Organizational Transformation and Top‐Down Change: The Case of the NHS
| Date | 01 March 1996 |
| Author | Ewan Ferlie,Lynn Ashburner,Louise FitzGerald |
| DOI | http://doi.org/10.1111/j.1467-8551.1996.tb00102.x |
| Published date | 01 March 1996 |
British
Journal
of
Management,
Vol.
7,
1-16 (1996)
Organizational Transformation
and Top-Down Change:
The Case of the
NHS
Dr Lynn Ashburner, Dr Ewan Ferlie* and Dr Louise FitzGerald*
Centre for Health Planning and Management, Darwin Building, Keele University, Keele,
Staffordshire
ST5
5BG and *Centre for Corporate Strategy and Change, Warwick Business School,
University
of
Warwick, Coventry CV4
7AL,
UK
This paper analyses the effects of government-sponsored attempts to change the way
that the NHS, one of the largest employers in Europe, is managed. The theoretical
issues raised relate to the concept of transformational change and attempts at pnblic-
sector restructuring, which set the context for the presentation of data. The empirical
research, carried out over three years, examines the changes since the most recent
reforms (the NHS and Community Care Act
1990).
The research considers the extent of organizational change which can be seen as the
outcome of these reforms in relation to: a multiple and inter-related change agenda;
the creation of new forms of organization; the creation of new roles; the reconfigura-
tion of power relations; and the creation
of
a new culture, ideology and organizational
meaning. These are presented as the key variables which could indicate whether trans-
formational, rather than incremental, change has occurred. The focus of this analysis
is at local board level.
This article concludes that earlier analyses of the limited success of administrative
reform are
no
longer the case.
Our
analysis of the key variables suggests that what is
occurring at least at local board level goes beyond incremental change and may
represent the beginnings of an ‘organizational transformation’. This contains un-
intended as well as intended elements as an unanticipated ‘hybrid’ form of manage-
ment may be emerging.
Introduction: the
problem
of
transformatory change
From incremental change to transformation
One of the features of British organizational
life
in the
1980s
was the continuing experience of top
down (indeed government sponsored) pressure
for change in both public and private-sector organ-
izations.
In
the
1980~~
the
UK
government con-
sistently focused on securing institutional reform
within the public sector, with education, local gov-
ernment, the civil service and the
NHS
all coming
under central scrutiny.
This raises interesting questions about the
nature of the change process in organizations,
whether public or private, and how these pro-
cesses are managed. Large organizations have
historically often been seen as dominated by
highly pluralist and incremental forms
of
decision
making, given the cognitive and political con-
straints on perfect choice (March and Simon,
1958;
Alford,
1975;
Hickson
et al.,
1985).
Given
a complex and uncertain world, the managerial
task was here seen as ‘muddling through with a
purpose’ and achieving a succession
of
small or
‘first order’ changes (Levy,
1986).
An even more
0
1996
British Academy
of
Management
2
L.
Ashburner;
E.
Ferlie and
L.
FitzGerald
sceptical view of reorganizations in complex
settings within the public sector is that they are
little more than ‘relabelling’ exercises, as organ-
izations adopt surface changes to ensure legitim-
acy, but retain their previous culture (Brunsson,
1989; Brunsson and Olsen, 1993).
The earlier work on organizational change from
the Organizational Development
(OD)
tradition,
stressed techniques for planned transition manage-
ment (Beckhard and Harris, 1977; Bennis, Benne,
Chin and Corey, 1976) and many of the examples
were of changes at the unit level in an organiza-
tion (Ottaway, 1976; Mumford, 1972).
As
the ideas
from this tradition mixed with the socio-technical
based analysis emanating from the Tavistock Insti-
tute of Human Relations (Trist and Bamforth,
1951; Emery and Trist, 1965),
so
the concepts took
on a more holistic form and whilst still incremental
in approach, there was greater recognition of the
interdependencies within organizations. Even
relatively small-scale changes were seen to create
unintended consequences and ‘waves’ of change.
Much of the
OD
tradition saw change as best
taking place incrementally,
on
the basis of con-
sensus, collaboration and participation (Quinn,
1980): the change process had to be ‘owned’ by
the employees. Dunphy and Stace (1988) argue
that the
OD
tradition, lacking a contextual or
environmental element, had difficulty explaining
the rise of ‘coercive’ reorganizations apparent in
the 1980s, often introduced by the dictate of newly
imposed chief executives. At this point, notions of
transformatory or ‘second-order’ change (Levy,
1986) began to assume increased significance.
As
the 1980s wore on, the analysis of attempts
at large-scale change as having only a superficial
effect came under closer scrutiny as an increasing
number of writers (Tichy, 1983; Kimberly and
Quinn, 1984; Pettigrew, 1985; Pennings
et
al.,
1985), by contrast, explored the possibility of
radical or strategic change and the conditions
required to bring it about. Lundberg (1984), for
instance, wrote of strategies for engineering
major organizational transitions. The discussion
often centred on distinctions between incremental
and strategic change, highlighting the fact that
strategic change involved changes to the purpose
of the organization and/or several major systems,
such as the technology, or core skills of em-
ployees. This clarification underlined the cos-
metic nature
of
changes to the structure
of
earlier
public-sector organizations, since such changes
‘
had rarely involved any alteration to the core
nature or even the form of delivery of services.
Extending the analysis further, writers began
exploring the concept of transformatory change.
On the one hand, there were writers (von
Braun, 1990; Senge, 1990) postulating that the key
to competitive success was the ability to innovate
and to take radical leaps forward which would
move an organization substantially in front of
competitors. However, the empirical evidence for
such events was rare. Some evidence existed for
organizations achieving dramatic ‘turnarounds’
under crisis conditions (Barrett and Cammann,
1984; Grinyer, Mayes and McKiernan, 1988). But
there was little evidence that planned and man-
aged innovation programmes always worked in a
systematic way. Indeed Quinn’s (1985) research
underlines that major innovations result from
‘chaos within guidelines’. Meanwhile some writers
were probing for the characteristics which would
distinguish transformatory change (Child and
Smith, 1987; Hinings and Greenwood, 1989; Van
de Ven, Angle and Poole, 1989).
Other writers have focused on creating a typo-
logy of different forms of change, and a cluster
of related distinctions has emerged. Levy (1986)
writes
of
first- and second-order change. First-
order change takes place through incremental
adjustments that do not affect the system’s core.
By contrast, second-order change involves altera-
tion of the system’s basic governing rules. It shifts
the system as a whole irreversibly to a new
paradigm. Tushman
et
al.
(1988) write of discon-
tinuous or ‘frame breaking’ change, involving
sharp and simultaneous shifts in strategy, power,
structure and control mechanisms. The role of
executive leadership is highlighted in initiating
and implementing discontinuous change, and the
tasks involved are seen as different from man-
aging incremental change. Child and Smith (1987)
offer a case example of transformational change
in Cadbury’s, stressing the lengthy period of
recognition which preceded transformation. Pet-
tigrew’s (1985) analysis of strategic change in ICI
stressed the role of crisis in creating periodic
revolutionary change in between long periods
of
evolutionary change. This implies that senior ex-
ecutives pushing for change in pre-crisis con-
ditions do not have sufficient leverage to break
the pattern of inertia.
Hinings and Greenwood (1989) usefully distin-
guish between four archetypes of organizational
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