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Managing the three Levels of Change a

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Margaret T. O'Hara , Richard T. Watson & C. Bruce Kavan

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CIS at Columbus State University, Columbus, GA

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Department of Management, University of Georgia, Athens

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The Nations Bank Professor of Information Technology at the University of North Florida in Jacksonville. Available online: 21 Dec 2006

To cite this article: Margaret T. O'Hara, Richard T. Watson & C. Bruce Kavan (1999): Managing the three Levels of Change, Information Systems Management, 16:3, 63-70 To link to this article: http://dx.doi.org/10.1201/1078/43197.16.3.19990601/31317.9

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MANAGING THE THREE LEVELS OF CHANGE Margaret T. O’Hara, Richard T. Watson, and C. Bruce Kavan Change may be introduced into an organization a variety of ways — implementing new technology, employing new people, or in establishing new organizational structures, new policies, or new procedures. Just as change is made up of different components, it comes in varying degrees. A three-level classification of change can help IS managers gain control over the variable components and nature of change.

RGANIZATIONAL CHANGE AS IT relates to information technology (IT) has been the subject of several studies since 1958, when Leavitt and Whisler, who first used the label information technology, predicted dramatic organizational changes as a result of IT. Forty years later, the exact nature of the relationship between IT and organizational change is still neither well-understood nor wellmanaged. Poorly managed technology implementation may result in only minimal benefits being realized.14 Although some studies have examined the impact of technology on organizations, few have explored the relationship between technology and the magnitude of change. All new information technologies cause change within organizations; the magnitude of change varies depending upon the technology introduced and the goals for the technology. Some technologies, because of their complexity, are more likely to cause higher levels of change. Client/server technology implementations, for example, can vary from very simple to extremely complex. Consequently, client/server technology makes an excellent focal point of analysis to examine organizational change. Client/server technology divides computing resources between a central processor (the

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MARGARET O’HARA is an assistant professor of CIS at Columbus State University in Columbus, GA. RICHARD WATSON is a professor in the Department of Management at the University of Georgia in Athens. C. BRUCE KAVAN is the NationsBank Professor of Information Technology at the University of North Florida in Jacksonville.

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server) and desktop PCs (the clients). An oftcited reason for employing this technology is its flexibility. Applications developed using client/server may be configured in a variety of ways, each one providing the users with a different access to information. Some client/server configurations closely resemble their mainframe predecessors; others are a radical departure from menu-driven systems. For many organizations, the move from the mainframe legacy system to client/server technology represents a major change. For some firms, it is the greatest change in computing since they adopted mainframes more than 30 years ago. Any new technology will be accompanied by some change. Thus, the conclusions drawn concerning client/server technology may be applied to the implementation of any new technology. In ever-increasing numbers, businesses are turning to IT to provide either the means or the support for achieving and maintaining sustainable competitive advantage.4,8,11 Often, to obtain competitive advantage and respond to their rapidly changing environments, businesses embrace new technologies without a complete analysis of their organizational impact, and they unleash unknown and possibly unanticipated problems.

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systems may form based on more temporary divisions. Exhibit 1 offers a graphical representation of the STS model.

EXHIBIT 1 The STS Model

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CASE STUDIES

THE SOCIO-TECHNICAL SYSTEM PERSPECTIVE

One way to understand the complex interaction between technology and people within an organization is to consider the organization as a socio-technical system (STS) in which organizations are viewed as the interaction of four highly interrelated variables: task, people, structure (or roles), and technology. The STS model is based on the fundamental concepts of general systems theory.15 Every organization may be thought of as a collection of interrelated parts working together toward a common goal. There are two primary systems in the organization: the social system and the technical system. These systems are interdependent; what affects one affects the other. People perform tasks; these tasks produce the organization’s goods and services. Structure results from the communications, authority, and workflow systems that operate within the organization. Technology refers to any direct problem-solving intervention, such as a computer. The technical system includes the technology and the tasks performed to achieve organizational goals. Although the same type of technology may be present in many organizations, the technical system will be different within each organization. This is because the technical system is the result of implementing the technology, and the implementation choices are manifold. People and the roles they assume comprise the social system. Thus, the attributes of people (attitudes, skills, and values), and the communications, authority and workflow systems within the organization are among the concerns of the social system.1 Multiple subsystems comprise the main social system; each department may form a unique social subsystem, or sub-

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Extending the STS model to include a focus on organizational change, we now introduce three orders of change observed in our case studies. Each order of change is specifically linked to a component of the STS model. First-order change involves only task accomplishment. It occurs, for example, when a task is automated in some fashion. Second-order change occurs when the tasks and the people who perform them are affected. An example would be the introduction of word processing, which changed the nature of many jobs. Third-order change affects task, people, and organizational structure. Reengineering both management structures and workflow is a good example of third-order change. Each order of change is examined in detail in the cases reported within this article. Interviews were conducted with multiple client/server implementation teams over a 12month period. An iterative process of withinand cross-case analysis was employed to analyze the data.2,7,9,16 This process consists of data reduction, analysis of data displays, and conclusion drawing and verifying. Although conclusion drawing and verifying took place throughout the analysis process, the activity reached a final stage only after all data was collected, reduced, and analyzed. Although many client/server implementations were evaluated as part of a broader study, only three cases are discussed, one to exemplify each specific order of change. The broader study findings, however, were very consistent with the cases chosen to illustrate each particular concept. First-Order Change

In the first case, an international cable manufacturer developed a client/server application to replace a label printing process in which each plant used a single non-networked PC to print customer labels for product shipment. These labels often contained outdated information, since updates were infrequent and inconsistent. The client/server implementation provided plants with multiple PCs linked to one another and to a central repository of data. Customer data on the local servers was updated nightly from the repository at the corporate office, resulting in a more reliable label for this mission-

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MANAGING THE THREE LEVELS OF CHANGE

critical process. Accurate address labels were critical to timely delivery of product to customers. The new label printing system did not change the manner in which work was accomplished from a people perspective; it simply enhanced the label-printing task. Jobs were not affected. Consequently, this project illustrates a first-order change. This level of change is easy to understand and plan. The consequences are rarely unanticipated or disruptive. The development team for this project was small yet fluid — it consisted of three permanent members and many temporary members. The project was the development team’s first venture into client/server technology. At various times during the project, users from different functional areas and representatives from the plants were brought onboard to assess progress, provide guidance, and specify requirements. Although this project was limited in scope, the project manager nonetheless felt it was very difficult to manage because of the changing nature of the project team and the learning process necessary to exploit the new technology. First-order change is highlighted in the STS model by an interaction arrow between technology and task. This represents alpha change (α), the lowest order of organizational change that may result from technology implementations (see Exhibit 2).

EXHIBIT 2 First-Order Change

dynamic represented by the arrow between task and people is the changing roles or procedures that affected the method of task accomplishment. Not only are the procedures changed, but the manner in which people interact with the technology is also altered. This dynamic is reflected in the arrow between people and technology. When both roles (people and task accomplishment) and the method of task accomplishment (people and technology) are altered, this is second-order or beta (β) change. Third-Order Change

Second-Order Change

The second case concerns the standardization of an application across various subsidiaries of a major utility. Each of the organization’s 17 subsidiaries used a different system to capture payroll information. The systems ranged from manual to fully automated. The client/server replacement application represented the first common system to be developed for use by all subsidiaries. It altered both the method of task accomplishment as well as people’s roles (jobs). Thus, a second-order change took place. Second-order change “replaces the status quo with a new way of doing things”.3 The two interaction arrows: (1) tasks and people and (2) people and technology in Exhibit 3 represent second-order or beta change (β) resulting from the technology implementation. Moving clockwise through the model from technology to task, the technology altered the method of task accomplishment (time accounting). However, not only was the method of task accomplishment altered (a), but so were the procedures. It was not a simple technology substitution such as in the first case study. The I N F O R M A T I O N

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The final case is represented by a major financial institution with 12 regional offices, each using different information systems. Regional offices operated autonomously with information systems developed by one region that were sometimes available for internal sale to the other regions. The regional office examined in

EXHIBIT 3 Second-Order Change

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and approved online at a lower managerial level. Thus, not only were the purchasing tasks automated, but the entire management structure of the firm also changed. As decision-making moved farther down the hierarchy, the structure flattened and the culture of the organization was adjusted accordingly. Thus, people, the tasks they perform, and the communications, authority, and workflow structures were all altered.

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EXHIBIT 4 Third-Order Change

this study had developed two previous client/server applications — one of which was later marketed to other regions. The purchasing and payables system in this case was also scheduled to be marketed to the other offices. The client/server application system affected more than 1200 people, and it was used by every department within a single region. Although client/server technology was not new to the development team, the project experienced many difficulties. It involved many different functional areas with an IS staff that was not prepared for such extensive business involvement. Many of the development team members lacked understanding of the functional user areas (i.e., business knowledge) and were not completely comfortable with client/server technology, nor were they rigorous in their approach to development and project management. Both the original IS project manager and business project manager left the regional office before the project was completed, and the new project managers held very different beliefs about the IS staff and users. All four managers were interviewed as part of this research. The original IS manager believed that the traditional mainframe development staff could not make the transition to client/server development. Still, he placed them on the project team with little or no client/server training. These team members subsequently resigned, and an entirely new team assumed development responsibilities. The new project manager made certain that the new employees received adequate training in client/server technology to ensure a smoother development process. Changes resulting from this system were also felt in the user area. The new system allowed for purchase requisitions to be entered

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Finally, because of implementation problems experienced with this project, changes were made to the project management structure for all technology initiatives. The makeup of the steering committee was changed to include more users. Accounting areas and IS areas were placed under the control of a single vice president, and new lines of accountability for technology acquisition were established. This change is highlighted in Exhibit 4 by three interaction arrows: (1) people and structure, (2) structure and task, and (3) structure and technology. In addition to the beta-level changes discussed previously, changes afforded by this implementation 1. flattened the organization decision processes (people and structure arrow dynamic) 2. changed the manner in which new technology was selected and implemented (structure and technology arrow dynamic) 3. altered the method by which the organization would accomplish tasks (structure and task arrow dynamic). These changes represents gamma-order change (γ), the highest order of organizational change that may result from technology implementations. The STS model, extended to include the impact of technologically induced change, is now renamed the socio-technical change impact model (SCI). Change is often unanticipated; however, not all unanticipated change causes problems. When task automation is not expected, it is often still welcomed because tasks are done faster and presumably more efficiently. Even beta-level change, which affects task and people, may be easily handled, since peoples’ skill sets may just need updating. It is gamma change, with its far-reaching effects, that causes the most trouble when it is not anticipated. This begs the question: How does a manager anticipate the level of change that a new technology will produce?

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EXHIBIT 5 Dimensions of Successful Change Management

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Dimension

Alpha

Beta Project manager: Management style Participatory Facilitating Business acumen General understanding Recognized specialized functional understanding Technical ability Specialist Generalist Project team: Orientation Technical specialist Training specialist Level of communications • Project status • Project status • Implementation • Implementation planning guide planning guide • Workflow walk-through • Job behavior changes defined and reward structtures altered

Gamma Empowerment Recognized superior general and functional understanding Futurist Organizational design specialist

• Project status • Implementation planning guide

• Workflow walk-through • Job behavior changes defined and reward structures altered

• Organizational preparedness processes

• Early successes publicized Attitude toward change Implementation training

Understanding • Task Oriented

Problem handling Problem response

Supervisory Immediate

Organization: Enthusiastic • Task Oriented • Role Oriented Middle management Methodical

IMPLICATIONS FOR MANAGING CHANGE

Managers, acting as change agents, can use the SCI model first to assess the magnitude of change and then orchestrate an appropriate response. In this manner, many undesirable consequences of inadequately planned change implementations may be eliminated. Managing Toward the Magnitude of Change

A close examination of the case data revealed several references to the complexities associated with higher-order (beta and gamma) change. As a result, a set of guidelines related to change management is presented to assist managers to achieve the desired results. Technology implementation projects may be divided into three categories, as exemplified by the SCI model: those that affect the tasks that people perform (alpha), those that affect the tasks and people (beta), and those that affect the tasks, people, and structure (gamma) of the organization. For each level of change, certain factors are critical to a project’s success. These factors can be considered dimensions that may be measured along I N F O R M A T I O N

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Executive Introspective

an alpha to beta to gamma change continuum as reflected in Exhibit 5. Project Management Success Factors

Alpha-level change is related to task — it may simply be replacing one type of technology with another type and thereby automating the task without altering employee’s roles or organizational structure. This is the simplest level of change and requires a participatory management style for the project manager — users participate on the team in the selection and implementation process. When individual roles are altered, such as in beta change, a facilitating management style is required. Such a style encourages the people affected by the change to identify role changes, redesign their job descriptions, and bring definition to the new roles. When the change is gamma-level, the pertinent management style is empowerment, which enables people and teams to redesign both their work roles and the organizational structure, recognizing that no single person or group can accomplish this task individually. As the complexity of the change increases, both the business acumen and the ratio of

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Mobilizing

• Task Oriented • Role Oriented • Oganizationally oriented

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business understanding to technical understanding increases. Only a general business understanding with a significant technical specialty is required to manage alpha-level change, while beta-level change requires greater business functional area knowledge. At the gamma level, the manager must not only have true insight into how the business works and where it is positioned in the marketplace, but that manager must also be clearly recognized within the organization as having such insight. Only then can the manager truly empower the project team members and the users.

Gamma-level change requires that the organization prepare for change in a more formal manner. Change orientation seminars emphasizing the problems associated with maintaining the status quo and the opportunities afforded by responding to these problems should be emphasized in such a manner as to solicit input as to how the organization might or should respond. This allows participants to buy in to the change process. Early successes resulting from the change should be highly publicized and rewarded to reinforce the new appropriate behaviors. Organizational Success Factors

Project Team Success Factors

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Just as the project manager’s management style must alter within the alpha to gamma change continuum, so must the nature of the project team. With lower-order alpha change, the team members function in the mode of technical specialists, with an emphasis on the technology. As there is little impact on the roles or structure of the organization, there is little need for the team members to be more than this. As the complexity increases and individuals’ roles are altered based on the planned change, the team needs to incorporate a significant training component concerning the new method of work accomplishment. To do this, the team members must have some experience with training. As change reaches the highest level of structural change, the team requires not only technical and training components but also an organizational design component. An organizational design specialist would review and develop the structures, reporting relationships and reward systems that affect the people who perform the work and the roles they assume. Good communication is critical to the success of any project. As the complexity of a project increases, so does the need for varying types of communications. At the lower alphalevel change, simple project status reports accompanied by the current implementation planning guides are a minimum. As the change expands to include role changes (beta change), workflow walk-throughs and redesigned job descriptions need to be prepared. The walkthroughs assist individuals in moving toward new ways of doing work (i.e., altered roles); however, new behaviors are not refrozen until the job descriptions are redesigned, optimally with the affected people as active participants in the activity.

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As indicated, organizations must prepare for high-order change. These high-order changes often require the entire organization to be mobilized in the process. In addition to the change preparedness processes described above, organizations can rally around threats such as a major competitor or new regulatory requirements. Such rallies lend themselves to contests, testimonials, or success stories, all of which provide to focal points for strategic planning purposes. Lesser-order change may require only motivating people through improved understanding of the rationale for change (alpha) or to generating enthusiasm for the new method of accomplishing work (beta). Training sessions, newsletters, kickoffs, and victory celebrations may all be useful in generating a positive attitude towards change. Unanticipated problems typically come with every change. The handling of these problems is often as critical to the project success as the handling of the intended change. The higher the order of change, the more deliberate the resolution of problems must be. Alpha-change problems should be handled swiftly by the immediate supervisor. Beta-order changes that affect the roles of individuals should be handled by a higher-level manager after a methodical understanding of the conflicts or problem. Problems associated with gamma-level change are best handled at the executive level, since they may involve organizational competitiveness or other market or competitive positioning. These problems may not be resolved in as expedient manner as the lower-order changes because they involve significant organizational and market introspection. Appropriate training can often minimize problems associated with the change. Alphalevel change requires task-level training (i.e., how the new technology is used). Since people’s roles

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EXHIBIT 6 Anticipated vs. Actual Level of Change

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Actual Level Alpha of change Beta Gamma

Anticipated level of change Alpha Beta Gamma Match Over committed Over committed Under comitted Match Over committed Under committed Under committed Match

are changed by beta-level change, training should be extended beyond task-level training to workflow training to understand how roles are changed. It is often useful to simulate these changes for individuals to internalize and accept that the change will indeed accomplish the required task. At the gamma level, the mobilization of the organization around the change needs considerable care and deliberate planning. When possible, the change should occur in phases to allow the organization to deal with it in smaller, incremental chunks rather than all at once. However, in such instances, it is very useful to understand not only the current phase and the end goal but also how each phase helps achieve the longer-term outcome. DISCUSSION

Projects associated with gamma-level change are difficult to manage: the tasks are changed, the people are affected, and the management structure is transformed. To be successful, a project manager must consider all the factors mentioned previously; concentrating on only one or two factors may not be enough to produce a success. With such projects, the manager must perform a true juggling act, insuring that all the factors are well-managed. The cases examined reinforce the notion that a clearly articulated vision for new technology is important if the change is to be successful. This is not a new concept, yet for new technologies it seems as if managers often lose sight of its importance.5,6,12,13 Perhaps it is the seductive nature of any new technology that the technical person becomes so preoccupied with the technology and that the users’ needs are overlooked.10 Perhaps it is simply the nature of the technical person to focus on what the technology can do rather than what it must do. Those projects, where a clear business need for new technology existed, progressed more smoothly than projects in which a need was not

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clearly articulated. Consequently, managers must recognize that the existence of a technology does not necessarily justify its use within the organization. Ideally, organizations should match available skills to projects at the outset. Management, users, and developers each anticipate certain organizational impacts resulting from every new project implementation. For example, a project designed to automate a simple process may be thought to initially bring about an alpha or first-order change. The actual change that results, however, may be greater than anticipated. When actual changes are greater than expected, resources may be under-committed for the project. A resulting change that is less than expected may indicate an over utilization of resources. Exhibit 6 illustrates these possibilities. Overcommitment often results in waste, since projects can expand to reflect the availability of resources. Conversely, under-committed projects will likely fail because of inadequate resources. In many change models, the first stage concerns preparing the organization to change. Yet many organizations do not plan implementations appropriate to the level of change anticipated. Exhibit 6 will help mangers match resource allocation and the level of planned change. CONCLUSION

The SCI model extends the traditional STS model by focusing on the varying magnitudes of organizational change. In an era when restructuring, downsizing, and reengineering have become commonplace, managers must pay closer attention to the human aspects of the change rather than continue to emphasize the technical system if organizational performance is to be maximized. â–˛

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analysis,” Management Information Systems Quarterly, Vol. 19 No. 4, pp. 487–505.

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Managing the three Levels of Change  

Managing the three Levels of Change

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