Organizational development approach to change management: Theory E versus Theory O

Change Management

An Evaluation of the OD Approach to Change

Change may occur in a number of ways, reflecting practical differences in the way it is implemented as well as the attitudes of management in the implementation. The current fashion in management literature, reflecting the predominant management theories is the utilization of organizational development values, with a softer and more humane approach to change management. This approach may be seen as contrasting significantly with the harder approaches to change management, often argued as the more favourable approach, but it is not always the best approach.

In order to appreciate when the OD approach is beneficial, and harder approach may be more useful it is necessary to examine both models and consider their application. To appreciate the differences a useful approach can be achieved by looking at Beer and Nohria (2000a, p136) model where change is divided into two types; Theory E and Theory O They are referred to in this manner to reflect the underlying approach, Theory E has a focus on creating economic value and provides a harder approach to change management with a task based approach, where as theory O focuses on creating organizational value and is a softer approach which is employee centric (Beer and Nohria, 2000a, p136; 2000b, p35).

Looking first at the softer model; Theory O, this may be seen as aligned with a stakeholder approach, and the concept of the human relations school of management (Beer and Nohria, 2000a, p136). This alignment may be argued as existing as softer OD models, including Theory O, take into account the human elements of change and the way this may impact on different stakeholders (Stonehill and Dullum, 1990, p254). It is argued that this model still pays attention to the financial performance of the organisation, which may be a driver, but it is achieved with consideration to the needs of the individuals (Beer and Nohria, 2000a, p136). The use of a softer approach involves a commitment to winning the support of the employees, so that they buy into the idea of change be needed. A number of different commentators have indicated that for change to be successful, and last in the long-term, employees need to be committed to achieving change, otherwise the change may fail or employees may revert to their old practices (Wright, 2003, p33; Dervitsiotis, 1998, p109; Kotter, 1996, p69). The softer approach to change facilitates the of ability to gain an increased level of commitment from employees, as it facilitates processes that allow them to communicate knowledge that will help to motivate employees to accept the change and allow them to ask questions and assess the change for themselves.