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Planned and Emergent Change

Using Mintsberg・s definitions, planned change (what Mintsberg called .deliberate strategy) describes .planning exercises carried out at the top of the organisation which try to predict environment changes and devise a suitable response to them・.  Emergent change is .the outcome of emergent processes organically linked to the positioning and expertise of individuals and organisations in small incremental steps・.  That means, planned change is a top-down approach; while emergent change is a bottom-up approach.

1.      Planned change

Beer and Nohria・s Theory E argued that planned change focused on economic value from top-down.  It was likely in Bertelsmann.  The top management of Bertelsmann set the goals based on the financial markets (most profitable niches) at most of the time.  The fast-changing and dynamic environments forced the management to make decisions for the others as speed was the critical success factor.  It was also a response to the pressure from the external threat or crisis, for example Amazon challenge.

The hardware of the company, for example structures and systems always moved first to complement the top-down change.  It was evidence in many of the ingredients of the Bertelsmann model such as decentralisation, autonomy, and pluralism in its early stage; and the company tried to centralise its databank in its later stage.  However, planned change was difficult to implement as there was work distraction and resistance from the structural inertia as in Bertelsmann・s case.  Its staffs felt that a central department would not work and believed it could slow down the company with tight sets of rules and regulations.

2.      Emergent change

There was also emergent change in Bertelsmann.  The corporate ethos of Bertelsmann encouraged entrepreneurship.  It allowed its staffs for experiment and variations as what Weick stated, like everyday contingencies, breakdowns, exceptions, opportunities and unintended consequences of work.  It was an open system according to the complexity theory point of view.  It was because the staffs were empowered for organising their work through profit centres.  According to Weick, organising implied a continuous interest in change as a means of improving one・s work.  Improving was one important elements of the incremental and emergent change.

Joint alliances or merge and acquisition in Bertelsmann case was a strategic action through planned change.  However, it concerned with the ability of the staffs to apply and develop their knowledge in new ways.  This was required in the development of emergent change and ensured there was a space for experimentation, innovation and variation.

The staffs were closest to the boundaries of the company and were adaptive (through learning from mistakes) to any changes from the external world.  The change was happened naturally so it was not easy to recognise.  It was an ongoing process without its beginning and end point.  These small changes eventually created a large gap among profit centres, for example internal competition and duplication of work.  It was likely caused by unclear common goals from the large planned change strategy.  This was also a liability in the fast-changing environments as competitors came from traditional as well as adjacent sectors.  If each profit centre focused on their work only, the company in a whole would respond slowly to meet the macro environmental change.

Beer and Nohria・s Theory O suggests that the emergent .change efforts was to develop organisational capabilities, particularly the capability of employees to become involved in identifying and solving work-related problems・.  It was less effective in Bertelsmann as the profit centres were too narrow-minded for own development and less committed to improve the overall performance of the company.  The concept of emergent change was good, only when everybody shared the same goals towards organisational success.  This would need a good leader from the top management giving clear direction.

As a conclusion, Bertelsmann tried to use a reconciliation strategy with both planned and emergent change to maintain the corporate ethos but remain entrepreneurship.  By planned change, the senior management planned the direction of the organisation and implements appropriate structures and controls.  To increase speed, the senior management also monitor the environments to reflect any changes.  By emergent change, the stable environment from the planned change encouraged the lower levels for entrepreneurship spirit such as experiments and variations.  However, this would be a dilemma situation as how to manage and balance both strategies would be a challenge to the management.

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