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Breaking the Code of Change

Organizational change may well be the most oft-repeated and widely embraced term in all of corporate America-but it is also the least understood. The proof is in the numbers: nearly two-thirds of all change efforts fail, and they carry with them huge human and economic tolls. Lacking any overarching paradigm for change, executives of large, underperforming organizations have been left with little guidance in how to choose the strategies that will lead them to sustained success. In "Breaking the Code of Change", editors Michael Beer and Nitin Nohria provide a crucial starting point on the journey toward unlocking our understanding of organizational change. The book is based on a dynamic debate attended by the leading lights in the field-including scholars, consultants, and CEOs who have led successful transformations-and presents a series of articles, written by these experts, that collectively address the question: how can change be managed effectively? Beer and Nohria organize the book around two dominant, yet opposing, theories of change-one based on the creation of economic value (Theory E), and the other on building organizational capabilities for the long haul (Theory O). Structured in an unusual and engaging point-counterpoint style, the book enlists the reader directly in the debate, providing a comprehensive overview of the strengths and weaknesses of each theory along every dimension of the change process-from motivation to leadership to compensation issues. The editors argue that the key to solving the paradox of change lies not in choosing between the two processes, but in integrating them. They identify the crucial considerations leaders must make in selecting strategies that satisfy shareholders and develop lasting organizational capabilities. With a groundbreaking conceptual framework applicable to established corporations and small organizations alike, "Breaking the Code of Change" is a unique and authoritative contribution to academic research and management practice on the process of organizational change. Michael Beer is the Cahners-Rabb Professor of Business Administration at Harvard Business School. Nitin Nohria is the Richard P. Chapman Professor of Business Administration at Harvard Business School.
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Table of Contents

Preface and Acknowledgements Introduction Resolving the Tension between Theory E and O of Change By Michael Beer and Nitin Nohria Section I: Purpose of Change: Economic Value or Organizational Capability Chapter 1 Value Maximization and the Corporate Objective Function By Michael Jensen Chapter 2 The Puzzles and Paradoxes of How Living Companies Create Wealth: Why Single-Valued Objective Functions Are Not Quite Enough By Peter M. Senge Chapter 3 Purpose of Change A Commentary on Jensen and Senge By Joseph Bower Section II: Leadership of Change: Directed From the Top or High Involvement & Participative Chapter 4 Effective Change Begins At the Top By Jay A. Conger Chapter 5 The Leadership of Change By Warren Bennis Chapter 6 Embracing Paradox: Top-Down vs. Participative Management of Organizational Change A Commentary on Conger and Bennis By Dexter Dunphy Section III: Focus of Change: Formal Structure and Systems or Culture Chapter 7 The Role of Formal Structures and Processes By Jay R. Galbraith Chapter 8 Changing Structure Is Not Enough: The Moral Meaning of Organizational Design By Larry Hirschhorn Chapter 9 Initiating Change: The Anatomy of Structure as a Starting Point A Commentary on Galbraith and Hirshhorn By Allan R. Cohen Section IV: Planning of Change: Planned or Emergent Chapter 10 Rebuilding Behavioral Context: A Blueprint for Corporate Renewal By Sumantra Ghoshal and Christopher A. Bartlett Chapter 11 Emergent Change as a Universal in Organizations By Karl E. Weick Chapter 12 Linking Change Processes to Outcomes A Commentary on Ghoshal & Bartlett and Weick By Andrew Pettigrew Section V: Motivation for Change: Financial Incentives Lead or Lag and Support Chapter 13 Compensation Systems and Organizational Change: Ideas and Evidence from Theory and Practice By Karen Wruck Chapter 14 Compensation: A Troublesome Lead System in Organizational Change By Gerald E. Ledford and Robert L. Heneman Chapter 15 Pay System Change: Lag, Lead, or Both? A Commentary on Wruck and Ledford By Edward E. Lawler, III Section VI: Consultants' Role in Change: Large Knowledge Driven or Small Process Driven Chapter 16 Human Performance That Increases Business Performance: The Growth of Change Management and Its Role in Creating New Forms of Business Value By Terry Neill Chapter 17 Assuring That Consulting Produces Benefits: Rapid Cycle Successes vs. The Titanics By Robert H. Schaffer Chapter 18 Scope and Involvement in Accelerated Organization Transformation A Commentary on Neill and Schaffer By Robert H. Miles Section VII: Research on Change: Normal Science or Action Science Chapter 19 Professional Science for A Professional School: Action Science vs. Normal Science By Andrew H. Van de Ven Chapter 20 The Relevance of Actionable Knowledge for Breaking the Code By Chris Argyris Chapter 21 Research That Will Break the Code of Change The Role of Useful Normal Science and Usable Action Science By Michael Beer Ending and Beginning Chapter 22 Breaking the Code of Change: Observations and Critique By Roger Martin Epilogue By Michael Beer and Nitin Nohria Index About the Contributors

About the Author

Michael Beer is the Cahners-Rabb Professor of Business Administration at Harvard Business School.

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