Doomed to Fail- A Case Study of Change Implementation Collapse in the Norwegian Civil Aviation

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This article was downloaded by: [University of Wolverhampton] On: 24 June 2014, At: 09:35 Publisher: Routledge Informa Ltd Registered in England and Wales Registered Number: 1072954 Registered office: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK Journal of Change Management Publication details, including instructions for authors and subscription information: http://www.tandfonline.com/loi/rjcm20 Doomed to Fail: A Case Study of Change Implementation Collapse In the Norwegian Civil Aviation Industry Eric Arne Lofquist a a Norwegian School of Management BI , Bergen, Norway Published online: 09 May 2011. To cite this article: Eric Arne Lofquist (2011) Doomed to Fail: A Case Study of Change Implementation Collapse In the Norwegian Civil Aviation Industry, Journal of Change Management, 11:2, 223-243, DOI: 10.1080/14697017.2010.527853 To link to this article: http://dx.doi.org/10.1080/14697017.2010.527853 PLEASE SCROLL DOWN FOR ARTICLE Taylor & Francis makes every effort to ensure the accuracy of all the information (the “Content”) contained in the publications on our platform. However, Taylor & Francis, our agents, and our licensors make no representations or warranties whatsoever as to the accuracy, completeness, or suitability for any purpose of the Content. Any opinions and views expressed in this publication are the opinions and views of the authors, and are not the views of or endorsed by Taylor & Francis. The accuracy of the Content should not be relied upon and should be independently verified with primary sources of information. Taylor and Francis shall not be liable for any losses, actions, claims, proceedings, demands, costs, expenses, damages, and other liabilities whatsoever or howsoever caused arising directly or indirectly in connection with, in relation to or arising out of the use of the Content. This article may be used for research, teaching, and private study purposes. Any substantial or systematic reproduction, redistribution, reselling, loan, sub-licensing, systematic supply, or distribution in any form to anyone is expressly forbidden. Terms & Conditions of access and use can be found at http://www.tandfonline.com/page/terms- and-conditions

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Change Management

Transcript of Doomed to Fail- A Case Study of Change Implementation Collapse in the Norwegian Civil Aviation

  • This article was downloaded by: [University of Wolverhampton]On: 24 June 2014, At: 09:35Publisher: RoutledgeInforma Ltd Registered in England and Wales Registered Number: 1072954 Registeredoffice: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK

    Journal of Change ManagementPublication details, including instructions for authors andsubscription information:http://www.tandfonline.com/loi/rjcm20

    Doomed to Fail: A Case Study ofChange Implementation Collapse In theNorwegian Civil Aviation IndustryEric Arne Lofquist aa Norwegian School of Management BI , Bergen, NorwayPublished online: 09 May 2011.

    To cite this article: Eric Arne Lofquist (2011) Doomed to Fail: A Case Study of ChangeImplementation Collapse In the Norwegian Civil Aviation Industry, Journal of Change Management,11:2, 223-243, DOI: 10.1080/14697017.2010.527853

    To link to this article: http://dx.doi.org/10.1080/14697017.2010.527853

    PLEASE SCROLL DOWN FOR ARTICLE

    Taylor & Francis makes every effort to ensure the accuracy of all the information (theContent) contained in the publications on our platform. However, Taylor & Francis,our agents, and our licensors make no representations or warranties whatsoever as tothe accuracy, completeness, or suitability for any purpose of the Content. Any opinionsand views expressed in this publication are the opinions and views of the authors,and are not the views of or endorsed by Taylor & Francis. The accuracy of the Contentshould not be relied upon and should be independently verified with primary sourcesof information. Taylor and Francis shall not be liable for any losses, actions, claims,proceedings, demands, costs, expenses, damages, and other liabilities whatsoever orhowsoever caused arising directly or indirectly in connection with, in relation to or arisingout of the use of the Content.

    This article may be used for research, teaching, and private study purposes. Anysubstantial or systematic reproduction, redistribution, reselling, loan, sub-licensing,systematic supply, or distribution in any form to anyone is expressly forbidden. Terms &Conditions of access and use can be found at http://www.tandfonline.com/page/terms-and-conditions

  • Doomed to Fail: A Case Study of ChangeImplementation Collapse In theNorwegian Civil Aviation Industry

    ERIC ARNE LOFQUIST

    Norwegian School of Management BI, Bergen, Norway

    ABSTRACT Managerial choices for change implementation methods have a direct impact onstrategic change outcomes. In a three-year longitudinal case study of the Norwegian airportmanagement and air navigation services provider Avinor a fundamental mismatch betweenorganizational culture type and change implementation method contributed to the prematurecollapse of a deliberate strategic change initiative. The major contribution of this article is toexpand our knowledge about identifying and avoiding potential pitfalls resulting from afundamental mismatch between organizational culture in place and change implementationmethods during deliberate organizational change. The findings from this case study will showhow managerial choices and actions, such as: consensus building, communication and use ofparticipation during deliberate change processes, can positively influence attitudes towardschange. However, it will also show that a sudden reversal from a participatory process to purelytop-down implementation can lead to a breakdown in consensus and trust, leading to internal andexternal resistance, and the premature collapse of a change process.

    KEY WORDS: Strategic change, organizational culture types, attitude formation, changeimplementation

    Introduction

    The purpose of this article is to shed light on how organizational culture affectsstrategic change implementation based on a three-year longitudinal case studyof the Norwegian airport management and air navigation services provider,Avinor. It is believed that matching organizational change methods with organi-zational culture types during deliberate organizational change affects change

    Journal of Change Management

    Vol. 11, No. 2, 223243, June 2011

    Correspondence Address: Eric Arne Lofquist, Norwegian School of Management, Leadership and Organizational

    Management, Lars Hillesgata 15, Bergen, N-5008 Norway. Email: [email protected]

    1469-7017 Print/1479-1811 Online/11/02022321# 2011 Taylor & FrancisDOI: 10.1080/14697017.2010.527853

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  • outcomes (Meyerson and Martin, 1987; Bluedorn and Lundgren, 1992; Walderseeand Griffiths, 2004). Outcomes are often based on issues such as: the effectivenessof various change models (Bamford and Daniel, 2005), change type (Leavitt,1965; Powell and Posner, 1980), content factors (Burke, 1994; Self et al.,2007), readiness to change (Armenakis and Harris, 2002, 2009; Jones et al.,2005; By, 2007), failures in implementation process (Beer et al., 1990; Dunphy,1996; Weick and Quinn, 1999; Quinn, 2004), culture as an integrating mechanism(Geertz, 1973; Schein, 1983), power and politics (Lines, 2007; Lofquist and Lines,2009), opportunistic behavior (By et al., 2008) and participative vs. unilateralimplementation (Beer and Nohria, 2000; Chapman, 2002; Johnson-Crameret al., 2003; Russ, 2008). Most notably, it is assumed that a mismatch betweenorganizational culture type and organizational change method will increase organ-izational resistance to change (Piderit, 2000) and decrease organizational supportfor the change initiative. Cultural matching has been argued to produce betterchange outcomes (Meyerson and Martin, 1987), although most studies havefocused either on clearly defined culture types or paradigms (Meyerson andMartin, 1987), or change types, such as, participative or unilateral change (Beerand Nohria, 2000; Chapman, 2002). Yet, few studies have looked at how mixedculture types react to mixed change processes.

    Most studies look at change as either structural or behavioral. Waldersee andGriffiths (2004) argue that the relationships between attitude and behavior aretwo opposing assumptions and underlie the participative and unilateralapproaches. Dunphy and Stace (1990), by contrast, propose that it is the size ofthe change that determines the appropriate change type, where large-scalechanges are less likely to be supported by employees due to complexity and uncer-tainty, and top-down methods are more appropriate. But according to Walderseeand Griffiths (2004), the studies carried out by Dunphy and Stace tended to bemore structural in nature, involving management restructuring, downsizing, re-engineering and outsourcing, and behavioral-type changes were limited in nature.

    Up to this point, very little empirical evidence has been provided to show howcomplex organizational cultural settings react to mixed-change types, and howthis interaction moderates change outcomes. Mixed-change types refer to organiz-ational change processes in complex organizations in which both structural and be-havioral changes are attempted simultaneously. Waldersee and Griffiths (2004)defined mixed-change types as those involving the introduction of new manage-ment systems, such as total quality management (TQM), as well as socio-technicalchanges. One reason for the lack of studies in this area may be that complex organ-izational changes are more difficult to categorize into either/or types. In complexcases, where organizations may also be separated geographically, even organiz-ations with relatively strong organizational cultures may develop distinct subcul-tures and anti-cultures that complicate change-implementation processes(Schein, 2004), or even disrupt the entire change process altogether.

    Research on the moderating effects of culture types on change-implementationprocesses have been mostly carried out by focusing on historical results from mul-tiple case studies (D. Miller et al., 1982; D. Miller and Toulouse, 1986; Dunphyand Stace, 1990), where culture types and change methods are relatively con-trolled. Most of these studies also focus on changes that are relatively successful.

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  • In addition, most studies focus on either identifying culture types (Meyerson andMartin, 1987) or change type, such as unilateral or shared (Greiner, 1967). Unilat-eral changes tend to be top-down in nature using prescription, control and auth-ority-based techniques, are procedural and focus on a reallocation of resources(Waldersee and Griffiths, 2004). Shared changes, by contrast, also described asthe participative approach (Lawler, 1992; Beer and Nohria, 2000; Chapman,2002), are argued to be absolutely essential for successful change implementationespecially in organizations where both socio-technical and behavioral changes aredesired (Lawler, 1992; Emery and Emery, 1993; Dunphy and Griffiths, 2002).

    This article examines the moderating effects of organizational culture on adeliberate strategic change process that leads to the collapse of a high-profile stra-tegic change initiative in the Norwegian civil aviation industry. The article willfirst focus on the legitimate reasons for change in the Avinor case, and the poten-tial influence of external stakeholders in change decisions. Second, the article willfocus on leadership attempts to build consensus for change during the planningphase of the change project through communication and direct employee partici-pation. Third, it will show how a sudden leadership decision to change from a par-ticipative process, to a purely top-down implementation, destroyed the consensusfor change and led to a general loss of trust, and subsequently to internal and exter-nal resistance to the change process. And finally, this article will examine the evol-ving role of internal and external power and politics that both complicate theimplementation process, and increase the level, intensity and complexity ofresistance.

    Theoretical Background

    Culture and change implementation matching have been approached in manyways. This study focuses primarily on the cultural paradigms described by Meyer-son and Martin (1987) as a theoretical point of departure. In particular, Avinorwould be characterized as a differentiation culture paradigm (Meyerson andMartin, 1987) that experiences a mixed-type change where both participativeand unilateral change types are used in a complex change process that includeboth structuraltechnical and behavioralsocial elements (Waldersee andGriffiths, 2004). Although one could argue that a mixed-change process wouldbe the most appropriate approach for strategic change in a complex, differentiatedculture, it is clear that leading such a mixed approach is highly demanding from aleadership perspective.

    But first, it is important to begin by looking at why organizations change, howthis change is formulated, how change is implemented and finally, why thesechange processes can fail due to a mismatch between organizational culturetype and the change implementation method selected. One reason for failure ofmany change initiatives is the lack of understanding of the overwhelmingimpact that organizational cultures have on the change process (Wilkins, 1983).Another key concept in implementing change, as already mentioned, is properlymatching change implementation strategies to organizational culture types,as introduced by Meyerson and Martin (1987) and further explored by Bluedornand Lundgren (1992). Increased focus in the deliberate change process is

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  • considered a significant step forward in that it gives a rather prescriptive accountof how to classify different organizational culture types or paradigms, and thenhow to match implementation strategies tailored to these types to achieve betterchange outcomes. One could also argue that failing to match implementation strat-egy with culture type can adversely affect attitudes toward change that have adirect moderating effect on change outcomes and often lead to failure.However, just matching implementation strategy to culture is not enough toensure success. For example, other important factors in change implementation,such as how to engage organizational participation in change (Lines, 2004),participation of change recipients (Armenakis and Harris, 2009), creating internalchange capacity and pacing (Amis et al., 2004), or how varying the speedof change can effect implementation (Meyer and Stensaker, 2005; Nikolaouet al., 2007), are all key elements in ensuring successful change strategyimplementation.

    Strategic change often involves changes in productmarket domains, followedby changes in structure, systems and processes (Lines, 2005), and by its complexnature is usually a more demanding and traumatic experience for an organization.Strategic change is also change based on deliberate choice and is highly visiblewithin the organization, and sometimes externally as well. This tends to activatestrong emotions, both positive and negative, which are deeply associated withorganizational culture (Piderit, 2000) and produce strong reactions to change.Reactions stemming from emotionally enabled bias associated with change areoften manifest by clashes between an organizations culture and its leadership,and can significantly affect strategy implementation (Dasborough et al., 2003).These reactions to change are caused by emotional bias toward change linkedto attitude formulated early in the change-implementation process and caneither facilitate or hinder the change-implementation process depending uponhow attitude is activated.

    Organizational Change

    It is widely accepted that organizations need to change over time to remain com-petitive and in many cases, simply to survive (Page et al., 2008). Organizationsthat do not change in response to changes in environmental demands risk facingdegrading performance over time (Burnes, 2004), or even sudden, and often unex-pected, life-threatening crises that can lead to early extinction (By, 2005). Much ofthis change happens naturally and comes in the form of evolutionary change thattakes place without conscious thought or effort within the organization, and itsmodel is algorithmic in nature in that outcomes occur if certain conditions aremet (Aldrich, 1999). However, evolutionary change can also be problematic inthat, due to its insidious nature, it often goes unnoticed and can interact with delib-erate change processes in unexpected ways (Reason, 1997). Deliberate change, bycontrast, is a conscious change effort in which decisions are made andimplemented in response to perceived threats or challenges.

    Studies addressing how leaders approach the entire organizational changeprocess often focus on strategy implementation and are limited in their coverageof the early phases of the change decision-making process (Isabella, 1990). One

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  • reason may be that large-scale changes, most reflective of strategic change, tend torequire extensive attention and take focus from other organizational matters(Meyer and Stensaker, 2005). This can often lead to accelerated decision-making processes and premature final strategy decision choices. Yet organiz-ational change, and strategic change in particular, is characterized by highlevels of complexity and ambiguity with regard to its causes, content and conse-quences (Isabella, 1990; Self et al., 2007). This would demand more attentiondevoted to the formulation phase of change, and not less, which is often thecase. Several authors (Meyerson and Martin, 1987; Bluedorn and Lundgren,1992; Elsmore, 2001; Lines, 2005; Meyer and Stensaker, 2005) have recentlyemphasized the focus upon a broader spectrum of integrating change activitiesand have actively considered how organizations need to prepare for change, inaddition to how the change process is carried out. This shift in emphasis fromthe implementation phase of change to the formulation phase is largely culture-driven and caused by a general move away from monolithic-type organizationsthat are homogenous in their cultural make-up, toward more heterogeneous organ-izations exemplified by complex and embedded subcultures with differentiatedneeds (Schein, 2004).

    One key aspect for change reflected in the change literature addresses employeereaction to change (Gopinath and Becker, 2000; Bovey and Hede, 2001; Huy,2002; Kickul et al., 2002; Dasborough et al., 2003). This can be summarized byLines (2005) who states that a key challenge for managing change is to controlthe attitude formation processes in the organization so that positive attitudestoward change are formed early in the change process, and the formation of nega-tive attitudes toward change is avoided (p. 17).

    Others claim that forming positive attitudes early in a change process, whenorganizational members are first exposed to information about a pendingchange, improves an organizations capability of implementing the change insuch a way that important objectives are met (Isabella, 1990; Armenakis et al.,1993). But attitudes toward change are not always only based on the informationpresented by leaders, and Starbuck et al. (1978) argue that employee resistance tochange is often not a result of negative attitudes toward change but from a well-grounded understanding of the implications of change that are different from man-agement. And that management can make poor change decisions. In theserespects, attitude and more importantly, attitude formation are tightly linked toculture, increasing the importance of the formulation phase of change implemen-tation and for matching change methods to culture type.

    It can be argued that even the simplest of organizational changes is complex anddynamic requiring a well thought-out plan for successful change implementation.But the leadership role does not end with the act of taking a decision and approv-ing a plan. Yet this is exactly how many leaders define their role in the change-implementation process. Change is often initiated without the deliberate thoughtprocesses essential for mapping decisions relating to successful implementationof strategy and are well-founded in exemplars of organizational change such as:deliberate strategic change (Mintzberg and Waters, 1985; Korsgaard et al.,1995), downsizing (Brockner et al., 1994; T.D. Allen et al., 2001), and processaspects such as communication or participation (Gopinath and Becker, 2000;

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  • Lines, 2005; J. Allen et al., 2007). This can also be extended to include researchconcerned with specific reactions to change such as emotional reactions (Huy,2002; Dasborough et al., 2003), consideration of change recipients (Armenakisand Harris, 2009), structure and function of attitude (Lines, 2005) and proceduraljustice (Brockner et al., 1994).

    Strategic Change Process

    Strategic change processes have been characterized as being highly complex,politically laden, affecting large parts of the organization and driven by upperlevel managers (Hambrick and Mason, 1984; Hardy, 1995). Specific activitieswithin the change process that require making organizational changes typicallyinclude: identifying the need for change, generating strategic alternatives,making appropriate change decisions, implementing change and evaluating theresults (Meyer and Stensaker, 2005). However, different subgroups within anorganization will see different priorities within these activities, each basedupon its own perceptions of how scarce resources within the organizationshould best be allocated (Elsmore, 2001) and these are often culture-related.

    In planned change processes, organizational members are likely to interpret thechanges in various ways (Isabella, 1990; Weick, 1995). An important task formanagers is, therefore, to be attentive to how changes are interpreted at differentlevels and divisions in the organization, and to continuously communicate therationale behind the change effort and how it will affect each particular groupor level in the organization (Meyer and Stensaker, 2005). In this way, leaderscan create a readiness for change within the organization (Armenakis andHarris, 2009). There is wide agreement in the change literature that it is difficultto implement change if those that are most affected are not involved (King andRodriguez, 1981; Guth and MacMillan, 1986; Floyd and Woolridge, 1992;Armenakis et al., 1993, 1999; Lines, 2005).

    Brown (1995) takes up the crucial issues about organizational power and its dis-tribution, and this was verified in the Avinor case where Lofquist and Lines (2009)identified the different internal and external constituencies jockeying for positionsof influence while power was in a constant state of flux between those groups (orsubcultures and anti-cultures). The concept of subcultures, how these fit intodifferent cultural paradigms and how to handle them in the implementationprocess, is a significant problem for change implementation, having a directimpact upon change implementation speed and success (Meyerson and Martin,1987). Participation has been found to have different forms and the appropriate-ness of a given form depends on which outcomes are sought, as well as thecontext in which participation is to be implemented (K.I. Miller and Monge,1986; Cotton et al., 1988). The concept of context is directly related to organiz-ational culture types, and contributes directly to implementation success.

    Matching Organizational Culture Types to Change Implementation Method

    Meyerson and Martin (1987), in their article Cultural change: an integration ofthree different views, describe three distinct organizational culture types

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  • requiring three different change-implementation approaches based upon theeffects of culture on change. These types, or paradigms, are described as: inte-gration (consisting of one overall culture); differentiation (a culture consistingof several distinct subcultures or anti-cultures, with various degrees of connec-tivity to the main culture); and ambiguity (a loosely connected organization con-sisting of numerous unconnected and potentially unrelated cultures). This articlewill only address change implementation concerning differentiation-type culturesthat, one could argue, are the more common organizational culture types found incomplex organizations today, and is the culture type that best fits the Avinor case.The differentiation culture type can range from monolithic-like to nearlyfragmented and ambiguous, and anywhere in between, and is due to the factthat complex organizations reflect broader societal cultures and contain elementsof occupational, hierarchical, class, racial, ethnic and gender-based identifications(Beyer, 1981; Trice and Beyer, 1984; Van Maanen and Barley, 1984). Thesesources of diversity often create overlapping, nested subcultures and can alsoinclude outlayers which do not conform to the dominant overall culture. In cul-tural terms, this means that this type of organization would probably be composedof a diverse set of subcultures and anti-cultures that share some, but not necess-arily all, integrating elements of a dominant culture (Martin et al., 1985). The dif-ferentiating factor in this type of culture is that it is composed of a collection ofvalues and manifestations, some of which may be contradictory (Meyerson andMartin, 1987). This is reflective of many large, sometimes international, firmswhere large subcultures coexist within a larger cultural framework (Schein, 2004).

    Change within a differentiation-type culture requires that leaders pay moreattention to inconsistencies, lack of consensus and non-leader-centered sourcesof cultural content (Meyerson and Martin, 1987). In addition, one must also payattention to the importance of various subunits, including groups and individuals(Louis, 1983; Nord, 1985), who represent constituencies based within and poten-tially outside the organization. This often requires more time devoted to the strat-egy planning phase in which different types of subcultures can be distinguished(Louis, 1983), and for identifying subcultural differences that may representdisagreements with an organizations dominant culture, as in a counter-culture(Martin and Seihl, 1983). One must also recognize how these subcultural identi-fications may be orthogonal to a dominant culture, reflecting functional, national,occupational, ethnic or project affiliations (Gregory, 1983; Van Maanen andBarley, 1984). Failure to consider these differences can lead to subculture oranti-culture resistance, which can threaten the success of planned change, depend-ing upon the relative strengths of such internal entities (Brown, 1995). This is alsoan area where Lines (2004) would argue that participation is believed to have anumber of positive effects on the strategy process, most notably in that it isassumed that involvement of those affected by a change in strategy will reduceorganizational resistance, and will create a higher level of psychological commit-ment among employees towards the proposed changes (p. 193). This argumentcan be taken one step further by claiming that participation within this type ofculture is not only a positive initiative, but also an absolute requirement fordifferentiated cultures containing strong, reactive subcultures with varyinglevels of power.

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  • Method

    This article is based on the findings of a three-year longitudinal case study of theNorwegian airport management and air navigation services provider (Avinor)during a volatile strategic change initiative that prematurely collapses in spring2006. Avinor delivers a wide spectrum of aviation-related services including:airport management, approach, departure and transit radar services and control,ground services, snow clearance, aircraft de-icing and weather reporting to dom-estic and international airlines. Avinor also provides airline customer-relatedservices including airport hotels, parking and food services, baggage handlingand physical security (Avinor Corporate Handbook, 2004).

    The goal of the change initiative was to make airport management and airnavigation services in Norway more productive and efficient through the trans-formation of the government management agency (Luftfartsverket) into a govern-ment-owned, private company (Avinor). Specific demands of the governmentrequired that this change take place without disruption of air traffic services to cus-tomers and that safety levels would either be maintained or improved during thechange process. This change was part of an international civil aviation initiativeknown as corporatization. The International Civil Aviation Organization(ICAO) describes corporatization as creating a legal entity outside the govern-ment to manage airports and/or air navigation services, either through a specificstatute or under an existing general statute, such as the company law. Normally,ownership of the corporation remains with the government. However, in a corpor-atized body, private sector participation is possible. It depends upon the provisionsof the statute under which it is established and the policy of the government(ICAO, 2002, p. 3).

    The goal of the study was to follow the change planning and implementationprocess and to observe how leadership decisions and actions during deliberateorganizational change affected change outcomes over time. This article focuses,in particular, on how a fundamental mismatch between organizational cultureand change implementation type, with particular focus on selected subcultures,contributed to the internal and external disruptions experienced during thechange process, and the eventual failure of the planned change initiative knownas Take-Off 05.

    Design of the Study

    There are limited studies of how differentiated organizational cultures (Meyersonand Martin, 1987) react to mixed organizational change implementation strategies(Waldersee and Griffiths, 2004), and even fewer, if any, that study these changeprocesses in live settings. In this study, unrestricted and real-time access wasgranted to observe and study a complex, deliberate strategic change projectwithin Avinor. The original focus of this study was to learn how organizationalchange would affect safety in a high-risk environment based on the four theoreti-cal constructs depicted in a conceptual structural model in Figure 1.

    However, as the change process developed, it became increasingly clear that theleaderships role in the change-implementation process was an important factor

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  • leading to a sudden collapse in the change project. For this article, the main focuswill be on the moderating variable (attitudes toward change), as affected by thedependent variables perception of leadership commitment and organizationalculture.

    Because the size and geographic dispersion of Avinor, three internal cases, com-bined with the supporting leadership structure, were chosen to represent the effectsof the change implementation strategy on three distinct subcultures composed pri-marily of air traffic controllers and air traffic controller assistants. It can be arguedthat this group holds a historical position of power within the organization, and, assuch, needs to be included in decisions that affect organizational goals.

    The strategic change process was given the name Take-Off 05, and was adver-tised by the leadership as a results improvement program. However, in realityTake-Off 05 was a cost-reduction program with two highly visible main goals:a reduction in costs through a downsizing of the workforce and a reduction inthe number of air traffic control centers in Norway from four to two.

    Data Collection

    The primary method for collecting data during the study was qualitative in nature,although several quantitative data sources were also used. In addition, intervie-wees and selected leaders from all levels of management were used as keyinformants, implying that participants were used as observers and interpreters ofthe change planning and implementation processes (Van de Ven and Huber,1990).

    The results presented in this article are based primarily on 57 one-hour, semi-structured interviews from three separate internal cases followed during thestudy. The internal cases chosen for the study were three air traffic controlcenters (ATCCs) that were similar in size, composition and function, but wereexperiencing three different phases of a common organizational change process.These cases also proved to be central to the internal resistance that developedwithin the company during the implementation phase of the project, and contrib-uted directly to the eventual collapse of the Take-Off 05 project (Lofquist, 2008).

    Figure 1. Conceptual model.

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  • Originally, 10 interviews were planned for each site, and consisted of a mix ofmiddle managers, supervisors, trainers and operative air traffic controllers and airtraffic controller assistants with varying levels of experience (Lofquist, 2008). Thechoice of interviewees was made as randomly as possible except that each unitleader was included as an interview object. Unfortunately, during the final inter-view session, the company CEO resigned unexpectantly, and three interviewswere postponed due to the uncertainty presented by the subsequent collapse ofthe Take-Off 05 project.

    The semi-structured interviews were designed based on the four theoretical con-structs depicted in Figure 1. Questions were designed using the academic literaturefor each individual construct as a basis, and modified to fit the Avinor case basedon an extensive internal orientation of the intended change process, a review of thechange planning documents and a familiarization with the three internal casesused in the study. Questions focused mainly upon individual attitudes towardthe change process and upon individual perceptions of the leaderships role andperformance in particular. The interview protocol was then reviewed by two airtraffic controllers not involved in the study for quality assurance of the questions,language and to strengthen internal validity of the question set.

    All interviews were digitally recorded and lasted approximately one hour. Theinterviews were then transcribed using the native language, Norwegian, and thenopen coded using NVivo 7 software. The individual codings were then groupedinto the four constructs depicted in Figure 1 using the tree function in Nvivo 7before being analyzed using within and across case comparisons from the threeinternal cases. The most representative quotations were used to support the find-ings of the study.

    Findings and Discussion

    The Avinor case is interesting from a strategic change perspective for manyreasons. First, Avinor is a complex organization within the high-risk, civil aviationindustry that has experienced many environmental challenges over the past years.In addition, the Take-Off 05 project, which was the focus of this study, wasmodeled after the international civil aviation initiative known as corporatization,which is closely related to New Public Management initiatives being introducedinto many industries. As such, many of the findings from this study should be gen-eralizable to related industries and support theories about the importance ofculture/change matching in strategic change.

    The decision to change the form for airport and air traffic control administrationin Norway was based on real change in the civil aviation environment. Discussionsto convert the government-administered civil aviation authority (Luftfartsverket)into the government-owned, private company (Avinor) began within the Norwe-gian government in 2000, but the final decision to initiate the change was not madeuntil 2002, in response to deteriorating economic conditions affecting the entirecivil aviation industry post-9/11. This led to the creation of a new, govern-ment-owned, private company, Avinor, on 1 January 2003.

    With a clear mandate from the government, and an urgent need for change basedon deteriorating economic results, the leadership communicated the following:

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  • The economic situation within the civil aviation industry is serious. Since the civil

    aviation industry and Avinors customers are having serious economic problems,

    and the income levels for Avinor are, correspondingly, too low for the current

    cost levels, the focus for Avinor is reduction of costs, and not increased income

    growth through increased pricing for the airlines. With the new competitive situation

    in the market, Avinors fees compose a larger and larger relative percentage of the

    companys costs.

    (Avinor Summary Report Take-Off 05 Design Phase, 27 October 2003)

    This description by the leadership of the dire situation facing the civil aviationindustry, in general, and Avinor, in particular, was universally accepted within theorganization. There was broad support for a proposed change initiative known asTake-Off 05 which officially kicked off in March 2003. Even the air traffic con-troller union, which had historically resisted all types of large-scale organizationalchange within the organization, agreed, in principle, that large-scale change wasneeded (Lofquist, 2008).

    The Air Traffic Controller union (NFF) was of the opinion that it was absolutely

    necessary to implement extensive changes within this poorly structured, overweight,

    and increasingly more bureaucratic actifity, NFF, therefore, supported parts of the

    Take-Off 05 project.

    The results of the Take-Off 05 planning phase were accepted with relative con-sensus within Avinor as to both the method to be used in evaluating changes, andthe scope of changes to be evaluated. The process was also described by the lea-dership as participatory in nature:

    Avinor has a comprehensive cooperation model with the employees and union repre-

    sentatives. These arenas are also used in association with the results improvement

    program. The program has, in addition, worked out its own communications plans

    both for the program as a whole, but also for the individual sub-projects. The

    employees and union representatives are invited to come with contributions and rec-

    ommendations during the entire process, and the central union representatives have

    had meetings with the program leadership and project groups underway. This has

    produced a significant engagement and there have been many solution recommen-

    dations by the employees from the entire country.

    (Avinor Summary Report Take-Off 05, 2003: p. 3)

    And the initial perception of participation was also reflected in the responses ofemployees directly involved in the planning process:

    We were very satisfied with our contribution. We worked hard during these brain-

    storming sessions to find as many potential cost savings as possible that would even-

    tually be put into a comprehensive implementation plan that would go through an

    extensive quality control and risk analysis process.(Sub-project planning member)

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  • In actuality, everything began very well with the whole Take-Off concept, and that

    we would be more effective . . . and that we should have a more rational business

    model, I was absolutely agreed.

    (Sub-project planning member)

    But the consensus for the change process was short-lived, and was essentiallydestroyed when the final implementation plan was made public in November2003. The final version of the Take-Off 05 plan called for a reduction of 725man-years over a six-year period with 655 redundancies already realized withinthe first two years of the implementation process. This represented over 25% ofthe workforce. The leadership justified the magnitude of the cuts as such:

    The total results improvement effect of the recommended measures is approximately

    490 million Norwegian Kroner annually compared to the basis year 2002. As the

    largest portion of the cost basis in Avinor is made of salary and personnel costs,

    over 75% of the cost savings come from the reduction of the number of employees.

    But the magnitude and speed of the changes did not match expectations, particu-larly since employees participated in every aspect of the planning process. Mostemployees expressed a feeling of shock caused by the unexpected depth andbreadth of the cuts and changes contained in the final version of Take-Off 05implementation plan. One participating member from one of the sub-projectsput it this way:

    I was totally shocked by the final Take-Off 05 plan as it was presented by the leader-

    ship as it did not truthfully reflect the expectations of the employee members that

    participated in the planning phase. The leadership simply took all of the potential

    savings ideas and combined them into one plan that was not integrated, as expected,

    and was not sufficiently analyzed for quality or potential risk to safety.

    And then added:

    In addition, we (employee members of working groups) were looked upon by our

    colleagues as being personally responsible for the contents of the plan, and this

    made life very difficult. I regret that I had anything to do with the Take-Off 05

    process, and I will never volunteer for anything again within this organization.

    The realization that the participative process was not as participative asbelieved, and that cost-cutting in the form of downsizing was the real focus ofthe change, led to a loss of trust in the leadership. This was also followed by anunexpected change in the leaderships approach to implementation from a partici-pative approach, as formally communicated, to a purely top-down implementationapproach.

    I must say that I thought the evaluation process was quite good up until the decisions

    were made. I was not allowed to take part in that process. I must say that I was rather

    surprised when I read the decisions of the group that I was a part of . . . I have to

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  • admit that it was a strange process in the end with a great deal of external steering,

    and most of the focus was on cost savings in the shortest time period. Maybe that is

    why I was not involved in the end.

    (Sub-project group member)

    Another middle manager described the final decision process as such:

    The whole thing was a custom-made solution, bought and paid for by the leadership.

    And I believe that is why I was not allowed to participate. There were many weak-

    nesses in the process and gaps where problems were passed off to other groups. And

    this proved to be a problem under implementation.

    The loss of trust in the leadership led to resistance, and this was particularlynoticeable from Avinors most powerful subculture the air traffic controllers(Lofquist, 2008). The air traffic controller subculture has a long history of dra-matic work action that can potentially paralyze whole sectors of international air-space. In Norway, for example, prior work action by air traffic controllers, in theform of strikes and work slow-downs, have created havoc due to Norways heavydependence on air travel as a normal form of communication. This demonstratedthat the organizational power possessed by air traffic controllers, in general, liesembedded in both the long initial training period required to achieve air trafficcontroller certification, and in the exacting demands and stress levels experiencedin performing air traffic control tasks. This power is amplified by the continualfocus on air safety, where air traffic controllers absorb a great part of the respon-sibility. Based on the internal power base that air traffic controllers have tradition-ally enjoyed, the literature would argue that this powerful subculture should beincluded in the planning and implementation of planned change processes.

    First, the air traffic controller union challenged the basis for the planned changeas published, particularly the number of air traffic controllers to be cut, stating thatthere were, in fact, too few air traffic controllers to carry out operations. The unionalso requested that implementation of the plan be delayed pending an investigationof the data supporting the decisions:

    The recommendations from this project are, in NFFs opinion, filled with essential

    missing information and a lack of clarity, and is not an adequate or acceptable basis

    for taking the important decision it is supposed to support.

    The leadership rejected this challenge outright and moved forward with theimplementation phase of the Take-Off 05 project. The disagreement concerningthe number of air traffic controllers, in particular, served as the focus ofthe tension between the leadership and Avinors most powerful union duringthe remainder of the Take-Off 05 process. This also led to a letter of no confidencein the CEO being sent to the Avinor Board of Directors on 15 June 2004, sixmonths into the implementation process. Although this initiative was led by theair traffic controller union, it was supported and signed by all seven trade unionrepresentatives in Avinor (Lofquist, 2008).

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  • A second issue that surfaced during the change process was the controversialdecision to close a second air traffic control center. The union, again, challengedthe basis upon which this decision was made. However, this challenge was also notconsidered valid by the leadership, and the decision to close Norways largest andmost modern air traffic control center was delivered personally in a publicannouncement to the affected units on 27 September 2004. The response fromindividual air traffic controllers was swift and effective. A large majority of oper-ative air traffic controllers on duty at the affected air traffic control center were sooverwhelmed by the surprising news of the impending closure that they no longerfelt capable of performing their duties in a safe manner. After all airborne trafficover southern Norway landed safety at their destinations, the air traffic controllersrefused to accept new traffic and the Norwegian airspace in southern Norway wasclosed for two days effectively stopping all air traffic in Norway (Lofquist,2008).

    The closing of the airspace over southern Norway marked a major turning pointin Take-Off 05 project. One reason that the air traffic controller union had beenso quiet about the change process prior to the effects of the airspace closure inSeptember 2004 was that they were not really sure how much power they hadretained in the new corporatized business model (Lofquist and Lines, 2009).However, the reactions by the leadership in the media to the spontaneous airspaceclosure reaffirmed their positional power and union resistance to the Take-Off 05project steadily increased over the next 12 months (Lofquist, 2008). Formal com-munication between the leadership and the union effectively ceased over thisperiod and the only effective communication was transmitted back and forththrough the news media.

    Another important issue related to power was that during this entire Take-Off 05process the Avinor leadership enjoyed the full support of the ruling government.This allowed the leadership to continue a top-down implementation of theTake-Off 05 plan, even when there were obvious signs that the system wasunder excessive stress (Lofquist, 2008). However, this situation changed suddenlywhen a new labor-friendly government officially took power on 15 October 2005.The incoming transport minister was seriously concerned about reports that safetyin the aviation industry was deteriorating and ordered an independent evaluationof both the Take-Off 05 project and the performance of the Avinor leadership.This effectively changed the power balance within Avinor and resulted in theimmediate resignation of the director of air navigation services, closely followedby the unexpected forced departure of the CEO in December 2005. With the repla-cement of the Avinor chairman of the board in early spring 2006, the Take-Off 05project was officially terminated.

    Although the Take-Off 05 project collapsed in January 2006, due largely tomounting pressure from employee resistance led by the air traffic controllerunion, the project was not necessarily a complete failure. According to the leader-ship, 80% of the planned change was implemented, on time, with significantincreases in overall revenue. In addition, it can be argued that Avinor today is asuccessfully corporatized entity. The successful changes that were accomplishedwithin the plan involved the parts of the organization where the literature arguesthat a top-down approach was possible, and recommended. This included

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  • structuraltechnical changes such as: a new management structure, reorganizationof administrative functions, introduction of a new management system and down-sizing and reorganization of various service areas that had no real expert or pos-itional power to resist the changes (Lofquist and Lines, 2009).

    However, the 20% of the Take-Off 05 project that failed included the plannedcost savings through a reduction in personnel and the reduction of air trafficcontrol centers in Norway. These were the changes that the Avinor leadershipcited as the most important cost drivers and where most of the leadership attentionwas focused (Lofquist, 2008). However, these changes proved to be more behav-ioralsocial in nature, particularly in the way in which individuals within thesystem were affected, and these were the areas where resistance was most influ-ential. In addition, these were areas of direct concern for air traffic controllers,both in accomplishing their tasks, but more importantly, to continue providingair traffic services safely within a new management model. Resistance camemostly in the form of unofficial communication between the air traffic controllerunion and the leadership via media articles. The media pressure escalated through-out the Take-Off 05 process, and by the end of 2005 Avinor-related articles weredaily occurances (Lofquist, 2008). The open resistance by the air traffic controllerunion to the planned changes, and the constant media coverage, created enoughconcern within Norwegian society that the Norwegian government had to takeaction. This resulted in the collapse of the Take-Off 05 project (Lofquist, 2008).In the end, neither of the two primary goals of the top leadership was fullyachieved.

    One could argue that a large part of the Take-Off 05 collapse could be attributeddirectly to a failure of the leadership to fully appreciate, and address, potentialpower and political imbalances both within the organization and from outsidesources. This was particularly evident when the leadership challenged the power-ful air traffic controller subculture. This group had a long history of conflict withthe organizational leadership during many prior unsuccessful change initiatives,and had historically held a significant positional and expert power base (Lofquist,2008; Lofquist and Lines, 2009). However, other external actors, including localand international civil aviation regulatory agencies, the ministry of transportationand the government, all had direct and indirect influences on the change-implementation process.

    From a strategic perspective, one could argue that the most significant error thatthe leadership made in the implementation process was to not actively monitor andreact to the changes taking place in the environment that could affect Take-Of 05implementation. The original Take-Off 05 plan was based upon several keyassumptions, not the least of which was the assumption that air traffic volumelevels, post-9/11, would remain flat or negative during the Take-Off 05 projectimplementation phase (Avinor Summary Report Take-Off 05, 2003, p. 3). Thesewere, in fact, legitimate projections from the European experts in Brussels.However, by 2003, when the plan was finalized, these projections proved to beinaccurate. Air traffic volume in Norway had grown 13% by 2004, and this levelincreased even further in 2005 (Havarikommisjonen for Sivil Luftfart og Jernbane,2005). This put an increasing strain on a new operative structure that had beendesigned to handle the earlier projections. Subsequently, this led to increasing

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  • demand on the air traffic controllers who were already struggling with the new,externally generated, administrative demands of the air traffic regulators.

    Another important mistake acknowledged by one leader was the miscalcula-tion by the Avinor leadership of the relative power of the air traffic controller sub-culture within the new business model. The air traffic controllers were not initiallyopposed to the Take-Off 05 process, and in fact supported the idea of and need forchange. But this support evaporated during the change process when the air trafficcontrollers ultimately disagreed with the breadth, scope and speed of the finalchange plan. When their opposition to several decisions was not acknowledgedby the leadership, and a purely top-down implementation approach of the Take-Off 05 plan was initiated, this led to increasing resistance and the eventual col-lapse of the Take-Off 05 project.

    Conclusion

    The Avinor case is an interesting example of a deliberate strategic organizationalchange process in an organization with a differentiated culture. As such, Avinor isrepresentative of many organizations that have experienced New Public Manage-ment-types of privatization. This is particularly true for organizations within thecivil aviation industry composed of complex sets of subcultures and anti-cultures,imbedded in weak overarching main cultures and characterized by varying levelsof positional and expert power bases. The literature reflects that deliberate organ-izational change in complex cultures is a difficult task, where leaders must care-fully balance their actions with the organizational culture in place. Deliberatechange is also a dynamic process within a continuously changing externalenvironment that needs to be monitored, and continual adjustments need to bemade to address external changes.

    Matching organizational culture with change implementation methods is oftencritical to implementation success. In the Avinor case, the leadership used amixed-methods approach in a differentiated culture that ended in collapse eventhough 80% of the planned change was characterized by the leadership as success-ful. Reasons for failure of the remaining 20% could be attributed to using thewrong implementation approach to powerful subcultures where the academic lit-erature suggests that a participative approach was more appropriate. In addition,although a conscious effort was made by the leadership to build consensusthrough communication and participation during the planning phase of theTake-Off 05 project, more attention should have been made to address the con-cerns that led to the loss of consensus for change. The decision by the leadershipto change from a participative approach to a purely top-down implementationapproach for all subcultures was a critical decision that led to loss of trust inthe leadership. The loss of trust was followed by resistance, and this led to theeventual collapse of the Take-Off 05 project.

    Several lessons can be learned from the Avinor study. First, it is clear thatunderstanding culture matters when designing change processes in complexorganizations. Different subcultures have different requirements and expectationsregarding change processes. The leadership needs to attempt to map the cultureand match implementation methods to the various groups. This also requires an

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  • understanding of the sources of power within the organization and how strongsubcultures might influence the change process. In the Avinor case, the airtraffic controller subculture had an established history of successful resistanceto change (Lofquist, 2008). However, with the new management model chosenfor the Take-Off 05 project (corporatization), enough confusion existed relatedto balance of power that the leadership were initially successful with top-downimplementation. Eventually, the air traffic controller subculture began to under-stand their relative power and gradually increased their resistance to changewhich in the end contributed to the collapse of the project.

    Second, in the Avinor case, the building of consensus for change and trustamong the employees was initially successful, as confirmed in individual inter-views. However, when the final implementation plan was made public, and itdid not reflect the expectations of the employee participants, this was receivedwith a general disbelief, and left some participants feeling personally betrayed.This was a critical moment for the leadership to take corrective action. Instead,the leadership chose to abandon the use of participation and changed to apurely top-down implementation of the Take-Off 05 plan. Consensus and trustwere quickly destroyed, and internal resistance began to build. This eventuallyled to external pressures from various stakeholders that ensured a final collapseof the Take-Off 05 project.

    A third area of interest could be described as the leaderships escalating com-mitment to a failed plan (Staw, 1976) where adjustments of the implementationplan were not considered, even when internal tension began to indicate that some-thing was seriously wrong. This was particularly evident in the public disagree-ment between the leadership and the air traffic controller union concerningmanning levels, but also extended to the disagreements over which air trafficcontrol centers should be shut down, the reasons for these choices and thetiming for these closures (Lofquist, 2008, 2010). This does not necessarilymean that the original plan was flawed, as the planning process seemed adequateand enjoyed early consensus from all parties involved. However, it was clear thatthe leadership was either unobservant of the changes in the environment during theimplementation phase of the plan, or unwilling/unable to change the plan due tosome unexplained commitment by the top leadership. One leader referred tokeeping promises as one reason for not changing the timing of the implemen-tation plan, but with no explanation as to whom these promises were made. Inanother context, the issue of loyalty was mentioned, but with no clarification ofto whom this loyalty was owed. When the original assumptions upon which theplan were founded were no longer valid, the plan could no longer achievethe stated goals as envisioned, and this became more and more obvious as thecollapse approached.

    A final lesson learned, that will be examined further in a new study, was thedevastating effect that large-scale organizational change can have on topleaders and middle managers responsible for implementing change. Of the 15leaders, representing all levels of management observed during the Take-Off 05study, starting with the minister of transportation (representing the owner) tothe local chief air traffic controllers involved in the internal cases, only 1 remainedin their original leadership position at the time of the change collapse in 2006.

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  • The effects on the middle managers involved in the change process were particu-larly damaging from a career perspective, and many are still suffering profession-ally within the organization.

    This study demonstrated that there is a need for more live studies of a longi-tudinal nature that follow mixed-methods change in complex organizations withcomplex cultures. However, one problem is access, as leaders do not particularlylike to have their actions followed and potentially second guessed. That was notthe intention of this article, where the findings of this study are focused on leader-ship, in general, from a strategic change perspective and not on any one individual.This study concluded that a deliberate strategic change process that fails to fullyunderstand, and account for, the importance of matching change method toorganizational culture is doomed to fail.

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