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  http://mos.sciedupress.com Management and Organizational Studies Vol. 1, No. 2; 2014 Published by Sciedu Press  59  ISSN    2330-5495 E-ISSN 2330-5509   Regulative, Normative, and Cognitive Elements of Organizations: Implications for Managing Change Jennifer Palthe 1,*   1 Department of Management, Western Michigan University, Kalamazoo, USA *Correspondence: Department of Management, Haworth College of Business, Western Michigan University, 1903 W Michigan Ave, Kalamazoo, MI 49008- 5429, USA. Tel: 1-269-387-5798. E-mail: jennifer.palthe@wmich.edu Received: April 21, 2014 Accepted: May 4, 2014 Online Published: May 27, 2014 doi:10.5430/mos.v1n2p59 URL: http://dx.doi.org/10.5430/mos.v1n2p59 Abstract Drawing support from current and seminal work on institutional theory, this paper explores the role of three elements involved in the management of change - regulative, normative, and cognitive . While organizational change traditionally deals with challenges associated with changing technologies, structures, and employee abilities, effective change also depends on the values and behavioral reasoning that srcinate in the institutional context – whether people have to change, ought to change, or   want to change .  A conceptual model reflecting the interplay of these systems on organizational change is presented, and implications for change management research and practice are extended. Keywords:  institutional theory; change resistance; change capacity; sustained change   1. Introduction The growing complexity of regulative, procedural, and cultural changes affecting contemporary organizations has  precipitated the increasing centrality of change management research and practice in recent decades. Despite the mounting importance of this subject in numerous academic fields, and the proliferation of books on the phenomenon, the literature on organizational change has been described as deficient in sound theoretical frameworks (Ford, Ford, & D’Amelio, 2008, Ford & Ford 1994; Worren, Ruddle, & Moore, 1999). Traditionally, organizational change has  been conceptualized as essentially a problem of changing technologies, structures, and the abilities of employees (Ogbor 1990). Although this is desirable, effective change also depends on the values, norms, and obligations of the change agents and change recipients in their response to change. Some change recipients may change because it is regulated company policy ( have to  change), others may simply change because it becomes the expected norm ( ought to  change), and other recipients may personally value the change and therefore embrace it ( want to  change). It is these values, norms and obligations that srcinate in the institutional context - regulative, normative, and cognitive - that constrain and support the operation of organizations (Scott, 1995). Institutional theory has generated a significant volume of work over the past three decades (Aten & Howard-Grenville, 2012; Aldrich, 1994; Dacin, 1997; Lawrence, Winn, & Jennings, 2001; Peng & Heath, 1996; Sherer & Lee 2002; Suchman, 1995; Zilber, 2012), yet there is still a paucity of studies showing how institutional systems affect organizational change. Greenwood, Suddaby & Hinnings' (2002) study of professional associations and the transformation of institutional processes is a rare example. Of the other studies that do exist, most have emphasized the importance of regulative and cognitive pressures in driving institutional change (e.g. Delbridge & Edwards, 2013; Heracleous & Barrett, 2001; Huy, 2001). Significant attention to the interplay between regulative, normative, and cognitive pressures to affect organizational change has not been as forthcoming. This paper examines the current and seminal work on institutional theory and its relationship to organizational change. The interplay between regulative, normative, and cognitive institutional elements and their impact on the institutional context and organizational change is explored. A conceptual framework of organizational change is  presented and implications for research and practice are extended.  http://mos.sciedupress.com Management and Organizational Studies Vol. 1, No. 2; 2014 Published by Sciedu Press  60  ISSN    2330-5495 E-ISSN 2330-5509   2. Institutional Theory and Change Institutional theory is not typically perceived as a theory of organizational change. Rather, it has traditionally been used to explain stability and similarity in a given population or field of organizations. Consistent with Greenwood and Hinings (1996), however, this paper supports the view that institutional theory is a useful framework to provide an explanation for change in organizations as it signals the contextual dynamics that precipitate the need for organizational change. The central thesis of institutional approaches is that many structures, programs, and practices in organizations achieve legitimacy through the social construction of reality. Meyer and Rowan (1977) stated that institutionalism involves the processes by which social processes and obligations come to take on rule-like status in social thought and action. Scott (1981) asserted that institutionalism is viewed as the social process by which individuals come to accept shared definitions of reality – the process by which actions are repeated and given similar meaning by oneself and others. Sometimes cultural  influences such as expectations, norms, and values ensure their repetition, and other times, social  influences such as desiring to look like or benchmark another institution alter it (Hatch, 1997; Hatch, 2012). Essentially, institutions are dynamic and display processes of change. They are “created, maintained, changed, and decline” (Hatch & Zilber, 2012, p. 95). From the rational perspective, institutions consist of distinctive values that are explicitly expressed by all organizational members. Universities, for example, are guided by educational values, and governments are guided by  political values. These institutional effects can be observed both within organizations and their environments, and operate to produce common understandings about what is appropriate organizational behavior. 3. Conceptual Model of Organizational Change A framework for understanding organizational change advanced in this paper is reflected in Figure 1 below. The  purpose of this framework is not to develop a comprehensive linear causal model. Rather, the Figure aims to exemplify several conceptually important relationships among institutional elements and variables discussed in this  paper. Figure 1 illustrates the connections between the institutional elements and organizational change via intra-organizational dissatisfaction with the current modes of operation. It suggests that the impact of this dissatisfaction with the existing methods and systems on change is restrained by the organization's capacity for change, and the level of resistance to the change. Figure 1. Conceptual Model of the Influence of Regulative, Normative and Cognitive Elements on Organizational Change HUMAN SYSTEMCONTEXT DISSATISFACTION ORGANIZATIONCHANGE   CHANGE CAPACITY   CHANGE RESISTANCE NORMATIVE    Work norms    Habits COGNITIVE    Beliefs    Values REGULATIVE    Policies    Work rules  http://mos.sciedupress.com Management and Organizational Studies Vol. 1, No. 2; 2014 Published by Sciedu Press  61  ISSN    2330-5495 E-ISSN 2330-5509   4. Regulative, Normative and Cognitive Elements of Institutions and Their Relationship to Organizational Change  Regulative, normative, and cognitive social systems have all been identified by theorists as central elements of institutions (Scott, 1995). Figure 1 suggests that these elements act together in mutually reinforcing ways to contribute to the institutional context. Table 1 exemplifies some of the key dimensions along which these elements differ. Table 1. Regulative, Normative, and Cognitive Elements Associated with Organizational Change  Regulative Normative Cognitive Legitimacy Legal systems Moral and ethical systems Cultural systems Central Rudiments Policies and rules Work roles, habits and norms Values, beliefs and assumptions System Change Drivers Legal obligation Moral obligation Change values are internalized System Change Sustainers Fear and coercionDuty and responsibility Social identity and personal desire Behavioral Reasoning Have to Ought to Want to As portrayed in Table 1 above, institutional theorists tend to differ in the primacy they ascribe to the various elements of institutions. Theorists emphasizing the regulative  view of institutions (e.g. Barnett & Carroll, 1993) are likely to view organizational change as fundamentally a product of market forces and regulative organizational elements such as new policies driven through coercive means.  Normative  theorists (e.g. Selznick, 1948) emphasize the role of social obligation and are likely to focus on informal structures rather than formal structures in organizational change. They are also likely to emphasize the immediate environment of organizations rather than the more general cultural rules of the society at large in driving such organizational change. Cognitive  theorists, or those examining changes in the cognitive aspects of organizations (e.g. Powell & DiMaggio, 1991), are likely to focus on changes in conceptual beliefs, mental models, and interpretations of shared meanings when organizations go through significant change. This perspective also stresses the importance of achieving change that is internalized by organizational members and culturally supported. Many scholars accept the regulative aspects of institutions, recognizing that they constrain and regularize organizational behavior (Scott, 1981; Meyer & Scott, 1983). However, some would view the role of regulative  processes in a more explicit and formal sense. Economists, for example, may view regulative processes like rule systems and enforcement mechanisms as the key drivers of institutional change. On the other hand, those who view institutions as primarily normative in nature, such as sociologists, may view change as a product of social obligation rather than mere expedience. These normative systems include values pertaining to preferred behavior and norms specifying how things should be done (Scott, 1995). In essence, they define legitimate means to pursue valued ends. While these normative expectations impose constraints on behavior, they also serve to empower and enable change. Each of these elements (regulative, normative, and cognitive) provides a basis for legitimacy – a condition reflecting congruence with rules or laws, normative support, or cultural alignment (Scott, 1995). However, as reflected in Table 1, the regulative element emphasizes conformity to legal systems as the bases of legitimacy. The normative element stresses the moral  bases for assessing legitimacy, and the cognitive element emphasizes cultural  legitimacy that comes from adopting a shared mindset. By relating these paradigms to the concept of organizational change, the factors that potentially play a role in resisting or igniting change are illuminated. From the regulative  perspective, legal obligation may be the essential driver of change, with coercion and fear acting as key factors perpetuating that change. Here, organizational members change because they have to  and not necessarily because they want to. From the normative  perspective, a sense of duty and moral obligation form the essential ingredients of what drives change. Organizational members feel they ought to  change out of a sense of duty and obligation even if they do not identify with the rationale for the change or believe that it will succeed. From the cognitive  perspective, for genuine organizational change to be generated and sustained, the premises of change would need to be internalized and valued by organizational members. Here, members choose to adopt and support a change because they believe in it and personally want to  support it, even if it is not enforced through an organizational policy (regulative) or workplace norm (normative).  http://mos.sciedupress.com Management and Organizational Studies Vol. 1, No. 2; 2014 Published by Sciedu Press  62  ISSN    2330-5495 E-ISSN 2330-5509   5. Market and Institutional Contexts and Their Relationship to Change Institutional theorists insist that organizational behavior is a product of values and beliefs that srcinate in the institutional context (Meyer & Rowan, 1977; Zucker, 1983). Survival, they assert, is dependent on an organization’s ability to accommodate institutional expectations, even when these expectations have little or nothing to do with the technical aspects of performance accomplishment (Scott, 1981). Institutional theory, therefore, illustrates how organizational behaviors are not necessarily just responses to market pressures but also products of the institutional context. Morrison (1995) and Scott (1995) assert that social actions are not context free, but are constrained and shaped by the setting in which they occur. The difference between institutionalized and non-institutionalized contexts often appears on the surface to be a matter of rationality. From this perspective, the economic and technical success in the market context is viewed as a product of rational decision making (Hatch, 1997). Rationality alone, however, does not distinguish institutionalized from non-institutionalized environments because rationalities can become contextualized (Scott, 1995). Conformity to pressures from the institutional context gives rise to social support and ensures survival of an organization, not because it elicits greater profits or better products, but because it goes along with accepted conventions (Hatch, 1997). Making decisions, for example, that only superficially conform to the norms of rationality can be an effective way to legitimize choices. Meyer and Rowan (1977), for example, assert that these rationalized arguments manifest themselves in the form of myths that cannot objectively be tested, but are classified as rational in that everyone knows them to be true. Rationalized myths form part of the institutional context in which organizations operate and to which they adapt in order to maintain their social legitimacy (Hatch, 1997). This notion of social legitimacy constitutes one of institutional theories greatest contributions. Organizations not only require labor, capital, knowledge, and materials, but also depend on the acceptance of the society in which they operate. This  becomes of critical importance when organizations are undergoing significant change and becoming increasingly global. These changes, fueled by globalization, create a situation where market contexts and cross-cultural contexts  begin to influence the institutional context in new and diverse ways. Hence, critical to an organization's survival and success is its ability to adapt not merely to its market environment, but its institutional environment as well. Every organization is a subsystem of a wider social system. This wider social system serves as the source of meaning, legitimacy, or higher level support that makes the implementation of the organization’s goals possible. Organizations are not simply the product of increasing technical sophistication but are the result of the increasing rationalization of cultural rules (Meyer & Rowan, 1977). Figure 1 seeks to capture these contexts and the role they play in influencing intra-organizational dynamics and organizational change in particular. The Figure also illustrates how the regulative, normative, and cognitive elements form the fundamental building blocks of the institutional context. Moreover, these contexts differ in terms of the strength that the mimetic, normative, and coercive pressures pertaining to the elements exert (i.e. the extent to which change may occur due to deinstitutionalization). Because of these forces, substantial or radical change is often difficult not just because of the challenge of gaining support, but also because of the normative embeddedness of an organization within its institutional context (Baum & Oliver, 1992). The greater the degree of embeddedness the more difficult is the achievement of significant change. On this note, drawing from the work of March and Simon (1958), Meyer and Rowan (1977), and Weick (1995), the greater the extent to which organizations are tightly coupled with their environments, the greater the potential resistance to change. Tight coupling refers to the existence of mechanisms for dissemination and the monitoring of compliance in combination with a consistent set of expectations (Greenwood & Hinings, 1996). However, this also suggests that if the institutional prescriptions change dramatically and the organization is tightly coupled with it, the result would be dramatic or revolutionary organizational change, not convergent and evolutionary change. Powell and DiMaggio (1991) assert that the institutional context provides “templates for organizing” (p.27). Conceptualizing organizational arrangements in terms of these templates provides a powerful definition of convergent and radical change in organizations. Convergent change occurs within the boundaries of existing templates. Radical change, on the other hand, occurs when organizations move from one template to another, involving a redefinition of meanings and interpretive schemes. This implies that if researchers and change specialists are to understand why it is difficult for organizations to change, they must first explore that which holds members of the organization to their old sets of actions, and what factors promote dissipation.
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