organizational culture & change management

The Impact of Organizational Culture andReshaping Capabilities on Change ImplementationSuccess: The Mediating Role of Readiness forChange

Renae A. Jones, Nerina L. Jimmieson and Andrew GriffithsQueensland University of Technology; The University of Queensland;

The University of Queensland

It was hypothesized that employees’ perceptions of an organizationalculture strong in human relations values and open systems values would be associatedwith heightened levels of readiness for change which, in turn, would be predictive ofchange implementation success. Similarly, it was predicted that reshaping capabilitieswould lead to change implementation success, via its effects on employees’perceptions of readiness for change. Using a temporal research design, thesepropositions were tested for 67 employees working in a state government departmentwho were about to undergo the implementation of a new end-user computing systemin their workplace. Change implementation success was operationalized as usersatisfaction and system usage. There was evidence to suggest that employees whoperceived strong human relations values in their division at Time 1 reported higherlevels of readiness for change at pre-implementation which, in turn, predicted systemusage at Time 2. In addition, readiness for change mediated the relationship betweenreshaping capabilities and system usage. Analyses also revealed that pre-implementation levels of readiness for change exerted a positive main effect onemployees’ satisfaction with the system’s accuracy, user friendliness, and formattingfunctions at post-implementation. These findings are discussed in terms of theirtheoretical contribution to the readiness for change literature, and in relation to thepractical importance of developing positive change attitudes among employees ifchange initiatives are to be successful.

Journal of Management Studies 42:2 March 20050022-2380

© Blackwell Publishing Ltd 2005. Published by Blackwell Publishing, 9600 Garsington Road, Oxford, OX4 2DQ,UK and 350 Main Street, Malden, MA 02148, USA.

Address for reprints: Nerina L. Jimmieson, School of Psychology, The University of Queensland, StLucia, QLD, 4072, Australia ([email protected]).

INTRODUCTION

While the failure of planned organizational change may be due to many factors,few are so critical as employees’ attitudes towards the change event. Schein (1987,1988, 1999) has addressed the failure of organizational change programmes byarguing that the reason so many change efforts run into resistance or outrightfailure is traceable to the organization’s inability to effectively unfreeze and createreadiness for change before attempting a change induction. In this respect, orga-nizations often move directly into change implementation before the individual or the group to be changed is psychologically ready. From this observation,researchers in the area of organizational change have begun to direct their atten-tion to a range of variables that may foster change readiness among employees,as well as examining the extent to which readiness for change leads to changeimplementation success. The notion of readiness for change can be defined as theextent to which employees hold positive views about the need for organizationalchange (i.e. change acceptance), as well as the extent to which employees believethat such changes are likely to have positive implications for themselves and thewider organization (Armenakis et al., 1993; Holt, 2002; Miller et al., 1994). Otherapproaches to the study of readiness for change have focused on whether employ-ees perceive that their organization and its members are ready to take on large-scale change initiatives (Eby et al., 2000). In the present study, it is proposed thatorganizational culture and reshaping capabilities are influential in shaping howready employees feel about impending organizational change. The extent to whichemployees’ perceptions of readiness for change are predictive of better changeoutcomes also was addressed.

Predictors of Readiness for Change

Several studies exist within the organizational change literature that have investi-gated employee resistance factors to organizational change (e.g. Armenakis et al.,1993, 1999; Martinko et al., 1996; Miller et al., 1994; Ogbonna and Wilkinson,2003; Wanberg and Banas, 2000). Typically, these studies have focused on charac-teristics associated with the individual. Such characteristics usually come from thepsychological literature and have focused on personality attributes (e.g. openness tochange), cognitive processes (e.g. self-efficacy beliefs), and the extent to whichemployees feel that they have had access to external coping resources to help themto deal with the stressful nature of organizational change (e.g. the provision of timelyinformation and opportunities to be involved in relevant decision-making). Forexample, Miller et al. hypothesized that employees who felt that they had receivedhigh-quality information about the impending changes would also report high levelsof readiness for change, a proposition that was supported for 168 employees in anational insurance company about to introduce team-based methods of working.

362 R. A. Jones et al.

© Blackwell Publishing Ltd 2005

Similarly, Wanberg and Banas found that pre-implementation measures of severalchange-specific variables (which included self-efficacy, information provision, andactive participation) were predictive of readiness for change (assessed two monthsafter the collection of the first wave of data) for 130 employees working in a publichousing association undergoing large-scale restructuring.

However, studies examining the role of employees’ perceptions of the organi-zational environment in fostering readiness for change perceptions are scarce. Thisis inconsistent with the organizational change literature that has proposed that anexamination of organizational culture and organizational capabilities (as theyrelate to organizational change) is essential for understanding the processes thatlead to successful change implementation (see Cummings and Worley, 2001; Detertet al., 2000; Paton and McCalman, 2000). Some preliminary empirical evidencein support of the potential role of broader contextual variables in developing posi-tive change attitudes was provided by Eby et al. (2000). They found that employ-ees who rated their division as having flexible policies and procedures were morelikely to evaluate their organization and the people working there as being moreresponsive to change. In light of research of this nature, the first aim of presentstudy was to test the role of organizational culture in the prediction of employ-ees’ levels of readiness for change. In addition, Beckard and Harris (1987) believethat readiness for change should be examined in relation to organizational capa-bilities, proposing a matrix to examine the relationship between existing organi-zational capabilities and levels of readiness for change. They state that anassessment of organizational capabilities will assist organizations to focus on spe-cific areas that need to be addressed in order to create the critical energy for changeto occur. In light of this idea, a second aim of the present study was to test theextent to which employees who rate their workplace as having adequate organi-zational capabilities relevant to the management of change (i.e. reshaping capa-bilities) also will report higher levels of personal change readiness.

Organizational Culture

There is no clear consensus of an organizational culture definition (see Howard,1998; Zammuto et al., 2000). However, many researchers in the area have adoptedSchein’s (1990) three dimensional view of organizational culture – consisting ofassumptions, values, and artefacts. Assumptions are the taken-for-granted beliefsabout human nature and the organizational environment that reside deep belowthe surface. Values are the shared beliefs and rules that govern the attitudes andbehaviours of employees, making some modes of conduct more socially and per-sonally acceptable than others (Rokeach, 1973). Artefacts are the more visible lan-guage, behaviours, and material symbols that exist in an organization. Given thatvalues are considered to be so central to understanding an organization’s culture(Ott, 1989) and they are also seen as a reliable representation of organizational

Culture, Capabilities and Readiness for Change 363


culture (Howard, 1998), the measurement of organizational culture has typicallyfocused on values. Indeed, Quinn and his colleagues used the notion of values todevelop the Competing Values Framework (CVF) of organizational culture (seeQuinn, 1988; Quinn and Hall, 1983; Quinn and Kimberly, 1984; Quinn andRohrbaugh, 1981, 1983). The CVF explores the competing demands within anorganization on two axes. In this respect, organizations are classified according towhether they value flexibility or control in organizational structuring (i.e. flexibil-ity versus control). In addition, organizations differ in terms of whether they adoptan inward focus towards their internal dynamics or an external focus towards theenvironment (i.e. internal versus external).

As a consequence, four quadrants, or culture types, are formed. The CVF andthe general characteristics of each quadrant are illustrated in Figure 1. An orga-nizational culture emphasizing human relations values aims to foster high levels ofcohesion and morale among employees through training and development, opencommunication, and participative decision-making. An open systems orientationalso values high employee morale but places more of an emphasis on innovationand development. This is achieved by fostering adaptability and readiness, vision-ary communication, and adaptable decision-making. An organizational culturewith high internal process values strives for stability and control attained throughformal information management, precise communication, and data-based deci-sion-making. Lastly, an organizational culture possessing a rational goal orienta-tion promotes efficiency and productivity, typically gained through goal-setting andplanning, instructional communication, and centralized decision-making. Thelatter two culture types tend to have lower levels of cohesion and morale amongemployees. Based on these descriptions, it would appear that each type of orga-nizational culture is mutually exclusive. As pointed out by Quinn, however, all fourculture types can exist in a single organization, although some values are likely to be more dominant than others (see Quinn, 1988; Quinn and Cameron, 1983;Quinn and Kimberly, 1984; Quinn et al., 1991). Indeed, there is a growing bodyof empirical evidence to suggest that organizations simultaneously emphasize multiple value orientations, as defined by the CVF (e.g. Buenger et al., 1996;Howard, 1998; Kalliath et al., 1999; Zammuto and Krakower, 1991).

Organizational Culture and Readiness for Change

As noted earlier, perceptions of readiness for change may differ within an organi-zation and this has been attributed not only to individual differences, but also tocultural memberships that polarize the beliefs, attitudes, and intentions ofmembers (Armenakis et al., 1993). To illustrate, Zammuto and O’Connor (1992)ascertained that organizational cultures with flexible structures and supportive cli-mates were more conducive to the successful implementation of advanced manu-facturing technologies than more mechanistic organizations characterized by



inflexibility and control. In light of this finding, it was proposed, in the presentstudy, that employees who perceive their workplace to be dominant in eitherhuman relations values or open systems values are more likely to hold positiveviews towards organizational change. Indeed, a human relations orientation ischaracterized by the training and development of its human resources, which mayrelate to an employee’s confidence and capability to undertake new workplacechallenges. Also, the dynamic and innovative nature of the open systems culturetype would suggest that employees who perceive their organizational culture to bean open system are more likely to possess positive attitudes towards organizationalchange. It is also important to note that factors already empirically demonstrated



Flexibility

Human relations

Ends

* cohesion and morale

Means

* training and development

* open communication

* participative decision-making

Open systems

Ends

* innovation and development

Means

* adaptability and readiness

* visionary communication

* adaptable decision-making

Internal External

Internal process

Ends

* stability and control

Means

* information management

* precise communication

* data-based decision-making

Rational goal

Ends

* efficiency and productivity

Means

* goal-setting and planning

* instructional communication

* centralized decision-making

Control

Figure 1. The Competing Values FrameworkSource: Adapted from Quinn, R. E. and Rohrbaugh, J. (1983). ‘A spatial model of effectiveness cri-teria: toward a competing values approach to organizational analysis’. Management Science, 29, 363–77.

to be associated with readiness for change (e.g. communication and employeeinvolvement) are characteristic of the human relations and open systems culturetypes (see Zammuto and Krakower, 1991). Therefore, this research seeks toexamine the extent to which employees who perceive their division as having char-acteristics in line with either the human relations culture or the open systemsculture perceive higher levels of readiness for change prior to the implementationof a specific change event than employees who rate their organizational culture asbeing low on these two types of value orientations.

Reshaping Capabilities

The concept of organizational capabilities has its foundations in the competitiveadvantage literature (Teece et al., 1997). The competitive advantage concept isgrounded in the resource-based perspective that views an organization as a uniquebundle of heterogeneous resources and capabilities (Barney, 1991; Grant, 1998).According to Sharma and Vredenburg (1998), the resource-based view implies thatan organization’s competitive strategies and performance depend significantlyupon organization-specific resources and capabilities. Teece and Pisano (1994)assert that organizational capabilities should be discussed in association with orga-nizational and managerial processes, the current endowment of technology andintellectual property, and the strategic alternatives that are necessary for sustainedbusiness performance. Meyer and Utterback (1993) add that higher levels of thesecapabilities are associated with sustained success, be it in terms of product devel-opment, financial performance, or employee satisfaction.

Researchers such as Teece and Pisano (1994) believe that leading organizationsin the current and future global markets will be those that can demonstrate timelyresponsiveness to effectively coordinate and redeploy external and internal com-petencies. The concept of organizations being flexible in manipulating currentcapabilities and developing new ones also has been acknowledged by severalresearchers (e.g. Penrose, 1959; Teece, 1982; Wernerfelt, 1984). However, onlymore recently have researchers begun to focus on capabilities needed to respondto shifts in the internal and external environment, more concisely, the capabilitiesneeded for change (Teece and Pisano, 1994). The capabilities required for suc-cessful change have been specifically addressed by Teece and his colleagues whorefer to these capabilities as dynamic capabilities (Teece and Pisano, 1994; Teeceet al., 1997). Dynamic capabilities refer to the capacity to renew competences soas to achieve congruence with the changing business environment.

Turner and Crawford (1998) also have discussed organizational capabilitiesneeded for change. Turner and Crawford differentiated between operational capa-bilities and reshaping capabilities. Operational capabilities are required for sus-taining everyday performance. They suggest that strong operational capabilitiesdo not generally help the organization to manage change effectively. Indeed, the



capabilities needed to achieve change implementation success are very differentfrom those required for current business performance. In an attempt to definereshaping capabilities more precisely, Turner and Crawford proposed a taxonomyconsisting of engagement, development, and performance management capabil-ities. Engagement is based on informing and involving organizational members inan attempt to encourage a sense of motivation and commitment to the goals andobjectives of the organization. Development involves developing all resources andsystems needed to achieve the organization’s future directions. Proactively man-aging the factors that drive the organization’s performance to ensure it consistentlyand effectively achieves the intended change is the capability Turner and Craw-ford label performance management.

Miller and Chen (1994) claimed that successful change implementation will bethe result of the development of reshaping capabilities such as these. Indeed, inanalyses of 243 cases of organizational change, Turner and Crawford (1998) foundthat, as the strength of reshaping capabilities rises, so too do the rates of changeimplementation success. Effective change outcomes are undermined when orga-nizations have low levels of reshaping capabilities. More specifically, they foundthat there was a strong positive relationship between reshaping capabilities andchange implementation success. Interestingly, the impact of engagement anddevelopment capabilities upon current business performance was much weaker.However, performance management capabilities were identified as being impor-tant for current business performance. Overall, Turner and Crawford concludedthat reshaping capabilities are needed whenever organizational change is needed.However, the potential to draw strong conclusions about these findings is limited, given that few studies have examined the direct relationship betweenreshaping capabilities and change implementation success. Furthermore, nostudies to date have examined the extent to which reshaping capabilities help tofoster a sense of readiness for change among employees. Indeed, readiness forchange perceptions may be the mediating variable that helps to explain the posi-tive relationship between reshaping capabilities and change implementationsuccess.

Reshaping Capabilities and Readiness for Change

Beckard and Harris (1987) have discussed the link between reshaping capabilitiesand readiness for change in their research on organizational transitions. Theyargued that it is essential to determine levels of readiness for change, which isessentially an analysis of employees attitudes towards the change event. However,in addition to the attitudes of those employees involved, they argued that the capa-bility of the organization to effectively manage the changes should also be exam-ined. Whereas readiness for change involves the motivation and willingness of theemployees, reshaping capabilities involves the knowledge, skills, and abilities of the



organization as a whole to carry out the necessary requirements for successfulchange implementation (Beckard and Harris, 1987). It is suggested in the presentstudy that an organization or division who is equipped to effectively manage orga-nizational change is doing so via its effects on individual perceptions of readinessfor change. Again, it is important to note that some of the change managementstrategies known to be important in creating readiness for change (e.g. communi-cation and involvement) are characteristic of an organization who is engaging anddeveloping its employees. Therefore, it was the aim of this research to test whetheremployees who perceive their division as being ready for change (i.e. possessingreshaping capabilities) will also perceive higher levels of personal readiness forchange prior to the implementation of a specific change event.

Linking Readiness for Change to Change Implementation Success

Readiness for change is often described and used as the dependent variable in bothconceptual and empirical studies (e.g. Armenakis et al., 1993; Eby et al., 2000;Miller et al., 1994). Readiness for change has rarely been considered as a mediat-ing variable between change management strategies and change implementationsuccess. This is with the exception of a study conducted by Wanberg and Banas(2000) who tested a mediating model of readiness for change. As noted earlier,they proposed that a range of variables (e.g. self-efficacy, information provision,active participation) would foster readiness for change which, in turn, would bepredictive of employee adjustment (e.g. job satisfaction, work irritation, intentionto quit, and actual turnover). Several of the pre-implementation measures werepredictive of readiness for change perceptions. There also was some evidence forthe main effects of readiness for change on work irritation, job satisfaction, andturnover intentions. Given that many of the predictor variables were not relatedto the indicators of employee adjustment, tests for a mediational relationshipbetween the predictor variables, readiness for change, and employee adjustmentwere not possible. Weak support for the mediating role of readiness for change inthis study may be attributed to the general nature of the employee adjustmentmeasures which did not specifically address outcomes associated with the restruc-turing taking place in the organization. Consequently, the present study willaddress this issue by focusing on indicators of change implementation success thatare specific to the nature of the organizational changes. In this respect, the presentstudy examined the mediating role of readiness for change in the relationshipbetween change management strategies and change implementation success for asample of employees undergoing the implementation of a new end-user comput-ing system in their workplace.

The outcome of implementing a new information system is not just a changein technology, but also a change in structures, duties, tasks, and personnel. In addi-tion, Bjorn-Anderson (1988) and Hirscheim and Newman (1988) claim that



managers and users of information systems often remain resistant throughout theimplementation process, despite the disappearance of most technical barriers.Understanding and creating the workplace conditions under which employeesembrace such challenges remains a high-priority research issue (Vankatesh andDavis, 2000). Based on the previous discussion, it is argued that readiness forchange is an important mediating variable to consider in understanding the effec-tiveness of change programs and, similarly, will be a relevant concept to considerin relation to the implementation of a new information system. As a consequence,the present study will utilize the context of information system implementation forstudying the relationships among organizational culture, reshaping capabilities,and readiness for change in the prediction of change implementation success.

In the present study, change implementation success was operationalized as usersatisfaction and system usage, both of which are prime criteria of successful infor-mation system implementation (Guimaraes et al., 1992; Lucas, 1973; Pinto, 1994;Santhanam et al., 2000). User satisfaction is defined by Ives et al. (1983) as theextent to which users believe the system meets their needs. Indeed, user satisfac-tion is probably the most widely used measure of success in this context (DeLoneand McLean, 1992). The degree of system usage also is a frequently adoptedmeasure of successful information system implementation (Haines and Petit, 1997;Lee et al., 1995; Lucas, 1975). System usage is defined by Lee et al. as the amountof effort expended by users interacting with the information system, or more sim-plistically, the amount of time per day spent utilizing the system. Together, usersatisfaction and system usage provide a more complete picture of success than ifeither measure was utilized alone. The first is based on beliefs and attitudes,whereas the second is based on behaviours (Haines and Petit, 1997).

Working Hypotheses

To summarize, first, it was hypothesized that employees who perceive a humanrelations cultural environment within their division would report higher levels ofuser satisfaction and system usage (than employees who rate their organizationalculture as being low on human relations values) and that this relationship wouldbe mediated by their ratings of readiness for change (Hypothesis 1a). Second, itwas predicted that employees who perceive an open systems cultural environmentwithin their division would report higher levels of user satisfaction and systemusage (than employees who rate their organizational culture as being low on opensystems values) and that this relationship would be mediated by their change readi-ness perceptions (Hypothesis 1b). Lastly, it was hypothesized that employees whoreport high, rather than low, levels of reshaping capabilities within their divisionwould also perceive heightened levels of readiness for change which, in turn, wouldbe predictive of change implementation (Hypothesis 2). These hypotheses weretested in a temporal research design in which employees’ perceptions of organi-



zational culture, reshaping capabilities, and readiness for change were measuredjust prior to the introduction of a new end-user computing system in the work-place. The measures of user satisfaction and system usage were assessed in asecond wave of data collection once the implementation process had been finalized.

METHOD

Organizational Setting

The context for this research was a state government department in Queensland,Australia about to implement an end-user computing system. The end-user com-puting system was an extension of the existing Human Resource InformationSystem (HRIS) that was implemented a year prior, with the implementation of theHRIS affecting only the data entry personnel at that time. The implementationof the end-user computing system would affect all employees within the organi-zation, as they would need to access the system for viewing payroll information,requesting annual leave, and applying for training courses. The implementationstrategy was incremental, consisting of three pilot stages and then a ‘roll-out’ toall employees. However, the implementation schedule was severely delayed due toa variety of technical problems. The implementation of the first pilot group wasclose to 10 months behind schedule and consequently, the organization modifiedits strategy to undertake only one pilot programme before devolving the system toall employees. Considering this, the organization was eager to undertake a com-prehensive evaluation of the pilot process to assist in identifying the most effectiveand efficient devolution process for the system to all employees.

Research Design

As noted earlier, a temporal research design was utilized in which the predictorvariables (i.e. organizational culture, reshaping capabilities, and readiness forchange) were measured at Time 1 (T1), just prior to the implementation of theorganizational changes described above. In order to examine the extent to whichthe predictor variables had any effects on change implementation success (i.e. usersatisfaction and system usage), the outcome measures were assessed at Time 2 (T2),approximately five weeks after the collection of the T1 data. At this point in time,employees had been using the new HRIS for a period of one month. A strengthof this research design was the temporal separation of the predictor and outcomevariables, all of which were self-report. This approach helps to minimize the effectsof common method variance that can emanate from the influence of priming,social desirability bias, consistency effects, and unstable occasion factors, such asmood states (Podsakoff and Organ, 1986). It is important to note, however, that



although this research design goes some way to reducing the effects of commonmethod variance, it does not permit inferences of causality (Zapf et al., 1996).

Sampling Procedure and Characteristics

Questionnaires were posted to all employees in the pilot group (N = 572) via theorganization’s internal dispatch system. Employees were asked to return the ques-tionnaire directly to the researchers in the reply-paid envelope provided. Despitea range of tactics to maximize response rates, only 156 employees provided dataat T1, representing a response rate of 27 per cent. Although less than optimal,this response rate is acceptable for mail questionnaires (Cavana et al., 2000).Cavana et al. comment that small response rates do not necessarily decrease thestudy’s scientific value, but its generalizability is restricted. In an attempt to demon-strate that the T1 sample was representative of the population in terms of itsdemographic characteristics, a comparison was made between the 156 employeeswho returned the first questionnaire and the pilot group as a whole on gender andorganizational unit. These were the only descriptive information available aboutthe pilot group. In the pilot group, the percentage of males and females was 53per cent and 47 per cent, respectively. These proportions are comparable to thegender breakdown in the T1 sample (males = 52 per cent; females = 48 per cent).In addition, the proportion of T1 employees across each of the organizationalunits (ten groups representing different job functions in the agency) was found tobe relatively consistent with the corresponding breakdown in the pilot group.

At T2, 98 employees returned the follow-up questionnaire. However, employ-ees who completed both the T1 and T2 questionnaires amounted to 43 per centof the T1 sample (n = 67). In the present study, analyses were performed only foremployees who provided data at both points in time. The T2 sample consisted ofa relatively equal proportion of male (41 per cent) and female respondents (57 percent; 2 per cent of employees failed to specify their gender). Employees ranged inage from 20 to 65 years, with a mean of 37.13 years (SD = 11.08). Four per centof the sample did not provide data about their age. The majority of participantswere either administrative officers (58 per cent) or professional officers (38 percent), whereas 4 per cent of employees occupied other roles in the organization.It is important to note that a series of t-tests established that employees who didnot respond at T2 did not differ significantly from employees who provided dataat both points in time on the variables of gender, age, organizational culture,reshaping capabilities, and readiness for change.

Measures

Multi-item scales were used to ensure adequate measurement of each variable. Forthe same reason, previously established scales were used where suitable. Reliabil-



ity of the measures was assessed using Cronbach’s (1951) alpha coefficient, andthese are presented in Table I. As can be seen from this table, all measures usedin the present research were considered to have adequate internal consistency.

Organizational culture. Organizational culture was assessed with a measure devel-oped by Zammuto and Krakower (1991). This measure has been used in severalstudies examining organizational culture (e.g. Bradley and Parker, 2001; Giffordet al., 2002; Parker and Bradley, 2000). Based on the CVF, this instrument asksemployees to indicate the extent to which their organization possesses character-istics associated with each of the four culture types (i.e. human relations, opensystems, internal process, and rational goal) along five dimensions. These dimen-sions include: (1) character (e.g. Organization A is a very personal place, very muchlike an extended family); (2) leadership (e.g. managers in Organization A are warmand caring, seeking to develop employees’ full potential); (3) cohesion (e.g. the gluethat holds Organization A together is tradition and loyalty); (4) emphases (e.g.Organization A emphasizes human resources); and (5) rewards (e.g. OrganizationA distributes its rewards equally and fairly among its members). Respondents dis-tributed 100 points across each of the four descriptive statements within each ofthe five dimensions depending on how well they matched their division. Proce-dures for devising a competing values profile for each employee were then utilized.First, scores were adjusted in order to correct for any mathematical errors madeby respondents. This ensured that the total score distributed across each of thefour statements totalled 100. This was followed by averaging a respondent’s ratingfor each culture type across the five dimensions. To illustrate, a respondent’s totalhuman relations culture score was created by summing their responses to 1A, 2A,3A, 4A, and 5A, and then dividing by five. This process created an overall scoreon each type of organizational culture for each respondent.

Reshaping capabilities. The notion of reshaping capabilities has received little empiri-cal investigation (Turner and Crawford, 1998; see also Teece et al., 1997). Thus,the choice of instruments to measure reshaping capabilities is limited. Ten itemswere developed for use in the present study based on Turner and Crawford’s tax-onomy of engagement, development, and performance management. Items alsowere selected from a similar scale developed by Waldersee et al. (2003). Respon-dents were asked to indicate the existing strength or weakness of each capabilityfor their division on a five-point scale, ranging from 1 (very weak) to 5 (very strong).An example item is: ‘The division’s ability to redistribute resources to cope withchange’.

Readiness for change. Levels of readiness for change were measured with seven itemsdesigned to assess the extent to which employees were feeling positive about the



changes introduced by the new HRIS (adapted from items developed by Miller etal., 1994). Items asked employees if they considered themselves to be open or resis-tant to the changes, if they were looking forward to the changes in their work role,and if the changes would be for the better, particularly in relation to how they didtheir job. Participants responded on a seven-point scale, ranging from 1 (stronglydisagree) to 7 (strongly agree). Four items were reverse-scored due to negativelyworded questions.

User satisfaction. Levels of user satisfaction were measured with the End-User Com-puting Satisfaction Instrument (Doll and Torkzadeh, 1988). Consisting of 34 items,this instrument is designed to measure five aspects of user satisfaction (i.e. accu-racy, content, user friendliness, format, and timeliness). Participants responded toeach item on a five-point scale, ranging from 1 (almost never) to 5 (almost always).

To assess the multidimensional nature of the scale, responses to the items weresubjected to an exploratory factor analysis using principal axis factoring and anorthogonal (varimax) rotation. This analysis was performed on the entire samplethat returned surveys at T2 (n = 98). It is important to acknowledge that the resultsof the factor analysis to be reported should be interpreted with caution, given thatthe minimum requirement of five cases per item was not met for this analysis (asrecommended by Tabachnick and Fidell, 2001). Thus, the items were first testedto determine the adequacy of the sample size for the purpose of factor analysis.Tabachnick and Fidell recommend the use of Bartlett’s test of sphericity, par-ticularly when there are fewer than five cases per item. This test showed that thecorrelation matrix was not an identity matrix, indicating that some significant correlations among the items existed (c2 = 2762, p < 0.001). Furthermore, theKaiser-Meyer-Olkin measure of sampling adequacy was relative high (0.85).Tabachnick and Fidell recommend values of 0.60 or above for good factor analy-sis. Based on these preliminary analyses, the factorability of the user satisfactionscale was considered to be favourable.

The number of factors retained was determined by the number of eigenvaluesgreater than one. On this basis, eight factors were extracted, which accounted for80 per cent of the variance. Initially, items that loaded below 0.40 or had factorloadings of 0.40 or above across two or more factors were eliminated (see Tabach-nick and Fidell, 2001). It also was appropriate to eliminate the third factor reflect-ing timeliness because only two items remained once impure items were removed.As discussed by Mulaik (1972), failure to include three or more items per factorwould result in situations where factors are indeterminate (see also Etezadi-Amoliand Farhoomand, 1991, for a discussion of this issue in relation to the End-UserComputing Satisfaction Instrument). This process resulted in four usable factorsfor use in the present study. Three items were retained to measure satisfaction withaccuracy (e.g. ‘Are you satisfied with the accuracy of the system?’). Five items



formed the content scale (e.g. ‘Does the system provide information that meetsyour needs?’). Six items comprised the user friendliness scale (e.g. ‘Is the systemeasy to use?’). Lastly, four items loaded on the factor measuring satisfaction withthe formatting properties of the HRIS (e.g. ‘Do you think the system’s output ispresented in a useful format?’).

System usage. Measurement of system usage consisted of a single item (i.e. ‘In atypical week, how many times do you utilize the system?’). Responses were madeon a five-point scale, ranging from 1 (never) to 5 (all the time). This approach isconsistent with other researchers who have measured system usage (e.g. Fuerst andCheney, 1982; Lucas, 1973; Raymond, 1985). A second question asked respon-dents to specify the exact number of times they use the system in a typical week.The intercorrelation between these two questions was significant, r = 0.51, p <0.01, validating the criterion validity of the Likert-scale approach. As a result, thefirst measure of system usage was used in subsequent analyses.

RESULTS

Preliminary Data Analyses

Descriptive data (means and standard deviations) and intercorrelations amongeach of the variables are displayed in Table I. Data for all four culture types hasbeen provided to give a complete picture of the culture profile of the organiza-tion. As expected with ipsative data, there were statistically significant relationshipsamong each of the four culture types. Human relations culture and open systemsculture were positively related to each other, r = 0.26, p < 0.05, whereas internalprocess culture and rational goal culture also were positively correlated, r = 0.24,p < 0.05. The human relations culture and open systems culture were both nega-tively correlated to the culture of internal process. Additionally, human relationsculture and open systems culture were both negatively related to the culture ofrational goal. It also should be noted that intercorrelations among accuracy,content, user friendliness, and format were high, which was expected as they aredimensions of the broader concept of user satisfaction. Given that the exploratoryfactor analysis provided support for a four-dimensional factor structure, these wereretained as separate dependent variables in this study. Lastly, intercorrelationsamong user satisfaction and system usage were low to moderate, suggesting thatthese variables are empirically distinct.

The effects of age and gender were investigated as these demographic charac-teristics have been reported to affect user satisfaction and system usage in com-puting environments. For instance, Howard (1986) found that age and computeranxiety were positively correlated with each other. Similarly, Zoltan and Chapa-nis (1982) found that youth was associated with more favourable attitudes towards



Culture,C

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Table I. Descriptive data (means and standard deviations) and intercorrelations among the variables

Variables M SD 1 2 3 4 5 6 7 8 9 10 11 12 13

1. Age 37.26 11.60 –2. Gender 1.60 0.49 -0.40** –3. Human relations culture 21.37 12.65 -0.04 0.13 (0.72)4. Open systems culture 18.52 11.45 -0.03 -0.06 0.26* (0.87)5. Internal process culture 32.24 18.10 0.00 -0.13 -0.61** -0.66** (0.82)6. Rational goal culture 27.87 11.77 0.08 0.12 -0.38** -0.29* 0.24* (0.61)7. Reshaping capabilities 3.10 0.68 0.08 0.06 0.30* 0.07 -0.21 -0.06 (0.88)8. Readiness for change 5.34 1.10 -0.05 0.13 0.33** -0.06 -0.17 -0.05 0.33** (0.85)9. User satisfaction – accuracy 4.06 0.77 0.03 0.01 -0.06 -0.19 0.11 0.08 -0.01 0.26* (0.90)

10. User satisfaction – content 3.85 0.90 0.11 -0.01 -0.09 -0.06 0.05 0.08 -0.09 0.11 0.71** (0.94)11. User satisfaction – user 3.42 0.95 0.01 -0.02 -0.06 -0.04 -0.06 0.20 0.08 0.31* 0.64** 0.65** (0.94)

friendliness12. User satisfaction – format 3.67 0.90 0.11 0.12 -0.09 -0.01 -0.07 0.21 -0.03 0.31* 0.65** 0.72** 0.68* (0.89)13. System usage 2.41 0.74 -0.10 0.04 0.23† -0.08 -0.05 -0.09 0.28* 0.42** 0.22 0.10 0.35** 0.14 –

Notes: Cronbach’s (1951) alpha coefficients for each of the variables are in parentheses along the main diagonal.† p < 0.075; * p < 0.05; ** p < 0.01.

computers. It also has been reported that although men often possess more computer-related skills, women are more likely to hold more positive perceptionsabout the benefits of computers (Gutek and Bikson, 1985). As shown in Table I, ageand gender were not significantly correlated with any of the predictor or outcomevariables assessed in this study. Furthermore, additional preliminary analyses withthe use of hierarchical multiple regression demonstrated that when age and genderwere statistically controlled (entered at Step 1), they did not alter any of the sig-nificant findings reported in this study. Thus, the hierarchical multiple regressionanalyses were performed on the complete sample, regardless of age or gender.

Data Analysis Overview

Consistent with Kenny et al.’s (1998) recommendations for the testing of medi-ated models involving continuously measured variables, hierarchical multipleregression analysis was employed (see also Baron and Kenny, 1986; James andBrett, 1984). It is important to note that the scoring method used to measure thefour types of organizational culture as represented in the CVF produces ipsativedata that are generally not appropriate for normative interpretation (Hicks, 1970).However, Hicks also notes that when one or more of the scales from the ipsativepredictor set is deleted when the data are analysed, then the scores do not meetthe criterion for pure ipsativity (p. 170). It was for these reasons that we did notdevelop and test hypotheses involving the internal process and rational goal quad-rants of the CVF. Other studies also have used only two quadrants of the CVF inorder to facilitate the appropriate use of multivariate statistical techniques (e.g.Shortell et al., 1995). Furthermore, the hierarchical multiple regression analyseswere performed separately for Hypotheses 1a (human relations culture) and 1b(open systems culture). In this way, the scores for these two types of organizationalculture were not considered simultaneously, thereby reducing the impact of thedependency relationship that exists between them. Thus, a total of three sets ofhierarchical multiple regression analyses were performed on each of the fivedependent variables. One set of analyses examined the indirect effects of a humanrelations culture on change implementation success, via its effects on employees’levels of readiness for change (Hypothesis 1a). The second set of analyses exam-ined the indirect effects of an open systems culture on the four dimensions of usersatisfaction and system usage, via its effects on employees’ change readiness per-ceptions (Hypothesis 1b). The final set of analyses examined the extent to whichreshaping capabilities predicted readiness for change, thereby heightening user sat-isfaction and system usage (Hypothesis 2). Baron and Kenny discuss four tests thatneed to be followed when establishing a mediated relationship among a set of vari-ables. These four tests were conducted for each of the three hypotheses and arediscussed below.



Analyses Involving Employees’ Perceptions of a Human RelationsCulture

Hypothesis 1a states that employees who perceive their division to be high on aculture emphasizing human relations values would report higher levels of user sat-isfaction and system usage and that this relationship would be mediated by theirreadiness for change perceptions. To provide evidence of a mediating model, it isnecessary to first establish that the predictor variable (i.e. human relations culture)is significantly correlated with the outcome variables (i.e. user satisfaction andsystem usage), thereby establishing if there is a relationship to be mediated. As canbe seen in Table II, employees’ perceptions of a human relations culture were notrelated to any of the user satisfaction dimensions. There was, however, evidenceto suggest that employees’ perceptions of a human relations culture exerted a posi-tive main effect on system usage, b = 0.26, p < 0.05, R2 = 0.07, F(1, 59) = 4.18,p < 0.05. Next, it needs to be established that the predictor variable is correlatedwith the mediator (i.e. readiness for change). This step requires that readiness forchange be treated as an outcome variable in the analysis. The last column in TableII shows that employees’ perceptions of a human relations culture were predictiveof readiness for change, b = 0.33, p < 0.01, R2 = 0.11, F(1, 60) = 7.43, p < 0.01.The third test requires that readiness for change is correlated with the outcomevariable, while controlling for the predictor variable at Step 1. Inspection of Table



Table II. Hierarchical multiple regression analyses involving employees’ perceptions of a human relationsculture

T1 predictor User satisfaction User User satisfaction User satisfaction System usage Readiness

– accuracy satisfaction – – user friendliness – format for change

content

b b b b b b b b b b b

Step 1

Human -0.01 -0.13 -0.08 -0.14 -0.06 -0.20 -0.09 -0.24 0.26* 0.13 0.33**relationsculture

R2 0.04 0.01 0.00 0.01 0.07* 0.11**

Step 2

Readiness 0.30* 0.16 0.37** 0.38** 0.35**for change

R2ch. 0.08* 0.02 0.12** 0.18** 0.10**

Notes: *p < 0.05; **p < 0.01.

II reveals that – after the effects of the human relations variable were partialedout – readiness for change (entered at Step 2) was predictive of system usage, b =0.35, p < 0.01, and accounted for a significant increment of variance, R2ch. =0.10, F(2, 58) = 8.83, p < 0.01. Fourth, for full mediation to be present, it is nec-essary to demonstrate that the significant effect of the human relations culturevariable on system usage is no longer significant when the effects of readiness forchange are controlled on the subsequent step. If the strength of this relationshipis reduced but remains statistically significant, then partial mediation is evident.The equation used for the third test is used to establish this effect. Support forHypothesis 1a was demonstrated in relation to system usage. In this respect, thepositive main effect of employees’ perceptions of a human relations culture on thisdependant variable was no longer significant, once readiness for change wasentered into the equation, b = 0.13, NS.

Analyses Involving Employees’ Perceptions of an Open SystemsCulture

Hypothesis 1b suggested that employees who perceived an open systems culturein their division would have higher levels of user satisfaction and system usage atT2 (compared to employees who rated their organizational culture as being lowon this set of values). In addition, this relationship was expected to be mediatedby change readiness perceptions. The open systems variable was not significantlyrelated to any of the user satisfaction indices or employees’ reports of system usage. Given that the first condition for mediation was not fulfilled, subsequentanalyses were not necessary. Thus, Hypothesis 1b received no support in thepresent study.

Analyses Involving Reshaping Capabilities

The hierarchical multiple regression analyses were continued to test the proposalthat reshaping capabilities would lead to high, rather than low, levels of user sat-isfaction and system usage, via its effects on employees’ perceptions of readinessfor change. First, the extent to which the predictor is correlated with the outcomevariables is presented in Table III. As can be seen from this table, employees whoperceived their division to have high levels of reshaping capabilities at T1 alsoreported higher levels of system usage at T2, b = 0.28, p < 0.05, R2 = 0.08,F(1, 63) = 5.98, p < 0.05. Consistent with the previous two sets of analyses, reshap-ing capabilities was not predictive of user satisfaction. Second, reshaping capabil-ities exerted a positive main effect on readiness for change, b = 0.33, p < 0.01, R2

= 0.11, F(1, 64) = 7.92, p < 0.01. Third, readiness for change (entered at Step 2)was predictive of system usage, b = 0.38, p < 0.01, R2ch. = 0.14, F(2, 62) = 11.42,p < 0.01, once the effects of the reshaping capabilities were taken into account atStep 1. The positive main effect of reshaping capabilities on system usage was no



long significant when readiness for change was added to the equation, b = 0.15,NS. Therefore, the results provided support for a fully mediated relationshipbetween reshaping capabilities and system usage, via employees’ levels of changereadiness.

Main Effects of Readiness for Change on User Satisfaction

As a consequence of testing for mediation, the main effects of readiness for changeperceptions on each of the dependent variables also was examined (see Step 2,Tables II and III). Although there was no support for the mediating role of readi-ness for change in the prediction of user satisfaction, there was some evidence tosuggest that pre-implementation levels of change readiness exerted a direct maineffect on the post-implementation measures of accuracy, user friendliness, and for-matting characteristics. Thus, employees who felt positive about the impendingorganizational changes at T1 reported higher levels of satisfaction with the accu-racy of the system, the user-friendly nature of the system, and the system’s for-matting functions after using the new HRIS for a period of one month. It shouldbe noted that regardless of which independent variables were entered at Step 1(i.e. human relations culture or reshaping capabilities), the effects of readiness forchange on these indicators of user satisfaction were relatively consistent.

DISCUSSION

Some support was found for two of the three hypotheses tested in the present study.In this respect, there was evidence to suggest that employees who perceived strong



Table III. Hierarchical multiple regression analyses involving reshaping capabilities

T1 predictor User satisfaction User User User satisfaction System usage Readiness

– accuracy satisfaction satisfaction – – format for change

– content user friendliness

b b b b b b b b b b b

Step 1

Reshaping -0.01 -0.10 -0.09 -0.15 -0.08 0.03 -0.03 -0.14 0.28* 0.15 0.33**capabilities

R2 0.00 0.01 0.01 0.00 0.08* 0.11**

Step 2

Readiness 0.29* 0.16 0.32* 0.34** 0.38**for change

R2ch. 0.07* 0.02 0.09* 0.10** 0.14**

Notes: *p < 0.05; **p < 0.01.

human relations values in their division reported higher levels of readiness forchange prior to the implementation of the new end-user computing system which,in turn, predicted system usage at T2 (Hypothesis 1a). This finding is consistentwith a growing body of research evidence in the area. For instance, Burnes andJames (1995) found that change resistance was low when a supportive and partici-pative culture was present, characteristics that are consistent with the human rela-tions culture. Eby et al. (2000) also found that flexible policies and procedures,which are artefacts of a human relations culture, were positively related to employ-ees’ evaluations of whether or not their organization was ready to cope withchange events. More recently, Harper and Utley (2001) found that people-orien-tated values were related to the successful implementation of information tech-nology. The present study supports research of this nature but has demonstratedsimultaneously that readiness for change may be the mechanism through whichan organizational culture emphasizing human relations values impacts on suc-cessful change outcomes.

The hypothesized relationship between employees’ perceptions of an organiza-tional culture strong on open systems values, readiness for change, and changeimplementation success was not supported (Hypothesis 1b). Although externallyfocused, the open systems orientation has characteristics similar to the human relations culture type. O’Neill and Quinn (1993) note that open systems culturesare characterized by adaptability and a willingness to take on new challenges.Zammuto and Krakower (1991) compliment this argument by commenting thatopen systems cultures are dynamic and entrepreneurial, usually displaying signifi-cant levels of adaptability and change readiness. The lack of support for Hypoth-esis 1b might be explained by a study conducted by Cooper (1994) who examinedthe compatibility of different types of information systems across the four culturetypes represented in the CVF. He suggested that the implementation of informa-tion systems that are incompatible with the cultural values of the organization willresult in less than successful change outcomes. Cooper noted that organizationswith a strong open systems culture require information systems that focus on theexternal environment and allow for the scanning and filtering of opportunities thatpromote linkages across organizations. Organizational systems characterized byinformal coordination and reduced control also are key features of this type oforganizational culture. These characteristics are somewhat inconsistent with thetype of HRIS implemented in the context of this study which was designed toapply structure to internal communication processes. Hence, employees with anopen systems view of their organizational culture may have felt that the new com-puting system was incompatible with the way in which work was done in their divi-sion, thereby reducing the role that these cultural values had on change readinessand the outcome variables of user satisfaction and system usage.

The hypothesis that reshaping capabilities would be positively related to systemusage via readiness for change was supported (Hypothesis 2). Turner and Craw-



ford (1998) believe that if an organization has strong reshaping capabilities, manyactions that help to achieve organizational change will take place as part of thenormal way in which the workplace functions. As noted earlier, reshaping capa-bilities focus on engagement, development, and performance management. Thesereshaping capabilities are consistent with strategies discussed in the readiness forchange literature for creating and maintaining a sense of employee readiness forchange. Although a measure was developed for use in the present study that incor-porated these three dimensions, it was treated as a uni-dimensional scale in theanalyses. A useful direction for future research would be to develop more com-prehensive measures for each dimension in order to more fully understand whichtype of reshaping capabilities are more or less important in promoting readinessfor change and change implementation success. The extent to which differentreshaping capabilities are required for organizational changes of a technologicalnature also requires further empirical investigation.

It also should be noted that there are similarities between the values inherentin a human relations culture and the notion of reshaping capabilities. Character-istics of the human relations culture are generally consistent with engagement,development, and performance management capabilities. Indeed, Turner andCrawford (1998) also have recognized this link, stating that an organization witha human relations culture will have in place practices that facilitate individual andcollective behaviour towards better change outcomes Although the two variableswere empirically related, r = 0.30, p < 0.05, this correlation is not high enough tosuggest that they are one in the same. Nevertheless, future studies should investi-gate more closely the link between different types of organizational culture andthe existence of reshaping capabilities.

Another avenue for future research in this area concerns the notion of readi-ness for change and the extent to which it should be treated as a multifaceted con-struct, both conceptually and empirically. Although the seven-item scale used inthe present study was adapted from previous scales (e.g. Miller et al., 1994), it isacknowledged that these items focused mostly on whether or not employees feltthat the new HRIS would be personally beneficially to them and the way they per-formed their job. This approach did not fully capture existing definitions of readi-ness for change that refer to levels of change acceptance, as well as whether or notemployees expect there to be positive implications for not just themselves, but thewider organization (Armenakis et al., 1993). The limited operationalization of thisvariable should be improved upon in future research. Indeed, Holt (2002) hasrecently begun work on a multifaceted measure of readiness for change that dis-tinguishes between five different components of change readiness. These includethe extent to which employees perceive a legitimate need for the proposed change,view the change as personally beneficial, believe that the change is of benefit tothe organization, feel that they can cope with the change (i.e. self-efficacy), andlastly, whether or not management have demonstrated support for the change. It



is likely that future research examining the antecedents and consequences of readi-ness for change will benefit from more precise measurement of this construct.

This study presents some encouraging results of importance to the organiza-tional change literature. However, these results should be interpreted with cautiondue to several issues. In particular, the small sample size is a potential threat to thestability of the analyses. In this respect, 67 cases is unlikely to have provided thestatistical power needed to detect the full extent of the complex relationships pro-posed in the present study. Furthermore, there is a risk that the two significantfindings detected in this study (in relation to system usage) may simply be a con-sequence of chance. In this respect, it should be noted that each of the threehypotheses were examined in multiple independent tests (one for each of the fivedependent variables) which may have increased the risk of Type 1 error (see Cohenand Cohen, 1983). Indeed, support for only two of the 15 tests for mediation per-formed on the data highlights the limited findings of the study. In addition, thesmall sample size has the potential to jeopardize the generalizability of the resultsto the rest of the population. Although it was statistically shown that those whofailed to respond at T2 were not significantly different on the focal variables fromthose who responded at both points in time, it is important to consider thoseemployees who did not respond at all. In this respect, it was possible to determinethat the T1 sample was relatively comparable in terms of gender and organiza-tional unit to the wider pilot group, but there may be other unknown variables onwhich these two groups differed. Generalizability is further diminished as theresults were derived from an investigation of employees in a single organization,more importantly, a public sector organization. This had the effect of limiting thevariance in culture types, with the majority of employees reporting that their divi-sion was most like the internal process culture (see also Parker and Bradley, 2000,for similar findings).

Another limitation of the present study concerns the fact that only five weekslapsed between the collection of the T1 and T2 data. This was a relatively shortperiod of time and may only have captured employees’ initial impressions aboutthe new information system. Baronas and Louis (1988) utilized a longitudinaldesign in their study of user involvement and system acceptance and measuredpost-implementation satisfaction eight weeks after implementation. Further,Vankatesh and Davis (2000) in their study on the technology acceptance model,measured usage at four points in time, ranging from one month to five monthsafter implementation. It would be valuable, in future research, to measure user sat-isfaction and system usage again, perhaps six months after the implementation, sothat the long-term effects of organizational culture and reshaping capabilities onsatisfaction and usage can be identified. However, it is important to note that abalance needs to be obtained, as researchers have highlighted that greater experi-ence with the computing system tends to decrease the strength of implementationsuccess perceptions (Vankatesh and Davis, 2000). Indeed, Pare and Elam (1995)



also have noted that factors – such as cultural norms – tend to become less salientover time in the use of information systems.

To conclude, this research was aimed at identifying the predictors and outcomesof readiness for change, in the context of an information system implementation.In the present study, there was evidence to suggest that readiness for change actedas a mediator in the relationship between employees’ perceptions of a human rela-tions culture orientation and their subsequent usage of the new computing system.A similar pattern of results was found in relation to reshaping capabilities. In addi-tion, T1 perceptions of readiness for change were a strong predictor of user satisfaction at T2. These results reinforce the importance of undertaking pre-implementation assessments of readiness for change. Such assessments should helpchange agents to make specific choices about strategies and tactics that are neededto help foster employee enthusiasm for specific change events. Overall, results fromthe present study highlight the importance of assessing the determinants of readi-ness for change as premature implementation may not produce intended outcomessimply because employees are not psychologically ready.

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