Complexity Theory in Change Management

Executive Summary

The organizational change is an integral part of every company nowadays. All organizations should be able to adapt to the rapidly changing environment. Globalization, technologies, pluralism, and multiculturalism are factors that predetermine the need to adapt to alternations to remain competitive in the sphere constantly. Managers may utilize a complexity theory to implement organizational change. According to this theory, the organizations are characterized by non-linear relationships and lack of order. Managers should identify the connection between variables to conduct an efficient change. Still, many employees resist to changes.

Resistance to change is a usual phenomenon that is unavoidable in most cases. The task of managers is to reduce resistance to change so that it cannot impede the implementation of the organizational change. Employee involvement is another significant factor that influences organizational change. Employee involvement presupposes the participation of workers in the achievement of the common goal. Involvement of employees depends on leadership style and trust drastically. Transformational and transactional leadership approaches may be utilized to evoke either intrinsic or extrinsic motivation of employees. Managers should use ways for the enhancement of employee involvement such as sharing information, joint decision-making, or discretion.

Introduction

The ability to implement a successful organizational change is of great significance in the modern business. The world faces a rapid globalization that results in the increasing number of other similar services that enhance the competition within the particular market. Consequently, the ability to implement and successfully adapt to modifications within the particular organization is important to stay competitive in the area. Still, organizational change management is rather a challenging task for all managers. A variety of approaches has been discussed and utilized to conduct the organizational change. In the following paper, the complexity theory, resistance to change, and employee involvement will be evaluated from the perspective of the organizational change management.

Discussion

How and Why Can Complexity Theory be Applied by Managers to Implement Strategic Change?

Scientists and researchers have made many attempts to comprehend the way organizations function and develop. Various approaches to their understanding have been used. For instance, the organization was often compared to the machine. However, this seeing of organization is no longer relevant due to the development of other theories. The complexity theory presupposes that organizations function based on instability, entropy, nonlinearity, and non-equilibrium. According to Grobman (2005, p.350), ‘Complexity theory suggests that organizational managers promote bringing their organizations to the “edge of chaos” rather than troubleshooting, to trust workers to self-organize to solve problems, to encourage rather than banish informal communications networks, to “go with the flow” rather than script procedures’.

Complexity theories aim to identify the possible achievement of order in complex systems. The complexity theory is relevant when it comes to large operating systems. Such systems are continuously changing and developing. As a result, it is impossible to apply the usual cause and effect approach to them. In such systems, the order should not be understood as something definite and exact. The notion of order is connected with chaos and uncertainty. According to Brunes (2005), complexity theory derives from mathematicians’ attempts to develop mathematical schemes of weather patterns. Senior and Swailes (2010) write about three basic distinctive theories within complexity theories such as chaos theory, dissipative structures, and complex adaptive theories. Chaos theory presupposes that large organizations may be viewed as chaotic systems that constantly change and develop.

The primary fact is that even the slightest changes may lead to significant consequences for the whole system. Also, a complex system is often regarded as a dissipative structure that is characterized by a non-stable operation. For instance, a dissipative structure can maintain its stability under the particular extensive pressure while some small international alternations may result in drastic changes. According to Amagoh (2008), complex adaptive systems comprise the essential aspect of the complexity theory. Amazon (2008, p.6) writes, ‘the concept of complex adaptive systems tries to explain how learning and innovation happen in living systems and is used to describe “nonlinear systems” whose behavior is determined by the interaction of its adaptive parts’.

Before the evaluation of the ways the complexity theory may be applied to strategic change, it is necessary to define the concepts of organizational and strategic changes. All researchers agree that strategic change is a crucial element of the modern business. Markets and industries are changing rapidly nowadays. Peter Drucker has identified major factors that predetermine the need to employ strategic changes. These factors include globalization, new technologies, knowledge capital, and pluralism. Thus, strategic change is the organization’s response to the changing environment.

The complexity theory may be applied to the strategic change if taking into consideration several important elements. Houchin and McLean (2005) state that the absence of equilibrium and dependence on various changes are important for the application of the complexity theory. Authors write that organizations should promote a high level of freedom and democracy. Self-organization is an important part of complex theories that cannot be regulated with the help of linear relations. Levy (2000) describes other implications of the complexity theory. Thus, a complex organization should realize that long-term planning is impossible in such conditions.

The supporters of the chaos theory have demonstrated the way small disturbances may affect a large organization in the future. Feedback effects and non-linear relationships cannot guarantee any stability. Levy (2000, p.78) writes, ‘Networks, even when in ordered regimes, are subject to perturbations from external influences, which sometimes cause substantial, though unpredictable reconfigurations’. One more aspect significant for application of the complexity theory refers to the understanding that standard cause and effect rules do not work in large systems. Thus, dramatic alternations may occur drastically as a result of small changes. Also, managers should pay attention to short-term patterns of complex systems. Short-term patterns are more likely to be predicted than long-term ones.

It has been proved that particular types of behavior are typical for competition between firms, or relations between departments. Finally, managers should give impetus to innovation and creativity. A constantly changing environment requires a high level of adaptability, learning capacity, and creativity. For instance, managers should engage workers in the decision-making process to enhance creativity and innovation. The establishment and development of the organizational culture, identity, and mission assist in the successful strategic management.

The knowledge of the complex theory is useful for managerial practices for several reasons. As Andrews et al (2008) state, knowledge of organizational theories is important for the understanding of factors that drive the particular processes. Thus, the complexity theory helps managers to see connections between numerous aspects of the organization. Also, it is useful for the development of visionary leadership skills. Houchin and McLean (2005) believe that the primary limitation of the complexity theory refers to its initial objective. This theory was used for the investigation of the behavior of animals. Some scholars believe that this theory is not efficient because of the absence of the human factor.

How and Why does Resistance to Change Affect the Implementation of Planned Organisational Change?

It has been already mentioned that organizational change is essential for the successful development of business and staying competitive. However, many companies fail to undergo an organizational change without significant losses and failures. The realization of the strategic change is largely predetermined by the choice of approach to change. Consequently, it is not surprising that there is controversy when it comes to the best approach to organizational change.

Planned change is an approach to the organizational change that presupposes the identification of major steps towards particular alternations. Such steps and decisions aim to transform the organization into a new form or kind that is more efficient in comparison to the existing one. Several theories of planned change may be described. The most well-known and popular is Lewin’s planned approach to change. According to Burnes (2004), Lewin believed that it was necessary to examine the behavior of social groupings and understand their motivations to achieve the necessary results. The scientists employed group dynamics and field theory for this purpose. Also, Lewin suggested a three-step model to change. This model is relevant even nowadays.

Thus, the first step to change is unfreezing. This initial phase means the introduction of new alternations or plans to employees. During this stage, employees face a need to change and should be motivated to support it. The next step is moving. New practices and behaviors are implemented. Employees start working in a new environment. The final stage is refreezing. Burnes (2004, p.986) writes, ‘refreezing seeks to stabilize the group at a new quasi-stationary equilibrium in order to ensure that the new behaviors are relatively safe from regression’. Apart from Lewin’s approach, there are other types of planned change. The action research model presents a planned change as a cyclic process. Thus, every step is necessary for the realization of the subsequent step. This approach to planned change depends on data gathering and evaluation predominantly. Eight steps are differentiated in this model:

• Problem identification;
• Consultation with a behavioral science expert (Cummings and Worley, 2014);
• Gathering of data and initial diagnosis;
• Provision of feedback;
• Collaborative diagnosis;
• Collaborative planning of action;
• Action;
• Gathering of data after the action is conducted.

It is worth mentioning one more approach to planned change known as the positive model. The distinctive feature of this model refers to the fact that it emphasizes the accomplishments of the organization. Previous models aim to reduce shortcomings while a positive model’s objective is to enhance achievements (Cummings and Worley, 2014). The model comprises of the following steps:

• Initial inquiry;
• Inquiry about the most successful practices;
• Discovery of themes;
• Envisioning of desirable future outcomes;
• Designing and realization of ways for future improvements.

Resistance to change is a typical practice when it comes to organizational change management. According to Pathak (2011), organizations are very conservative by their nature. This fact concerns not only business organizations but other establishments as well. For instance, organized religions are extremely stable, and any attempt to modify some doctrines is usually accompanied by severe resistance. Educational establishments also are enormously resistant to change even though they aim to open minds and create the environment for new talents. Still, most schools follow the approaches of teaching that have been introduced more than fifty years ago.

The same is with organizations. There are two general views about the nature of resistance to change. The first is a demonizing resistance to change. Supporters of this vision believe that resistance to change constitutes a hindrance to organizational change. Thomas and Hardy (2011) provided an example when employees of the US’ sewing factory practiced job quitting, hostility, and improper working performance after they had been moved to other positions as a result of the change. There is the other view of the resistance to change — celebrating resistance. This recent concept considers resistance as a necessary part of the organizational change. Also, theorists believe that resistance provides managers with the opportunity to improve the organizational change and workflow.

Resistance to change can hinder the implementation of planned organizational change. People comprise the most significant resource in every organization. Consequently, the result of such a change largely depends on people’s desire to implement it. Resistance to change is associated with a lack of motivation and desire. Some employees may deliberately make errors in jobs to impede the implementation of organizational change. Also, people may become dissatisfied with the job on the psychological level. Thus, the job performance will not be efficient and enough for the successful change.

Razali and Vrontis (2010) believe that the knowledge of employees’ acceptance to change is important for the choice of the approach to planned change. Besides, it is necessary to be aware of the possible reasons for resistance. Lunenburg (2010) investigates the most common sources of resistance. Uncertainty is the most typical cause. People are worried that a particular change may influence their lives negatively. The second reason is group resistance. The staff of some departments may resist changes if they do not adhere to employees’ rules of behavior. The level of trust in a leader is another significant cause. Thus, a leader who has not substantial authority and respect should not expect to have great support. This reason also explains the need for proper leadership strategies.

How and Why can Employee Involvement Help to Achieve Effective Organisational Change?

Employees are the most important resource for change management. According to Sims (2002), the enhancement of employee involvement is crucial for the change management at all stages. The involvement of employees is necessary for the quick adaptation of the organization to the changing environment. Employees assist in rethinking old suppositions about change management.

Morgan and Zeffane (2003, p.59) define employee involvement as ‘the exercise, by employees of influence over how their work is organized and carried out’. Many attempts have been made to identify constituents of employee involvement. Some scholars believe that involvement is a combination of participation, knowledge, rewards, information, and power. Morgan and Zeffane write about five dimensions of employee involvement. The first element is a structure. Thus, employee involvement may be formal (following rules and orders) and informal (direct participation in the decision-making process). The second is a form that presupposes making direct decisions and serving as a kind of delegate. The third aspect concerns decision-related issues such as requirements for the task, the level of knowledge, and working conditions. The degree of involvement forms the fourth dimension. The decision process underlies the fifth element. The distribution of power and decision-making should be regarded as essential elements of employee involvement.

Managers should employ various techniques to enhance employee involvement. Working with people requires the knowledge of their behaviors, motivation, and relation to changes. Motivation and desire to fulfill the particular strategy may be developed or increased with the help of leadership and trust. The significance of leadership should not be underestimated. Thus, leaders set particular goals and motivate followers to achieve them. The primary aim of every leader is to establish a commitment to the idea and the common target.

The most popular types of leadership may be used for this purpose — transformational and transactional. ‘Leaders show transformational behavior when they articulate a shared vision of the future, act as role models, encourage the acceptance of collective goals, set high expectations, and when they provide intellectual stimulus and support for the individual development needs of subordinates’ (Deichmann and Stam, 2015, p.205). Thus, transformational leaders inspire workers to collaborate and evoke their inner motivation. Transactional leaders choose the other way for the increasing commitment. Transactional leadership style induces extrinsic motivation. In such a way, workers are motivated by particular material rewards. Some scholars believe that the transformational leadership is a positive one because intrinsic motivation is more powerful in comparison to extrinsic.

At the same time, the transformational leadership is extremely challenging as far as a constant motivation of employees requires immense efforts. Transactional leadership is utilized much more often because it is easier to enhance involvement with the help of rewards. It should be also noted that the choice of leadership style depends on the type of change and organizational culture. Trust is another important prerequisite for employee involvement. Sorensen et al (2011, p.406) write that ‘trust is generally defined as a psychological state comprising the intention to accept vulnerability based upon positive expectations of the intentions or behavior of another’.

Trust is usually investigated as an individual feeling. However, a collective trust of the group to the manager or administration is relevant in organizational settings. Resistance to change decreases employee involvement while trust is necessary to eliminate uncertainties and vulnerabilities. The results of the study of Sorensen et al (2011) have shown that the low level of trust among employees is most likely to hinder a successful implementation of change. The lack of trust results in resistance to change, and it may lead to further complications.

Managers can apply various methods to enhance employee involvement depending on their approach to leadership and change. Ryan et al (2008) write about a top-down approach to change as an efficient method to increase employee involvement. In a top-down change, middle managers receive instructions from senior executives and then implement them in practice. Ryan et al consider that this type of power division is crucial for the radical changes as far as it demonstrates that all people are involved in the process of organizational change. Gifford et al (2005) describe types of employee involvement techniques.

Thus, managers may increase the exchange of information through general assemblies, group briefings, consultation committees, notice boards, or newsletters. Consultation and joint decision making constitute another way to increase employee involvement. It can be achieved with the help of employee surveys, consultation committees, working groups, quality circles, suggestion schemes, and total quality management. The third type of involvement is discretion, and it presupposes the establishment of autonomous workgroups or team working.

Employee involvement is significant for the efficient organizational change for several reasons. The most important one is motivation. Employee involvement is impossible without proper motivation, and the latter is necessary for good performance. Also, employee involvement makes the process of organizational change smooth as far as all workers know their jobs and are committed to the common goal. Amah and Ahiauzu (2011) have conducted research aimed at investigating the importance of employee involvement. The results have shown that employee involvement increases an organization’s profitability, market share, and productivity.

Conclusion

The organizational change is regarded as an important element of the modern business. Even more, it is inevitable nowadays. New technologies, globalization, pluralism, and multiculturalism result in rapid and unexpected changes. Organizations should be able to adapt to these changes quickly, or they will lose their authority and market. The ability to conduct efficient organizational change is crucial for all companies. Managers should develop a plan for strategic change and realize it. Complexity theory should be taken into consideration when discussing current organizations.

This theory presupposes that large organizations function based on non-linearity and interaction of different variables. Even the slightest modification may lead to further drastic changes. Complexity theory assists managers in obtaining a new vision of the way organizations work. During the process of planned change, managers may face resistance. Resistance derives from uncertainty and fear in most cases. Thus, managers have to reduce it to the minimum. Employee involvement is another important element of successful organizational change. Managers should implement various methods to involve employees because they are a crucial resource in any change.

Bibliography

Amagoh, F. (2008) Perspectives on Organizational Change: Systems and Complexity Theories. The Innovation Journal, 13 (3), p.1-14.

Amah, E. and Ahiauzu, A. (2011) Employee Involvement and Organisational Effectiveness. Journal of Management Development, 32 (7), p.661-674.

Andrews, J., Cameron, H. and Harris, M. (2008) All Change? Managers; experience of organizational change in theory and practice. Journal of Organizational Change Management, 21 (3), p.300-314.

Burnes, B. (2004) Emergent Change and Planned Change — Competitors or Allies? The Case of XYZ Construction. International Journal of Operations & Production Management, 24 (9), p.886-902.

Burnes, B. (2004) Kurt Lewin and the Planned Approach to Change. Journal of Management Studies, 41 (6), p.977-1002.

Brunes, B. (2005) Complexity theories and organisational change. International Journal of Management Reviews, 7 (2), p.73-90.

Cummings, T. and Worley, C. (2014) Organizational Development and Change. Boston: Cengage Learning.

Deichmann, D. and Stam, D. (2015) Leveraging transformational and transactional leadership to cultivate the generation of organization-focused ideas. The Leadership Quarterly, 26, p.204-219.

Gifford, J., Neathey, F. and Loukas, J. (2005) Employee Involvement [online]. Brighton, Institute for Employment Studies. Web.

Grobman, G. (2005) Complexity theory: a new way to look at organisational change. Public Administration Quarterly, 29 (3), p.350-382.

Houchin, K. and McLean, D. (2005) Complexity Theory and Strategic Change: an Empirically Informed Critique. British Journal of Management, 16, p.149-166.

Levy, D. (2000) Applications and Limitations of Complexity Theory in Organization Theory and Strategy. In Handbook of Strategic Management, ed. J. Rabin and G. Miller, p.67-87. Boca Raton: CRC Press.

Lunenburg, F. (2010) Forces for and Resistance to Organizational Change. National Forum of Educational Administration and Supervision Journal, 27 (4), p.1-10.

Morgan, D. and Zeffane, R. (2003) Employee Involvement, Organisational Change, and Trust Management. International Journal of Human Resource Management, 14 (1), p.55-75.

Pathak, H. (2011) Organisational Change. Upper Saddle River: Pearson.

Razali, M. Z. and Vrontis, D. (2010) The reactions of employees toward the Implementation of Human Resources Information Systems (HRIS) as a planned change program: a case study in Malaysia. Journal of Transnational Management, 15 (3), p.229-245.

Ryan, N., Williams, T., Charles, M. and Waterhouse, J. (2008) Top-down organisational change in Australian Government agency. International Journal of Public Sector Management, 21 (1), p.26-44.

Senior, B. and Swailes, S. (2010) Organizational Change. Delhi: Pearson Education.

Sims, R. (2002) Changing the Way We Manage Change. Santa Barbara: Greenwood Publishing Group.

Sorensen, O. H., Hasle, P. and Pejtersen, J. H. (2011) Trust relations in management of change. Scandinavian Journal of Management, 27 (4), p.405-417.

Thomas, R. and Hardy, C. (2011) Reframing Resistance to Organizational Change. Scandinavian Journal of Management, 27 (3), p.322-331.