The document discusses two organizational models of change, Theory E, which emphasizes creating economic value through top-down, planned changes, and Theory O, which focuses on improving human capital and emergent change from within. The authors, Michael Beer and Nitin Nohria, propose that neither model alone is uniquely effective and suggest a potential integration of both approaches for optimal results. This integration requires significant skill, will, and wisdom.

1. Theory E & Theory O
Organizational Models of Change

2. The Authors
• Michael Beer and Nitin Nohria both professors at Harvard
• Beer: Cahners-Rabb Professor of Business Administration,
Emeritus, at Harvard Business School.
• Nohria: Dean of Harvard Business School.

3. Theory E or “$”
• Create economic (shareholder) value
• Formal Structure and systems
• Driven from the top w/ consultants
• Change is planned

4. Theory O
• Improve the people to improve the organization
• When employees implement change, learn from it
• Creates employees as stakeholders
• Change is emergent

5. Purpose and Means Theory E Theory O
Leadership Top-down Participative
Focus Structure and systems Culture
Planning Programmatic Emergent
Motivation Incentives lead Incentives lag
Consultants Large/ knowledge-driven Small/ process-driven
Comparison Chart for E and O Models

6. Examples
• Theory E: Dunlap and Scott Paper
• Theory O: Champion and the employees
• NEITHER was uniquely effective.
> And / Or paradox, mixing

7. How can E and O be integrated?
• Two Ways:
1. Initiated at determined, separate times
2. Integrated together
* Takes largest amount of “skill, will and wisdom.”