Journal of Management Studies 28:2 March 1991

0022-2380 $3.50

CHAMPIONS OF CHANGE AND STRATEGIC SHIFTS: THE ROLE OF INTERNAL AND EXTERNAL CHANGE ADVOCATES*
ARI GINSBERG

Stern School of Business, New York University

ERIC ABRAHAMSON

Graduate School of Business, Columbia University

ABSTRACT Change advocates who participate in the process of strategy-making can play an important role in enabling organizational adaptation. To examine the nature of this role, this article investigates the influence on strategic shifts of two such participants - new members of the top management team and management consultants. Empirical findings suggest that managers see these two types of change agents as having two different kinds of influence on strategic shifts. Specifically, the change agent role of management consultants is viewed as one that creates pressure for change by helping to shape new managerial perspectives of the environment. In contrast, the change agent role of new members of the top management team is viewed as one that counteracts inertial forces that may block the implementation of change. These results suggest that management consultants may be much more useful in stimulating changes in the ways executives think about their environment than they are in implementing radical strategic changes. To overcome institutional resistance to extreme strategic shifts, organizations may need to resort to stronger political and symbolic actions, such as promoting or hiring new top executives in key leadership roles. INTRODUCTION Change in strategic orientation is a pivotal component of organizational adaptation (Chaki-avarthy, 1982; Galbraith and Kazanjian, 1986). Two dominant schools of thought have emerged to understand the occurrence of such changes (Johnson, 1987). The rational school of thought about strategy formulation and implementation asserts that when environmental changes are perceived to have occurred, strategists recognize available strategic options, evaluate them, and make the apropriate decisions. Studies rooted in this perspective have examined the influence of two factors: (1) the feedback effects of prior performance Address for reprints: Ari Ginsberg, New York University, Stern School of Business, Graduate Division, 90, Trinity Place, New York, NY 10006, USA.

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(Fombrun and Ginsberg, 1989; Grinyer^^a/., 1988;Oster, 1982); and (2) environmental conditions (Miller and Friesen, 1983; Smith and Grimm, 1987; Tushman and Anderson, 1986). In contrast, the interpretive, or cultural, school of thought asserts that strategic changes occur as the result of changes in the strategic 'recipes' or 'formulae' that managers use to construe their environment (Grinyer and Spender, 1979; Hinings and Greenwood, 1989). Studies rooted in this perspective have examined the role of new chief executives or management consultants in loosening the mechanisms that act to preserve or institutionalize such recipes, or orientations {e.g. Grinyer et al., 1988; Johnson, 1987). According to the cultural school of thought, pressure for strategic reorientation occurs when new frames of reference emerge among managers that make them see aspects of the environment that necessitate realignment (Hedberg, 1981). However, inertial forces can create resistance to realignment by blocking the implementation of strategic changes (Greenwood and Hinings, 1988). According to Lewin (1952), these two types of forces create a social system that is in stationary equilibrium until change agents act to transform the system in three steps: unfreezing, moving, and refreezing. Consistent with this perspective, participants in the strategy-making process may facilitate extreme strategic shifts in two important ways: (1) by introducing new perspectives that create pressure for orgainizational change; and (2) by taking political and symbolic actions that counteract institutional inertia and cultural resistance to change. The influence of such change advocates may explain why similar organizations react differently to the same environmental stimuli or performance outcomes even when similar levels of resources for change are available to both (Gooper and Schendel, 1976). In contrast to the strategic management literature which focuses on the role of the top management team in facilitating organization-environment alignment (see, e.g., Ginsberg, 1990; Hambrick, 1989), the organizational development (OD) literature has focused largely on the efforts of change agents who are external to the client system (see, e.g., Ottaway, 1983). Although such efforts have traditionally focused on lower level management processes (Tichy, 1980), more recently they have begun to emphasize top management decision-making processes. For example, Buller (1988) identified a number of important ways in which OD concepts and practices may be used to enhance the formulation and implementation of strategic decisions. Despite increased recognition of the opportunities that OD or management consultants have for influencing strategy-making processes, few empirical studies have examined the role of management consultants in facilitating strategic change. Nor have they compared the change agent roles of management consultants to those of new members of the top management team. This article begins to address this gap by linking conceptualizations of the role of change agents to the literature on strategic change. Such an integrative focus allows for the development and testing of specific propositions regarding the influence of two types of change advocates on shifts in strategic orientation: (1) internal, specifically, new members of the top management team, and (2) external, specifically, management consultants. We begin by discussing the literature which underscores the role of cognitive and socio-political rigidities in preventing strategic shifts in response to a changing environment. We then delineate the roles of management consultants and new members of the top

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management team in creating pressure for, and in countering resistance to, changes in strategic orientation. To explore the relation between the theoretical conceptions expressed in this literature and the conceptions held by executives, we next pose specific research questions that emerge from this discussion. Finally, we present the results of an empirical study that investigated top executives perspectives on the role of these change advocates in facilitating shifts in strategic orientation.

RIGIDITIES PREVENTING STRATEGIC REALIGNMENT

The literature that examines rigidities preventing adaptation to changing environment details two broad approaches - one that emphasizes resistance to new environmental perspectives that create pressure for strategic reorientation, and another that emphasizes inertial forces that block the implementation of change (Ginsberg, 1988). Depending on their orientation, researchers examining the cognitive biases that impede the formation of new perspectives in strategic decision-making focus at either the individual or the group level. An example of individual-level resistance is the tendency among managers to seek out information that confirms their preconcpetions (Zaskind and Costello, 1962) and to discount data that discredits them (Nisbett and Ross, 1980). An example of group-level resistance is Janis' (1972) description of group-think in which he initially drew attention to self-validating processes that narrow the perspectives that guide and rationalize group responses to various issues. Goncern with the effect of cognitive biases on the strategic decision-making process is widespread in the management literature (Jackson and Dutton, 1988; Schwenk, 1984; Walsh, 1988). Inertial forces can block the implementation of a strategic reorientation even when a new perspective calling for the need to change has emerged in the schema, or information domain, of strategic decision-makers. Inertial forces can be both internal and external to organizations (Hannan and Freeman, 1977). Externjilly, organizations must conform to strategies and policies that stakeholders have come to expect, or else lose legitimacy and stakeholder support (DiMaggio and Powell, 1983); Meyer and Rowan, 1977; Rhenman, 1973). Resistance to change may thus reflect an organization's ongoing effort to appear legitimate to its stakeholders. As summarized by Miller and Friesen (1980), internally based inertia and resistance to change emerge for the following reasons: (1) organizational myths and ideologies are enduring factors which tend to inculcate narrow views among employees that reinforce past behaviour and cause its future amplification; (2) procedures and strategies are extrapolated past their point of usefulness because they have enjoyed success in the past; (3) continuity in the direction of the developmental wishes of key members of the organization is more likely to be in line with the elaborate set of programmes, goals, and expectations that have grown up around the organization and have come to reflect these wishes; and (4) strategic rebrientations may entail admissions of failure and a concomitant erosion of the political base and self-esteem, not only of managers but also of employees who had a vested interest in these norms. In sum, two types of forces impede extreme shifts in strategic orientation. In

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the first, forces block the emergence of new perspectives on the environment that can reveal the need for realignment. In the second, new perspectives may emerge, but inertial constraints, both external and internal to the organization, create resistance to organizational changes. The occurrence of strategic reorientation may thus require the presence of decision-making participants that act in two capacities as change agents. These participants overcome forces blocking the emergence of new insights and understandings that create pressure for realignment, and help counter inertial forces that create resistance to the implementation of extreme shifts in strategy orientation. The literature discusses two important participants in the strategy-making process that can counteract these rigidities by acting as change advocates - those who act from the 'inside', i.e. managers with new executive positions and those who act from the 'outside', i.e. management consultants. The next section examines their role in overcoming rigidities impeding organizational change.

THE ROLE OF CHANGE ADVOCATES

Creating Pressure for Realignment

New members of the top management team''' have the potential to facilitate strategic change. They do so by fostering the emergence of new frames of reference among strategic managers that make them see aspects of the environment that necessitate a shift in strategy (Hedberg, 1981). Organizations in environments undergoing turbulent change and increasing environmental complexity need to be able to adapt to such change by transforming their modes of strategy making, or orientation towards managing their environment (Miller and Friesen, 1983; Smart and Vertinsky, 1984). New members of the TMT. Executive succession is an important mechanism for creating pressures for strategic realignment because of the frame-breaking perspectives new members of the top management team may bring with them (Pfeffer and Salancik, 1978). New members of the T M T who have come from other hierarchical levels, organizations, or industries can import into top management groups new perspectives that reveal the perceived need for change and its direction (Graham and Richards, 1979; Virany and Tushman, 1986). Management consultants. The organizational development literature leads in conceptualizing the role of consultants in organizations. These early efforts recognized the catalytic role consultants play in the unfreezing stage of Lewin's (1952) unfreezing, moving, refreezing sequence (Bennis, 1969; French and Bell, 1978, p. 16; Huse, 1975). Organizational change is the raison d'etre of both organizational development and management consulting (Ottaway, 1983). However, the former has tended to have a narrow focus on altering individual and group level within the context of strategic decisions that have already been made, whereas the latter has tended to have a broader focus that includes guiding top managers in designing new strategies and structures for their organizations. More recently, scholars have begun to examine how management consultants contribute to the creation and evolution of new perspectives or schema among

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strategic decision-makers. Management consultants challenge the existing cognitive order - they 'state the obvious, ask foolish questions, and doubt - ill of which helps organizational members get outside of themselves' (Smircich and Stubbart, 1985, p. 731). They 'offer the potential advantage of being experienced observers and analysts without the related disadvantage of being locked into defending previously established positions or ways of thinking' (Gattiker and Larwood, 1985, p. 120). By ushering in new conceptualizations and jargon, consultants act like fashion setters who create new frames of reference that force top managers to recognize the antiquated nature of previous strategic orientation and the 'fashionability' of the new (Abrahamson, 1986). As the environment becomes increasingly turbulent and complex, innovation becomes increasingly important to avoid obsolete products and practices (Miller and Friesen, 1983) and firms should tend to increase experimental behaviour {e.g. new product development) to find novel answers where old ones no longer work (Dutton and Freedman, 1985). Gonsequently, as the environment becomes more complex, firms seeking to gain competitive advantage over other firms in their environment should attempt to become more innovative and proactive (Brittain and Freeman, 1980). Nevertheless, empirical evidence does not consistently support the claim that firms shift their strategic orientation in tune with shifts in environmental complexity (Miller and Friesen, 1983). The influence of change agents, such as new members of the T M T and management consultants, may explain why some firms make such shifts in adapting to increasing environmental complexity while others do not. According to the theories espoused in the literature discussed above, new members of the T M T and management consultants hired can have a significant impact on the way in which a firm adapts to an increasingly complex environment because they help reshape existing perspectives and schema. An important research question, then, is whether or not new members of the T M T and management consultants play an important role in facilitating extreme changes in perceived environmental complexity. More specifically: Ql\ Are perceived changes in environmental complexity more likely to be extreme when strategic shifts are strongly influenced by new members of the top management team? Q2: Are perceived changes in environmental complexity more likely to be extreme when strategic shifts are strongly influenced by management consultants?
Counteracting Resistance to the Implementation of Change

Extreme organizational changes threaten to usher in entirely new beliefs and to alter radically the patterns of resource allocation, dependency, and power underlying the interaction of organizational constituents (Greenwood and Hinings, 1988). Those who have studied organizational cultures argue persuasively that firms must often change these cultures in order to implement strategic changes (Deal and Kennedy, 1982; Sathe, 1985; Schwartz and Davis, (1981). Additionally, strategy implementation requires political restructurings in which opponents of strategic changes are either enticed to support them or blocked from obstructing them (Gray and Ariss, 1985). The resistance to cultural

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and political inertia will be particularly strong when proposed organizational changes are far-reaching in nature. However, new members of the top management team and management consultants can act to ease the implementation of strategies. New members of the TMT. Quinn's (1980) seminal work suggests that well managed strategic change requires signals to the organization that change is coming and that new courses of action are legitimate. Changes in top-management teams provide such signalling and legitimating functions. Repeated findings that management changes in athletic organizations have no discernible impact upon performance support the notion that executive succession plays a legitimating role by reflecting a form of scapegoating to assure fans, players or other stakeholders that a team does not tolerate poor performance (Brown, 1982; Eitzen and Yetman, 1972; Gamson and Scotch, 1964). A ceremony of status degradation of the old leader followed by an elaborate ceremony of replacement aimed at building up the organization's collective image often constitutes an important element of this symbolic process (Gephart, 1978). Succession, then, helps communicate that a highly competent top executive or management team directs the strategic reorientation that will lead the organization to success. Adroit executives can reinforce the symbolic impact of succession with actions specifically designed to remove cultural obstacles to implementation (Argyris, 1985). Tunstall (1986), for instance, changed recruiting, training and promotion, built new headquarters and developed a new mission statement in order to integrate AT&T into its newly deregulated environment. Executive succession, however, probably accomplishes more than a symbolic function in implementing strategic change. Quinn (1980, p. 26) noted that wellmanaged implementation of strategic changes called for decisive political acts by top managers - 'they try to get people behind their concepts whenever possible, to co-opt or neutralize serious opposition if necessary, or to find the "zone of indifference" where the proposition will not be disastrously opposed'. In two areas where successful top managers have intervened politically, first, they acted to defeat efforts of the 'old guard' to maintain the status quo, then they counteracted the efforts of other coalitions to control a disproportionate share of change resources (Tichy and Ulrich, 1984). Furthermore, in an effort to secure the support of key stakeholders and to attain legitimacy for their change efforts, executives and dominant coalitions may exaggerate and even construct crises (Neilson and Rao, 1987). These arguments are consistent with empirical findings that administrators may create the illusion of a fiscal crisis so as to increase their control over scarce financial resources and thereby to increase their power (Bradshaw-Camball, 1989). Management consultants. Tbe mere presence of expert consultants in tbe strategy formulation process may serve to signal to organizational constituents that expert knowledge bas been applied to the problematic situation, and that,the strategic reorientation is justified and legitimate. As Pfeffer observed 'consultants are presumably objective, experts, and expensive. The two former beliefs ensure they will be legitimate and the latter tends to foster commitment to their recommendations' (Pfeffer, 1981, p. 143). Thus, by soliciting the advice of

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management consultants, top managers advocating strategic changes may tip the balance of pov^er in their direction (Kanter, 1984; Pfeffer, 1981). In recognizing the ability of management consultants to enhance the credibility of those who hire them, scholars have argued that the consulting process of bringing about change is inherently political (see e.g. Cobb and Margulies, 1981). According to the theories espoused in the literature discussed above, the participation of management consultants and new members of the top management team can help implement extreme shifts in strategic orientation by counteracting cultural and political obstacles. An important research question then, is whether or not this role is important in facilitating extreme changes in perceived strategic orientation. More specifically: Q3: Are perceived changes in strategic orientation more likely to be extreme when strategic shifts are strongly influenced by new members of the top management team? Q4: Are perceived changes in strategic orientation more likely to be extreme when strategic shifts are strongly influenced by management consultants?

METHOD Time Frame and Sample, . The enactment in 1980 of the Depository Institutions Deregulation and Monetary Act (DIDMC) represents a significant change in the retail banking environment. The DIDMC act, called the most monumental banking legislation to be passed in nearly half a century (McLean, 1980), marks the beginning of a new era of competition among commercial banks and savings institutions in the United States., The six-year period beginning with the passage of this legislation thus provided a meaningful time horizon for this study, since it was not only adjacent to a critical regulatory event that would likely lead to increased environmental complexity, but also sufficiently long for firms to have made discernible strategic changes (Ginsberg, 1986). To maximize access to top managers and to control for differences in state regulations, the data collection centred on one state in the northeastern region of the United States.
Data Collection Procedures

Data were collected via questionnaires and interviews. Questionnaires were sent to all banking institutions listed in the American Bank directories for this state. Interviews regarding the role of management consultants and executive succession were conducted with top managers of 29 firms from this sample. Questionnaire data. To ensure that the analysed sample consisted of senior executive respondents who had adequate familiarity with the firm's strategic decisionmaking environment, we excluded all questionnaires that were not filled out by executives who had been in this position for at least eight years. Only respondents who were managing officers (president or CEO) were included in the analysed sample. These managing officers were asked to comment on the

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replacement of subordinates at the executive or senior vice president level as well as the use of management consultants. Using a test of proportions, we next compared distributions of size and type of institution categories distributions of this sample and the state population from which it was drawn and found no significant statistical differences. Although these analyses indicated that the sample of firms examined was representative of the state population from which they were drawn, we cannot, strictly speaking, generalize from the results of this study to firms in other types of industries. Interview data. To conduct interviews, we selected 16 organizations in which questionnaire respondents had indicated that new members of the top management team had exerted a strong influence on strategic shifts and 13 organizations in which questionnaire respondents had indicated that management consultants had exerted a strong influence on strategic shifts. Using open-ended questions, we asked executives interviewed to describe the following: (1) the nature of the shift in strategic orientation that their firm had undergone since the year prior to the passage of the DIDMC Act and (2) the nature of the roles new members of the TMT euid management consultants played in facilitating strategic shifts.
Qualitative Analysis

Based on verbal descriptions, we classified changes in strategic orientation as either incremental or radical. In accordance with a classification scheme of changes in strategy proposed by Ginsberg (1988), the former were defined as changes in degree or magnitude and the latter as changes in state or pattern. For example, efforts by a bank emphasizing specialized service to selectively acquire competitors to deepen expertise were classified as incremental. In contrast, efforts by a financial boutique to broaden expertise, i.e. to offer a full line of products and services and to realize economies of scale were classified as radical. Based on this classification, almost 40 per cent of the executives in the first group (those that had indicated that new members of the top management team had exerted a strong influence on strategic shifts) described the change in strategic orientation which the firm had undergone as radical; In contrast, only 17 per cent of the executives in the second group (those that had indicated that management consultants had exerted a strong influence on strategic shifts) described the change in strategic orientation which their firm had undergone as radical. We also used classified verbal descriptions of the role of new members of the top management team and management consultants as either providing a fresh look at the organization's problems and opportunities and rendering expert advice, or as overcoming political and cultural barriers to change. Based on this classificar tion, about 56 per cenit of the first group (those that had indicated that new members of the top management team had exerted a strong influence on strategic shifts) indicated that the primary change role of new members of the top management team was to help overcome political and cultural barriers to change. Of those who were classified as describing their firms as having undergone an extreme shift, about 67 per cent indicated that the primary change role of new members of the top management team was to help overcome political and cultural barriers to change.

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About 87 per cent of the executives in the second group (those that had indicated that management consultants had exerted a strong influence on strategic shifts) indicated that the primary role management consultants played in the strategy-making process was to help take a fresh look at the organization's opportunities and problems, and to render advice about how to become more competitive. About 81 per cent of the executives in this group indicated that consultants worked for one of the big eight consulting firms. The others were hired from small firms. In sum, the executives interviewed tended to view the change advocate roles of management consultants and new members of the top management team as fundamentally different. Management consultants were viewed as quite useful in helping to reframe managerial perspectives regarding the external environment. However, they were seen as considerably less useful than new members of the top management team in helping to overcome political and cultural barriers to the implementation of extreme strategic shifts.
QUANTITATIVE ASSESSMENT OF VARIABLES

To conduct statistical analysis of the relationships between level of influence and nature of change, we asked executives to use seven-point scales to indicate the direction and magnitude of change in environmental complexity and strategic orientation which occurred since the year prior to the passage of the DIDMC Act. Change in environmental complexity was assessed as top managers' perceptions of variations among the firm's markets that require diversity in servicing and marketing orientations (Chandler, 1962; Khandwalla, 1977). Five items were used to measure this dimension. Adopted from a scale used by Miller and Friesen (1983) to measure change in environmental heterogeneity or complexity, these are: (1) change in rate of innovation of new products and services among competitors in the firm's markets; (2) change in rate of innovation of product/ service technology among competitors in the firm's markets; (3) change in diversity of products/services offered with regard to customers in the firm's markets; (4) change in diversity of products/services offered with regard to the nature of competition; and (5) change in diversity of markets in which firms operate. These scales were rated from 1 (greatly decreased) to 4 (no change) to 7 (greatly increased). Change in strategic orientation was operationalized as top managers' perceptions of changes that reflect shifts in a firm's approach to managing its product/market environments (Khandwalla, 1977; Smart and Vertinsky, 1984). Five items were used to measure modes of strategy-making, these are: (1) change in aggressiveness in dealing with competitors; (2) change in seeking unusual and/or novel solutions to problems by senior executives; (3) change in the rate of new product/service introduction; (4) change in the methods of providing products and services; and (5) change in top management operating philosophy regarding emphasis on R&D costs, technological leadership, and product innovation. These scales were rated from 1 (greatly decreased) to 4 (no change) to 7 (greatly increased). Perceived influence of new members of the TMT and management consultants on shifts in strategic orientations was measured by using a five-point scale that

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ranged from 'not at all' (1) to 'a great extent' (5) for each of these two factors. Executives were also asked to indicate whether or not changes in top management had occurred during the relevant time frame, and whether or not management consultants had participated in the strategy-making process.
Statistical Data Analysis

Construct validity (Nunnally, 1978) of measures of perceived change in environmental complexity and of perceived change in strategic orientation was
determined through the use oi confirmatory maximum likelihoodfactor analysis. This

form of classical factor analysis extracts factors with predefined characteristics and then tests to determine if the residual matrix still contains significant variance (Gorsuch, 1974). As can be seen in table I, the x^ indicates that the residual matrix contains no significant variance and thereby confirms the existence of the two hypothesized factors explained by these items - change in environmental complexity and change in strategic orientation. The sample was then split in hcdf randomly in order to subject the two indices that emerged from the factor analysis to a reliability test. Cronbach's a, which is preferred as an estimate of index reliability (Mclver and Carmines, 1980), was calculated and found to be 0.748 for change in environmental complexity and 0.755 for strategic reorientation. These are both greater than Nunnally's (1978) suggested threshold of acceptable a coefficients.
Table I. Confirmatory factor analysis of the items measuring changes in environmental complexity and strategic orientation" Factors Factor 1 0.548 0.582 0.692 0.790

Items'' 1. Change in rate of innovation of new products and services among competitors 2. Change in rate of innovation of product/service technology among competitors 3. Change in diversity of products/services offered with regard to customers' buying habits 4. Change in diversity of products/services offered with regard to nature of competition 5. Change in diversity of markets in which firms operate 6. Change in aggressiveness towards competitors 7. Change in frequency of seeking unusual/novel solutions to problems 8. Change in rate of new product/service introduction 9. Change in rate of new distribution methods introduction 10. Change in emphasis on product/service innovation Eigenvalues " '' ' ''

Factor 2 0.097 0.194 0.165 0.216 0.246 0.468 0.574 0.799 0.661 0.466 1.02

0.451
0.208 0.230 0.077 0.173 0.162 3.11

Maximum likelihood model was used Loadings are derived through varimax rotation Kaiser-Meyer-Olkin measure of sampling adequacy = 0.81 The two factor structure has a x^ value of 34.83 which is significant at /!<0.115

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Variables were coded in accordance with this study's focus on the relationship between high and low change agent influence and extreme and moderate changes in environmental complexity and strategic orientation. We first coded the independent variables 'influence of new members of the top management team' and 'influence of management consultants' as low influence [1] and high influence [2]. We next coded the dependent variables 'change in environmental complexity' and 'change in strategic orientation' as 'moderate' [0] and 'extreme' [1]. Table II presents univariate descriptive statistics and a correlation matrix of the variables.
Table II. Descriptive statistics and correlation coefficients" Variables 1. TOPMAN'' 2. CONSULT'' 3. Environmental complexity"^ 4. Strategic orientation' Means 1. 41 1. 49 S.D. 0.49 0.50 0.24 1 2 3 4

0. 44 0.52

0.49 0.50

0.11 0.25

0.28 0.22 0.50

" N = 71. Coefficients greater than 0.19 are significant at the /)<0.05 level '' Coded as a dichotomous variable where 1 = weak influence and 2 = strong influence ' Coded as a dichotomous variable where 0 = moderate change and 1 = extreme change

To examine the research questions through statistical analysis, we needed to use a technique that reflected the simultaneous and potentially interactive effects of the perceived influence of management consultants and new members of the top management team. To accomplish this more complex kind of analysis, methodologists recommend the use of loglinear model approaches that analyse the effects of criterion variables on a binary dependent variable through a maximum likelihood estimation routine (Agresti, 1984; Aldrich and Nelson, 1984). We conducted a logistic regression analysis to determine which of the change agent influences and their interactions provided the best model for predicting extreme changes in environmental complexity and extreme changes in strategic orientation. This process allowed us to examine the following models:
(1) = /3Q + |8,Z,+/32Z2 +13,2^,2

(2) ^=/3o + /3,Z, +/32Z2 + |8,2^,2 Where: E = the loglinear probability that perceived change in environmental complexity is extreme; S + the loglinear probability that a perceived change in strategic orientation is extreme; X^ = the perceived influence of new members of the top management team (TOPMAN); X2 = the perceived influence of management consultants (CONSULT); A',2 = the interaction between TOPMAN and CONSULT.

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ARI GINSBERG AND ERIC ABRAHAMSON RESULTS OF STATISTIGAL ANALYSIS

The results of the logistic regression analyses shown in table III indicate that perceived shifts in environmental complexity (ENVIRON) are more likely to be extreme when management consultants (CONSULT) are seen as having had a strong influence on strategic changes. Although the influence of new members of the top management team (TOPMAN) is not a significant predictor of shifts in environmental complexity, the interaction between TOPMAN and CONSULT is significant. This indicates that the influence of new members of the T M T increases the likelihood that extreme shifts in perceived environmental complexity will occur when the influence of management consultants is strong. In contrast to the results for model 1, the results for model 2 do not support a significant association between the influence of management consultants and extreme shifts in perceived strategic orientation. However, the results do indicate that shifts in perceived strategic orientation are more likely to be extreme when the perceived influence of new members of the T M T is strong. Moreover, the interaction between these two types of change agents is also not a significant predictor of extreme change in strategic orientation. Although the nature of the analysis precludes our ability to infer causality, the patterning of these results still points to the contention that senior executives associate these two change agents with different roles or functions. For example if we interpret the results as indicating that top managers' perceptions of changes prompted their choice of whether to add a new team member or to hire an outside consultant, we still need to explain why changes in environmental complexity prompted only the hiring of outside consultants, but not the addition of a new team member, or why changes in strategic orientation prompted the addition of new team members, but not the hiring of outside consultants. The combined results of the analyses shown in table III reinforce the results of the qualitative analysis discussed earlier regarding the different roles of these two types of change advocates. Although Model 2 (p = 0.987) is significantly stronger than Model 1 (/? = 0.721), both models provide highly significant fits to the data.
Table III. Logistic regression analysis: maximum likelihood parameters Maximum likelihood estimates"
Model 1: Change in environmental complexity'' Explanatory variables Coeff. Std. error p-value Model 2: Change in strategic orientation'^

Coeff. 0.024 0.656 0.004 0.279

Std. error p-value 0.271 0.260 0.246 0.268 0.661 0.012 0.812 0.255

Intercept

-0.730 0.104 0.549 0.523

0.287 0.290 0.264 0.290

0.007 0.721 0.033 0.060

TOPMAN CONSULT TOPMAN 'CONSULT

Sample size = 71 Model likelihood ratio chi-square = 0.128, D.F. = 1,/> = 0.721 Model likelihood ratio chi-square = 0.000, D.F. = 1, /) = 0.987

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Although management consultants are viewed as playing an important role in facilitating changes in the ways executives look at the environment, they are not viewed as playing an important role in overcoming the political and cultural barriers that prevent the implementation of changes in strategic orientation. These results are consistent with Gattiker and Larwood's (1985) findings that a political rationale for hiring management consultants received weak support among top executives that were polled. They found that, instead, consulting clients felt that they were likely to hire consultants: (1) on the basis of their ability to provide stimulation for others in the organization; (2) to bring their expertise to bear on solving problems; (3) to take an objective stance toward them; and (4) for their ability to apply consulting processes in the organization. In contrast to the change agent role of management consultants, new members of the top management team may facilitate extreme strategic shifts in two important ways. First, because they are likely to be more open to new ideas and to change, they may make it easier for management consultants to change the way other key executives think about the environment. Secondly, new members of the top management team may themselves be promoted or hired to help overcome political and cultural barriers to the implementation of radicaJ changes.

DISCUSSION

Results of both qualitative and statistical analysis suggest that management consultants and new members of the top management team play different roles in facilitating extreme shifts in strategic orientation. The results of the ansdyses reported above indicate that executives perceive management consultants to be quite useful in creating pressure for strategic realignment by helping to reframe managerial perspectives of the environment. However, they consider them less useful than new members of the top management team in helping to implement extreme changes in strategic orientation. Although Ginsberg (1986) found a significantly positive association between the influence of management consultants and radical strategic changes, his study did not control for the influence of new members of the top management team or for differential types of influence processes as the present study does. The findings of the present study suggest that management consultants are seen as more useful than new members of the top management team in changing ideas and perceptions of key executives. However, the likelihood of successful intervention is enhanced when the composition of the top management team has been recently changed. Moreover, new members of the top management team are considered to be more useful than management consultants in counteracting inertial forces by helping to implement extreme strategic shifts. These results dovetail nicely with those of other studies that underscore the important roles played by new members of the top management team in implementing strategic changes. As mentioned earlier, these studies indicated that the symbolic impacts of succession itself (Brown, 1982; Gephart, 1978) and the deliberate political and symbolic actions of top managers (Quinn, 1980) served to overcome cultural and political inertial forces forestalling strategic changes. The conclusions derived from this study are consistent with anecdotal evidence

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regarding the change agent role of management consultants versus members of the top management team. For example, in reporting results of the McKinsey study to GE's management in May, 1970, Fred Borch noted: 'We decided that their recommendations on both the operating front and the staff front conceptually were very sound. They hit right at the nut of the problem, but the implementation that they recommended just wouldn't fly as far as General Electric was concerned. We accepted about 100% of their conceptual contribution and virtually none of their implementation recommendations'.'^' To develop an approach for implementing the McKinsey recommendations in a way suitable for GE, Borch decided to set up a task force headed by Group Vice President W. D. Dance.'3' To stimulate significant changes in the ways top managers think, executives may do well to hire management consultants who bring good problem-solving and coaching skills along with a more 'objective' view of the organizationenvironment interface. However, in general; management consultants may be inadequate for counteracting the intertial processes through which organizational symbols, meanings, and values are created and institutionalized (Allaire and Firsirotu, 1985). To legitimize and facilitate extreme changes in strategic orientation, or 'recipes', organizations may need to resort to strong political and symbolic actions, such as hiring new top executives in key leadership roles.
Limitations and Future Directions

By its very nature, strategic change is both a process and an outcome. This dual nature presents a methodological dilemma: researchers can carry out in-depth longitudinal case studies of a single strategic change episode {e.g., Greiner and Bhambri, 1989). Such studies capture with great accuracy the process of strategic change and its outcomes. They can be used to untangle the causal directionality linking the multiple variables that affect the dynamic evolution of strategic change. Researchers using the case study approach, however, rapidly discover one horn of the research dilemma (McGrath, 1981): their studies, like any case study, provide little generalizable knowledge concerning strategic change in multiple organizations. Researchers can adopt an alternative methodology: they can use questionnaire studies to elicit information concerning strategic changes in multiple organizations. This approach generates findings with greater generalizability, but also uncovers the other horn of the dilemma: questionnairebased research suffers from well-known biases of perceptual and cross-sectional data; the directionality of causality between variables as well as the accuracy of retrospective data is disputable. Ideally, researchers would carry out multiple case studies of strategic changes occurring in different organizations. Alternatively, they would distribute questionnaires at different stages of strategic change across multiple organizations and supplement their findings with longitudinal archival data. Both these approaches, however, have been shown to be highly impractical and provide rather unrealistic solutions to the methodological dilemma presented above (Miles, 1979). We suggest that for research on strategic change to progress, three types of studies are necessary: (1) single-organization, longitudinal case studies; (2) multivariate questionnaire studies of numerous organizations; and (3) studies that combine both qualitative and quantitative measures of strategic change. This

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Study provides an example, though not an exemplar, of this third approach. Qualitative research provided a way of accessing the validity of perceptual measures and the directionality of causation. Quantitative research provided a way of checking the generalizability of these observations. In line with this approach, future research should strive for greater methodological rigour, both qualitatively and quantitatively. Future studies on the role of change agents in organizational transformations should address a number of important questions: (1) Do organizations with different types of structures, systems and cultures require different types of change agents to facilitate strategic change? (2) Are different types of change agents required for peripheral changes than for changes in an organization's core? (3) How does the timing and sequencing of strategic change influence the effectiveness of different types of change agents? (4) What performance measures are appropriate for evaluating the effectiveness of these different types of change agents? (5) How does the type of consultant used or the level of top manager replaced affect the implementation of strategic changes; (6) How do the perceptions of executives regarding the influence of change agents emerge, e.g., how are perceptions affected by performance outcomes? Although the findings of this study are very preliminary, they have important implications. Not only do they provide insights into managerial theories of organizational change, but they also challenge researchers to begin more rigorous research on the roles of change advocates in facilitating strategic shifts. In this way, the results of this study begin to suggest how practitioners interested in modifying or redirecting organizational strategy can select and utilize change advocates more effectively. NOTES * Support from the Center for Entrepreneurial Studies at New York University is gratefully acknowledged. We thank Jane Dutton, Charles Fombrun, N. Venkatraman, and the reviewers for their helpful comments on earlier versions of this article. [1] In this article, 'members of the top management team' refers to managers that are no lower than two levels below the President or CEO in the organizational hierarchy. [2] Source: 'General Electric: Strategic Position - 1981'. HBS Case Services, Harvard Business School, Boston, Mass., 1981. [3] Ibid. REFERENCES
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