Culture change or reengineering : A case study of employee perceptions preceding a major imminent change

Two major approaches are found in managing organizational change. The traditional view subscribed to a strong link between organizational culture and changes related to organizational effectiveness. The more recent approach of organizational re-engineering is much more behavior oriented and places less emphasis on changing attitudes, beliefs and values as a prerequisite for organizational change. This article represents a case study investigating employee perceptions of a major imminent change in a large organization in view of these two approaches. The study indicates that employees are prepared to change their work behavior if they understand the reasons for the required changes, that they evaluate proposed changes in terms of their impact on the company as a whole rather than their impact on the individual or functional group contexts, and that they evaluate change in terms of its effects on their work satisfaction and individual fulfillment rather than on the status quo. The implication is that under circumstances of strategic or operational change, following the long route of culture change may be inappropriate.


INTRODUCTION
Organizations, like individuals, are constantly changingthrough employee turnover, new leadership, economic disaster, regional growth, socio-political developments, and environmental influences.The changes that have to be implemented are often important to the survival of the organization.Most of these changes are not "it would be nice if we could do it" or "do it if you get around to it" changes.Change is the nature of management today, and organizations that cannot manage change effectively are not likely to survive for long (Puth, 2002).
However, change management endeavors are seldom totally successful, and resistance to change remains one of the most difficult management contexts to deal with.It is not uncommon for people to be consumed by fear when the issue of change becomes real (Allen et al., *Corresponding author.E-mail: gustav.puth@up.ac.za.2007; Avey et al., 2008;Kerfoot, 1996;McNulty and Ferlie, 2004;Pettigrew et al., 2001;Vakola and Nikolaou, 2005).This article endeavors to deal with some of the approaches to change management, and to illuminate underlying dynamics of employees" experience of change by way of a relevant case study.

The problem of differing points of view
It seems to be part of organizational life that managers and employees view change differently (Kerfoot, 1996;McNulty and Ferlie, 2004).Strebel (1996) states that toplevel managers see change as an opportunity to strengthen the business while employees often see change as disruptive, intrusive, and upsetting to the familiar and status quo.In addition, Allen et al. (2007) found distinctive differences in employees" perceptions of senior management and direct supervisors during change.Weidenbaum (1995) refers to confirming evidence contained in a 1994 survey of management views by Arthur D. Little Inc., where only 12% of companies indicated that they embarked on downsizing and other changes to improve profitability or to increase shareholder value.Rather, a major purpose of corporate overhaul in a clear majority of cases (60%) was "to improve employee satisfaction".To this, Weidenbaum (1995: 5) reacts by saying that it seems inevitable that employees are going to mistrust any management that attempts to "peddle this patently unbelievable line".In addition, Weidenbaum (1995), and Bagraim (2003) argues that employee satisfaction is directly related to motivations held by employees.These motivations are fuelled and sustained by the persistence to engage in meaningful activities, and the need and the willingness to meet new or changing organizational goals if these are meaningfully explained and contextualised.In the same context of employee satisfaction, Zohar and Marshall (2004) developed a scale of employee motivations which reflects on both positive (constructive) and negative (destructive) values related to either job satisfaction ordissatisfaction.By using this scale, management can often derive by simple arithmetic whether the motivations and attached values of employees towards any changes in the organization are positive or negative.What is significant in this instance is that Zohar and Marshall"s (2004) and Van der Walt"s (2006) results indicate that employees today are in general more dissatisfied with their positions in the organization because they are not sufficiently recognised by management in important decision-making processes, especially with regards to change endeavours.
In order to bridge this gap between management and employees, Brigham (1996) suggests that, to transform a culture, the people affected by the change must be involved in creating the change.He points out that this simple, fundamental insight has been proved a hundred times over in academic journals and real life settings.In similar vein, Avey et al. (2008) found that positive employees can contribute to positive organizational change.More specifically, they found that employees" psychological capital (consisting of varying levels of hope, efficacy, optimism, and resilience) was related to their positive emotions that in turn were related to their attitudes (engagement and cynicism) and behaviors (organizational citizenship and deviance) relevant to organizational change.This again aligns with the positive motivations towards changes identified by Zohar and Marshall (2004) as that of exploration, gregariousness, cooperation, mastery and generativity.
However, the mere existence of differing points of view with regard to organizational change is not the full extent of the problem.The way in which such differences are used to advance vested interests can have serious implications in an organization.Buchanan (1997) remarks that organizationalchange and re-engineering processes Puth and van der Walt 11627 give politically motivated actors considerable influence with respect to defining terms of reference which will shape potential outcomes in their favor.He concludes that, unlike other organizational development interventions, business process re-engineering is not a "context sensitive" approach.In such circumstances, the role of the project manager becomes critical in establishing a balance between individual, functional, and organizational goals in such a way that it is perceived to be legitimate in the context.Effective change and reengineering management thus requires a combination of political and process analysis skills.With reference to the aspect of context sensitivity, McNulty and Ferlie (2004) similarly found contradictions between organizational process ideals and pre-existing organizational arrangements and relationships in large public service organizations.

Change and organizational culture
The past three decades have been characterized by a proliferation of research and applications linking the management of change with the dynamics of organizational culture (Buchanan, 1997;Burris, 2008;Dolan and Garcia, 2002;Kavanagh and Ashkanasy, 2006;Pearce and Sims, 2002;Rashid et al., 2003;Tsoukas and Chia, 2002).Many of the endeavors in this regard have either directly or indirectly implied a significant relationship between organizational culture and organizational effectiveness (Avey et al., 2008;Kavanagh and Ashkanasy, 2006;Rashid et al., 2003;Williams, Dobson and Walters, 1993).One study that could be highlighted in this regard is by Ahmed et al. (1998: 31) which states that culture is a primary determinant of innovation towards change in the organization since positive cultural characteristics in the organization provide the organization with the necessary ingredients to innovate.Since innovation is a competitive advantage in organizations today, it is argued that management needs to establish an organizational culture that supports innovation related to change.
However, it cannot be ignored that the assumption of such a relationship as highlighted by the previous authors is also questioned by others (Beer et al., 1990;Ogbonna and Wilkinson, 2003).Schaffer and Thomson (1992), for example, argue that there is ample evidence to indicate that a substantial proportion of all organizational change efforts have been unsuccessful, and that protracted effort over longer periods is needed to achieve such goals.In fact, relying on cultural change as a vehicle for effective structural, procedural, or operational changes in the organization may be somewhat of an illusion (Ogbonna and Wilkinson, 2003).The reason is that organizational culture simply changes much slower than the pragmatic requirements of structural or procedural changes (Williams et al., 1993).
In view of the foregoing, Buchanan (1997) states that more rapid approaches to the improvement of or changes in, organizational effectiveness are needed.One such approach, advocated by Beer et al. (1990), can be labeled a "task aligned" approach to organizational change, which stands in contrast to what they refer to as "programmatic change" and which is so typical of most change efforts in organizations.According to Ogbonna and Wilkinson (2002), the latter represents documented changes in behavior which are related more to surveillance, direct control and the threat of sanction than any transformation of managerial values, whereas task alignment focuses on changes in behaviors rather than in attitudes and beliefs, and seeks to achieve this by changing roles and responsibilities rather than through management development programs aimed at changing values (Buchanan, 1997).A similar line is followed by Schaffer and Thomson (1992), when they differentiate between "results driven" and "activity-centered" approaches to organizational change management.They compare the latter approach to a rain dance, where the participants look good and feel good about what they are doing, but seem to have no significant impact on the performance of the organization.In view of this, these authors argue for a stronger emphasis on demonstrable results approaches, found so clearly in connotations of the by now firmly established term "re-engineering" (Davenport, 1993;Hammer and Champy, 1993).

Re-engineering
In a succinct summary of the features and implications of re-engineering, Buchanan (1997) describes it as a results-driven approach to change where the focus is on critical or core cross-functional business processes.In order to stimulate a radical organizational rethink, the starting point for re-engineering is a blank sheet of paper.The anticipated outcomes are dramatic and rapid improvements in performance.Thus, re-engineering seeks to dismiss the history and context of the organi-zation and to begin again "from scratch".It also endeavors to break down the barriers to change created by functional barriers -the silos that characterize traditional organizational charts and that indicate career ladders and personal or functional empires that individuals and groups defend in resisting change.
It is interesting to note that, despite arguments against a significant link between change and culture, most of the common features of re-engineering processes identified by Hammer and Champy (1993), such as worker empowerment and job enrichment are typical organizational culture terms.This equally applies to a number of characteristics of processes of re-engineering described by Hammer and Champy (1993): work becomes multiskilled, activities are carried out in teams, structures become flatter, and traditional management is replaced by principles of leadership.Similarly, Ogbonna and Wilkinson (2003) places greater emphasis on the negative outcomes of the re-engineered role of managers during change, particularly with regard to reduced autonomy, close monitoring and control, and resultant perceived career insecurity.
In summary, it can be said that the results oriented approach to change management encapsulated in the dynamics of re-engineering is characterized by two basic principles (Buchanan, 1997).Firstly, the target of organizational change is the business process, and not the organizational culture.The effectiveness of the change effort should thus be assessed in terms of the performance of those processes, and not with respect to changes in attitudes, beliefs, and values that may have an insignificant immediate impact on organizational effectiveness.Secondly, the pace of re-engineering is ambitious in comparison with the more conventional culture based change programs.If culture change is a high effort, medium risk, long-term prospect, then reengineering seems to be much more appropriate to the organization seeking rapid changes or improvements (Buchanan, 1997).

Research focus
In view of the preceding overview of various approaches to change management, the case study reported in this article represents an investigation into employee perceptions of a major imminent operational change in a large organization.Traditionally, the culture change approach to change management would have argued for a program concerned with changing people"s attitudes, beliefs and values related to the particular change process.From the results-oriented re-engineering approach point of view, it could be argued that employees need to be given the reasons for the change, and be told what is expected in terms of new behavior related to the change.In this context, the following propositions for the study are formulated: Proposition 1: Employees are prepared to change their work behavior if they understand the reasons for the required changes.Proposition 2: Employees evaluate proposed changes in terms of their impact on the company as a whole rather than their impact on the individual or functional group contexts.Proposition 3: Employees evaluate change in terms of its effects on their work satisfaction and individual fulfillment rather than on the status quo.

The case study
The case study reported in this article represents the first phase of an on-going change process in a major telecommunications company in South Africa.For purposes of confidentiality, the organization is simply referred to as The Company.The operational change dealt with in the case, is for similar reasons referred to as "the new process or TNP".

Case background
During the past few years, The Company has become particularly aware of the strategic importance of a customer oriented business approach.This emerged as the driving force behind the initiation and institutionalization of a number of structure and process interventions, inter alia a customer service measurement methodology, with a view to realizing the new business philosophy.The customer business system (TNP) project is a natural progression in this on-going process, and constitutes an integrated business system intended to form the core of the entire spectrum of customer services.It is envisaged that the TNP system will have a significant impact on The Company, particularly on the level of IT support, by replacing existing technology and operational systems.The primary objective of TNP is to enable The Company to become more customer focused by providing excellent service that is fast and flexible.The ultimate goal is to provide The Company with a clear competitive advantage.

Problem statement
In view of the crucial strategic role envisaged for TNP, it was decided to measure its effects with a view to ensuring its success in delivering the services that The Company requires to gain a competitive advantage.For this purpose, it has been decided to use a pre and post rollout design to determine its impact and detect and identify possible shortcomings in time.This study represents the pre-roll out measurement and provides insight into employee perceptions of a major imminent operational change in the organization.

RESEARCH DESIGN
The methodological foundation of this research design was taken from similar developments of multiple item scales for the measurement of service quality (Parasuraman et al., 1988), market orientation (Jaworsky and Kohli, 1993) as well as the principles in scale development proposed in the work of Churchill (1979).
The investigation was conducted in the following two phases: 1.An exploratory qualitative investigation to generate and refine the possible dimensions and variables related to the measurement and tracking of the TNP program.The dimensions and variables were generated from a combination of individual in-depth interviews and focus groups.
Puth and van der Walt 11629 2. The design and implementation of a measurement instrument for longitudinal use in order to track and manage the TNP service performance over time.

Data collection
In the qualitative phase of the research, in-depth interviews were firstly conducted with the five key drivers at top and regional management level responsible for conceptualization and management of TNP.This was followed by a total of 10 focus groups with TNP trainers and affected staff with a view to determining current perceptions and to generate items for measurement of TNP.
The second phase entailed a paper-based survey employing a self-completion questionnaire among a sample of 200 of The Company"s employees who were or would be involved with TNP in some way or another.A total of 185 questionnaires were received back.
The employee survey entailed measurement of the perceptual rather than the performance elements of The Company"s current operations as experienced by the employees.In the questionnaire, employees were required to respond to 74 statements pertaining to The Company in general and specifically to TNP.Respondents were asked to rate each of the statements on a 10-point agreement scale, where 1 = totally disagree and 10 = totally agree.A bi-polar scale was used with no nominal descriptors for the medial values on the 10point scale.

Item purification
Item purification was conducted through three iterations of Chronbach Alpha item-to-item correlations administered to the mean scores of the total sample on each of the items.The purpose of this procedure was to identify and delete the peripheral or relatively unimportant items in terms of the statistical significance of their relationship with the total pool of items.In practical terms, this is a procedure that ensures that only those items that are really relevant to employees" perceptions of The Company"s operations are reflected in the eventual results of the investigation.

Factor analysis
In the final treatment of the data, a Principal Component Factor Analysis using a normalized varimax rotation was applied to the set of purified items.The results of the factor analysis provide a very clear picture of how The Company"s employees perceive those aspects of The Company"s operations particularly pertaining to TNP.As a matter of technical consideration, it should be stated that an Eigen value of 1 was specified for each of the factor resolutions, and only those items with a factor loading of higher than 0.40 were considered as descriptors for the various factors.

Descriptive statistics: Perception items most and least agreed with
The perception items most and least agreed with by the employees are shown in Tables 1 and 2.
The pattern emerging from Table 1 seems to be clearly encouraging with regard to employees" perceptions of 8.3 1.The Company"s technical services will have to be realigned to adapt to TNP.
2. TNP will have a dramatic impact on the way in which The Company does things.
3. Effective communications between technical and commercial divisions will determine whether TNP will really improve things in The Company. 4. I am prepared to endure the difficulties of the transition in order to benefit from the new system.
8.1 I am proud to be part of The Company.
8.0 1.In general.I enjoy my work.
2. TNP will significantly decrease the current duplication of information in The Company.
Table 2. Perception items respondents disagree with most.
Mean score Item 4.1 A system like TNP will only make the customer more demanding and unreasonable.
4.3 1.If TNP is going to provide a better service, the customer should pay more.
2. A single system like TNP will not be able to handle all the information traffic.
4.7 I am scared that I will be blamed for the teething mistakes of the new system.
4.9 1.I am satisfied with the quality of strategic management and leadership in The Company.
2. The process of change is focused too much on the needs of the customer.

5.0
Once people find out what TNP entails they may be disappointed. 5.1 1.People are making much more of TNP than it really deserves.
2. The current level of faults in The Company is not unreasonably high.
3. The Company"s existing technology and systems enable us to render adequate customer service.
TNP.In summary, it seems as if respondents, although they are quite aware of the drastic changes and initial problems that may be associated with TNP, are quite willing to accept the changes in the interest of The Company, its clients, and their own career development.
In many respects the pattern emerging from Table 2, representing those items employees least agreed with, is almost a flip side of the result in Table 1.TNP is generally not seen in a negative light.It is not perceived to be the result of unjustified client demands, but is rather clearly seen as the solution to some of The Company"s most pressing problems.Neither are employees afraid to accept the challenges of the transition phase that will inevitably result from an innovation such as TNP.Employees further indicate that the high expectations with regard to the impact of TNP are not unjustified, and Technological developments such as TNP are something we will simply have to accept and adapt to 0.522 8.0 TNP will significantly decrease the current duplication of information in The Company 0.521 7.3 I am personally committed to TNP and look forward to its implementation 0.505 7.0 With TNP the old geographical and regional boundaries will not be a problem anymore *1 = Totally disagree; 10 = totally agree.
that they actually think that clients are entitled to the improved service that will result from TNP.
The only note of discord found in Table 2 is the item pertaining to the quality of strategic management and leadership in The Company.This should clearly be dealt with as a point of concern, irrespective of the validity thereof.This perception may certainly be a future stumbling block despite the apparent high expectations and anticipation of TNP.

Multivariate statistics: Factor analysis
A factor analysis was conducted on the data of the employee survey with a view to identifying the coherent patterns of interrelationships between the items.Four factors were generated through the factor analysis conducted on the purified pool of perception items responded on by the sample of The Company employees.
Factor 1 and its constituent items are indicated in Table 3.
Compared to normal standards, where more than 10 items are seldom found in a single factor, Factor 1 is constituted by the unusually large number of 23 items.It is clear, however, that the seemingly wide range of items essentially represents two main themes: the anticipated positive effects of TNP, and the general acceptance of TNP by the employees.With the exception of TNP"s effect on the empowerment of employees, this factor is clearly a significantly positive vote of confidence for the renewal implied by TNP.Factor 1 is labeled positive effects and acceptance of TNP.
Factor 2, which is constituted by 13 items, is outlined in Table 4.This factor clearly seems to be the exact opposite of Factor 1.Since the mean scores of all of the items are relatively low (mostly below 6.0 on the 10 point agreement scale), the factor seems to be clearly indicative of a rejection of these items by the respondents.In view of the fact that virtually all of the items reflect negatively on the

Factor loading
Mean score* Item 0.737 5.9 There is too much emphasis on TNP at the cost of people"s skills 0.663 5.8 The expectations of what TNP can do are much too high 0.615 5.4 TNP will not necessarily lead to a higher customer satisfaction 0.583 5.1 People are making much more of TNP than it really deserves 0.582 5.0 I am a little skeptical about the long term benefits of TNP 0.576 5.8 I am concerned that my current job will become redundant at The Company 0.574 6.1 The better technology of TNP will endanger the jobs of some people in The Company 0.567 5.0 Once people find out what TNP entails they may be disappointed 0.541 4.3 A single system like TNP will not be able to handle all the information traffic 0.536 4.3 If TNP is going to provide a better service, customers should pay more 0.522 6.3 TNP will make The Company more vulnerable because if the system fails the whole organization will be paralyzed 0.510 4.9 The process of change is focused too much on the need of the customer 0.509 4.1 A system like TNP will only make the customer more demanding and unreasonable *1 = Totally disagree; 10 = totally agree.effects of TNP, the factor is labeled as rejection of the negative effects of TNP.Factor 3, which is constituted by only three items, seems to be a clear indication of work satisfaction (Table 5).Although the mean scores of the three items are not particularly high on the 10-point agreement scale, the implication is that the outcome of TNP is clearly seen to be potentially significant with regard to the levels of work satisfaction experienced by the employees.Factor 3 can be described as work satisfaction.
As in the case of Factor 3, the next factor shown in Table 6 is also constituted by three items.In a certain sense, the items of Factor 4 almost seem to represent the latent or implied results of those in Factor 3.Where the items of Factor 3 represent the relative satisfaction with physical work conditions, Factor 4 indicates the inner experience of such satisfaction levels in the form of the relative fulfillment the individual experiences from his or her work.In this context factor 4 is described as PersonalFulfillment.
A summary of the total factor resolution for the TNP employee survey is given in Table 7.
It should be clear that the first two factors, representing employees" acceptance of the positive effects of TNP and their rejection of the possible negative effects, account for most of the variance explained by the four factor resolution.In simple terms, it means that these two factors, and their constituent items, are uppermost in the minds of employees with regard to their perceptions of TNP.

DISCUSSION
In the review of literature earlier in this article, it transpired that two main approaches to change management could be distinguished: 1.The organization culture approach which focuses on changing attitudes, values and beliefs as precursors to changes in organizational effectiveness.
2. The business process re-engineering approach based on shorter term changes in behavior to improve effectiveness.
From the results reported previously, it seems clear that in this particular case there seems to be a significant substantiation for the short-term results oriented approach of re-engineering.Factors 1 and 2 (Positive effects and acceptance of TNP and Rejection of the negative effects of TNP) are clear confirmations of the assumption of Proposition 1 that employees are readily prepared to change their behavior if they understand the business reasons for the required changes.This comprehension of "business reasons" is also supported by Pinchot and Pinchot (1996) and Bakke (2005) who argue that employees today are more skilled, educated and analytical, and thus to a certain extend able to compare the current position of the organisation to what its transformed position might look like, and by implication what it might hold for them.Proposition 2 stated that employees evaluate proposed changes in terms of its impact on the company as a whole rather than its impact on their individual or functional group contexts.This is also clearly borne out by the results of Factors 1 and 2. In view of the results of these two factors, Propositions 1 and 2 are accepted.Proposition 3, stating that employees evaluate change in terms of its effects on their work satisfaction and individual fulfillment rather than on the status quo, is clearly supported by the results of Factors 3 and 4 (Work satisfaction and Individual fulfillment), and is thus accepted.In support of these results is Covey (2004) who states that employees have a need to be involved in tasks and functions that they perceive to be meaningful and satisfying.They demand a degree of autonomy and participation in decision-making processes and to work in an organisation that supports selfenhancement.Whenever employees perceive changes in the organisation to be both supportive of their own needs for job satisfaction and individual fulfilment, in addition to the logical business-sense of such changes to the organisation"s future, will these changes be more readily accepted.However, the differences in percentage of variance explained by the various factors in this study indicate that being aware of, and having an understanding of the business reasons for structural and operational changes, are significantly more important from employees" point of view than job satisfaction or individual fulfilment.It may be assumed, in fact, that there may be a reciprocal relationship between these two sets of variables, with knowledge and understanding of these changes being a prerequisite for deriving satisfaction from and finding fulfilment in new ways of doing things.This obviously holds major implications for the communication of change, and it should be assumed that the results of this particular study are a function of the communication strategies and processes followed in this case.

LIMITATIONS AND RECOMMENDATIONS
The current study is obviously limited in its scope and basis for generalization, being representative of a change process in a single organization, and pertaining to an operational intervention.There are, however, clear directions for further research on organizational change in terms that are more generic.It is recommended that further studies be undertaken across organizational, industry and national lines.It may also be useful to undertake comparative research to determine differences between organizational levels and functional areas.

Table 1 .
Perception items respondents agree with most.

Table 3 .
Factor 1: Positive effects and acceptance of TNP.

Table 4 .
Factor 2: Rejection of the negative effects OF TNP.

Table 7 .
overall factor resolution of the company employees" perceptions.