Coercive change strategies in highly significant change situations

Coercive change strategies in highly

significant change situations

Arjan Miedema, S2577666

Faculty of Economics and Business, University of Groningen Research paper pre-master Change Management

Abstract

The use of power-coercive change strategies is often connected to negative consequences in literature. Even though, a group of authors within the organisational change literature proposes that there is a time and place for power-coercive change strategies. In the two decades since the emergence of this stream, no solid arguments were brought to the table. This research attempts to further elaborate on the situational use of power-coercive change strategies, adding reasoning from psychological and sociological literature to develop the arguments needed. Following this, a quantitative research held among change agents from small and medium enterprises was used to test whether highly significant change situations might be that right time and place for the use of power-coercive change strategies.

Introduction

deal with change, while other researches were presenting examples of successful changes that used a much more authoritative change strategy. By conducting case studies, they found some confirmation for the possibility that a coercive leadership style might have a place in certain types of organisational changes. Organisational change literature has had 25 years to dig further in to this interesting finding, but has failed to come up with any quantitative confirmation or qualitative reasoning behind it. The fields of psychology and sociology show more progression on this notice. Some strong quantitative evidence has been found, indicating that in highly urgent change situations, a leader’s use of power will be evaluated more positively and accepted more easily (Halverson et al., 2004a, Hamblin, 1958). This paper studies the hypothesis that power-coercive change strategies lead to more successful changes in highly significant change situations than in less significant change situations. The added value, relative to the existing body of literature, lies in combining the field of organisational change literature with psychology on high urgency situations to put Dunphy and Stace’s bold statements to a quantitative test. Methodologically, the research in this paper uses the literature review as summarised above to present a conceptual model, which will be tested by doing regression analysis using quantitative survey data. The source of this data is a survey held amongst 114 change agents, gathering information on the what, how, why etc. of the organisational change projects they leaded.

Research framework

(1959) describe five generic bases of power. Legitimate power can be seen as the power derived from ones formal position. Reward power refers to the extent to which a person can reward another. Referent power is based on identification with another, someone with referent power is admired amongst others. This can be derived from for instance charisma or personality traits. Coercive power can be seen as the negative equivalent of reward power. It is the power to withhold rewards or punish someone. Expert power can be seen as the degree to which someone views another person as having knowledge in a particular area. When analysing literature on power-coercive change, the five sources of power by French and Raven (1959) will be seen as the scope of coercive strategies. Using the literature as described above, a power-coercive change strategy will be defined as enforcing an organisational change upon members of the organisation using one or more power bases as derived from French and Raven (1959). The body of literature on power-coercive change strategies has two main features, which are both rather interesting for this research and need further elaboration.

Different perspectives on power-coercive change

The second feature of the power-coercive change literature is the emphasis on its situational utility. Muczyk and Reimann (1987) conclude that there is a fairy-tale like view on ideal organisations with democratic decision making, but argue that in practise, organisations do not have the resources to follow through on this. Therefore, leaders must be directive at times in order to get things done in the organisation. Based on authors such as Muczyk and Reimann (1987), Dunphy and Stace (1988) proposed a situational approach towards change, encompassing the more directive/coercive strategies. Situations in which time is short, change is of essence for the organisation to stay alive are named as fit for coercive change strategies. Later on, they elaborated on this view, showing case study evidence of successful coercive change projects (Dunphy and Stace, 1993). In this article, a model is proposed which states that in corporate transformations, directive and coercive change strategies are appropriate. A problem arises in the article of Dunphy and Stace (1993). Though they start a quantitative research, they end with examples of successful cases of each of their four types of change. Given that they show no reliable quantitative support for highlighting a successful example, they appear to base their model on ‘cherry picking’. In general, the organisational change literature proposing there is a place for power-coercive change strategies lacks solid argumentation. Case studies are predominantly used in arguing, but reasoning is not supported with quantitative data or solid qualitative analysis.

Power-coercive leadership in situations of high urgency

stressful situations (Driskell and Salas, 1991). Concluding, the literature on leadership in crisis/high urgency situations has some strong argumentation. Multiple quantitative studies have shown consistent and complementary evidence stating that members evaluate leaders more positively, attribute a higher level of charisma to their leaders, are more acceptant of the influence by leaders and conform to decisions made by others more easily in crisis situations or situations of high urgency. This fits well with the proposed use of power-coercive change strategies in situations where urgency is high.

Defining the significance for change

reduction. Whether change or stability is being pursued will be determined by the dominance of either the forces for change or the forces for stability. Combining these different elements into a useful concept for this research, the term ‘significance of change’ will refer to a threefold of aspects determining the significance of a change situation. Firstly, the degree to which the drivers for change dominate the drivers for stability; secondly, the degree to which the situation is urgent in terms of time available and duration of the expected outcome and thirdly, the degree to situation threatens to keep the organisation from attaining its goals. In other words, there are aspects referring to the organisational tendency for change, aspects referring to time and duration and aspects referring to the degree of crisis, that together compose the significance of a change situation.

Change success

Change success is a fashionable concept in lecture, but less defined in literature. This can be explained by the observation of Dunphy and Stace (1988) who argued that there is no one best way in organisational change. It will therefore be hard to find any generic measures for change success. Burnes and Jackson (2011) attempted to do just that, building on the situational approach to change. They argued that the success of a change has two components, the first aspect is the degree to which the outcomes of the change are accepted and the second aspect is the degree to which the change process is accepted. In addition to this, Pinto et al. (2009) used a similar definition, emphasizing on completing a change project with successful outcomes, acceptable costs, within the proposed time planning and meeting stakeholder expectations. In the conceptual model, change success will be seen as the degree to which the outcomes of a change initiative and the process of a change initiative are meeting stakeholder expectations and predetermined goals about time, costs and change deliverables.

Hypotheses and conceptual model

Following the literature review, two hypotheses appear. The first hypothesis that will be tested is: ‘the use of a power-coercive change strategy will negatively influence the change

success’(H1). The second hypothesis introduces a moderator on the effect proposed in the

hypothesis above. This hypothesis will be: ‘the negative relation between the use of a

power-coercive change strategy and change success will be negatively influenced by the significance of the change’(H2). This hypothesis could indicate whether a highly significant change situation

fields indicates. Following the hypotheses, a conceptual model can be drawn. As seen in figure 1, the conceptual model is a physical display of the second hypothesis stated above.

Figure 1. Conceptual model

Research design

The data-gathering for this research was done via a questionnaire containing mostly closed questions. The questionnaire is to a high extend based on a conference paper by Brand et al. (2012). In this paper, only the questions relevant to the conceptual model will be analysed, which can be found in the appendix. The subject of the questionnaire is ‘change management in small and medium enterprises’. The respondents are formed by so called ‘change agents’, which are the professionals who have led a change in a small or medium sized organisation, often the entrepreneurs of the organisation. A small to medium sized organisation is defined as having a minimum of 10 and a maximum of 249 employees. There were no restrictions regarding branch, geographical location etc. A total of 114 respondents completed the questionnaire successfully. Some respondents were from start-up organisations, some from organisations that are too large to fit within the research scope. Excluding these respondents from the data set, a final sample size of 101 was used in analysis. Out of these 101 change agents, 98 were of a Dutch nationality. Furthermore, out of the 100 that filled in their gender, 74 change agents were male.

Measures

In order to test the conceptual model, three variables need to be analysed. The degree to which the power-coercive strategy was used will be used as independent variable. Five questions were asked to infer the degree to which change agent felt that they had used the power-coercive strategy in the change. Change success was used as dependent variable. Six questions were asked to find out how successful the change had been in the opinion of the change agent. The

significance of change was used as a moderating variable. Six questions we asked testing how significant the change was felt to be in the view of the change agent. All 17 relevant questions were answered on a seven point Likert scale, the possible answers were: Strongly disagree, disagree, somewhat disagree, neutral, somewhat agree, agree and strongly agree. The inter-variable reliability for multi-question inter-variables are tested using a Chronbach’s alpha test. The Cronbach’s Alpha’s of the three measures can be seen in table 1. The measure was seen as adequate when the Cronbach’s Alpha was 0,6 or higher, therefore all measures are adequate.

Table 1. Inter-variable reliability

Measure Cronbach’s Alpha Number of questions Power-coercive strategy 0,654 5

Change success 0,834 6 Change significance 0,655 6

Using a Pearson’s correlation coefficient, the relation between the degree of power-coercive change strategy and the degree of change success will be measured as well as the relation between the degree of crisis and the degree of change success. For testing the moderating role of the degree of crisis as proposed in the conceptual model, multiple linear regression will be used.

Data collection, analysis and findings

In table 2, the mean and standard deviation of the three variables are shown. Overall, the table shows that the power-coercive strategy is relatively unpopular, scoring under the ‘neutral’ answer on average. On average, the changes were somewhat significant, scoring around a whole point above the neutral answer. A surprising finding is that the changes scored an average of 5,59 on the success measure. This score appears to be extremely high given that around two third of all change projects have been known to fail (Beer and Nohria, 2000).

Table 2. Descriptive statistics

Power-coercive strategy

Change success Change significance

Mean 3,66 5,59 5,07

Testing the conceptual model

Using Pearson’s correlation coefficient, a negative relation between the power-coercive change strategy and change process success was found of 0,066. As can be seen in table 3, the relation is far from significant. Between the significance of the change and the degree of change success, no relation was expected. As a check for unexpected but relevant findings, the Pearson’s correlation coefficient was also done to test this relation. As shown in table 3, practically no relation was found.

Table 3. Correlation coefficients.

Pearson’s correlation coefficient

Change success Power-coercive strategy Correlation

coefficient

-0,066 Significance

(2-tailed)

0,514 Significance of the change Correlation

coefficient

0,011 Significance

(2-tailed)

0,909

Testing the moderating role of the significance of the change on the relation between the power-coercive change strategy and the change process success was done via multiple linear regression. The results are shown in figure 6. It shows that there is indeed a negative moderating effect of the change significance on the negative relation between the use of the power-coercive strategy and change success. However, the coefficients are low and the p-values show that the relations are far from significant. Furthermore, the R2 _{indicates that only 0,9% of the response} variable variance is explained by the moderator.

Table 4. Regression analysis.

Model Variable Change success

Discussion

In this research, two hypotheses were proposed. The first hypothesis reads: ‘the use of a

power-coercive change strategy will negatively influence the change success’. Through statistical

analysis this relation was found, but it was far from significant. Therefore, the H1 hypothesis can be rejected. The second hypothesis reads: ‘the negative relation between the use of a

power-coercive change strategy and change success will be negatively influenced by the significance of the change’. Because H1 was rejected, H2 already contains an invalid assumption. Therefore,

the hypothesis can be rejected before statistical analysis. However, analysis showed that the proposed moderating effect was indeed present. As could be expected though, the relation was far from significant. A possible explanation for the absence of a significant negative relation between the use of the power-coercive strategy and change success can be found in the descriptive statistics. The average score on the change success questions was 5,59 on a 1 to 7 scale. This is surprising, knowing that as much as two third of all change projects are known to fail (Beer and Nohria 2000). Furthermore, the variance within the three variables was very high. This indicates that a larger sample might be needed to find the relations proposed in the hypotheses. On this note, it is promising to see that all relations are at least found to be in the direction that followed from the literature review, even though these relations were not significant.

Conclusion, limitations and implications for further research

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Appendix: questionnaire

Five questions were asked to measure the power-coercive strategy:

1 The need for this change was justified by members of

top management only. 1 2 3 4 5 6 7

2 To get employees to change, I used my position of

power to implement the change. 1 2 3 4 5 6 7

3

As change agent I played the role of order giver. 1 2 3 4 5 6 7

4 As change agent I did not focus on how employees

would accept the change. 1 2 3 4 5 6 7

5 As change agent I created a clear division between

myself and those responsible for carrying out the change.

1 2 3 4 5 6 7

Six questions were asked to measure the change success:

1 Regarding the company’s performance after and as

result of the change, I am… 1 2 3 4 5 6 7

2 Regarding the achievement of the goals we set for this

change, I am... 1 2 3 4 5 6 7

3 On the whole, regarding the change results, I am… 1 2 3 4 5 6 7

4 Changes take resources (such as money and

manpower), but as regards the costs of the resources for this change, I am…

1 2 3 4 5 6 7

5 Regarding how we involved the people concerned

during the change, I am… 1 2 3 4 5 6 7

6 Changes take time, but as regards the time we spent

to realize the change I am… 1 2 3 4 5 6 7

Six questions were asked to measure the significance of the change:

1 Without this change the company’s continuity would be

in danger. 1 2 3 4 5 6 7

2 The change was needed to increase the company’s

adaptability to market circumstances. 1 2 3 4 5 6 7

3

The change was needed to reduce costs. 1 2 3 4 5 6 7

4 The change was needed to maintain/become

competitive. 1 2 3 4 5 6 7

5 The change was needed because of the company’s

strategy. 1 2 3 4 5 6 7

6 The change was needed because of daily operational