we examined the influence of political and social factors on the

objectives of change, the extent of employee involvement in the process of

change, and the degree of process formalization with both the planned and

enacted content of change. Comparisons across cases relied on methods

suggested by Eisenhardt (1989) and Miles and Huberman (1994). This literal

replication (Lee, 1999) enabled step-wise development and refinement of a

theoretical model (Yin, 1994).

In order to verify our interpretations, we used triangulation across our

various sources of evidence for each case (multiple interviews, observations,

and documents), which revealed a very high degree of consistency. The few

inconsistencies that did emerge were reconciled through verification by theoriginal informants or the collection of additional data. For example, we

went back to several informants and pointed out you said this, but they said

(or the documents indicate) that. Subsequently, each informant reviewed not

only our notes from their interview but also any reported findings that were

based upon their statements. These steps minimized the scope for subjective

judgment and thus help to assure the validity and accuracy of the findings

from our case studies (Yin, 1994).

Business process re-engineering in Chinese organizations

With strong existing positions in the domestic economy and international

aspirations, these BPR pioneers in China had no clear reason to deviate from

the BPR normative baseline as espoused by Hammer and Davenport. Each

firm was financially healthy and initiated BPR as part of a broader effort to

pursue growth opportunities rather than because of either a direct threat or

any need to turnaround a business with unsatisfactory performance. Atop manager from every one of the organizations insisted that the initial

intention was to more or less follow the BPR textbook.

Our analysis of our case study data focused upon identifying falsifying

examples. When the BPR implementations diverged from the normative

baseline, we examined in greater detail both the nature of the divergence and

the reasons that it occurred. Consistent with Glaser and Strauss (1967), the

key evidence and insights from our cases are organized into a theoretical

framework that is illustrated in Figure 2. This theoretical framework links

Chinese contextual elements to the observed change initiatives, and organizesour observations around the fundamental dimensions of OC.




21/42

Objectives

The cases demonstrate the importance of explicitly considering change objec-tives. In every case, the original intention was to implement textbook BPR.

However, the enacted change quickly diverged from the BPR normative

baseline. The change objectives initially selected were influenced by con-

textual elements, and evolved as the OC initiative progressed. The objectives

were modest, emphasized reputation, and lacked formal targets or evaluation

criteria. These characteristics were consistent across the cases, and reflect

business interdependence and a reactive/adaptive orientation.

Objectives adopted

The key objective of BPR is to improve efficiency. However, this objective

was seen as less critical in our Chinese cases than relationship and reputation


Figure 2 Influences on organizational change in China

Informal

Adaptive

Centralized

Interdependent

business networks

Organizationalcharacteristics

Resist formalizingbusinessprocesses and plans

Resist formalizinginformationand communications

Resist clean-slate thinking,and accept the status quo

Easily initiate change

Difficulty completingchange(with empowerment)

Difficulty inunilateral pursuitof rapid change

Organizational changecharacteristics

Reputationand flexibility aremore important thanefficiency Changeobjectives

Change

process

Change

content



22/42

objectives. In all cases, managers admitted to being under pressure to

improve competitiveness. Nevertheless, as shown in Table 2, a key objective

was to enhance their reputation or legitimacy with business partners while

aiming to avoid problems. In half our cases, managers agreed that being

seen to apply BPR was more important than actual improvements in

operational performance, with one executive stating that the motivation for

change was to improve (our) reputation and relationships with outsiders,


Table 2 Summary ofBPR project characteristics

Case Primary Improvement Durations of Management

stimulus objectives planning (P) and comments on

implementation project outcomes

(I)

State enterprise 1 BPR book and Competitiveness P: 8 weeks satisfactory,

peer discussion reputation I: 18 months improved

productivity and

response

State enterprise 2 BPR seminar Competitiveness P: 9 weeks acceptable,

reputation I: 12 months improved

Tech. transfer efficiency,betterimage

State enterprise 3 Peer discussion Competitiveness P: 4 weeks all that it was

reputation I: 9 months possible to do,

satisfactory

State enterprise 4 BPR book and Competitiveness P: 8 weeks quite successful,

articles reputation I: 13 months faster response,

lower expenses

Township BPR seminar Competitiveness P: 6 weeks acceptable, more

enterprise and book legitimacy I: 8 months efficient,better

image

Sino-foreign JV 1 Suggested by Competitiveness P: 9 weeks satisfactory,

foreign partner reputation I: 9 months higher quality,

faster response

Sino-foreign JV 2 BPR seminar Competitiveness P: 8 weeks successful,good,

reputation I: 10 months lower unit cost,

Tech. transfer better quality,

tighter integration

Private enterprise BPR book and Competitiveness P: 3 weeks satisfactory

peer discussion legitimacy I: 6 months outcome, better

customer service



23/42

and the consultant agreeing that success was viewed in terms of better

business relations rather than higher productivity.

This tension between efficiency gains and reputation was evident in all

of our cases. To maximize efficiency gains, it would be necessary to under-

take significant changes, yet the need for such changes was perceived as

damaging managers reputations. Employees in the case organizations told

us that the situation must be quite bad or worse than we thought if drastic

changes were needed, and they lost (some) respect for their bosses as a

result. Thus, while OC was initiated with the intention of following the BPR

baseline, the OC objectives ultimately emphasized reputation and legitimacy

rather than efficiency. Exceptions to this occurred only in the presence of

significant pressure from foreign business partners. A foreign manager in onejoint venture stated that keeping the business successful was the top priority.

This was a stark contrast to his Chinese counterparts focus upon avoiding

problems.

Formalization of criteria and evaluations

BPR calls for the formalization of objectives and planning. However, we

found that the OC implementations in China were marked by a low degree

of formalization. In part, this stems from a tradition of reactive and adaptivemanagement, rather than pro-active planning for the future. The consultant

noted that (they) pay little attention to long-term development. Even the

private enterprise managers indicated that they tend to wait for orders and

requests from customers and business partners rather than formulating their

own plans.

The evaluation of change effectiveness was also marked by a low

degree of formalization. While managers were satisfied with the outcome of

the change initiative, in only two cases were they able to offer quantitativedata to support their judgment. In another two cases, the adoption of specific

IT applications was used as a key indicator of success. These four cases

included the two joint ventures. The interviewees tended to agree that foreign

participation in these cases encouraged both the quantification of perform-

ance measurement and the application of information technology.

Contextual elements influencing objectives

A few critical contextual elements were repeatedly mentioned by our inter-viewees. First, maintaining harmony within the organization and building

strong relationships, both externally and internally, were viewed as critical

objectives. In addition, the importance of maintaining organizational




24/42


25/42

formalization reflected the need for managers to direct and coordinate more

people and activities during the actual organizational change, rather than a

desire to enable employee input on the proposed plans for change.

Slow and continual change processes

The decisions to proceed with OC were made quickly in China. However,

the pace of implementing the change tended to be comparatively slow. Most

Chinese managers envisioned OC as an on-going process with ebbs and

flows, and ideally a gradual and incremental process. This was distinctly

different from the periodic but rapid change prescribed with BPR. Rather

than make fundamental change to core processes, the managers in ourcases preferred progressive refinements based on small trial-and-error

experiments, with the refinements occurring in order to adapt to changes in

the environment.

The prevailing conservatism of the Chinese managers was found to be

a key factor in hindering the acceptance of rapid and fundamental change.

A modest pace of change was considered useful to avoid problems and to

maintain relationships. The interdependence of stakeholders in the Chinese

business culture slowed the process of OC even when top management were

convinced that rapid and fundamental changes were needed. This need totake into consideration other stakeholders, such as the suppliers of critical

materials and the providers of complementary services, resulted in barriers

to rapid change.

Contextual elements influencing processes

Two of the key influences on change objectives, namely business inter-

dependence and an emphasis upon adaptability, also affected changeprocesses, and so did the centralized nature of Chinese organizations. As a

result, it was easy to proceed with OC, but difficult to fully implement the

planned change. In addition, the OC initiatives evolved to fit within the

prevailing business environment.

Content

BPR advocates radical changes to workflow processes in order to dramati-

cally improve performance. In every one of the eight cases, the implementedchange deviated significantly from the BPR baseline. Prevailing character-

istics of the business environment acted to constrain the appropriateness of

specific BPR recommendations. The BPR prescriptions ultimately represented




26/42

a fundamentally different business approach that was unacceptable to the

Chinese managers.

About a dozen process changes that were implemented across the eight

cases did alter relationships with other organizations significantly. Most

commonly, peripheral activities were transferred to sub-contractors while

new quality assurance processes modified relationships with suppliers or

distributors. In terms of internal restructuring, the decentralization of

decision-making was insignificant in all but two cases. Only in the private

enterprise and one joint venture did the employees end up taking up signifi-

cant discretionary responsibilities as a result of a business process redesign.

Compromises among internal and external stakeholders commonly moder-

ated both the extent and pace of change. The enacted changes were muchmore modest than those prescribed with BPR, and as noted earlier, they were

implemented slowly and incrementally.

Enacted change

Business processes in the eight Chinese organizations were only slightly more

standardized and formalized after re-engineering. Meanwhile, the strategic

plans in most of the organizations remained primitive or unsystematic. The

adoption of comprehensive strategic planning was evident in only three cases,and was invariably due to foreign influences. Resistance to higher degrees of

formalization for both operational processes and strategic planning was

attributed to two different reasons: their stated desire to maximize adapt-

ability, and their managers preference for informal systems in order to

maintain their discretionary power.

Top managers asserted that rigorous strategic planning was neither

necessary nor feasible, since the business environment was very dynamic,

difficult to forecast, or subject to significant and unpredictable change. Thedesire to maintain discretionary power was also frequently mentioned, with

one manager noting that standardization would make workers responsible

for following a standard set of procedures regardless of who they were

serving. Even when standardized procedures were implemented, employees

admitted that the process documentation only provided a rough guide

rather than rigid rules.

The interdependence of business networks also acted to constrain the

change elements that were ultimately implemented. In all but one case, the

authorization to proceed with BPR relied on significant input from externalstakeholders. Two organizations cancelled plans for major change due to

external objections, from government officials in one case and a powerful

person objected in the other. In four other cases, changes to procurement




27/42

and/or distribution processes were significantly revised in response to

concerns from business partners. The consultant noted that even when

savings are obvious . . . it is difficult to get all the business partners on

board.

BPR as transformational change

The leading advocates of BPR (Hammer & Champy, 1993) envision it as

a radical and transformational change. Their prescriptions were not

completely acceptable to the Chinese managers and employees in our cases.

At a fundamental level, the specific details of BPR prescriptions represented

significant changes from the traditional way in which Chinese organizationsare managed. One manager stressed that implementing the BPR prescriptions

would be too disruptive, while the consultant noted the high incidence of

objections to anything that changes the way basic things are done.

Resistance to the changes came from both managers and employees.

Even after implementing BPR, the Chinese managers expected that they

would remain in charge, and continue to tell the workers what to do. This

was due to a reluctance to give up authority, but also since the workers

would not respect me if I told them to figure it out for themselves. The

Chinese employees echoed this, stating it is not my role, or suggestingchanges only create problems.

Ultimately, the OC did not significantly modify either organizational

cultures or management styles. The enacted changes in every case, regardless

of ownership type, were consistent with the prevailing organizational culture

and management style. At least one manager in each case admitted that strict

adherence to Hammers prescriptive advice was impossible in practice,

because of its challenge to existing values and attitudes invited serious

negative repercussions.

Discussion and implications

Our multiple case studies examined a specific type of organizational change

in China with the aim of determining how theories of OC could be made

more internationally applicable. The eight cases represented a wide range of

organizational size, industry, geographic location, and ownership structure

in a country with significant contextual differences from the West. Ourresults strongly suggest that OC initiatives in mainland China will exhibit

specific characteristics that reflect the prevailing values of the Chinese

culture. Consistent with prior researchers findings, we find that change




28/42


29/42

The model illustrated in Figure 2 leads to a number of obvious researchpropositions testing the hypothesized relationships. One important lesson to

be drawn from our study is that the objectives of change represent a critical

starting point for understanding OC in China. The objectives chosen will

influence the rest of the change initiative, so it is first necessary to understand


Table 3 Chinese adaptations ofBPR elements

Original element of BPR Enacted Chinese practice

Objectives

Fundamental belief Disrupting the status quo Enacting changes will improve performance

will dramatically improve while maintaining (many of) the existing

performance values and structures

Underlying theory Western rationality, and Institutional perspective, with an emphasis

specifically the transaction on building and sustaining relationships

cost perspective

Change objectives Significantly improving Improving organizational reputation and

organizational efficiency legitimacy while also improving efficiency

and effectiveness and/or effectiveness

Process

Involvement Employees involved in Top management made all decisions,

both planning and employees follow directives

implementation

Pace ofchange Rapid Slow change with time for adjustments,

unless change is adaptation to an

environmental shock

Frequency ofchange Discrete and episodic Preference for gradual and frequent change

Content

Starting point Clean slate Adapt and modify existing business

processes and work systems

Nature ofchange Radical restructuring and Tendency towards evolutionary and

systemic transformation transactional change

Extent ofchange Broad. Spans across the Fairly broad. Commonly spans the

entire enterprise enterprise, and often extends beyond it

Risks and rewards Large (and risky) initiative Conservative tendency can limit acceptable

will produce significant risk and potential benefits

benefits

Focus ofchange Business processes Business processes, but with difficulties in

redesigning a formal articulating a formal model

model



30/42


31/42

Second, theories of OC need further explication of the relationship between

change manipulations and change content. Third, each change manipulation,

which enacts a specific policy or practice, has an implicit underlying value.

Finally, the distinction between transformational and transactional change

content is useful for relating values to OC. Each of these points will be

discussed in turn.

Change objectives

Our findings suggest that both the stimulus for change and the objectives of

the change initiative depend significantly upon contextual factors. In concen-

trating upon OC process, and by implicitly accepting the OD values articu-lated by Tannenbaum and Davis (1969), many studies have taken change

objectives as given. OC models need to incorporate the setting and evolution

of objectives, and explain how objectives influence the choice of change

manipulation/content. The model of an OC initiative presented in Figure 1

may be expanded to better illustrate the key components of OC as shown in

Figure 3.

There are two key differences from the earlier diagram. The first shows

that the process of change, as well as the manipulation/content of change, is

driven by the change objectives. The second modification reflects our findingsthat the objectives may evolve as the change is implemented. Huy (2001)

argues that OC theory must include a temporal component, and we believe

that the evolution of change objectives should play a key role in temporal

models of change. This evolution of objectives held true across our cases,

where it was clear that experiences while implementing change could lead

the ultimate outcome criteria to vary significantly from the initial change

objectives.

Barringer and Milkovich (1998) suggest that different theoreticalperspectives highlight the potential importance of different goals and objec-

tives, such as reputation (institutional theory), control of managers (agency


Figure 3 Expanded fundamental components oforganizational change

Current(starting)system

EnactedsystemOC processStimulus

Feedback

Contextualfactors

Contextualfactors

Contextualfactors

Feedback

Contextualfactors

Realizedperformanceoutcome(s)

Changeobjectives(intendedoutcomes)



32/42

theory), or operational efficiency (transaction cost theory). Critically, the

relative priorities attached to these objectives do not merely reflect differ-

ences in theoretical perspective, but have also been related to environmental

forces. Hofstede et al. (2002) have identified cultural groupings in managerial

goals which suggest that organizational goals are influenced by culture. Simi-

larly, Hempel and Kwong (2001) have suggested that culture influences an

organizations willingness to adopt the transaction cost perspective, or in the

words of Hofstede et al. (2002: 800), nationality constrains rationality. In

our cases, the rational objective would be to maximize efficiency, and

certainly our sample companies were subject to competitive pressures.

However, absent pressure from foreign partners or strong market forces, the

companies in our cases ultimately decided that the company would be bestserved by change objectives that emphasize relationships and reputations.

This emphasis is consistent with arguments by other researchers that insti-

tutional forces exert a stronger influence in developing economies (Child &

Tse, 2001; Li et al., 2000; Martinsons, 2008).

Proposition 1: In well developed economies and established markets,

organizations will tend to set change objectives that emphasize

efficiency outcomes.

Corollary 1a: In less developed economies and emerging markets, an

OC initiative may initially emphasize efficiency outcomes, but it will

tend to shift towards outcomes that focus on relationships and repu-

tations as the change is implemented.

Change manipulation and change content

Our cases raise concerns about how relationships between change manipu-lation and change content are conceptualized. Conceptualizations of change

content in theories of OC have focused upon measures of difference in

change, such as revolutionary/evolutionary (Greiner, 1972). However, we

believe that it is important to distinguish between the change manipulation

that is planned and the actual content of change.

Multinational enterprises undertake OC initiatives with specific inten-

tions, such as to adopt BPR, implement ISO 9000, decentralize decision-

making, or move towards team-based work design. We find that even when

a specific manipulation is planned, the content of OC is influenced by thecontext in which change occurs. A specific manipulation across a multi-

national enterprise would constitute different contents of change in the parts

of the organization that inhabit different national contexts. Thus, the same




33/42

change might need to be implemented differently in different parts of the

organization, in order to reflect varying local contexts. These contextual

variations can be either structural (institutions) or cultural (values) in nature,

with external pressures likely to be reflected in the internal structure,

processes, and values.

Change manipulation and implicit values

Our cases show that the values implicit with BPR are not accepted readily

or universally. The importance of identifying the values that underlie specific

managerial practices has been identified previously. For example, Detert

et al. (2000) argue that TQM success depends upon the adoption of a certainset of values, while Jaeger (1986) contends that a particular subset of Western

values underlies most OD theories and practices. In China, a number of

specific BPR practices were inconsistent with the existing Chinese values

and practices. Consequently, key elements of BPR were either modified or

abandoned. Examples include an adoption of formalization and an emphasis

upon efficiency.

The process by which change is brought about, such as the rapid

implementation of change or involving employees in the change process, is

itself a manipulation. As such, it is also based upon an implicit set of values(see Jaeger, 1986). For example, the existing OD and OC literature examin-

ing the role of the change agent presumes that it is desirable to conform to

OD values on leadership and involvement (Tannenbaum & Davis, 1969). Our

cases show that this presumption is not valid globally. Both BPR and the OD

and OC literatures presume that change is best achieved when employees are

involved. However, there was very little employee participation during the

process of planning and designing the organizational changes in China.

These all serve to highlight the need to examine the implicit values ofboth the planned change manipulation and the change process to determine

if they are congruent with the values that currently prevail in the organization.

Linking values to change

We suggest that values not only provide the link between change manipu-

lation and change content, but that they are also a salient concept for change

process. The prior literature has defined change content in terms of differ-

ences, and we suggest that the relevant difference is between the currentlyprevailing values and those implicit in the change manipulation. Comparing

the existing values with the implicit values of the proposed OC initiative

provides a clear mechanism to account for the context, regardless of whether




34/42

the interest is upon national culture, organizational culture, or some other

conceptualization of values.

By proposing to link change manipulation and change content via

values, we echo the call by Amis et al. (2002) for OC research to follow other

management studies and focus on the influence of values. This focus implies

that Burke and Litwins (1992) conceptualization of change content as

transformational/transactional is more appropriate than other approaches

such as Greiners (1972) revolutionary/evolutionary conceptualization. The

planned manipulation and change processes may be defined to be trans-

actional when they are congruent with the prevailing or pre-existing values,

and transformational when they are not.

Our case studies show that importance of congruence with the implicitvalues associated with change manipulation and process. For example, involv-

ing employees in change planning was not congruent with the hierarchical

organizational cultures evident in our cases. Thus, a transformational change

would be required. As shown in Figure 4, employee involvement would tend

to be an easier manipulation to implement in the US, where it tends to repre-

sent value-maintaining transactional change, than in China, where it typically

represents value-modifying transformational change.

More generally, our analysis of the cases suggests that a transforma-

tional change is unlikely to be successful unless it includes an explicit effortto change the prevailing values and beliefs. In the absence of such a cultural

change, the enacted content of change will diverge significantly from the

planned content of change.

Proposition 2: When the values implicit in the planned manipulation

and process of change are congruent with the prevailing values, the

change initiative will be more easily implemented in the originally

planned form.


Figure 4 BPR as transformational change in China

Hierarchical Egalitarian

Employee involvement inchange planning

China US

Small difference invalues transactional change content

Large difference invalues transformational change content



35/42

Proposition 3: When the values implicit in the planned manipulation

and process of change are not congruent with prevailing values, the

change initiative will evolve towards a form congruent with the prevail-

ing values, unless there is an explicit and successful effort to first

modify those values.

The prevailing national culture is a key determinant of organizational values,

but the personal values of the organizations founder(s) and leaders as well

as the values of the profession or industry will also be important. Organiz-

ational values in different national locations of multinational organizations

are thus influenced by both convergent and divergent forces. Attempts to

build a strong and globally consistent organizational culture will lead toconvergence across locations. Meanwhile, values arising from the different

national contexts will lead to divergence across locations.

Our cases suggest that the pressure for global conformity is an import-

ant determinant of the extent to which the OC initiative is modified to

become congruent with the pre-existing organizational values. We observed

the greatest changes in organizations where there was strong pressure from

foreign partners, suggesting that the liaison with foreign partners helps

provide the impetus to bring about transformational change rather than take

the easier transactional change path. Our findings are also consistent withTaplins (2006) observation that strong controls from headquarters are

necessary to prevent local country managers from making superficial trans-

actional changes rather than more fundamental transformational changes.

Extending this reasoning to multinational enterprise, when the enter-

prise has different organizational values across national boundaries, the

implementation of an enterprise-wide change initiative will be subject to

different pressures in different locations. A strong and globally consistent

organizational culture will help to moderate the forces for divergence andminimize the difficulties of implementing consistent change initiatives across

many countries.

Proposition 4: In the absence of strong pressure from foreign stake-

holders, such as business partners or customers, both the content and

process of organizational change initiatives will be adapted to fit with

the prevailing national values and practices.

Proposition 5: Multinational enterprises will be more effective atimplementing OC initiatives consistently across national and cultural

boundaries if there is a strong and global organizational culture.




36/42


37/42

organization change (such as increased formalization or participation) have

implicit values that are associated with that manipulation, and that the

congruence of these implicit values with existing values of the organizational

context has a powerful effect upon the OC initiative. When the implicit

values of the planned OC are congruent with existing organizational values,

then the change is both easier to implement and more likely to be im-

plemented successfully. When the change to be implemented contains implicit

values that differ significantly from existing organizational values, then the

change initiative will experience considerable resistance and difficulty due to

these value incongruities.

A second lesson is the need to consider explicitly the interrelationship

between the context of change and the content of change in theories of OC.The content of change has been conceptualized largely in terms of the differ-

ence between the starting and end points of change. Insufficient attention has

been given to the relationship between change context and the specific change

manipulation to be implemented. As the example of employee participation

shows, the same change manipulation can represent significantly different

change content, depending upon the organizational context. We propose that

the linkage between change manipulation and change content is via values.

Our intensive cases in China indicate that specific change manipulations

can represent significantly different change content in different contexts.Specifically, many of the principles and prescriptions of BPR carried implicit

value orientations that varied significantly from the values prevailing in the

Chinese organizations. This lack of congruence in values was not recognized

and explicitly planned for in the change initiatives. Consequently, rather

than altering the prevailing values to match the principles underlying BPR,

the implementations of BPR practices were instead modified to match the

existing organizational values.

There are also clear implications for international business arising fromour findings. Given the international differences in values and business

practices, significant variation in organizational and managerial values is

likely across a multinational enterprise. As a multinational organization

seeks to implement a specific policy or practice throughout its entire organiz-

ation, it must recognize that identical policies or practices can represent very

different types of change in the various parts of the organization. A specific

policy or practice may be implemented using processes appropriate for

transactional change in some parts of the organization. However, trans-

formational change processes may be required elsewhere in other parts ofthe organization to implement the exact same policy or practice. Unless this

is recognized, an international change initiative is unlikely to achieve the

desired result across the entire multinational enterprise.




38/42


39/42

Boisot, M. & Child, J. Organizations as adaptive systems in complex environments: Thecase of China. Organization Science, 1999, 10, 23752.

Brouthers, K.D. & Bamossy, G.J. Post-formation processes in Eastern and WesternEuropean joint ventures.Journal of Management Studies, 2006, 43, 20329.

Buchanan, D.A. The limitations and opportunities of business process re-engineering in a

politicized organizational climate. Human Relations, 1997, 50, 5172.Burke, W.W. & Litwin, G. A causal model of organizational performance and change.

Journal of Management, 1992, 18, 52345.Burrows, G.R., Drummond, D.L. & Martinsons, M.G. Knowledge management in China.

Communications of the ACM, 2005, 48, 736.Child, J. Theorizing about organization cross-nationally. Advances in International

Comparative Management, 2000, 13, 2775.Child, J. & Tse, D.K. Chinas transition and its implications for international business.

Journal of International Business Studies, 2001, 32, 521.Choi, C.J. Samsung: Re-engineering Korean style. Long Range Planning, 1995, 28, 7480.

Choi, T.Y. Conceptualizing continuous improvement: Implications for organizationalchange. Omega, 1995, 23, 60724.

Cooper, R. & Markus, M.L. Human reengineering. Sloan Management Review, 1995, 36,3950.

Damanpour, F. Organizational innovation: A meta-analysis of effects of determinants and

moderators. Academy of Management Journal, 1991, 34, 55590.Davenport, T.H. Process innovation: Reengineering work through information technology.

Boston, MA: Harvard Business School Press, 1993a.

Davenport, T.H. Need radical innovation and continuous improvement? Integrate processreengineering and TQM. Planning Review, 1993b, 21, 612.

Davison, R.M. & Martinsons, M.G. Empowerment or enslavement: A case of process

based organisational change in Hong Kong. Information Technology & People, 2002,15, 4259.

Davison, R.M. & Vogel, D.R. Group support systems in Hong Kong: An action researchproject. Information Systems Journal, 2000, 10, 320.

Detert, J.R., Schroeder, R.G. & Mauriel, J.J. A framework for linking culture and improve-ment initiatives in organizations. Academy of Management Review, 2000, 25, 85063.

DiBella, A.J. Culture and planned change in an international organization: A multi-level

predicament. International Journal of Organizational Analysis, 1996, 4, 35272.Eisenhardt, K. Building theories from case study research. Academy of Management

Review, 1989, 14, 488511.Fox-Wolfgramm, S.J., Boal, K.B. & Hunt, J.G. Organizational adaptation to institutional

change: A comparative study of first-order change in prospector and defender banks.Administrative Science Quarterly, 1998, 43, 87126.

Galpin, T. The human side of change: A practical guide to organization redesign . SanFrancisco, CA: Jossey-Bass, 1996.

Glaser, B.G. & Strauss, A.L. The discovery of grounded theory: Strategie

Documents

Developing International Organizational Change Theory Using Cases From China