Source: The Burke-Litwin Model of Individual and Organizational Performance (Burke & Litwin, 1992).
Figure 7.1 The Burke-Litwin Model of Organizational Performance and Change
In presenting this causal model (therefore a normative view, Burke & Litwin, 1992) we are attempting to provide yet another perspective, and at the same time demonstrate that this more recent framework captures some of the best qualities of previous models. As does Tichy in the technical political cultural (TPC) framework, this model takes certain positions about organization change and thus predicts behavior and performance consequences and therefore deals with cause (organizational conditions) and effect (resultant performance).
Important background regarding the development of the model (the concepts of organizational climate and culture) is presented first, followed by a description of the model. Finally, suggestions for ways to use the model as well as case examples are provided.
The original thinking underlying the model came from George Litwin and others during the 1960s. In 1967, the Harvard Business School sponsored a conference on organizational climate. Results of this conference were subsequently published in two books (Litwin & Stringer, 1968; Tagiuri & Litwin, 1968). The concept of organizational climate that emerged from this series of studies and papers was that of a psychological state strongly affected by organizational conditions, such as systems, structure, and managerial behavior. In their theory paper, Tagiuri and Litwin (1968) emphasized that there could be no universal set of dimensions or properties for organizational climate. They argued that one could describe climate along different dimensions, depending on the kind of organization being studied and the aspects of human behavior involved. They described climate as a molar, synthetic, or changeable construct. Further, the kind of climate construct they described was relatively malleable; it could be modified by managerial behavior and by systems and strongly influenced by more enduring group norms and values.
This early research and theory development regarding organizational climate clearly linked psychological and organizational variables in a cause-effect model that was empirically testable. Using the model, Litwin and Stringer (1968) were able to predict and to control the motivational and performance consequences of various organizational climates established in their research experiment.
The concept of organizational culture is drawn from anthropology and is used to describe the relatively enduring set of values and norms that underlie a social system. These may not be entirely conscious. (Elaboration on this point is the theme of Chapter 8, “Understanding Organizations: Covert Processes.”) Rather, they constitute a “meaning system” that allows members of a social system to attribute meaning and value to the variety of external and internal events they experience. Such underlying values and meaning systems change only as continued culture is applied to generations of individuals in that social system.
The distinction between climate and culture must be very explicit because this model attempts to describe both climate and culture in terms of their interactions with other organizational variables. Thus, this model builds on earlier research and theory with regard to predicting motivation and performance effects.
In addition, the variables that influence and are influenced by climate need to be distinguished from those influenced by culture. Thus, there are two distinct sets of organizational dynamics. One set primarily is associated with the transactional level of human behavior or the everyday interactions and exchanges that create the climate. The second set of dynamics is concerned with processes of human transformation; that is, sudden “leaps” in behavior. These transformational processes are required for genuine change in the culture of an organization. Efforts to distinguish transactional and transformational dynamics in organizations have been influenced by the writings of James McGregor Burns (1978) and by consultants’ efforts to change organizations.
The Burke-Litwin model has been refined through a series of studies directed by Burke (Bernstein & Burke, 1989; Fox, 1990; Michela et al., 1988). Later collaboration led to the current form of this model, which attempts to:
1. Specify the interrelationships of organizational variables
2. Distinguish transformational and transactional dynamics in organizational behavior and change
Figure 7.1 summarizes the model.
Source: The Burke-Litwin Model of Individual and Organizational Performance (Burke & Litwin, 1992).
Figure 7.1 The Burke-Litwin Model of Organizational Performance and Change
In accordance with accepted thinking about organizations from general systems theory (Katz & Kahn, 1978), the external environment box represents the input and the individual and organizational performance box represents the output. Feedback loops go in both directions. The remaining boxes of the model represent the throughput aspect of general systems theory.
The model is complex, as is the rich intricacy of organizational phenomena. However, this model, exhibited two-dimensionally, is still an oversimplification; a hologram would be a better representation.
Arrows in both directions convey the open-systems principle that change in one factor will eventually have an impact on the others. Moreover, if the model could be diagrammed so that the arrows were circular (as they would be in a hologram), reality could be represented more accurately. Yet this is a causal model. For example, although culture and systems affect one another, culture has a stronger influence on systems than vice versa.
The model could be displayed differently. External environment could be on the left and performance on the right, with all throughput boxes in between, as with the Nadler–Tushman model (see Chapter 6, “Understanding Organizations: The Process of Diagnosis”). However, displaying it as shown makes a statement about organizational change: Organizational change stems more from environmental impact than from any other factor. Moreover, with respect to organizational change, the variables of strategy, leadership, and culture have more “weight” than the variables of structure, management practices, and systems; that is, having leaders communicate the new strategy is not sufficient for effective change. Changing culture must be planned as well as aligned with strategy and leader behavior. How the model is displayed does not dictate where change could start; however, it does indicate the weighting of change dynamics. The reader can think of the model in terms of gravity, with the push toward performance being in the weighted order displayed in Figure 7.1.
In summary, the model, as shown in Figure 7.1, portrays the following:
• The primary variables that need to be considered in any attempt to predict and explain the total behavioral output of an organization
• The most important interactions among these variables
• The ways the variables affect change
The concept of transformational change in organizations is suggested by such writers as Bass (1985), Burke (1986), Burns (1978), McClelland (1975), and Tichy and Devanna (1986). Figure 7.2 displays the transformational variables (the upper half of the model). Transformational refers to areas in which alteration is likely caused by interaction with environmental forces (both within and without) and which require entirely new behavior sets on the part of organizational members.
Figure 7.3 shows the transactional variables (the lower half of the model). These variables are very similar to those originally isolated by Litwin and Stringer (1968) and later by Michela et al. (1988). They are transactional in that alteration occurs primarily via relatively short-term reciprocity among people and groups. In other words, “You do this for me, and I’ll do that for you.”
Each category or box in the model can be described as follows:
• External environment. Any outside condition or situation that influences the performance of the organization. These conditions include such things as marketplaces, world financial conditions, political/governmental circumstances, and so on.
• Mission and strategy. What employees believe is the central purpose of the organization and how the organization intends to achieve that purpose over an extended time.
• Leadership. Executive behavior that provides direction and encourages others to take needed action. For purposes of data gathering, this box includes perceptions of executive practices and values.
• Culture. “The way we do things around here.” Culture is the collection of overt and covert rules, values, and principles that guide organizational behavior and that have been strongly influenced by history, custom, and practice.
• Structure. The arrangement of functions and people into specific areas and levels of responsibility, decision-making authority, and relationships. Structure assures effective implementation of the organization’s mission and strategy.
• Management practices. What managers do in the normal course of events to use the human and material resources at their disposal to carry out the organization’s strategy.
• Systems. Standardized policies and mechanisms that are designed to facilitate work. Systems primarily manifest themselves in the organization’s reward systems and in control systems, such as the organization’s management information system, goal and budget development, and human resource allocation.
• Climate. The collective current impressions, expectations, and feelings of the members of local work units. These in turn affect members’ relations with supervisors, with one another, and with other units.
• Task requirements and individual skills/abilities. The behavior required for task effectiveness, including specific skills and knowledge required for people to accomplish the work assigned and for which they feel directly responsible. This box concerns what is often referred to as job-person match.
• Individual needs and values. The specific psychological factors that provide desire and worth for individual actions or thoughts.
• Motivation. Aroused behavioral tendencies to move toward goals, take needed action, and persist until satisfaction is attained. This is the net resultant motivation; that is, the resultant net energy generated by the sum of achievement, power, affection, discovery, and other important human motives.
• Individual and organizational performance. The outcomes or results, with indicators of effort and achievement. Such indicators might include productivity, customer or staff satisfaction, profit, and service quality.
In the causal model, day-to-day climate is a result of transactions related to issues such as the following:
• Sense of direction. The effect of mission clarity, or lack thereof, on one’s daily responsibilities
• Role and responsibility. The effect of structure, reinforced by managerial practice
• Standards and commitment. The effect of managerial practice, reinforced by culture
• Fairness of rewards. The effect of systems, reinforced by managerial practice
• Focus on customer versus internal pressures or standards of excellence. The effect of culture, reinforced by other variables
In contrast, the concept of organizational culture has to do with those underlying values and meaning systems that are difficult to manage, to alter, and even to be realized completely (Schein, 1992). Moreover, instant change in culture seems to be a contradiction in terms. By definition, those things that can be changed quickly are not the underlying reward systems but the behaviors that are attached to the meaning systems. It is relatively easy to alter superficial human behavior; it is undoubtedly quite difficult to alter something unconscious that is hidden in symbols and mythology and that functions as the fabric helping an organization to remain together, intact, and viable. To change something so deeply embedded in organizational life does indeed require transformational experiences and events.
Distinguishing transformational and transactional thinking about organizations has implications for planning organizational change. Unless one is conducting an overall organizational diagnosis, preliminary interviews will result in enough information to construct a fairly targeted survey. Survey targets would be determined from the interviews and, most likely, would be focused on either transformational or transactional issues. Transformational issues call for a survey that probes mission and strategy, leadership, culture, and performance. Transactional issues need a focus on structure, systems, management practices, climate, and performance. Other transactional probes might involve motivation, including task requirements (job-person match) and individual needs and values. For example, parts or all of “The Job Diagnostic Survey” (Hackman & Oldham, 1980) might be appropriate.
An organization development (OD) consultant helping to manage change would conduct preliminary interviews with, say, 15 to 30 representative individuals in the organization. If, on the other hand, the organization is a loosely coupled system (see Chapter 10, “Understanding and Changing Loosely Coupled Systems”) such as a network, then all individuals need to be interviewed. If a summary of these interviews revealed that significant organizational change was needed, additional data would be collected related to the top or transformational part of Figure 7.1. Note that in major organizational change, transformational variables represent the primary levers, those areas in which change must be focused. The following examples represent transformational change (concentrated at the top of the model, as illustrated in Figure 7.2):
1. An acquisition in which the acquired organization’s culture, leadership, and business strategy are dramatically different from those of the acquiring organization (even if both organizations are in the same industry), thereby necessitating a new, merged organization (for an example of how the model has been used to facilitate a merger, see Burke & Jackson, 1991).
2. A federal agency in which the mission has been modified and the structure and leadership changed significantly, yet the culture remains in the past.
3. A high-tech firm whose leadership has changed recently and is perceived negatively, whose strategy is unclear, and whose internal politics have moved from minimal (before) to predominant (after). The hue and cry here is “We have no direction from our leaders and no culture to guide our behavior in the meantime.”
For an organization in which the presenting problem is more a fine-tuning or improving process, the second layer of the model (shown in Figure 7.3) serves as the point of concentration. Examples include changes in the organization’s structure; modification of the reward system; management development (perhaps in the form of a program that concentrates on behavioral practices); or the administration of a climate survey to measure job stratification, job clarity, degree of teamwork, and so on.
It is also useful to consider the model in a vertical manner. For example, Bernstein and Burke (1989) examined the causal chain of culture, management practices, and climate in a large manufacturing organization. In this case, feedback to executives showed how and to what degree cultural variables influenced management practices and, in turn, work-unit climate (the dependent variable).
The change effort at British Airways (BA) is a good example of an organization in which practically all boxes of the Burke-Litwin model were eventually examined and changed. The model provided a framework for executives and managers in BA to understand the massive change they were attempting to manage. To understand the model in use a bit more as well as to consider a significant example of large system change, let us review the change in BA.
Prior to 1987 and practically since World War II (although two organizations for most of that time period), British Airways (BA) was a government organization, the product of a merger between British European Airways (BEA) and British Overseas Airways Corporation (BOAC) in the early 1970s. These two organizations had in turn been spawned from Britain’s Royal Air Force. The BA of 1983, when Colin Marshall arrived as president and CEO, operated largely as a function of its history, rather like the military, and was draining the British treasury with financial losses year after year. Moreover, passengers referred to BA as “bloody awful.” Prime Minister Margaret Thatcher had decided earlier that BA was to be privatized and had brought in Lord John King, a successful businessman, to be chairman. King recruited Marshall from Avis Rent-A-Car in 1983 and gave him the charge and the authority to change BA so that it could survive privatization.
In addition to the external environmental force on British Airways by Prime Minister Thatcher and her government administration, another key environmental change was the growing deregulation of international air traffic—many air fares were no longer set by governments but instead by the marketplace.
Internally, BA had to change its mission and strategy as well as its corporate culture. BA’s mission was to serve with distinction as the United Kingdom’s flagship airline and strategically to compete both domestically and internationally. The mission and strategy would need to change more toward the customer and BA would need to become much more competitive. The culture would need to be transformed from one described as bureaucratic and militaristic to one that was service oriented and market driven.
Let us now consider the changes that took place in BA’s mission and strategy, leadership, and culture, in other words the transformational changes:
• Mission and strategy. To make BA more competitive and to reduce costs, the first step Marshall took was to reduce the size of the workforce from about 59,000 to 37,000. The downsizing was done with a certain amount of compassion via primarily early retirements with substantial financial settlements. Marshall’s background was marketing in a service industry and he began to change BA’s strategy accordingly. BA was to become “The World’s Favourite Airline” with a strong emphasis on the customer by providing superior service.
• Leadership. Of course the major change here was the hiring of Marshall. He in turn hired Nicholas Georgiades, a psychologist and former professor and consultant, as head of human resources (HR). Georgiades developed the specific tactics and programs required to bring about the culture change. Gordon Dunlop led the way financially via his position as chief financial officer. He was indispensable in transforming the accounting and financial functions from a government orientation to one that helped managers to understand competition and the marketplace.
• Culture. Led by Georgiades, a series of programs and activities were developed to shift the culture from too much bureaucracy to a real service orientation. The first program was called “Putting People First.” “Aimed at helping line workers and managers understand the service nature of the airline industry, it was intended to challenge the prevailing wisdom about how things were to be done at BA” (Goodstein & Burke, 1991, p. 12).
The next steps were to focus even more intensely on the culture. Georgiades conceptualized the process metaphorically as a “three-legged stool.” The seat was the new, desired culture (customer-service oriented) and the three legs were (1) the “Managing People First” (MPF) program, a five-day residential experience to help managers learn about how to manage their people in such a way (more participatively, for example) that they would be more service oriented; (2) a performance appraisal where half of a manager’s evaluation was based on results and half on how the results were achieved, the how being an incorporation of the behaviors and practices emphasized in the MPF program; and (3) pay for performance, rewarding managers according to how they were rated in (2) above.
In addition to these interventions primarily targeted at management, a five-day residential training program was conducted for all human resource people in BA. This program concentrated on consultation skills to enhance the HR people’s abilities to help line managers to apply what they had learned in the MPF program.
Part of the rationale for concentrating on managers in the early stages of the culture change was based on the research work of Ben Schneider. In a series of studies (Schneider, 1980, 1990; Schneider & Bowen, 1985), he has demonstrated that how frontline people in a service business (in his case, banks; therefore, tellers, loan officers) are treated by their respective supervisors has a differential effect on customer satisfaction. In bank branches where frontline employees were managed more participatively as opposed to bureaucratically—following procedures strictly, for example—customer satisfaction was significantly higher. With British Airways being a service business, we applied this same principle. You do not have to teach cabin crew members or ticket agents how to smile. Rather you need to teach managers about how to manage these frontline people so that smiles come naturally by their desire to treat customers with respect and enthusiasm. The MPF program was therefore designed and conducted to help managers to manage more participatively, openly, respectfully, enthusiastically, and with greater trust in their subordinates. Managers cannot manage the myriad of hour-by-hour contacts that employees who have direct contact with customers encounter every day, those 50,000 “moments of truth” as Jan Carlzon, another successful airline CEO, described in his popular book (Carlzon, 1987). Managers can, however, work with their subordinates in an involving manner that will in turn have a positive effect on customers.
In summary, because the BA change was clearly fundamental and transformational in nature, concentrating on the top three boxes of the Burke-Litwin model that were changed in response to external environment demands was the appropriate approach to take. Subsequently, efforts were concentrated on (1) the climate via team-building processes, (2) support systems by modifying, for example, rewards (pay for performance) and, as noted above, (3) training all human resource people in consulting skills to help managers apply what they had learned in the MPF program.
For a more detailed description of the history behind the BA change and a brief overview of the change effort, see the case by Leahey and Kotter (1990). Goodstein and Burke (1991) as well as Burke (2014b) have provided a more comprehensive analysis of the change process itself at BA.
That BA has changed is now a matter of record (Goodstein & Burke, 1991). It became one of the most profitable airlines in the world and its significantly improved service meant that passengers considered it “bloody awesome” rather than “bloody awful” (see the article by Power in Business Week, October 9, 1989; 97).
Considering the Burke-Litwin model from a vertical perspective entails hypothesizing causal effects and assuming that the “weight” of change is top-down; that is, the heaviest or most influential organizational dimensions for change are external environment, first and foremost, and then mission/strategy, leadership, and culture.
It is interesting to note that executives and managers typically concern themselves with the left side of the model illustrated in Figure 7.1: mission and strategy, structure, and task requirements and individual skills or abilities. In contrast, behavioral scientists are more likely to be concerned with the right side and middle of Figure 7.1: leadership, culture, systems (especially rewards), management practices, climate, individual needs and values, and motivation. For a fundamental, large system change effort, one should be concerned with the entire model and with a more effective integration of purpose and practice.
As with other models, the Burke-Litwin model has its limitations. For example, the model does not explicitly account for technology, the organization’s technical strengths, those core competencies that make it competitive in the marketplace, or effective in accomplishing its mission. Because technology largely pervades the entire organization, displaying the Burke-Litwin model three-dimensionally with technology as the third dimension might improve its validity.
Provided we do not allow ourselves to be trapped by a particular model, and as a consequence “not see” certain, critical information about an organization, using a model for diagnosis is highly beneficial. A sufficiently comprehensive model can help us to organize data into useful categories and to see more easily and quickly domains in the organization that need attention. Choosing the model should depend on at least three criteria. First, the model should be one that you as a practitioner thoroughly understand and feel comfortable with as you work with organizational members. Second, the model you choose should fit the client organization as closely as possible—that is, be comprehensive enough to cover as many aspects of the organization as appropriate, yet be simple and clear enough for organizational members to grasp fairly quickly. Third, the model should be one sufficiently comprehensive to allow you to gather your data about the organization according to the model’s parameters without missing key bits of information.
This chapter, along with Chapter 6, covered organizational diagnosis by examining models and theories that can help to summarize considerable data and point the way for important organization change. These models and theories have been largely rational, a deliberate and overt way of understanding an organization. Yet we know that the reality of organizational dynamics is not by any stretch of one’s imagination exclusively rational. Much of an organization’s culture is below the surface buried within the collective unconscious of organizational members. To be thorough and subsequently effective with our organizational diagnosis, we must therefore examine both the rational and irrational, overt and covert, and what is apparent and transparent and what is not obvious. In other words, we must understand what is below the surface, not discussed, and perhaps avoided. We now address this other perspective in the following chapter.
