Vision and Change in Institutional Entrepreneurship: The Transformation from Science to Commercialization 9781845459840

Table of contents :
Contents
List of Tables and Figures
Acknowledgments
Chapter 1. Introduction
Chapter 2. Methodology
Chapter 3. Conceptual Framework
Chapter 4. Gamma: The Evolution of a Governmental R&D Organization
Chapter 5. Survival: The Pressure for Change
Chapter 6. Change in Style, Change in Form: Regenerating the Organizational Structure
Chapter 7. Sensemaking for Change: Striving for Coherent Sensemaking Accounts
Chapter 8. The Construction of Legitimacy for Change
Chapter 9. The Envisioning Process: Building an Entrepreneurial Vision
Chapter 10. The Task of Constructing Change: The Mechanics of Vision Creation
Chapter 11. Conclusions: Vision and Change in Gamma
Notes
References
Index

Citation preview

VISION AND CHANGE IN INSTITUTIONAL ENTREPRENEURSHIP

Vision and Change in Institutional Entrepreneurship The Transformation from Science to Commercialization

Israel Drori and Dana Landau

Berghahn Books New York • Oxford

First published in 2011 by Berghahn Books www.berghahnbooks.com ©2011 Israel Drori and Dana Landau

All rights reserved. Except for the quotation of short passages for the purposes of criticism and review, no part of this book may be reproduced in any form or by any means, electronic or mechanical, including photocopying, recording, or any information storage and retrieval system now known or to be invented, without written permission of the publisher.

Library of Congress Cataloging-in-Publication Data Drori, Israel. Vision and change in institutional entrepreneurship : the transformation from science to commercialization / Israel Drori and Dana Landau. p. cm. Includes bibliographical references and index. ISBN 978-1-84545-767-9 1. Defense industries—Israel—Management—Case studies. 2. Research, Industrial— Israel—Laboratories—Case studies. 3. Organizational change—Israel—Case studies. 4. Organizational behavior—Israel—Case studies. 5. Corporate culture—Israel—Case studies. I. Landau, Dana. II. Title. HD9743.I762D76 2011 658.4’21—dc22 2010029679

British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library

Printed in the United States on acid-free paper.

ISBN: 978-1-84545-767-9 Hardback

Contents

List of Tables and Figures

vi

Acknowledgments

vii

Chapter 1. Introduction

1

Chapter 2. Methodology

11

Chapter 3. Conceptual Framework

20

Chapter 4. Gamma: The Evolution of a Governmental R&D Organization

41

Chapter 5. Survival: The Pressure for Change

62

Chapter 6. Change in Style, Change in Form: Regenerating the Organizational Structure

73

Chapter 7. Sensemaking for Change: Striving for Coherent Sensemaking Accounts

82

Chapter 8. The Construction of Legitimacy for Change

91

Chapter 9. The Envisioning Process: Building an Entrepreneurial Vision

105

Chapter 10. The Task of Constructing Change: The Mechanics of Vision Creation

122

Chapter 11. Conclusions: Vision and Change in Gamma

131

Notes

142

References

144

Index

157 v

Tables and Figures

Tables Table 3.1. Types of planned organizational change

25

Table 4.1. General trends in Gamma’s development

46

Table 5.1. Attitudes toward organizational survival strategies

66

Table 6.1. Challenges of the organizational change

76

Table 9.1. Comparison of four vision drafts

113

Table 10.1. Comparison of the three visions based on the adopted theoretical framework

129

Table 11.1. Old and new organizational paradigms

138

Figures Figure 4.1. Gamma’s location in R&D settings Figure 8.1. Schematic model of regulatory and normative legitimacy creation at Gamma

vi

46 103

Acknowledgments

We wish to express our gratitude to the people at Gamma who joined us so enthusiastically in this project and provided us the opportunity to step into their intriguing and fascinating world. Special thanks are due to Dr. Uriel Halavie and Dr. Zvi Kaplan who invested much time and effort in bringing this book to life. Marion Berghahn, Ann Przyzycki, and Melissa Spinelli at Berghahn Books, have been very helpful and supportive during the various stages of the writing and production of this book. Finally, we would like to thank our colleagues at our respective institutions for their encouragement.

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Chapter 1

Introduction

For many years, the character of defense research and development (R&D) organizations tended to be a mission-oriented one, which assumed that their roles should flow directly from national missions and avoid extending beyond these in pursuit of other goals. Following this mission paradigm, defense R&D organizations tended to adopt a “one-track” raison d’être based upon strong national standards. Accordingly, their aspirations regarding the future were not anchored in profit-making goals, but sought to contribute only to national well-being and security. As might be expected, such ideological views were expressed in organizations’ respective vision statements. Though the original vision statements of defense R&D organizations tended to express commitment to pursuits narrowly focused on interests of national security, during the last few decades, in practice, these organizations began to pursue other activities. The lack of governmental support and threats of closure were unprecedented challenges for an industry that had been sustained within a sheltered public sector environment for a long time. Under state ownership, Israeli defense organizations enjoyed job security for its personnel and professional research autonomy, and therefore faced little incentive to institute changes against the status quo. A limited product range, lack of marketing expertise, inability to compete in an open market due to high overhead costs, and low export rates were additional obstacles to making successful market-oriented changes. As a result, many working in defense R&D organizations wished they would return to their early modes of operation with original vision statements intact, though these adaptations were necessitated by changes in the national security environment. Thus, the main proposition of this book is as follows: Defense R&D organizations that wish to implement comprehensive changes to their operations must be led by a suitable vision that mediates between two sets of organizational values—those that existed before changes were begun, and those that are to guide the organization following the planned changes. In this book we explore the constitution of vision as a mechanism of intentional change. Although a vision is a formally instituted statement that conveys what an organization is and what it aspires to become, it is understood to be more than a mere statement of mission, philosophy, or a strategic 1

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Vision and Change in Institutional Entrepreneurship

objective, but constitutes a strategic tool that guides strategic action toward the desired future of the organization (Landau, Drori, and Porras 2006; Landau and Drori 2008). Organizational scholars who address the role of vision during change tend to regard it as an instrumental tool necessary for engineering change (e.g., Adams 1984; Belgrad, Fisher, and Rayner 1988; Bennis and Mische 1995; Bennis and Nanus 1985; Deetz, Tracy, and Simpson 2000; Hitt and Ireland 1986; Kanter, Stein, and Jick 1992; Kotter 1995, 1996; Porras 1987; Porras and Silvers 1991). According to this view, vision can be seen as an inspiring, motivating, and guiding force that legitimizes change and helps overcome reluctance to embrace it (Kanter, Stein, and Jick 1992: 509). Is this view of the supportive role of vision fully representative of the nature of interrelationships between organizational vision and change? This book considers this question by pursuing a contrary scenario, and asks whether, to what extent, and how organizational members reconstruct vision in a way that can sometimes support or detain change. The findings of this study are expected to contribute to the literature on the development of organizational vision and on organizational change, and to be of interest to management scholars as well as professional managers in organizations within both public and private sectors. This book is based on an ethnographic field study in 1995–1997 and 2001–2002 carried out at Gamma, an Israeli government laboratory that has undergone major restructuring. Steady funding cuts have encouraged Gamma to diversify its sources of income by exploiting new economic opportunities in the civilian commercial market. As a result, applied research and development, production, and services have replaced basic scientific research in nuclear physics and related fields. Gamma’s success, therefore, depends on its ability to revitalize new organizational resources and capabilities while simultaneously securing new resources and creating new opportunities in previously alien markets. When an organization finds itself in a position to readjust its relationship to its environment, the organization’s culture is challenged. In consequence, a major issue meriting consideration is the role of culture in defining and shaping the process of vision creation and, consequently, the planned change. In this book, we therefore focus on the content of organizational culture and the way social actors recreate and enact various types of visions; how the social actors—scientists, who are the core members of the organizations involved—define, interpret, and utilize their cultural resources for either supporting or objecting to plan-change processes through reconstruction of organizational vision. In addition, we explore how scientists assign meaning to their various types of visions and the changes in their scientific work by way of the sensemaking accounts they embrace as strategic guides for action. Furthermore, we explain the change at Gamma through the

INTRODUCTION

3

lens of the members’ perspectives, beliefs, perceptions, and understandings of what Gamma’s vision is, stands for, and what it represents. However, our observations and study of Gamma change led us to concur that the members’ perceptions and beliefs about the distinctive nature of their organization are constantly evolving, and in this regard, both the scientists and management have been pursuing different interpretive schemes that correspond to their objectives, beliefs, values, and perceptions of the required vision and, respectively, the needed change. Note that both members’ and management’s understanding of Gamma is meaningfully associated with their interpretation of the undergoing vision and change; perceptions, beliefs, and behaviors are modified and revised in light of both internal and external pressures and stimuli. Thus, the institutional decisions are embodied in the members’ actions and, in particular, in the ways of reconstructing vision as a legitimation mechanism for planned change. As was common to many governmental organizations, Gamma experienced internal and external pressure to change to a market-based system and become competitive in the marketplace. Gamma’s management perceived this planned change process as highly significant and comprehensive in its nature. In 1995, during an address to the workers, the general manager described the scope and rationale of planned change to the organization as follows: For the past few years, I’ve felt the need for some radical changes. The pressure on an organization like ours has become more and more noticeable. The competition is tough, government budgets are shrinking, and we need to readjust fast. Our legacy and history have led us on a certain path, which is not always relevant. We need to change. We need to think radically, in terms of business development, aligning our organizational structure with both short and long-term business strategy, and rethink our vision, mission, and objectives. Even though we have adapted a lot throughout the years, developing a new infrastructure and entering new fields, the change process is an opportunity to think systematically how to go forward from here, how to counter threats and exploit new opportunities.

Though the need for Gamma to change was described by the general manager in relatively positive and optimistic terms, the organization faced a situation in which it had to rapidly implement comprehensive change or risk default. However, as we mentioned earlier, the dynamic of change was arising from the interplay between two different understandings and beliefs about the identity and the meaning of Gamma—those of the management and the members. Both reflect the institutional context and both engage in active pursuit to interpret the organization’s course toward change and to influence the others’ understandings and beliefs, and eventually influence the organization’s course of action. In this regard, both the management and members engaged in a kind of institutional entrepreneurship aimed at contesting a strategy of action

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Vision and Change in Institutional Entrepreneurship

and influence in regard to activities such as the construction of different types of visions and the nature of change. In understanding the vision-creation and change process in Gamma, we believe that institutional constraints and external challenges highly shaped how management and members interpreted and acted, negotiated and promoted their version of the vision and change. In this vein, this book is an institutional story that recounts the process of introduction and implementation of new initiatives and ways of doing things within an existing institutional context. The dilemma presented by Gamma’s general manager must be seen within both national and global contexts. In 1998, Amnon Barzilai, one of Israel’s leading defense correspondents, contended: “The Israeli Defense Industry faces a true threat to its continued existence. … Assessment of its business and technological status and position within the global market points to the fragile basis of optimistic forecasts sounded by government authorities today. The defense industries, mainly those affiliated with the government, are on a declining course, which, failing a major and timely change of course is spinning toward fatal collapse” (“Defense Industry on the Verge of Collapse,” Ha’Aretz, 9 November 1998.) Developments in the Middle East peace process and shifts in government priorities resulted in reduced government allocation of resources to the defense industry and a decline in the demand for the industry’s products and services. Furthermore, throughout the last decade, the Israeli defense industries faced intensified market competition both domestically and internationally (Dvir and Tishler 1999; Sadeh 1995). It is important to note that the Israeli defense industry has deep roots as part of Israel’s national heritage and has held special status since its foundation. The centrality of defense during the early stages of Israel’s establishment as a nation encouraged considerable and sustained levels of support for the developing industry (Bonen 1995; Galai and Schachar 1993; Klieman 1992; Sadeh 1995). Such strong support created a well-established defense-industrial sector with its main components1 under government ownership. The defense R&D facilities, in particular, have always been an integral part of both the national security ideology and the national security establishment, with the Ministry of Defense serving as both owner and principal client. The linkage between the government and the defense industry has been further reinforced due to the nature of the products and services developed by the industry. These were regarded as exclusive, secretive, and as one of the keys to achieving the country’s innovative and qualitative edge, a view that served to further enhance the interdependency between the government and the defense industry. Such interdependency brought national objectives and priorities to the forefront, sometimes to the point of overshadowing economic and market considerations. However, economic gains were also part of the

INTRODUCTION

5

national interest: rapid growth in the internal demand for defense products (especially after the 1973 Yom Kippur war), accompanied by a significant increase in defense export at the same time, resulted in a meteoric growth rate for the industry (Klieman 1992; Peri and Neubach 1985). The mid 1980s marked a turning point in the position of the Israeli defense industries. The government, attuned to the consequences of global changes (the end of the Cold War2) and local developments (beginning of the peace process), began to reassess its policies toward these industries. One of the decisions following this reassessment was that a major transformation would be required in order for these industries to survive. By the beginning of the 1990s, the Israeli defense industry faced a severe crisis, and was forced to change or risk default (Dvir and Tishler 1999). General Ilan Biran, former director of the Defense Ministry, described the requirements for the defense industries to change as follows: In order to exist, develop and compete in the global economy, considering the decline in demand for defense related products, and to provide answers to the defense establishment’s needs, Israeli defense industries must export at least $2 billion annually. There has been a 50% decline in demand for defense related products over the past decade, from $60 to $30 billion annually. … In order to meet the challenges in the world and by the defense establishment, defense industries must continue carrying out structural reforms, including mergers and joint production in order to prevent redundancies. (Statement before the managers’ club of the Kibbutz Union, 30 December 1998)

Similarly to their American counterparts, the Israeli R&D organizations operating within the defense industry offer perhaps the most conspicuous example of the need to change. Throughout the last decade, these organizations were in a steady state of decline. Diminishing capital investments, reduced budgets for the defense ministry, divisions of R&D activities, and severe cash flow problems all contributed to the decline. The industry also suffered from labor unrest, rigid employment and operating structures, and an aging population of scientists. In order to survive in the face of such an array of challenges, defense R&D organizations undertook defense conversions and applied research activities at increasingly high rates, especially in comparison to levels of basic academic research. These trends led to the development of a new industry of organizations, which combined both defense and civil activities. This dire situation was not unique to Israel. In recent decades, defenserelated R&D organizations have been engaged in an intensive struggle aimed at adapting to and keeping abreast of the changes in their operating environments. These changes have resulted largely from the declining demand for the defense industry’s business and services as well as from the increasing desire of governments to divest themselves of the financial burden of these organi-

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Vision and Change in Institutional Entrepreneurship

zations (Blum and Tishler 2000; Dvir and Tishler 1999; Ham and Mowery 1998). Thus, national research laboratories have experienced a reallocation of resources from security issues3 to projects concerned with post–industrial knowledge society and economy, such as environment, energy, communication, and transportation (Defense Conversion 1993: 86). National laboratories, the progenitors of the “big science” era (Galison 1997), and the pinnacle institutions of scientific and technological innovation and advancement, have become the center of a heated debate that calls for assessing the paradigm that guides the way their science and technology should be organized and structured in the twenty-first century. Perhaps the most notable example of the fundamental transformation experienced by the defense industry is that of the R&D national laboratories in the United States, such as Los Alamos, Lawrence Livermore, and Sandia. These labs are government-run institutions operating under the auspices of the Department of Energy, but also enjoying the academic freedom of basic scientific research and the individualistic free spirit of a college faculty (Gusterson 1998; Leuchter 1997; Shroyer 1998). Within the scientific community of defense R&D organizations, these labs have faced the most pressing need to change and redirect their priorities. The urgency of their transformation stems from the fact that these organizations are essentially “nuclear weapon labs,” with nuclear activities accounting for about 60 percent of their operating budgets (Defense Conversion 1993: 11). The change in policy toward these laboratories has led to a crisis, in which resources for defense research have dried up, leaving the laboratories to figure out how to make up the shortfall. Some laboratory managers have even expressed concern that the crisis would cripple the ability of their organizations to uphold high scientific standards. Laboratory managers have claimed that this decrease in funding may, in the long run, compromise national security as well as hinder capacities for meeting the new challenges of integration of such labs into the “civilian” market (Defense Conversion 1993). National laboratories have taken many approaches to restructuring themselves in the face of these changes. Some laboratories have realigned their research interests according to the new policy transformations, converting themselves into sites of research on environment or energy issues, but continue to rely heavily on government resources and contracts. Others have changed their research priorities, looking for new opportunities in the civilian market, while still retaining their defense research capabilities. Yet others “open their gates” for “outsiders” and pursue strategies of joint ventures, partnerships, or outsourcing of their expertise in R&D (Augustine 1997; Defense Conversion 1993; Galvin 1995; Leuchter 1997). The necessity of such transformations has led the industry to reevaluate its main objectives, and to reexamine its primary mission and goal (Ringer and Strong 1998). Hence, the early focus on pure defense and scientific research in physics and nuclear weapons devel-

INTRODUCTION

7

opment has been supplemented by applied research in energy, environment, and other advanced technologies (Ham and Mowery 1998). This transition to applied research found its most evident expression in the rapidly increasing trend of defense conversion—that is, the transfer of military technologies to the civilian market and the establishment of partnerships with private industry to develop technologies holding commercial promise (Defense Conversion 1993: 86). The move to applied science has proven difficult, as one of the deputy directors in charge of operations in Los Alamos vividly stated: “You simply can’t turn astrophysicists into people who dig up environmental sites” (Leuchter 1997: 21).

The Structure of the Book The following chapters present an ethnographic account and interpretation of how Gamma’s scientists and management use their diverse cultural repertoires—ranging from intense ideological commitment to pure science to opportunistic views of Gamma’s scientific work—in promoting their own survival, as well as that of their organization. The book is presented as an ethnographic study in narrative form: it describes various events—in particular, change interventions and the formulation of new vision, conversation, or debates. The narratives also present the thoughts, opinions, and interpretation of the members on their work and the looming change. Chapter 2 describes our methodology. Data collection was conducted according to prevailing standards for ethnographic studies, and consisted of participant observation, interviews, and analysis of archival documents. Our goal was an emic research strategy (Headland, Pike, and Harris 1990) focusing on how Gamma’s scientists and management defined, interpreted, and enacted the plight for change and the formulation of new vision. We describe in detail the data collection and analysis procedures as well as our first-hand experience as a research team in such a unique organization. Chapter 3 presents the theories and rationales underlying the main thrust of the research. The chapter is comprised of a critical review of the literature and presents a conceptual and analytical framework with which to study the dynamics of the interrelationships between institutional entrepreneurship and factors such as vision, mission, legitimacy, and sensemaking. Of particular interest are two contrasting approaches for evaluating planned change toward entrepreneurship and related transformations of vision. The first, and more popular, perspective holds vision to be a promoter and enabler of change toward entrepreneurship. The second perspective, which significantly informs the present work, theorizes the possibility for vision to deter and limit capacities for change toward entrepreneurship.

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Vision and Change in Institutional Entrepreneurship

Chapter 4 provides a detailed narration of the extensive reform that was initiated in the organization’s structure, work processes, style, and modes of work in order to become an entrepreneurship-oriented organization. The chapter unravels the story of planned change, describing the considerations and antecedents that lead management to instigate a comprehensive structural reform aimed at encouraging commercialization and internal entrepreneurship. Beginning with an overview of environmental challenges and constraints urging change, it presents a detailed analysis of the process of organizational change that commenced at Gamma as part of its efforts to cope with urgent internal and external pressures that stem from becoming more entrepreneurial. The chapter concludes by contending that a successful implementation of such comprehensive change requires a clear definition of the organization’s objectives and goals. Chapter 5 chronicles the challenges faced and unique course of events that took place during the last decades as the organization evolved from one that focused exclusively on basic research to one that also conducted applied research for the civilian market. Some of the difficulties observed during the transition are discussed with linkage to Gamma’s efforts to define its organizational directions. The chapter notes three important findings: The first is a lack of clarity and agreement about the organization’s goals among many of Gamma’s members and part of its management. Such ambiguity suggests that the original vision failed to provide meaningful guidance. The second is the development of the survival vision, spontaneously created by organizational members to help them cope with the lack of formal guidance regarding the organization’s objectives. The third finding is that the survival vision negatively emphasized threats to the sustenance of an insecure organization, and spurred low morale. Chapter 6 describes the process and the internal assessments and deliberations that resulted in planned change in Gamma. In order to create a viable new organization, we argue that Gamma management resorted to both structural and cultural change. A crucial aspect of this was the attempt to reconstruct new identity through formulating new vision for the organization. Chapter 7 explores the cultural narratives through which members of the organization make sense of their new vision and the planned organizational change. We view sensemaking as a cultural interpretive process that takes the form of organizational narratives. The chapter shows that the sensemaking accounts used by the scientists can be arranged along four dimensions, each shaping and reshaping the others. The first consists of coherence—associated with academia, family and egalitarianism, national security and bureaucracy; these reveal the organization’s largely agreed-upon legacy. Confrontational accounts outline the contradictions between Gamma’s legacy and its current practices; they reflect reactions to management’s strategic line of action by

INTRODUCTION

9

comparing it to the coherence accounts. Change accounts lend semiotic and practical meaning to the change predicaments of the coherence and the confrontational accounts, emerging from management’s espoused survival strategy. Chapter 8 explores the cultural narratives through which members of the organization define legitimacy during prolonged periods of change. We view legitimacy as a cultural interpretive process that takes the form of organizational narratives. The chapter shows how the context of internal power relations shapes both the choice and the meaning attached to the varied legitimacy narratives and how legitimacy narratives influence the planned change toward creating entrepreneurial organization. Using theory of practice, we provide insights into the construction and deconstruction of the legitimacy by analyzing the core narratives in play during a process of planned change. We show how the formation of legitimacy during a process of change entails contested dynamics among actors over the validation and endorsement of the dominant legitimacy narrative. Chapter 9 presents an analysis of the processes that led to the formulation of the organization’s new, entrepreneurial-oriented vision. The process of vision creation is critiqued from a theoretical perspective, leading to the finding that despite the prevailing consensus on the centrality of vision to organizations, it appears that there is a dearth in research as to how this vision is formed. From an empirical perspective, it is contended that, at Gamma, the phases that led to the development of the entrepreneurial-oriented vision followed the logic of central theoretical models. These models theorize the process of forming a new vision as starting in the minds of executive leaders, followed by empowerment processes with the manager serving as a facilitator. The chapter concludes by noting the complexity of tensions between the need to promote a certain degree of continuity and stability within organizations on one hand, and the need to continually adapt and change toward becoming an entrepreneurial organization with evolving circumstances on the other. Chapter 10 provides an account of the actual process of creating new vision. It shows that such vision has developed in two stages. Each stage presents different ideology, values, and objectives. The first survival vision was more pragmatic and its formulation is closely associated with the need to reconcile different ideas about what Gamma is and where it should be heading. Such vision—seen by members of Gamma as the “best-of-the-worst” alternatives— serves to reconcile differences and provide a practical guideline for an interim period. The second strategic vision was drafted while a planned change had been underway. Its objective was to craft a long-term view of Gamma and outline its strategic path. The strategic vision was created through a process of negotiation and construction. Both management and scientists designed a mechanism that assured fair representation of the different views regarding how Gamma should change and what its basic ideology and values were. The

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Vision and Change in Institutional Entrepreneurship

chapter describes in detail the mechanics of creating both the survival and strategic visions and how these visions were linked to the process of change. Chapter 11 discusses the findings of our research followed by several conclusions, including conceptual understandings of how government-owned organizations become entrepreneurial, and the implications of such change. Lastly, we provide practical recommendations for those encountering the need to converge and become entrepreneurial in similar organizational contexts.

Chapter 2

Methodology

It is discovery that attracts me to this business, not the checking out of what we already know. (Henry Mintzberg 1979: 584)

Ethnographic fieldwork, conducted between November 1995 and December 1998 at Gamma, and additional work in 2001–2002, constitutes the basis of this book. Gaining entry and permission to conduct research within an organization bound by strict secrecy is not usually an easy endeavor. However, the opportunity arose when we were invited to participate in a consulting and research project aimed at designing an organizational change process. With the consent of Gamma’s management, the project was designed, at its inception, to involve a long phase of ethnographic data collection. Gamma’s executives preferred the “vagueness” of long-term ethnographic fieldwork to more “concise” consulting methods focused on clear-cut terms of time and content. Gamma’s general manager explained: “The selection committee decided in favor of the anthropologists, not in spite of their methodology, but because of it. We are scientists and know how to appreciate thorough and detailed research.” He then paused, smiled, and added: Gamma is one-of-a-kind, and you can’t comprehend it instantaneously, you need time and patience. We are not about to carry out this exercise of planned change every day, so we decided to justify our image as scientists and be unconventional. Personally, I think that if you want to design change that is based on solid facts, you need to expose the guts of the organization. I hope that someone who studies the organization from within, while at the same time observing as an outsider, will eventually help us see things that we take for granted. This might give us that extra input that will eventually enable us to not only design the change, but also to implement it.

With these words, Gamma’s general manager expressed his support for the use of qualitative and ethnographic methods for this research. The qualitative approach is an inductive one in which theory emerges and develops from the data, during and after it has been collected (Glaser and Strauss 1967). This contrasts with methods of the deductive approach, in which theory is conceived prior to data collection. The inductive approach 11

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Vision and Change in Institutional Entrepreneurship

requires the researcher to enter the field with few or no theoretical preconceptions. The guiding objective is to try to see things from the participants’ points of view (Morey and Luthans 1984) and incorporate their explanations and interpretations in descriptions of various organizational behaviors and processes. Understanding events and patterns of behavior from an insider’s perspective is also a central and principal attribute of ethnographic research. Ethnography is a situated inquiry into a set of social interactions within, for example, an organization, a community, or a culture. What happens in such interactions is understood to be a product of who the actors are and what they do. As such, ethnography is fundamentally descriptive and can be seen as an attempt to provide an objective description and interpretation grounded in the information provided by the participants. What is described and interpreted is the shared experience of the members. To understand and learn from an “insider’s” point of view requires direct and firsthand involvement in the field. Ethnographic researchers tend to see the development of such proximity as their main aim, much more than the testing of hypotheses, as Agar (1996: 121) explains: “Ethnography is a different sort of research process from hypothesis-testing. From my viewpoint, ethnography is the more general process of understanding another human group; hypothesis-testing is a minor, though potentially significant part of that process.” We share Agar’s view and believe that the ethnographer’s approach stems not so much from a refusal to test hypotheses, but from the belief that these hypotheses must grow from an understanding of the “insider’s picture” of his or her environment (Burrell and Morgan 1979: 28). Thus, we have attempted to present the “insider’s perspective” in our ethnography, using a naturalistic, non-manipulative, and non-controlling research format (Guba and Lincoln 1989; Patton 1990). These methods have provided us with rich insights into life at Gamma, which, we believe, could not have been obtained through other methods. This qualitative-ethnographic research of a defense R&D organization joins other ethnographic studies of research laboratories published during recent years (see, for example, Allen 1977; Gusterson 1998; Dubinskas 1988; LaTour and Woolgar 1986; Shroyer 1998). As in these previous works, the data collection in this research was accomplished through an ethnographic investigation of a single case study in the field. The ethnographic methodology enabled us to explore, firsthand, the shaping of Gamma’s reality during a process of planned organizational change. Being close to the process under investigation also enabled us to focus on the interpretations and perspectives of those experiencing it, allowing explanations to emerge from the data. These emerging explanations tended to reveal the patterns, themes, and categories used by organizational members during, rather than after, the re-

METHODOLOGY

13

search process. This furthered our comprehension of “how” and “why” events were interrelated and enabled “real-time” interpretations of inter-organizational relationships. Since this research was intended to understand a process and related developments of various interrelationships rather than to confirm or disconfirm a theory, the ethnographic-interpretive approach seemed most appropriate. Once arriving at this conclusion, the next task was to begin collecting the data.

Data Collection Data collection at Gamma was based on basic principles of qualitative research: induction, interpretation, close proximity, and unmediated relationships with the people being investigated. In addition, the fieldwork included close observation and documentation through active note taking to develop descriptions of the organization’s activities, routines, and social as well as professional events (Van Maanen 1979, 1998). Through the use of these methods, we were able to collect intimate, rich, and detailed information. The resulting record is comprised of vivid narratives that help establish reliability as well as provide “thick description” (Geertz 1988). The main tools used in data collection were participant-observations and open-ended interviews. Participant-observation refers to research characterized by “a period of intense social interaction between the researcher and the subjects, in the milieu of the latter” (Bogdan and Taylor 1975: 5). The ethnographer as a participant-observer comes to the setting with two purposes: to engage in a set of activities and to observe the people involved in them (Mouly and Sankaran 1995). Our activities of participant-observation were aimed at comprehensive data collection, covering all aspects of Gamma’s organizational life. We visited the laboratories, watched the work process, participated in meetings, and lunched regularly in the cafeteria. In field notes, we meticulously documented the information gathered on each of these occasions, ranging from physical descriptions of events and behaviors to more expressive descriptions based on what people expressed about their feelings and experiences. This intensive participant-observation process served as our passage into “acceptance” as a legitimate presence within the organization. Its main purpose was twofold: First, to collect a detailed description of the organization, learning to know its members and identifying the major issues that might promote or hinder change. Secondly, it was intended to gain a foothold, to become present and absent, inside and outside, and above all, to gain people’s confidence. One of the most obvious signs of our acceptance came from casual remarks made by organizational members with whom we had not yet

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met. When we chanced upon such members, they would often comment halfjokingly and half-seriously that we had not yet talked to them and asked if and when we intended to do so. Ethnographic interviews, the other important data collection tool, were flexible in nature and supplemented our observations as active participants. The interviews enabled us to perceive the discrepancies between the ideal and real values, beliefs, and perceptions held within the organization. Thus, the indepth interviews were a valuable means for learning about the organization. These interviews were conducted during two time periods: before the initiation of the change process and after it had begun. The first round included ninety-one interviews and the second, forty-two. During both periods, interviews were held at all levels and departments of the organization. Whenever we felt that the interviewee had something more to tell or if anyone specifically asked to meet with us once more, we conducted additional follow-up interviews. Our initial interviews were semi-structured or open-ended in nature so that participants would be free to discuss events or subjects of interest and importance to them. The interview always began with general questions such as: “Describe your work; How would you describe Gamma’s main goal?” and “Do you recognize any need for change?” These questions were non-threatening and tended to put individuals at ease, thereby paving the way for further discussions concerning their thoughts and other topics. Responses during interviews helped us gain insights into the people with whom we spoke, what they did, their feelings about their work, and their thoughts and beliefs. Through these conversations, we learned about the interrelationships between and within organizational units, and became acquainted with the jargon and inside language (such as “the yard,” a nickname for the organization that Gamma’s management and employees often used). In addition, these discussions were the starting point for collecting suggestions and recommendations regarding how the required change should proceed. The second round of interviews was held during a period of approximately six months, and was carried out after the initiation of change efforts. This round of interviews included many, though not all, of the participants interviewed in the first round. This enabled us to compare many of the members’ feelings, opinions, and interpretations of the organizational reality before changes were begun and then after they had commenced. However, whereas the first round of interviews posed general questions dealing with various issues, this time the questions were much more focused on the change process. These included questions on how members evaluated the process, what facilitating and inhibiting factors influenced changes, and whether changes provided adequate solutions to problems.

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For both rounds, the interviews were organized and prearranged by the general manager’s secretary, who arranged full-day meetings once a week, on Mondays, from 9:00 AM to 5:00 PM. Meetings were scheduled according to our requests and the general manager’s recommendations. We received the list of interviewees from the secretary, along with directions to each interviewee’s work site. Usually, our day at the field included people from different fields and departments staffing various organizational positions. Schedules for conducting interviews were designed to include a diverse range of respondents. The main consideration with which participants were selected was the position of each within the organization, with conscious efforts to include perspectives from a variety of vantage points. Almost all of the interviews were conducted in the respondents’ offices. This was in order to minimize distractions during interviews and to assure that respondents would feel as comfortable as possible. For the same reasons, we decided not to tape any of the interviews and took written notes instead. After each interview was completed, we thanked respondents and asked if we could return for a follow-up interview, if necessary. All were open to this possibility. In addition, at the end of interviews, we asked for recommendations of others with whom we might speak. In this sense, the interviews were arranged, in part, by a process of “snowballing,” with each respondent leading to others. Since this study began principally as a consulting project, all members of the organization were informed about our arrival, so that our presence and purpose of coming were known to all. Nonetheless, we introduced ourselves at the beginning of each interview and explained that we were doing a joint research and consulting project. The interviewees were all aware that the professional consulting was also an academic research project. A few even jested on the issue, asking questions such as: “Are you going to write a book on us eventually?” and “Are you using Gamma as a unique case study for your students?” The general manager was the only person with whom we discussed our academic intentions. This was not incidental. Gamma’s management, and especially the general manager, were open and supportive from the very beginning. However, it must be stressed that although we began as an envoy of management, we made it quite clear that the information gathered in the interviews or in any other formal or informal meeting was not to be reported to management on behalf of the members. We also emphasized that the final report submitted to Gamma’s management would be presented in such a manner as to protect employees’ identities. After a while, we felt we had gained members’ acceptance and confidence. Organizational members were open and even friendly, and started to pro-

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vide more personal information regarding their work habits, the way they perceived management, and their personal aspirations and goals. While interviewing, we also collected documents relevant to the issues that emerged during the interview. These included letters from the general manager to organizational members and other corporate and departmental messages, memos, or documents. The interview process provided informal observations as well, for example, while waiting for appointments, in casual conversations between interviews, on the way to the cafeteria, or during lunchtime. These led to the formulation of additional questions to include during interviews and added to the contextual analysis of Gamma.

Data Analysis Our data analysis protocol followed the inductive methodology of case studies (Eisenhardt 1989; Yin 1994; Eisenhardt and Graebner 2007). Data on Gamma consisted of participant observation, interviews, and documents, and included interview transcripts and fieldwork notes. Our objective was to create a conceptual framework that would enable us to understand how and why members of Gamma might be motivated to draw different models of change and vision. Thus, we aimed at elaborating theory rather than providing a new theoretical conceptualization. Our case study is not intended to generalize about every case of vision and institutional entrepreneurship. Instead, our rich data enable us to develop and articulate our institutional entrepreneurship approach, which contributes to an understanding of how R&D governmental organizations construct their change and vision through cultural practices. In analyzing the data, we followed procedural principles common in qualitative, ethnographic research (see Fetterman 1989; Glaser and Strauss 1967; Miles and Huberman 1994). This involved moving from concrete descriptions and documentations made in the field to more abstract and conceptual descriptions, and searches for meaning through a process of categorization (Van Maanen 1979). The process of categorization was a multi-step process, during which we refined and updated the categories several times. Our first step within this process was to divide the data according to whether the material had been collected before the change process was initiated or after it had begun. Next, we identified emergent themes as major categories. These categories stemmed from our observations as well as from the respondents’ observations and interpretations of the organizational life in Gamma. The main categories dealt with issues of organizational flexibility; diversification and decentralization; compartmentalization and secrecy; values and norms; strategy and structure; entrepreneurship; innovation and change;

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employee motivation; project management; marketing; and organizational vision. Within each category, we used a grounded methodology approach and moved back and forth between the data and frameworks of interpretation (Glaser and Strauss 1967). All of the interviews were transcribed only after we had thoroughly read the material collected from both rounds of interviews and identified relevant categories. We recorded things exactly as they were said; quoting word by word, and then added our interpretation of the data. Despite the emphasis on the final analysis, one should be aware that data analysis in qualitative research is not a single-step process, but rather an ongoing process, taking place during the interview, while categorizing the data, and in the final analysis. Therefore, the period of analysis tends to overlap with the period of data collection. Most qualitative researchers tend to agree that this overlapping and “real-time” approach to data analysis wields certain advantages (see, for example, Denzin 1978; Glaser and Strauss 1967; Guba and Lincoln 1981; Patton 1990). Most significantly, the researcher is able to continually evaluate whether the data being collected is sufficient and appropriate for thorough and comprehensive analyses. However, the final stage of data categorization and analysis is conducted after leaving the field. This is because an extensive and significant analysis of the field data should incorporate relevant theoretical and conceptual thinking, which requires some distancing from the field. This is why we intentionally did not categorize the material during the data collection process. Although after the first set of interviews we had already identified many important categories, we felt that delaying categorization until all data had been collected would provide a less biased picture. We thus hoped to avoid the trap of looking for specific information to reinforce or to add information on certain issues that we may have decided to emphasize, prematurely. During the data collection and analysis phases we found ourselves confronting an important issue of great relevance in ethnographic study (Agar 1996): the role of the researcher.

Role of the Researchers The role of the researcher is an issue that frequently comes into question in this type of study. It is increasingly accepted in the field of ethnographic research that the researcher is not necessarily a neutral observer simply recording social facts and processes. In some cases, the field researcher can be an active participant, taking a dynamic part in the construction of organizational reality (Turner 2000). Such active participant-observation involves, at least to some extent, the development of researcher-informant relationships. This

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kind of relationship is based on ongoing reciprocity and mutual learning. By assuming this role, we were permitted access to almost all divisions, branches, and laboratories, and this allowed us to observe a wide range of organizational activities and situations, within certain limits. This kind of intensive participant-observation with Gamma’s scientists entailed the development of researcher-informant relationships that are far from the stereotypical image of an anthropologist studying powerless people. The latter takes the form of an inter-relationship in which the flow of information is unidirectional by nature. In contrast, our role as researchers at Gamma resembled that of an equal participant in a conversation in which, regardless of the subject under discussion, the researcher and informant found themselves equally at ease. As time passed, we were attributed multiple roles, with distinctive characteristics, such as advocates, consultants, and researchers. The scientists related easily to our role as researchers, even offering their own suggestions regarding methodology and other questions of research. Our role as advocates, the most appealing to the scientists, served as an effective trigger for full-fledged research cooperation. It also provided them an outlet for expressing their own ideas regarding various organizational issues. Michael, a nuclear physicist stated: “Among ourselves we question the organization and try to convince the management of the best possible direction for Gamma. They don’t listen to us, so maybe through you we could promote our ideas, and exert some influence on the direction of change.” Our role as consultants, although not raising antagonism, was regarded as management-directed and always aroused skepticism, even cynicism. As Yoel, one of the section heads, commented: “You will get our cooperation, but you should know that at Gamma we don’t believe in management’s ability to foster meaningful change, we are too traditional. If management wants a consultation project we’ll cooperate, not because we believe in the outcome, but because Gamma is an obedient organization.” This multiplicity of roles demanded a constant awareness of the responsibility involved in taking up such an endeavor, and the development of different frames of reference (Garcia 2000). Different frames of reference entailed constant assessment of the data, and a strict selection process aimed at differentiating between information collected for the purposes of consulting and for research. Understanding our role was only part of the process. Another part required understanding the role organizational members played in that process. Gamma’s members described their organizational realities using sociological and organizational jargon. By bestowing an emic dimension, their own view of themselves, and ethical concepts, Gamma’s members fashioned a tool for interpretation and theory building (see Headland, Pike, and Harris 1990). One of the many scientists who bombarded us with endless memos regarding

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the desired vision and the recommended organizational structure commented on the active interpretive role taken up by many scientists in the following way: “Maybe many of us are frustrated social scientists, you ask me a question and I’ll give you an analysis, you want information and I’ll give you an interpretation.” Since the scientists were familiar with Gamma’s values and culture, interactions with us encouraged many to speak as “auto-ethnographers” (Hayano 1979). As such, they tended to offer insiders’ views and perspectives (Bartunek and Reis-Louis 1996) while also giving suggestions regarding various aspects of the research, including relevant questions to be asked and interpretations of various events in their organizational lives. Taking on such a role enabled them to participate in examining their organization along with the challenge of implementing an effective organizational change process.

Chapter 3

Conceptual Framework

This chapter presents an analytical framework that will be used in this study to assess how Gamma underwent a prolonged process of transformation. This transformation was initiated by the management, under the leadership of a highly motivated general manager, who detected opportunity for transformation that entailed the creation of new meaning and values. The analytical framework integrates theoretical perspectives that are based on institutional entrepreneurship approaches to change, the nature of planned change interventions, the meaning and significance of organizational constructs associated with the change such as: vision, and the nature of the interrelationships between vision and organizational change, legitimacy, and sensemaking.

Institutional Entrepreneurship: An Approach to Organizational Transformation The institutional approach has promoted interest in how management ideas are nurtured, systematized, utilized, and modified (Morgan and Sturdy 2000), emphasizing the multiplicity of forces that interact at various levels to produce a certain pattern of outcomes in particular contexts. Thus, it suggests that the meanings of “organizational change” will vary across firms, sectors, professions, and states according to specific institutional contexts and dynamics (Morgan and Sturdy 2000). In this vein, the institutional context is the source of normative pressures for organizations to conform with certain “rules of the game” (Robey and Boudreau 1999). To achieve and sustain legitimacy, organizations tend to comply with the pressures (Meyer and Rowan 1977). As a result, they tend to become passive and adopt the same “templates for organizing” that have enabled them to succeed (DiMaggio and Powell 1991). Consequently, some researchers argue that the institutional approach considers the factors that may encourage the replication rather than the transformation of organizational practices (Buchko 1994; Ledford et al. 1989). The institutional approach may therefore be seen as one that is concerned with organizational qualities of stability or durability rather than change (see Hatch 1997; Oliver 1992). The 20

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growing interest in institutional entrepreneurship emerged out of recognition of the crucial role that social actors play in effecting organizational change (Dacin, Goodstein, and Scott 2002). It has greatly expanded our theoretical and empirical understanding of this process, ranging from the role of power to conditions for establishing institutional entrepreneurship to the processes through which organizational actors strategize or mobilize various tangible and intangible resources (Garud, Hardy, and Maguire 2007). Accordingly, we are witnessing a proliferation of studies showing the discursive and practice processes through which social actors overcome institutional constraints while shaping and changing their institutions (Battilana, Leca, and Boxenbaum 2009). Most of this literature, however, focuses on the work of institutional entrepreneurship as primarily that of overcoming resistance to change, and delineates the nature of various arrangements and activities undertaken by institutional entrepreneurs in their plight to identify what needs to be done to instigate and guide change. The hallmark of institutional entrepreneurship is associated with the importance given to the actors’ choices, perceptions, and actions in the context of the change. The nature and scope of action is closely related to the available schemas and resources (Battalina, Leca, and Boxenbaum 2009). Moreover, an institutional entrepreneurship perspective assumes that varieties of social processes are activated by individuals in organizations and results in outcomes that are framed within a set of interactions, rules, and procedures, or values, norms, and identity. Thus, institutional entrepreneurship calls our attention to the role of agency in constructing social interpretations and activities that enable members of organizations to validate and enact social interaction that may result in certain transformation of the organization (see Sewell 2005). Furthermore, the more embedded an organization is in its institutional context, the more likely it is that organizational change will be revolutionary if the “institutional prescriptions change dramatically” (Greenwood and Hinings 1996: 1028). Highly embedded organizations are those that are tightly coupled with the institutional context. Changes in the institutional context might also lead to changes in “value commitments” inside organizations, which, when coupled with sufficient managerial capability, result in second-order transformational change (Greenwood and Hinings 1996; Newman 2000). These theories are useful in constructing a framework of analysis for studying the dynamics of the change process that took place at Gamma. This book therefore considers the interplay between external contextual forces—namely, changes in the levels of governmental support and market competition (and internal dynamics)—including changes in Gamma management’s perceptions regarding relevant organizational objectives and goals. Changes to an organizational vision can reflect influences of both internal and external factors. Institutional entrepreneurship is associated with the shift from the notion of

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isomorphic processes, whereby organizations tend to adopt similar forms for the sake of conforming to their environment, to issues of institutional change and agency (Dacin, Goodstein, and Scott 2002). Thus, the main thrust of this shift is to delineate the role of actors in institutional change as “independent” of their social context and, consequently, able to change it. In this book, we follow the institutional perspective for the purpose of showing how various organizational actors interact with their institutional environment in an attempt to either change it or counter an effort for change. Institutional entrepreneurship is best understood on the backdrop of institutional perspective. Institutions are social structures that have attained a high degree of resilience. [They] are composed of cultural-cognitive, normative, and regulative elements that, together with associated activities and resources, provide stability and meaning to social life. Institutions are transmitted by various types of carriers, including symbolic systems, relational systems, routines, and artifacts. Institutions operate at different levels of jurisdiction, from the world system to localized interpersonal relationships. Institutions by definition connote stability but are subject to change processes, both incremental and discontinuous. (Scott 2001: 48)

Institutions are thus based on culturally embedded structures, norms, rules, and values (Scott 2001). Once institutionalized and diffused, societal rules and arrangements serve as basic requirements and guidelines for individual organizations if they are to receive support and legitimacy (Scott 2001). Furthermore, institutions are enacted through three major processes: regulative, which is associated with mandatory formal arrangements in forms of laws and regulations; normative, in which the driving force for certain action is guided by norms, beliefs, world view, or ethics; and cognitive, which refers to scripts encoded through socialization processes and that serve as interpretive schema (Scott 2001). Social actors serve as the prime movers of building new institutions, motivating by their interests and available resources (DiMaggio 1988). Institutional entrepreneurs therefore exploit entrepreneurial forces and capabilities for creating change within already institutionalized organizations that tend to “reinforce continuity and reward conformity” (Garud, Hardy, and Maguire 2007). Thus, a key question may well be asked: What are the conditions and the processes that trigger the action of institutional entrepreneurs? In this book, we view institutional entrepreneurs as those social actors who are embedded in their organizations while serving as enablers, supporter advocates, or objectors and constraints for change. Furthermore, our conception of institutional entrepreneurship seeks to explain the range of activities taken by organizational actors in order to structure, develop, and institutionalize new norms and values as well as new practices and routines while moving toward commercialization.

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It should be noted that the institutional environment of Gamma provides both enabling and constraining conditions. The changes in the fate of the defense industry during during the 1970s and 1980s, together with the greater strain on government resources allocated to Gamma, brought about management’s decision to engage in plan change. In other words, the unstable environment and Gamma’s ongoing exposure to governmental pressures (leading to an uncertainty about whether or not the organization could survive), provided management with the opportunity to initiate change (e.g., Dimaggio 1988; Fligstein 1997). The position of management is seen in this book as the key factor not only in the decision to initiate change but also in its content, the planning and implementation of the change processes, and the role of different organizational actors in supporting or objecting to the change. As we show in this book, the divide between actors in their attitude and actual support and role in the change is closely associated with their organizational position and the ways in which they understand and maintain their identity for the sake of promoting their best interests (Fligstein 1997, 2001). In adopting procedures that are, in turn, viewed as rational in order to legitimize their existence, organizations tend to mimic one another (DiMaggio and Powell 1983; Meyer and Rowan 1977; Zucker 1987). This tendency toward isomorphism also suggests that the particular nature of environmental pressure would increase the likelihood that governmental organizations, in their plight for commercialization, would rationalize and institutionalize their strategies in accordance with environmental demands (Aldrich and Ruef 2006). In particular, internal and external actors around governmental organizations are more likely to accept rational norms and standard operating procedures, even if they are not, per se, any more efficient, rather than accept an ad hoc decision to make the organization an “incubator” for capitalist development. Institutional theorists also suggest that when institutional pressures force the organization to divert from its regular modus operandi, it will tend to “decrease internal co-ordination and control in order to maintain legitimacy” (Meyer and Rowan 1977: 340). As a result, governmental R&D organizations attempting to introduce entrepreneurship within a non-entrepreneurial setting, will find it hard to institutionalize the new forms, fearful that the new structures will clash with existing directives. Their solutions, naturally, will be to claim precedent from other organizations. This is where organizational theory becomes particularly relevant. The basic thrust of institutional theory suggests that organizations become more similar over time because of normative pressure that rewards similarity (Meyer and Rowan 1977; Scott 2001; Zucker 1987). The institutional drive for isomorphism enhances the organization’s chances for survival and well-being. In this regard, an organization that encounters the need for transformation may introduce changes that are incongruence with its search for alignment within its internal and external

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institutional context. This alignment may reflect on issues such as: creating new vision and mission, decision making, structure, authority, responsibilities, budget, established routines, or legal arrangements. Academic research on the process of founding new firms suggests that the degree to which they are embedded within supportive social networks plays an important role in the firm’s chance of survival. The degree to which organizations are embedded in their environment, in turn, positively influences business decisions, facilitates the transfer of knowledge, encourages organizational learning, affects the flow of resources, and ultimately promotes business contacts (Aldrich and Ruef 2006). Thus, entrepreneurs who choose to operate in a “friendly environment” will facilitate the new venture’s chance of survival and ultimate success. As a result, one would expect that the institutional entrepreneurship within governmental R&D organization would be encompassing an intensive intra- and inter-organizational collaboration. The dynamic of this collaboration enables the organization to tap into existing resources and enhance the capabilities and development of networking in its prospective environment. Building on the extant work, we claim that entrepreneurial action within institutional constraints is not only a confrontation between initiative and inertia; it can also be a creative adaptation to institutional constraints that are intrinsic to the structure and strategy of the organization in question. Seen in this perspective, the institutional entrepreneur, working within the constraints that are embedded in the legitimate logic of the organization, is motivated to find creative solutions to existing problems, is ready to translate creative insights into ventures, and is creative when it comes to reconceiving the basic purpose and ethos of the organizations in which he or she works.

Planned Change Interventions Two perspectives regarding planned change interventions are especially prominent in organizational management literature. The first, the Organizational Development (OD) approach, emerged with influences from the field of applied social psychology in the early 1960s (Adams 1984; Porras and Silvers 1991). The second, the Organizational Transformation (OT) approach, emerged during the 1980s and represents a departure from OD orientations (Nielson, Frame, and Pate 1992; Porras and Silvers 1991). Organizational Development interventions are useful for helping organizations become more effective and productive at accomplishing unit and organizational goals (Adams 1984). The types of changes addressed by OD tend to be those concerning structural factors such as the organizational order and design of work, or upon process factors such as work relationships and group work (Nielson, Frame, and Pate 1992; Smither, Houston, and McIntire 1996).

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Basically, OD interventions support the development of gradual changes in individuals’ perceptions and behaviors in line with the best interests of the organization (Porras and Silvers 1991: 54). Because OD interventions do not aim to change established organizational patterns, values, and norms, this kind of change is sometimes referred to as “first order change” (Newman 2000; Porras and Robertson 1992). Others emphasize how OD changes are those that involve adjustments in systems, processes, or structures, but do not involve fundamental changes in core values, corporate identities, or basic paradigms used by organizations to guide overall functioning (Dutton and Dukerich 1991; Fox-Wolfgramm, Boal, and Hunt 1998; Porras and Robertson 1992). Although OD perspectives have made a substantial number of important contributions, the field has also had its shortcomings. Some criticize OD approaches for having a “messianic” rather than scientific flavor, with skepticism toward the robustness of OD research methods and validity (Porras and Robertson 1992). In contrast to the moderate nature of OD interventions, organizational transformations tend to be much more radical. Transformational changes entail fundamental shifts in the ways individuals perceive, think, and act, and thus aim to alter an organization at its core (Adams 1984; Aldrich 1999; Meyer 1982; Tushman and Romanelli 1985). Table 3.1 below presents the types and order of planned change interventions on a two-matrix dimension, as given by Jerry Porras and Peter Robertson. Table 3.1. Types of planned organizational change Order of change

Type of planned change

first

developmental

second

transformational

(Source: Porras and Robertson 1992: 722)

OT interventions are induced primarily through changes to an organization’s vision (Frame, Nielsen, and Pate 1989; Porras and Silvers 1991; Smither, Houston, and McIntire 1996).1 Typically, an organization’s vision is redefined in response to drastic environmental or internal disruptions, crises, or lifecycle changes (Bartunek and Reis-Louis 1988; Cummings and Huse 1989; Tushman, Newman, and Romanelli 1986). However, because the organizational vision provides the logic for all other system factors, these factors will also be altered if the vision shifts (Levy 1986). Since OT changes involve a radical shift in the way an organization functions, organizations generally need compelling reasons for engaging in potentially risky forms of change. Reasons may come in the form of external or internal constraints (Tushman, Newman, and Romanelli 1986). External constraints might be linked to environmental changes in competitive conditions

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within institutional or market contexts, and include, for example, political changes, budgetary problems, and decreased resource allocations (Greenwood and Hinings 1988; Meyer 1982; Tushman and Anderson 1986). Inadequate attention to such developments may render organizational practices valueless and ineffective (Nutt and Backoff 1997a). Internal constraints might include cultural changes such as changes to the meanings, beliefs, and values that are shared by an organization’s members, changes in leadership (Romanelli and Tushman 1994), or a decline in organizational performance against basic standards or ambitious targets (Greve 1998). Both internal and external challenges can pose serious threats to an organization’s survival and force senior managers to initiate extensive change efforts. Such a process begins when a group of senior managers determines that a significant change is necessary and appoints individuals responsible for bringing about the change (Smither, Houston, and McIntire 1996). The pivotal role that senior managers play in directing and driving OT interventions has already been argued by organizational researchers (e.g., Clark and Soulsby 1995; Harvey and Brown 1992; Morgan and Sturdy 2000). These researchers contend that managers can be potentially powerful agents in the transformation process through the “contribution of a complex set of cognitive, affective and behavioral influences” (Clark and Soulsby 1995: 223). They also note that managers’ judgments and decisions regarding desirable forms of organizational change result from their own complex sets of factors. Specifically, these include “level[s] of education, knowledge and understanding of options available to them, and their effective power, social legitimacy, and competence to get things done in the organization.” Thus, organizational change is more than an abstract or technical process aimed at finding adequate solutions to emerging problems. Rather, it may be better understood as a set of practices that are embedded in particular contexts reflecting attributes of senior and middle managers as members of influential sociopolitical groups (Clark and Soulsby 1995; Morgan and Sturdy 2000). This suggests that an analysis of the interplay between organizational contexts and actions—including managerial practices—is vital for understanding processes of organizing and transforming organizations. Further considerations of contextual factors are included, below, in a review of the institutional approach to organizational transformation.

Organizational Vision Over the past few decades, both scholars and practitioners have invested considerably in efforts toward understanding the concept of vision and its importance to organizational life (Bennis 1989a; Hitt and Ireland 1986; Kanter,

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Stein, and Jick 1992; Kouzes and Posner 1995; Larwood et al. 1995; Nanus 1992; Peters 1987; Stewart 1994). However, the literature remains diffuse and full of divisions amid a wide range of ideas. One of the primary reasons for the variety of meanings arises from the use of words that have been open to wide-ranging definitions and interpretations. Vision has become perhaps one of the most poorly understood terms used in organizational management jargon, associated with different meanings for different users. It has been used to refer to “deeply held values,” “outstanding achievement,” “mission,” and “raison d’être.” Despite such diverse meanings, two characteristics are found in almost every definition or description of the concept. First, there is usually some inclusion of a futuristic orientation as well as a reference to tangible courses of immediate action (Bass 1985; Bennis and Nanus 1985; House and Shamir 1993). Futuristic and ideal facets of vision tend to integrate ideas and desires toward eventual and increasing improvements. Beyond capturing the way things should be, vision also connotes the ability to take action and progress toward ideals. Therefore, although it can seem as though a vision is something abstract and elusive, in an organizational context, vision is meaningful only in so far as it is effective in manifesting concrete results in an organization’s development (Quinn 1977; Thompson 1989). Thus, vision can be regarded as a combination of a futuristic ideal manifestation of the organization’s direction, and a tangible road map envisioning the way toward achieving it. In various works (1991, 1994, 1996), James Collins and Jerry Porras have further elaborated this framework. According to them, a well-conceived vision consists of two major components: a core ideology and an envisioned future. Core ideology expresses the organization’s basic assumptions, principles, values, and beliefs. It influences and shapes the organization’s identity and signifies the purpose for its existence. Once established, the organization’s core ideology takes the form of a “genetic code”—an influential force whose presence may always be sensed in the background (Collins and Porras 1991: 34). These researchers theorize that the organization’s core ideology consists of two distinct parts: core values and core purpose. Core values represent the essential and enduring beliefs of an organization. In outstanding organizations, these values—either explicitly stated or tacit—are deeply felt and continually reinforced by the leaders. The purpose of such reinforcement is to stabilize these values and make them an integral part of organizational life. The core purpose represents the organizational “reason for being,” providing a source of guidance and inspiration for all members of the organization (Collins and Porras 1996: 68.) Another component of Collins and Porras’s vision framework is the envisioned future. This component is more concrete and real, in comparison to

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the general and more idealized core ideology. The envisioned future represents a tangible picture of a desirable future and focuses organizational members’ attention toward achieving it. This component consists of two parts: audacious ten- to thirty-year goals and a vivid description of the anticipated future (1996: 73). “Audacious goals” are adventurous and encouraging ends that are usually general and all-encompassing. These goals translate a theoretical ideology into an energizing, motivating, and focused goal that drives an organization forward (Collins and Porras 1994). A vivid description of the future, the second component of the envisioned future, provides a specific portrait of how things will be, once the audacious goals have been achieved. A well-articulated description tends to have a strong impact on organizational members as it enables them to create a clear and compelling image of the future in their minds, and “paint the picture with their own words” (Collins and Porras 1991: 47). The definitions of vision suggested by Collins and Porras, and other works cited above, regard vision as a “road map” that pictures the future image of the organization and the objectives it aspires to achieve. Establishing an organization’s future direction is generally regarded as a primary aspect of leadership. Indeed, current leadership literature frequently characterizes the leader as the one who has the capacity to create a compelling vision, and the ability to translate that vision into reality (see Bennis 1989a). The next section further elaborates on this “vision-leadership” connection.

Vision and Organizational Leadership There appears to be a consensus in the leadership literature that vision is a fundamental attribute of effective leadership and a source of one’s power to lead (Kouzes and Posner 1995; Quigley 1993). Much of the organizational literature acknowledges the importance of the “role of the leader” in an organization’s establishment and ability to uphold a vision (Bass 1985; Burns 1978; Conger and Kanungo 1987; Yukl 1989). Vision represents an image created by leadership to motivate followers to respond in positive ways; this occurs when a vision reflects appropriate values, shows an ideal future, and contains enough information to provide clear directions. By presenting an ideal image of the future, the vision defines a more general goal that the leadership is striving to have an organization realize (Porras and Silvers 1991; Thoms and Goveker 1997). In modern management literature, theories of charismatic and instructional leadership were the first to use the concept of vision (Conger and Kanungo 1987; Yukl 1989). According to these theories, the unique personality of the leader informs the creation of a vision, which then, ideally, captures organiza-

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tional members and moves them toward the actualization of this vision. The theory of instructional leadership also emphasizes the importance of vision in creating and building effective leadership (Bass 1985; Burns 1978; Pearson 1989; Phillips and Hunt 1992; Tichy and Devanna 1990). This suggests that with appropriate kinds of leadership and managerial capabilities, leaders can shape their organizations by developing a conceptual framework of forward thinking, expressed in the form of an organizational vision. The importance of the leader in creating a vision was further developed in studies of organizational culture, where there was general consensus supporting the view that leaders create cultures in their organizations as a way to give life to their visions. Such notions portray leaders as the prime movers behind historical events and articulate visions, which, in turn, create certain organizational cultures (Barnard 1938; Clark 1970; Selznick 1957; Ouchi 1981; Schein 1983, 1985). The most powerful “movers,” those who tend to have a long-lasting impact on the nature and form of a vision, are usually the founders of an organization (Deetz, Tracy, and Simpson 2000). Not only do founders forge the vision, which initiates and establishes an organization, they also choose key managers who determine the conventions of an organization’s day-to-day practices. Thus, founders have a major influence on how an organization initially defines its goals and ideals (Schein 1983). This early influence is perpetuated through informal organizational rituals and procedures, which in turn shape actions of succeeding leaders. As a result, the “founder’s vision” tends to be reinforced over and over, even after he or she has left the organization (Deetz, Tracy, and Simpson 2000; Schein 1983). Such tendencies often lead to situations in which a gap forms between an organization’s vision and actual operational conditions. The tensions engendered by such a gap will ideally be addressed by a leader who can see how and where the organization is heading, and continually check against the status quo becoming obsolete (Fritz 1984). The wider such gaps, the more far-reaching changes must be. An extremely wide gap may encourage the implementation of a transformational change (Porras and Silvers 1991). As previously described, transformational change tends to involve a review and revision of an organization’s mission and goals, as embodied within its vision (Collins and Porras 1991, 1996). Revision of a vision, therefore, requires an organizational transformation—a set of comprehensive and far-reaching changes to an organization. Organizational scholars tend to see vision as not only important for studies of transformational change processes in progress, but also as a source of influence that initiates such a process (see, for example, Adams 1984; Belgrad, Fisher, and Rayner 1988; Bennis and Nanus 1985; Kanter, Stein, and Jick 1992; Kotter 1995; Porras and Robertson 1992; Porras and Silvers 1991; Smither,

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Houston, and McIntire 1996). Two contrasting perspectives with which the interrelationships between organizational vision and transformational change may be explored include: an approach in which vision is seen as a facilitator and a supportive factor within a change process, and an approach in which vision is seen as a factor that may or may not facilitate transformational change, and in some circumstances, will hinder change.

Organizational Vision: A Facilitator of Change The perspective that regards vision as a critical element of successful changes and a powerful tool for inducing desirable developments within an organization rests on the assumption that organizational members are complacent and need guidance to grasp and adopt an agenda for change. In this model, managers tend to mobilize subordinates toward a cause and a future that is unknown. Vision serves to paint the picture of the “envisioned future” purposefully (Collins and Porras 1991); vision is not just a portrayal of the future to be, but actively provokes organizational members to help the organization attain future goals. Ideally, vision serves the function of making change efforts appear to be “central to the community, rather than just more work piled on by peripheral people” (Kanter 2001: 266). Some scholars have tried to explore how an organizational vision comes to take up a role that supports a process of organizational change. First, vision can serve as a motivational tool when it is seen by organizational members to offer descriptions of the actions that need to be taken to enable the organization to move in appropriate directions (Tichy and Devanna 1990). By describing a desirable future, a vision can help define the direction for change and focus organizational members’ efforts on more specific and meaningful objectives (Nadler and Tushman 1989a; Nutt and Backoff 1997b). Members’ commitment to a collectively desired future can encourage the recognition of a need for change and spur motivations to implement it. The development of such shared desires is crucial for enabling an organization’s transformation (Kotter 1997). Support of the change process may also stem from the inspirational nature of an organizational vision, which may nurture the willingness of organizational members to implement a desirable set of changes (Kanter, Stein, and Jick 1992; Peters 1987) and minimize related difficulties (Nanus 1992; Nutt and Backoff 1997b). A further explanation relates to vision as a “roadmap,” directing the organization during the process of change (Robbins and Duncan 1988; Wright 1994). Within this role the vision serves as a “trail blazer,” marking the path that links future goals and down-to-earth reality. Such linking is made possible by assigning long-term “audacious goals” (Collins and Porras 1996: 73)

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alongside a clear description of the anticipated future. One can only assume that the clarity of the path and its final destination will increase organizational support for the change process.

Organizational Vision: A Hindrance to Change This perspective suggests that vision can also function as an inhibitor of change. A situation of that kind might happen, for example, when “ideological” factors within an organization’s vision—including those that may arise from an organization’s basic values, beliefs, and identity—shape the goals and practices of the organization in unrealistic or unsuitable ways (Collins and Porras 1994, 1996). Hence, this perspective recommends the need for careful scrutiny of the circumstances under which vision might influence processes of organizational change in both enabling and disabling ways. An organizational vision can be seen as an expression of organizational identity, so changing either changes both. An organizational identity reflects members’ shared beliefs regarding what is central, distinctive, and enduring about their organization (Albert and Whetten 1985: 265) and often springs from the ideological component of a vision. Thus, issues of identity can play a significant role in organizational members’ decisions to support or oppose proposed changes to an organization’s vision or operations. Such decisions involve interpreting the implications of proposed changes with regard to the organization’s existing identity. When a change is interpreted by members of an organization to be “nonthreatening” to the organizational identity, they tend to support and even promote the process (Fiske and Neuberg 1990; Pryor, McDaniel and Kott-Russo 1986). However, if members of the organization view a proposed change as one that may undermine the stability of the prevailing identity, they will be more likely to resist or actively oppose such measures (Bouchikhi and Kimberly forthcoming; Dutton and Dukerich 1991). Such resistance reflects how identity threats tend to be perceived by organizational members as endangering both personal and external images of what their organization is or stands for, as well as their perceptions of what their own individual roles within an organization may be (Elsbach and Kramer 1996). These perceptions define members’ socially constructed realities and provide patterned ways of dealing with ambiguous, uncontrollable events (Schein 1992). Members thus tend to be “emotionally invested” in non-negotiable assumptions that shape their perceptions for sensemaking and meaning-giving. Challenging this source of emotional stability is therefore equivalent to attacking core aspects of identity and can trigger strong opposition (Huy 1999; Schein 1992; Weick 1995). Organizational identity can hence be a liability when an

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organization needs to undergo fundamental change (Dutton and Dukerich 1991; Fiol 2001; Pratt and Foreman 2000; Reger et al. 1998; Stimpert, Gustafson, and Sarason 1998). Several studies have already pointed out that such emotional attitudes toward an organizational identity can “constrain understanding and create cognitive opposition to radical change” (Reger et al. 1998: 565). These researchers also suggest that under such irrational influences, organizations can develop identities that are inconsistent with institutional expectations and/or environmental pressures (see also Dutton and Dukerich 1991; Fiol 2001; Fox-Wolfgramm, Boal, and Hunt 1998; Gioia 1998; Gioia and Thomas 1996; Huy 1999; Milliken 1990; Reger et al. 1998). Notably, an organization will find it especially difficult to retain an incoherent identity during a transformational change process when the organization’s goals, values, beliefs, and basic assumptions undergo thorough examinations (Porras and Silvers 1991). Thus, though an organization’s members will often try to preserve existing forms of an organizational vision, under certain circumstances an organization might find it impossible to do so. Gamma faced a situation in which it was impossible to sustain its original vision but also saw much resistance from members against organizational transformation. The ways with which Gamma’s managers planned and enacted a transformation of its original vision and the many factors influencing these efforts—including notions of organizational identity and perspectives about institutional realities—are areas of concern in this book. Forms of analysis to be incorporated into the theoretical framework of this study will include a look at how Gamma’s leaders addressed and failed to address tensions that arose between interests of retaining the organization’s original vision (which expressed nonprofit ideals), and operational agendas (which sought to promote profit-seeking successes). Building on previous works and theories concerning vision reviewed above, in this book vision is defined as a statement of purpose determined by management, based on the organization’s core values and beliefs, which combines an ideal manifestation of its direction alongside a more tangible prescription envisioning the way for achieving it. This definition emphasizes the influential roles that organizational values and beliefs have in efforts to formulate a vision, and the pivotal role of management in determining an organization’s vision.

Narratives The central concept of our theoretical approach—organizational narratives— has been used to explain how social actors construct and interpret their social

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reality both to themselves and to others (see Boje 1991, 2001; Czarniawska 2004; Gabriel 2000). The growing interest in the “linguistic turn” (Alvesson and Karreman 2000) brought to the fore the use of language and it’s symbolic, rhetorical, or discursive traits as a tool for organizational analysis (e.g., Burke 1969; Phillips and Hardy 2002). The notion of language as narrative involves generating stories that have been used to construct and interpret social processes and actions (Pentland 1999; for a review, see Rhodes and Brown 2005). Narratives provide a context through which individual actors or particular communities define various facets of their identity or occupation both for internal and external purposes (Brunner 1986). Thus, through narratives people in organizations justify for themselves and other stakeholders the raison d’être of their actions or construct their identity within a broader set of acceptable cultural models, therefore engaging in legitimacy construction (Meyer and Rowan 1997). What is it about an organizational narrative that is particularly important to change? A few ideas come to mind. The first is associated with a sensemaking approach (Weick 1995) and assumes that discourse and stories embody symbolic actions that create social reality through a mechanism of how well the story hangs together (narrative probability) and how fully it rings true with experience (narrative fidelity; Weick and Browning 1986). Thus, change and vision are reconstructed through the production of narratives, which have both an internal reasoning for stakeholders and an ontological quality that relates to the ability to reason, and persuade, and create values and enhanced action. “Narration, much like metaphor, has power precisely because it captures complex experiences that combine sense, reason, emotion and imagination. Narration stirs all those elements together and preserves their interaction in a compact summary that can be reconstructed starting from any of its parts” (Weick and Browning 1986: 250). Second, narratives are integral parts of the organization’s culture and, as such, they provide a shared meaning of accepted and expected behaviors, norms, or values (Bartel and Garud 2009). Narratives reflect the underlying symbolic application of vision that is embedded in the organization’s social structure by demonstrating how it’s grounded in preordained institutional logic, and contested and interpreted in an organizational context of change (Meyer and Rowan 1977). Furthermore, managers use narratives as a signaling “mechanism,” using symbolic action and impression management to portray their organizations as appropriate and worthy by the virtue of their actions, stature, or alignment with their organizational fields (Pfeffer 1981 Elsbach 1994; Zott and Huy 2007). Relevant stakeholders are attracted by the ways narratives are conveying symbols that have been taken for granted and resonating with the organization’s attributes, be it a novel idea (Lounsbury and Glynn 2001), the need for capital resources (Zott and Huy 2007), or the task of crafting new vision. In this way, narratives

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are serving as reification mechanisms that, for example, assure stakeholders that the organization’s planning and intentions of change are meaningful, appropriate, and necessary, thereby justified. Thus, organizational narratives may portray the intentions and implementation of those characteristics that can be translated by external and internal stakeholders as being in line with the environment’s demands, internal logic, and accepted organizational norms (Lounsbury and Glynn 2001). The translational nature of narratives is well documented (Brunner 1986; Boje 1991; Czarniawska 2004). Narratives are used as translation devices through different mechanisms. As boundary objects, for example, they facilitate communication and understanding through the creation of a common context among varied stakeholders (Carlyle 2004). Recently, Bartel and Garud (2009: 110) outlined three ways through which narratives are used as translation tools during periods of change: “First, narratives enable people to translate ideas across different parts of the organization in a manner that allows them to generate new inferences and application for their own work. Second, narratives enable people to translate emergent situations that are ambiguous or equivocal so as to promote real-time problem solving. Third, narratives enable people to translate ideas accumulated from particular instances of past [innovation] in order to inform current and future efforts throughout the organization.” Narratives consist of certain components and structures that may be used for respective purposes, the story plot and its structure (see also Brunner 1986; Boje 2001). The former refers to plots that portray events according to their emergence, while attributing meaning to these events from the narrating actor’s point of view. The structure of the narrative provides the logic and the sense of continuation and integration to an unfolding series of events (Czarniawska 1997; Boje 1991;). Furthermore, studies that focus on the strategic use of narratives raised our attention to the fact that narratives instantiate the structuring features of a discourse genre. In turn, the structuring features of the genre serve as both coherency constraints and a semantic context for the speech acts that are deployed (Robichaud et al. 2004). Following Greimas (1987), it is argued that the recursive nature of narrative occurs as an effect of modality. Thus, as Barbara Czarniawska suggests (1997, 2004), narratives structure our social reality by providing us with the opportunity to present our knowledge, intention, and discourse to others. In this vein, “to narrate and follow a story is already to ‘reflect’ upon events with the aim of encompassing them in successive totalities” (Ricoeur 1983: 279). Narratives help actors and listeners appreciate ambiguities and provide a contextually sensitive understanding of locally enacted events. The “text” of the story forms the “surface” from which the organization is read, as members select past circumstances, rules, or structural forms that are locally relevant to their rationalities and behaviors.

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Legitimacy as a Practice Mechanism Organizational life consists, in part, of an ongoing effort to create and maintain legitimacy. Legitimacy, or the recognition that an organization’s actions are acceptable within its cultural system, determines “how the organization is built, how it is run and simultaneously, how it is understood and evaluated” (Suchman 1995: 576). Legitimacy is essentially the construction of social reality that consists of those taken-for-granted cultural objects that are shared by members of an organization or society (Aldrich and Fiol 1994; DiMaggio and Powell 1991; Johnson, Dowd, and Ridgeway 2006; Meyer and Scott 1983; Scott 2001; Suchman 1995). Studies of legitimacy have also paid close attention to ways in which stakeholders conduct a normative evaluation of the organization, while the organization is meanwhile seeking their endorsement and support (e.g., Golant and Sillince 2007; Suchman 1995; Suddaby and Greenwood 2005). Thus, achieving and sustaining legitimacy is a crucial managerial task, particularly during periods of change, because the organization may shed many of its former concrete characteristics such as its structure, products, services, or even its identity, while seeking to regain stakeholders’ support and resources (e.g., Suddaby and Greenwood 2005). Furthermore, studies on legitimacy also pointed to the evaluative aspect of legitimacy— the way legitimacy is assuring stakeholders that the organization’s practices, values, or contributions are in line with their “well-being” (Golant and Sillince 2007; Suchman 1995). For example, Michael Lounsbury and Marry-Ann Glynn (2001: 545) demonstrate how entrepreneurial stories facilitate the forming of an organizational identity that “serves as a touchstone upon which legitimacy may be conferred by investors, competitors, and consumers, opening up access to new capital and market opportunities.” Christoph Zott and Quy Nguyen Huy (2007) showed how new entrepreneurs perform various strategies of impression management to achieve legitimacy. Israel Drori, Benson Honig, and Zachary Sheaffer (2009) used a cultural script approach to demonstrate how an Internet organization alternates between internal and external social actors to achieve legitimacy during its life cycle. Benjamin Golant and John Sillince (2007) used a narrative perspective to show how a new non-profit organization founded for helping HIV patients constructed legitimacy through the persuasiveness of organizational storytelling and on the realization of taken-for-granted narrative structure. It is well documented that, particularly during periods of organizational change, cultural incoherencies have the potential to inhibit change either due to inertia, internal conflicts over vision and identity, or because of more pragmatic issues (e.g., Jelinek and Schoonhoven 1990; Tushman and O’Reilly 1996; Landau, Drori, and Porras 2006). Thus, a cultural perspective on legitimacy requires an understanding of actions taken by managers in the process of seeking legitimacy.

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At Gamma, internal legitimacy is constructed through the ability of social actors to choose and apply strategies of legitimacy by developing different alternative narratives that interpret the social context differently. From these various narratives, symbols and practices are selected, composed, and applied to generate legitimacy and to delegitimize opponents (e.g., Mizrachi, Drori, and Anspach 2007). Social actors use different and sometimes conflicting narratives alternately and interchangeably in the construction of legitimacy during a period of change. This implies that rather than looking at legitimacy as being driven by institutional endorsement and the need for status (Suchman 1995; Scott 2001), the construction of legitimacy at Gamma involved the use of an array of narratives by social actors in their quest to achieve legitimacy (Swidler 2001). Thus, the construction of legitimacy is seen as a repertoire of narratives that becomes the source of action and meaning during an organizational change. The role of agency in enabling the formation of legitimacy is a key aspect of institutional entrepreneurship (e.g., Battalina, Leca, and Boxenbaum 2009). This validates the organization’s internal and environmental social and economic characteristics and attributes. Constructed values and interests, as well as actions, eventually shape and reshape both the individual and the institutional contexts of legitimacy. Thus, understanding legitimacy via the perspective of institutional entrepreneurship calls for taking into account those constructs that refer to both the micro (that is, individuals, actions, cognitions, and beliefs), as well as the macro (that is, structural and institutional contexts). As we mentioned earlier, a notable aspect of the institutional entrepreneurship approach is the importance given to the actors’ choices, perceptions, and actions in the institutional context. Moreover, the nature and scope of action is closely tied to the schemas and resources that are available to the actors, taking into account that action is conditioned respectively by the environment and shared systems of meaning. We suggest that the taken-for-granted aspects of legitimacy are the outcome of active choices (e.g., Mizrachi, Drori, and Anspach 2007). Respectively, this book shows how social actors construct, pursue, and advocate forms of legitimacy, while attempting to undermine those other forms of legitimacy that are perceived as conflicting with their own. The institutional entrepreneurship approach assumes that the varieties of social processes that lead to change are activated by individuals in organizations and result in outcomes that are framed either within a set of interactions, organizational rules, and procedures, or within group values, norms, and identities. Thus, the construction of legitimacy calls our attention to the role of agency in constructing social interpretations and activities that enable organization members to validate and enact control over social interaction, resulting in the transformation of the organization (Sewell 2005).

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Viewing social actors as vehicles for constructing legitimacy suggests that actors have the ability to form repertoires of legitimacy. Actors’ activities in forming their legitimacy choices can be varied, and as William Sewell offered, may include the ability “to coordinate one’s actions with others and against others, to form collective projects, to persuade, to coerce, and to monitor the simultaneous effect of one’s own and others’ activities” (Sewell 2005: 145). In this vein, it should be noted that the strategic action of actors in pursuing legitimacy depends on their position in the organization, enabling them to invoke a set of interactions within and outside the organization. These interactions construct values and interests, social bonding, and consented actions that eventually lead to a new individual and institutional context of legitimacy. Robin Stryker claimed that “legitimacy processes provide a central means through which rules/resources shape action through cognitive, normative, and instrumental mechanisms” (1994: 856). Thus, the logic of understanding legitimacy from the lens of the theory of practice is anchored in the understanding that actors are actively using their resources, skills, cultural knowledge, ideology, and power. While assessing the context and the relevant constituencies in their efforts to construct legitimacy, social actors strategize, or, as Ann Swidler noted, “‘routinely’ go about attaining their goals” (2001: 82). As mentioned above, the multiple facets of legitimacy and their dynamic interactions imply that legitimacy is shaped by actors who use a repertoire of schemas and resources in a variety of action strategies (e.g., Swidler 1986). The necessity of radical change, such as in our case, calls for bringing legitimacy to the fore as a tool for mobilization around an apparent common vision, justifying various unconventional business models and organizational practices and experimentation with technology and innovation (Kanter 2001). Thus, the relationship between the creation and destruction of legitimacy reveals a complex dynamic (Human and Proven 2000). In this regard, legitimacy was constructed in Gamma through multiple legitimacy mechanisms enacted by social actors embedded in the institutional environment.

Sensemaking Accounts as Schemas for Change For the most part, sensemaking in organizations consists of intentional organizational activities, themselves closely linked to the strategies that managers follow in response to perceived threats and opportunities (Gephart 1993; Gioia and Thomas 1996; Weick 1995). The very process of sensemaking, as well as its consequences, affects the way organizations are themselves perceived; sensemaking thus contributes to the construction of organizational identity (Pratt 2000). Studies of organizations therefore place special stress on this process during periods of crisis and change (Gephart 1992, 1993;

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Weick 1993). They do this, for example, by claiming that during crises an organization’s ability to confront challenges is largely dependent on its ability to reinforce internal coherence (Gioia and Thomas 1996, Weick 1993, 1995). Sensemaking is thus considered one of the mechanisms that minimizes ambiguity and uncertainty by providing organization members with an interpretive reference point during or after periods of change. When an organization finds itself in a position to readjust its relationship to its environment, the organization’s culture is challenged. Consequently, a major issue meriting consideration is the role of culture in defining and shaping sensemaking and action, in our case, at Gamma. We therefore focus on the content of culture and sensemaking as well as how the social actors involved utilized these cultural resources. In addition, we explore how scientists assign meaning to changes in their scientific work by way of the sensemaking accounts they embrace as strategic guides for action. While the accounts do not cohere to form a unidimensional view of the organization and its work, they reflect the reality of multifaceted narratives that allow sense to be made of the organization’s course during the prolonged change period. Considering the occupations of organization members offers additional opportunities to gain insight into the sensemaking that is likely to unfold in times of change. While organizational lenses on sensemaking represent a traditional focus for scholars of change, an occupational lens (Van Maanen and Barley 1984) is added here. Professional scientists are members of a strong occupational community, one that employs its own systems of education, accreditation, and reputation, quite distinctive from the systems at play in the organizations (e.g., university, research center) where the scientists carry out their work. As such, occupational communities offer an additional source of cues, interactions, and relationships that feed into the sensemaking process. Since those engaged in scientific work emerge from such an intense, common socialization experience, as well as an academic community that shares information and acknowledgement of developments, they are more than likely to be guided in their sensemaking by their occupational community’s norms and understandings as well. It has been often noted that sensemaking may trigger social processes that allow stakeholders to jointly plan and act in achieving their respective goals (see, for example, Maitlis 2005; Weick and Roberts 1993). Research on sensemaking has likewise stressed the role of managers or middle managers in designing the context and content of various organizational or environmental variables that are considered to be detrimental to the organization’s wellbeing (Dutton and Jackson 1987; Dutton et al. 1997; Gioia and Thomas 1996; Smircich and Stubbart 1985; Westley 1990). Sensemaking may therefore be described as the mechanism by which managers create a common understanding of the organization and its environ-

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ment in order to better cope with change or crisis. This “positive” perspective is closely related to the notion of shared collective understanding: those cultural norms and values characterized as “functional” and associated with the notion of strong culture, which enables the organization to cope with crisis and change (see, for example, Deal and Kennedy 1982; Peters and Waterman 1982; Schein 1985). Sensemaking accounts, by clarifying and interpreting the context, actions, and dilemmas engendered by change, in effect help organization members adjust more easily to the associated uncertainty (Weick 1993; Weick, Sutcliffe, and Obstfeld 2005). Accordingly, we can describe organizational sensemaking as an iterative social process that allows organization members to engage in the exchange of interpretations and the construction of schemas likely to generate coherent adaptive strategies (Weick and Roberts 1993). Here we are drawing from the literature on organizational impression management and symbolic interaction (e.g., Elsbach 1994); Furthermore, managers signal the appropriateness and effectiveness of organizational responses to change to internal participants and external organizational stakeholderss (Golant and Sillince 2007: 1152). Rather than dwell further on managerial perspectives, the objective of this study is to explore a different angle of sensemaking, namely, a situation of change and crisis in which the sensemaking process focuses on presenting the organization’s members with an alternative understanding of its worldview, norms, and values. Unlike studies on sensemaking that tend to provide evidence of coherent processes (Weick and Roberts 1993), this study calls attention to sensemaking as an incoherent process of diverse cultural interpretations. In addition, we explore the relationship between accounts and actions (Maitlis 2005) in an attempt to explain the link between interpretation and its associated actions and outcomes (see Gioia and Chittipeddi 1991). Although previous studies have dealt with the different patterns of accounts and actions associated with sensemaking (see Maitlis 2005), here we explore how the multiple cultural narratives that emerge during prolonged crisis and change promote sensemaking with respect to organizational actions.

Conclusions Gamma faced a situation in which it was impossible to sustain its original vision, but they also saw much resistance from members against organizational transformation. The ways with which Gamma’s scientists and managers planned and enacted a transformation of its original vision and the many factors influencing these efforts—including notions of organizational identity and perspectives about institutional realities—are areas of concern in this book.

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As defined above, vision emphasizes two central ideas: the active role of organization members embedded in the organization’s institutional environment and the dynamic nature of reconstructing vision and, consequently, planned change. Four complementary perspectives guide our main propositions in analyzing the changes in culture and vision in Gamma. The institutional entrepreneurship theory claims that entrepreneurial action within institutional constraints is not only a confrontation between initiative and inertia, it can also be a creative adaptation to institutional constraints that are intrinsic to the structure and strategy of the organization in question. Seen from this perspective, the institutional entrepreneurs—the scientists in Gamma— were working within the constraints that are embedded in the legitimate logic of the organization. The scientists were motivated to find creative solutions to management’s plight of changing vision. They proposed creative insights aimed at reconceiving the basic purpose of the change while maintaining the ethos of the organization. Finally, drawing on the theories reviewed in this chapter, this book conceives of the role of vision as something that can simultaneously facilitate and hinder change in a variety of ways. Vision is held to be a force that is neither unidimensional nor unidirectional, but adaptive and flexible within contexts of ongoing organizational self-preservation and transformation.

Chapter 4

Gamma The Evolution of a Governmental R&D Organization

On 8 December 1953, President Eisenhower unveiled his “Atoms for Peace” program to the United Nations, bringing an end to the American policy of nuclear secrecy that had been maintained since 1945. In 1954, the United States began to declassify and distribute a huge amount of nuclear research data, and lifted prohibitions on the export of research reactors. Israel, then a country in its early stages of development, was granted a research reactor from the US government and a contract for research cooperation between the two countries was signed. In 1958, the Israeli Nuclear Energy Commission established Gamma for the purpose of serving as a national laboratory for basic and applied research and development in the field of nuclear science. It was instituted to serve national interests of scientific advancement with a basic mission: To develop knowledge regarding nuclear power and technology, as well as to further the use of nuclear energy in industry, medicine, and agriculture. In its early years of operation, the organization resembled an academic research institute. Most of its activity revolved around its research reactor, and yielded a rich flow of publications in international scientific journals. In fact, scientists were recruited from national universities rather than from industry, because Gamma was meant to conduct advanced forms of research, which were primarily pursued in the academic arena. Gamma’s founding scientists, in turn, selected from within their personal networks, choosing academic peers and students to fill additional positions. These recruits shared the work culture of academia, and fostered a similar working environment at Gamma among those with common professional expectations. Jointly led by a scientist and a professional administrator, scientific departments were organized according to disciplines such as mathematics, chemistry, and physics, and further divided by subspecialties. Beyond Gamma’s broadly defined mission to promote nuclear research, researchers were given almost unconditional academic freedom. As a nuclear research organization, Gamma was unique, and there were no competing organizations to contend 41

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with. Jacob and Abraham, two scientists, gave their accounts of Gamma’s early days, as follows: JACOB: There were no central objectives to be achieved and no timetables to abide by. We did research without professional guidance or project pressure and more important than that—we did what we liked. ABRAHAM: In the beginning of the 1960s, the state had no precise mission for us. Without many restrictions, we were left with considerable freedom to decide what to do. After much discussion and debate, we finally agreed to focus on nuclear research, especially on unique, qualitative aspects for which Gamma had a relative advantage. Under this general framework, most researchers could freely choose the specific issues they wished to pursue. This was academic research at its best. Some researchers decided to focus more on applications of nuclear research—for example, the production of isotopes—while others focused on pure science, like nuclear chemistry.

In most cases, scientists were given the budgets and professional freedom to pursue almost any research agenda. A self-generated culture of “publish or perish” led to an academic approach of tenureship, which recognized the quality and quantity of researchers’ contributions as measured by their publications. Various rankings by tenure also served to reward and promote members. As in an academic institution, researchers were supported in attending international conferences, and in applying for research grants and awards from academic bodies in Israel and abroad. Moshe, a scientist, gave his description of Gamma’s early culture: “Gamma was characterized by academic curiosity led by university professors determined to do at Gamma what they did in academia: publish or perish. Free of professional guidance and project pressure, scientists did what they wanted, and what they specialized in, not what Gamma or the Atomic Energy Commission needed. We were like a university—our goal was to publish. In the early days, we went wild intellectually. We could do whatever we liked.” The veterans of Gamma nostalgically spoke of the “old days” when the organization was not just a workplace but also a home and a family. In many respects, Gamma’s most ingrained norms and values were determined in these early days. Scientists Jacob and David depicted this as follows: JACOB: Professional freedom was anchored in close, almost intimate, working relations. We were a small group of excellent researchers, for whom Gamma was not just a workplace but also a home and a family. We grew up here and raised our kids together. Some even got married in the central yard. We enjoyed the optimal combination of professional camaraderie, sense of family, and close friendship. DAVID: We used to be one big family. We spent a lot of time together after working hours, used to go on social outings, trips, and evening meals. I remember

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feeling that this was more than just a workplace. Support was strong in every way. Whether you had problems with other staff members, your health, wife, or kids, you received almost unconditional help. There were mutual obligations: we were there for the managers and we knew that they were there for us if we ever needed them.

Such an atmosphere of togetherness diminished competition and conflicts within the organization and encouraged cooperative working relations. In the early years of Israel’s nationhood, egalitarian ideals of this kind were widely embraced in the wider society (Eisenstadt 1967). The adoption of such an egalitarian ideology left its imprint on the institutional structure of the state through a process of selective entrenchment and permeation, which took place in different ways—such as the development of sectors in which the institutional derivatives of the ideology were strictly adhered to (Eisenstadt 1967). The military-research establishment is an example of such a sector. Egalitarian values were widely seen within Gamma, as scientist Gideon reflected: “Gamma has always delivered one important message to its workers: cooperate. Indeed, the preferred working style has been in terms of ‘we’ and not ‘me.’ Those who won awards of excellence tried to hide their achievements. Those who did not win kept silent. There has been a strong culture of modesty here—the message has always been—don’t show off. This message is internalized at all levels of the organization. Notice that our CEO drives a Subaru and not some fancy executive’s car.” Egalitarianism was coupled with individual autonomy, as autonomy was seen to be an essential condition for scientific achievement. Gamma supported the view that “the best person to decide what research work shall be done is the man who is doing the research” (Pelz and Andrews 1976: 322). Creativity and freedom of research were strongly emphasized, and the general atmosphere was to let people do what they felt like doing, which stimulated their imaginations. Any attempts to measure output in hourly units or other conventional tools of project management aroused enormous resistance, and deadlines and timetables were rarely seen. Hanna, a veteran scientist, conveyed how such autonomy was given at Gamma, early on: “When Gamma was instituted, intellectually and financially, we ran wild. Professional freedom was practically unlimited. There were more people, more budgets, and more scientific activity. Morally, we were like a university and the ideology was a Mao Tse Tung one: ‘Let a thousand flowers bloom.’ Those who were here thirty years ago wanted to publish; economic considerations were a non-issue. Our choices of projects were dictated by what was close to our hearts.” One of Gamma’s attributes as an “ideal workplace” was the sense of concrete vision and predictability that members clearly saw and shared. The message conveyed by its vision was that Gamma’s academic strength was of primary importance for both the organization’s raison d’être and its work val-

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ues. Indeed, Gamma’s early researchers were self-motivated and dedicated to their work. These researchers felt that they were doing ground-breaking work that was important to both the organization and to the nation. In such a strongly nationalistic culture, the boundaries between individual and organizational identities and interests were blurred, and professional commitments carried strong emotions. Kunda (1992: 11) describes such emotional conditions among workers as constituted by “normative control,” a “selfcontrol” mechanism that motivates workers to act along corporate interests not with instrumental concern for direct economic rewards and sanctions but by “internal commitment, strong identification with company goals and intrinsic satisfaction from work.” Such personalized motivations were expressed in the following account of Amos, a scientist: “There was internal discipline, and an atmosphere of devotion, faithfulness, and willingness to volunteer. People used to work over holidays or Sabbath without being paid overtime. Management was amateurish, with no project management tools, which we objected to. We had vague objectives, loose management, little bureaucracy and few reports, and nobody checked your production level.” Strong national commitment and a sense of solidarity were seen at Gamma while it enjoyed unique access to a valuable research reactor, an excellent group of scientists and stable levels of government funding. Then, Israel found itself faced with an increasingly complicated and difficult defense agenda that started at the end of the 1960s with the Six-Day War (1967) and continued through the 1970s with the War of Attrition (1970) and the Yom Kippur War (1973). After the Yom Kippur War, questions concerning Gamma’s goals and basic assignments were raised. These led to a process of self-examination, leading to a gradual move from operating as an organization that focused exclusively on basic, pure research toward one that included, increasingly, applied and practical forms of research.1 Gideon, chair of the Atomic Energy Commission, described the changes that Gamma had to face during this time: “It took Gamma quite a while to internalize the fact that it could no longer play the role of the university, aiming to produce knowledge and research only. When the country was fighting for survival and the pressures on the defense budget grew exponentially, there was no justification for the state to finance scientists’ curiosities solely for the sake of promoting science. Gamma was left with no choice but to realize that to remain a national research laboratory was no longer even an option.” During the 1970s, Gamma’s organizational and administrative structure and practices underwent dramatic changes. Although the government continued to provide over 50 percent of Gamma’s operating budget, the organization now competed for its funding against other research and development institutions, both in Israel and abroad. From that time on, a large part of the

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responsibility for project acquisition rested with the managers of their respective fields and staff members. These first forays into practical research were perceived to be revolutionary by most and traumatic for some of Gamma’s staff. Many scientists refused to abandon the concept of a “national laboratory” along Gamma’s original purpose of advancing basic nuclear science as an agenda in service to national defense interests. They strongly resisted Gamma’s new, practically oriented, and more business-like engagements and some even left. Those who stayed found themselves in a new organization, still oriented principally toward defense activity, but one that was also active in civil and business domains. To successfully transform itself, Gamma had to identify new scientific and technological domains beyond the nuclear realm but within the reach of the capabilities and interests of its scientists. These had to be areas not yet covered by other R&D bodies, and at the same time, held practical promise. Industrial uses of radiation and nuclear physics, nuclear imaging for medical applications, the development of electro-optical devices, security-screening systems, the enhancement of gemstones, and space technologies were among the commercial applications developed successfully. To conclude, throughout the 1960s, Gamma’s main areas of expertise had been developed, principally, along self-contained interests. In the 1970s, new areas of expertise emerged in response to a range of pressures from both public and private sectors. During this early period, most contracts were awarded by the state on a non-competitive basis, with the state prepared to absorb all costs. This fostered a distinctive culture characterized by close, often “cozy” relationships between Gamma’s management, the military, and the state. The major contractors within this “military-industrial complex” relied upon a steady flow of defense contracts and were relatively protected from national and international competition (see Bishop and Williams 1997). The 1980s saw a growth in emphasis on applied forms of R&D and an opening up of the possibilities of “pure” business activity, with Gamma’s increased attention to the needs of private business sectors. During the early 1980s, there was a prevalence of feasibility studies and the development of simple technological systems. By the late 1980s, projects became more sophisticated, with, for example, the development of components for manufacture. Throughout the decade, a gradual but consistent decline in governmental financial support was seen, along with growing competition from other organizations. Such pressures forced Gamma to de-emphasize pure R&D activity in favor of increased penetration into civilian business markets during the 1990s and the start of the new millennium. The relatively stable nature of Gamma’s market was shattered during the last decade as a result of a series of dramatic changes in its domestic and in-

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ternational environment, as previously discussed in the introductory chapter. These changes, along with severe cuts in defense spending, forced Gamma to pay greater attention to costs and competitive pressures in “real” commercial and market terms. In table 4.1, below, the general trends in each decade of Gamma’s development are presented. Table 4.1. General trends in Gamma’s development Decade

Focus

1960s

Development of scientific and nuclear research

1970s

Applied R&D to fulfill the needs of the defense system; expansion to include practical applications

1980s

Defense R&D, along with private contracts; emphases on feasibility studies, optical and nuclear detector technologies and components, and x-ray systems

1990s

R&D for external customers focusing on the developments of advanced products and systems designed for the use of the private business sector

Expanding its domains of activity has been beneficial to Gamma, in terms of increased financial stability and decreased dependence on the government. During the last decade, the organization successfully financed over 50 percent of its inputs (including investments in infrastructure, facilities, and laboratories), achieving profitable revenues from its R&D contracts and sales of highend products. Furthermore, Gamma established itself as both a successful research academy as well as a high-tech business, and became situated in an exclusive position, as shown below in figure 4.1.

Pure market industry

Figure 4.1. Gamma’s location in R&D settings

Challenges to the Mandate for Organizational Change Despite notable success during its early years in both realms of science as well as business, political and economic developments in the global arena of

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the defense industry made it increasingly difficult for Gamma to maintain its competitiveness. This prompted Gamma’s senior management, together with the Atomic Energy Commission and the Israeli government, to launch an organizational change, with a plan for change announced in 1995. In a detailed memo addressed to his staff, the general manager explained the rationale of the proposed changes: Over the last 14 years, Gamma’s external environment has changed dramatically: The defense industries found themselves facing a severe crisis and their relevancy has been measured more and more according to economic parameters. Gamma’s annual level of public funding has decreased and now covers less than half of our expenses. The Israeli industry has developed significantly and gained international recognition. In addition, our “home” environment has also changed: some of our traditional areas of expertise disappeared and the few remaining are underwriting our continued existence. We also face the necessity to deal with business customers coming from the industry, the civilian market, local and overseas. These customers have proven to be much more demanding and much less forgiving than our traditional clients. As a result, we are currently in a state where a wide-ranging mandate for change is needed. This mandate touches almost every aspect of our reality: from vision to operation, from organization to marketing, from closeness to openness and we need to change in all these areas simultaneously.

This statement may be viewed as an attempt to promote a new organizational culture. However, it failed to address two significant challenges. Specifically, it lacked a clear order of priorities between the organization’s overall mission and various objectives and a clear description of the means by which communicative engagement and cooperation between professional divisions within the organizational structure would be brokered to enable coordinated changes. To expand, one of the more notable findings of this study is the lack of clarity regarding the relationship between Gamma’s organizational vision and a range of subsidiary goals among staff at all levels. Among the interviewees, some believed Gamma should operate as a national laboratory as it was in its earliest years; others expressed the view that the organization had to develop into more of a business; and those within a third group claimed that each worker had “his own Gamma.” Among those who refused to adopt of a more business-oriented approach was Menahem, a scientist, who stated: Gamma is facing a dangerous paradox these days. It’s becoming an R&D organization perceived by its residents as one that does not encourage R&D. What does it encourage, then? The answer is profit making. Everything is measured here according to moneymaking parameters. There is no forward thinking or support in researchers’ ideas, which are, basically, our future. New ideas are advanced through personal connections and seniority instead of through relevancy and

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scientific importance. A significant gap exists between what is “burning in the bones” of management—money—and what is “burning in the bones” of most of the scientists—scientific achievements. During the last few decades, this gap intensified, leading to the neglect of creativity and new ideas, which are the essence of this institute.

Another common view was one that saw Gamma’s increasing involvement in the civilian market as forcing the organization to adapt to a business environment that imposed rules that were incompatible with interests of the defense and governmental sectors. Several described how private industry clients had brought greater demands and pressures on Gamma than seen under defense authorities. Such pressures were seen to have diffused Gamma’s vision and goals, compromising all interests of the organization to be subordinated to one basic goal: to survive. The following accounts of scientists Yoav and Abraham expressed such views: YOAV: It is absurd that there is enough money and people to do research but apparently, not enough time. I see people that are like mercenaries, being transferred from one department to another according to ad-hoc needs. The existence of such routine, unchallenging work in an organization that is supposed to do creative and innovative R&D is simply unbearable. ABRAHAM: The basic goal of developing new ideas became unimportant. What’s important for management today is the “available income”2 measured according to economic parameters. This over-emphasizing of economic parameters detracts from the natural focus of an R&D organization: innovation. Thinking about it metaphorically, if in the past we were wild horses, today we are more like tamed mules walking in paved lanes.

Personal frustrations such as these were intensified by Gamma’s organizational structure, which not only enabled undesirable work patterns to persist but also partly caused them to emerge. Initially, Gamma’s organizational structure was comprised of three technological sections and four facilitating sections, which supported each of the technological sections. In addition, there was a general marketing department, as well as small marketing units operating within the technological sections. Each technological section included several departments, which were further divided by domains and sub-sections. It was a typical hierarchical structure (Jones 2001), which included four managerial levels: the general manager at the top, followed by section heads, department managers, and unit or project supervisors. Several respondents stated that there were inadequate connections between sections and departments, and even between departments that operated under the same section. There were also more statements describing divisions between departments than those describing positive engagement within sections. A general lack of communication and cooperation was also widely cited.

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Scientists Ami and Yoav gave two descriptions of poor communications at Gamma: AMI: I often do not get to see the full picture of the project I’m working on. What is missing is an integrative rationale that stands behind the whole idea. Even when the project is proceeding as scheduled, I still feel that I need more interaction and information. Sometimes I find myself in really absurd situations in which I help conduct experiments and take an active part in writing proposals without knowing what it’s about, at all. I get no advance information on who manages the project, who takes part in it, what its final objectives are, etc. Everything is uncertain and unknown; the lack of cooperation creates a lot of confusion and complicates things. YOAV: The disconnections here are so severe that some of the people are unaware of our general capabilities. Unfortunately, this “ignorance” exacerbates the disconnection between the departments here and the weak flow of information from management to the departments.

Qualities of disengagement were reported by staff at all levels of Gamma. The lack of communication seemed especially pronounced between the management and its departments and between managers and project heads. The interviewees talked about incomplete understandings of managers’ policies and decisions, a lack of shared operational and strategic information, inadequate cooperation between workers and management, and low levels of individual identification with organizational goals. Shlomo, a scientist, shared his observations: Because of the strong compartmentalization here, some of our staff are not contributing as much as they could. This fuels division between the departments and the lack of communication between the management and departments. Gamma’s management is preoccupied with the present and daily routines and less concerned about the essence of the institution and its future. There is no forward strategic thinking here. We live from “hand to mouth.” In addition, the direct exposure of management to actual operations is low. Everything is scanned and broached before reaching the CEO. Reports by individuals reflect the needs and interests of each reporting figure.

Some of the scientists felt that this low level of cooperation and information sharing prevented them from maximizing their potential contribution to the organization. Judging from interviewees’ responses, there seemed to be a large group—mainly comprised of project heads—with little or no input into decision making and other management processes. Members of this group testified that their potential contribution to the overall organization was unduly limited and reflected poorly on their actual capacities. Others expressed feeling that they operated in vacuums, without desirable understanding regarding what the organization was striving to achieve, as a whole. This view

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was also conveyed by a project head, who said, “Management here is led more by constraints and less by objectives.” One area in which a low level of cooperation was especially evident was in the marketing domain. The marketing department was subordinated to the general manager, while each of the technological sections operated a small marketing unit under the authority of a section head. Notably, the central marketing unit did not coordinate its activities with the marketing units within the technological divisions. Such lack of coordination was evidenced in almost every facet of marketing activity: there was inadequate support for project marketing and unclear priorities and roles, which were disputed between central marketing and technological sections. Udi, one of Gamma’s younger researchers, described the situation as follows: A common approach is for a marketing man who knows what we are doing here and knows a client who needs our services to bring the two sides together, in order to develop a shared project. … I have no knowledge in marketing so they bring me to the discussion when technical input is needed. Other than that, I’m not involved in the process. I don’t have enough knowledge in project management, but in reality, that’s what I do … so the end result is that I miss important meetings and feel disconnected as far as the management of the project is concerned.

In addition to the limited understanding among researchers regarding R&D marketing, there was little or no interest in the field. Several of the scientists insisted that the marketing of R&D was not a job for “salesmen” and could only be done by technological specialists with experience in the organization. As a result, external marketing professionals were often treated with disrespect and left the organization within short periods of time. Michael, a veteran scientist, gave a representative view of those who were skeptical about sales professionals: Gamma is not “marketable” in the simple business sense. The only ones that are qualified to market Gamma are the scientists themselves and the only way this would work is if those who develop sell what they develop. Exogenous marketing forces don’t stand a chance here since this is not standard marketing work. The tragedy of marketing in Gamma arises, to a large extent, from the fact that the marketing persons perceive marketing science and marketing shoes as practically the same. On the other hand there are many excellent scientists here who don’t have a clue regarding how to market themselves outside Gamma’s limits.

The importance of integration between R&D and marketing has been already documented in other research. This research contends that a lack of coordination between these functions can lead to high product failure rates by, for example, encouraging creative R&D outputs with no apparent commercial use and/or fostering marketing efforts that miss significant opportunities to

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capture potential markets (see, for example, Souder and Sherman 1993). For Gamma, at a time of increased budgetary pressures and a sharp decrease in governmental finance, a lack of affinity and low professional cooperation between marketing and R&D was a failure the organization could not afford. To summarize, interview responses suggested that although the upper level managers acknowledged a need for major organizational changes, efforts to implement change measures lacked clarity about how changes were to fit in with the organization’s overall vision and goals. This led to widespread division between employees and departments as well as general demoralization within Gamma. Even after Gamma’s managers realized that there was an urgent need to clarify and redefine the organization’s vision and goals, formulating the vision involved a prolonged and complex process that brought some long-ingrained tensions within the organization to the surface. These tensions were mainly between those who wished to retain the academic culture of a national laboratory and others who saw a need to develop a more market-oriented business culture in the organization. The next section explores these tensions and how Gamma’s leaders attempted to manage them.

Managing Tensions In many ways, the large research laboratories seem to have become disengaged from the business of the company. From the windows of the corporate finance office, the research center has looked more like a resort for misplaced academics than a business division. Scientists often seem motivated by obscure, intensely personal goals rather than by company goals. Production and marketing staffs have had more than their fill of assimilating inventions “thrown over the wall” by research. (Corcoran 1992: 103).

Gamma’s need to adjust its agenda of traditional basic research to more multidisciplinary and applied research represents a common experience of many defense R&D organizations (see, for example, Bertodo 1988; Starr 1988; UhlBien and Graen 1992; Whitney 1988). Similar to these organizations, Gamma was to operate as an entity somewhere on the continuum between the university and industry, leading expertise in nuclear research as well as developing applied projects with commercial viability. However, as Gamma attempted to modify some parts of its vision and preserve other aspects of its operations toward these aims, the organization found itself having to simultaneously operate within two different cultures: an academic culture, as well as a commercial one. This section explores some of the challenges that arose out of these seemingly conflicting sets of demands.

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As described, the informality and liberalism seen in Gamma’s academic culture gradually evolved into a more project-based one, which incorporated timetables and tightened budgetary and quality controls. While early projects directed toward defense applications were financed by the government, commercial research was underwritten either internally with funding from Gamma’s own resources, or externally by private sponsors. The need to actively seek financial resources had been an unfamiliar demand for many of Gamma’s scientists, especially those who enjoyed considerable security afforded by government funding in the organization’s early days. Around the mid 1970s, Gamma’s managers concluded that the organization no longer had the privilege of claiming its share of the national budget if it devoted all of its time and efforts only to academic pursuits, and desired the organization to become more independent and financially viable. Scientists Ron and Adi gave their contrasting views regarding these developments: RON: There were times in which being a Gamma member was considered a mark of national pride. Those days are gone. Today, we are facing a new reality in which we have to adjust and fight for survival. At present, Gamma is resting on its record of twenty glorious years of research and academic activity. Today, research activity has almost completely stopped. Very few people here are free to do what they want (or think) they should do. On the other hand, realities have also changed. Many of us are having difficulty adopting the image of the “new” Gamma in which pure science, our main activity of the past, is not part of the game anymore. ADI: We have to learn to compete with the external world. The “how” has already been decided: Gamma should concentrate on filling the gap between academia and the industry, doing research in areas other defense organizations are excluded from.

In order to compete against similar organizations such as the Israel Armament Development Authority (Rafael), Israel Aircraft Industries (IAI), Israel Military Industries (IMI), and the Renovation and Maintenance Centers within the IDF logistics branch (MASHA), Gamma aimed to capitalize on areas of strength in connection with its traditional areas of expertise over others. While such objectives toward greater competitiveness were widely acknowledged, the authority of managers was mitigated by some scientists’ doubts that Gamma could successfully compete in the free market. Gamma’s competitiveness was also hampered by governmental rules and regulations, bureaucratic red tape, strict codes of confidentiality, and an inability to pursue activities that conflicted with the mandates set by the Atomic Energy Commission. On these points, Itzhak, a veteran scientist, gave his point of view: Gamma cannot compete with pure business organizations. We are only a business organization in disguise. Our roots are governmental with all the implica-

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tions connected with this, and that hasn’t changed. Governmental organizations don’t have the required means to compete in a business world. If you want to compete in the business world, you have to act as if you were an organization that belongs to that world. We don’t act this way cause we don’t belong there. A governmental unit like us knows how to produce knowledge, not products, and [knowledge] is what we should focus on.

Nationalistic sentiments also influenced operations to be atypical of other businesses and organizations. Some of the scientists believed that as a national research center, its managers were obliged to direct technological as well as financial developments in order to serve national interests. Others pointed out that Gamma’s management was hindered with an inability to control salaries and workers’ incentives to direct Gamma’s members with the influence managers enjoyed in other organizations. In addition to the dominance of nationalistic interests over economic considerations, Gamma had to overcome several bureaucratic obstacles connected with unnecessary paperwork burdens and uncoordinated work patterns, which hampered its ability to successfully compete in the free market. Motti, the operations manager, contributed his view regarding the problems arising with such bureaucratic inefficiency: “Bureaucracy is a big issue here. This is also one of the obstacles to success. Many personal initiatives and new ideas are blocked due to a surplus of strict bureaucratic rules and regulations. In addition, Gamma is operating under strict conditions of divisiveness between departments and general secrecy. This problem becomes evident when we try to enter new fields and promote new ideas. In such a reality how can we even think of adopting a business orientation?” Problems of communication between staff members were often confounded by Gamma’s distinctive culture of secrecy. National secrecy standards institutionalized at Gamma nurtured what many called a “culture of secrecy.” Beyond the formal requirements for protecting organizational security, a broader system of secrecy that did not involve national security matters was seen in informal and everyday actions of many of Gamma’s members. The tendency toward strong secrecy is a pathology seen in most large organizations primarily because insularity provides advantages for bureaucrats and the executive organizations in which they work. Weber (1922) referred to such practices as those of “bureaucratic secrecy,” stating that such forms of secrecy were seen in the widespread tendency of organizations to limit the information that they release to outsiders so as to control perceptions of the organization. In such instances, secrecy means power and control; the use of these mechanisms enables the organization to evade public scrutiny and gain autonomous control over resources under minimized public accountability. Weber (1922: 233) explains: “Every bureaucracy seeks to increase the superiority of the professionally informed by keeping their knowledge and intentions secret. Bureaucratic administration tends to be an administration

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of ‘secret sessions’; in so far as it can, it hides its knowledge and action from criticism.” Along these lines, secrecy is something that is pervasive and is sanctioned by the culture of the national system itself, guarded behind such terms as “national security,” “sensitive information,” and a variety of other terms and phrases. When these terms are ascribed to certain aspects of the organizational activity, secrecy limitations, both inside and outside organizational limits, are usually activated (Holloway 1994; Shroyer 1998). At Gamma, a culture of secrecy not only insulated the organization from the external world but also buffered internal compartments from one another. Gideon, a scientist, indicated: “One of the main disadvantages of this place is the strong divisions between departments. No one tells and no one asks. The guiding rationale is ‘if you don’t need to know, you don’t know.’” Thus, Gamma’s developed culture of secrecy has further intensified the lack of information sharing that already existed within the organization. Circulation of knowledge was restricted by interpersonal pressures or by formal pressures connected with interests of national security. Many of Gamma’s scientists also supported such “rituals of secrecy” in order to create an air of dramatic importance and intrigue around their work and identities. Regarding the ways many scientists manipulated project requirements of secrecy in self-serving ways, Shalom, one of the scientists, commented: “This strong tendency towards secrecy is in our blood. However, sometimes it serves as a ‘way out,’ using the excuse that if it’s so secret, you shouldn’t discuss the project with anyone or have to check its advantages and disadvantages. Projecting the need for secrecy can be useful as a means of avoiding extra utility checks. In an organization like Gamma, departmental division and secrecy are ‘musts,’ but it has gone too far. Personally, I think it serves the scientists’ interests; therefore I call it ‘functional secrecy.’” Various pressures for secrecy created enormous barriers to professional interaction and kept both Gamma’s members and potential customers from becoming fully informed about Gamma’s potential capabilities. This often inhibited research activities and hampered efficiency in distributing resources for new missions and commercial applications. Gamma’s general manager often mentioned that there were quite a few civilian industries that Gamma could choose to assist, but did not even consider pursuing. He also admitted that Gamma tended to isolate itself from the outside world, thus becoming unaware of its limitations and needs. As a result, the organization faced severe internal conflicts with aspirations to open up and enter the industrial-civilian niche, while it remained restrained by fears of disclosing elements that had traditionally been kept secret from the public and to all those “who did not need to know.” Ron, a young scientist, shared his observations about Gamma’s secrecy:

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We are extremely suspicious regarding the media. We would not like to hear our name on the news even when the connotation is positive. If you want to hear a good example, listen to this one: Our department won a prize given by the Israeli Police Forces. Besides the fact that this achievement wasn’t even mentioned by the media, no one here knew about it, not even the general manager. … We don’t mention our scientific successes in order to avoid causing jealousy or making too much noise. We were raised on the principle of “small and secretive.”

Gamma’s insularity was also indicated by the fragility of its relations with other research institutions, universities, and businesses. Since Gamma tended to recruit its top managers from within its own ranks, most of them had spent the majority of their professional lives working within the limited realm of the governmental defense establishment, and had limited knowledge about environments outside such bounds. Thus, though with nuanced knowledge about the labyrinths of government, such ignorance about the competitive market was apparent in Gamma’s inabilities to coordinate successful business strategies. The following story, that was often recounted, illustrates this point: A scientist and a marketing man went together to a business meeting in order to sell a product that the scientist was still developing. After the marketing person finished promoting the qualities of the proposed product, there was a moment of silence, after which the client directed his gaze at the scientist to ask him whether he could really fulfill the promises he had just heard. The scientist shifted in his seat uncomfortably, and after a bit of awkward hesitation, admitted that since he was still working on the project, he couldn’t fully guarantee all of the promises. The meeting ended with no deal. It is said that since that day, the scientist and the marketing man were never seen together again.

Gamma’s difficulty in instituting successful business practices was partly attributed to the structure and qualities of its system of recruiting and retaining staff. As a governmental entity, employment security for tenured workers, together with pressures from professional unions and collective agreements, limited Gamma’s ability to adopt conventional commercial practices of competitive staffing. While more conventional organizations could shut down and either transfer or lay off unprofitable units, at Gamma, such actions were not possible. Because tenure guaranteed job security for staff, reassigning scientists to new and desirable projects was not always possible, and the management could only discourage unprofitable projects or departments by decreasing levels of support to gradually deliver their closures. As a result, many “old guard scientists” who were not in line with management’s directives continued to work defiantly in fields that had run dry, posing heavy monetary burdens on the organization. As many of these scientists were tenured, management had little leverage over their actions, and was left to wait for them to quit or retire of their own accords.

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Despite such potentially undesirable effects, at Gamma, tenure remained a highly significant means for the management to acknowledge an individual’s contributions to academic literature and add to the stature of the organization. This meant that scientists had to prove success in two different, sometimes contradictory, domains in order to receive tenure. Since the demands, expectations, and skills required to succeed in academia and in business are not always aligned, many of the scientists struggled to develop coherent strategies for attaining tenure. Scientists Rose and Ronen gave corroborating accounts of such conflicts embedded in Gamma’s policies of tenure promotion: ROSE: The issue of tenure is very dominant here. There is constant tension and an inherent conflict—on one hand you need to demonstrate ability and show that “you can.” On the other hand, despite the demand to be obedient, you need to show independence, initiative, and the ability to work alone. Researchers are evaluated according to two somewhat conflicting parameters: their publications and whether they are able to finance themselves. It contradicts the kind of conformity and obedience required here. I find myself fighting against time doing first of all what I’m required to and then developing new things. Some of the people manage to divide their time successfully, others don’t, and focus either on what’s important for Gamma or on what’s important for them. These conflicting demands create tension. RONEN: The promotion criterions in Gamma are very different from those accepted in regular business organizations. It is not enough to show financial achievements to climb the ladder of managerial success. Most of the managers here reached their positions in accordance with academic criterions. Managerial success, which is perhaps the most common criterion for promoting managers in business organizations, is almost a non-issue here. It is absurd that the relevant criterion here is publishable papers, when this is not something that management encourages or emphasizes in everyday life. This creates an almost unbearable conflict so that in order to achieve professional advancement, one needs to defy and even ignore management’s directives.

Management’s pressures to institute economic efficiency and generate profits resulted in sharp differentiations between “successful” and “unsuccessful” scientists and technological fields within the organization. Such new methods of differentiating between those who generated profits and those who did not were upsetting too many of Gamma’s members, especially those who had been with the organization since its early years. For such veteran staff, the use of profit-making parameters for judging the contributions of researchers contradicted Gamma’s traditional values of a free academic environment and egalitarian camaraderie between staff members. Older scientists’ views indicated how motivations of science could be at odds with economic incentives, on which Dubinskas (1988: 197) has commented: “Scientists see the goal of producing scientific knowledge as primary, and they tend to devalue

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economic goals in their world view. There is an aesthetics to this appraisal, too, where open-ended scientific work is more pleasing or ‘elegant’ than the accomplishments of business ends motivated by short-run goals. Nobel prizes have more panache to them than veterinary dipstick diagnostics.” As a result of such developments, the stature of some of the scientists who specialized in basic or pure science declined, including those that had previously been among the most prominent. At the same time, the visibility of more practically oriented researchers, who sometimes had unremarkable research skills, was heightened by bringing about profitable projects. Yoel, one of the scientists, expressed his antagonism toward such competitive comparisons: If I were to characterize the image of the successful scientist in “today’s Gamma” it’s the one who brings in money. We have moved from “science-oriented research” to “money-oriented research.” The emphasis on scientific excellence is almost nonexistent. When you suggest an idea to one of the department managers or section heads, the first question you are asked is “how much?” … Projects that do not generate high income don’t stand a chance because the dominant values here are profitability, survival, and money. Researchers that do not bring projects are considered second rate citizens.

A small group of scientists defied management’s directives and resisted all pressures to pursue profitable forms of research. Despite being pushed to the organization’s periphery, exceptional levels of tolerance were shown by the organization with allowances for such dissenting individuals to remain in the organization. In most businesses, such contentious behavior and challenges to the hierarchical authority would not be tolerated (Lambright and Teich 1981). However, in scientific organizations like Gamma, technical authorities can sometimes challenge higher administrative authority from below, because the work of scientists is based on knowledge. As the nature of scientific work innately requires the autonomy to make decisions based on specialized knowledge, scientists can often negotiate with authorities at higher levels of managerial hierarchies (see Lambright and Teich 1981; Pelz and Andrews 1966; Schriesheim, Von Glinow, and Kerr 1977). As explained, Gamma’s managers were also restrained from firing researchers by the organization’s system of tenure. Thus, the management often only had leverage in the form of its capacities to selectively increase or decrease levels of funding for research projects according to organizational interests. Gamma’s scientists knew when they were being marginalized as a result of their unwillingness to take up commercial projects, but many did so in order to defend their identities as academics. The preservation of a scientific identity and ethos became a kind of personal mission for some scientists, and their obstinate refusals to compromise on their academic interests were sometimes rationalized as a means for preserving some integrity in their organization.

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Some researchers who refused to accept the new rules of commercialization referred to management’s practices in coarse terms such as “prostitution,” and warned that if Gamma adopted a purely business-minded perspective, it would soon be nothing more than a “technological garage.” For these researchers, R&D required unlimited autonomy, time, money, and patience. Every attempt to limit any of these factors under economic pressures was seen to be a betrayal of the organization’s scientific raison d’être. Yoni, a scientist, expressed his position: “R&D is a slow, expensive, and inefficient process that takes a lot of time and requires a long breath. The nature of R&D activity is to have a lot of failures. It is acceptable that this kind of system loses money, as that’s part of the process. Technically, Gamma is a non-profit organization. However, in reality, behaviors which encourage profit making are imposed. We are required to act as if an independent, economical entity and sell technologies at high costs.” Others contended that the competitive climate nurtured by managers had resulted in the emergence of territoriality and rivalry between sections over shares of limited resources. These scientists complained that the situation had gotten to the point where groups working in the same project would not talk to each other about their work, and were in a state of financial competition with each other. Jonathan, a scientist, described these newly felt pressures and their implications as follows: Gamma’s management no longer promotes the family values of mutual respect and togetherness. Now, it’s every field for itself, and not for the organization. The managers encourage it by giving extra resources to the more successful fields. Everybody keeps a scoreboard, and your score is what matters. Those with low scores don’t want to participate. The competition for income even spreads within the fields themselves. You hardly see any cooperation anymore—everybody puts his nose to his own grindstone. Interaction between researchers is scarce.

Others insisted that despite pressures of extreme competitiveness, a culture of modesty and a conservative tendency to curtail individual prominence had been maintained. Scientists Yoel and Tal relate to these tendencies in the following words: “The organizational culture here is very different from that of a regular R&D organization. Those who get rewarded for excellence keep the news for themselves; those who do not, also keep silent. There is an apparent recoil from extravagant gestures.” Gamma’s tendency to curtail individual prominence integrates well with another one of its unique gestures: enable veteran scientists to continue work on their research projects although these do not seem to carry any profitable potential. This costly retention of scientists who were unprofitable and unproductive was valued by some as an expression of humane values, which were being maintained at Gamma. Roni, a scientist, claimed: “Management

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is considerate here; they don’t throw the old generation to the streets even if their projects do not stand the tough criterions of profit generation. There are well-developed mechanisms of financial and personal support and this creates a very positive work environment. This is maybe the only domain on which money hasn’t imprinted its stamp, yet. …” However, it seems that the downside of this humane behavior is that many scientists, especially the more “productive” ones, complained of unfairly heavy burdens on their shoulders. Gamma’s general manager acknowledged that only about one-third of all of the organization’s projects were profitable. This meant that a few dozen successful scientists were financing all the others. Rafael, a scientist, and Ariel, Gamma’s general manager, opposed such practices to differing degrees: RAFAEL: Those who were born here are a bit limited in their capacities to adopt new concepts and ideas. Most of them are pretty naive and have never been exposed to the “real world” in terms of competition. The need to change and move to a more economic way of thinking has heightened the visibility of such inabilities. In any other workplace, these people would have found their way out one way or another, but here, we feel a kind of a moral obligation to live with them. They are different from the rest of us in almost every visible parameter, you can recognize them even according to their physical appearance—they all have wrinkles and gray hair. ARIEL: In contrast to any “normal” business company where the unproductive find their way out, here, we let them stay. Perhaps there aren’t so many of them, but still the fact that these workers get paid like all the others —and sometimes, even more—causes aggravation, de-motivation, and frustration. Practically speaking, you can find two basic types of workers here: the motivated—those who contribute to the organizational interests; and the unmotivated—those who burn time waiting for their official retirement date to arrive.

Management’s moves toward emphasizing profitable applied-research capabilities led some scientists to expect that pay incentives would be aligned with such directions. These expectations were not met. Instead, Gamma distributed resources so that profitable departments and sections subsidized other less-profitable units. For many scientists, such practices were not only absurd but also inconsistent with management’s rhetoric, which valued profitability as a measure of success. Despite inconsistencies, the idea that successful sections would finance unsuccessful ones appealed to some, as such an approach was seen to be in line with Gamma’s traditional values of cooperativeness, coherence, and egalitarianism. Some of the scientists believed that these “socialist” principles should be incorporated within the organization’s rewarding system. The rationale underlying such support rested on the notion that such financial flows would preserve Gamma’s unique set of organizational values. Expressing such

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a view, Zohar, a veteran scientist, commented: “Twice a year we give a prize here for excellence. You might be surprised to hear that many of the workers disapprove of this prize. These workers claim that there is no point in giving the prize since we are all ‘one big family,’ investing time and efforts to serve the interests of the organization. Thus, choosing certain people for the prize decreases motivation, not vice versa. The biggest objectors to the prize are those who have won it many times … they believe that the prize should be distributed according to more socialistic principles.” Many of the more competitive scientists were opposed to this “socialist” culture and expressed their antagonisms against Gamma’s tendencies to neglect its most competent employees. Several scientists also shared their frustrations with the view that the emphasis on profitability was limited to that of the organization. There was also related bitterness against how professional security for individuals continued to be secured by tenure, which maintained many different demands of academic achievement. Scientists Moshe and Yoav expressed their strong dissatisfaction: MOSHE: The incentive and rewarding system here is distorted because of its connection to collective work agreements. Not only does it fail to motivate, it depresses [staff]. … For some reason, unlike at other organizations, here, it’s hard to reward those who deserve it. The system here is a non-rewarding and non-motivating one. YOAV: Sometimes I feel like a slave here. I bring in income to the value of 2 million shekels and others do with the money as they wish. It’s difficult for me to even get a pair of [working] shoes for my people. Our strength was in the intrinsic motivation that people used to have here. Today, this motivation is being exterminated, as strong alienation and disconnection is spurred.

Judging from these words, Gamma’s rewarding system was clearly controversial. Practices of rewarding tenured senior scientists with job security even when they no longer contributed meaningfully to the organization, while productive young scientists remained insecure without tenure, was hardly consistent or fair from the perspective of the younger scientists. Financial bonuses, which are commonplace in business organizations, were not part of incentives given at Gamma, so the personal earnings of the scientists sometimes failed to reflect their contributions to the organization. Furthermore, many scientists chose to work on scientific projects and publications “under the table,” pursuing academic research secretly toward earning academic credentials to gain tenure, while also fulfilling management directives to uphold profitable projects with commercial viability. Another anomaly of Gamma’s reward system was represented in the “league table,” a mechanism developed for evaluating the contributions of each technological section. The “league table” was basically a collective perfor-

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mance–evaluation system that ranked the various contributions of each technological field by measures of profitability. The purpose of the league table was to encourage competition between sections. Once a year, Gamma’s general manager assembled all of the sections together and formally announced the high achievers of the year. The sections that brought in the highest revenues were usually rewarded as a unit, often with purchases of new research equipment and computers. The institutionalization of the league table as a differentiating mechanism between successful and unsuccessful sections created a great deal of cynicism and even disdain among some of the scientists. Gabriela, Gamma’s marketing manager, explained: “The rationale of the ‘league table’ created a problematic situation in which units or fields adopted a certain project only because it had commercial potential. Adding to this problem, people sometimes hesitated to suggest and initiate new ventures and ideas when they didn’t seem likely to be profitable. The current measure of business success is therefore very problematic and tends to have negative influences on innovation, entrepreneurship, creativeness, and motivation.” For the management, the league table represented a legitimate means of generating peer pressure. According to Gabriella, such shortsighted and narrow pressures did not encourage comprehensive or progressive thinking about the organization’s long-term goals and strategic plans. The only thing it clearly—and unduly—emphasized was the need for fiscal efficiency, she contended. To summarize, Gamma’s system of work arrangements created a static labor force, which could not be rationally adjusted to keep up with changing priorities of the overall organization. Despite management’s recognition of these problems, it seemed unable to address them. The difficulty arose from the fact that the organization remained part of the defense establishment, operating according to strict and inflexible bureaucratic directives, resulting in the management’s inability to reconcile conflicting demands. The situation created tensions between many scientists seeking endorsements in two conflicting spheres—those of scientific excellence and those of market profitability—simultaneously.

Chapter 5

Survival The Pressure for Change

Right now, the only thing that matters is how to survive. We cannot dream about any other vision while we are facing a battle of survival. To endure we need to show good profits, words are not enough. We need to excel professionally so that our customers will be satisfied and so that we survive. (Gamma’s general manager, speaking at an annual assembly of the workers)

It appears that the concept of survival provided Gamma’s members a means to cope with changes in the face of seeming threats to Gamma’s identity and core features (Collins and Porras 1994; Hannan and Freeman 1984). Survival notions were promoted to encourage those who resisted change to accept temporary and unconventional measures while preserving Gamma’s original vision. For those who identified with the need to change, survival signified an immediate objective that needed to be met. For others who felt uncertain or confused about Gamma’s vision and future goals, survival was an interim means for helping them cope with the unknown. Thus, it seemed that in Gamma’s culture, survival played an important role in helping the organization change. In this chapter, some of the members’ notions of survival and the role of survival in Gamma’s efforts to change are probed and compared. The term survival can be defined in various ways. One of the definitions offered by the Oxford Dictionary (1989) describes survival as: “Continuance after the end or cessation of something else, or after some event; spec. Continuance of a custom, observance, etc., after the circumstances or conditions in which it originated or which gave significance to it have passed away.” If we accept the definition that survival means endurance after a change of earlier terms or circumstances, then survival can be seen as connected to and resulting as a response to change of a prior situation. Indeed, the view that survival often arises as the result of a preceding transformational process has been noted in organizational literature (see Aldrich 1999; Friedland and Alford 1991; Martin and Scott 1998). Two early theoretical perspectives that have considered the consequences of change on organizational chances for survival include the contingency approach (Lawrence and Lorsch 1967; Thompson 1967) and the classic manage62

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ment approach (Andrews 1971; Chandler 1962; Porter 1980). These approaches suggest that when top managers recognize that environmental conditions are changing, they are likely to change organizational proceedings in quick and flexible ways in order to ensure an organization’s survival over time (Andrews 1971; Child 1972). The institutional approach (DiMaggio and Powell 1983; Meyer and Rowan 1977; Zucker 1987) also subsequently acknowledged the effect of organizational changes attempted in order to ensure organizational survival. According to this perspective, organizations are continually trying to adapt to changing environmental contexts and conditions, and change mainly when they have no choice but to do so. In other words, changes are often responses to modifications in their larger settings (Aldrich 1999: 51). Institutional analyses thus view environmental changes as dramatic events, which can bring discontinuities into an organization and thereby threaten its survival (Aldrich 1999; Friedland and Alford 1991; Martin and Scott 1998). To cope with the threat, organizations scan their environment, formulate responses to changes, and attempt to adapt to changing environmental contexts and conditions. The ultimate aim of this matching process is to encourage adequate forms of responsiveness to environmental changes to promote the continued survival of an organization (Singh, House, and Tucker 1986). A different view concerning the effect of change on organizational chances of survival is presented in the ecological approach (see Aldrich 1990; Carroll and Delacroix 1982). This perspective emphasizes the significance of the competition between similar organizations for vital resources. The nature and distribution of material and resources within an organization’s environment is regarded as the primary factor explaining the direction and content of organizational changes. The environment is conceptualized as consisting of clusters of resources, and the quality of selections from these determines an organization’s ability to survive (Aldrich 1999). Unlike previous theories, the ecological approach represents a rather pessimistic view about an organization’s ability to adapt itself to its changing surroundings. As Robbins (1990: 166) contends, “if there is a shift in the environmental niche that the organization occupies, there is little that management can do.” This is because organizations tend to change in a slower pace than environments do (Aldrich 1999; Kelly and Amburgey 1991). There can also be resistance arising from organizations’ concerns that a change might cause a loss of identity and purpose, and seem to hurt the chances of continued survival (Hannan and Freeman 1984). Such potentially harmful consequences of organizational transformation are addressed in Hannan and Freeman’s model of structural inertia (1984: 156). Although the researchers contend that transformations might improve an organization’s life chances in the long run, they note a tendency for orga-

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nizations to resist change due to members’ fears of harming “core” organizational features, which include: 1. The organization’s stated goals—the bases on which legitimacy and other resources are mobilized; 2. Forms of authority within the organization; 3. Core technology, especially as encoded in capital investment, infrastructure, and the skills of members; and 4. Marketing strategy in a broad sense—the kinds of clients to which the organization orients its production and the ways in which it attracts resources from the environment.

Gamma’s difficulties in expanding its range of activities to include more applied research align with the expectations that would be led by ecological theories describing organizational resistance to change. As suggested by these theories, one of the main reasons for Gamma’s difficulties stemmed from scientists’ anxieties related to the unknown hazards of such significant changes to the organization. Institutional and ecological theories guide understanding of how demands of organizational survival shape particular tactics of responsiveness to changing circumstances, and are thus useful in analyses of developments at Gamma. As previously stated, new institutional and economic pressures compelled Gamma to change in order to avoid closure. Zeev, a veteran scientist, described Gamma’s responses to these challenges: “In the last few years, the financial structure of the organization has changed dramatically. Gamma is operating under a heavy load of pressure of budgetary demands and the need to self-finance itself. A lot has changed here since the ‘good old days’; concepts like ‘pure research’ and ‘national laboratory,’ which once were our essence and pride, are practically ‘obscene’ words in today’s reality. Our glory days are gone; today the only thing we are fighting for is our survival.” As reflected in Zeev’s words, Gamma found itself facing a complex situation in which it needed to change some of its “core features” to keep up with changing external conditions, including governmental reductions of funding and intensified market pressures. However, Gamma’s managers had to be careful to initiate changes through gradual measures in light of considerable internal resistance to the changes. The directed changes included: 1. Adding economic and profit making goals to nationalistic ones; 2. Flattening the organizational structure while preserving coverage of basic functions; 3. Continuing support for research in nuclear technology but extending the scope of research areas and encouraging developments of technological applications; 4. Modifying marketing strategies to attract civilian clients and business partnerships with the private sector.

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In accordance with these guidelines for change, commercializing initiatives were enacted with careful efforts to project respect for scientific integrity through the use of statements like “the scientist knows how to market best” and “selling R&D requires more talent than selling shoes.” Other expressions such as “changing the core while keeping the essence” evoked Gamma’s strategies to ensure organizational survival. The dire quality of demands in terms of survival helped establish the necessity of adjustments to Gamma’s ideology, purpose, and stated goals. Although most of the scientists were aware that the organization’s concerns of survival were embedded in managerial actions, survival as a motivation was not explicitly acknowledged, as the general manager explained: Gamma’s need to emphasize applied research and seek civilian markets was not accompanied by any orderly organizational or entrepreneurial planning. In fact, it happened mostly ad hoc without altering our manpower distribution or our organization and without rethinking our mission and vision. Gamma was a research institute; nobody asked for whom or for what it existed. We had a fixed budget. Then, budget decreased, and we moved into applied research, more selffinancing, and even production. We didn’t think about setting ourselves a new vision or a new set of objectives. Perhaps this lack of concise objectives helped smooth our way through these changes. Not exactly smooth, since we still stuck to different objectives, some reflecting our past, and some our future. The combination of the two crystallizes our sole current objective: survival.

Demands of survival took both organizational and individual forms. On the organizational level, survival reflected the need to generate income and increase Gamma’s involvement in applied science activity. For example, strategies for survival dictated managers’ discouragement of the “not invented here” (NIH) syndrome. The NIH syndrome referred to the tendency of researchers to reject any idea that originated outside their immediate and familiar setting (see Jain and Triandis 1990; Katz and Allen 1982). When research and development groups were inflicted with the NIH syndrome, performance suffered under insularity and failure to keep up with advances in the wider scientific community and industrial circles (Katz and Allen 1982). Gamma’s newly pressured demands of survival required more openness to collaboration with private industry, and this required the need for managers to uproot scientists’ tendencies to seclude themselves from the outside world, indicating attitudes of bias against anything “not invented here.” The adoption of survival as a basic organizational goal served to force the scientists to think in more concrete terms of time, outcomes, results, and resources. Moreover, it conveyed the notion that the organization was constantly in a crisis situation, and diminished fantasies of Gamma remaining a national laboratory. Survival also required no more definite vision or objectives, for better and for worse. A positive effect was that everybody came to

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recognize that they had to put out their best efforts toward survival. More negatively, as Amir, a scientist, explained: “Enslavement to ensuring our survival has blinded our senses: no one really knows what you want, and nobody looks beyond his own face in the mirror.” On the individual level, survival required some of the scientists to modify their professional interests, research style, and work habits, and become involved in unfamiliar activities. These scientists were required to give up some of their academic freedom and work more cooperatively along management’s directives. For a governmental institution in which scientists had grown accustomed to considerable academic freedom, such demands were difficult to establish. Table 5.1, below, summarizes various attitudes toward Gamma’s survival strategies. Table 5.1. Attitudes toward organizational survival strategies Views of managerial leader Improves the quality of organizational activities, including research objectives and procedures Enhances capacities to generate income and profitability Engages scientists with developments outside the institution Positively redefines original objectives and goals Views of dissenting scientists Forces modifications of scientists’ professional interests, research areas, and methods Creates dependency on industry and the market Demands compromising research interests under economic pressures

Management’s new emphasis on survival as the main force guiding operational decisions was conveyed through all levels of the organization. For some, especially Gamma’s veteran scientists, pressures for survival were not only inappropriate but also seen to endanger the integrity of the organization’s original vision to seek uncompromised standards of scientific excellence. Resistance against demands of survival was seen in reactions insisting on adhering to Gamma’s “core ideology.” Scientists who expressed such reactions perceived the vision of the past as sacred. They considered themselves as the ones that had worked to make that vision meaningful, and resisted any changes to it. Thus, although the pursuit of pure research had become unsustainable, for these scientists, such an agenda remained a legitimate one. Gideon, a section head, reflected on the issue: “Our vision is still pretty much scientific. That’s how we were brought up and what we still believe in. But management prefers to promote a blurred vision, without any clear-cut identity or objectives beside survival. They think the blurriness will moderate the scientists’ resistance to coloring diamonds.”1

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As adjustments to the original vision were made, it no longer guided coherent directions for the organization like it used to. Demands for the adjustment of Gamma’s organizational vision created some confusion regarding Gamma’s identity and future goals. In order to address such confusion, management had to carefully legitimize new goals and objectives. Maintaining the organization’s identity as one that played an integral role in serving Israel’s national defense interests became especially important in enabling other changes to be made. Moshe, a scientist, explained: We can’t neglect our scientific vision. People here are educated to be researchers and strive for research achievements. You can’t deny our contributions to national security. This was our prime vision and should remain so. … You can’t measure our vision by the bottom line alone. We aren’t a regular business concern. Our vision should be linked to our nation’s interests of defense. The old vision has been shattered by new [economic] realities, and it’s very hard for us, who so strongly identify with patriotic interests, to shift our loyalties to that of mere survival.

Management’s survival principles created clashing subcultures (see Lambright and Teich 1981) within the organization. Some scientists fought to preserve desirable forms of academic freedom, while others accepted demands for ensuring the commercial viability of their activities. The views of scientists who resisted survival efforts sought to guard their original credo. For them, the move to production and entry into civilian markets was at the expense of scientific excellence, as Tuvia, a veteran scientist, contended: Changing from a national laboratory into an economic unit is an anomaly for us [the seniors at Gamma]. I can neither accept it nor live with it. For me, Gamma is still a national laboratory supported by the government. Moreover, I believe that Gamma shouldn’t become an economic unit and should maintain its national orientation. If the government and management believe that Gamma’s research aims no longer have any national value, we can close the gates of this glorious institution. Any attempt to turn Gamma into a successful factory or production unit is doomed to fail. The amazing thing here is that management doesn’t see [this] and guides the organization to its doom.

Judging from these words, a major part of the resistance against the new survival-seeking measures was tied to members’ fears that economic priorities would eventually overshadow scientific ones. For many of the scientists, Gamma could not survive being led by economic considerations alone, as this would strip the organization of its capabilities, advantages, and basic identity. For them, if Gamma started to chase after projects for the sole purpose of generating revenue, this would indicate the organization’s loss of integrity. Some of the scientists voiced concerns that such errors were already underway. Shalom, another veteran scientist, expressed such a view:

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We should focus on gaining, nurturing, and developing scientific technological knowledge. Research projects are the foundations of the technological future of a modern society, but the only concern here is how much money we make from each project. Scientific accomplishments are no longer recognized. The organizational culture is starting to look like that of a production factory and I wonder how much further we can stoop. Maybe we should start renting rooms; that could solve some of our financial problems and bring easy money. … I think we have really lost our way.

Alongside those who were vehemently opposed to Gamma’s survival strategies were those who felt confused and unsure about their individual duties in supporting the adjusted vision and goals. These scientists often complained about the lack of clear policies and goals besides those that encouraged profitseeking. Some attested that they didn’t even know what kind of activity they should promote and what they should reject. To cope with the ambiguity, many defined for themselves general notions regarding Gamma’s goals and directives, incorporating the idea of survival into these notions although it had not been explicitly stated that such a motivation should guide them. Yoram, a scientist, reflected on the issue as follows: “I still don’t get what management here expects from me. Is it new ideas? Projects? Finance? Writing professional reports? I try to follow the organizational goals and be attentive to them but the organization does not help me to actualize and achieve its goals. As a result, I’m very demoralized. The message of the management is that our goal is to keep our head above the water. Personally, I think survival is a wrong directive. It might suit the army but not an R&D organization.” Yoram’s words here show how efforts for survival could be frustrating and unclear, with much ambiguity arising from multiple interpretations about Gamma’s vision and goals. With the need to modify core institutional elements, the inability of some staff to loosen their commitments to earlier core features and accept new or modified ones contributed to situations of confusion and disorientation. Meanwhile, other scientists did not feel threatened or confused by the new survival tactics, and readily accepted changes toward increasing commercial viability. Avi, one of Gamma’s younger scientists, depicted this perspective: “The possibility of being a national laboratory is not even an option anymore. Those days are gone and nowadays, Gamma is forced to live on its sword. Our relevant niche is doing R&D with expertise located somewhere between that of the university and that of industry. We need an interdisciplinary perspective for doing that. It may be a business risk, but this is our future.” While managers seemed adamant about the need to incorporate survival strategies into all of Gamma’s operations, there was no clear line of authority directing the development of such strategies and change measures. External marketing and business development consultants were contracted to help di-

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rect the organization to be better exposed to a wider range of potential clients and business partners, and strengthen Gamma’s links with private industry. As a result, Gamma’s projects were diversified to include, for example, those of electro-optics, medical diagnostics, pulsed power technologies, and space environment simulators. Efforts to sustain nationalistic motivations while directing greater realism in the interests of organizational survival aroused several disagreements, most of which concerned the bases of selecting and supporting Gamma’s activities. One central controversy revolved around the issue of whether and to what extent Gamma should cooperate with the industry.2 During the 1980s, Gamma opened itself up to a wider range of industries, yielding notable achievements like the development of a camera for nuclear medicine, laser applications for the audio-video industry, and industrial applications for neutralizing toxic waste. With the initiation of “Isobar,” Gamma’s commercial arm, collaborations with other companies active in radiopharmaceuticals and related fields led to additional developments including the creation of pain palliation products and peptides for nuclear medical imaging. Despite the apparent successes, Gamma encountered great difficulties in its experiences to cooperate with the industry. Where partnerships did form, conflicts between governmental and academic interests and industrial-business interests have been common (see Stockdale 1996). Such disagreements have not only fostered stop-and-go policies at the federal level but also troubled Gamma’s efforts to develop a clear mission and goals. The implications of such a reality are seen in the words of Yoel, a marketing person: Gamma does not have a long-term policy aimed to answer the question: where are we heading? Instead, we are floating from one year to the next, emphasizing the importance of “available income.” Gamma has adopted a “quarterly” approach to planning, no more and no less. What’s missing is preparedness for the longer-term future. … Without this, you cannot decide where and how much to invest in order to build toward a desirable future. An R&D organization that does not look ahead has a serious problem. We make a severe mistake in examining everything through the whole of the coin. The most severe impact of this kind of policy is on creativity and innovation and if these qualities are damaged, our future is in danger.

Yet, despite a lack of consensus behind a coherent vision and clear set of future goals at Gamma, collaboration with the private industry clearly became an integral strategy guiding the organization’s activities. Representatives of the Atomic Energy Commission explained: We could not establish R&D research that would contribute to the industry without putting some amount of effort in product specialization. Without this our efficiency as an R&D center would have dramatically dropped and we would

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have found ourselves in a worse place than the universities. We have reached the conclusion that Gamma needs to work with a wide spectrum of activities [to include] services, products [while remaining] mostly R&D. Gamma will be lucky if there are successful lines of production. Without this, in the long run, Gamma won’t be useful nor profitable.

The Commission’s representatives indicated that collaboration between Gamma and the industry was expected to yield important benefits to both parties. However, Gamma’s difficulties in attempting to comply with market requirements and civil needs led to some cancellations of high-potential projects during their early stages or even before they even had a launch. To summarize, the adoption of survival-seeking aims was part of an extensive process in which Gamma adapted and redefined its mission and objectives to encompass activities of both basic and applied forms of research. Managers led survival-seeking efforts to induce necessary changes with force while carefully moderating adjustments to avoid alienating those most resistant to the changes. For managers, directing changes in terms of survival demands filled a functional role; notions of survival effectively projected organizational demands to progress and evolve with realistic responsiveness to changing conditions. Thus, the notion of survival served as a functional tool for organizational change, guiding its scientists, including those opposed to the new demands, to cooperate as a matter of organizational “life and death.”

Conclusions An examination of Gamma’s development over the last four decades reveals a series of organizational dilemmas. To a large extent, these dilemmas are a result of Gamma’s transition from a national laboratory belonging to, and funded by, defense authorities, to a more self-reliant organization that aspired to be competitive in the market as well as defense-related arenas. These findings attest to the great difficulty inherent in such transformational forms of transitions. In the first decades of its existence, Gamma was funded, to a large extent, by the defense authorities, and therefore the budgetary constraints were relatively light. These authorities encouraged Gamma’s academic output (scientific publications and research reports) and demanded very little applicable output (projects to be implemented or actual products), except for nationallevel projects that were meant to enhance national security. Accordingly, during that period scientists enjoyed a large degree of professional freedom, and the message passed along by the organization and by management was that the preferred areas of activity are a combination of national needs and the researcher’s scientific interests. Thus, in most cases, scientists enjoyed gener-

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ous budgets and wide professional freedom, which were intended to allow them to realize their research objectives. During the mid 1970s, Gamma found itself having to face a new organizational reality, and this required major shifts in the organization’s modes of operations. From about the 1980s, the government and the defense establishment decided that basic research would be transferred to universities and to research institutes, and Gamma was asked to utilize the knowledge it had acquired and apply it to more practical purposes. An examination of interview responses and a survey of documents indicated that the implementation of such organizational transitions was incremental and manifested mostly in structural changes. These changes facilitated the preparation for acting in the business market by developing a wide variety of technological specializations and initiatives for additional projects, operating according to market and client needs, separating the business activity from the defense activity, and promoting sources for advancing and nurturing new ideas. Gamma’s management realized that the scientific and technological knowledge that had accumulated in the organization over the years could be made relevant to market-oriented applications. The record of Gamma’s experience with various projects showed that it had the capability to develop civilian applications of science and technology. Commercial success was also made possible by Gamma’s advantages as a laboratory, which had developed and amassed unique forms of expertise in nuclear research and other technologies. In other words, the scientific-research background was perceived by the organization as assisting in achieving the flexibility required for the relatively complex and rapid transition to applied and civilian implementation. Despite the apparent advantages, it seems that there was a price tag attached to holding on to a culture of basic research. One of the important findings of this chapter is that maintaining the organizational culture of a national laboratory entailed some aspects that hindered, and even held back, Gamma’s ability to adapt to the new demands dictated by the organizational reality. As stated above, the organizational culture that accompanied basic research was unique, and included a value system that was significantly different than that of a regular business organization. Some members zealously sought to preserve traditions of egalitarianism and insularity, which were markedly at odds with those best suited to the organizational culture of competitive firms (see Deal and Kennedy 1982; Weick 1985). There were several manifestations of this adherence to the original values. One was maintaining employment conditions and a salary structure that were based on research and academic criteria. Others were holding on to a marketing system incompatible with the civilian market, and developing an organizational culture that placed reaching a technological solution as its pri-

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mary priority, even when this was not the best solution for the needs of the civilian market. With increasingly clashing views about the appropriate balance between the development of historically significant advances in science and service to the more immediate needs of lucrative civilian markets, Gamma’s managers had to mediate between those who sought to preserve demands of tradition and the demands of others who desired reforms to increase efficiency and competitiveness. The management encouraged entry into the business market and advancing initiatives that led to new ideas and simultaneously tried to preserve core aspects of Gamma’s traditional research culture. Gamma operated for several decades with this duality of aims, as managers all the while attempted to increase the range of applied projects, promote Gamma’s exposure to the civil market, and diversify areas of expertise and activity. Despite the efforts of Gamma’s owners and managers to direct such shifts, relevant measures were not adequately defined in clear, coherent, and structured policies. Beyond the ideological challenges inherent in transitioning from operating as a laboratory for basic research to one that also served applied research, a large part of the organization’s difficulties in its transition efforts were connected to the ambiguity of Gamma’s goals and future objectives. Despite the fact that the original vision was no longer suitable for the organization, no alternative vision was defined to formally establish a coherent set of desirable goals and purposes toward future targets. This meant no collective target toward which members of the organization might cooperatively work and aspire. To fill the vacuum, many members of the organization developed—spontaneously and informally—the “survival vision.” This vision became a functional mechanism that helped members cope with the conflicts and stresses that sprouted from the gaps between the original vision and the new organizational reality. The most important characteristic of the survival vision was that it enabled members to accept changes in the operational modes of the organization as necessary adaptations while preserving the organization and its heritage. In other words, the survival vision nurtured acceptance of changes while maintaining the identity of the organization. Although the survival vision fulfilled certain needs, its effectiveness was partial and not fully satisfactory. Defining the activities of the organization in terms of serving survival needs could fuel frustration, bitterness, cynicism, and uncertainty. On the organizational level, adopting the survival vision not only failed to define an order of goals and objectives, but also brought about significant anomalies that suggested an inability to establish autonomous, long-range plans. For example, the scheduling and quality requirements of too many uncoordinated sets of projects forced inefficient allocations of employees and resources, and failures to finish some projects successfully.

Chapter 6

Change in Style, Change in Form Regenerating the Organizational Structure

In the past, all research activities were based on a bottom-up system. But unless someone takes the leadership, there will be no synergistic affect. The problem is that researchers have no outside contacts and, therefore, are unable to generate any synergy within the company. So we are changing our thrust to put these projects under the corporate business planning division, not under the laboratories. The aim of entrepreneurial projects is to bring together people from accounting, sales, marketing and R&D. The general manager of the division is going to have strong responsibility for decision-making of the project. (Y. Takeda, executive managing director of Hitachi’s corporate laboratories, in Boulton, Mejeran, and Tummala 1995)

There is general consensus among organizational scholars that today’s organizations are operating in a turbulent era, one in which their environments have faced constant and rapid fluctuations (Beckhard and Harris 1987; Bennis 1966; Benveniste 1994; Howard and Geist 1995; Mohrman and Mohrman 1989). The need to keep up with such an accelerating pace of oscillation, and remain flexible, effective, and responsive, often serves as the trigger for initiating change. Thus, managing and implementing change has become, perhaps, one of the most critical factors for the successful management of organizations (e.g., Buchanan and Boddy 1992; Jarrar and Aspinwall 1999). Ideally, effective changes involve cooperative decision-making processes and encourage continuous improvement and learning (Pollalis 1996). These were views that influenced Gamma to initiate its organizational change process. The objective of this chapter is to probe the plans and methods with which Gamma’s change process was implemented. The organization’s efforts and experiences will be described and analyzed while considering factors of its internal and external environments.

Why Change? The Demands of Organizational Environments Some researchers argue that the universal model of a modern organization is one that is adaptable to change and sensitive to its environment (see, for ex73

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ample, Beckhard and Harris 1987; Kanter, Stein, and Jick 1992; Mohrman and Mohrman 1989). Organizations following this model are usually structured with relatively few levels of formal hierarchy and loose boundaries among functions and units in order to empower their members to be proactive and entrepreneurial. A basic belief embedded in this model is that improving the “fit” between an organization and its environment can enhance the efficacy of the organization’s operations. Organizational changes are often initiated in order to improve operations along this rationale. Organizations face challenges of volatility with regard to two specific environments: the external and the internal (Lawrence 1989; Mohrman and Mohrman 1989). External challenges include increased levels of competition, changes in stakeholders’ expectations, technological developments, and legalpolitical challenges.

External Environmental Dilemmas The globalization of the economy, a lack of growth in domestic markets, and cessations of protected market niches are some of the forces that can create increased competition and compel organizations to change (Lawrence 1989). At Gamma, for instance, the growing competition from the worldwide market for defense products, as well as fierce competition from private Israeli firms (operating in Israel and abroad; Sadeh 1995; Dvir and Tishler 1999), forced changes to ensure the organization’s survival. Besides the growing level of competition, there are also customers, suppliers, and other relevant stakeholders that place additional economic pressures on organizations. These entities can increase the costs that need to be met by organizations in order to competitively deliver products and services within rapid response times and high quality (Cole 1989; Mohrman and Mohrman 1989). Such pressures were especially evident in Gamma’s encounters with new industrial and civilian consumers. Such clients proved to be demanding ones, with greater requirements in terms of quality and rapid results than seen under past defense contracts and commissions. Technological developments also enabled increased scrutiny by stakeholders, who sought access through the online monitoring of orders as had become commonplace in many businesses. Gamma had to follow such trends of improved customer service, which, in turn, led to structural modifications, changes in project emphases, and the coordination of various employee sections. Political developments such as changes of leadership constitute another element that might impact organizational policies and modes of operation. Political changes can open up new markets or close existing ones. Legislation can also have significant effects on market outcomes. For example, Israeli

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laws, which encouraged joint research, have promoted professional partnerships and the pooling of domestic resources so that Israeli R&D organizations may be more competitive with those outside the nation (Mohrman and Mohrman 1989). At Gamma, these and partnerships expressed a trend of increasing defense conversions, the transfer of military technologies to the civilian market and the establishment of partnerships with private industry to develop commercial applications (Defense Conversion 1993). Government support has also led to the development of new, cooperative, joint-venture, and industrial laboratories, while university and state laboratories were transformed into new and different entities (Crow and Bozeman 1987).

Internal Environmental Dilemmas Most organizations’ internal environments are unstable and constantly in flux. Changing elements include those of an organization’s culture, structure, and strategy, as well as modifications in organizational members’ behaviors (Lawrence 1989). At Gamma, for instance, the organizational culture gradually shifted from that of a national laboratory to that of an applied research organization, becoming more business than scientifically oriented. The organizational structure also underwent incremental modifications over the years. These changes resulted in response to the management’s efforts to diversify Gamma’s areas of activity and expertise. Required modifications in members’ behaviors were seen in management’s request to demonstrate entrepreneurial skills, including the capacities to develop and market financially viable projects. In response, the newer generations of scientists tended to support such initiatives, whilst those of the older generations were generally more resistant. Changes in the external and internal environments of organizations tend to expose operational difficulties and coordination problems, which in turn bring about calls for organizational change ( Jain and Triandis 1990; Staudenmayer, Tyre, and Perlow 2002). It seemed that such generational divisions became apparent as Gamma’s environment and internal practices changed. Table 6.1, below, summarizes the main challenges and expected outcomes resulting from Gamma’s plans of organizational change. As may be drawn from the table, change was to enable improved responsiveness to challenges in five ways. First, as a low level of flexibility had been identified as contributing to problems of poor internal communications and ineffective mobilization of human resources, creating a flexible organizational structure was expected to enable more efficient and competitive responsiveness to market and client needs. Secondly, through redefining the formal organization of work, internal interaction and engagements with business partners and clients were to be better coordinated toward greater efficiency and overall effectiveness.

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Table 6.1. Challenges of the organizational change Challenge of change

Expectations

Increase organizational flexibility

• Increase responsiveness to market and client needs • Improve internal communications within and between sections • Enhance the effective organization of human resources within and between sections

Establish clear definitions of the organization of work

• Increase internal coordination, work motivation, and • operational efficiency

Remove unnecessary compartmentalization and bureaucratic limitations

• • • •

Improve internal communication, coordination and information sharing Open new business opportunities Encourage creativity and reduce bureaucratic obstacles

Penetrate the civilian market and the private industry, and establish marketing as a professional expertise

• • • •

Reduce redundancies and duplications Improve information sharing and internal coordination between sections and among them and between the marketing persons and the scientists

Establish a new organizational vision

• Define organizational direction, future objectives and leading • goal; the new vision is expected to enable the organization to merge between a nuclear-oriented past to a business-oriented future

Thirdly, through reducing Gamma’s excessive compartmentalization, improvements were expected in internal communications, greater creativity, and the elimination of unnecessary, time-consuming procedures. Fourthly, by effectively allocating human resources, better linkage between marketing and technological sections in both their activities and communications was sought. Finally, through formulating a new organizational vision, better understanding of Gamma’s targeted goals and greater coherence between members’ efforts was to be nurtured. Both managers and employees expected that the new vision would enable the organization to preserve its nuclear heritage while adapting it to newly required business orientations. Despite the apparent necessity, Gamma saw significant barriers to the implementation of these reforms. A rigid civil bureaucracy, an inflexible rewards system, traditionally specialized boundaries of professional responsibilities, and highly formalized work processes were some of the obstacles. In addition to such formal and institutional obstacles, there were also some interpersonal barriers that had to be confronted. Some of the scientists, especially those of the senior generation, resisted management’s attempts to instigate changes on rationalized as well as highly emotional grounds.

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In spite of these difficulties, in 1995, Gamma’s management launched a plan for change that aimed to overcome problems of inadequate internal and external coordination to improve patterns of operation. These efforts are detailed next.

Deploying Change at Gamma The changes initiated by Gamma’s management can be classified as falling into the category of a “planned change” intervention. Planned change is a formal process that “originates with a decision by the system to deliberately improve its functioning” (Levy 1986: 6). It is a proactive process that the organization deliberately begins in anticipation of, or in response to, changes in the environment or to pursue new opportunities. The planned change approach has also been further described as change that is initiated from inside the organization to deal with environmental demands that are expected to affect many segments of the organization (Porras and Robertson 1992). Planned change interventions call for organizational leaders to be responsible not only for initiating the change but also for planning and implementing it (Burnes 1996; Farrell 2000). Following this rationale, Gamma’s management initiated a process of planned change in order to alter not just the organizational structure but also its work patterns, habits of operation, and its organizational vision. These changes were expected to improve qualities of Gamma’s engagements with its markets, strengthen its basis for seeking financial resources, and improve processes of communication, coordination, and decision making within and across its sections.

Introducing a Plan for Change Transformational change efforts are usually initiated by the leaders of the organization (Beer and Walton 1987; Cummings and Huse 1989; Nadler and Tushman 1989b), as managers are considered responsible for the entrepreneurial direction and operation of the organization. Respectively, Gamma’s managers established a steering committee to examine and evaluate possible approaches for guiding organizational change. The committee was composed of a steady team of seven members, including the general manager and two organizational consultants. Other members joined the committees’ meetings on an ad hoc basis, according to particular needs. At the end of the process, the committee, with the general manager as its head, crystallized a plan for change. Although primary responsibilities for formulating the plan for change were in the hands of management and its committee, they attempted to be

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inclusive of others’ input. This was pursued with the expectation that successful implementation of desirable changes was most likely to occur if workers who had to carry through prescribed actions were consulted and engaged in the process (Levine and Mohr 1998). The decision to improve internal coordination by decentralizing the organization of Gamma’s resources and personnel directed more responsibility to unit and department managers, and reduced the need for “high-rank” approvals. By reducing layers of hierarchy, units were expected to be more independent and closely linked to the needs of industries and markets (see Kanter, Stein, and Jick1992). The aim of flattening the organizational structure by eliminating levels of middle management was also supported by shifting the section heads’ authority over resource allocation and decisions to project and unit supervisors. Under the new organizational structure, the general manager was to become more directly accessible to all levels of the organization, and serve with greater authority to oversee overall cooperation and coordination. The general manager was to help form and supervise a business-development unit composed of rotating members of staff, to conduct long-range business planning and facilitate coherence in overall organizational strategies. This unit was also to be responsible for formulating marketing and policy strategies toward entrepreneurial innovation. The human resources department was also to be placed under the general manager, to facilitate cohesion between sections. The decision to increase the number of technological sections was intended to more clearly acknowledge areas of expertise and promote a better focus on particular markets and customers. The new system of division was expected to enable the section managers to manage the fields more efficiently and facilitate greater involvement of the scientists in the development of projects. Section managers were to serve as integrators of units and projects, and help define professional priorities and handle issues of resource allocation and finance in their oversight of projects and marketing in each section. Released from many administrative burdens, section heads were expected to facilitate efficiency with more autonomous power to coordinate activities between sections. For project and unit heads, increased control over projects—with greater authority over budgets and human resources, marketing strategies, and client relations—was expected to encourage personal commitment to direct their projects successfully. Increasing levels of responsibility was expected to empower researchers to initiate and develop innovative and successful R&D projects with greater integration between formerly divided units. Involving researchers in all aspects of project generation and management was expected to clarify each section’s research and scientific interests and facilitate entrepreneurial interdisciplinary collaborations. Creating forums

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across sections was also intended to promote keeping up with technological and business advances and to ensure the currency of new product developments, as well as improve capacities to overcome technological and marketing challenges. The business development unit was to be responsible for both long-range and short-term business planning, and develop coherent organizational strategies accordingly. Under the authority of the general manager, the unit was expected to continually refine organizational policies and strategies whilst keeping abreast of changes in the market. Changes to administrative and operational units were to increase integration and synergistic teamwork between the technological and administrative sections. The planned change rested on the rationale that communication and cooperation are essential to a functional organizational structure. Better coordination between administrative and technological sections was expected to encourage more integrative efforts such as collaborative work forums and interdepartmental committees. Eliminating levels of middle management and increasing authority within technological sections was expected to improve internal communications, encourage creativity, and reduce time-consuming bureaucratic procedures. By dividing the organization into seven technological sections on the basis of professional expertise and ties to clientele, each section was given greater autonomy to select and manage their own projects and markets, with more direct engagements of scientists in decision-making processes. Scientists were expected to become better informed about the need to manage projects with financial viability, and identify new sources of funding from a wide range of sources. These changes were expected to more effectively tap the insights of scientists and encourage entrepreneurial innovation by improving the coordination of projects with specifically targeted markets. Finally, a strengthened marketing system was expected to help Gamma coordinate and streamline processes of R&D development and marketing though improved information sharing and professional cooperation. In turn, this was hoped to improve the development, management, and promotion of various products and services. In spite of the considerable thought and effort invested in guiding change sensibly, reorganizing the structure at Gamma proved to be a complex and difficult task. It required an integration of organizational learning and change to address demands of both science and the market. Before long, Gamma’s managers realized that in order to achieve a successful change, a reformulation of the organization’s vision was imperative. Without changing Gamma’s existing, original vision—which emphasized a future of basic research enabled by strong government support—it was unlikely to succeed in inducing its planned set of operational changes.

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Conclusions Today’s organizations face a complicated web of environmental opportunities and threats, necessitating thoughtful and considered responses. These responses often take the form of organizational renewal and change. This chapter described such developments at Gamma, where its management initiated comprehensive reforms in an effort to confront new environmental challenges and constraints. Gamma’s need to renew itself and change arose as the government became less reliable as a source of support to the organization, and domestic and foreign R&D markets became extremely competitive. As part of its fight for survival, management decided to flatten the organizational structure and increase the levels of discretion and responsibility given to scientists to encourage greater flexibility and innovation. These and other changes to Gamma’s organizational structure aimed to create a work environment and culture that encouraged competition, market orientation, commercial understanding, economic feasibility, and a focus on tasks and measurable target, and better engagements of managers. An emphasis on functional and client-oriented structures was also expected to improve the quality of projects and promote financial solvency for the organization as a whole. In spite of the considerable thought and effort invested in guiding the change sensibly, reorganizing the structure at Gamma turned out to be a complex and difficult task. This reflected how successful implementations of change required not only functional logic but also adequate support from members who had to accept and actualize the planned changes. The organizational vision can contribute significantly to generate such needed support from an organization’s members. Vision can be a motivational tool, clarifying the direction in which the organization needs to progress and driving organizational members to collectively adopt that direction (Tichy and Devanna 1990). Defining targeted directions can encourage both the recognition of the need for changes as well as the motivation to facilitate them (Kotter 1997). The change initiated at Gamma did not have a coherent vision that united members with clear objectives and shared motivations. As mentioned previously, some of the scientists adhered to the traditional view of the organization as a national research laboratory, while others adopted a more business-like perspective and saw the need to operate with profit-making objectives and goals. Still others were confused and uncertain about what the organizational vision and goals were. A significant gap was also seen to have emerged between the management and scientists regarding Gamma’s vision and goals. Against the prevalent view that a shared and guiding vision is a prerequisite for organizational change (see, for example, Belgrad, Fisher, and Rayner 1988; Bennis and Mische 1995; Deetz, Tracy, and Simpson 2000; Jones and

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Kahaner 1995; Kanter 2001; Kanter, Stein, and Jick 1992; Kotter 1996; Miles et al. 1995; Porras and Robertson 1992; Smither, Houston, and McIntire 1996), at Gamma, processes of initiating change and those of formulating a shared vision occurred simultaneously. As it attempted to implement operational changes, Gamma’s management recognized that the organization lacked a unifying vision—there was no motivating or guiding force to lead the change efforts. In response, as part of the planned-change intervention, managers decided to incorporate a process of reformulating the organization’s vision.

Chapter 7

Sensemaking for Change Striving for Coherent Sensemaking Accounts

As in most research laboratories, the scientists at Gamma viewed their professional identities in terms of individual knowledge production. Publishing in respectable, peer-reviewed scientific journals not only enhanced personal and professional prestige, it also served as the major institutional criterion for tenure and promotion. The notion of “publish or perish” was supported by the management and embedded in the local culture. Scientists at Gamma enjoyed broad academic freedom, pursuing research they found intellectually and personally stimulating. Scientists at Gamma perceived themselves as among the nation’s “favorite sons” and felt that they should be cared for and given the resources needed to pursue scientific work. As scientific work inherently requires the autonomy to make decisions based on specialized knowledge, scientists often characterized their contacts with management as based on trust and mutual understanding of “what scientific work is all about” (Pelz and Andrews 1966; Schriesheim, Von Glinow, and Kerr 1977). Gamma supported the view that the best person to decide what research work should be done was the person doing the research (Pelz and Andrews 1966: 322). Creativity and freedom were strongly emphasized, with the general atmosphere allowing scientists to do as they pleased, with an almost total absence of deadlines. Gamma scientists therefore perceived their work as a “natural” right that obligated the organization to provide the resources and conditions necessary for the promotion of knowledge production. The outcome was considered, with no hesitation or criticism, a national asset. The legacy of the “Kibbutz”—a collective of close-knit members who share a common worldview and egalitarian, cooperative norms—was also a dominant sensemaking account in use at Gamma. One of the veteran scientists described the Kibbutz legacy in these terms: “We operated like a Kibbutz. The atmosphere was egalitarian. There was no status, but a mixture of managers, researchers and technicians. Nobody was a manager because of his position in the hierarchy, and no one needed to pull rank to impose authority. There was an internal discipline, and an atmosphere of devotion, faithfulness and volun82

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teering. People used to work over holidays or Shabbat without being paid for overtime.” Thus, the legacy of the Kibbutz and its associated practices were portrayed as unbounded social and institutional arrangements that supported the idea of the self as accountable to the whole, internally motivated to work hard and “do the right thing.” To fully understand the significance of the Kibbutz legacy, it is important to note that one of its strongest manifestations was modesty and professional humbleness. Scientists proudly told us that personal achievements that had won public recognition and prizes were not announced internally. For example, when a group of scientists won a highly-publicized prize for their development of an explosives detector device, Gamma members learned about it from the media. When the general manager was asked to comment on the prize, he attributed the success to the department, not to the individual scientists. Furthermore, any attempt to encourage and acknowledge individual excellence was rejected, as one of the youngest department managers, recounted: “I try to encourage creativity. You might be surprised to hear that most of the workers disapprove of the prize for excellence given semi-annually … many workers imply that everyone here is giving everything he can for the organization. Choosing certain people for the prize is therefore demotivating. … The largest objectors are those who won many times … they believe that the prize should be distributed according to more socialistic principles.” If egalitarianism and modesty distinguish Gamma’s scientific work, the notion of the organization as family and home transcended the work itself and expanded its domain (see also Barley and Kunda 2004). Scientists often reminisced about the social activities that were part of their work routine (e.g., barbecues on Gamma premises, parties, dinners, trips), lamented the loss of kinship bonds among scientists (e.g., wives/husbands and children were considered integral parts of the organization), and complained about the diminishing accountability in addition to the organization’s reduced concern for its members, and vice versa. For example, veteran scientists often responded to the absenteeism that periodically plagued Gamma with stories from the past of colleagues who insisted on coming to work despite explicitly being very ill. Thus, the Kibbutz legacy portrayed Gamma as an ideal workplace, infused with universal values of accountability, egalitarianism, and altruism. The legacy represented a coherent cultural script of an elite community that had shaped its basic identity through scientific practices as well as the values and symbols that singled out Gamma as a professional scientific and familial organization, beyond its contribution to national security. In effect, the Kibbutz in Gamma reflected numerous social contexts that linked scientific work, organizational culture, and Israel’s national ethos. Furthermore, as a subsidiary of the IAEC, Gamma was considered an integral part of the defense establishment. During the nation’s youth, institutions associated with the defense

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establishment unequivocally enjoyed an “aura of sacredness” due to the fact that they assured the nation’s existential protection. The national security secrecy standards institutionalized at Gamma nurtured what many called a “culture of secrecy.” This culture intensified the lack of information-sharing already existing within the organization. Knowledgesharing was restricted by interpersonal pressures or by formal pressures connected with national security per se. Many scientists supported these “rituals of secrecy” in order to create an air of dramatic importance and intrigue around their work and identities. Others viewed the notion of secrecy in functional terms, supported by the organization’s structure. For example: “In an organization like Gamma, departmentalization is needed; but here, there is overdepartmentalization and it serves the scientists’ interests.” Hence, the legacy of secrecy boomeranged. Some scientists complained that secrecy served as a smoke screen for manipulating resources and engaging in self-serving behavior. Others claimed that the tendency toward rigid secrecy was a management tool for exerting power and control while evading accountability and transparency, a practice strongly contradicting the Kibbutz legacy. However, most of the scientists we interviewed rejected such claims, as expressed in this comment: “In matters of national security, it is better to know less.” Furthermore, the scientists often expressed their fear of exposing their work to the public. In their use of “patriotic” sensemaking accounts, the scientists employed organization’s culture/legacy to justify maintaining a screen of secrecy: “Many times we give our technology to the industry for low returns compared to the ones we could get from selling to foreign markets. We are doing it from patriotic motives only, even if it means loss of money. This is a moral obligation by definition. You won’t find it in any saintly business organization but it’s very common here in Gamma.” The high level of secrecy also served to explain the scientists’ difficulties in cooperating with other units within Gamma. The scientists claimed that the tradition of secrecy resulted in inadequate ties between divisions and even hampered cooperation within divisions. In describing the relationships among divisions and departments, scientists made many more mentions of the isolation from other departments than they did about closeness. Some scientists felt that the causal link between secrecy and low levels of cooperation and information-sharing prevented them from maximizing their potential contribution to the organization. Judging from the responses, there seemed to be a large group—mainly project managers—with little or no input into decisionmaking and other managerial processes. Members of this group stated that their potential contribution to the overall organization was unduly limited and reflected poorly on their actual capabilities. Others expressed the feeling that they operated in a vacuum, without understanding what the organization

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as a whole was striving to achieve. This view was conveyed by one project manager in these words: “Management here is led more by constraints and less by objectives.”

Confrontational Sensemaking Accounts The confrontational sensemaking accounts stemmed from repertoires that joined/isolated cultural meanings from the new conditions to former ideological forms of scientific work. The confrontational accounts tended to be pervasive by virtue of the management’s and the scientists’ deep involvement in or commitment to producing the organization’s cultural meaning of work. Hence, when advancing claims regarding the true nature of Gamma, the two sets of actors pursued different strategies within a confrontational context. The following section presents a more conciliatory, middle-of-the-road mode of sensemaking in which different varieties of cultural motifs developed, to a certain extent, in conjunction with one another. The confrontational cultural scripts arose as part of the scientists’ resistance to the changes at Gamma. Symptomatic of these scripts was the tendency to present a dualistic sensemaking account rooted in the assumption that scientific work and change are mutually exclusive. Scientists therefore described the process of change as a response to new environmental conditions. As the scientists understood it, management’s responses to the changed environment had resulted in the demise of proper scientific work as they knew it. By using a repertoire of confrontational accounts, scientists could make sense of their current experience against the backdrop of their contradictory “ideal” past. The following words of Abraham, a senior scientist, reflect such notions: The ethos was academic freedom. No one asked for reports or periodical assessment. You were expected to do the research, share the results, and get published. People knew who is who and who is brighter than the other. But no one used it or gloated in his or her excellence or achievement. Humbleness was the key value. You do your science and your creative repository was our team work and the tolerance of the management. This doesn’t mean that we hug each other every morning. You know scientists, they argue and are critical. But I don’t remember envy as such. Criticism yes, disagreement, yes. But all of these were done through respect.

A particularly troublesome issue for the scientists was their choice of projects. Such a portrayal of their work experience explains how scientists expanded the meaning of their work by reviving either the academic or the Kibbutz legacy and advocating their continued relevance through confrontational accounts. Some scientists who refused to accept the new trend toward commercialization referred to management’s practices in alarmist terms and

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warned that if Gamma adopted a purely business-minded attitude, it would soon be nothing more than a “production facility.” For these researchers, R&D required unlimited resources of autonomy, time, money, and patience. Any attempt to limit such resources due to economic pressure was viewed as a betrayal of the organization’s historical mission. Gamma scientists usually challenged management’s view by portraying science and business as mutually exclusive types of work. The prevalent strategy focused on exposing the inherent differences between the two. A story told by a marketing manager illustrated this point: “I brought a physicist who had developed a good product to a meeting with a promising client. The customers started to ask the researcher all kinds of questions about his development. At a certain point he became angry and told/hinted that the clients’ questions were pointless and redundant. That signaled the end of the contacts; the potential client evaporated. For instance, the conversation was dominated by: ‘What you are asking is totally irrelevant,’ ‘read the material again,’ etc.” In effect, the scientist’s reaction to the new commercial focus of Gamma was framed in terms of the reasoning of science, which proved to be totally misaligned with a business mentality. Gamma’s struggle was also evident in the fragility of its relations with prospective civilian clients. Since Gamma tended to recruit its top managers from within its own ranks, most of them had spent the majority of their professional lives working within the limited realm of the governmental defense establishment; they thus had limited knowledge of the environment outside. Thus, although managers possessed nuanced knowledge about the labyrinths of government, their ignorance of the competitive market was apparent in Gamma’s inability to initiate successful business relationships Gamma’s changing environment led to the embedding of economic considerations into the actual practice of work. Scientists complained about the added weight of the work loads, resulting from running several projects simultaneously and time spent on activities—such as grant and proposal writing— not directly linked to scientific work. Others contended that the competitive climate nurtured by management, together with the pressure for economic returns, had driven the emergence of territoriality and rivalry between units over limited resources. Management’s moves toward emphasizing profitable, applied research led some scientists to expect pay incentives to follow the organization’s new direction. These expectations were unmet. Instead, management instituted cross-subsidization, with resources distributed to enable profitable departments and units to subsidize other, less-profitable units. For many scientists, such practices were not only absurd but also inconsistent with management’s rhetoric, which valued profitability as a measure of individual and unit success. However, the scientists were unwilling to recognize that Gamma’s dif-

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ficulty in instituting successful business practices could be attributed in part to the structure and qualities of its staff recruitment and retraining system. As a governmental entity, employment security for tenured workers, together with pressures from professional unions and collective agreements, limited Gamma’s ability to adopt conventional commercial practices of competitive staffing. While other commercial organizations could shut down unprofitable units and either transfer or lay off their members, such actions were not possible at Gamma. Because tenure meant guaranteed job security for staff, reassigning tenured scientists to new and desirable projects was not always possible, and management could only discourage unprofitable projects or departments by decreasing support or, alternatively, wait for them to quit or retire. As a result, many of what employees called “old guard scientists,” meaning veteran tenured colleagues who were opposed to management’s directives, defiantly continued to work in fields that had run dry, incurring heavy monetary burdens on the organization. The preservation of a scientific identity and ethos became a kind of personal mission for some scientists, and their obstinate refusals to compromise their academic interests were sometimes rationalized as a means for preserving their integrity in the organization. The new methods of differentiating between those who generated profits and those who did not upset many of Gamma’s scientists, especially those who had been with the organization since its early years. For such veteran staff, the use of “profitmaking” parameters for judging a researcher’s contributions contradicted Gamma’s traditional values of a free academic environment and egalitarian camaraderie between staff members. As one distinguished scientist observed: “The move from a national laboratory to an economic unit is strange for us [the seniors of Gamma]. I can neither accept it nor live with it. For me, Gamma is still a financed national laboratory financed by the government. If the government and management believe that those issues in which Gamma indulges no longer hold national value, we can close the gates of this glorious institution. Every effort to turn Gamma to a successful factory or production unit is doomed to fail.” These words echo the scientists’ view of the goal of producing knowledge, which trumps any economic considerations. For the scientists, scientific work has merit in itself, beyond its universal and collective significance. Normatively, science motivates via an altruistic and humanistic vision that contrasts sharply with purely economic/commercial goals. As Dubinskas (1988: 197) remarked: “Nobel prizes have more panache to them than do veterinary dipstick diagnostics.” At Gamma, a small group of scientists defied management’s directives and resisted all pressure to pursue profitable avenues of research. Despite their being pushed to the organization’s periphery, management was forced to allow the dissenting individuals to remain in the organization. In

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most businesses, such contentious behavior and challenges to the hierarchical authority would not be tolerated (Lambright and Teich 1981).

Change-Related Sensemaking Accounts The importance of survival was expressed in organizational and individual responses. On the organizational level, survival reflected the need to generate income and increase Gamma’s presence in the applied sciences. As Katz and Allen (1982) found, when research and development staff is inflicted with the NIH syndrome, performance suffers from insularity and failure to keep up with advances in wider scientific and industrial communities. In the Gamma context, survival demanded greater openness to collaboration with private industry, which required managers to contend with scientists’ tendencies to isolate themselves from the outside world. Efforts to sustain Gamma’s national security ethos may conceivably have facilitated management’s sensemaking accounts regarding survival. The need to adapt military technology developed at Gamma to civilian needs, which required the organization’s ability to adjust itself to operating in civilian markets, aroused disagreement among the scientists. Many acknowledged the existence of two different sets of values—national security and Gamma’s survival—which were perceived as competing with each other. There was little prospect for reconciliation, as one scientist claimed: “It is impossible to transmit both sets of values simultaneously. Instead of the merger of two sets of values, it seems that the market side is more powerful and we have become a bunch of obedient and submissive researchers. This is not who we really are or want to be.” Movement toward the civilian market was seen as dispossessing the scientists of their basic asset: creative research abilities. A blunt expression of this trend was the response to Gamma’s entry into production. Scientists claimed that the growing economic pressure had demoted them personally and professionally. Some referred to Gamma’s entry into production as making them no different from a production line in the “condom industry.” These sensemaking accounts in turn affected Gamma’s action strategy. On the practical side, the experience of change and its cultural interpretation did not omit or segregate coherent sensemaking accounts, including the academia, science, and Kibbutz scripts. Thus, scientists’ and managers’ experiences could coexist in a manner that allowed both to save face by promoting sensemaking accounts sufficiently blurred to enable each side to admit its own cultural rationale for Gamma’s need to change. Working in the civilian market was seen by both scientists and management as requiring the total overhaul of sensemaking. In the previous envi-

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ronment, scientists had to earn individual recognition in order to enhance Gamma’s prestige. The civilian market, however, had different professional and organizational criteria. It was now management’s responsibility to integrate the principles of commercialization with scientific work and then to implement the strategy necessary to ensure Gamma’s survival. Thus, management regarded the shift from focusing sensemaking on individual scientists and their scientific work to focusing sensemaking on concerted and collaborative efforts for survival as necessary to provide Gamma latitude for operating in commercial markets. The new sensemaking account was characterized as conciliatory in nature; it shifted priorities and de-legitimized older practices without negatively sanctioning their bearers, those scientists who were passive in the face of new demands for commercialization, or those who chose not to cooperate with management. This sort of mixed sensemaking allowed past and present to live side by side by leaving cultural and organizational processes vague. This state of affairs in turn produced a comprehensive sensemaking repertoire from which each side—scientists and management—was able to infer, adopt, and interpret Gamma’s realities according to their own particular standards. For example, the idea that collective accountability should continue to serve as an organized principle justified management’s decision regarding cross-subsidization. This decision appealed to many scientists as it was seen to be in line with Gamma’s traditional values of cooperation, coherence, and egalitarianism. Some of the scientists even believed that egalitarian principles should be incorporated within the organization’s reward system by, among other things, ensuring that financial flows preserved Gamma’s unique set of organizational values. Pragmatic sensemaking was therefore not portrayed in “either/or” terms. Many scientists also echoed the view that professional reputation should accompany the necessary financial balance. According to this view, pure and applied sciences were complementary; mutual dependence and “cross fertilization” would have a direct bearing on Gamma’s ability to survive (Landau and Drori, 2008).

Conclusions Institutional arrangements such as collective bargaining agreements and affiliation with a strong union were ingrained in cultural norms that constructed a “moral” behavioral model. Although the new conditions might have called for a strategy exhibiting a more rigidly economic rationale, management’s line of action continued to be influenced by considerations of solidarity and compassion. A representative example of how these considerations were applied can be seen in Gamma’s reward system. From the perspective of the younger

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scientists, the practice of rewarding tenured scientists with job security even when they no longer meaningfully contributed to the organization was unfair, particularly when productive young scientists were deprived tenure. Financial bonuses, common in business organizations, were not among the incentives given at Gamma; hence, the scientists’ personal earnings sometimes tended not to reflect their contributions to the organization. This forced many scientists to work on scientific projects and publications secretly in pursuit of the academic credentials needed to obtain tenure while also complying with management directives to maintain projects having commercial viability. Overall, the change sensemaking accounts can be seen as a response to a changed environment that presented new ways of thinking and doing things at Gamma. The purveyors of Gamma’s competing ideologies—namely, scientists (pure science) versus management (commercialization)—chose a sensemaking strategy that incorporated pure science into rhetoric while adopting survival and blurriness as the preferable strategy of action.

Chapter 8

The Construction of Legitimacy for Change

In the following chapter, we describe the dominant legitimacy narratives that the scientists and managers subscribed to and used to describe Gamma’s past, present, and future, as well as the nature of its mission. The legitimacy narratives used by the scientists can be arranged along three dimensions: legitimacy creation narratives, which are those that reveal the largely agreed-upon legacy of the organization; legitimacy destruction narratives, consisting of “confrontational” accounts that outline the contradictions between the legacy practices of Gamma and current practices; and legitimacy reconciling narratives, which give semiotic and practical meaning to the change predicament. The last category of legitimacy narratives are “external” and stem from Gamma’s institutional affiliation. This chapter presents the key narratives, summarizes their main plots, and the meaning for legitimacy.

Competing Legitimacy: Narratives of Legacy Founding Note that the creation narratives are the reconstructions of veteran scientists, who reminisce on the “good old days,” or are promoted by those scientists who echo the ideal core values embedded in Gamma during its early days (Landau, Drori, and Porass 2006). These narratives were used for two main purposes. Firstly, they were an attempt to de-legitimize the plan for changing Gamma’s mission and vision that was widely considered to be an early signal for privatization. Second, they were used to legitimize “academic freedom,” which had substantially eroded since 1973 as the management shifted toward promoting a policy of applied research, which led to the denial of funding or approval for theoretical research projects, even when the scientists were seeking external support.

The Research Legacy Narratives During Gamma’s early days (1958–1973), scientists viewed their professional identities in terms of their individual knowledge production. Publishing in 91

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respectable, peer-reviewed scientific journals not only enhanced personal and professional prestige and recognition but also served as the major institutional criterion for tenure and promotion. Gamma’s management supported the view that the best person to decide what research work should be done was the person doing the research. Creativity and freedom were strongly emphasized, and the general atmosphere allowed scientists to do as they pleased, with an almost total absence of deadlines and timetables. Gamma scientists perceived science work as an embodiment of their autonomy and “natural” right; there was a mandate for the organization to provide the resources and conditions needed for the promotion of knowledge production. Gamma’s academic legacy meant not only the enhancing of personal legitimacy to scientists who excelled but also institutional legitimacy to Gamma itself, which was seen an integral part of the Israeli scientific community and enjoyed high esteem internationally. For example, publishing in academic outlets has been established as the constitutive mechanism of scientists’ legitimacy. During the 1970s,1 with the introduction of applied research, a second form of legitimacy was institutionalized. What were the narrative plots that were used by Gamma managers in their plight to legitimize the applied research? First, management pursued narratives that linked applied research with national security. Tapping into the fact that the scientists at Gamma perceived themselves as vanguards in the field of “nation-building,” the general manager, for example, in one of his internal memos to a scientist proclaimed that “the planned change is going to strengthen our legacy of organization which is focused on benefiting the nation. It will give us the possibility to compete effectively for contracts. Doing projects for the private market would enable us to generate resources that eventually will be channeled to those ‘public’ projects which are all dear to us and are part and parcel of our mission.” Second, management emphasized the complementary nature of both theoretical and applied research, and the imperative need for the two to coexist. As Yaakov, one of the veteran field managers explained, “pursuing applied science by all means can’t hurt our scientific vision, you can’t neglect that our contribution to the national security is needed. I remembered, I used to tell my colleagues, we should raise both flags [applied and scientific research].” The scientists who objected to the move presented their own narrative that used, to a certain extent, the same logic of the management’s, but for de-legitimization purposes. First, the scientists presented themselves as gatekeepers of the “true” Gamma and the guardians of its original mission. The following narrative, provided by a well-respected veteran scientist, is illustrative: “Around the mid-seventies, Gamma found itself adopting a ‘business’ perspective. We refused to accept the new rules and tried to preserve the image of a national scientific laboratory, financed by the government and not

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subjected to the mercy of the market. For us, the fight to preserve Gamma’s scientific image was much more than a professional mission; it was a national mission.” Thus, both management and scientists were using the notion of a “national mission” for the reconstruction of legitimacy—the management for the new strategy of applied and commercially focused research and the scientists for retaining and validating their legitimacy for scientific research (Zeldich 2001). The conflict of the applied versus theoretical research was resolved by the “owner” of Gamma, the Atomic Energy Commission, which decided in the early 1970s to endorse the policy that was marked by a change toward applied research and commercialization. Soon, management followed the directives of the AEC, adopting a more practical method of applied research. As a result, the stature of some of the scientists who specialized in basic or pure science declined. The endorsement of the AEC and the implementation of applied research policy practically marginalized the scientists who couldn’t adopt or weren’t willing to change. Thus, the conflicting narrative of the management and the scientists used the same basic plot, which emphasized the Gamma role in nation-building, however, each had a different interpretation. The reconstruction of legitimacy and de-legitimacy, where each of the social actors (management and scientists) attempt to validate their legitimacy and de-legitimize the other, was pursued through similar plot. Nation-building became an overridden construct that was given different interpretations, depending on where you were for or against applied and theoretical research. This conflict was partially solved by an external stakeholder, the AEC, who endorsed the management strategy, thus providing the management with the legitimacy to marginalize theoretical research and those scientists who insisted on continuing to pursue it. Note that, similarly to the customs in the academic world, management still couldn’t touch those scientists who enjoyed the “protection” of tenure and strong unions.

The National Security Narratives The narrative that replaces the nation-building of the early days is that of national security. Since the 1970s, Gamma enjoyed an “aura of sacredness” bestowed on it by the fact that the organization was perceived as a contributor to the nation’s assurance of physical protection. Taking into account the post Yum Kippur period, marked by national recognition that the country’s ability to survive should not be taken for granted, Gamma scientists have constituted the legitimacy meanings associated with national security in idealistic and collective terms, as illustrated by what a scientist told us: “We knew from the beginning that we were not only pioneers, but also champions of national security. Our work at Gamma was the pride of the whole country.”

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National security narratives institutionalized at Gamma a moral legitimacy that was based on the endorsement of being the “right things to do” (Suchman 1995: 579). These narratives were manifested through what many called a “culture of secrecy.” Gamma’s culture of secrecy further intensified the lack of information-sharing that already existed within the organization. Knowledgesharing was restricted by interpersonal pressures or by formal pressures connected to interests of national security. Many of the scientists supported these “rituals of secrecy” in order to create an air of dramatic importance and intrigue around their work and identities. Secrecy reflected both moral and pragmatic legitimacy and was underlined in every other type of legitimacy in Gamma. In this vein, legitimacy based on secrecy narratives clearly created a clear sense of insiders and outsiders. Thus, scientists were demarcated by Gamma’s tightly bounded culture, which sharply defined values and practices. Aspects of such pragmatic legitimacy can be traced in what Stryker (1994, 2000) terms an “instrumental mechanism,” which in Gamma was associated with enacted strategies of action that utilized secrecy. These where, for example, codes of behavior, standard operation procedures associated with security restrictions, and veils of secrecy which militated against professional interaction among department and divisions. As Oren, one the younger scientists, commented: “This strong departmentalization sometimes serves as a way out: if it’s so secret then you shouldn’t discuss the project with anyone or examine it, and this can be functional to escape utility checks and it harms our commercialization efforts.” One of the objectives of the planned change toward commercialization in the late 1990s has been management’s desire for more cooperation and the scientists alleged disruption of this cooperation by using secrecy as a rationale. The issue of secrecy was so ingrained in Gamma’s culture and operational routines that although it is considered by many, mainly younger scientists as counterproductive to commercial projects and harmful to cooperative initiatives among the various fields, its institutional and normative legitimacy, which bestowed a standing of strong moral ethics, has been never shuttered. Thus, the legacy of secrecy had a backlash effect. Some scientists complained that secrecy served as a “smoke screen” for manipulating resources and engaging in self-serving behavior for their fellow scientists who objected to the commercialization strategy. As one of the younger scientists described, using the biblical metaphor for sticking on to outdated values and practices, “They [the old guard] are hanging on to secrecy like holding the Kranot Hamizbeach [holding the corners of the Temple’s Alter to ensure sanctuary] as an excuse to resist any change.” Some claimed that the tendency toward strong secrecy was management’s tool for exerting power and control, evading accountability and transparency, a practice that contradicts the strategy of commercialization. However, most

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of the scientists we interviewed rejected such claims, and one decisively commented, “In matters of national security, it is better to know less.” It seems that the value of secrecy in Gamma has been embedded in the organization moral legitimacy, embodied by Gamma as part of Israel’s national security ethos. In addition to the institutional logic of secrecy, there was also functional legitimacy. Secrecy was used to justify resistance to change and underscore management claims for changing Gamma’s structure and culture. It shunned cooperation and coordination between various divisions as well as hindered effective distribution of resources.

The Kibbutz Narratives One of the constitutive narratives of Gamma, which shaped the organization in its formatives years and continues to dominant its culture during the twentyfirst century is its legacy of the Kibbutz. This narrative portrayed Gamma as a collective of close-knit members who share a common world view and egalitarian norms of cooperation, and was the “echo” of the constitutive ethos of the early Israeli statehood. The Kibbutz legacy reflected a normative evaluation of Gamma and was associated with normative values and actions perceived by members and external constituencies as congruent with Gamma’s mission (Suchman 1995; Stryker 2000). One of the scientists depicted this ideology, as follows: “Being a Kibbutz of a kind implies that we have a very developed social life both at work and outside. You could see us sitting together in the loans, arguing about how to do the work, and get decisions in consensus. We did our science work without being told what to do and we were involved with each other’s work. Most important, we felt like a Kibbutz, one big united family.” The Kibbutz legacy served as a normative mechanism of legitimacy because it signified action and behavior of overt egalitarianism toward each other. In this regard, during the implementation of the change, Gamma members employed various tactics to “signal” to both its members and external stakeholders (e.g., the Atomic Energy Commission) that, regardless of the circumstances or outcomes, its core identity and dispositions would still hold (e.g., Scott 2001). The legacy of the Kibbutz and the practices associated with it were portrayed as egalitarian and unbounded by social and institutional arrangements. It supported the idea of the self as accountable for the whole, and motivated the persons involved to work hard and do the right thing. Indeed, Gamma managers shied away from any conspicuous status symbols such as executive cars and separate dining spaces. To fully understand the significance of the Kibbutz legacy, it is important to note that one of its strongest manifestations was an attribution of modesty and an avoidance of overt impression management. Scientists proudly told us

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that personal achievements that won public recognition and prizes were kept quiet in Gamma. Thus, when a group of scientists won a highly publicized prize for their development of an explosive detector device, Gamma members learned about it from the media, while nothing was said formally at the lab. When the general manager was asked to comment on the prize, he attributed the success to the department, and not to the individual scientists. Thus, the Kibbutz legacy promoted strategies of action that preferred recognition of the group rather than individuals by shaping the recognition of legitimacy as a way of doing the appropriate things and not bestowing legitimacy on individuals who were pursuing individual goals. As expressed by one of the veteran scientists: “At the old days, there was internal discipline, and an atmosphere of devotion, faithfulness, and a willingness to volunteer. People used to work over holidays or Sabbath without being paid overtime. Management was amateurish, with no project management tools, which we objected to. We had vague objectives, loose management, little bureaucracy and few reports, and nobody checked your production level.” If egalitarianism and modesty have a distinct link to science work, the notion of Gamma as family and home transcended the work place itself and expanded its domain. Scientists often reminisced about the social activities that were part of their work routine (e.g., barbecues on Gamma premises, parties, dinners, trips), lamented the loss of kinship bonds among scientists (e.g., in terms of wives/husbands and children being considered an integral part of the organization), and complained about the diminishing accountability and care of the organization for its members and vice versa. For example, veteran scientists often reacted against the absenteeism that periodically plagued Gamma with stories from the past of sick scientists who insisted on coming to work, in spite of explicit medical orders, and the nearly impossible task of convincing them to stay home. Thus, the Kibbutz legacy built Gamma’s legitimacy as an ideal workplace, fused with universal values of accountability, egalitarianism, and altruism. The Kibbutz legacy was a normative legitimacy marker that shaped the cultural script of an elite community and its basic identity through both scientific practices and assorted values and symbols that simultaneously singled out Gamma as a professional scientific and familial organization. Thus, the meaning of the Kibbutz in shaping Gamma’s normative legitimacy reflected a multitude of social contexts that linked community life to science work.

Confrontational Narratives of Legitimacy During Change During the mid 1990s, Gamma management initiated transformational change that implied both changes in the organization’s vision and mission as well as

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its structure. The intentional change was aimed at moving further in the plight toward commercialization and privatization by shifting the organization toward more meaningful integration with the market. Management’s strategic plans soon encountered resistance that echoed the old debates over legitimacy through using science work as the constitutive narrative plot. Symptomatic of these narratives was the tendency to present a dualistic sensemaking account (Weick 1995), rooted in the assumption that scientific work and change are mutually exclusive. As the scientists understood it, management’s responses to the changed environment had resulted yet again in the demise of proper scientific work as they knew it. By using a repertoire of confrontational narratives, scientists attempted to reconstruct legitimacy of scientific work against the backdrop of the management-planned change. The following comments of Dan, one of the scientists, provides the common justification for insisting on preserving scientific work in Gamma: “In the early days, we were encouraged to strive for excellence. … With no hierarchy and no red tape; everybody could express their own individuality. We were a group of nonconformist prima donnas. Today, there is a surplus of bureaucracy and a scarcity of creativity. With the new change management pushes us further toward whatever is feasible and economical, and the scientists push to do what they like. This kind of atmosphere results in constant tension.” Some scientists who refused to accept the new trend toward commercialization referred to management’s practices in derisive terms—such as “prostitution.” For these researchers, R&D required unlimited resources of autonomy, time, money, and patience. Any attempt to limit such resources due to economic pressure was viewed as a betrayal of the organization’s historical raison d’être. It is important to note that the conflict narratives brought to the fore the inherent contradiction associated with Gamma’s institutional affiliation as a governmental organization. For example, the planned change toward commercialization contradicts the reality of institutional practices such as the rules of getting promotion through publications. These rules were subjugated by the national collective agreement of research workers in government and public institutions (including the universities). Furthermore, the scientists were categorically opposed to any changes in their employment conditions, fearing that change in even one clause would create a cascade of changes in other more relevant clauses of the agreement. During the period of the planned change (mid 1990s and on), the issue of tenure has become a source of contesting narratives promoted by the management and the scientists. These narratives were used to provide alternative meanings to the notion of tenure. Although scientists endorsed the legitimacy of tenure and promotion through publications, they still disputed the organizational logic that linked publishing with business activities. Since the demands, expectations, and skills required to

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succeed in academia and in business are not always aligned, many of the scientists struggled to develop strategies for “holding the stick at both sides,” as one of the senior scientists commented: “Researchers are evaluated according to two somewhat conflicting parameters: their publications and whether they are able to finance themselves. It contradicts the kind of conformity and obedience required here. I find myself fighting against time doing first of all what I’m required to and then developing new things. These conflicting demands create tension, which need to be reconciled by us; the management sees these two activities as not mutually exclusive.” The changes toward applied and commercialized R&D removed opportunities to publish academic work, which, as noted previously, served as the basis for tenure and promotion. This legitimized the pursuit of scientific projects and publications “under the table”—engaging in academic research secretly aimed at earning academic credentials to gain tenure—while also fulfilling management directives to uphold profitable projects with commercial viability, as vividly illustrated by one of the scientists in the following narrative: “So what one does, if he wants tenure or promotion, is to do science ‘under the table.’ It is more difficult and requires resourcefulness, manipulation, and much hard work. Now the management wants projects—no matter what kind. The pressure for income and survival precedes research considerations and scientific curiosity. However, I couldn’t guarantee my tenure unless I published. Management knows it of course and ‘silently agrees.’” Thus, the consequence of the contradictory narratives leads to an individual strategy of action that legitimizes breaking the institutional rules through encouraging opportunistic behavior of the scientists. Thus, legitimacy doesn’t have to be unitary. Actors have the capacity and must hold contradictory narratives of legitimacy to survive. The destruction of legitimacy through confrontational narratives was presented as contrary to those attributes that created legitimacy. The latter reflected the past legacy described in terms like freedom, independence, friendship, and togetherness, in contrast to the new reality, described in terms like deadlines, timetables, outputs, goals, and delivery. It was as if each of the legitimacy-creation narratives described earlier (e.g., academic, Kibbutz, and national security) was clashing against the destruction of legitimacy narratives that were portrayed as bureaucratic, business-like scripts that together formed a whole new cultural repertoire. Out of this grew confrontational narratives that contrasted the making and breaking of legitimacy at Gamma. Because many of these scientists were tenured, management had little control over their actions, and was forced to wait for them to quit or retire when they so chose. Thus, the making and breaking of legitimacy constituted a narrative that constricted around the theme of what science work actually was. For the scientists, science work had merit in itself, in addition to its universal

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and collective significance. Normatively, the legitimacy of science is motivated via an altruistic and humanistic vision that contrasts sharply with purely economic goals. Similarly at Gamma, scientists defied management’s directives and resisted all pressure to pursue economically profitable forms of research. Despite being pushed to the organization’s periphery, the organization was forced to allow such dissenting individuals to remain in the organization. Another form of undermining management legitimacy was associated with the management’s attempt to develop commercial projects based on interorganizational cooperation, aimed at taking advantage of the diverse skills and expertise of Gamma’s scientists and engineers. To break the legitimacy of management’s intentions, scientists referred to the inherent need for compartmentalization and secrecy in Gamma and hinted that management’s intentions would result in a compromise of Gamma’s secrecy. The legitimacy claim that management constructed in the face of these arguments emphasized that the tradition of secrecy had resulted in inadequate connections between Gamma divisions and departments, and even hampered cooperation within single divisions. It was argued by management that the indiscriminate link between secrecy and low levels of cooperation and information-sharing prevented Gamma from maximizing its R&D capabilities and potential. The confrontational narratives aimed at breaking management’s legitimacy during the change provided a solution to the difficulty of the new conditions by sticking to the old practices of Gamma’s science work. The confrontational narratives presented an active attempt by managers and scientists to influence the meaning and the course of the legitimation process (Elsbach and Sutton 1991; Lounsbury and Glynn 2001). In advancing claims regarding what the true nature of Gamma was, management and scientists were involved in pursing their preferred strategic lines of action through continued contesting of legitimacy. The following section presents a more conciliatory, “middleof-the-road” mode of legitimacy narratives, in which varieties of a legitimacy repertoire developed, to a certain extent, in conjunction with one another, for the purpose of reconciling between the narratives that make and break legitimacy in Gamma.

Reconciling Legitimacy: Survival Narrative How, then, did Gamma’s management and scientists reconcile their different and conflicting narratives and pursue the planned change of mid 1990s? Our findings show that legitimacy construction during periods of change was based on narratives founded on moral and pragmatic legitimacy, which provided internal justification for both points of views (Suchman 1995). Both managers and the scientists pursued their legitimacy through distinctive programs

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of action. However, as our findings illustrate, management narratives forced the scientists to reconstruct their traditional research narratives and adopt the management survival narratives. The following section describes the basic justification of the survival narratives by both management and scientists, and shows how it shaped their strategies of action (Swidler 2001). Managers started to use the survival narrative in the early 1990s in accordance with the plight for planned structural change as a “cure” for aligning Gamma’s research toward commercialization. The narrative of survival was associated with the institutional logic that Gamma depends on its ability to secure resources while at the same time developing new resources and creating new opportunities in competitive commercial and civilian markets. The strategies of action that were constructed around a legitimation process of survival helped to implement the necessary changes at Gamma, including changes in its vision and structure. The notion of survival expressed itself in two levels: the individual and the organizational. On the former level, many scientists acknowledged the existence of two different sets of contradicting values—research and market, which were still portrayed as competing with each other (e.g., Hill, Hitt, and Hoskisson 1992). On the organizational level, Gamma’s new demands for survival required more openness to collaboration with private industry, and this required managers to fight scientists’ tendencies to seclude themselves from the outside world. One of the strategies of action to legitimize the approach to the civilian market was through instigating new activities in addition to R&D. An example of this trend is found in Gamma’s collaborations with business companies, especially those active in radiopharmaceuticals and related fields. The constitution of legitimacy through narratives of survival affected the scientists’ strategic line of action. On the practical side, the experience of change, and the cultural interpretation of this change, did not omit or isolate the legitimacy creation narratives that included the legacy of research, the Kibbutz, and national security. As Ran, one of the scientists, commented: “Gamma is embracing two kinds of values, market and the Kibbutz. I go with management, and chase after projects. I get a lot of funding, both from within and without, but people here downplay it. They think you shouldn’t air your success so as not to insult those less successful. Sometimes it gets to an extreme, as when recently we [Ran’s team] were awarded for a distinguished prize for technical achievement, and nobody here, including the general manager, even mentioned it.” At the same time, the experience of change incorporated management’s commercialization strategy as part of the new legitimization process that used survival as its constituting theme. Thus, the survival theme promoted a legitimacy narrative that allowed both scientists and management to save face by enabling each side to find its cultural justifications for Gamma’s need to

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change. Gamma’s astute general manager explained how the new legitimacy was constituted out of the survival theme: I prefer to promote blurred objectives which may moderate scientists’ resistance to the commercialization of science. So the notion of survival as our main mantra gives us the legitimacy to change. It enables us to bypass the fact that we are a governmental organization subjected to governmental regulation; that we have unions; that scientists have tenure; that their salaries come out of the taxpayers’ pocket, and with all their devotion, they can’t understand that if they don’t think commercially and market their ideas, our budget is cut. So survival is blurred enough regarding the fate of science and critical enough to get the scientists to cooperate with me.

By casting the commercialization strategy of action in terms of Gamma’s survival, management was also able to effectively blur the narrative account of “national security.” This account served as an overpowering legitimation dynamic, blotting out the rest of the existing legitimacy narratives by elevating Gamma’s legacy from the organizational level to the national domain. Management’s pursuit of survival meant taking a different direction. While not discarding the importance of Gamma to national security, management referred to national security, not as an overarching ideological narrative, which is altruistic and beyond immediate organizational concerns, but as an earthly construct that was mainly associated with economic and market considerations. Thus, national security was manipulated and the nature of its legitimacy reconstructed in accordance with the new business environment and the new functions that management envisioned for Gamma. The shift from focusing the legitimacy narrative on individual scientists and their science work to a focus on a legitimacy narrative of concerted and collaborative efforts for survival was regarded by management as a necessary mechanism to provide latitude for operating in commercial markets. This narrative allowed past and present to live side by side and left cultural and organizational processes in a blurry state. This blurry state of affairs has produced a survival narrative repertoire from which scientists and management, each on their own side, was able to infer, adopt, and interpret Gamma’s realities by using their own particular legitimacy yardsticks for their respective strategy of action.

Conclusions The repertoire model of constructing legitimacy presented here provides insights into how legitimacy is created or destroyed, offering both theoretical and practical implications to public organizations. By and large, the repertoire model is based on viewing legitimacy as a series of narratives offered by di-

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verse actors. These narratives also reflect the varied sources of legitimacy, the situated context of legitimacy, and the legitimation process aimed at influencing relevant institutional and environmental elements (Ruef and Scott 1998). The repertoire model of legitimacy construction provides scholars with an analytical tool to understand legitimacy as a diverse and dynamic phenomenon that is actively pursued by social actors who strive to reiterate their actions during organizational change. The legitimacy narratives presented and analyzed are characterized by the actors’ recognition and knowledge of the multiple combinations of cultural repertoires and the structural circumstances faced by Gamma. This, in turn, enhanced and expanded the opportunities for constructing legitimation processes based on diverse narratives and, consequently, pursuing the desired strategies of action, which were based on notions of survival. We have shown that although legitimacy narratives supported change, by legitimizing change on the grounds of survival, these narratives were still confined within Gamma’s institutional logic (and the constraints) of public organizations. As Swidler (2001: 209) has commented, “It is not self-propagation of schemas through homologous transposition that is at work, but active agents constrained by the same institutional logic who seek out cultural resources to solve similarly shaped problems.” Thus, construction of legitimacy can be also seen as a corollary of fit with a cultural belief system and its respective rules and procedures (e.g., Ruef and Scott 1998). The presence of competing legitimacy repertoires, such as the one that symbolizes the predominantly academic and egalitarian nature of Gamma, the one that portrays Gamma culture as confrontational theatre, and the repertoire, which portrayed various manifestations of survival, does not represent a linear predetermined path of legitimacy, namely the replacement of an old by a new set of sources, antecedents, and assessments of legitimacy. Instead, these diverse repertoires of legitimacy constitute a “pool,” from which social actors drew their preferences and resources for the purpose of pursuing and promoting legitimate lines of action. Thus, the process of change in Gamma, as reflected in the construction of legitimacy, was characterized by a cohabitation of wide repertoires that enabled Gamma’s members to make sense of the change. Our study demonstrated that these varied legitimacy narratives guided the organizations’ functions in a way described by Gamma’s general manager, using a common military metaphor, as “crying and shooting”; namely, adopting the change while complaining about its nature. Overall, each of Gamma’s varied legitimacy narratives portrays different symbolic ideas and meanings, and focuses on distinct thematic issues regarding science work and commercialization. For the scientists, the legacy narratives became evident in the use of underlying themes that represented distinct ideological and moral positions such as altruism, solidarity, family, or national

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security in contrast to profit-seeking and opportunism. For the management, such narratives were also part of their heritage and as such were not discarded. However, the management tended to endorse the legacy repertoire, only within the context of the need for change, and as a nostalgic past that was not relevant anymore, but was still part of Gamma’s history. The ideal view of the past that was promoted by the scientists through confrontational narratives was not intended so much to reverse the trend and bring back the “good old days” of pure science, as much as to cast doubt on and contest the legitimacy of the organizational transformation, while bypassing the need to offer tangible alternatives. Note, that the diverse legitimacy narratives identified at Gamma have pervasive roles in influencing the practices and the lines of action that directed the process of change in Gamma as a state-owned organization. All the repertoires have appeared to contribute to the change process by shaping and reshaping the symbolic content and context of actions. The legacy narratives represented the resentment of the change and the past symbolic logic that was based on the rationale of the organization being state-owned and needing to contribute to the state’s well-being and its scientific innovation; the confrontational narratives supported the symbolic rationale for skepticism (rejection) of the change toward commercialization; and the reconciling and external narratives provided the symbolic rationale to comply with the change objectives and processes (see figure 8.1). Gamma’s legacy became the constitutive mechanism of legitimacy that enabled Gamma’s members to accept the change toward commercialization and to comply with it. The survival narratives reflect the symbolic cultural meaning

Figure 8.1. Schematic model of regulatory and normative legitimacy creation at Gamma

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through which the accepted reality was rationalized within the two contexts: the internal context of Gamma and the external institutional context of government ownership and the market. In addition, Gamma scientists were able to mobilize those “past” resources, falling back on their legacy and history as constitutive principles of the present. We claim that the Gamma legacy has served as a “deep” overarching cultural script that enabled both scientists and management to use it for legitimation of the rationalization, acceptance, and eventual active participation in the process of change. In sum, the main role of a legitimation repertoire in Gamma was to resolve social and organizational tensions, both within the organization and as a response to its robust institutional arrangements. Rather than constructing legitimacy as a “developmental” process of one set of legitimacy assessments replaced by another, legitimacy is constructed through providing social actors the choices and opportunities to test varied strategies of action and organize their capacity for action in a way that would cater to their personal and organizational needs (e.g., Swidler 2001). Thus, the choice of a legitimacy narrative of survival was aimed at voluntary compliance with the requirements of the changing reality. Both management and the scientists realized that the new strategies of action have to be reconciled with the strong ideological stance of the past. In sum, legitimacy is embedded within the contradictions of the different spheres of organizational life. It is the task of the social actors to create, contain, and navigate through the various forms of legitimacy. Thus, the layers of legitimacy narratives serve as the building blocks within which actors create their organizational lives.

Chapter 9

The Envisioning Process Building an Entrepreneurial Vision

Entrepreneurial vision is a mental image of what the future world ought to be like. … Development of an entrepreneurial vision is preceded by forecasting the actual, matter of fact, realistic and pragmatic future to create an estimate of what the future is likely to be. In doing this, the strategist looks at history, the current situation, and trends. Strategy is the crossover mechanism for moving from the world as forecasted to the world of our vision. (Colonel Bruce B. G. Clarke, “Entrepreneurial Vision,” 1994: A–2)

The importance of a vision in shaping an organization’s objectives and driving the formation of its strategies is based on the assumption that because of dramatic changes that can occur in the global environment, today’s successful strategies are unlikely to work in the changed world of tomorrow. With this in mind, a vision geared for success must suit a dynamic environment (Wind 2000). This was the rationale underlying management’s decision to initiate a process by which Gamma’s original vision would be revised and a new, entrepreneurial vision would be developed to replace it. This chapter focuses on the processes through which Gamma created its entrepreneurial vision. Composed of two main sections, the chapter first reviews several models of the vision-creation process. We then consider the specific vision-creation process that took place at Gamma. The chapter aims to describe and analyze phases of the development of Gamma’s entrepreneurial vision, understand the characteristics and main features of the entrepreneurial vision in its final form, and explore the ways in which the revised vision relates to the organization’s original vision. Of special interest is the extent to which the entrepreneurial vision can be linked to the organization’s broader range of change efforts. In addition, the extents to which the reformulated vision may be a compromise reflecting challenges, or is a formalized expression of the organization’s heritage and ideology in idealistic terms, will be explored.

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Building a Vision: Existing Theoretical Models The development of a vision can be seen as an iterative, interpretive, and multi-phased process that begins in the minds of top managers and prime decision makers (Dutton and Duncan 1987). There are usually specific circumstances that bring managers to the decision that a new organizational vision is required. These may include external threats to the organization, such as changes in market conditions and in competition, as well as internal threats that find expression in poor performance, ineffective decision making, confusion over priorities and objectives, and poor entrepreneurial planning. Managers often identify the source of such problems as a “lack of a guiding vision,” and pursue the adaptation or reformulation of the existing organizational vision accordingly.1 A review of organizational literature on vision and vision creation indicates that most of the empirical literature does not distinguish between actions that create visions and visions that create action. For example, much of the research on charismatic leadership seems to take vision as a given, and focuses on its implementation (e.g., Kirkpatrick and Locke 1996) or explores how vision affects the motivational state of followers (e.g., Shamir, House, and Arthur 1993). Such studies offer many interesting insights into what leaders must do to make vision a transformational force, but neglect to illuminate the crafting of vision (Nutt and Backoff 1997b). This work views the process of vision creation and change as composed of two main steps: interpreting the relevant changes in the organizational environment and the initial vision formulation. The early phase of the process of changing an organizational vision involves detecting significant changes in the organizational environment, leading to the recognition that the existing vision is no longer suited to the organization’s objectives and goals. The interpretation phase involves determining how, and to what extent, the organization should redefine its vision so that it is current with, and appropriately positioned to function within, a particular environment. At Gamma, increased competition within domestic and foreign markets, budgetary constraints, and political developments all pressured the managers to evaluate the opportunities, threats, and contingencies facing the organization. This evaluation led management to diagnose Gamma as suffering from a “lack of guiding vision.” Such lack of vision was seen to have resulted through a gradual process in which the original vision had become obsolete and disengaged from the organization’s environmental realities. The detachment from reality was seen in members’ confusion regarding Gamma’s priorities, objectives, and entrepreneurial focus. Thus, Gamma’s vision failed to reflect or guide relevant or-

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ganizational directions. Once the managers identified the problem, they were ready to move on to the second step of comprehensively analyzing the organizational environment. In order to enable a comprehensive understanding about an organization’s environment, the use of complementary internal and external perspectives is advised (Wind 2000). The external perspective is to raise critical questions about existing expectations concerning the business environment, the changing nature of key stakeholders such as customers, competitors, suppliers, and business partners, and environmental forces such as technological developments and governmental regulations. The internal perspective is to raise questions about the values, objectives, and core competencies of the organizational management (Wind 2000; Wind and Main 1998). A common challenge that arises is the demand for organizations to reconcile differences between internal and external perspectives. Generally, such difficulties arise when external and internal pressures on an organization provoke natural inclinations for those within organizations to resist change (Wind 2000). This was a common reaction seen at Gamma, so that the process of selfassessment proved to be difficult and emotionally charged, and created strong frictions between members. Some believed the organization should become more commercially competitive and move beyond the development of prototypes to manufacture final products and engage in other profitable activities. Others strongly opposed such views, insisting that Gamma maintain its academic traditions of focusing on defense-oriented developments and scientific research. Such opposition was often led by fear that the new trends might bring the organization to prioritize profits over science, and diminish the stature of scientists below those who could generate profits for the organization. It is not surprising, therefore, that those opposing such change (mainly the seniors) expressed cynicism about vision creation, dismissing both such objectives and processes. Although these opposing perspectives had existed in the organization for some time, the vision-change process ignited and polarized debates. The second step of the vision creation process, the initial vision formulation, is usually led by an organization’s executive leaders. Thus, personal characteristics of the organizational leaders such as their individual values and beliefs are likely to reflect and affect the process (Stogdill 1974). There are two main perspectives regarding the role of the leaders during the phase of initial vision formulation. The first of these, the traditional perspective, assigns the leader responsibility for framing the organization’s direction and changing it when circumstances warrant. According to this perspective, leaders are believed to have powerful entrepreneurial ideas that inspire and mobilize subordinates within their organizations (Bryson and Crosby 1992; Nanus 1989; Terry 1993; Tichy

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and Devanna 1990). According to these models, followers may have an active role in shaping the final vision, but not in the initial and central phases of its conception (Nutt and Backoff 1997b). Many studies have supported this traditional view of visionary leadership by identifying how a leader’s foresight founded, recovered, or regalvanized a particular organization’s vision (Bennis 1989b; Conger 1991; Kanter 1983; Nutt and Backoff 1997b). A second perspective, which emerged more recently, regards leaders’ roles in vision formulation as less significant (Coulson-Thomas 1992; Kelley 1992). Findings that the leader-dominated approach not only limited vision creation, but was also rarely successful, have been cited by several scholars (e.g., Bennis 1989a, 1989b; Bryman 1992; Kouzes and Posner 1987). These scholars contend that even a visionary leader who is highly skilled and creative cannot ensure successful formulation of an organization’s vision. With the emergence of new approaches to organizational management, such as those of re-engineering (Linden 1994) and total quality management (Sashkin and Kaiser 1993), the more skeptical perspective regarding visionary leadership has gained increased attention. The concept of staff “empowerment” as a key ingredient in reshaping an organization (Walton 1985) also advocates participative management as an alternative to traditional top-down approaches (Lewin 1958; Walton 1985), so that “guiding coalitions” might constructively challenge leaders’ perspectives including those regarding an organization’s vision (Kotter 1995: 81). Empowerment approaches to formulating a vision can take several forms. In one model, the leader may encourage others to take part in the process but still serves as its prime mover, presenting initial ideas for others to adapt and shape (Nadler et al. 1992), endorse, or develop (Nutt and Backoff 1997b). In another model, the leader may adopt the role of a facilitator, building a vision from the collective ideas of key stakeholders such as senior managers and subordinate members (Covey 1990; Kelley 1992). The extent of inclusivity can range from one in which top managers design the new vision (Tichy and Devanna 1986) to key people selected or recruited to voluntarily participate in the vision-creation process (Kelley 1992). Regardless of the processes engaged, empowerment approaches to formulating a vision presume that the development of a vision is not a panacea or a stand-alone activity, but rather, a collaborative organizational action. The collective process of vision formulation has been characterized by Wilson (1992: 22) as follows: 1. The development process is typically iterative. The future vision may emerge from the organization’s original objectives and early environmental conditions. Ideally, elements in an existing ideology, which remain relevant, are identified for preservation, and serve as a foundation for the launch of new strategies.

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2. The process can be outlined as a series of key steps. Projections of the organization’s future environment, along with examinations of existing resources and capabilities, can clarify appropriate management values and identify entrepreneurial objectives and goals toward the development of a realistic and effective vision. 3. Vision-creation can be a well-designed collective process. Penetrating insights frequently come from the interplay (though sometimes contentious) between different perspectives. Thus, the vision creation process should involve key stakeholders such as senior managers as well as their subordinates. Drawing on the diversity of experience and perspectives is likely to enrich and improve the formulation of an organization’s vision. 4. External perspectives can be valuable. External knowledge concerning markets, competitors and technology and “outsiders’” views of an organization can provide perspectives that challenge, confirm, or otherwise inform an organization’s insiders. 5. Executive leaders can successfully drive the formulation of an entrepreneurial vision. Many successful efforts originate in the minds of one or a few key individuals who then refine the initial vision and garner support for it with input from the organization’s members.

With regard to the dominance of the leader, some researchers suggest that an organization’s executive leaders must gather information from seniors and other organizational members before the formulation process begins (see, for example, Rogus 1990). These researchers contend that the writing of a concise statement, which describes the organization and projects future developments, is expected to encourage discussion and unity among members and should, thus, represent various organizational perspectives. Gamma’s experiences of changing its original vision were observed to align with the majority of the models reviewed here. The next section indicates this, describing the vision-formulation process that took place at Gamma.

Gamma’s Formulation of a Entrepreneurial Vision Realizing that Gamma’s original vision was no longer an ideal expression of the organization’s desired direction and strategies, management acknowledged the need to define a new vision. The new vision was expected to enable the organization to better respond to its changing environment by defining an ideal and desirable future, reflecting shared values, objectives, and goals toward which the organization should aim and aspire (Bass 1985; Bennis and Nanus 1985; House and Shamir 1993). Gamma’s management believed that this change would improve the organizations’ ability to cope with its transforming environment and increase the opportunity for organizational success.

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By making this process a collaborative one, management sought to increase members’ ownership in the resulting organizational vision, values, entrepreneurial objectives, and behaviors. The guiding assumption was that if a sense of ownership in the process of reformulating Gamma’s vision could be nurtured among members, adoption of it was more likely. Promoting such support was believed to enhance the organization’s chances for survival as well as for success. With these notions in mind, a steering committee was formed with seven members: the general manager, two section heads, the operations manager, one senior manager, and two consultants. It was decided that additional members would join the committee’s sessions on an ad hoc basis, according to emerging needs and circumstances. The committee met twice every week, for approximately three hours per session, after routine work-day hours. The committee was charged to initiate and facilitate processes aimed at formulating a new organizational vision and transform the organization, accordingly. At its second meeting, on 26 June 1995, the committee’s members established the following: 1. Gamma should focus on research and development activities with practical applications, including those which were expected to contribute to the country’s defense and serve the interests of the Atomic Energy Commission, the military and industry; 2. Gamma must be at the forefront of technological knowledge, especially in areas that are significantly important for the country’s defense; 3. The organization must strive towards high professional and personal achievements; 4. Gamma must work closely along schedules and timetables to improve service to its clients; 5. The organization must increase public knowledge about nuclear research through educational activity.

At that meeting, it was also decided that the committee’s members would each draw up their own drafts for Gamma’s future vision incorporating these five leading principles. At the subsequent meeting, the following versions were presented: DRAFT 1 (Yoni, section head): Gamma was founded by the Atomic Energy Commission more than thirty years ago for the purpose of promoting the building of a technological infrastructure in the nuclear area. This meant training teams of scientists, engineers, and technicians to develop the use of nuclear methods in research, industry, medicine, and agriculture. Since its initiation, Gamma has had a dual vision of serving both defense and civilian needs. Thus, it transferred technologies in nuclear and defense areas to

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the development of products for private industry. This has led to a diversification of Gamma’s activities. Among these: 1. Nuclear activities such as initiating and operating an industry of nuclear medicine, applying nuclear chemistry and physics toward the development of advanced technologies, and researching nuclear radiation to improve nuclear safety 2. Activities in the area of electro-optics such as producing systems operating in a wide spectrum and using non-linear components, and developing materials and components for optical systems 3. Conducting inter-disciplinary research to apply to concerns of plasma, high power lasers, and electro-thermal acceleration 4. Complex analyses of nuclear reactors and space DRAFT 2 (Shay, section head): Gamma provides applied R&D and technological services. It operates in the service of the AEC, the defense authorities, and the society at large. Gamma operates at the high end of the technological spectrum to maintain competitive market advantages to benefit Israeli society. It is Gamma’s duty to balance its finances and pursue publicly funded projects with both national and public significance. Satisfying clients’ needs for highquality products and services on time is required in all of Gamma’s activities. Gamma’s activities will be conducted while acknowledging that Gamma is a state organization with responsibilities and commitments to the nation. Being a subordinate of the [Atomic Energy Commission], Gamma prioritizes nuclear activities, which improve the well-being of Israeli citizens and promote public awareness of nuclear safety requirements. Full and reliable accountability is a basic feature of Gamma’s foundation. This principle is upheld in our external relations with clients, as well as in internal relations between staff at all levels. The knowledge and devotion of Gamma’s employees are the most important asset of the organization. Thus, maintaining harmonious work relations and looking after the safety and welfare of workers will always be priorities at Gamma. DRAFT 3 (Motti, operations manager): Gamma conducts applied R&D for the uses of the state, the defense system, and industry. Gamma strives to be a leader in its areas of expertise, and advance technologies and expertise in areas that are important for the [Atomic Energy Commission] and the needs of national defense. Gamma will pursue activities relevant to the state of Israel with excellence. Gamma will utilize its resources effectively to satisfy its clientele.

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Gamma will endeavor to improve the level of education and involvement of the community in areas of nuclear research, and create a supportive environment for enhancing scientific activities. Gamma’s human resources comprise its most significant asset. Thus, the organization strives to encourage and develop the skills of its staff toward excellence. Gamma strives to promote the well-being of its employees and create a familial environment of support for its former and current staff. DRAFT 4 (Zvika, senior manager): Gamma is an applied R&D organization operating under the supervision of the [Atomic Energy Commission], and is committed to its tasks. The organization serves the needs of national defense and the state of Israel in unique R&D areas; it maintains a reputation for professionalism and the highest levels of expertise. Gamma has proven research abilities in the nuclear realm, as well as through a history of successful developments of a wide range of applied technologies. Gamma is committed to providing quality service to its authorities and clients. As an organization with a national heritage and unique scientific and research insights, Gamma strives to operate at the forefront of both national and international scientific and technological knowledge. Gamma nurtures its employees’ professional achievements with effective organizational support for research activities and the development of projects to fully satisfy clientele. Gamma is committed to encouraging high personal and professional standards. Gamma is a home for current and former employees. Management is committed to maintaining a familial atmosphere through both prosperity as well as crisis.

Table 9.1, below, summarizes a comparison of the four vision drafts. To more thoroughly re-examine the positions presented in the table, we would like to return to Collins and Porras’s (1991, 1996) vision model presented earlier in this work. According to these writers, a well-conceived vision consists of two major components: a core ideology and an envisioned future. A core ideology expresses the organization’s basic assumptions, principles, values, and beliefs. It influences and shapes the organization’s identity and signifies the purpose for its existence. The envisioned future involves a projection of the desired future and directs operations toward tangible goals accordingly. As the table indicates, Gamma’s managers were committed to preserving the organization’s traditional nuclear image and scientific ethos and sustain its commitments to its founders and the state. There seemed to be a consensus among senior management regarding the centrality of these attributes that, in Collins and Porras’s terms, represent the organization’s “core ideology” and

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Table 9.1. Comparison of four vision drafts Draft 1

Draft 2

Draft 3

Draft 4

(1) Foundation and subordination

Notes Gamma’s foundation by the Atomic Energy Commission (AEC)

Notes authority of the AEC, the defense leaders, and society at large

No specific reference

Notes the authority of the AEC and Gamma’s subordination to its committee

(2) Focus of activity (audacious goal)

To promote nuclear research and it’s various industrial applications

To promote applied R&D and provide technological services

To promote applied R&D for the use of the state, defense, and industry

To promote applied R&D

(3) Activity in civilian and private markets (strategic goal)

To diversify activities toward better serving civilian markets and private industry

To be technologically and commercially competitive

To develop applied R&D for industrial and market uses

To successfully develop a wide range of applied technologies

(4) Economic constraints (strategic value)

No specific reference

Need for financial No specific strength and reference ability to attract funded projects

No specific reference

No specific (5) Commitment to clients reference and quality (strategic value)

Satisfy clients’ needs for high quality products and services

Satisfy clients’ needs

Quality service to private clients and state defense authorities

(6) National commitment (core purpose)

No specific reference

Commitment to national interests to reflect its status as a state organization

Commitment to develop research applications along national defense interests

Commitment to operate at the forefront of national scientific and technological knowledge

(7) Nuclear research (strategic value)

To promote No specific Gamma’s nuclear reference heritage; play a leadership role in promoting nuclear knowledge

To improve the To demonstrate level of education research success in and involvement the nuclear realm of the community in areas of nuclear research

(8) Work values and attitudes (core value)

No specific reference

Employees are an asset; the well-being of employees and familial work culture are to be maintained

Emphasis on harmony between employees and protected welfare of workers

To support members to nurture their success; to maintain a familial atmosphere

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constitute its raison d’être. All four visions indicate the significance of these principles and their importance to Gamma’s new vision. It is important to note that at Gamma, there was an underlying belief that the need to institute comprehensive change was accompanied by the condition that core and unique features of the organization were to be preserved. Traits to be maintained included commitment to nuclear concerns, national interests, and a work culture of cooperative cohesion among members. Such foundational continuities were seen to be especially important during times of change. There were notably greater differences between the drafts regarding projections of the organization’s future. However, all of the drafts project a future involving applied science and increased engagements with private industries and civilian markets. The greatest contrast is seen in differences of the degrees of importance given to the financial viability and profitability of the organization’s activities. For example, draft 2 clearly demands applied-science activities to generate financial returns. Drafts 1 and 3 acknowledge Gamma’s need to adopt applied-science activities alongside those that serve national defense demands, but do not demand all of Gamma’s activities to be profitable. Other contrasts exist between drafts. For example, in the first draft, Gamma’s need to serve defense and civilian purposes are advocated along with demands to increase the organization’s involvement in technology transfer and product development. Similarly, the second draft refers to Gamma’s commitment to the Atomic Energy Commission and the defense authority, as well as the need for the organization to conduct applied R&D. Such multiple purposes were largely created by financial pressures; survival rather than ideology led the development of a mixed set of objectives. Demands of survival influenced Gamma to adapt its original vision to one that was more entrepreneurially oriented as seen, to various degrees, in all of the drafts. The first draft, for example, does not directly address financial pressures but states the need for Gamma to develop products for use in private industry, indicating interests shaped by financial constraints. The second draft is more straightforward in conveying Gamma’s need to “maintain competitive market advantage,” and promote “a financial balance” through pursuits of diverse projects. Thus, all four drafts attempt to preserve Gamma’s scientific heritage and familial relations between members whilst incorporating new, more entrepreneurially oriented objectives and goals to ensure organizational survival. The steering committee conducted its own review and comparison of the four versions at a meeting. Although members unanimously agreed that each would like to see Gamma operate as “more than just a workplace” and as an organization that treated current and former employees as “family,” it was agreed that these characteristics should be less emphasized in Gamma’s new organizational vision.

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Another point of consensus was that Gamma’s activities aimed at product generation did not need to be formally included in the vision. R&D was considered the core activity, and though applied product manufacture was valuable, the committee decided to exclude product generation from Gamma’s vision statement. Similarly, the majority of the committee felt it was inappropriate to include “survival needs” in a formal statement of ideals and objectives, though pressures to balance the budget had become increasingly acute and impossible to ignore. The committee also discussed issues of initiating projects with industrial and other professional partners. The group concurred that it was necessary to legitimize R&D activities for commercial and profit-making purposes. As Gamma was founded with a vision aligned with the interests of the AEC, certain civilian involvements seemed potentially unfavorable to the commission. Therefore, it was agreed that the references to Gamma’s civilian and industrial activities would be carefully worded as an extension of Gamma’s promotion of national interests. The draft authored by Motti, the operations manager, managed to do this in the statement: “Gamma conducts applied R&D for the uses of the state, the defense system, and industry.” In an attempt to reconcile these seemingly conflicting interests, the committee decided that the new vision would not be presented in a short statement of important priorities. The general manager led the committee in drawing up a list of several issues that were to be addressed in the final version of the entrepreneurial vision: • The organization’s main areas of expertise • The organization’s formal position and relations with the state and AEC • The relevance and future prospects for nuclear research • The spectrum and nature of Gamma’s professional activities • Standards of excellence, innovation, and entrepreneurship to be promoted • How Gamma would contribute to the research community, state, and the society at large • How the organization would contribute to the well-being of its employees • A statement regarding high work ethics • Professional standards to be upheld when working with industry and commercial markets • Acknowledging the need for balanced budgets

On the last issue, Zvika, a senior manager, suggested that Gamma should acknowledge its directive to maintain balanced budgets, but also ensure that the organization’s commercial activities were not projected to be merely a part of self-sustaining efforts to generate income. When the goal was clearly to

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conduct high-end R&D, involvement with the civilian market could be made more legitimate in the scientific community. Zvika felt that Gamma’s vision should encourage its members to develop an excellent organization, which functions successfully within the civilian market. However, he also argued that Gamma’s priority was not to serve civilian market interests, per se. Gamma’s general manager accepted the above argument, noting that Gamma turned to business only because this is where the money and immediate future lay. The general manager added in response that a true vision should stand the test of time; for that purpose, money-making objectives were not enough, and a set of deeper values was needed. It was decided that the general manager, together with consultants, would synthesize the drafts into a single document. The steering committee’s revised draft of Gamma’s vision was as follows: “DESIGNING A VISION” (a fifth draft, synthesized by the general manager and consultants): Gamma is conducting applied R&D and supplying high-end products and services for the AEC, the military, and Israeli society. In all its areas of expertise, Gamma strives to be at the forefront of world knowledge. Thus, we encourage excellence, entrepreneurship, and innovation, and strive to achieve technological superiority. Our belief is that in this way, we shall best serve the interests of the state of Israel and accomplish relative advantages in strong and competitive markets. Balanced finances are key to our existence and future development. Therefore, we will seek financially viable projects in private and public sectors, both in Israel and abroad. We will work hard to satisfy our clients’ needs and keep up with timetables. For that purpose we will maintain high professional standards among all our staff, and encourage professional commitment and cooperation. As an entity operating under the AEC, Gamma is committed to the research and development of nuclear knowledge in Israel, promoting public understanding about the safe usage of nuclear technologies and improving the public image of nuclear power. We uphold integrity and high work standards in all our areas of expertise, as we believe that such standards are a pre-requisite to meeting our national and defense responsibilities. Gamma’s employees, with all of their knowledge, initiative, devotion, and cooperative spirit, are our prime asset. We therefore seek to nurture our workers and look after their safety and well-being.

A significant purpose of this vision statement was to reconcile seemingly conflicting interests: those of serving civilian markets and others seeking to preserve a focus on serving state defense interests. Such dual aims are seen in almost every section of the statement. The first line connects efforts to gener-

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ate products and offer services with national defense interests. The second section expresses Gamma’s goal to be at the forefront of technological knowledge, and achieve excellence, innovation, and entrepreneurship in business. It is then suggested that such activity works to improve Gamma’s ability to serve national interests and goals; business principles are presented to be consistent with national goals. The third section addresses the need to be financially sound. Here, the vision states cautiously the need to operate within economic parameters. Expressing the objective to pursue “financially viable” projects suggests that Gamma seeks securely financed projects. The statement is formulated to diminish the visibility of income-seeking motives by emphasizing the national and international relevance of such projects. The fourth section addresses commitments to clients’ needs and respect for timetables, reflecting sensitivity to competitive market demands. The fifth section acknowledges Gamma’s relationship with the Atomic Energy Commission, to reassure authorities that its first commitments remain in the nuclear area. The sixth section can be seen as a reassertion of Gamma’s early commitment to the welfare of its employees, though such values are not as strongly emphasized. Copies of the committee’s draft, accompanied by a personalized letter and a survey soliciting feedback were distributed to all employees. The survey response from employees was fairly high, with seventy-five respondents from all levels of the organization, roughly 25 percent of Gamma’s total staff. Generally, responses were strong and emotional, demonstrating the importance and relevance of this issue to employees. Some of the respondents argued that there was a wide gap between Gamma’s actual everyday activities and the statements articulated in the draft. It was contended that the draft referred to general objectives, which are not unique to Gamma and can suit any other high-tech business, and that the statement failed to adequately distinguish Gamma from other organizations. Yoni, a scientist, commented on that issue: “The personal side was always emphasized here. This characteristic differentiated us from other, regular organizations. I felt it when I encountered troubles; my colleagues and management were always there for me. This is something you do not have in any other organization, and Gamma had it from day one. This unique trait is not evident enough in the suggested vision and it definitely should be, as it helps strengthen our identification [with the organization] and feelings of belonging.” Other members expressed seeing a need to acknowledge the scientific and technological domains in which Gamma excelled. Since these were areas the organization sought to promote and nurture, it seemed extremely important to identify them in the statement. Some members criticized the draft’s claim that Gamma’s employees are its main asset, arguing that nurturing the worker was a meaningless goal. It was suggested that the vision statement should more

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clearly indicate how the organization would act to promote the personal and professional capabilities of its workers. Some commented more generally on the meaning and significance of formulating a vision. Included were those who saw an urgent need for defining goals and objectives to address the cynical view that Gamma operated merely to survive, with no long-term aims or direction. Others suggested that in order to promote identification with the vision, it was essential for a large number of employees to be involved in formulating it. Several felt that the draft did not represent Gamma’s actual vision and that there were strong internal contradictions embedded in the statement. For example, saying that the organization nurtures excellence and innovation while emphasizing the need for balanced finances was seen to be contradictory to many scientists. One respondent remarked that when the private sector chose to work on projects, decisions were led by economic interests, with secondary concerns about high-quality standards. It was considered inappropriate for Gamma to assert objectives that could be misconstrued to be similar to those of purely commercial entities. The need to distinguish Gamma’s uniqueness was emphasized by Rafael, a scientist, who contended: “What’s missing in this vision is an emphasis on our commitment to promote excellent scientific research. A scientific research organization should put as a top priority the desire to promote its research excellence. This vision lacks such content. The way I see it, the suggested vision draft is more of a description of our present operations than a force for directing us toward the future.” Some rejected the draft, favoring the more familial and intimate flavor of the original vision statement. There were complaints that managerial concern for workers had decreased in recent years and some vehemently opposed the attempts for Gamma to forge a new image. A few scientists, mostly of the older generation, found it hard to accept appliedscience activities, and criticized the draft for being too “industrial” in its nature. However, other researchers understood the necessity for moving from basic to applied science; those who took this stance felt that basic research should be incorporated into the vision but with stronger emphasis on applied research. After carefully reviewing the respondents’ comments and suggestions, the steering committee met to discuss the contents and implications of responses. Members of the committee agreed on the need to produce a concise and clear document that expressed the leading goals and values of the organization, with the final draft providing answers to the following questions: • What is our mission? • What are the derivative goals and objectives? • What are the basic values that guide us? • What are the important domains of Gamma and its workers?

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Based on these considerations, the final version of Gamma’s vision was articulated. This finalized version was distributed, together with an accompanying letter, to managers and employees in the departments and sections. Who are we? Gamma’s organizational vision. Gamma engages mainly in conducting applied research and development and supplying knowledge-intensive products and services, in the service of the Atomic Energy Commission, national defense, and Israeli society. In all of our activities, we constantly strive to retain our place at the forefront of world knowledge and technological expertise, encouraging innovation, striving for excellence, and investing time and effort toward developing new ideas and new ventures. We believe that this will enable us to increase our competitive advantage and our usefulness to the state of Israel. Operating under the auspices of the Atomic Energy Commission, Gamma combines its scientific nuclear research and development activities with guidance and instruction on working safely with nuclear power, and demonstrating and explaining the nature and implications of nuclear radiation. Our balanced financial statement provides a measure of our abilities and is the key to our survival and development. We endeavor to obtain financing for our projects from government, public, and private sources in Israel and abroad. Satisfying the needs of our customers, keeping up with timetables, and producing high-quality products are central objectives of our operations at Gamma. The tenets of ethical behavior guide our activities and business connections with our clients, suppliers, colleagues, and government authorities. Gamma acts in the interests of its workers, ensuring their safety and welfare at all times. We see individual dedication, integrity, and identification with the organization as our most important assets.

With the completion of this final version of its entrepreneurial vision, Gamma’s management ended a long and complex process through which it defined its identity, professional direction, and future goals. The organizational literature on vision creation and vision change regards such a prolonged and formal process as key to the successful formulation of a new organizational vision. However, we believe that the process might be examined from a more critical perspective and consider whether the process of articulating a shared vision is not merely something that is forced to occur under conditions of prolonged crisis. Throughout the last few decades, Gamma has faced intensified identity crises, economic problems, and turbulent transformations in its market environment—all factors that made Gamma more fragile and susceptible to change.

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While the process of vision change may actually reflect the organization’s desires to change some of its core features manifested in its vision, a more cynical perspective might interpret the changing of Gamma’s vision as a manipulative ploy to project an established unity of purpose to managers, employees, customers, owners, and other stakeholders despite ongoing divisions. To what extent is Gamma’s new vision really an articulation of the organization’s objectives, goals, and future ideals, and to what extent is it more of a pragmatic attempt to imposingly portray comprehensive and fundamental forms of organizational change—these are both questions that remain unanswered.

Conclusions Despite widespread consensus on the importance of vision to organizations, it appears that few researchers have explored how this vision is formed or changed. One reason for this might be related to the inherent difficulties involved in the vision-creation process. In most studies, the steps organizations followed to realize a vision, such as “field meetings” (Wheatley 1992), “visionbuilding workshops” (Kelley 1992), “online learning” (Senge 1990), and “story creation” (Bryson and Crosby 1992), are not clearly specified. As a result, in the bulk of the vision literature, the philosophical underpinnings of visioncreation procedures are often unclearly compared (see Nutt and Backoff 1997b). Thus, this book attempts to analyze the nature and characteristics of the vision-formulation processes observed at Gamma. It appears that at Gamma, this process incorporated several approaches theorized by the various models presented at the start of this chapter. First, it followed the idea that the process of forming a new vision starts in the minds of executive leaders, as the general manager served as the driving force behind the formulation of the entrepreneurial vision. It then followed empowerment processes with the manager serving as a facilitator, to refine the initial vision draft with input from other organizational members on the steering committee. After the improved draft was distributed to members at all levels of the organization, feedback was collected and reviewed to enable the development of the final version of the vision. As Wilson (1992) has suggested, at Gamma, the process of re-defining a vision was observed to be iterative, with efforts to preserve many aspects of its existing ideology and established values. The process emerged sequentially, beginning with new projections of the organization’s future environment and an examination of existing resources and capabilities, which guided clarifications of values and entrepreneurial objectives. The process was also collective, involving several members of various ranks from within the organization. Al-

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though the initial draft of the new vision was begun by a group of top managers and its committee, the final statement incorporated the diverse responses reflecting a variety of experiences and perspectives among organizational members. Essentially, Gamma’s vision was reformulated to renew core aspects of its original vision, while adding new, more market-oriented future projections to guide entrepreneurial goals to ensure organizational survival. This book seeks to contribute to studies of processes of vision creation and change, with the view that more thorough understandings of such processes need to be developed. Additional work needs to be done to consider, more comprehensively, important attributes of the process and flesh out the steps needed to craft an organizational vision (Nutt and Backoff 1997b). Further explorations of these issues would, hopefully, enable better syntheses between existing visioncreation models.

Chapter 10

The Task of Constructing Change The Mechanism of Vision Creation

A wide gap between an organization’s current vision and the reality in which it operates may encourage the implementation of far-reaching organizational change. Some writers indicate that beyond having a significant part in the change process, vision also constitutes a major source of influence to initiate it (see, for example, Belgrad, Fisher, and Rayner 1988; Kanter, Stein, and Jick 1992; Kotter 1995; Porras and Robertson 1992; Porras and Silvers 1991). In alignment with this view, vision tends to be perceived as a facilitator of change and an instrumental tool necessary for engineering the process. Moreover, vision is seen as an inspiring, motivating, and guiding force that legitimizes change and helps overcome reluctance to embrace it (Kanter, Stein, and Jick 1992: 509). Following this line of reasoning, the majority of vision research emphasizes the supportive role of vision during change. As we demonstrate in this book, social actors are developing an alternative scenario, in which vision is not always supportive of change and, in fact, may even hinder the process. Thus, there is significant variance in the role that vision may play during a process of organizational change. In particular, organizations that encounter a need for change or internal conflict tend to use their vision as a kind of “shock observer.” Although various studies attested to the robustness of a vision’s core values, reformulating the vision is still considered as a key element in any planned change process (e.g., Collins and Porras 1996). At Gamma, we were witness to the drafting of two different visions during the implementation of a comprehensive plan change (between the late 1990s mid 2000s). The first, the “survival vision,” was seen as an interim vision, and the second, a strategic vision, was seen as an integral part of the change process. In drafting the two different visions, management adopted Collins and Porras’s (1991, 1994, and 1996) vision framework, and define vision as a statement of purpose, determined by management, based on the organization’s core values and beliefs. Accordingly, vision defines who the organization is, and combines an ideal manifestation of its direction alongside a more tangible prescription envisioning the way for achieving it. Three significant issues that relate to this definition, and are important for further understanding of this 122

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case, should be noted here. First, organizational values and beliefs have an influential role in directing the efforts to formulate a vision. Second, management has a pivotal role in determining these values and goals. Finally, once the vision becomes clear, coherent, and acceptable to organizational members, they develop a strong sense of identity and commitment to this vision and tend to resent any attempts to change it. By and large, the two visions at Gamma served two general purposes. Firstly, the new vision was benchmarked in accordance with the original vision. Many scientists suggested that their support for change grew when they realized that in the process of drafting the final (strategic) vision there was a room to include elements of the original vision, and thus maintain important core values. The process of drafting the new vision in two stages enabled both the scientists and the management to enter into negotiations regarding the content of the new vision, as Zvi, who was in charge of the process of drafting both visions, commented: We try to minimize objection. People here are very sensitive, and there are many “sacred cows” which you are not allowed to touch. So we do the drafting of visions in stages. First, start with a more mild vision aimed at giving us guidance for the near future and lay down the basic values that represent the new reality at Gamma. Then we moved to the second stage and drafting a strategic vision which was aimed at providing a comprehensive view for the future. Both visions relied heavily on the original vision of Gamma, mainly on more abstract manifestations of the old values of solidarity and commitment, and to the greater mission than to the success of the organization.

Secondly, achieving the wide participation of Gamma scientists enhanced the consensus around both core values and the mission of Gamma, following the change. By drafting two visions, management was able to rally many scientists into taking part in the process. This, as Gabi, the marketing director, noted, “forced those who were sitting on the fence to acknowledge that there is a need to change and to take part in shaping Gamma’s future.” Furthermore, the drafting of two visions created an opportunity for long deliberation over the strategic vision. By drafting a survival vision that preceded the strategic vision, both scientists and managers were able to prolong the process. This facilitates more vivid and serious debate on the new vision and the strategic path of Gamma. During the period of drafting the visions, management encouraged an atmosphere of open debate and discussion that contributed greatly to the legitimacy of both visions and, consequently, to the process of change. This chapter presents the content of the two different visions that provided a guideline for Gamma during its periods of transformation from an academic-oriented to an applied R&D organization. We start with outlining

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the survival vision, which can be seen as driving the change in Gamma’s core, and then we describe the basic tenets of the strategic vision.

Creating a Vision for Survival Gamma’s need to adjust its agenda of traditional basic research to more multidisciplinary and applied research represents a common experience for many defense R&D organizations (see Bertodo 1988; Starr 1988). Similarly to these organizations, Gamma would operate as an entity somewhere on the continuum between the university and industry, leading in nuclear research as well as developing applied projects with commercial viability. In its attempts to modify some parts of its original vision and preserve other aspects of its operations toward these aims, Gamma found itself having to simultaneously operate within two different cultures—an academic culture as well as a commercial one. These basic and conflicting cultures were embedded in different ideals and symbols and influenced the nature and scope of Gamma’s vision during its transition period. The leading values of informality and autonomy seen in Gamma’s academic culture gradually evolved into more project-based ones, which incorporated timetables and tightened budgetary and quality controls. While early projects directed toward defense applications were financed by the government, profit-making research was underwritten either internally with funding from Gamma’s own resources, or externally by institutional and private sponsors. The need to actively seek financial resources had been an unfamiliar demand for many of Gamma’s scientists, especially those who enjoyed considerable security afforded by government funding in the organization’s early days. Around the mid 1970s, Gamma’s managers concluded that the organization no longer had the privilege of claiming its share of the national budget if it devoted all of its time and efforts to academic pursuits. The organization needed to become more competitive and financially viable. Below we outline the key constraints that considered by management as potential threats to change. Non-competitive. While objectives toward greater competitiveness were widely acknowledged, the authority of managers was mitigated by some scientists’ doubts that Gamma could, or should, successfully compete in the free-business market. One of the veteran scientists gave his point of view on the issue as follows: “Gamma cannot compete with pure business organizations. We are only a business organization in disguise. Our roots are governmental with all the implications connected with this, and that hasn’t changed. Governmental organizations don’t have the required means to compete in a business world.

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A governmental unit like us knows how to produce knowledge, not products, and [knowledge] is what we should focus on.” Nationalistic. Nationalistic sentiments, atypical of other businesses and organizations, also influenced operations. Some of the scientists believed that as a national research center, Gamma was obliged to direct technological as well as financial developments in order to serve, first and foremost, its core and enduring national interests. A young scientist commented on the issue as follows: “We have to be idealistic and Zionist—this is our raison d’être. The leading logic here is upside down in comparison with regular business organizations. For example, many times we give our technology to the industry for low returns, considering what we could get from selling to foreign markets. We do this out of patriotic motives only, even if it means a loss of money. This is a moral obligation by definition. You will not find it in any saintly business organization, but here it’s a common gesture.” Secretive. In addition to the dominance of nationalistic interests, Gamma’s competitiveness was also hampered by strict codes of confidentiality. National secrecy standards institutionalized at Gamma nurtured what many called a “culture of secrecy.” Beyond the formal requirements for protecting organizational security, a broader system of secrecy that did not involve national security matters was seen in informal and everyday actions of many of Gamma’s members. The pressure for secrecy created enormous barriers to professional interaction and kept both members and potential customers from becoming fully informed about Gamma’s capabilities. This often inhibited research activities and hampered efficiency in distributing resources for new missions and commercial applications. Gamma’s marketing manager illustrated the implication of this culture of secrecy: “The main problem here is the lack of professional connections between technological fields. Formally, there aren’t any routine meetings and the whole issue of information exchange is very loose here. I’m acquainted only with what’s going on in my department. I have no idea what’s going on in the room next to me. An anecdote that can demonstrate this awkward situation is that one of our head sections didn’t recognize his neighbor, who had been working here at Gamma for quite a long time.” Gamma’s tendency to curtail individual prominence integrates well with another one of its unique gestures: enabling veteran scientists to continue work on their research projects even when these did not seem to carry any profit potential. This costly retention of scientists who were unprofitable and unproductive was valued by some as an expression of humane values, which were still being prioritized at Gamma. These values were maintained while at

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the same time a set of strategic business values such as competitiveness, profitability, and dynamism were adopted. With increasingly contradictory views about the appropriate balance between the development of historically significant advances in science and the more immediate needs of lucrative civilian markets, Gamma’s managers had to mediate between those who sought to preserve demands of tradition and others who desired reforms. They encouraged forays into the business market and offered advanced initiatives leading to new ideas while simultaneously trying to preserve the core aspects of Gamma’s traditional research culture. Many of the scientists believed that this duality of aims was not part of a coherent plan for change but rather a reactionary action narrowly focused on one central goal: enabling Gamma’s survival. It appears that the concept of survival provided Gamma’s members with a means for coping with changes in the face of threats to Gamma’s identity and core features. In survival language, when top managers recognize that environmental conditions are changing, they tend to change organizational proceedings in quick and flexible ways to ensure an organization’s survival over time (Andrews 1971; Child 1972). Accordingly, organizations more easily adapt to changing environmental contexts and conditions, and change when they have no choice but to do so. In other words, change is a necessary response to modifications in the larger organizational environment (Aldrich 1999: 51). Although researchers contend that transformations might improve an organization’s life chances in the long run (see Andrews 1971; Child 1972), there can also be resistance to change arising from members’ concern that change might cause a loss of identity and purpose, and therefore hurt the organization’s chances of continued survival (Hannan and Freeman 1984). In Gamma’s case, institutional and economic pressures compelled the organization to change. The organization found itself facing a complex situation in which it needed to change some of its central features to keep up with changing external conditions, including governmental reductions of funding and intensified market pressures. Following this logic, the mission of producing knowledge, which was included in the original vision, was modified by the “need to use the knowledge produced to generate income” (Gamma’s general manager, interview, October 2002). However, the core purpose of securing national interests remained untouchable. Thus, during the change process, Gamma’s original strategic goal of producing knowledge was separated from its newly adopted strategic goals, which became more commercially oriented and focused on utilizing the knowledge produced for business purposes. However, in both contexts, the strategic goals served the same purpose—i.e., securing national interests. Gamma’s management responded to such pressures carefully in light of considerable internal resistance to the idea of such demands. For some, especially Gamma’s veteran scientists, the adoption of survival as the organization’s

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new compelling goal was not only inappropriate but also seen to endanger the integrity of another audacious goal—to seek uncompromised standards of scientific excellence. Resistance against demands for survival surfaced in staff reactions, such as the insistence on adhering to Gamma’s strategic goal of “creating knowledge.” Recognizing the problematic aspects of defining a vision in terms of survival highlighted the need to determine an appropriate and more proactive vision for the organization. It was expected that such a vision would preserve the unique, original character of the organization while adapting its operations to suit new operational contexts and environments. This was the rational that guided the development of the strategic vision. To conclude, it seems that the clear need for change has been blunted by the resistance of some organizational members who lay claim to decisions about the future by virtue of their tenure and past contributions to the organization.

Constructing Strategic Visison It was agreed by the committee that Gamma should focus on research and development activities with practical applications in order to help the organization shape its compelling goal. There has also been consensus regarding the idea that Gamma should continue to encourage those practical applications that are expected to contribute to the country’s defense and serve the interests of the state, the military, and the industry. This way, it was presumed, the organization could maintain consistency with its enduring purpose and still pursue the unavoidable shift toward practical research. Committee members were unified in their opinion regarding the need to emphasize Gamma’s need to be at the forefront of technological knowledge, especially in areas that are significantly important for the country’s defense, as well as strive toward high professional and personal achievements. These ideas support the organization’s core purpose and constantly reinforce its core values. Finally, to develop innovative and significant strategic objectives, it was agreed by the committee that Gamma should strive to become more client oriented and strengthen its relations with the community. In order to achieve these goals, it was recommended that the organization work closely along schedules and timetables to improve service to its clients and also make an effort to increase public knowledge about nuclear research, mainly through educational activity. In alignment with these goals, members of the steering committee developed four alternative drafts for Gamma’s new vision. These drafts were presented to the organizations’ management and employees. The main emphasis was on changing the part of the vision that envisioned their future—namely, redefining the organization’s innovative and audacious strategic goals as well as the strategic values that promote the achievement of these compelling goals

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while still retaining the core purpose of relating to national commitment and core work values. The steering committee was committed to preserving the organization’s traditional nuclear image and scientific ethos and sustain its commitments to its founders and the state. All drafts indicate the significance of these principles and their importance to Gamma’s new, strategic vision. There were notably greater differences between the drafts regarding projections of the organization’s future. However, all of the drafts project a future involving applied science and increased engagements with private industries and civilian markets. The greatest contrast is seen in differences of the degrees of importance given to the financial viability and profitability of the organization’s activities. For example, the second draft clearly demands applied-science activities to generate financial returns. The first and third drafts acknowledge Gamma’s need to adopt applied-science activities alongside those that serve national defense demands, but do not demand all of Gamma’s activities to be profitable. The process of synthesizing the drafts into a single document represented an attempt to reconcile seemingly conflicting interests: those of serving civilian as well as business markets, and others seeking to preserve the historic mission of serving state defense interests. Furthermore, although members unanimously agreed that each would like to see Gamma operate as “more than just a workplace” and as an organization that treated current and former employees as “family,” it was agreed that these characteristics should be less emphasized in Gamma’s new organizational vision. The final draft of the strategic vision also concurred that it was necessary to legitimize R&D activities for commercial and profit-making purposes while still maintaining a balanced budget. It was also agreed that the references to Gamma’s civilian and industrial activities would be carefully worded as an extension of Gamma’s promotion of national interests. As reflected in Gamma’s case, the urgent need for change arose when the envisioned future in the vision no longer fit the realities of the changing organizational environment. When Gamma’s mere survival was threatened, the envisioned future evolved to a survival-oriented one, which helped the organization to endure, but was not appropriate for the long term. The survival vision essentially provided an updated version of the original vision; it reflected a reactive stance to current environmental constraints, new objectives, and short-term operational goals, but without totally repudiating those embedded in the original vision. Then, the envisioned future evolved again to a more long-term one, as reflected in the strategic vision. The two visions that prevailed during change are presented in table 10.1. The table also depicts Gamma’s original vision. Note that despite the seeming changes in the “envisioned future” part of the vision, in all three visions— original, survival, and strategic—the core ideology remained stable.

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Table 10.1. Comparison of the three visions based on the adopted theoretical framework ORIGINAL VISION

SURVIVAL VISION

STRATEGIC VISION

Core Ideology

Core Ideology

Core Ideology

Core Purpose: Securing and serving national interests Core Values: Informality; ethical behavior; acting in the best interests of the workers; dedication, integrity, strong family orientation; egalitarianism and identification

Core Purpose: Same as in original vision Core Values: Same as in original vision

Core Purpose: Same as in original vision Core Values: Same as in original vision

Envisioned Future

Envisioned Future

Envisioned Future

Audacious Goals: Remain at the forefront of scientific knowledge and technological expertise

Audacious Goals: Survival, i.e., leading in nuclear research as well as developing applied projects with commercial viability

Audacious Goals: Strive to remain at the forefront of technological expertise, especially in areas that are significantly important for the country’s defense

Encourage innovation, strive for excellence, and invest time Increase involvement in and effort toward developing multidisciplinary and new ideas and new ventures applied-practical forms of research

Encourage innovation, strive for excellence, and increase engagements with private industries and civilian markets leading to the implementation of new projects and ideas

Strategy

Strategy

Strategic Goals: Promote nuclear research for peace purposes

Strategic Goals: Openness Strategic Goals: Focus to collaboration with private on research activities with industry and civilian markets practical applications

Produce knowledge and academic research

Become commercially oriented Utilize knowledge produced for business purposes

Strategy

Legitimize R&D activities for commercial and profit-making purposes Maintain a balanced budget Strive to become client oriented and strengthen relationship with the community

Strategic Values: Academic curiosity; professional freedom; “publish or perish”; “do whatever we like”; egalitarianism

Strategic Values: Competitiveness; financial viability; profitability; dynamism

Strategic Values: Financial viability; competitiveness; excellent service and commitment to clients and quality; keeping up with schedules and timetables

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Conclusions This chapter demonstrates how a defense R&D organization wishing to deal effectively with new reality developed two sets of visions, survival and strategic, that accommodated somewhat contradictory sets of aspirations and goals: the old, national goals, together with the new, economically motivated and market-oriented ones. The novelty of this claim rests not only on the recognition of the role of vision in organization survival and development, but also on the organization’s ability to use vision in a manipulative and interchangeable way to pursue its strategic objectives. The respective dynamics of drafting a vision have usually been portrayed in normative terms, guided by the assumption that vision is a prerequisite for change (e.g., Kanter 2001; Kotter 1997; Nadler and Tushman 1989b; Nutt and Backoff 1997b; Peters 1987). Such an approach regards vision as a critical element for successful change and a powerful tool for introducing positive organizational modifications. The conceptual approach applied in this book challenges the one-sidedness of this view. This perspective dictates a careful scrutiny of the circumstances under which vision might influence change, in both enabling and disabling ways. Following this line of argument, we have demonstrated that at Gamma vision was used in two ways. The first was in the traditional sense of providing a value compass and goal direction for the organization and a sense of identity. The second, as part of management toolkit for promoting its strategic ideas and plan and convincing the organization’s members to endorse and legitimize its planned change. Our research also inquired into how and why aspects of the original vision persisted despite evidence of the need for its revision. We claim that although many of the core values associated with the original vision are divorced from the required change, the legitimization of the process of drafting new vision is still highly dependent on recognition of the past, irrespective of the behavioral changes introduced. At least in the short run.

Chapter 11

Conclusions Vision and Change in Gamma

In the past, defense R&D organizations were perceived as being missionoriented—that is, researchers concluded that these organizations’ roles flowed directly from national considerations (e.g., Dvir and Tishler 1999; Ham and Mowery 1998; Ringer and Strong 1998). Consequently, these organizations tended to avoid pursuing goals beyond their historical missions. Accordingly, defense R&D organizations were assumed, in the main, to adopt a one-track raison d’être based on strong national values. Hence, their aspirations regarding the future were not anchored in economic profit-making motives, but rather in what they could contribute to national well-being and security. As might be expected, such ideological views were expressed in these organizations’ vision statements, which tended to emphasize commitment to the pursuit of narrowly focused interests as defined by national security. In recent decades, these organizations have exhibited a marked change, as seen in their tendency to pursue, in practice, activities beyond the nationaldefense spectrum. This change, prompted by the necessity to survive, was expressed in intense engagement with adaptation to their altered environment. The most significant changes entailed decreased demand for defense-industry services coupled with the increasing desire of governments to divest themselves of the financial burden of maintaining these organizations (Blum and Tishler 2000; Dvir and Tishler 1999; Ham and Mowery 1998). To successfully confront the exigencies of the new reality, defense R&D organizations began to confront the need to initiate changes. These changes were expected to enable them to incorporate economic considerations into their approaches and practices. Despite these intense pressures, the process of change in the defense R&D industry has nonetheless been uneven and complex. This complexity was rooted in the sheltered atmosphere that formally enveloped the industry. As state-owned organizations, they enjoyed several valuable benefits (e.g., job security and professional research autonomy) and few incentives to alter the status quo. Moreover, professional disadvantages—such as a limited product

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line, lack of marketing expertise, low capacity to compete in open markets due to high overhead and little export—further obstructed change. The present research claims that it is incumbent upon defense R&D organizations wishing to deal effectively with the described reality to develop a vision that accommodates somewhat contradictory sets of aspirations and goals. The novelty of this claim rests on the recognition of the role of revision in defense R&D organization survival. The literature has tended to focus on the advent of alternative visions while neglecting the positive and often essential continuity, in one form or another, of the original visions. Each type of vision has been recognized, but not in combination. To explore this claim regarding the two facets of organizational vision, we examined the case of Gamma, a defense R&D organization undergoing change in response to the challenges previously described. The main premise behind the choice of this case-study approach was that a thorough understanding of Gamma’s story would enrich our understanding of similar organizations undergoing comparable processes and thereby improve the quality of scholarly interpretations of the related phenomena. This study thus focused on the challenge of understanding the relationship between vision and change. A thorough review of the literature revealed that the respective dynamics have usually been portrayed in normative terms, guided by the assumption that vision is a prerequisite for change. Such an approach regards vision as a critical element for successful change and a powerful tool for introducing positive organizational modifications. However, the conceptual approach applied in this study challenges the one-sidedness of this view. Accordingly, it is posited that vision is a factor that may or may not facilitate organizational change; in some circumstances, it may even hinder change. Incorporation of the notion of organizational vision as a negative force within the research’s analytical framework demanded that vision formation in Gamma also be examined with respect to how it inhibited change. Such a situation might arise, it was postulated, when ideological factors within an organization’s vision—including the organization’s basic values, beliefs, and identity—shape the goals and practices of the organization in unrealistic or unsuitable ways (Collins and Porras 1994, 1996). This perspective dictated a careful scrutiny of the circumstances under which vision might influence organizational change in both enabling and disabling ways. Within the framework of the research, vision was conceptualized as encompassing notions of organizational identity as well as individual perceptions and attitudes toward institutional realities. Methodologically, this required examination of how elements in the original vision that had guided the organization throughout its formative years had effectively restricted or, alternatively, expanded the organization’s ability to adapt to its present altered environment.

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With respect to the original vision, our research attempted to reveal how this vision was formed and understand its impact on both the organizational and individual levels. Our findings indicate that the original vision served to unite the organization and its individual employees by emphasizing a common sense of belonging and identification. Following this line of argument, we inquired into how and why aspects of the original vision persisted despite evidence of the need for its revision. Such a vision is expected to legitimate as well as encourage change. However, if the original vision is divorced from the required change, legitimization of the process will be forestalled irrespective of the behavioral changes introduced, at least in the short run. During the planning of the change effort, as found in our research, Gamma’s management had itself recognized vision’s critical role, and that changes planned to support the new goal of pursuing competitive advantage must be backed by a supportive and relevant vision. The thrust of our research was, then, to ascertain whether the organization can implement comprehensive changes in its operations if led by a suitable vision that mediated between two sets of organizational values: those that existed prior to institution of change and those that would guide the organization toward change. The findings of our research supported these expectations. With respect to how the original vision affected the organization and its operations, it was observed that intense adherence to the original vision could be found in management and members’ inclination to cling to existing organizational goals, behaviors, objectives, and procedures irrespective of their current lack of suitability (see Fox-Wolfgramm, Boal, and Hunt 1998; Greenwood and Hinings 1988, 1993). That is, the vision continued to be adhered to in practice, and effectively thwarted introduction of change. As to why this original vision was difficult to change, another of our research questions, we found that this point may be rhetorical if an alternative vision is not offered it its place. It was found that Gamma’s management was initially unable to present a coherent alternative set of goals and purposes. To compensate for this inability, management and many members of the organization developed—spontaneously and informally—what we term a survival vision. The survival vision essentially provided an updated version of the original vision: it reflected current environmental constraints, new objectives, and short-term operational goals but without totally repudiating the original vision. At Gamma, the survival vision became a functional, though informal, mechanism that helped members cope with the conflicts and stresses engendered by the gaps between the original vision and the new organizational reality. The most important characteristic of the survival vision was that it enabled members to accept changes in the operational modes of the organization while preserving the organization’s image and heritage.

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Although the survival vision fulfilled certain needs, its effectiveness proved to be partial. Redefinition of the organization’s activities in terms of survival fueled frustration, bitterness, cynicism, and uncertainty. These outcomes indicate that on the organizational level, adoption of a short-term survival vision not only fails to introduce order in goals and objectives, it also initiates significant conceptual barriers that inhibit the formulation of autonomous, long-range plans. As events were to show, Gamma’s survival vision was rudimentary and required further elaboration. Stated differently, a survival vision may, at times, be less a vision than a tactical accommodation. Effective mediation between the original vision and the survival vision necessitated modification of the survival vision. A significant finding of our research points to the fact that such a situation may yield an entrepreneurial vision, one in which the original vision rests at its core, yet is supplemented by the survival vision. An entrepreneurial vision can therefore be seen as hybrid in nature, uniting the two visions into a distinct whole. This process of vision development suggests the complexity of the relationships between vision and (planned) change within defense R&D organizations. Thus, the multi-dimensionality of organizational vision, as a concept, enabled Gamma’s top management to address the tensions that arose between interests supporting retention of the organization’s original vision (i.e., one that upheld goals divorced from profit-making) and interests advocating adoption of a new operational agenda (i.e., promotion of profit-seeking). In effect, these findings support the assumption of the research. Drawing on the theories reviewed (see, for example, Collins and Porras 1991; Nutt and Backoff 1997b; Kotter 1997; Pryor, McDaniel, and Kott-Russo 1986), the research question posited organizational vision as something that can simultaneously facilitate and hinder change. In other words, vision is a force that is multi-dimensional and multi-directional, sometimes flexible and sometimes rigid, whether in the context of ongoing organizational self-preservation or transformation. In addition to developing the argument that organizational vision has the potential to hinder change, this research’s inquiry into the relationship between vision and change also contributed an important observation regarding the sequence of the two events. Contrary to the prevailing view that a shared and guiding vision is a prerequisite for organizational change, findings from the case of Gamma indicate that initiation of change and formulation of an organizational vision can occur simultaneously (see, for example, Belgrad, Fisher, and Rayner 1988; Deetz, Tracy, and Simpson 2000; Jones and Kahaner 1995; Kanter 2001; Kanter, Stein, and Jick 1992). This observation provides an innovative addition to the organizational research literature. It challenges the accepted notion of the place of a shared vision in the sequence of change. Specifically, our research suggests that vision can itself be perceived as sus-

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ceptible to transformation simultaneously with other aspects of the change process. As stated, while attempting to implement operational changes, Gamma’s management recognized that the organization lacked a unifying vision—there was no shared motivating or guiding force to direct the change efforts. In response, as part of the planned-change intervention, managers decided to reformulate the organization’s vision. We may conclude from these events that an organization’s vision may be less rigid than the behavioral or operational changes that realize the envisioned transformation. From the perspective of methodology, this book contributes to strengthening the nexus between theory and empirical research. Review of the available literature indicated that the conceptual underpinnings of the practice of vision creation are often blurry because few researchers have empirically explored just how this vision is formed or changed (see, for example, Nutt and Backoff 1997b). The current research contributes to the literature by observing the entire process at the same time that it confronts the theoretical implications of the observations made. For example, the process of redefining a vision at Gamma was found to be iterative, with efforts to preserve as many aspects as possible of its existing ideology and established values. The process evolved sequentially, beginning with new projections of the organization’s future environment and an examination of existing resources and capabilities. These actions guided clarification of organizational values and entrepreneurial objectives. The process was also collective, involving several members from various ranks within the organization. Although the initial version of the new vision was formulated by a group of top managers, its final statement incorporated diverse inputs that reflected the full range of experiences and perspectives perceived to be meaningful by the organizational members. Our research seeks to contribute to studies of vision creation and change, with the view that more thorough understanding of such processes is called for. Additional research should be undertaken to “flesh out” the steps involved in crafting an organizational vision (Nutt and Backoff 1997b). At the same time, further research should be conducted to verify the theoretical conclusions and new concepts suggested here. This case study of Gamma’s experiences during its efforts to institute change examined the nexus of organizational change and organizational vision within a defense R&D organization. Our research engaged two key areas of ongoing debate, namely: those related to organizational vision and those related to organizational change. The place and role of vision during an organization’s efforts to change was clarified by considering issues of identity to illuminate individual forms of resistance to and support for change. Although existing literature on organizations and organizational change have acknowledged the importance of vision in the leadership and organiza-

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tion of institutions, little has been published on understanding the influential components—both positive and negative—of an organization’s vision. It was both the conspicuous paucity of such research and the observed importance of vision during Gamma’s efforts to institute change that led us to focus on these particular concerns. In light of these challenges, several theoretical conclusions were drawn. The first relates to the nature of the relationship between organizational vision and organizational change. While several scholars have written about organizations undergoing change, none have explicitly examined the connection between organizational vision and change. Moreover, the few studies that have considered the interplay between these two concerns have tended to emphasize the facilitative roles of vision during change efforts. (These include the work of Belgrad, Fisher, and Rayner 1988; Bennis and Mische 1995; Deetz et al. 2000; Jones and Kahaner 1995; Kanter 2001; Kanter et al. 1992; Kotter 1996; Miles et al. 1995; Porras and Robertson 1992; Smither et al. 1996). Within all of these perspectives, vision is regarded as a critical element of successful change and a powerful tool for overcoming obstacles to embrace it (Kanter et al. 1992: 509). However, this study found that vision could serve as not only a facilitator of change, but also function in other ways to hinder change. The second theoretical conclusion we drew concerns the influence of an organization’s history on its efforts to change. Some aspects of organizations can come to be thought of, or referred to, as “essential” because they have become historically legitimated to appear so. Lawler (1989: 64) states that “any change effort that criticizes the way things have been done in the past will produce defensiveness. Usually the people who have created the past practices and polices are still in the organization and it is impossible for them to separate criticism of their systems from criticism of themselves.” Other researchers speak of organizational history as a source of “tradition,” “pride,” and an “anchor to the past” (see Tushman, Newman, and Nadler 1988), indicating that once organizational values have been inculcated or adopted by organizational members as their own, these members can then be counted on to act in the best interests of the organization (Simon 1976). Along these lines, at Gamma, tradition was not only an influential force on the organization’s vision, but also had significant bearing on the organization’s ability to induce change and configure, as part of this change, a new vision. The third theoretical conclusion relates to the connections between organizational identity (Albert and Whetten 1985) and organizational vision. Although existing literature has addressed the strong linkages between identity and change (see, for example, Bouchikhi and Kimberly forthcoming; Dutton and Dukerich 1991; Fiol 2001; Fiske and Neuberg 1990; Pratt and Foreman 2000), there has been little work considering vision, identity, and change to-

CONCLUSIONS

137

gether. This book theorized identity as a “core” element of the organizational vision. At Gamma, it was noted that strong commitments to an original organizational identity can lead to situations in which the rigidity of such loyalty may be seen to be a liability, especially when the organization is required to undergo a process of transformation. It was also argued that understanding the place of identity in an organization’s vision can help clarify effective strategies for guiding complex changes. The inability for some of Gamma’s members to depart from an early organizational vision and cope with imposed demands for change forced Gamma’s leaders to redefine the organization’s identity and reinvigorate its organizational vision. Gamma management’s use of terms of survival was seen to effectively convey the urgency of the proposed changes to their scientists. A series of ad hoc and small-scale changes were introduced as measures toward survival and accepted so long as the integrity of the organization’s core identity was being preserved. Early analyses of the data at hand led to the identification of two main challenges at Gamma. Namely, a lack of clear priorities between the organization’s overall mission and objectives and a lack of communicative engagement and cooperation between professional divisions within the organizational structure. These observations led to this study’s focus on the importance of organizational vision within the process of complex organizational change. Table 11.1, below, summarizes the central organizational tensions we identified during Gamma’s attempts to preserve the “old” while initiating the “new.” As reflected in the table, central tensions relate to issues of organizational goals, areas of expertise, organizational culture, and miscellaneous work arrangements. Basically, the “old” paradigm supports the preservation of academic goals, defense-oriented areas of expertise, egalitarian and nationally oriented culture, and work arrangements that represent collective, rather than individual, interests. In contrast, the “new” paradigm promotes the incorporation of business and profit-oriented goals, supports the development of practical and commercial areas of expertise, advances entrepreneurial and project-oriented culture, and nurtures work arrangements that reward competitiveness, initiative, and creative individual behavior. As Gamma’s management gradually realized the need to initiate a comprehensive plan of change, external consultants were hired to provide entrepreneurial guidance. Gamma’s leaders desired the organizational structure to be redesigned to capitalize on its main areas of expertise and most significant products by effectively serving its principal customers. Simultaneously, Gamma was to improve its overall marketing approach and develop and strengthen cooperative linkages with other organizations. After six months of studying the organization, the consultants recommended that Gamma consider classical change models (see, for example, Beck-

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Table 11.1. Old and new organizational paradigms Organizational Goals

Areas of Expertise

Organizational Culture

Work Arrangements

Old paradigm

New paradigm

Contribute to academic literature and generate scientific knowledge

Contribute to organizational income and profitability

Demonstrate research excellence

Demonstrate market-oriented competence

Emphasis on basic research and generation of prototypes

The development of practical and commercial products and applications

Mostly defense-oriented contracts with the government and defense industry

Engagement with the private sectors

Values of egalitarianism and togetherness

Individualized projects

Marketing equals scientific expertise

Marketing equals commercial expertise

Strong habits of secrecy and insularity

Internal and external cooperation, exposure to foreign markets and publicity

Publication-oriented work

Project-oriented work

Nationally oriented values

National and conomic interests

Bureaucratic culture

Entrepreneurial culture

Tenure system and strong union representation of collective interests

Individualized promotions of creativity, initiative, motivation, and entrepreneurship

Undifferentiated rewards

Competitive rewards

hard and Harris 1987; Bennis, Benne, and Chin 1985; Kanter et al. 1992; Kaplan 1991; Kotter 1996; Tichey 1983), which emphasized the importance of articulating a clear and unifying organizational vision. In response, the management decided to initiate a structured process through which members could contribute toward the development of a new vision. With the resulting reformulation of the organization’s entrepreneurial vision, Gamma was able to preserve core parts of its original vision and at the same time rid itself of peripheral parts. It was clear that strengthening such organizational foundations was important. This was because the changes Gamma sought were not those that could be implemented through a series of steps. In fact, interview responses

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from organization members indicated that the very multiplicity of steps could be seen as a source of considerable stress. In this book we uncovered some of the unique challenges faced by defense R&D organizations. These organizations are government-owned, and as such, their primary interest has traditionally been along national interests and narrow aims of producing scientific knowledge and innovation (Defense Conversion 1993). Working within an organization established with an identity as a public institution, many of Gamma’s veteran members found it difficult to adapt to more market-oriented aims and activities such as those emphasizing applied forms of research and ventures within commercial, civilian markets.. As we show, the critical consideration of vision expands the understanding of both the potential positive and negative influences of organizational identity during efforts to institute organizational change. Existing literature tends to emphasize only the positive aspects of vision as an enabler of organizational stability, excellence, and success (Baum, Locke, and Kirkpatrick 1998; Gordon 1991; Howell and Frost 1989; Kirkpatrick and Locke 1996; Peters and Waterman 1982; Vail 1989). The findings of our work, therefore, suggest the need for further studies on the “inhibitory effects” of vision in relation to other organizational processes besides change, as well as within a wider range of organizational settings. This book demonstrates how vision can be a powerful binding force within an organization. Although always essentially beginning as a management construction, vision exerts its influence through the organization’s values and other markers of identity as may be commonly shared among members within an organization. Although the history of shared experiences can also be a key determinant in the development of an organization’s vision, the construction and development of a vision must be recognized as involving complex, multi-faceted processes. Organizational vision is linked with an array of ongoing organizational functions and actions, as well as a variety of individual interests and concerns. Such multi-dimensional aspects of vision discouraged the definitive identification of the most relevant interpretative method with which to study developments of vision at Gamma. Finally, In closing, we wish to offer a few practical implications that arise from this study, particularly targeted at individuals and organizations facing challenges similar to those faced by Gamma’s leadership. First, we recommend that managers carefully consider the potentially emotional nature of organizational change. Many of those who see the need for change often think of the implementation and management of change in narrowly logical terms, and fail to recognize that those individuals who must enable the realization of proposed changes may undergo a variety of emotions that can serve to encourage or hinder certain actions.

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Our second recommendation is to promote clarity in the relationships between the “old” and the “new.” When the relationships between traditional values and practices and proposed changes are not made clear, misunderstandings about both the aims and methods connected with desired changes can arise. For example, some Gamma members became resistant to change when changes were perceived to discount or discredit veteran members’ valued traditions or past contributions. Thus, it can be important to explicitly acknowledge the value of past standards and practices to ensure that those who have invested toward the establishment of certain institutions are not made to feel unduly dismissed by efforts to renew or reformulate institutional practices. It is also important for an organization’s leadership to provide a credible rationale with which to legitimate proposed changes. During our interviews and observations with Gamma’s members, a frequently heard concern was that changes were being made just “for change’s sake.” It was clear that no one within the Gamma leadership desired change for change’s sake, but such expressed concerns indicated that there was inadequate understanding of the reasons for change as held by the organization’s managers. Valuing past contributions and championing change may seem like conflicting agendas, but we believe that both may be accomplished simultaneously by showing how the old and the new are consistent with common and more basic concerns of identity, as led by an entrepreneurial vision. Our final recommendation is for managers to consider the role that generational differences play in multi-generational organizations. Ideological differences along generational lines can contribute to the challenges of instituting organizational change effectively. In Gamma’s case, it would be unfair to characterize the lines of division in strictly generational terms. However, it would be fair to say that the majority of those members resistant to change were older and the preponderance of those advocating change were younger. Hence, those who conduct studies in mixed generational contexts may benefit from noting variables of age and organizational experience and consider whether such factors may contribute to the variance in members’ attitudes toward the implementation of various organizational processes. At Gamma, the scientists and the management posited varied organizational stakes and world views and drew upon strategic and symbolic actions to promote their version of the vision. This was done through the following two mechanisms. The first is the way in which the scientists demarcated symbolic boundaries by using past cultural schemas for the purpose of acquiring moral standing and, consequently, were able to shape the new vision. The second relates to the way the new vision is created. This process underlines social construction of negotiation between management and scientists for the purpose of creating common meaning out of differences. We demonstrated

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in this book that the strategic action of organization members in formulating the new vision depended on their position and understanding toward change. This standing invoked a set of interactions within the organization for the purpose of advocacy and mobilization. These interactions constructed values and interests, social bonding, or consented actions that eventually shape and reshape the contexts and process of drafting and implementing the new vision and, consequently, organizational change. Thus, the logic of understanding the enactment of new vision is anchored in the ability of the two major stakeholders within the organization—management and scientists on the one hand, and the Atomic Energy Commission on the other—as an external stakeholder to interact before and during the process of change. All stakeholders exercise desire, role, and formal and informal status to present their view and transpose their schemas and resources. The new vision, eventually, has been created out of competing schemas and resources of the various organizational constituencies. New vision enactment provides a central means through which schemas/resources shape the organizational change processes.

Notes

Chapter 1 1. For example, Israel Aircraft Industries, TAAS-Israeli Military Industries and RafaelArmament Development Authority. 2. The beginning of the end of the Cold War started in the mid 1980s but most refer to the end of the Cold War occurring in the late 1980s. 3. It seems that history is repeating itself. In the wake of 9/11, some of the leading U.S. national laboratories have been leading major national security projects. For example, the Pacific Northwest National Laboratory’s mission in national security is to “support the U.S. government’s efforts to protect our homeland, ensure a strong and fast military, and fight proliferation of weapons of mass destruction. Our broad range of scientific and engineering expertise enables us to deliver high-impact, science-based, practical solutions to our clients” (www.pnl.gov/main/sectors/national).

Chapter 3 1. In an example of transformation through vision change, Charlotte Beers, assuming leadership of the advertising agency Ogilvy & Mather evaluates three cases in which the development of the future vision for the organization was an element critical to successful change. See H. Ibarra and N. Sackley, Charlotte Beers at Ogilvy & Mather Worldwide. Harvard Business School case #495031, 1995.

Chapter 4 1. Applied-research areas included, for example, a search for finding possible solutions to problems of national security, economic competitiveness, and quality of life. 2. The “available income” refers to an economic measure that management used to estimate the contribution of sections and department, in terms of financial revenues.

Chapter 5 1. Coloring diamonds was one of Gamma’s applications of pure research. 2. Cooperation with the industry has been perceived as instrumental to Gamma’s economic success.

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Chapter 6 1. In the interests of protecting the security of the organization under study, we are unable to provide a complete description of all the departments or provide further elaboration on the roles of specific sections and departments.

Chapter 8 1. In particular after the Yom Kippur War, October 1973.

Chapter 9 1. We refer here to a situation where the organization already has a vision and needs to revise or redesign it.

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Index

Allen, T.J., 88 Atomic Energy Commission, 42, 44, 47, 52, 69, 93, 95, 103, 110, 111, 112, 112, 113, 114, 115, 116, 117, 119, 141 “Atoms for Peace,” 41 Barzilai, Amnon, 4 Beers, Charlotte, 142ch3n1 Biran, General Ilan, 5 Collins, James, 27–28, 112–13, 122–23 “culture of secrecy,” 53–55, 84–85, 94–95, 99, 125 Drori, Israel, 35 Dubinskas, F.A., 56, 87 Eisenhower, President, 41 emic research strategy, 7, 19 environmental challenges, 8, 23, 25, 32, 38, 63, 80–81, 106–9, 126 external dilemmas, 74–75 internal dilemmas, 75–77 “empowerment” approach, 108–9 ethnography, 12–13 interviews, 14–15, 17 participant observation, 13–14, 17–19 Freeman, J.H., 63 Gamma, 2–4, 7, 21, 23, 37, 38, 39–40, 131–41 background of, 41–61 envisioning process at, 105–21 kibbutz legacy at, 82–84, 85, 88

narratives at, 91–104 planned change at, 74–81 sensemaking at, 82–90 survival of, 62–72 vision creation at, 122–30 Glynn, Marry-Ann, 35 Golant, Benjamin, 35 Hannan, M.T., 63 Honig, Benson, 35 Huy, Quy Nguyen, 35 inductive methodology, 11–12, 16 “insider’s perspective,” 12, 19 institutional approach, see institutional entrepreneurship perspective institutional entrepreneurship perspective, 3–4, 7, 16, 20–24, 26, 36, 40, 63 Israel Aircraft Industries (IAI), 52, 142ch1n1 Israel Armament Development Authority (Rafael), 52, 142ch1n1 Israel Military Industries (IMI), 52, 142ch1n1 Israeli Nuclear Energy Commission, 41 Katz, R., 88 Lawrence Livermore laboratory, 6 legitimacy, 7, 9, 20, 22, 23, 26, 33, 35–37, 64, 123 competing, 91–96 confrontational, 96–99 narratives, 91–104 reconciling, 99–101 repertoire model of, 101–4

157

158

Index

Los Alamos laboratory, 6, 7 Lounsbury, Michael, 35

Porras, Jerry, 25, 27–28, 112–13, 122–23 practice, theory of, 9, 37

(MASHA) Restoration and Maintenance Center within the IDF Logistics branch, 52 mission, 1–2, 3, 6, 7, 24, 27, 29, 41–42, 47, 54, 65, 69, 70, 91–93, 95, 96, 118, 123, 125, 126, 128, 131, 137

Robertson, Peter, 25

narratives, 8–9, 32–34, 35, 36, 38, 39, 91–104 confrontational, 96–99 kibbutz, 95–96 legitimacy creation, 91–96, 103 legitimacy destruction, 96–99, 103 legitimacy reconciling, 99–101, 103 nation building, 92–93 national security, 93–95, 101 research legacy, 91–93 survival, 100–1, 103–4 “not invented here” syndrome, 65, 88 Ogilvy & Mather, 142ch3n1 organizational change, 2, 8, 11, 12, 19, 20–21, 25–26, 30, 31, 35, 36, 46–47, 51, 63, 70, 73–81, 102, 120, 122–30, 132, 134–37, 139–42 organizational culture, 2, 29, 33, 38–39, 47, 58, 68, 71–72, 75, 83, 137, 138 Organizational Development (OD) approach, 24–25 organizational identity, 8, 27, 31–32, 33, 35, 37, 39, 67, 72, 83, 112, 123, 130, 132, 135–37, 139, 140 organizational survival, see survival Organizational Transformation (OT) approach, 24–26 organizational values, 1, 32, 59, 89, 123, 133, 135, 136 organizational vision, see vision Pacific Northwest National Laboratory, 142ch1n3 “planned change,” 1–3, 7, 8, 9, 11, 20, 24–26, 40, 77, 79–81, 92, 94, 97, 99, 103, 122, 130, 131, 134–35

Sandia laboratory, 6 sensemaking, 2, 7, 8–9, 20, 31–32, 33, 37–39, 82–90, 97 change-related accounts, 88–89 confrontational, 85–88 Sheaffer, Zachary, 35 Sillince, John, 35 Six-Day War, 44 structural inertia, 63–64 Stryker, Robin, 37, 94 subcultures, 67–68 survival, organizational, 23–24, 26, 62–72, 74, 88–90, 102, 110, 114–15, 121, 130, 132, 137 classic management approach, 62–63 contingency approach, 62 ecological approach, 63 institutional approach, 63 see also narratives; vision Swidler, Ann, 37, 102 vision, organizational, 1–3, 7, 17, 21–22, 25, 26–32, 40, 47, 67, 76, 77, 80–81, 105–21, 131–39 and organizational leadership, 28–30 as limiting change, 7, 31–32, 122, 132–34, 136, 139 as mechanism of change, 1–2, 7, 30–31, 122–30, 132–34, 136 as “road map,” 28, 30–31 definition of, 1–2, 27–28, 32, 122–23 strategic, 9–10, 122–23, 127–30 survival, 8, 9–10, 72, 122–27, 129– 30, 133–34 vision creation, 9, 105–9, 120–21, 122–130 and organizational environment, 106–7 initial formulation of, 107–8

INDEX

vision statement, 1–2, 109–20, 131 War of Attrition (1970), 44 Weber, Max, 53–54 Wilson, I., 108–9, 120

Yom Kippur War (1973), 5, 44, 143ch8n1 Zott, Christoph, 35

159