A Perception-Based View of the Employee: A Study of Employees’ Reactions to Change doc

A Perception-Based View of the Employee: A Study
of Employees’ Reactions to Change




DISSERTATION
of the University of St. Gallen,
Graduate School of Business Administration,
Economics, Law and Social Sciences (HSG)
to obtain the title of
Doctor of Business Administration




submitted by

Chaiporn Vithessonthi

from

Thailand




Approved on the application of

Prof. Dr. Markus Schwaninger

and

Prof. Dr. Günter Müller-Stewens




Dissertation no. 3040


D-Druck-Spescha, St. Gallen 2005
The University of St Gallen, Graduate School of Business Administration, Economics, Law
and Social Sciences (HSG) hereby consents to the printing of the present dissertation,
without hereby expressing any opinion on the views herein expressed.


St Gallen, January 20, 2005


The President:




Prof. Dr. Peter Gomez

i

Abstract

Drawing on several theoretical perspectives (e.g., individual motivation, behavioral
decision-making, social exchange theories, organizational justice theories, social cognition,
institutional theories and neoclassical economics theories) from different disciplines (e.g.,
organizational psychology, strategic management, and economics), this dissertation
developed a perception-based approach to examine a possibility that employees’ perceptions
and/or attitudes will be associated with their decisions in an organizational setting.
Specifically, this dissertation examined the effects of employees’ perceptions and/or
attitudes on their reactions to organizational change.
This dissertation addressed two major research questions relevant to organizational
change management, organizational behavior and applied psychology. First, it addressed a
question of what perceptions and/or attitudes influence employees’ resistance to change.
Second, it addressed a question of what perceptions and/or attitudes influence employees’
support for change? This was done by drawing on several theoretical perspectives and
examining relationships between perception and/or attitude variables and resistance to
change and support for change.
Based on data obtained from two samples of respondents from two different settings
(i.e., a downsizing in Study 1 and a privatization in Study 2), this dissertation found
significant relationships between perceptions and/or attitudes and resistance to change
and/or support for change. The findings provide some empirical support for the perception-
based view of the employee. Using multinomial ordered probit modeling, some perceptions
and/or attitudes were found to be significantly predictive of employees’ reactions to change.
The potential practical value of using perceptions and/or attitudes as predictors of
employees’ reactions to change is discussed, as are implications and suggestions for future
research.

ii

Acknowledgements

This dissertation began with a conversation with Professor Dr. Markus Schwaninger, a
professor of management at the University of St. Gallen, in the summer of 2003, when I was
about to finalize my master’s degree in international management at the same university.
During this conversation we discussed organizational change, and since I had thought that it
might make an interesting piece of research, I asked him about the possibility to write the
dissertation that lies before you today. As I expected, his response was clear, insightful,
interesting, and encouraging. He enthusiastically agreed to supervise my dissertation and
told me to proceed with my ideas. So it began.
I am reminded as I finalize these notes of my good fortune in being able to do
something I enjoy, and to complete my research. It is the rarest of privileges for me, with
my limited ability, to do that in a relatively short span of time; this seems tremendously
precious to me. But this work could not have been completed without support from many
people. I owe a debt of gratitude to the 315 respondents who took time out of their busy
schedules to complete and return the questionnaire. I am extremely grateful to Prof. Dr.
Markus Schwaninger, who has been not only the referee for this dissertation but also my
mentor throughout the past years, for offering his invaluable help, comments, perspectives,
and suggestions, and for showing great interest in my research. Undoubtedly, he has pointed
me in the direction of a fascinating landscape, not for the first time and, I hope, not for the
last.
I also want to express my sincere gratitude to Professor Dr. Günter Müller-Stewens,
who has magnanimously taken time out of his busy schedule to become the co-referee, for
offering his valuable insights and perspectives on the theoretical, methodological and
empirical aspects of my dissertation. I am very grateful to Dr. Klaus Edel as well, not only

for offering his valuable suggestions and solutions to statistical issues with enthusiasm, but
also for allowing me to use his computer and statistical applications. I am also grateful to
Silke Bucher, Bernd Beuthel, and Jasmina Hasanbegovic for their thoughtful and
constructive feedback on earlier versions of this dissertation. And, of course, I thank Linda
Roberts, my editor and proofreader, at Western Illinois University, who shouldered the
editorial and proofreading work on my unpolished lines of English. Last but not least, I
would like to thank my parents for their love, incredibly great confidence, and unbounded
support throughout the course of this journey and beyond.

Basel, January 2005 Chaiporn Vithessonthi


iii

Table of Contents

Abstract i
Acknowledgements ii
List of Tables vi
List of Diagrams and Figures viii
List of Abbreviations x
1. Introduction 1
1.1. Research Issues 1
1.2. Research Questions 3
1.3. The Importance of the Research Questions 6
1.4. The Scope of the Dissertation 8
1.5. The Intended Contributions of this Dissertation 10
2. Core Concepts and Relevant Literature 12
2.1. Theories of Change 12
2.2. Perceptions 16

2.3. Attitude 19
2.4. Emotion 21
2.5. Individual Decision-Making 23
2.6. Reactions to Change 27
3. Theoretical Development and Research Model 31
3.1. Perception-Based View of the Employee 32
3.2. Research Model and Hypotheses 35
3.2.1. Perceived Organizational Support 38
3.2.2. Perceived Procedural Justice 40
3.2.3. Perceived Participation in Decision-making 42
3.2.4. Perceived Need for Change 45
3.2.5. Attitude towards Organizational Change 48
3.2.6. Fear of Known Consequences of a Change 50
3.2.7. Fear of Unknown Consequences of a Change 52
3.2.8. Perceived Change in Power 54
3.2.9. Perceived Change in Status 56
3.2.10. Perceived Change in Pride 58
3.2.11. Job Satisfaction 60
3.2.12. Job Security 62

iv

3.2.13. Job Motivation 64
3.2.14. Perceived Employability 66
3.2.15. Self-Confidence for Career-Relevant Learning 69
3.2.16. Affective Commitment 71
3.2.17. Trust in Management 73
3.2.18. Colleagues’ Reactions to Change 75
4. Research Methodology 77
4.1. Context, Sample and Procedure 78

4.1.1. Study 1 – Context, Sample and Procedure 78
4.1.2. Study 2 – Context, Sample and Procedure 79
4.2. Alternative Methods of Data Analysis 80
4.3. The Multinomial Ordered Probit Model 81
4.4. Measures of Theoretical Constructs 83
4.4.1. Dependent Variables 83
4.4.2. Independent Variables 84
4.4.3. Control Variables 87
4.5. Data Analysis Procedures 87
5. Results and Discussion 89
5.1. Study 1 – Results and Discussion 89
5.1.1. Analyses of Correlations among Dependent Variables 89
5.1.2. Analyses of Correlations among Independent Variables 90
5.1.3. Results for Hypotheses – The Multinomial Ordered Probit Models 94
5.1.4. Discussion of Study 1 106
5.2. Study 2 – Results and Discussion 108
5.2.1. Analyses of Correlations among Dependent Variables 109
5.2.2. Analyses of Correlations among Independent Variables 110
5.2.3. Results for Hypotheses – The Multinomial Ordered Probit Models 114
5.2.4. Discussion of Study 2 127
5.3. General Discussion 131
5.3.1. Key Contributions of the Dissertation 131
5.3.2. Limitations to this Dissertation 136
5.3.3. Implications and Directions for Future Research 138
5.3.4. Implications and Directions for Practice 139
6. Conclusions 140
References 142
Appendices 165

v

Appendix A: Questionnaire Survey Items for Studies 1 and 2 165
Appendix B: Study 1 – Diagrams and Correlations 171
Appendix C: Study 2 – Diagrams and Correlations 195
Appendix D: Additional Regression Analyses for Study 2 219
Curriculum Vitae 236


vi

List of Tables

Table 1: Characteristics of Alternative Regression Models 81
Table 2: Study 1 – Correlations for All Final Variables 93
Table 3: Study 1 – Regression Results of Active Resistance to Change 95
Table 4: Study 1 – Regression Results of Passive Resistance to Change 96
Table 5: Study 1 – Regression Results of Active Support for Change 97
Table 6: Study 1 – Regression Results of Passive Support for Change 98
Table 7: Study 2 – Correlations for All Final Variables 113
Table 8: Study 2 – Regression Results of Active Resistance to Change 115
Table 9: Study 2 – Regression Results of Passive Resistance to Change 116
Table 10: Study 2 – Regression Results of Active Support for Change 117
Table 11: Study 2 – Regression Results of Passive Support for Change 118
Table 12: Summary of Results for Hypotheses in Study 1 and Study 2 132
Table 13: Study 1 – Correlations for All Dependent Variables 182
Table 14: Study 1 – Correlations for Active Resistance 183
Table 15: Study 1 – Correlations for Active Resistance (cont.) 184
Table 16: Study 1 – Correlations for Active Resistance (cont.) 185
Table 17: Study 1 – Correlations for Passive Resistance 186
Table 18: Study 1 – Correlations for Passive Resistance (cont.) 187

Table 19: Study 1 – Correlations for Passive Resistance (cont.) 188
Table 20: Study 1 – Correlations for Active Support 189
Table 21: Study 1 – Correlations for Active Support (cont.) 190
Table 22: Study 1 – Correlations for Active Support (cont.) 191
Table 23: Study 1 – Correlations for Passive Support 192
Table 24: Study 1 – Correlations for Passive Support (cont.) 193
Table 25: Study 1 – Correlations for Passive Support (cont.) 194
Table 26: Study 2 – Correlations for Dependent Variables 206
Table 27: Study 2 – Correlations for Active Resistance 207
Table 28: Study 2 – Correlations for Active Resistance (cont.) 208
Table 29: Study 2 – Correlations for Active Resistance (cont.) 209
Table 30: Study 2 – Correlations for Passive Resistance (cont.) 210
Table 31: Study 2 – Correlations for Passive Resistance (cont.) 211
Table 32: Study 2 – Correlations for Passive Resistance (cont.) 212
Table 33: Study 2 – Correlations for Active Support 213

vii

Table 34: Study 2 – Correlations for Active Support (cont.) 214
Table 35: Study 2 – Correlations for Active Support (cont.) 215
Table 36: Study 2 – Correlations for Passive Support 216
Table 37: Study 2 – Correlations for Passive Support (cont.) 217
Table 38: Study 2 – Correlations for Passive Support (cont.) 218
Table 39: Summary of Regression Results of Indicators for Resistance to Change 223
Table 40: Summary of Regression Results of Indicators for Support for Change 224
Table 41: Regression Results of Active Resistance to Change 1 225
Table 42: Regression Results of Active Resistance to Change 2 225
Table 43: Regression Results of Active Resistance to Change 3 226
Table 44: Regression Results of Passive Resistance to Change 1 227
Table 45: Regression Results of Passive Resistance to Change 2 228

Table 46: Regression Results of Passive Resistance to Change 3 229
Table 47: Regression Results of Active Support for Change 1 230
Table 48: Regression Results of Active Support for Change 2 231
Table 49: Regression Results of Active Support for Change 3 232
Table 50: Regression Results of Passive Support for Change 1 233
Table 51: Regression Results of Passive Support for Change 2 234
Table 52: Regression Results of Passive Support for Change 3 235


viii

List of Diagrams and Figures

Figure 1: Dimensions for Categorization of Reactions to Change 29
Figure 2: A Categorization of Reactions to Change 30
Figure 3: Alternative Models Relating Perceptions and Reactions to Change 31
Figure 4: Conceptual Diagram of the ‘Direct Effects’ Model 37
Figure 5: Five Stages of Organizational Decline 46
Figure 6: Summary of Measures of Reactions to Change 84
Figure 7: Summary of the Sequence of Data Analysis 88
Figure 8: Study 1 - Indicators for Active Resistance to Change 171
Figure 9: Study 1 - Indicators for Passive Resistance to Change 171
Figure 10: Study 1 - Indicators for Active Support for Change 172
Figure 11: Study 1 - Indicators for Passive Support for Change 172
Figure 12: Study 1 - Indicators for Perceived Organizational Support 173
Figure 13: Study 1 - Indicators for Perceived Procedural Justice 173
Figure 14: Study 1 - Indicators for Perceived Participation in Decision-Making 174
Figure 15: Study 1 - Indicators for Perceived Need for Change 174
Figure 16: Study 1 - Indicators for Attitude towards Organizational Change 175
Figure 17: Study 1 - Indicators for Fear of Known Consequences of a Change 175

Figure 18: Study 1 - Indicators for Fear of Unknown Consequences of a Change 176
Figure 19: Study 1 - Indicators for Perceived Change in Power 176
Figure 20: Study 1 - Indicators for Perceived Change in Status 177
Figure 21: Study 1 - Indicators for Perceived Change in Pride 177
Figure 22: Study 1 - Indicators for Job Satisfaction 178
Figure 23: Study 1 - Indicators for Job Security 178
Figure 24: Study 1 - Indicators for Job Motivation 179
Figure 25: Study 1 - Indicators for Perceived Employability 179
Figure 26: Study 1 - Indicators for Self-Confidence for Learning 180
Figure 27: Study 1 - Indicators for Affective Commitment 180
Figure 28: Study 1 - Indicators for Trust in Management 181
Figure 29: Study 1 - Indicators for Perceptions of Colleagues’ Resistance to Change 181
Figure 30: Study 2 - Indicators for Active Resistance to Change 195
Figure 31: Study 2 - Indicators for Passive Resistance to Change 195
Figure 32: Study 2 - Active Support for Change Indicators 196
Figure 33: Study 2 - Indicators for Passive Support for Change 196

ix

Figure 34: Study 2 - Indicators for Perceived Organizational Support 197
Figure 35: Study 2 - Indicators for Perceived Procedural Justice 197
Figure 36: Study 2 - Indicators for Perceived Participation in Decision-Making 198
Figure 37: Study 2 - Indicators for Perceived Need for Change 198
Figure 38: Study 2 - Indicators for Attitude towards Organizational Change 199
Figure 39: Study 2 - Indicator for Fear of Known Consequences of a Change 199
Figure 40: Study 2 - Indicators for Fear of Unknown Consequences of a Change 200
Figure 41: Study 2 - Indicator for Perceived Change in Power 200
Figure 42: Study 2 - Indicators for Perceived Change in Status 201
Figure 43: Study 2 - Indicators for Perceived Change in Pride 201
Figure 44: Study 2 - Indicators for Job Satisfaction 202

Figure 45: Study 2 - Indicators for Job Security 202
Figure 46: Study 2 - Indicators for Job Motivation 203
Figure 47: Study 2 - Indicators for Perceived Employability 203
Figure 48: Study 2 - Indicators for Self-Confidence for Learning 204
Figure 49: Study 2 - Indicators for Affective Commitment 204
Figure 50: Study 2 - Indicators for Trust in Management 205
Figure 51: Study 2 - Indicators for Perceptions of Colleagues’ Resistance to Change 205



x

List of Abbreviations

AR Active resistance to change
AR1 Indicator 1 for active resistance to change
AR2 Indicator 2 for active resistance to change
AR3 Indicator 3 for active resistance to change
AS Active support for change
AS1 Indicator 1 for active support for change
AS2 Indicator 2 for active support for change
AS3 Indicator 3 for active support for change
e.g. Exempli gratia; (for example)
etc. Et ectera (and so forth)
i.e. Id est; (that is)
IIA The independence of irrelevant alternatives
IPO Initial Public Offering
OLS Ordinary least square
PBV Perception-Based View (of the employee)
POS Perceived organizational support

PR Passive resistance to change
PR1 Indicator 1 for passive resistance to change
PR2 Indicator 2 for passive resistance to change
PR3 Indicator 3 for passive resistance to change
PS Passive support for change
PS1 Indicator 1 for passive support for change
PS2 Indicator 2 for passive support for change
PS3 Indicator 3 for passive support for change
S.E. Standard error

1

1. Introduction

1.1. Research Issues
The starting point for this research is the challenge of “managing change in organizations.”
Managing organizational change is problematic: situations in which changes are undertaken
are shifting, it is harder for organizations, and in particular top managers as well as change
agents, to prepare for and manage the change in ways that satisfy the demands of both the
organization and its employees.
1
How do organizations go about making “structured” and
“unstructured” decisions concerning how to cope with resistance to change, so that they
achieve the goals of their organizational change efforts? It is not surprising that, over the
years, resistance to change has attracted increasing attention from researchers, practitioners,
and the general public. A great deal of research has focused on understanding the sources
and determinants of resistance to change. The media and the general public are generally
interested in various forms of active resistance to change such as strikes or protests. Other
forms of resistance such as passive resistance, although less observable, have not gone
unnoticed and thus have also warranted extensive research over the years.

2
Not surprisingly,
resistance to change is frequently reported as being one of the sources of organizational
change failures (Coch and French, 1948; Kotter, 1995; Kotter and Cohen, 2002).
Broadly speaking, the concept of organizational change (e.g., Meyer, 1982; Nadler,
1998) refers to an effort or a series of efforts designed to modify certain aspects or
configurations of an organization: for example, identity, goals, structure, work processes or
human resources. Furthermore, ideas of organizational learning (e.g., Argyris, 1990; Argyris
and Schön, 1978; Fiol and Lyles, 1985; Crossan and Berddrow, 2003) or strategic flexibility
(e.g., Harrigan, 1985; Sanchez, 1995; Raynor and Bower, 2001) that emphasize the extent to
which a firm is capable of learning and adapting itself to changing environments are
associated with the antecedents and outcomes of organizational change. We can thus see
that the growing attention to these concepts has enhanced both the frequency and scale of
organizational change efforts. Hence, one can reason that the likelihood of employees facing
some type of organizational change is higher than ever before.

1
According to the institutional school of organizational thought, individuals in organizations have their own interests
and generally try to make use of organizations for their own interests. For a more detailed discussion of these
problems, see Selznick (1965) or Meyer and Rowan (1977).
2
To me it seems that we should distinguish between active resistance and passive resistance. This view is consistent
with those of Hultman (1998) and Judson (1991). For a more extensive discussion of reactions to change, see
Section 2.6 of this dissertation.

2

In addition to the greater level of exposure of employees to organizational change,
managers within most organizations are also experiencing greater internal and external
pressures to initiate change within their organization in order to maintain or improve firm

performance. These pressures include, for example, increased competitive pressures (Meyer,
Brooks and Goes, 1990), new government regulations (Meyer et al., 1990; Haveman, 1992;
Fox-Wolfgramm, Boal and Hunt, 1998), technological change (Haveman, 1992), or
declining firm performance (Bibeault, 1982).
Given the above-mentioned environments, research on organizational change has been
enriched by both empirical and theoretical studies investigating many aspects of
organizational change such as change strategies, change processes, or antecedents and
outcomes of different forms of change.
3
To search for conditions that promote successful
change in organizations, it is crucial to know the implications or organizational change for
employees, and more importantly, the reactions employees will have. Much of the past
research on employees’ reactions to change seems to have been implicitly based on a
rational choice theory about employees’ behaviors
4
, thereby giving little attention to the
potential effects of perceptions, attitudes, or social influence on decisions and behaviors.
Indeed, rational choice theories
5
have long dominated the research in organization theory,
which encompasses research on organizational change and development In their roughest
form, rational choice theories would assert that when organizational change efforts are
understood to be beneficial to a firm, employees in this firm should support such changes.
This raises the question of whether all employees do in fact share the same view on this
change. What are the implications for their decisions if they do not share the same view?
Within the large body of research on decision-making in the literature on strategic
management or management science, several concepts and underlying assumptions—for
example, cost-benefit analysis and human rationality—seem to have conditioned both the
theoretical and empirical research in organizational change and employees’ reactions to

3
Organizational change can be considered as a class of organization theory.
4
Note that it is important to understand choice theories and underlying assumptions about how people make choices
because any kind of reactions to change—for example, resistance to change and support for change—is an outcome
of choice-selection process. In its simplest form, the economic model of decision-making assumes that managers
have perfect information and thus could make decisions that maximize profits. For a critique of the economic model
of decision-making, see Simon (1957) and March and Simon (1958). For a more extensive discussion of the concept
of rationality, see Section 2.5 of this dissertation.
5
Simon (1978, 1985, 1986) pointed out that there are at least two main forms of human rationality in social science:
one of them is in an area of cognitive psychology; and the other is in an area of economics. In this dissertation,
unless stated otherwise, both rational choice theories and human rationality shall refer to the form of human
rationality in the field of neoclassical economics. It is important to note that in economics there are variations in the
concepts of rationality.

3

change. This view is consistent with that of Rumelt, Schendel, and Teece (1991), who have
suggested that the logic of economics has dominated the field of strategic management.
Only recently have researchers become aware of the limitations of decision-making models
in economics, and thus have applied a cognitive paradigm in their research on strategic
decision-making (e.g., Schwenk, 1984, 1995; Tversky and Kahneman, 1974).
6

Employees who are confronted with changes in their organization face an inevitable
choice: whether they should support or resist such changes in order to still (or best) achieve
their personal goals and objectives. Despite a large body of normative literature on
techniques for managing change, for example, models of implementing change by Judson
(1991), Kotter (1995), Galpin (1996), and Kotter and Cohen (2002), empirical studies of

their application seem to be too sparse to indicate convincingly and conclusively whether
the techniques presented in those models have had significant influences on employees’
reactions to change. Because I do not share the views and assumptions of some prior
researchers
7
, this dissertation theoretically deviates from the mainstream research on change
management by introducing a perception-based view of the employee as an alternative
approach to understand employees’ reactions to change.

1.2. Research Questions
Researchers and practitioners alike posit that employees’ reactions to change have critical
implications for change implementation and firm performance (e.g., Kotter, 1995; Kotter
and Cohen, 2002). For instance, the issue of intraorganizational conflict as a serious
challenge for managers in making strategic asset decisions has been highlighted (Amit and
Schoemaker, 1993). The question of how firms, managers or consultants can minimize
employees’ resistance to change is a subject of debate and further research. There are a
number of theoretical and practical questions, some of which lie more in the area of
philosophy than in the area of change management or social science. In this dissertation I
am particularly concerned with the role of perceptions and attitudes and how these might
constitute determinants of employees’ reactions to change. These perceptions and attitudes
about change (e.g., perceived need for change, perceived change in power, and job security)
are theorized to be factors leading to subsequent conscious or unconscious decisions and/or
behaviors in response to changes in organizations, which may significantly impact the

6
For a more extensive discussion of decision-making, see Section 2.5 of this dissertation.
7
For a more extensive discussion of assumptions in prior studies and assumptions made in this study, see Section 3 of
this dissertation.

4

change implementation and firm performance. In particular, this dissertation attempts to
answer two research questions:

• What perceptions and/or attitudes influence employees’ resistance to change?
• What perceptions and/or attitudes influence employees’ support for change?

With the above research questions, I advance and test an argument that perceptions and/or
attitudes influence employees’ reactions to change. Rather than hindering or substituting for
current change management models where the main focus is on human rationality, well-
understood effects of perceptions and/or attitudes may actually promote more
comprehensive, effective and pragmatic change management models designed for
promoting employees’ support for change and/or for reducing employees’ resistance to
change. In response to seemingly limited empirical evidence on the effectiveness of most
change management models, well-understood effects of perceptions and attitudes on
reactions to change narrow the domain of potentially key factors influencing employees’
reactions to change to which an organization should pay attention. In addition, these
research questions are consistent with contemporary research on the role of psychological
factors in predicting employees’ behaviors in response to various types of decisions of
organizations, but the role of several psychological factors require empirical verification.
Thus, this dissertation attempts to fill a gap in current empirical research by empirically
examining relationships between several perceptions and/or attitudes on the one hand and
resistance to and support for change on the other hand.
Despite evidence that certain change management practices during organizational
change are related to employees’ resistance to and/or support for change rates (i.e., a
percentage of the total number of employees who support or resist a change to the total
number of employees) at the organizational level, it would be a fallacy to then assume that
such practices are similarly and/or directly related to employees’ resistance to and/or
support for change decisions at the individual level. Thus, it is critical to explain the

relationship between any type of change management practices and resistance to and/or
support for change at the individual level. The results in this dissertation may help scholars
explain such relationship by providing a connecting answer. Rather than answering the
question of the effect of change management practices on employees’ reactions to change
directly, empirical evidence of the role of perceptions and/or attitudes in predicting
employees’ reactions to change may promote a better understanding of psychological
factors influencing employees’ reactions to change. If certain change management practices
were found to influence these perceptions and/or attitudes, then such practices may thereby

5

have the effect on employees’ reactions to change. Thus, the findings in this dissertation add
to the change management literature by examining relationships between perceptions and/or
attitudes held by employees and their reactions to change. Given these research questions,
this dissertation has three major objectives.

• In order to provide foundations for developing a theoretical framework in this
dissertation, the first objective is to review prior research on perceptions, attitudes,
decision-making, theories of change, and employees’ reactions to change. It should
be noted that the literature review on decision-making focuses on the normative and
cognitive decision theories in the fields of management and economics.
• The second objective is to conceptualize a theoretical framework representing the
link between various perceptions and attitudes on the one hand, and resistance to
change and support for change, on the other hand. Here I propose to bring several
theoretical perspectives together, creating a more realistic model of employees’
reactions by combining different conceptions of human rationality. The main aim of
the research model is to investigate which perceptions and attitudes are associated
with resistance to change and/or support for change. Additionally, it aims to provide
theoretical and, perhaps, practical insights to organizations, top managers, as well as
change agents to assist them in developing tools that may detect and alter employees’

perceptions and attitudes in order to (minimize resistance to change and) optimize
support for change.
• The final objective is to empirically test the hypothesized relationships presented in
the research model by gathering and analyzing relevant empirical data in a systematic
way.

After having identified the main research questions, the next step is to decide the
appropriate level of analysis: employee, top manager, or firm level. To answer the research
questions above, the employee, not the firm, will be the unit of analysis in this dissertation.
Using the employee as the unit of analysis, one can explore a perception or attitude as a
predictor of employees’ reactions to change. Further, examination at the decision level of
analysis—that is to say, resistance to change and support for change—diminishes at least
two concerns. First by relating perceptions and attitudes rather than decision-making
process to reactions to change, casual ambiguity is not an issue since (1) the relationships
between perceptions and reactions to change are more direct; and (2) such analyses do not
have to deal with the extent to which an employee uses rational decision-making processes.
Second, to use the decision level of analysis, it is not necessary to assume that employees

6

consistently use specific processes across time or decisions, thereby allowing the notion that
different decision-making processes may be at work for each reaction to change.
Past research has posited that it is a key interest of a firm to appropriately deal with
resistance to change in order to achieve the goals of organizational change efforts (Coch and
French, 1948; Kotter, 1995; Kotter and Cohen, 2002). However, it is important to know
whether resistance to change always has a negative impact on change efforts and thus firm
performance, or whether there might at times be a counter-intuitive implication, i.e., a
positive effect, on change efforts and thus firm performance. Despite the claim that
resistance has a negative effect on change efforts and therefore should be minimized (e.g.,
Kotter, 1995; Kotter and Cohen, 2002), the question is, then, whether resistance to change

may be strategically valuable or positive when it acts as a means to ensure that the change is
indeed designed and implemented to promote an organization’s goals. Thus, one can
question the accuracy of the claim made by some researchers (e.g., Coch and French, 1948)
that resistance to change is always

undesirable. This question seems to have gone unnoticed,
providing little recognition of the conditions under which resistance to change may result in
superior outcomes of organizational change. Although identifying conditions in which
resistance to change has positive or negative outcomes on change processes is not the goal
of this dissertation itself, it deserves mention so as to reflect on this issue.
In order to state that resistance to change always has negative implications for the
firm, one would have to show that such resistance can legitimately be considered negative at
any given moment and in any particular circumstance. If this same resistance does not
create a negative implication for the firm at another moment and in another similar
circumstance, one may not legitimately and precisely conclude that resistance to change is
always undesirable and negative. On the other hand, it is probable that resistance to change
may at times have a positive effect on the outcome of organizational change, and that it may
be strategically valuable to an organization. For example, it is imaginable that resistance to
change could be constructive by entailing a high degree of objective evaluation of the
change. This should suggest that researcher should not make the critical assumption that
resistance to change always has negative effects on the outcomes of organizational change.
Instead, they should investigate how to benefit from resistance to change.

1.3. The Importance of the Research Questions
Clearly, improved firm performance is one of the main objectives of organizational change,
but intermediate outcomes are more proximal indicators of its success or failure.
Employees’ performance can be considered as an immediate outcome or a path through
which changes in organizations affect firm performance. Therefore, one can also reason that

7

employees’ resistance to or support for change which are arguably predictive of their
performance at the time of the organizational change, can be seen as an indicator predicting
the probability of success of the change (Kotter, 1995; Kotter and Cohen, 2002). Thus, the
optimization of resistance to change and support for change may enhance the probability of
success of organizational change, thereby improving firm performance. In order to optimize
these levels of resistance to change or support for change, we need to understand the factors
that play an important role in creating or changing them. In this dissertation I focus on the
direct relationships between perceptions and attitudes on the one hand, and resistance to
change and support for change on the other hand. This perspective assumes that employees’
perceptions and attitudes are likely to influence their reactions to change. I take this a step
further by proposing that if we know which perceptions or attitudes affect levels of
resistance to change and support for change, we will then have opportunities to develop
tools to properly influence reactions to change.
Although individual decision-making processes are not programmed, they are
programmable (Mintzberg, Raisinghani and Theoret, 1976): the underlying basis of this
argument is that strong evidence indicates that a basic logic or structure underlies the
actions of a decision-maker and that this structure can be identified by a systematic study of
his or her behavior
8
. If individuals have patterns of decision-making processes, the study of
employees’ reactions to change may yield some valuable insight. That is, if certain
perceptions or attitudes are associated with certain decisions at a given moment and in a
particular setting, the same pattern of relationships may persist at other moments and in
other settings.
One assumption in this dissertation is that employees’ decisions are based on their
interpretation and evaluation of the data available to them. As this data is collected and
interpreted, different employees may arrive at different perceptions, interpretations and
understandings of the same data. Consistent with Simon’s (1957) concept of ‘bounded
rationality’ in decision-making processes

9
, I argue that there are potential gaps between the
object’s (e.g., organizational change’s) ‘objective’ (what they actually are) characteristics
and ‘perceived’ (what people believe or perceive them to be) characteristics, and that the

8
Note that in this dissertation, words like “decision”, “behavior”, or “reaction” are used interchangeably since they all
refer to an employee’s resistance to change and/or support for change. In its simplest form, one may find that
resistance to change and support for change can be considered as one kind of decision, and that both resistance to
change and support for change are expressed in terms of behaviors or reactions.
9
Simon (1957) has discussed the two main problems with the economic model of decision-making; first, managers
seldom have perfect information and thus often have to make decisions under uncertainty. Second, managers are not
cognitively capable of processing all of the information that they would need to make a profit-maximizing decision.
Therefore, Simon (1957) has introduced the concept of “bounded rationality” for the model of decision-making.

8

‘perceived’ characteristics rather than the ‘objective’ characteristics are used as inputs in the
decision-making processes determining decisions. Thus, perceptions of the object play an
important role in decision-making processes and result in decisions that at least partially
reflect these perceptions.
As I reflect on economic theories that seem to explain well the utilitarian side of
human behavior, but seem to fail to explain the side of human behavior that goes beyond
outcome-driven self-interest, I want to explore an alterative approach in understanding
employees’ reactions to change, and label this approach the “perception-based view of the
employee.” In short, using perception-based logic, this dissertation focuses on the role of
perceptions and attitudes as the driving forces leading employees to either support or resist
organizational change. Understanding the ways in which employees react to change will
certainly provide a potential avenue for developing new change management strategies that

may bring employees’ perceptions into alignment with ones desired, thereby eliciting
desired reactions to change.

1.4. The Scope of the Dissertation
Obviously, the field of organizational change and its scientific investigation is manifold. For
instance, archetypes of a firm’s organizational change can be neatly classified into five
groups or dimensions: (1) identity; (2) strategy; (3) business processes; (4) structure; and (5)
human resources. Each of these dimensions has different implications for an organization as
well as its employees.
10

In view of the fact that organizational change can take on many forms, this dissertation
focuses on two aspects of organizational change: “downsizing,” which can be subsumed
into the “firm structure” dimension, and “privatization.” which is part of the “firm strategy”
dimension.
11
In Study 1, a downsizing effort was chosen because this kind of change
typically has direct and significant implications for employees, who directly experience the
effects of these changes. For example, employees may have to increase their productivity
(Hambrick & Schecter, 1983) or risk losing their jobs. Further, downsizing has often been
employed as a means to improve firm performance (Freeman & Cameron, 1993).
Additionally, firms in a crisis situation often downsize as part of their turnaround strategies
(Robbins & Pearce, 1992; Appelbaum, Everard & Hung, 1999). Similarly, there were

10
Donaldson (1987) pointed out that organizational change can be thought of as an adjustment of strategy, structure,
or processes of an organization. For a more extensive discussion of organizational change, see Section 2.1 of this
dissertation.
11
It is noteworthy that from different perspectives, any kind of organizational change can be classified into more than

one category.

9

numerous reasons for choosing privatization as a context of the study. First, many state-
owned enterprises in several countries are, or will eventually be, in a process of
privatization, and this privatization has several implications for markets, other firms, and
their employees. Second, in addition to being a change in itself, privatization is also a source
of other changes within an organization—for example, changes in corporate strategies and
corporate structures. Consequently, it is important to note that a study of employees’
reactions to privatization not only has to deal inclusively with reactions to privatization but
also with reactions to a set of changes that come along with the privatization initiative in a
broader sense.
This dissertation aims to develop a research model which suggests relationships
between perceptions and attitudes on the one hand and resistance to change and support for
change on the other hand, and to empirically test it by using data gathered from employees
currently facing organizational change. The number of variables examined in this
dissertation is limited predominantly due to two key reasons: theoretical aspect (the greater
the number of variables in the model, the less the degree of parsimony of the model), and
practical aspect (the greater the number of variables in the model, the lower the response
rates in the survey).
This dissertation focuses on empirical evidence gathered at a particular point in time
from employees in two organizations. In Study 1, a survey was distributed to a random
sample of 100 teachers at a large private school in Thailand where the management has
recently decided to reduce the number of teachers. Of those sampled, 91 teachers returned
the surveys (91% response rate). In Study 2, a survey was distributed to 500 employees at a
large state-owned company in Thailand where top managers have attempted to privatize the
organization. Of those sampled, 224 employees returned the survey (44.8% response rate).
The focus of this dissertation is strictly limited to the examination of the relationships
between perceptions and attitudes on the one hand and reactions to change on the other hand

at the given moment in time rather than during different points in time. Thus, it is not a
longitudinal study. This implies that these studies did not investigate feedback-loops or a so-
called dynamic model
12
that addresses: (1) the effects of employees’ resistance to and
support for change on the change efforts (e.g., the change goals and processes); and (2) the
perceptions of the modifications in organizational change efforts at time t
1
as a consequence
of employees’ reactions at time t
0
on their reactions to such modifications at time t
1
. One

12
As March (1955) pointed out problems in determining influence order, one may consider that the influence
relationships in this dissertation may represent closed-loop systems. For a detailed discussion of this issue, see
March (1955).

10

reason why this dissertation does not include the feedback-loops model concerns the casual
link between perceptions or attitudes, and reactions to change. If we were to find such a
relationship at one moment in time, then we might expect to find that relationship at another
moment in time. Another reason concerns the practical aspect of developing and validating
the feedback-loops model using data from the questionnaire surveys: this would require not
only comparing results of different surveys but also gathering data from the same
respondents at different times, which would be too problematic or beyond the scope of this
study.

It is important to note that the nature and magnitude of the impact of organizational
change on employees depends on, among other things, the type of change and the way in
which the change is introduced. For example, changes can be initiated either from top
management (a so-called top-down approach) or from employees (a so-called bottom-up
approach). Because I assumed that the strength of the impact of the change was inherently
expressed in the perceptions of the employees, it was not necessary to separately explore the
effects of the change on the employees, or distinguish how the changes were introduced.
However, because the changes studied in this dissertation entailed organization-specific,
situation-specific, time-specific, and relationship-specific contexts, the extent to which the
findings can be generalized to other contexts is limited. It is also useful to note that the
implications of cultural differences on reactions to change are not within the scope of this
dissertation. Thus, the examination of relationships between predictors and outcomes within
one culture (Thailand) is conducted.

1.5. The Intended Contributions of this Dissertation
The principal thesis that emerges from the research model is that employees who are
confronted with any form of organizational change tend to develop the initial and
subsequent reactions to this change through a variety of decision-making processes.
Consistent with the bounded rationality framework (Simon, 1957), this dissertation further
argues that certain perceptions and attitudes enhance or prohibit their choices of reactions to
change.
Specifically, this dissertation focuses on employees’ perceptions and attitudes in a
downsizing situation (in Study 1) and a privatization situation (in Study 2). These
perceptions and attitudes are theorized to be factors leading to subsequent conscious and/or
unconscious decisions and/or behaviors in response to the changes, which may significantly
impact the change implementation and firm performance. This dissertation attempts to
contribute to the research on organizational change, especially employees’ resistance to
change and support for change, in three ways.

11

First, this dissertation examines a variety of actions that employees may choose in
response to a change in the organization. Drawing upon prior research, it identifies two
primary types of employees’ reactions to change: resistance to change and support for
change. These are further divided into: active and passive resistance, and active and passive
support.
Second, using perception-based logic, this dissertation examines a number of
perceptions and attitudes that may influence employees’ choice (conscious or unconscious)
to support or resist change, thus shedding light on whether perceptions and attitudes impel,
impede or exert no effect on employees’ behavior and decisions. Although the
organizational change literature is rich, there seems to be a surprising gap in the literature
concerning the role and nature of employees’ perception of change in organizations. In
particular, this dissertation aims to contribute in this area by examining the link between
various perceptions and attitudes on the one hand and resistance to change and support for
change on the other hand. Consensus on these issues will allow theories of employees’
reaction to change to move forward in a systematic fashion.
Third, based on the findings in this dissertation, it is probable that we will be able to
develop a variety of tools for predicting employees’ reactions to change. More importantly,
understanding the ways in which employees establish certain reactions to change will
provide a potential avenue for developing a range of change management strategies that
may bring employees’ perceptions in alignment with those desired, thereby strengthening
the degree to which employees support organizational change. Specifically, the key findings
are mainly relevant to the design, implementation, and closing phases of change
management strategies in Thailand. Nonetheless, it goes without saying that part of the
knowledge derived from the present dissertation will be applicable and transferable to firms
in other geographical settings and industries wishing to introduce a change, any change, to
their organization.
The findings in this dissertation will also be informative for consultants, as a way to
improve the current change management practices in dealing with employees’ resistance to

change. As discussed earlier, employees’ resistance to change is reported to be a source of
problems for organizations and has subsequent negative effects on firm performance.
Understanding employees’ perceptions and attitudes before, during, and after the
implementation of organizational change may prove to be valuable to firms, managers, and
consultants.

12

2. Core Concepts and Relevant Literature

This section discusses the central tenets of theories of change, perception, attitude, emotion,
individual decision-making, resistance to change and support for change, focusing on the
core theoretical and empirical arguments. It is important to note that I neither seek to
provide an exhaustive literature review, nor seek to explicitly review an extended list of the
critiques of the core arguments previously made. This narrow focus is deliberate, for my
purpose is to concisely outline the main tenets of concepts and theories concerning these
topics, to assess how they are conceptualized, to provide a basis for establishing the link
between key concepts, and to develop my research model.

2.1. Theories of Change
There are several relevant questions concerning change. What is it? Why do firms need to
change? Under which conditions will firms initiate changes in their organization? What
kinds of outcome will a change bring to firms? Certainly, these questions already suffice to
show that there is need for research on organizational change.
13
The wide range of past
research on organizational change has focused on four main categories. One category has to
do with content issues, and it mainly focuses on factors related to successful or unsuccessful
change attempts (e.g., Hofer 1980; Bibeault, 1982; Hambrick and Schecter, 1983; Barker
and Duhaime, 1997). Another category concerns process issues, mainly focusing on steps,

phases, or actions undertaken during the implementation of an intended change (e.g.,
Judson, 1991; Kotter, 1995; Galpin, 1996). An additional category deals with context issues,
focusing on internal or environmental forces or conditions affecting a change in an
organization (e.g., Schendel and Patton, 1976; Slatter, 1984; Robbins and Peace, 1992). The
final category concerns reaction issues, and it focuses on employees’ responses to
organizational change (e.g., Weiss and Cropanzano, 1996; DeWitt, Trevino, and Mollica,
1998; Patterson and Cary, 2002).
The literature suggests several internal and external factors that lead a firm to
commence a change. Examples of these factors include: (1) increased competitive pressure
(Meyer, Brooks and Goes, 1990); (2) new government regulation (Meyer et al., 1990;
Haveman, 1992; Fox-Wolfgramm, Boal and Hunt, 1998); (3) technological change
(Haveman, 1992); and (4) management team change (Castrogiovanni, Baliga and Kidwell,
1992).


13
As mentioned earlier, research on organizational change is one of the areas in organization theory research.

13

Firms that undertake change, any change, in their organization often aim to improve
their performance in terms of, for example, higher profits, better responsiveness to the
market, and long-term competitive advantage. For example, past studies on corporate
turnaround (e.g., Hofer 1980; Bibeault, 1982; Hambrick and Schecter, 1983; Barker and
Duhaime, 1997) have found several actions or strategies that can revive the troubled firms
through corporate turnaround. We can thus conclude that the real value of organizational
change rests on its ability to alter an organization’s identity, strategy, structure, operation or
human resources as a means to enhance firm performance.
Now let us consider the characteristics of change. Change is defined as a movement
away from a current state toward a future state (George and Jones, 1995). In the

organizational change literature, at the abstract level, there are two distinct modes of
change: first- and second-order change. The phrase “first-order change” is used to describe
organizational changes that occur within a relatively stable system that remains mostly
unchanged; and for a system to remain stable or unchanged, it requires frequent first-order
changes (Weick and Quinn, 1999).
14
On the contrary, second-order change or so-called
episodic change modifies or transforms fundamental structures or properties of the system
(Weick and Quinn, 1999). The concept of first- and second-order change is very popular
and powerful, and its fruits have been many. To give but a brief sample of some of the
works that have benefited from this concept, it has advanced several theoretical models such
as Argyris and Schön’s (1979, 1996) single- and double-loop learning by individuals, Miller
and Friesen’s (1984) adaptation vs. metamorphosis by organizations, and Tushman and
Anderson’s (1986) competence-enhancing vs. competence-destroying changes in
technology. In summary, there are several patterns or types of change (Miller, 1980;
Johnson-Cramer, Cross and Yan, 2003): small or large (Ledford et al., 1989), planned or
emergent in nature (Johnson-Cramer et al., 2003), radical or incremental (Weick and Quinn,
1999).
Another aspect of change is that it can occur at differing organizational levels. First,
change can occur within a population of organizations. For example, changes occurring at
an industry level (e.g., changes in customers’ demands and preferences) have implications
for most, if not all, companies within the industry. Similarly, changes occurring at a country
level have implications for most, if not all, organizations within the country. In addition,
changes can occur in a single organization, having implications for the whole organization

14
As the phrase “continuous change” is used to describe organizational changes that tend to be ongoing, cumulative,
and evolving (Weick & Quinn, 1999), the terms “first-order change” and “continuous change” seem to be used
interchangeably.