Organisational adaptation or environmental selection? An enhancement of the evolutionary change theory based on a study of the New Zealand electricity industry

Abstract

Alterations to social, economic and political conditions demand that organisations change to survive under new settings. Hence, the study of organisational change is an important topic within organisational studies as theorists continue to examine "how" and "why" organisations change. The Evolutionary Change Theory proposed by Van de Ven and Poole (1995) represents a model of organisation change which is cyclical in nature and progresses through stages of variation, selection, and retention. Originally a process explained by Darwin in biology as "natural selection", it made its way to organisational theory with Hannan and Freeman’s seminal work on population ecology (1977). However, critics argue that natural selection is too deterministic as it denies managerial intentionality and freewill while also ignoring the strategic decision making abilities of organisational actors (Aldrich & Pfeffer, 1976; Lewin, Weigelt, & Emery, 2004). The critiques have provided a basis for examining the relevance of various external and internal influences on the process of organisational change following the mechanism described by the Evolutionary Change Theory. For the present study, an enhanced model of the Evolutionary Change Theory was developed after a review of the relevant management literature. In order to appraise the proposed enhanced Evolutionary Change Theory, this research examined changes in the New Zealand electricity industry since 1984 by utilising a process research approach. The research relies on archival data; however, it also involved real time data collected during the period from 2008 to 2012. By developing an account of important incidents throughout the change process and coding them into predefined stages of change, it was possible to crtically examine the enhanced model of change. Each incident was also examined to identify the role and contribution of external environmental forces along with the influence of various stakeholders. The research provided insights into how various events impact organisational change, particularly when examining it from an evolutionary perspective. The effects of external environmental influences – social, political, economic and legal were evident. “Dissatisfaction” appeared to be a precursor to variation in order to initiate the change process. The research also documented “adaptation” as a necessary stage within the evolutionary change process clearly highlighting the adaptability of organisations. Additionally, the different stakeholders – primary, secondary, external and internal who had the ability to influence change in the New Zealand electricity industry – were identified.