Much of the literature reviewed in this chapter refers to change in organisations. Change refers to a minor adjustment in organisation systems, procedures and systems, while organisational transformation refers to a significant alteration in an organisation that results in an entire modification in the structure and operation and ultimately in the culture of an organisation. The principles, purposes, theories, methods, advantages and disadvantages of change in organisation can equally apply to organisational transformation. The difference is only that an organisational transformation process is more extreme than a change process. The following four levels show a clear difference between change and transformation (Dumphy & Stace, 1993).
The first level refers to fine alteration and continuous adjustments of processes, policies and procedures to ensure an on-going match between sections, units and departments of an organisation. The second level is an incremental adjustment which refers to distinct changes of strategies or processes due to changes in the external environments. The second last level is modular transformation which means a radical change in departments or divisions. The fourth level refers to organisational transformation as a radical change across the entire organisation. The first three levels refer to changes in the organisation while the last level refers to organisational transformation. For the purpose of this study organisational transformation will be defined as a radical change across the entire organisation (Dumphy & Stace, 1993).
3.4 AN OVERVIEW OF ORGANISATIONAL TRANSFORMATION
This section examines the reasons for organisational transformation and areas where organisational transformation can take place. The subsequent sections examine the benefits and the negative impact of an organisational transformation process. In conclusion this section offers the advantages of an effective organisational transformation plan.
A study amongst 50 British firms shows that the speed at which organisations transformed is increasing (Whittington & Meyer 2002) but that 70% to 90 % of organisational transformation processes fail. Who and what contributes to such a high percentage of organisational transformation failure? The leaders in an organisation are primarily responsible for the success or failure of an organisational transformation process (Hage, 1999). Choi (2011) adds that the reason for failure of organisational transformation is that management underestimates the vital role the individual team members play in the organisational transformation process. Morrison (2011) is in agreement with Choi (2011) and argues that team members may have knowledge that may not be known by the management team. Team members should feel free to make suggestions and criticise without fear of victimisation or punishment (Milliken, Morrison & Hewlin, 2003). Armenakis and Harris (2009) claim that the successful realisation of an organisational transformation process depends on the team members’ acceptance and support. The commitment towards an organisational transformation represents a passionate pledge to the organisational transformation process. Team leaders should provide support to their team members (Herscovitch ; Meyer, 2002).
Conger and Riggio (2007) identify four inevitable concerns that directly emerge from an organisational transformational process. The first concern is that it is difficult to manage an organisational transformation, secondly organisational transformation is difficult for team members to cope with, thirdly mismanagement of organisational transformation may have severe impact on organisations and team members and the fourth concern is that organisational transformation may release new potential in the organisation and amongst team members (Conger ; Riggio, 2007). Team members should let go of their old ways and approaches before organisational transformation can become effective. It is evident that if an organisation wants to capitalise on organisational transformation it is of fundamental importance to get the team members on board.
Organisational transformation is characterised by negative outcomes for both the organisation and the individual in the organisation. For the individual in the organisation it can be stress (Axtell, Wall, Stride, Pepper, Clegg, Gardner ; Bolden, 2002), time pressure and emotional welfare (Probst, 2003), and lack of job satisfaction (Amiot, Terry, Jimmieson ; Callan, 2006). These negative consequences of an organisational transformation can negatively affect productivity and increased health care (Mack, Nelson ; Quick, 1998) and absenteeism (Martin, Jones ; Callan, 2005) and the wish to leave the job (Holt, Armenakis, Field ; Harris, 2007). These negative consequences for the organisation are directly related to the problems the individual experiences during a proposed organisational transformation process. To reduce the negative impact of an organisational transformation on individual(s), effective strategies should be put in place.
To eliminate these negative outcomes of an organisational transformation Hellriegel, Jackson and Slocum (2005) offer a seven step approach for change which may equally apply to an organisational transformation process is reflected in figure 3.1 below.