A Causal Model of Organizational Performance and Change

Abstract

To provide a model of organizational performance and change, at least two lines of theorizing need to be explored-organizationalfunctioning and organizational change. The authors go beyond description and suggest causal linkages that hypothesize how performance is affected and how effective change occurs. Change is depicted in terms of both process and content, with particular emphasis on transformational as compared with transactional factors. Transformational change occurs as a response to the external environment and directly affects organizational mission and strategy, the organization 's leadership, and culture. In turn, the transactionalfactors are affected-structure, systems, management practices, and climate. These transformational and transactional factors together affect motivation, which, in turn, affects performance. In support of the model's potential validity, theory and research as well as practice are cited.