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Cracking the Code of. Change by Michael Beer and Nitin Nohria. Included with this full-text Harvard Business Review article: The Idea in Brief—the core idea. Citation: Beer, Michael, and Nitin Nohria. “Cracking the Code of Change.” Harvard Business Review 78, no. 3 (May–June ): – In this article, authors Michael Beer and Nitin Nohria describe two archetypes–or theories–of corporate transformation that may help executives crack the code.

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However, it is often too hard to manage even this circumstance because it takes years to fully implement. Instead of using only one theory or sequencing both theories, a company should implement both Theory E and Theory O at the same time. Finally, consultants should get managers to think and not just blindly act on a set of procedures.

Rather than rely on a single form of incentives that concentrate on a single issue, the company should tailor its incentives to get the managers and employees to be the best they can be.

In my personal experience I worked for a bank that valued its employees too much and we took it for granted that we were the most important component of the bank. Theory E change strategies are ones that make all the headlines. Additionally, employees should be rewarded for meeting performance goals too. The company should explicitly confront the tension between E and O goals and embrace the paradox between the two theories.

Note on Human Behavior: Bbeer studied two companies, both in the paper production, and looked at how each executive of the companies approached change. However, important research in recent decades strongly suggests that situational factors often dominate character in ethical decision making—for leaders and for members of their organizations.

Today’s fast-paced economy demands that businesses change or die. They contrast those corporate transformations with that of UK-based tthe ASDA, which has successfully embraced the paradox between the opposing theories of change and integrated E and O.


This proliferation of recommendations often leads to muddle when change is attempted. In their methodology, they used a mixed method design including both qualitative and quantitative data. The company should use a variety of incentives to encourage good work within the corporate structure.

Cite View Details Educators Purchase. Journal of Cost Management Summer: By clicking accept or continuing to use the site, you agree to the terms outlined in our Privacy PolicyTerms of Serviceand Dataset License. Now the Challenge Is Inclusion. The writers recommend the use of the combined theories to other organizations to achieve lasting change. CEOs need to learn to simultaneously manage the seemingly contradictory dualities of the job: Help Center Find new research papers in: Managers should be crackung to use consultants as a tool and nothing else.

Cracking the code of change. – Semantic Scholar

This note summarizes the recent research, shows its implications for the basic steps dode ethical decision making, and provides a basis for in-depth discussion of the character-versus-situation question. A nohhria view of the role of middle management in the implementation of strategic change Rosalie KuyvenhovenTurner ConsultingWolfgang Buss Editorial Washington Post May 19, The simultaneous use of both theories is more likely to be the source of sustainable competitive advantage.

The role of budgets in organizations facing strategic change: From This Paper Topics from this paper. Theory O is change based on organizational capability.

Cracking the Code of Change

Theory O a soft approach, which is based on organizational capability and focuses on developing corporate culture and human capability through individual and organizational learning.

To show the differences between these hard and soft approaches, Beer and Nohria devised a system to compare the three companies. Cracking the code of change. Why major change programs fail: However, those who do not learn and cannot learn should be replaced. According to Jensen an organization should have a single valued objective function that calls for purposeful behavior, which may not be possible when there are multiple dimensions which may potentially lead to confusion and complexity.


Most companies focus purely on one theory or the other, or haphazardly use a mix of both, the authors say. Change usually involves heavy use of economic incentives, drastic layoffs, downsizing, and restructuring.

We’ve Gotten Better at Diversity. Showing of extracted citations. Those firms at maturity stage can apply both theories whereas those companies at tne decline stage may only concentrate on shareholders welfare as their survival technique Hayes By looking at different dimensions of each company, like its goals, leadership and focus, Beer and Nohria were able to outline key differences between each theory on its own and identify what changge happen when the theories were used together.

Beer and Nohria present the examples of two companies, Scott Paper and Champion International, that used a purely E or purely O strategy to create change–and met with limited levels of success. Another recommendation would be, further research be undertaken involving a larger sample to validate the theories. They accomplished this by compiling a fode of key dimensions of change.

Cite View Details Register to Read. Often the presence of consultants can make managers abdicate any sense of leadership; rather, consultants should help managers become better leaders. About the Authors Michael Beer. Changing the way we change. Harvard Business Review November-December: The goal should be to make the company a aand financially and a great place to work.

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