6.2 Business change approaches
At an organisational level, Michael Beer and Nitin Nohria (2000) name two business change approaches.
Theory E changes
‘The creation of economic value and high returns to shareholders’ (Kippenberger, 2000) are normally driven from the top of the organisation, are strategic and programmatic in nature and often carry financial incentives. ‘Disconfirmation’ triggers in this case may be easier to identify, as key metrics are often regularly measured such as turn-over, a sharp drop in profits from a particular product or a change in market conditions (adapted from Beer & Nohria, 2000 and Kippenberger, 2000).
Theory O changes
In contrast, Theory O changes ‘see the organisation as having many stakeholders … [and] has at its heart the development of organisational capabilities and employee’s capacity’ (Kippenberger, 2000). Theory O disconfirmation is more emergent and less planned (such as a high turn-over of staff in a particular department), and change in this area emphasises values and high employee engagement (i.e. trying to address ‘learning anxieties’) (adapted from Beer & Nohria, 2000 and Kippenberger, 2000).
As with Schein’s model, ‘tension’ obviously exists between these two approaches. Successful changes normally require an element of both, but the balance has to be right: Beer and Nohria state that only a third of any initiatives to change organisational culture achieve success and suggest that where ‘the objective is to create an organisation that will adapt, survive and prosper in the long run, Theory E change must be combined with Theory O’ (adapted from Beer & Nohria, 2000 and Kippenberger, 2000).