A causal model of organizational performance and change

Journal of Management, Sept, 1992 by W. Warner Burke, George H. Litwin

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McClelland, D. C. 1961. The achieving society. Princeton, NJ: Van Nostrand. To provide a model of organizational performance and change, at least two lines of theorizing need to be explored--organizational functioning and organizational change. The authors go beyond description and suggest causal linkages that hypothesize how performance is affected and how effective change occurs. Change is depicted in terms of both process and content, with particular emphasis on transformational as compared with transactional factors. Transformational change occurs as a response to the external environment and directly affects organizational mission and strategy, the organization's leadership, and culture. In turn, the transactional factors are affected--structure, systems, management practices, and climate. These transformational and transactional factors together affect motivation, which, in turn, affects performance.

In support of the model's potential validity, theory and research as well as practice are cited.

Organization change is a kind of chaos (Gleick, 1987). The number of variables changing at the same time, the magnitude of environmental change, and the frequent resistance of human systems create a whole confluence of processes that are extremely difficult to predict and almost impossible to control. Nevertheless, there are consistent patterns that exist--linkages among classes of events that have been demonstrated repeatedly in the research literature and can be seen in actual organizations. The enormous and pervasive impact of culture and beliefs--to the point where it causes organizations to do fundamentally unsound things from a business point of view--would be such an observed phenomenon.

To build a most likely model describing the causes of organizational performance and change, we must explore two important lines of thinking. First, we must understand more thoroughly how organizations function (i.e., what leads to what). Second, given our model of causation, we must understand how organizations might be deliberately changed. The purpose of this article is to explain our understanding so far. More specifically, we present our framework for understanding--a causal model of organizational performance and change. But, first, a bit of background.

In our organizational consulting work, we try very hard to link the practice to sound theory and research. The linkage typically is in the direction of theory and research to practice: that is, to ground our consultation in what is known, what is theoretically and empirically sound. Creation of the model to be presented in this article was not quite in that knowledge-to-practice direction, however. With respect to theory, we strongly believe in the open system framework, especially represented by Katz and Kahn (1978). Thus, any organizational model that we might develop would stem from an input-throughput-output with a feedback loop, format. The model presented here is definitely of that genre. In other words, the fundamental framework for the model evolved from theory. The components of the model and what causes what and in what order, on the other hand, have evolved from our practice. To risk stating what is often not politic to admit in academic circles, we admit that the ultimate development of our causal model evolved from practice, not extensive theory or research. What we are attempting with this article, therefore, is a theoretical and empirical justification of what we clearly believe works. To be candid, we acknowledge that our attempt is not unlike attribution theory--we are explaining our beliefs and actions ex post facto: "This seemed to have worked; I wonder if the literature supports our action."

Our consulting efforts over a period of about 5 years with British Airways taught us a lot--what changes seemed to have worked and what activities clearly did not. It was from these experiences that our model took form. As a case example, we refer to the work at British Airways later in this article. For a more recent overview of that change effort see Goodstein and Burke (1991).

Other Organizational Models

From the perspective of both research about organizations and consultation to organizational clients, we have experienced some frustration about most if not all current organizational models that do little more than describe or depict. A case in point is the 7S model developed by Pascale and Athos (1981) and further honed by Peters and Waterman (1982). Parenthetically, let us quickly add that by comparing our model with others, particularly those the reader may be familiar with, if not fond of, we wish to clarify the nature of our thinking and, ideally, its distinctive contribution, not cast our comments in a competitive manner.