Developing International Organizational Change Theory Using Cases From China

Human Relations
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Developing international organizational change theory using cases from

China
Paul S. Hempel and Maris G. Martinsons
Human Relations 2009 62: 459
DOI: 10.1177/0018726708101980
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Human Relations
DOI: 10.1177/0018726708101980
Volume 62(4): 459499
Copyright 2009
The Tavistock Institute
SAGE Publications
Los Angeles, London, New Delhi,
Singapore and Washington DC
http://hum.sagepub.com
Developing international organizational

change theory using cases from China
Paul S. Hempel and Maris G. Martinsons
A B S T R AC T
This article contributes to international theory development by

examining organizational change (OC) in mainland China. Eight case
studies of a single type of OC, business process re-engineering
(BPR), reveal that Chinese organizations diverged consistently from
initially planned changes. Change context is found to influence not
only the process of change, but also the content and even the
objectives of change. Since specific practices carry implicit values,
the congruence with existing values influences OC implementation
significantly. Multinational organizations must recognize that a
specific practice or policy can represent very different changes in
different contexts.
K E Y WO R D S
case studies Chinese management comparative

management institutional theory organizational change
The growing globalization of business has led to an increasing need to implement organizational strategies that transcend national boundaries. Issues
arising from different national contexts have been identified as a critical
stumbling block for international joint ventures (Brouthers & Bamossy,
2006), mergers and acquisitions (Antila, 2006; Napier et al., 1993), and
alliances (Jones, 2002). The rapid growth of developing economies also
makes it important that firms adapt to changes in these economies (Peng,
2003). The successful implementation of global strategic plans requires a
mastery of international organizational change.
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460
Human Relations 62(4)
Organizational change (OC) occurs in a diversity of contexts, but the

OC literature is dominated by American perspectives and evidence, and
has an unwitting tendency to treat context as undiscussed background
(Pettigrew et al., 2001: 703). There has been an awareness for quite some
time that theories of OC might be culture bound (see Burke & Litwin, 1992;
DiBella, 1996; Jaeger, 1986), but research has primarily focused upon culture
at the expense of other contextual elements, such as social and legal
institutions or the stage of economic development. It is only recently that
international studies have demonstrated that these other contextual elements
can also lead to divergent experiences (see Lau et al., 2002).
Overall, while there is a growing body of research into international
OC, existing studies tend to highlight the shortcomings of existing OC
theories rather than develop more comprehensive or context-sensitive
theories. In calling for theories of OC that are globally applicable, Pettigrew
et al. (2001) suggested that a comprehensive OC theory must address at least
three fundamental dimensions of change (Pettigrew, 1990): the process, the
content, and the context. OC research predominantly focuses upon change
process (Van de Ven & Poole, 1995), but given the wide range of regional
and national contexts that multinational and global organizations operate
in, a better understanding of how OC is influenced by context is needed.
The rapid change that has been occurring in China along with its
growing role in the global economy makes it increasingly important to understand the nature of OC in China. The distinctive contextual characteristics
of China also make it an ideal research location for identifying and addressing deficiencies in current theories of international business and management
(Child & Tse, 2001), particularly when the focus is upon identifying the
effect of implicit assumptions concerning context. This article therefore
examines organizational change initiatives in China in order to both develop
a greater understanding of how OC unfolds in China, and to determine how
OC initiatives are influenced by non-Western contextual elements. Our
ultimate objective is to advance the development of OC theories that are
applicable throughout the world.
The limited existing knowledge about international differences in OC,
combined with our desire to theorize about the effects on OC of specific
contextual characteristics, makes the use of qualitative research methods
appropriate. This article examines the experiences of eight Chinese organizations that undertook a specific type of change business process reengineering (BPR). The clearly defined prescriptions associated with BPR
(Hammer & Champy, 1993) are helpful as a baseline against which to
identify divergence and adaptation in OC implementation, and the use of
multiple cases allows the identification and confirmation of systematic
Hempel & Martinsons Developing international organizational change theory
patterns as well as increases the methodological rigor of our study (Miles &
Huberman, 1994).
Our research contributes to the literature in several ways. First, it
advances our limited knowledge of the OC phenomenon in China. Second,
the limitations in the existing theories of OC that are revealed by our Chinese
case studies prompt us to suggest specific ways in which OC theories may
be modified in order to increase their geographic scope of applicability.
Organizational change
Our focus is on planned organizational change, which seeks to shift an
organization from an initial state to a different end state in order to achieve
one or more objectives. For example, decision-making may be decentralized
to front line workers, with the ultimate goal of increasing customer satisfaction. Planned OC has been researched extensively (Porras & Robertson,
1990), with Pettigrew (1990) suggesting that a comprehensive theory of OC
must address three fundamental dimensions: process, content, and context.
This suggestion has been widely accepted, with Armenakis and Bedeian
(1999) augmenting this list of dimensions to include the outcome(s) of
change.
Figure 1 illustrates the relationship between the various components of
a planned change initiative, and visually elaborates the implicit models of
Armenakis and Bedeian (1999) and Pettigrew (1990). This model provides
a basis for our review of current theories of OC and empirical findings, with
the objective of identifying topics and ideas important for international OC
research. Our review is organized around four key components of this
diagram: Change criteria, the outcomes (and objectives) of change; change
process, the means by which change is brought about; change content, the
Contextual
factors
Stimulus
Contextual
factors
Starting
system
OC process
Contextual
factors
Enacted
system
Feedback
Feedback
Figure 1
Fundamental components of organizational change
Performance
outcome(s)
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substance of the change that occurs; and change context, internal and
external situational factors that influence the change initiative.
Change criteria: Objectives and outcomes

Armenakis and Bedeian (1999) point out the problems in measuring change
outcomes, and argue that it is important to consider change criteria in
addition to process, content, and context. A planned organizational change
will typically have one or more objectives or intended outcomes at the
organizational level (such as improvements in financial or efficiency
measures) and/or individual level (such as behavioral or psychological
responses). The earliest theories of OC, such as that presented by House
(1967), tend to focus upon organizational outcomes. Individual level
outcomes received more attention after behavioral change became recognized
as a prerequisite for changing organizational outcomes. For example,
Goodman and Dean (1982) discovered that behavioral change at the individual level acts as a mediator for changes at the organizational level. More
recently, Armenakis and Bedeian (1999) have identified a trend away from
individual behavioral outcomes towards psychological variables, such as
commitment and loyalty.
The choice of change criteria against which change outcomes are
assessed has influenced the development of OC theory. The shift in OC
theories from organizational outcomes towards behavioral outcomes and
then to psychological variables was prompted by a desire to better understand the processes by which change occurred. However, in contrast to the
advances made in understanding individual responses to OC, the relationship between specific OC characteristics and the resulting performance
outcomes remains poorly understood. Pettigrew et al. (2001) attribute this
deficiency to both an emphasis on change process and a problem in defining
OC success.
Despite the growing emphasis upon change criteria in OC theory, it is
unclear whether an initiative is successful whenever the planned change is
implemented, or only if the intended outcome is achieved. Returning to our
hypothetical example, if decision-making was decentralized but customer
satisfaction did not improve, would this OC initiative be successful? We
argue that judging or evaluating the success of an OC initiative must start
by considering its initial objectives. The selection of organizational level
objectives has received little attention in the OC literature, with the change
criteria against which OC success is considered being treated as exogenously
given.
While the OC literature has not addressed the question of how

change criteria (objectives) are selected, this has been considered extensively
in the strategic management literature (see Porter, 1980). Drawing upon the
strategic management literature, Barringer and Milkovich (1998) examine
how the determination of objectives drives the adoption of particular
management innovations. They identify four theories (institutional, resource
dependence, agency, and transaction cost) that suggest differences in desired
organizational objectives, and examine similarities and differences in the
objectives predicted by these theories. All four theoretical perspectives agree
that managerial selection of objectives is influenced by environmental
conditions, but emphasize different sources of influence. Under the institutional perspective, managers are influenced primarily by institutions
external to the organization. Both the agency and transaction cost perspectives emphasize internal conditions related to the nature of work. Resource
dependence is the only theoretical perspective that explicitly considers forces
both internal and external to the firm.
There are also fundamental differences between these four theories in
terms of how the organization responds to environmental constraints. The
resource dependence, agency, and transaction cost models all assume that
organizations will actively manage environmental constraints, while under
the institutional perspective, the organization reacts to conform with the
environment. These contrasting perspectives lead to significant differences in
change objectives. The resource dependence, agency, and transaction cost
theories each focus on organizational efficiency or effectiveness, while institutional theory focuses upon objectives that gain or enhance legitimacy. All
of these theoretical perspectives highlight the role of the organizational
context, both internal and external, in explaining the way in which
objectives are set.
These theories represent complementary (rather than competing)
perspectives of how change objectives are set (Barringer & Milkovich, 1998).
The question is not about which theoretical perspective is the right one, but
rather a question of under what conditions these perspectives gain primacy
in influencing which change objectives are selected. Measuring change
implementation progress against the change objectives is an important tool
in change implementation (Armenakis et al., 1999; Galpin, 1996), yet at
present the selection of OC objectives remains unstudied.
This importance of considering OC objectives and effectiveness from
multiple perspectives is highlighted by Damanpours (1991) meta-analysis
which shows that organizational effectiveness depends upon the congruence
between context, content, and process. This idea of congruence implies that
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an OC initiative should be planned according to its objectives, and so the

setting of change objectives is the starting point for any OC initiative.
Ultimate success requires that, given a particular set of change objectives, the
OC initiative be adapted to the environment (both external and internal) of
the organization in order to be effective.
Change process
The change process component of OC research covers research focusing
upon the specific actions taken by the organization as a means of bringing
about the planned change. The process of change has been the primary focus
of the OC literature and the closely related organizational development (OD)
literature. Van de Ven and Poole (1995: 510) contend that change process
has been a central and enduring quest of scholars. Porras and Robertson
(1990) support this contention by finding that only four of 16 published OC
and OD theories discussed outcomes in addition to process. The emphasis
on process rather than enacted content or context is evident in both the OC
(Armenakis & Bedeian, 1999) and OD literatures (Porras & Robertson,
1990), and is sustained in more recent works (see Poole et al., 2000).
Process-based OC theories fall into two categories: change implementation theories and change process theories (Porras & Robertson, 1990).
Both categories examine the process by which change is brought about, and
tend to assume that using an appropriate change process is necessary and
sufficient to achieve a planned change. However, two key issues are
neglected: the matching of specific changes to specific outcomes; and the
influence of context upon the feasibility of the change.
The change implementation theories tend to be simple and prescriptive,
detailing the steps to take in order to achieve the intended outcomes. The
practical difficulties of applying a single list of sequential actions while maintaining congruence between the objectives, process, context, and content of
change ultimately limits the usefulness of change implementation theories.
The change process theories are less prescriptive than are the change
implementation theories, and explain the dynamics of OC in terms of
relationships between key variables to be manipulated in order to achieve a
desired outcome. However, change process theories typically fail to fully
specify the variables that can be manipulated (Porras & Robertson, 1990),
even though the content and process of change required to achieve specific
objectives depend on the context (Damanpour, 1991).
Time has been recognized as a critical aspect of the change process
(Huy, 2001), such as in Lewins (1947) model of unfreezing, moving, and
freezing. Armenakis et al. (1999) present several process-based change
models derived from Lewin (1947), and adapt social learning theory
(Bandura, 1986) to consider how change messages are conveyed and
received. However, as change implementation theories, all of these models
still suffer from the deficiencies identified by Porras and Robertson (1990).
Sustained interest in the process of change has produced a rich and
extensive body of literature. However, there are still topics of significance
that are under-represented in the change process research. Most importantly,
the matching of specific manipulations (such as changes in policies or practices) to the desired outcomes remains poorly specified, as is a clear understanding of how different change processes might be matched to various
change manipulations. These shortcomings are due to the fact that, in
contrast to our extensive knowledge of change process, our knowledge about
the content and context of change is much more limited, particularly with
regards to understanding how content and context might influence process.
Change content
The change content component of OC research is concerned with the specific
policies and practices that are implemented, and which represent a difference
from the previous state of affairs within the organization. The emphasis in
the OC literature on process has left the content of change largely unexamined (Armenakis & Bedeian, 1999; Huy, 2001). Consequently, little is
known about either the relationship of specific change elements to the objectives and context of change, or the effectiveness of those specific change
elements. Even the specification of change content remains poor. With the
earlier example of decentralized decision-making, the fundamental change is
decentralization. However, it is unclear whether the content should be
defined in terms of: changed administrative rules and procedures; changed
job duties; or the adoption of new values within the organization.
Rather than conceptualizing OC content in terms of any specific
characteristic, content has been commonly considered in terms of the
movement from a starting point using simple dichotomies. The content of
change is thus described using terms such as revolutionary/evolutionary
(Greiner, 1972), major/minor (T.Y. Choi, 1995), or transformational/
transactional (Burke & Litwin, 1992). These terms essentially equate the
content of change with a measure of difference. Using our example, we might
describe the change as the decentralization of decision-making, but the
enacted content of change would (by definition) depend upon the starting
system. Decentralization of decision-making in a highly autocratic organization represents a fundamentally different type of change than it would in
an organization already enjoying some levels of employee participation.
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Thus, the same initiative would not represent the same change content across
different change contexts.
Burke and Litwin (1992) thus provide a useful way to characterize
content by distinguishing change as transformational, where organizational
values and worker attitudes must be modified, or as transactional, where it
merely requires modified work procedures. Thus, the manipulation that
decentralizes decision-making in a highly autocratic organization would be
a transformational change. The same initiative would be a transactional
change if the organization already had high levels of employee participation.
The complete description of the change content would include the specific
change manipulation (such as decentralization of decision-making) and the
starting position. Thus, to describe the content of a change, it is first necessary to be able to describe the context under which that change occurs.
Change context
Each OC initiative occurs within a specific context, comprising factors both
external and internal to the firm. This context influences all aspects of the
OC initiative. Pettigrew et al. (2001) point out that OC process is influenced
by multiple levels of context, ranging from that within the organization,
through industry/sector and national context, to the global competitive
context. Two aspects of the organizational context that require particular
attention are structural issues (such as prevailing practices and policies) and
cultural issues (such as prevailing values and beliefs).
The effects of structural changes have been examined by FoxWolfgramm et al. (1998) and Haveman (1992). These studies overcome the
problem of relegating context to undiscussed background (Pettigrew et al.,
2001), but may be limited by a common context the US. Fox-Wolfgramm
et al. (1998) employed a modified grounded theory approach, adopting
Strauss and Corbins (1990) method of using prior theory to guide case-based
research, justifying this qualitative approach by noting the weakness of prior
theorizing on how context affects OC initiatives.
Whereas Fox-Wolfgramm et al. (1998) start from a strategic change
perspective, other researchers have examined OC context from a culture and
values perspective. Amis et al. (2002) argue that OC research should follow
studies in other areas of management and focus on the influence of values.
As noted by Rokeach (1968), the preference for particular behaviors is influenced by values, and so values will influence OC initiatives.
Amis et al. (2002: 461) find that achieving the planned end state for
an OC initiative depends on how closely the values held by individuals
within an organization coincide with the changes being proposed. In
particular, when a planned change is inconsistent with the prevailing values,

the enacted change falls short of the planned change. Detert et al. (2000)
adopt a similar view in their theory that total quality management (TQM)
success depends upon the adoption of a set of TQM values.
The effects of the national context upon OC had remained largely
unexplored in the past (Pettigrew et al., 2001), but researchers recently have
begun to focus on this relationship. Studies of national context tend to fall
into two broad categories: one emphasizing the role of institutions, and
another concentrating on the influence of national culture. Most research has
emphasized cultural explanations when examining the effect of national
context upon OC, with a particular emphasis upon how prevailing national
values influence change processes. Jaeger (1986) concludes that the cultural
values of many nations, as found by Hofstede (1980), are in conflict with
Tannenbaum and Daviss (1969) OD value scales. Similarly, Burke and
Litwin (1992) predict that national cultural differences will influence both
the process and content of OC. Empirical studies have examined cultures
influence on OC implementations. Lau (1996) argues that the OC process
must be adapted to the specific cultural environment, while DiBella (1996)
suggests that certain types of change are resisted on cultural grounds due to
the content of the change. Taplin (2006) provides case examples of fundamental strategic change which suggest that some forms of institutionalized
control are necessary in order to successfully implement global change.
Research on the influence of institutional forces upon OC in countries
other than the US remains rare. Lau et al. (2002) examine both institutional
forces and organizational culture in China, and find that managerial change
schemas are influenced by organizational culture, ownership type, and local
development levels. However, they focus on the schemas and attitudes of
managers rather than specific change initiatives. Zhou et al. (2006) examine
factors both external and internal to the organization that influence the
decision to undertake OC initiatives in China. The decision to implement
change, as well as the decision to implement either technical or administrative change, is driven by motivation, opportunity, and capability. Since the
emphasis upon these driving factors varies with national context, it is clear
that OC initiatives will differ across national borders.
Lau and Ngo (2001) suggest that the type of OD initiative to be
implemented will be influenced by cultural values, while the effectiveness of
its implementation will depend upon institutional factors. This highlights the
complexity and interdependent influence of institutional and cultural forces
upon OC and OD. Zhou et al. (2006) echo Pengs (2003) call for further
study of how firms adapt to changes in emerging economies. Since adaptations occur through the mechanism of OC, these findings suggest a need
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to further examine the implementation of OC, with a particular emphasis

upon understanding how organizations respond to their internal and
external environments.
Using differences in national context to advance theory

The emphasis of the OC literature upon process, and the use of primarily
American samples, has limited OC theory in (at least) four ways: First, the
effect of change objectives upon the content, process, and effectiveness of
change is poorly understood. While theories have been offered to explain
the basis for setting objectives, the connection between OC objectives and
initiative implementation remains mostly unspecified. Second, the relationship between change manipulation and change content depends upon the
change context, but studies of change rarely adopt the contextual approach
needed to promote greater understanding in this area. Third, national
context is believed to influence OC, yet there is no systematic understanding
of how current theories of OC remain bound to the Western (and mainly
American) context. Finally, studies of OC content and international OC both
emphasize either the importance of values and beliefs, or the importance of
institutional structure, yet they do not provide a comprehensive model of
how institutions, values, and beliefs influence OC.
The implicit acceptance of the Western (and American) values and
business practices has resulted in theories of OC that may not apply in
different national contexts (Lau, 1996; Lau et al., 2002). The direct and
unchanged application of management theory generated in one national
context to foreign contexts is problematic (Peppard & Fitzgerald, 1997).
This is a particularly acute concern in China with its historical and social
differences from the West (Child & Tse, 2001). The development and
changes that are occurring in China together with the countrys growing role
in the global economy make it increasingly important to understand OC in
the Chinese business context.
Child and Tse (2001) suggest that international studies will be helpful
to identify and address many deficiencies of existing theories. In addition to
the obvious cultural differences between China and the West, Child and Tse
(2001) identify several characteristics that make China a good location for
examining management theories. China has strongly developed and unique
institutions, it is large in size with significant internal variation, and as a transitional economy is experiencing significant growth and environmental
changes. These factors all combine to make China a challenging location to
apply existing Western theories, and represent significant differences which
place contextualization in the forefront of research (Child & Tse, 2001).
Theories of OC should therefore be expanded to account for different

national contexts, but currently we lack the empirical knowledge to do this.
Researchers attention has focused upon national values, but it is becoming
clear that institutional forces are also critical. In general, while there is a
growing consensus that the national context influences OC, there is no clear
idea of the way in which national context influences change objectives,
process, or content. Just as Fox-Wolfgramm et al. (1998) relied on qualitative techniques to examine thoroughly the effect of the US context, we
believe that qualitative methods are appropriate to understand how a different national context affects the current US-centric theories of OC.
International research tends to introduce theoretical and empirical
complexities that can be difficult to handle (Child, 2000). To reduce the level
of complexity it is helpful to study a specific type of OC. Business process
re-engineering (BPR) is a specific type of radical approach to OC with a clear
set of normative guidelines (Martinsons, 1995). Studying BPR in a nonAmerican context, and identifying systematic variations from the normative
baseline, can be helpful to understand how the national context influences
the objectives, process, and content of OC.
Business process re-engineering as organizational change

BPR is typically viewed from a workflow engineering perspective, rather
than from a traditional OC perspective. The leading advocates of BPR
(Davenport, 1993a; Hammer, 1990; Hammer & Champy, 1993) have
elaborated a normative baseline that sets out the objectives of BPR, and
recommends both what types of changes should be made, and how they
should be implemented.
BPR change objectives

BPR initiatives commonly seek to lower costs, improve outputs, and/or
reduce cycle times (Davenport, 1993a; Hammer & Champy, 1993). These
objectives are consistent with the paramount focus on efficiency of both the
agency perspective (Ross, 1973) and the transaction cost perspective
(Williamson, 1981).
BPR change process

BPR is an example of a change implementation theory (Porras & Robertson,
1990). The BPR process involves a clear sequence of steps (e.g. Davenport,
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1993a), including: conduct a rational analysis; design a new business process

model; then implement changes rapidly rather than gradually. The BPR
literature also provides specific guidance for implementing each step, such as
involving employees in the design and implementation of the change
(Hammer & Champy, 1993).
BPR change content

A defining element of BPR is Hammers (1990) call to obliterate existing
processes, rather than simply automate them. BPR is thus an example of
what Greiner (1972) identifies as revolutionary change. In order to achieve
this, the BPR canon contains a number of specific recommendations that do
not directly address content, but are actually specific OC manipulations.
These manipulations, such as adopting a business process (workflow)
orientation rather than a functional orientation, follow naturally from the
objective(s) of reducing various transaction costs.
Detert et al. (2000) contend that Total Quality Management (TQM),
another form of OC with a strong normative baseline, is congruent with a
specific set of organizational values. Similarly, we suggest that BPR is
grounded in a specific set of values that prevail in the United States. The
prevailing American culture encourages progressive change and individual
initiative. There is also a strong belief that people can and should control the
environment in order to reduce uncertainty (Hofstede & Bond, 1988;
Martinsons & Hempel, 1995). These values are consistent with the proactive, rapid, and discontinuous changes prescribed by BPR. The reengineering ideology is also consistent with the prevailing tendency of US
business managers to focus on inductive thinking, rational problem-solving,
and scientific models and principles (see Martinsons & Westwood, 1997).
The alignment of BPR and American cultural values is reinforced
rhetorically by the following: Hammer and Champy (1993) assert that BPR
fits Americas penchant for innovation, change, and focusing on tomorrow
rather than yesterday (p. 223); Davenport (1993b) conceptualizes BPR as
an American adaptation of the Japanese focus on process management; and
Grint (1994) views BPR as an American response to TQM.
BPR was subject to significant hyperbole in the early 1990s as a result
of provocative journal articles (Hammer, 1990) and best-selling books
(Davenport, 1993a; Hammer & Champy, 1993). BPR has been variously
criticized, for ignoring human factors (Cooper & Markus, 1995), producing
layoffs (Jarrar & Aspinwall, 1999), being insensitive to context (Buchanan,
1997), and even being a tool of American imperialism (Grint, 1994).
Although it has arguably failed to live up to the huge expectations

generated by the hyperbole, it has been a popular way to improve business
performance.
Although Davenport (1993b) and Grint (1994) suggest that BPR is
essentially an American concept, Jarrar and Aspinwall (1999: 175) contend
that there is now a universal acceptance of re-engineering concepts.
However, they acknowledge that operational tactics might differ across
countries. The limited studies to date of BPR outside of the US suggest that
it is influenced by national context, with variations from the BPR prescriptive baseline being attributed primarily to cultural factors.
The employee empowerment that is inherent with BPR produced
significant cultural conflicts in Brazil (Kock & McQueen, 1996), Hong Kong
(Davison & Martinsons, 2002), and South Korea (C.J. Choi, 1995). Efforts
to involve employees at different stages of the BPR process were resisted in
Brazil (Kock & McQueen, 1996) and South Korea (C.J. Choi, 1995), while
a BPR project in Hong Kong that explicitly sought to empower employees
ended up enslaving them (Davison & Martinsons, 2002). In contrast,
empowering employees was not mentioned as a problem with BPR efforts in
two countries with more participative work cultures Germany (Peppard &
Fitzgerald, 1997) and Japan (Cooper & Markus, 1995).
The characteristics of the decision-making taking place during a BPR
initiative have also varied across countries. More participative decisionmaking was related to Germanys tradition of industrial democracy (Peppard
& Fitzgerald, 1997) and Japans reliance upon consensus (Cooper &
Markus, 1995), while autocratic decisions made in South Korea were
attributed to its militaristic decision-making traditions (C.J. Choi, 1995).
Meanwhile, the results of BPR initiatives in international settings have
varied significantly from the American baseline. The enacted changes in
Germany (Peppard & Fitzgerald, 1997), Brazil (Kock & McQueen, 1996),
South Korea (C.J. Choi, 1995), Hong Kong (Davison & Vogel, 2000), and
Japan (Cooper & Markus, 1995) were moderate and incremental rather than
radical and transformational, reflecting their comparatively conservative
values.
Taken together, the existing international literature on BPR, although
limited, indicates that BPR implementations vary in a manner that reflects
differences in prevailing values. However, these international studies (e.g.
C.J. Choi, 1995; Davison & Vogel, 2000; Kock & McQueen, 1996; Peppard
& Fitzgerald, 1997) have examined BPR by adopting a workflow engineering perspective rather than the perspective of OC theory. Thus, it is not
certain how the Chinese context might influence the process and content for
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this type of OC. To address this issue, we review relevant findings about
Chinese business culture and management systems before examining the
emerging BPR phenomenon in China.
BPR and the Chinese business context

The values underlying the normative BPR baseline contrast starkly with those
prevailing in China. This difference begins with the change objectives. BPR
initiatives commonly seek to increase operating efficiency and output quality
(Hammer & Champy, 1993). These objectives reflect a Western rationality
that may be more appropriate in a developed economy than in Chinas
transitional socio-economic environment. Business in China remains very
personalistic, relying less upon formal institutional rules and legal
contracts than upon trust-based personal relationships (Boisot & Child,
1996; Martinsons, 2008; Xin & Pearce, 1996). As a result, Chinese business
success has depended critically on building and sustaining relationships
(Martinsons, 2000; Peng & Luo, 2000).
Studies of new business development in China (Ahlstrom & Bruton,
2001; Martinsons, 2008) have also highlighted the importance of gaining
and sustaining organizational legitimacy. This implies that financial or
economic objectives must be supplemented by social or political considerations. As a result, we expect that developing and maintaining or enhancing
the reputation or legitimacy of the organization will be a key objective of
change. This suggests an externally-oriented institutional perspective in
contrast to the BPR focus on internal efficiency. Indeed, the Chinese reliance
on business networks and personal relationships (Martinsons, 2008; Peng &
Tan, 1998) as well as the role of business alliances as Chinese businesses
internationalize (Li, 2007), has been essentially ignored in the BPR literature,
which rather naively calls for radical alterations to internal processes.
Prevailing Chinese values also conflict with many BPR process characteristics. BPR is envisioned to be driven by rational analysis and the development of a formal business process model. However, high levels of analysis and
formality are inconsistent with typical business practice and management
systems of Chinese organizations (Martinsons & Hempel, 1995). The Chinese
tend to adapt to their environment rather than attempting to control it (Boisot
& Child, 1999). Their external locus of control or fatalism encourages a type
of dynamic flexibility with continual and incremental types of organizational
changes rather than episodic and dramatic organizational changes that are
elaborately planned and designed to achieve an optimal level of static
efficiency. They tend to respond quickly and effectively without developing
detailed forecasts or plans (Peng & Tan, 1998). Chinese businesses can thus
be seen as a product of their external environment, being comparatively good

at handling emerging developments but remaining comparatively inefficient
on a global basis (Martinsons, 2000).
BPR applies information technology to standardize core processes
(Hammer, 1990). However, IT applications in Chinese businesses tend to
focus more on monitoring and vertical data flows, and less on coordination
and horizontal data flows, compared to US businesses (Martinsons &
Westwood, 1997). The highly contextual nature of Chinese communications
and the largely tacit nature of Chinese business knowledge make it difficult
to fully formalize them using computer-based information systems (see
Burrows et al., 2005). With information being fundamentally a personal
asset rather than an organizational resource in the Chinese business context
(Martinsons & Westwood, 1997: 222), the potential value of IT is further
reduced by an inclination to hoard rather than share information and knowledge (Burrows et al., 2005).
BPR also prescribes discrete and rapid implementations relying upon
a high degree of employee empowerment and information sharing. However,
employee engagement in decision-making and knowledge sharing may be
limited by the hierarchical and authoritarian nature of Chinese businesses
(Martinsons & Hempel, 1995). In Germany, industrial democracy slowed
down the planning and design stages, but enabled rapid implementation
(Peppard & Fitzgerald, 1997). In contrast, authoritarian executives in China
could initiate change rapidly, but Chinese employee resistance, which is often
manifested in passive forms, can be expected to hinder implementation.
Both the planned and enacted content of change may also be influenced
by the Chinese cultural context. BPR starts with a clean slate and leads to
radical changes. However, the Chinese reliance upon relationships and
business networks may inhibit a truly radical redesign, while an inherent
conservatism would favor enacting incremental and evolutionary change.
The Chinese preference for adapting to environmental changes will also
encourage OC initiatives that maintain or enhance organizational adaptability rather than those rigidly specifying an intended end-state. For the
same reasons that the formalization of both process and communications are
resisted, the content of change may lack formalization and be only partially
articulated.
Towards an international theory of organizational change

The rapidly evolving economy of China makes managing change a fundamental challenge to business, yet previous studies of OC in China are limited
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to descriptive accounts (see Sun, 2000) and micro-level analyses (see Tsang,
2003). Woodman (1989: 211) argued that we have plenty of theories that
address organizational change and development. However, this contention
does not apply internationally since the application of existing OC theories
to different national contexts has been very limited. Little is known about
the objectives, process or content of OC in China, nor about how appropriate it would be to apply existing theories of OC to this context. Consequently, there is a limited knowledge base for building international OC
theories. As a result, we sought to examine OC in a non-Western context in
order to strengthen the foundation for theorizing about international OC.
In order to achieve this, it is helpful to focus on a single type of OC,
such as BPR. The clearly defined objectives, process, and content of BPR are
helpful to draw conclusions about the influence of contextual variables on
various change characteristics. By examining OC in China, a context with
significant historical, structural, and cultural differences from the West (see
Hofstede & Bond, 1988), we sought to identify the implicit assumptions and
associated deficiencies of existing OC theories.
Research question: How can insights from examining OC in China
contribute to the development of more comprehensive and internationally applicable theories of OC?
By studying BPR in China, we sought to not only gain an understanding of
OC in China, but more critically, to enhance the development of OC theory
in general. This would enable us to provide a foundation for developing more
comprehensive and internationally applicable OC theories.
Research design and methods

Our literature review suggests that the straightforward transfer of OC
initiatives from the US to non-US locations will face contextual obstacles.
Given our research aim of developing internationally generalizable theories
of OC, the distinctive socio-economic context of mainland China provides
an opportunity to identify areas where current theories are constrained
(Child & Tse, 2001), while examining a single form of OC is helpful to
minimize undesired variation in our data.
We have investigated BPR efforts in mainland China since 1996
using the case study methodology to examine an emerging phenomenon
(Yin, 1994). Our design uses multiple cases to enable replication logic (Yin,
1994). Each case relies on multiple data sources and perspectives. This
expands upon the traditional approach to grounded theory by enabling a

higher degree of generalization and opens up the proverbial black box
between inputs and outcomes (Van de Ven & Huber, 1995: ix).
Our eight cases represented a cross-section of the Chinese economy, as
profiled in Table 1. We studied state-owned, collective, and private enterprises engaged in manufacturing, distribution, retailing, and service
provision to both corporations and consumers. Rather than being selected
deliberately or randomly, the cases resulted from a convenience sample of
Chinese organizations that initiated BPR efforts between 1996 and 1999. We
have followed all these change initiatives through to their conclusion, which
ranged from six months to six years. Both the case study methodology and
convenience sampling have been used commonly and justified previously for
studies of organizational phenomena that are newly emerging or emerging
in new contexts (see Eisenhardt, 1989; Pettigrew, 1990). To the best of our
knowledge, the organizations represented in our eight cases were among the
first 20 to initiate BPR in mainland China.
Top managers from three of our eight case-studied organizations
attended a BPR seminar conducted in Guangzhou by a leading authority,
while access to the other five organizations was the result of relationships
that were developed during previous research and consulting projects.
We collected data that could be compared against our theorized expectations using analytic induction [see pp. 148790 in Yan & Gray (1994) for
a detailed description and a contrast with enumerative induction]. Each case
was treated as an independent experiment that helped to confirm or disconfirm our implicit hypothesis that BPR in the Chinese business context
can be analyzed using the context-objectives-process-content framework
Table 1 Profile of the eight Chinese organizations
State enterprise 1
State enterprise 2
State enterprise 3
State enterprise 4
Township enterprise
Sino-foreign joint venture 1
Sino-foreign joint venture 2
Private domestic enterprise
a
Industry
Number of
employees
Location
People
interviewed
Manufacturing
Manufacturing
Manufacturing/processing
Distribution
Manufacturing/distribution
Manufacturing
Manufacturing
Retail
25,000
15,000
13,000
5000
4000
10,000
5000
1000
Chongqing
Guangdong
Beijing
Shanghai
Guangdong
Shanghai
Guangdong
Guangdong
6
4
6
5
4 + 1a
7
11
9 + 1a
A foreign consultant hired to guide the OC project was interviewed in two cases.
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(Armenakis & Bedeian, 1999; Pettigrew, 1990). The use of multiple cases
enables step-wise refinement of our empirically grounded theory. We
collected data using interviews, simple questionnaires, work and methods
study, and document reviews, allowing triangulation to increase reliability
and avoid common source bias (Podsakoff et al., 2003). Semi-structured
interviews of between four and 11 people in each organization were based
on a pre-designed protocol. Explicit steps recommended by Miller et al.
(1997) were taken during the interviews to minimize the possibility of
attribution biases and memory lapses.
The informants for every case included at least one top management
team member and another manager lower in the hierarchy. Interviews with
non-management employees were conducted in all but two cases, where our
requests to conduct interviews were denied. We also interviewed an American
consultant who worked on the BPR projects for two of the organizations. In
addition, three of the managers that we interviewed had been involved previously with BPR projects in the US and/or Canada before coming/returning
to China. Data from these four people with North American experience in
BPR was helpful to provide a comparative perspective.
Our data collection, and specifically the interview questions, were
organized around the steps in BPR implementation, such as the business
needs analysis followed by designing the new processes. As such, our data
collection for each case proceeded in stages guided by viewing BPR as an
example of process implementation theory. We considered BPR projects in
terms of their sequential stages, typically including initiation, project
planning, process redesign, implementation of change, and completion/
consolidation of the enacted change. For each BPR initiative, we sought to
collect data about the objectives, process, content and context of change.
Each interviewee was asked probing questions (to establish or confirm
project details) and open-ended questions (to focus on the how and why of
each project) related to all or some of the following: 1) rationale for change
and the existing situation; 2) objectives of the change; 3) planned content of
change; 4) implementation process; 5) enacted content of change; and 6)
reasons for any differences between planned and enacted change.
The collected data were content coded based on the elements of the
OC model shown in Figure 1. Data were organized according to the four
dimensions of change before being analyzed and interpreted. Our data set
was checked to resolve ambiguities and discrepancies. We reviewed the
evidence assembled in each case to ensure that it was not only internally
consistent, but also that it reflected a logical flow of events. Each case was
treated as an independent experiment that helped to confirm or disconfirm
our implicit hypotheses about BPR in the Chinese business context. For
example, we examined the influence of political and social factors on the
objectives of change, the extent of employee involvement in the process of
change, and the degree of process formalization with both the planned and
enacted content of change. Comparisons across cases relied on methods
suggested by Eisenhardt (1989) and Miles and Huberman (1994). This literal
replication (Lee, 1999) enabled step-wise development and refinement of a
theoretical model (Yin, 1994).
In order to verify our interpretations, we used triangulation across our
various sources of evidence for each case (multiple interviews, observations,
and documents), which revealed a very high degree of consistency. The few
inconsistencies that did emerge were reconciled through verification by the
original informants or the collection of additional data. For example, we
went back to several informants and pointed out you said this, but they said
(or the documents indicate) that. Subsequently, each informant reviewed not
only our notes from their interview but also any reported findings that were
based upon their statements. These steps minimized the scope for subjective
judgment and thus help to assure the validity and accuracy of the findings
from our case studies (Yin, 1994).
Business process re-engineering in Chinese organizations

With strong existing positions in the domestic economy and international
aspirations, these BPR pioneers in China had no clear reason to deviate from
the BPR normative baseline as espoused by Hammer and Davenport. Each
firm was financially healthy and initiated BPR as part of a broader effort to
pursue growth opportunities rather than because of either a direct threat or
any need to turnaround a business with unsatisfactory performance. A
top manager from every one of the organizations insisted that the initial
intention was to more or less follow the BPR textbook.
Our analysis of our case study data focused upon identifying falsifying
examples. When the BPR implementations diverged from the normative
baseline, we examined in greater detail both the nature of the divergence and
the reasons that it occurred. Consistent with Glaser and Strauss (1967), the
key evidence and insights from our cases are organized into a theoretical
framework that is illustrated in Figure 2. This theoretical framework links
Chinese contextual elements to the observed change initiatives, and organizes
our observations around the fundamental dimensions of OC.
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478
Organizational
characteristics
Organizational change
characteristics
Reputation and flexibility are
more important than efficiency
Change
objectives
Adaptive
Easily initiate change
Difficulty completing change

(with empowerment)
Centralized
Difficulty in unilateral pursuit

of rapid change
Change
process
Interdependent
business networks
Resist clean-slate thinking,

and accept the status quo
Resist formalizing business

processes and plans
Informal
Resist formalizing information
and communications
Figure 2
Change
content
Influences on organizational change in China
Objectives
The cases demonstrate the importance of explicitly considering change objectives. In every case, the original intention was to implement textbook BPR.
However, the enacted change quickly diverged from the BPR normative
baseline. The change objectives initially selected were influenced by contextual elements, and evolved as the OC initiative progressed. The objectives
were modest, emphasized reputation, and lacked formal targets or evaluation
criteria. These characteristics were consistent across the cases, and reflect
business interdependence and a reactive/adaptive orientation.
Objectives adopted
The key objective of BPR is to improve efficiency. However, this objective
was seen as less critical in our Chinese cases than relationship and reputation
objectives. In all cases, managers admitted to being under pressure to

improve competitiveness. Nevertheless, as shown in Table 2, a key objective
was to enhance their reputation or legitimacy with business partners while
aiming to avoid problems. In half our cases, managers agreed that being
seen to apply BPR was more important than actual improvements in
operational performance, with one executive stating that the motivation for
change was to improve (our) reputation and relationships with outsiders,
Table 2
Summary of BPR project characteristics
Case
Primary
stimulus
Improvement
objectives
Durations of
Management
planning (P) and comments on
implementation project outcomes
(I)
State enterprise 1 BPR book and

peer discussion
Competitiveness
reputation
P: 8 weeks
I: 18 months
satisfactory,
improved
productivity and
response
State enterprise 2 BPR seminar
Competitiveness
reputation
Tech. transfer
P: 9 weeks
I: 12 months
acceptable,
improved
efficiency, better
image
State enterprise 3 Peer discussion
Competitiveness
reputation
P: 4 weeks
I: 9 months
all that it was

possible to do,
satisfactory
State enterprise 4 BPR book and

articles
Competitiveness
reputation
P: 8 weeks
I: 13 months
quite successful,
faster response,
lower expenses
Township
enterprise
BPR seminar
and book
Competitiveness
legitimacy
P: 6 weeks
I: 8 months
acceptable, more
efficient, better
image
Sino-foreign JV 1
Suggested by
foreign partner
Competitiveness
reputation
P: 9 weeks
I: 9 months
satisfactory,
higher quality,
faster response
Sino-foreign JV 2
BPR seminar
Competitiveness
reputation
Tech. transfer
P: 8 weeks
I: 10 months
successful, good,
lower unit cost,
better quality,
tighter integration
Competitiveness
legitimacy
P: 3 weeks
I: 6 months
satisfactory
outcome, better
customer service
Private enterprise BPR book and

peer discussion
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and the consultant agreeing that success was viewed in terms of better
business relations rather than higher productivity.
This tension between efficiency gains and reputation was evident in all
of our cases. To maximize efficiency gains, it would be necessary to undertake significant changes, yet the need for such changes was perceived as
damaging managers reputations. Employees in the case organizations told
us that the situation must be quite bad or worse than we thought if drastic
changes were needed, and they lost (some) respect for their bosses as a
result. Thus, while OC was initiated with the intention of following the BPR
baseline, the OC objectives ultimately emphasized reputation and legitimacy
rather than efficiency. Exceptions to this occurred only in the presence of
significant pressure from foreign business partners. A foreign manager in one
joint venture stated that keeping the business successful was the top priority.
This was a stark contrast to his Chinese counterparts focus upon avoiding
problems.
Formalization of criteria and evaluations
BPR calls for the formalization of objectives and planning. However, we
found that the OC implementations in China were marked by a low degree
of formalization. In part, this stems from a tradition of reactive and adaptive
management, rather than pro-active planning for the future. The consultant
noted that (they) pay little attention to long-term development. Even the
private enterprise managers indicated that they tend to wait for orders and
requests from customers and business partners rather than formulating their
own plans.
The evaluation of change effectiveness was also marked by a low
degree of formalization. While managers were satisfied with the outcome of
the change initiative, in only two cases were they able to offer quantitative
data to support their judgment. In another two cases, the adoption of specific
IT applications was used as a key indicator of success. These four cases
included the two joint ventures. The interviewees tended to agree that foreign
participation in these cases encouraged both the quantification of performance measurement and the application of information technology.
Contextual elements influencing objectives
A few critical contextual elements were repeatedly mentioned by our interviewees. First, maintaining harmony within the organization and building
strong relationships, both externally and internally, were viewed as critical
objectives. In addition, the importance of maintaining organizational
flexibility and adaptability constrained both formalization and planning. A

state enterprise manager said that redefining the way that we should do
business was intellectually challenging, but a solvable problem. It was much
more difficult to put things into practice by getting people to change. Change
objectives, either initially or ultimately, were adapted to fit established
conventions, rather than being chosen to change those conventions.
Process
Just as change objectives consistently diverged from the BPR baseline, so did
change processes. BPR prescribes the rapid implementation of a redesigned
business process model. Change in the Chinese organizations was implemented at a deliberate pace, with limited participation or input from
employees. With limited formalization in planning, the decision to commence
with change was quickly made, but the need to preserve harmony and
relationships limited the pace at which change could be implemented.
Little employee participation
The involvement of employees is a central element in the planning and design
stages of BPR. However, employees were not involved to a significant extent
in planning or designing any of the changes in China. Data collected from
various interviewees clearly indicated that employee participation was
resisted by both managers and employees. In all but one of the cases, top
managers admitted that they were reluctant to compromise their discretionary power by sharing critical information with employees. The lack
of information sharing limited the scope of employee participation.
Managers in all the cases agreed that their employees were reluctant to
become involved, with one manager stating that he experienced difficulty in
getting my work teams to accept responsibility for deciding what they would
do next.
In China, we found that the top executives typically decided to proceed
with OC, and then tell their subordinates what, when, and how to implement change. The consultant noted that elapsed time from initiation of
the BPR project to completing the process redesign was 20% to 40% less
than in the US. The time reduction was due largely to limited amount of
both formal analysis and discussion with employees. A strictly top-down
approach was used in every case, with employee participation being
discouraged by management. Although a sequential process was followed in
all the cases, more formalized implementation plans were developed in the
larger organizations. Our interviewees suggested that this incremental
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formalization reflected the need for managers to direct and coordinate more
people and activities during the actual organizational change, rather than a
desire to enable employee input on the proposed plans for change.
Slow and continual change processes
The decisions to proceed with OC were made quickly in China. However,
the pace of implementing the change tended to be comparatively slow. Most
Chinese managers envisioned OC as an on-going process with ebbs and
flows, and ideally a gradual and incremental process. This was distinctly
different from the periodic but rapid change prescribed with BPR. Rather
than make fundamental change to core processes, the managers in our
cases preferred progressive refinements based on small trial-and-error
experiments, with the refinements occurring in order to adapt to changes in
the environment.
The prevailing conservatism of the Chinese managers was found to be
a key factor in hindering the acceptance of rapid and fundamental change.
A modest pace of change was considered useful to avoid problems and to
maintain relationships. The interdependence of stakeholders in the Chinese
business culture slowed the process of OC even when top management were
convinced that rapid and fundamental changes were needed. This need to
take into consideration other stakeholders, such as the suppliers of critical
materials and the providers of complementary services, resulted in barriers
to rapid change.
Contextual elements influencing processes
Two of the key influences on change objectives, namely business interdependence and an emphasis upon adaptability, also affected change
processes, and so did the centralized nature of Chinese organizations. As a
result, it was easy to proceed with OC, but difficult to fully implement the
planned change. In addition, the OC initiatives evolved to fit within the
prevailing business environment.
Content
BPR advocates radical changes to workflow processes in order to dramatically improve performance. In every one of the eight cases, the implemented
change deviated significantly from the BPR baseline. Prevailing characteristics of the business environment acted to constrain the appropriateness of
specific BPR recommendations. The BPR prescriptions ultimately represented
a fundamentally different business approach that was unacceptable to the

Chinese managers.
About a dozen process changes that were implemented across the eight
cases did alter relationships with other organizations significantly. Most
commonly, peripheral activities were transferred to sub-contractors while
new quality assurance processes modified relationships with suppliers or
distributors. In terms of internal restructuring, the decentralization of
decision-making was insignificant in all but two cases. Only in the private
enterprise and one joint venture did the employees end up taking up significant discretionary responsibilities as a result of a business process redesign.
Compromises among internal and external stakeholders commonly moderated both the extent and pace of change. The enacted changes were much
more modest than those prescribed with BPR, and as noted earlier, they were
implemented slowly and incrementally.
Enacted change
Business processes in the eight Chinese organizations were only slightly more
standardized and formalized after re-engineering. Meanwhile, the strategic
plans in most of the organizations remained primitive or unsystematic. The
adoption of comprehensive strategic planning was evident in only three cases,
and was invariably due to foreign influences. Resistance to higher degrees of
formalization for both operational processes and strategic planning was
attributed to two different reasons: their stated desire to maximize adaptability, and their managers preference for informal systems in order to
maintain their discretionary power.
Top managers asserted that rigorous strategic planning was neither
necessary nor feasible, since the business environment was very dynamic,
difficult to forecast, or subject to significant and unpredictable change. The
desire to maintain discretionary power was also frequently mentioned, with
one manager noting that standardization would make workers responsible
for following a standard set of procedures regardless of who they were
serving. Even when standardized procedures were implemented, employees
admitted that the process documentation only provided a rough guide
rather than rigid rules.
The interdependence of business networks also acted to constrain the
change elements that were ultimately implemented. In all but one case, the
authorization to proceed with BPR relied on significant input from external
stakeholders. Two organizations cancelled plans for major change due to
external objections, from government officials in one case and a powerful
person objected in the other. In four other cases, changes to procurement
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and/or distribution processes were significantly revised in response to

concerns from business partners. The consultant noted that even when
savings are obvious . . . it is difficult to get all the business partners on
board.
BPR as transformational change
The leading advocates of BPR (Hammer & Champy, 1993) envision it as
a radical and transformational change. Their prescriptions were not
completely acceptable to the Chinese managers and employees in our cases.
At a fundamental level, the specific details of BPR prescriptions represented
significant changes from the traditional way in which Chinese organizations
are managed. One manager stressed that implementing the BPR prescriptions
would be too disruptive, while the consultant noted the high incidence of
objections to anything that changes the way basic things are done.
Resistance to the changes came from both managers and employees.
Even after implementing BPR, the Chinese managers expected that they
would remain in charge, and continue to tell the workers what to do. This
was due to a reluctance to give up authority, but also since the workers
would not respect me if I told them to figure it out for themselves. The
Chinese employees echoed this, stating it is not my role, or suggesting
changes only create problems.
Ultimately, the OC did not significantly modify either organizational
cultures or management styles. The enacted changes in every case, regardless
of ownership type, were consistent with the prevailing organizational culture
and management style. At least one manager in each case admitted that strict
adherence to Hammers prescriptive advice was impossible in practice,
because of its challenge to existing values and attitudes invited serious
negative repercussions.
Discussion and implications

Our multiple case studies examined a specific type of organizational change
in China with the aim of determining how theories of OC could be made
more internationally applicable. The eight cases represented a wide range of
organizational size, industry, geographic location, and ownership structure
in a country with significant contextual differences from the West. Our
results strongly suggest that OC initiatives in mainland China will exhibit
specific characteristics that reflect the prevailing values of the Chinese
culture. Consistent with prior researchers findings, we find that change
process is influenced by context. Also, where studies typically take change

objectives as given, our cases show that contextual factors influence the
initial choice and evolution of change objectives. In addition, our cases show
that it is important to take into account context in determining change
content. BPR in the Chinese business context represents a fundamentally
different type of change than it does in the North American home of BPR.
It thus appears necessary to consider contextual factors when undertaking or researching OC initiatives. More generally, a consideration of our
study suggests implications for ways in which OC theories may be extended
and elaborated in order to become more internationally applicable. Perhaps
of more general concern, by considering OC in a context considerably different from the Western context, deficiencies arising from implicit assumptions
in existing theorizing concerning change objectives and content have become
more readily apparent. Accordingly, while we begin with a discussion of
organizational change in China, we conclude by considering the implications
of our results for international OC theory.
Organizational change in China

We studied the BPR pioneers in China, whose strong industry positions and
growth ambitions resembled those of the early adopters in the US described
in Hammer and Champy (1993). In each case, a top manager indicated that
their organization intended to more or less follow the textbook prescription
for BPR. However, all of the organizations, both private and state enterprise,
diverged from this prescription significantly and in a highly uniform manner.
The Chinese organizations wanted the benefits of re-engineering, but they
were unwilling or unable to accept many specific elements of re-engineering.
Table 3 shows how the core elements of BPR were adapted rather than
accepted directly by the Chinese organizations.
Figure 2 generalizes the findings from our BPR cases to show how OC
characteristics in China are influenced by contextual characteristics. The
specific linkages show how organizational characteristics such as a high
degree of centralization, reliance upon managerial discretion rather than
formal rules, a high degree of business adaptability, and the prominence of
interdependent business networks influence the objectives of change, the
content of OC that is considered, as well as the process by which change is
implemented. For example, the interdependence of Chinese business
networks and the need to constantly adapt to the external environment
combine to encourage changes to enhance the reputation of the organization.
These same factors discourage the formalization and standardization that
would be expected to achieve economies of scale and increase efficiency.
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Table 3 Chinese adaptations of BPR elements

Original element of BPR
Enacted Chinese practice
Disrupting the status quo

will dramatically improve
performance
Enacting changes will improve performance

while maintaining (many of) the existing
values and structures
Underlying theory
Western rationality, and

specifically the transaction
cost perspective
Institutional perspective, with an emphasis

on building and sustaining relationships
Change objectives
Significantly improving
organizational efficiency
and effectiveness
Improving organizational reputation and

legitimacy while also improving efficiency
and/or effectiveness
Employees involved in
both planning and
implementation
Top management made all decisions,

employees follow directives
Rapid
Slow change with time for adjustments,

unless change is adaptation to an
environmental shock
Objectives
Fundamental belief
Process
Involvement
Pace of change
Frequency of change Discrete and episodic

Content
Starting point
Preference for gradual and frequent change
Clean slate
Adapt and modify existing business

processes and work systems
Nature of change
Radical restructuring and

systemic transformation
Tendency towards evolutionary and

transactional change
Extent of change
Broad. Spans across the

entire enterprise
Fairly broad. Commonly spans the

enterprise, and often extends beyond it
Risks and rewards
Large (and risky) initiative

will produce significant
benefits
Conservative tendency can limit acceptable

risk and potential benefits
Focus of change
Business processes
redesigning a formal
model
Business processes, but with difficulties in

articulating a formal model
The model illustrated in Figure 2 leads to a number of obvious research

propositions testing the hypothesized relationships. One important lesson to
be drawn from our study is that the objectives of change represent a critical
starting point for understanding OC in China. The objectives chosen will
influence the rest of the change initiative, so it is first necessary to understand
how the objectives are chosen. Business process re-engineering is deeply

concerned with operational efficiency, which is consistent with the transaction cost perspective. Barringer and Milkovich (1998) encourage the
consideration of multiple theoretical perspectives when examining change
objectives, and our cases indicate that OC objectives in China are most likely
to emphasize organizational legitimacy and reputation. The Chinese organizations diverged from this institutional perspective primarily due to pressures
from foreign partners or customers, who were more concerned with organizational efficiency and supply chain costs.
These results are consistent with recent studies of e-commerce in China
which suggest that a single-minded focus on economic efficiency is inadequate to explain the behavior of Chinese organizations. In one case, a
Chinese firm resisted changes with clear economic benefits when they did not
fit with its fundamental way of doing business (Hempel & Kwong, 2001).
Another multiple case study found that personal relationships played a
critical role in the development of e-commerce across three sectors of the
Chinese economy (Martinsons, 2002).
Although the national government is professing to encourage marketbased transactions and rules-based governance (Child & Tse, 2001), relationships remain critical for business in China (Xin & Pearce, 1996). Whether
this emphasis upon relationships and reputation will persist is debatable (see
Li et al., 2004), but it does suggest a second important lesson about OC in
China. Rather than OC initiatives leading to fundamental changes in Chinese
organizations, these initiatives are modified to fit the existing context.
Chinese management practices are very resilient, and our study indicates that
OC initiatives result in modest changes in processes and behaviors while the
underlying organizational values remain unchanged. The adoption of ISO
9000 standards provides a good example. In each of the three cases where
ISO 9000 standards had been adopted, employees informed us that the
process documentation provided only a rough guide, rather than rigid
rules, for how to do the work.
Organizational change beyond China

Our Chinese case studies suggest that context matters a great deal, and that
current theories do not adequately explain OC initiatives outside the Western
context. We provide empirical support for the theoretical argument that
Pettigrew et al. (2001) make to justify their call for more international and
cross-cultural OC research.
Our research in the Chinese context shows the need for both a broader
and a more precise view of OC to address the following points. First, theories
of OC must treat change objectives as endogenous rather than as exogenous.
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Second, theories of OC need further explication of the relationship between

change manipulations and change content. Third, each change manipulation,
which enacts a specific policy or practice, has an implicit underlying value.
Finally, the distinction between transformational and transactional change
content is useful for relating values to OC. Each of these points will be
discussed in turn.
Change objectives
Our findings suggest that both the stimulus for change and the objectives of
the change initiative depend significantly upon contextual factors. In concentrating upon OC process, and by implicitly accepting the OD values articulated by Tannenbaum and Davis (1969), many studies have taken change
objectives as given. OC models need to incorporate the setting and evolution
of objectives, and explain how objectives influence the choice of change
manipulation/content. The model of an OC initiative presented in Figure 1
may be expanded to better illustrate the key components of OC as shown in
Figure 3.
There are two key differences from the earlier diagram. The first shows
that the process of change, as well as the manipulation/content of change, is
driven by the change objectives. The second modification reflects our findings
that the objectives may evolve as the change is implemented. Huy (2001)
argues that OC theory must include a temporal component, and we believe
that the evolution of change objectives should play a key role in temporal
models of change. This evolution of objectives held true across our cases,
where it was clear that experiences while implementing change could lead
the ultimate outcome criteria to vary significantly from the initial change
objectives.
Barringer and Milkovich (1998) suggest that different theoretical
perspectives highlight the potential importance of different goals and objectives, such as reputation (institutional theory), control of managers (agency
Contextual
factors
Stimulus
Contextual
factors
Current
(starting)
system
Change
objectives
(intended
outcomes)
Contextual
factors
Contextual
factors
OC process
Enacted
system
Feedback
Feedback
Figure 3
Expanded fundamental components of organizational change
Realized
performance
outcome(s)
theory), or operational efficiency (transaction cost theory). Critically, the

relative priorities attached to these objectives do not merely reflect differences in theoretical perspective, but have also been related to environmental
forces. Hofstede et al. (2002) have identified cultural groupings in managerial
goals which suggest that organizational goals are influenced by culture. Similarly, Hempel and Kwong (2001) have suggested that culture influences an
organizations willingness to adopt the transaction cost perspective, or in the
words of Hofstede et al. (2002: 800), nationality constrains rationality. In
our cases, the rational objective would be to maximize efficiency, and
certainly our sample companies were subject to competitive pressures.
However, absent pressure from foreign partners or strong market forces, the
companies in our cases ultimately decided that the company would be best
served by change objectives that emphasize relationships and reputations.
This emphasis is consistent with arguments by other researchers that institutional forces exert a stronger influence in developing economies (Child &
Tse, 2001; Li et al., 2000; Martinsons, 2008).
Proposition 1: In well developed economies and established markets,
organizations will tend to set change objectives that emphasize
efficiency outcomes.
Corollary 1a: In less developed economies and emerging markets, an
OC initiative may initially emphasize efficiency outcomes, but it will
tend to shift towards outcomes that focus on relationships and reputations as the change is implemented.
Change manipulation and change content
Our cases raise concerns about how relationships between change manipulation and change content are conceptualized. Conceptualizations of change
content in theories of OC have focused upon measures of difference in
change, such as revolutionary/evolutionary (Greiner, 1972). However, we
believe that it is important to distinguish between the change manipulation
that is planned and the actual content of change.
Multinational enterprises undertake OC initiatives with specific intentions, such as to adopt BPR, implement ISO 9000, decentralize decisionmaking, or move towards team-based work design. We find that even when
a specific manipulation is planned, the content of OC is influenced by the
context in which change occurs. A specific manipulation across a multinational enterprise would constitute different contents of change in the parts
of the organization that inhabit different national contexts. Thus, the same
489
490
change might need to be implemented differently in different parts of the

organization, in order to reflect varying local contexts. These contextual
variations can be either structural (institutions) or cultural (values) in nature,
with external pressures likely to be reflected in the internal structure,
processes, and values.
Change manipulation and implicit values
Our cases show that the values implicit with BPR are not accepted readily
or universally. The importance of identifying the values that underlie specific
managerial practices has been identified previously. For example, Detert
et al. (2000) argue that TQM success depends upon the adoption of a certain
set of values, while Jaeger (1986) contends that a particular subset of Western
values underlies most OD theories and practices. In China, a number of
specific BPR practices were inconsistent with the existing Chinese values
and practices. Consequently, key elements of BPR were either modified or
abandoned. Examples include an adoption of formalization and an emphasis
upon efficiency.
The process by which change is brought about, such as the rapid
implementation of change or involving employees in the change process, is
itself a manipulation. As such, it is also based upon an implicit set of values
(see Jaeger, 1986). For example, the existing OD and OC literature examining the role of the change agent presumes that it is desirable to conform to
OD values on leadership and involvement (Tannenbaum & Davis, 1969). Our
cases show that this presumption is not valid globally. Both BPR and the OD
and OC literatures presume that change is best achieved when employees are
involved. However, there was very little employee participation during the
process of planning and designing the organizational changes in China.
These all serve to highlight the need to examine the implicit values of
both the planned change manipulation and the change process to determine
if they are congruent with the values that currently prevail in the organization.
Linking values to change
We suggest that values not only provide the link between change manipulation and change content, but that they are also a salient concept for change
process. The prior literature has defined change content in terms of differences, and we suggest that the relevant difference is between the currently
prevailing values and those implicit in the change manipulation. Comparing
the existing values with the implicit values of the proposed OC initiative
provides a clear mechanism to account for the context, regardless of whether
the interest is upon national culture, organizational culture, or some other

conceptualization of values.
By proposing to link change manipulation and change content via
values, we echo the call by Amis et al. (2002) for OC research to follow other
management studies and focus on the influence of values. This focus implies
that Burke and Litwins (1992) conceptualization of change content as
transformational/transactional is more appropriate than other approaches
such as Greiners (1972) revolutionary/evolutionary conceptualization. The
planned manipulation and change processes may be defined to be transactional when they are congruent with the prevailing or pre-existing values,
and transformational when they are not.
Our case studies show that importance of congruence with the implicit
values associated with change manipulation and process. For example, involving employees in change planning was not congruent with the hierarchical
organizational cultures evident in our cases. Thus, a transformational change
would be required. As shown in Figure 4, employee involvement would tend
to be an easier manipulation to implement in the US, where it tends to represent value-maintaining transactional change, than in China, where it typically
represents value-modifying transformational change.
More generally, our analysis of the cases suggests that a transformational change is unlikely to be successful unless it includes an explicit effort
to change the prevailing values and beliefs. In the absence of such a cultural
change, the enacted content of change will diverge significantly from the
planned content of change.
Proposition 2: When the values implicit in the planned manipulation
and process of change are congruent with the prevailing values, the
change initiative will be more easily implemented in the originally
planned form.
Employee involvement in
change planning
Hierarchical
China
US
Egalitarian
Small difference in values

transactional change content
Large difference in values
transformational change content
Figure 4
BPR as transformational change in China
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492
Proposition 3: When the values implicit in the planned manipulation

and process of change are not congruent with prevailing values, the
change initiative will evolve towards a form congruent with the prevailing values, unless there is an explicit and successful effort to first
modify those values.
The prevailing national culture is a key determinant of organizational values,
but the personal values of the organizations founder(s) and leaders as well
as the values of the profession or industry will also be important. Organizational values in different national locations of multinational organizations
are thus influenced by both convergent and divergent forces. Attempts to
build a strong and globally consistent organizational culture will lead to
convergence across locations. Meanwhile, values arising from the different
national contexts will lead to divergence across locations.
Our cases suggest that the pressure for global conformity is an important determinant of the extent to which the OC initiative is modified to
become congruent with the pre-existing organizational values. We observed
the greatest changes in organizations where there was strong pressure from
foreign partners, suggesting that the liaison with foreign partners helps
provide the impetus to bring about transformational change rather than take
the easier transactional change path. Our findings are also consistent with
Taplins (2006) observation that strong controls from headquarters are
necessary to prevent local country managers from making superficial transactional changes rather than more fundamental transformational changes.
Extending this reasoning to multinational enterprise, when the enterprise has different organizational values across national boundaries, the
implementation of an enterprise-wide change initiative will be subject to
different pressures in different locations. A strong and globally consistent
organizational culture will help to moderate the forces for divergence and
minimize the difficulties of implementing consistent change initiatives across
many countries.
Proposition 4: In the absence of strong pressure from foreign stakeholders, such as business partners or customers, both the content and
process of organizational change initiatives will be adapted to fit with
the prevailing national values and practices.
Proposition 5: Multinational enterprises will be more effective at
implementing OC initiatives consistently across national and cultural
boundaries if there is a strong and global organizational culture.
Study limitations and suggestions for further research

As with all qualitative case studies, our analysis and conclusions are
suggestive rather than conclusive. Future research should follow two broad
streams. First, quantitative methods should be used to confirm whether the
characteristics as identified in our cases apply to various types of OC
initiatives in China, and not just BPR initiatives. Given the consistency of the
findings across our cases, we are confident that our conclusions would hold
true across other BPR initiatives in China, but it remains to be seen whether
these results hold true for OC in general within China. Second, another
stream of further research should seek to determine whether our conclusions
from China generalize across international boundaries as suggested in our
propositions.
A key limitation in our research is that we compared Chinese BPR
initiatives against the American normative baseline, rather than against a
paired sample of American BPR initiatives. Given the later adoption of BPR
in China, such a comparison was not possible. It is possible that actual
American BPR initiatives also fail to conform to the normative baseline.
However, given that BPR was an American adaptation of TQM (Grint,
1994), and the consistency of reports on how BPR was implemented by US
companies (e.g. Davenport, 1993a; Hammer & Champy, 1993), we believe
that the normative baseline accurately reflects American BPR initiatives.
Conclusions
Existing theories of OC emphasize change processes grounded in OD values
(Tannenbaum & Davis, 1969) which are Western in nature (Jaeger, 1986)
and based upon contexts which are rarely considered explicitly (Pettigrew
et al., 2001). Our research of Chinese organizations that intended to
implement BPR, a specific type of change, found that these organizations ultimately diverged from the prescription for BPR in a highly uniform manner.
We conclude that these divergences are due to contextual elements. There
was a fundamental incompatibility between the values pre-existing within
the organization and those implicit within BPR. Our findings suggest that
the theories of OC are constrained by their grounding in the Western context,
and that the context influences the objectives, process, and content of change.
Several lessons may be drawn from our cases with respect to both OC in
China and the international applicability of current OC theories.
The primary lesson is the importance of values, both organizational
and societal, in OC initiatives. It must be recognized that specific types of
493
494
organization change (such as increased formalization or participation) have

implicit values that are associated with that manipulation, and that the
congruence of these implicit values with existing values of the organizational
context has a powerful effect upon the OC initiative. When the implicit
values of the planned OC are congruent with existing organizational values,
then the change is both easier to implement and more likely to be implemented successfully. When the change to be implemented contains implicit
values that differ significantly from existing organizational values, then the
change initiative will experience considerable resistance and difficulty due to
these value incongruities.
A second lesson is the need to consider explicitly the interrelationship
between the context of change and the content of change in theories of OC.
The content of change has been conceptualized largely in terms of the difference between the starting and end points of change. Insufficient attention has
been given to the relationship between change context and the specific change
manipulation to be implemented. As the example of employee participation
shows, the same change manipulation can represent significantly different
change content, depending upon the organizational context. We propose that
the linkage between change manipulation and change content is via values.
Our intensive cases in China indicate that specific change manipulations
can represent significantly different change content in different contexts.
Specifically, many of the principles and prescriptions of BPR carried implicit
value orientations that varied significantly from the values prevailing in the
Chinese organizations. This lack of congruence in values was not recognized
and explicitly planned for in the change initiatives. Consequently, rather
than altering the prevailing values to match the principles underlying BPR,
the implementations of BPR practices were instead modified to match the
existing organizational values.
There are also clear implications for international business arising from
our findings. Given the international differences in values and business
practices, significant variation in organizational and managerial values is
likely across a multinational enterprise. As a multinational organization
seeks to implement a specific policy or practice throughout its entire organization, it must recognize that identical policies or practices can represent very
different types of change in the various parts of the organization. A specific
policy or practice may be implemented using processes appropriate for
transactional change in some parts of the organization. However, transformational change processes may be required elsewhere in other parts of
the organization to implement the exact same policy or practice. Unless this
is recognized, an international change initiative is unlikely to achieve the
desired result across the entire multinational enterprise.
Examining OC in China has served to highlight limitations in current

research into OC arising from an insufficient emphasis upon the context in
which change occurs. Based upon our cases, we recommend that future
research continues to examine the influence of context upon change processes.
Meanwhile, future OC theories will need to distinguish between valuemaintaining transactional change and value-modifying transformational
change. Our case studies also show that context has a clear influence upon
both the objectives and content of change, and so these relationships warrant
greater consideration in the future development of international OC theory.
Acknowledgements
The preliminary results of this research project were first presented at the 2001
Academy of Management meeting and appeared in its Best Paper Proceedings.
The completed study was initially presented at the Organization Science conference hosted by Peking University (Beijing, China) in July 2002 and subsequently
at the City University of Hong Kong, the University of Melbourne, and the
University of Toronto. The authors gratefully acknowledge the data contributions of key stakeholders in each of the eight organizations that were studied
and the constructive comments made during the development and fine-tuning of
the manuscript by John Child, Chung-Ming Lau, Marshall Meyer, Anne Tsui,
Syed Akhtar, Aelita Brivins Martinsons, Robert Davison, Kwok Leung, Lynne
Markus, Neale OConnor, and many anonymous reviewers.
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[E-mail: mgmaris@cityu.edu.hk]
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Developing international organizational

This article contributes to international theory development by

case studies Chinese management comparative

Human Relations 62(4)

Organizational change (OC) occurs in a diversity of contexts, but the

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Hempel & Martinsons Developing international organizational change theory

Fundamental components of organizational change

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Human Relations 62(4)

Change criteria: Objectives and outcomes

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Hempel & Martinsons Developing international organizational change theory

While the OC literature has not addressed the question of how

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Human Relations 62(4)

an OC initiative should be planned according to its objectives, and so the

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Hempel & Martinsons Developing international organizational change theory

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Human Relations 62(4)

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Hempel & Martinsons Developing international organizational change theory

particular, when a planned change is inconsistent with the prevailing values,

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Human Relations 62(4)

to further examine the implementation of OC, with a particular emphasis

Using differences in national context to advance theory

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Hempel & Martinsons Developing international organizational change theory

Theories of OC should therefore be expanded to account for different

Business process re-engineering as organizational change

BPR change objectives

BPR change process

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Human Relations 62(4)

1993a), including: conduct a rational analysis; design a new business process

BPR change content

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Hempel & Martinsons Developing international organizational change theory

Although it has arguably failed to live up to the huge expectations

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Human Relations 62(4)

BPR and the Chinese business context

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Hempel & Martinsons Developing international organizational change theory

be seen as a product of their external environment, being comparatively good

Towards an international theory of organizational change

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Human Relations 62(4)

Research design and methods

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Hempel & Martinsons Developing international organizational change theory

expands upon the traditional approach to grounded theory by enabling a

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Human Relations 62(4)

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Hempel & Martinsons Developing international organizational change theory

Business process re-engineering in Chinese organizations

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