The Theory-Practice Gap: Myth or Reality?

Abstract

The series of papers that follow were first presented at an All-Academy of Management Symposium dealing with organizational change at the 1985 National Annual Meeting. The committee that organized the symposium did so with the beliefs that: (1) organizational change and redirection, the process of making and keeping organizations competitive in changing environments, is an important topic; (2) many executives were wrestling with just these issues, and had some interesting insights to share with us; and, most importantly, (3) an examination of what these executives and their organizations were doing would probably reveal that, in fact, many of the things being tried were consistent with research and theory in organizational behavior. In other words, in spite of the fact that some of our colleagues have bemoaned the gap between our research and the world of practice, our research, whether or not it has formed the basis for what was being done, was quite applicable and indeed was being applied in a number of contexts. Three industries that were facing particularly turbulent times and in which change was certainly required were banking, telecommunications, and computers. With increasing deregulation of banking and with the growth of competition from other kinds of financial institutions such as brokerage firms, savings and loans, and mutual funds, the days when a license to operate was almost the same as a license to make money were over. Interstate banking was either de facto occurring or on the horizon, and turbulence in the world economy was playing havoc with loan portfolios. Nowhere was or is this more evident than at one of the nation's largest banks, the Bank of America. Thus we decided to see if we could get Bob Beck to share with us his observations on the goals, the practices, and the preliminary results of what is surely one of the largest attempts to change an organization's culture, reaffirm its values, and revitalize its strategies and operations. His description of that process is a case study of the use of measurement, feedback, and information systems to both demonstrate the need for change and to help guide the change process. Telecommunications is and was yet another industry facing rapid and dramatic change that required new ways of operating and thinking. Since the late 1960s decisions of the Federal Communications Commission (FCC) have slowly eroded the monopoly position the phone companies had on long-distance service, and new technologies were making it possible for competitors to develop even in the local service market, at least with respect to business customers in the downtown areas. These technologies and regulatory changes pale in comparison with the significance of the antitrust decree that forced the breakup of AT&T effective January 1, 1984. The divestiture created seven new operating entities as well as a new AT&T, and required the splitting up of people, assets, and activities on a truly tremendous scale. The largest of the newly created operating entities was Southwestern Bell, a company with about 90,000 employees and 8 million customers. Zane Barnes graciously volunteered to share with us his experience in managing the company through the period of divestiture. His remarks speak to the importance of communications, having a clearly defined strategy, and of the role decentralization and delegation has played in making Southwestern Bell more responsive to new opportunities and new competitors. And there is the case of the computer industry. Although the changes that IBM itself faces, particularly in the personal computer and minicomputer markets, are far from trivial, we wanted to get the experience of someone competing in this rapidly changing business but without the same kind of dominant market position and size, which would be both more important and more resource constrained. Jim Renier of Honeywell describes a major effort at organizational renewal, predicated on applying some basic managerial and behavioral science concepts in a consistent and intelligent fashion. In addition to charting a somewhat new strategy, the Information Systems division embarked on a process that involved getting enthusiasm, commitment, and teamwork from its workforce more effectively. Renier's discussion of how this was brought about deals with issues of the connection between organizational and personal goals and the role of ethics and morals in organizational change. These three case studies are interesting, both compared with each other-what was the situation, what was done, how did it work-and compared with other things that might have been done. It is particularly important to see the extent to which these major change efforts followed or departed from what might be derived from the organization development literature and the more general literature on organizations. This exercise will, I believe, be fruitful for executives, consultants, and academics who teach and conduct research in these areas. My impression is that there are remarkable consistencies among the cases and between