Strategic Change in Government Based on Hierarchy

Strategic Change in Government Based on Organization Hierarchy

Will Price

University of Texas at Permian Basin

March 22, 2005

The literature supports the position that there should be a relationship between the structure and organization change. This study was undertaken to determine how different organization roles, hierarchy, and sizes affect planned strategic change. A survey instrument was administered to top federal government agency leadership to assess change in their organization. The intention is to draw common relationships between organization change and specific categories or sizes of organizations.

Role of Change

Business strategy and structure have always been related. Organizational change involves innovation, process improvement, and organizational redesign (Galbraith and Lawler, 1993). They also noted that the hierarchical structure is related to changes in speed, quality and productivity. In recent years, the pace of change has accelerated so drastically that most organizational structures and management principles have no hope of adjusting or adapting (Hammer and Champy, 1993). Today's changes are discontinuous and happening at a geometric rate. Organizations must be sufficiently agile to be instantly reconfigurable to meet new demands (Tetenbaum, 1998).

Change efforts involve attempting to reduce discrepancies between the real and the ideal (Hersey and Blanchard, 1993). The change could be a first order change that occurs in a stable system that itself remains unchanged. It could be a second order change when fundamental properties of the system are changed such as the fall of communism (Hersey and Blanchard, 1993). Evolutionary changes are gradual and tend to be first order while revolutionary changes are second order. Both of these events could be driving the changes described in this study.

Some changes are limited and incremental in nature. Strategic, system wide changes implemented under crisis conditions are highly risky. Nadler and Tushman (1990) found that all strategic organizational changes initiated under crisis conditions with short time constraints were by far the riskiest. Such changes usually require a change in core values. Some recent trends that have generally lead to significant changes in corporate culture are reengineering, shift to horizontal forms of organizing, total quality management (Daft, 1998). These should not negate the importance of the vision statement as these are tools to assist in bringing about the change.

Some organizations are more able to change than others. Nutt and Backoff, (1992, p. 112) explain that some types of public organizations that can control change and other types that cannot easily control change. Professional agencies such as the IRS and FBI have considerable prerogative to act in a prescribed arena and have a protected budget. Political agencies, such as the State Department, have high control over their actions and may have legislation to protect it. Thus, change may be in the hands of parties outside of the agency.

In examining change, Lewin identified three phases of the change process - unfreezing, changing, and refreezing. This involves getting people ready for the change, providing new patterns of behavior, integrating the behavior into the individual permanently.

Tushman and Romanelli (1985) noted that "only executive leadership has the position and potential to initiate and implement strategic change". There are four levels of change in people: knowledge, attitude, behavioral, organizational change (Hersey and Blancherd, 1993). This research focuses on the organizational or group performance changes.

Change in Organizations

Organizational change is considered to be the adoption of a new idea or behavior by an organization (Pierce and Delbecq, 1977). The Amburgey and Dacin (1994) study found that strategic and structural changes occurring throughout the history of a firm affect the rates of change in strategy. Strategic change is a change in the firm's strategy, mission, and vision. This change should influence other organizational changes in technology, structure, and culture (Nadler and Tushman, 1990). The vision is inclined to drive important organizational changes (Belasco, 1990). Strategic organizational changes are usually triggered by factors outside the organization. External challenges, such as dramatic technological innovations, may cause strategic changes. "Strategic organizational changes affect the entire organization and usually change the strategy and the structure, culture, people, and processes" (Nadler and Tushman, 1990).

Burns and Stalker (1961) found that a stable, unchanging environment demanded a different type of organization than did a rapidly changing one. A stable environment can be portrayed as predictable demand for the organization's service, technological innovation is evolutionary, and government policies regarding regulation change little over time. An innovative environment is portrayed as having service demand change drastically on short notice, technological innovation occurs rapidly, and government policies and regulations change suddenly.

Important Burns and Stalker (1961) findings led to the concept of mechanistic and organic organizations. Mechanistic organizations have adherence to the chain of command, functional divisions, high specialization, formal hierarchy, detailed job descriptions, interaction is vertical, and behavior governed by instructions. Organic organizations are the opposite and have little concern with chain of command, jobs not clearly defined, and lateral communication.

Ban (1995) noted that the traditional model of bureaucracy does not appropriately fit all government organizations. Some are far more formal and impersonal, while others are smaller, more informal, and stress the importance of personal relationships. Most organizations "differ in the extent to which they stress use of formal regulations for control" (Ban, 1995, p. 23).

Stereotyped views of public bureaucracy in terms of change varies greatly among individual administrative institutions (Goodsell, 1989). He relates that to the Department of Commerce, advocating change means improving the productivity of American industry while to the Department of Defense it means rearming an alarmingly weak military establishment.

Boeker and Goodstein (1991) found organizations that have recently been successful will resist changes in their basic strategies and missions. Tushman and Romanelli (1985) found that a buffeted organization, such as

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