The literature review begins with an overview of the theories that provide the framework and foundation for innovation and change in organizations. Perspectives on developmental processes and disciples are introduced. These theories also provide a possible explanation for change in the organization. A review of generative mechanisms for change in the literature is also presented, including the circumstances and contingencies that inspire change.
Building Blocks for Change and Innovation
Van de Ven and Scott (1995) explore four theories they describe as “building blocks for explaining processes of change in organizations” (p. 510). These four building blocks are described as life cycle, teleology, dialectics and evolution (Van de Ven & Scott 1995). The authors suggest each of these theories represent different change events that can operate at different levels of an organization, and different circumstances drive each theory. Van de Ven & Scott (1995) reviewed 20 different theories on change in the organization, grouping these into each of these four primary schools of change. These theories incorporate the causes for change, pioneering researchers behind the theories, and conditions under which change operates in each grouping. The first group, life-cycle theory, incorporates developmentalism biogenesis, ontogenesis, and many stage theories, organizational development, group decision-making stages and new venture development resulting in change (Van de Ven & Scott 1995: 513).
One of the more common and prevalent theories according to the researchers, life-cycle theory suggests that change is imminent in any organization, and comes with “form, logic, program or cord” that helps propel an organization from point A to B (Van de Ven & Scott 1995: 514). While external events may influence change, ultimately change is dominated by the logic, programs and other standards governing the development of the organization. Sequencing is common to life-cycle theory; this theory commonly involves problem research, development of new ideas, commercialization of a product, and adoption of the new product.
The teological model involves development via teleology, or philosophical doctrine whose purpose rests in functionalism and social construction (Van de Ven & Scott 1995). Goal setting and planning often result from this theoretical framework, as do creative endeavors. Dialectical theory assumes an organization exists “in a pluralistic world of colliding events, forces or contradictory values competing for control” (Van de Ven & Scott 1995: 517). Change occurs when organizations pursue causes or directions that collide with those of others. Evolutionary theory suggests change occurs through continuous cycles incorporating variation, selection and retention that may emerge through random chance (Van de Ven & Scott 1995: 518). Of these theories the life-cycle theory is most prevalent and common to innovation and the development of new products, while the teleological approach is most commonly adopted among leaders interested in inspiring goals and common action among employees and underlings.
Technological Advances and Change in the Organization
Lorenzi and Riley (2000) examine change as a side effect of introducing new technology into organization. The researchers note that more heterogeneous groups of people are being affected by change in more organizational areas as technologically advanced, more innovative systems are being introduced into organizations. These innovations are in response to global needs. As innovations occur the most common response is a behavioral resistance to change and new technology, which can delay rapid and productive introduction of innovative technologies (Lorenzi & Riley 2000). The authors examine while introduction of change innovation fails with specific attention to technology, the core theories supporting change management, and practical applications of change management. While the study is geared toward health informatics, general applications are made to change management to global industries at large that can be applied to any organization attempting to implement innovative change and technological advances.
The authors note that new systems affect larger groups of people and greater organizational areas, presenting new problems that are not only technical but more behavioral in nature. To cope with change management leaders must become solid organizational managers with skills that include social and political interaction skills. With regard to the reasons that new technological innovations fail, the researcher’s findings revealed that technology was not to blame, but rather communications failures among people and lack of ownership among business leaders (Lorenzi & Riley 2000). The authors note that a changing environment typically involves “threat” and to reduce threat, a total systems approach that is realistic and empowering must be created within the organization.
Lorenzi & Riley (2000) cite four types of organizational changes: operational changes affecting how business operations are conducted including automation of events; strategic changes affecting business direction; cultural changes affecting philosophies; and political changes affecting staffing and patronage. These four levels are similar to the four theories presented earlier, having different impacts at different levels of the organization. Operational changes may impact the workers at the base level of the organization, whereas strategic changes are more likely to affect frontline managers and executives.
Greve (2003) puts for the notion that rational decision-makers in organization seek to fulfill goals. The idea of goal seeking and risk taking is that organizational innovation can be tied to realizing organizational goals, or assumptions that individuals in the organization linked with management attempt to change as a consequence of setting goals. A rational decision-maker according to Greve (2003) is never content, thus is consistently in a position to change and evolve. While simplistic in nature, this theory ties into the idea of imminent change in the organization.
Tidd & Bessant (2011) note that modern innovation is driven “by the ability to see connections, spot opportunities and take advantage of them.” This coincides readily with evolutionary theories of change presented in the literature review, suggesting that modern organizations may evolve as they continue to invest in technology and the global market of the future. Examples exist in the past and present. Innovation includes new markets but as the authors note, even investing in established markets can usher in change. An example is the Spanish company Inditex, which has retail outlets under many different names, and has pioneered a quick-turn clothing organization with more than 2000 outlets in over 52 countries despite failures in other countries to succeed in this area (Tidd & Bessant 2011).
The organization, working in the textile and clothing markets, began operations in the west of Spain, a region note well-noted for textile production (Tidd & Bessant 2011). Despite this by gathering information about local trends, new designs and innovation the organization changed to meet the demand of consumers and popular needs. “Radical new options” as the authors describe are often fostered by technology; another example offered is Magink, a company now taking advantage of newer digital ink technology, enabling “paper-like display technology for indoor and outdoor displays” (Tidd & Bessant 2011). The organization is taking advantage of technology, and life-cycle theory, to innovate and invest in a market that is now worth over $5 billion dollars in the U.S., and more abroad (Tidd & Bessant 2011). These organizations, and many others have in common innovation, through individual enterprise and mobilization of technology. The authors point out that “virtually all economic growth occurring since the eighteenth century is attributable to innovation” (Tidd & Bessant 1.2).
Innovation is inevitable, and leads to necessary change management. The results of the literature suggest that many theories support change management as a consequence of globalization, technological advances and the normal life cycle of organizations. Many factors can influence the success of change including independent behaviors. Individuals within an organization are more likely to perceive change as a threat if change and innovation are not managed correctly. This suggests a need for strong attention to the management of strange from a strategic and behavioral perspective. However, when managed successfully, innovation can lead to widespread economic gains as evidenced in organizations like Magink and the Spanish textile company taking off in a relatively short time frame, by paying attention to the market and surroundings.