Kotter's 1996 change model revisited after 15 years

Back to the future: revisiting
Kotter’s 1996 change model
Steven H. Appelbaum
John Molson School of Business, Concordia University,
Montreal, Canada
Sally Habashy
P S L Group, Montreal, Canada
Jean-Luc Malo
Ergoplan, Montreal, Canada, and
Hisham Shafiq
Oracle Corporation, Montreal, Canada
Abstract
Purpose – The purpose of this paper is to gather current (2011)
arguments and counterarguments in
support of the classic change management model proposed by
John P. Kotter in his 1996 book Leading
Change. His work was based on his personal business and
research experience, and did not reference
any outside sources that has questioned its value. A current
perspective on a limited tested model aims
to be a focus of this paper.
Design/methodology/approach – The literature on change
management was reviewed for each of
the eight steps defined in Kotter’s model, to review how much
support each of these steps had,
individually and collectively, in 15 years of literature.

Findings – The review found support for most of the steps,
although no formal studies were found
covering the entire spectrum and structure of the model.
Kotter’s change management model appears
to derive its popularity more from its direct and usable format
than from any scientific consensus on
the results. However the model has several limitations, that are
identified, impacting upon its universal
acceptance and popularity.
Research limitations/implications – Further studies should
examine the validity of Kotter’s model
as a whole. More importantly, change management research
should form a greater link with
stakeholders in order to translate current research into a format
usable by practitioners.
Practical implications – No evidence was found against Kotter’s
change management model
and it remains a recommendable reference. This paper attempts
to “test” the “how-to-do-change
management” with empirical and practitioner literature that was
not evident in the original text. The
model would be most useful as an implementation planning tool,
but complementary tools should also
be used during the implementation process to adapt to
contextual factors or obstacles.
Originality/value – Based upon a thorough review, this is the
first formal review of Kotter’s change
management model, 15 years after its introduction.
Keywords Change management, Organizational change,
Corporate strategy, Empowerment,
Engagement, Vision, Management
Paper type Conceptual paper
Introduction

Businesses are constantly required to adapt to a changing
environment in order to
maintain their position in the market and even more so if they
are to truly grow
(Biedenbacha and Soumlderholma, 2008). Changes are an
inevitable part of the current
market. The current rate of technological advancement and
growing global
competition lets us foresee a continuing need for change in the
future (Armenakis
and Harris, 2009). Many authors argue that change never starts
because it never stops
(Weick and Quinn, 1999). Many organizations, in an attempt to
adapt to the constant
The current issue and full text archive of this journal is
available at
www.emeraldinsight.com/0262-1711.htm
Journal of Management Development
Vol. 31 No. 8, 2012
pp. 764-782
r Emerald Group Publishing Limited
0262-1711
DOI 10.1108/02621711211253231
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evolutions of their environment, are adopting cultures of a
learning or agile
organization. Whether or not an organization tries to constantly

evolve, successfully
implementing changes can be a major determinant of its short-
and long-term success.
Considering that “research suggests that failed organizational
change initiatives range
from one-third to as high as 80% of attempted change efforts”
(Fisher, 1994; Beer and
Nohria, 2000; Higgs and Rowland, 2000; Hirschhorn, 2002;
Knodel, 2004; Sirkin et al.,
2005; Kotter, 2008; Meaney and Pung, 2008; Whelan-Berry and
Somerville, 2010),
considerable research efforts have been deployed to fill that
knowledge gap and
support managers in the field of change management.
The paper looks at one of the eminent change management
models, specifically,
John P. Kotter’s. His model was first published in a 1995 article
in the Harvard Business
Review. The following year, it was published with greater detail
in classic the book
titled Leading Change. Both Kotter’s (1995) article and 1996
book were based on his
personal business and research experience, and did not
reference any outside sources.
This was not typical of an academic undertaking and led to the
need to present this
paper to test it over 15 years.
Although Kotter’s model of change management lacks rigorous
fundaments, it
became an instantaneous success at the time it was advocated
and it remains a key
reference in the field of change management. In 1997, Leading
Change (Kotter, 1996)
became a business bestseller. It subsequently became the best-

selling book ever of its
kind. Hundreds of researchers refer to one or other of Kotter’s
publications on change
management. This book has been cited over 4,000 times in
Google Scholar. The model
is also presented to this day in academic textbooks such as
Langton et al. (2010).
The general lack of empirical fundaments to most change
management theory
(Todnem, 2005) probably is not alien to this success. “Theories
and approaches to
change management currently available to academics and
practitioners are often
contradictory, mostly lacking empirical evidence and supported
by unchallenged
hypotheses concerning the nature of contemporary
organizational change
management” (Todnem, 2005). The success of the theory and at
the same time the
lack of research and rigorous investigation are quite
counterintuitive in the world
of empirical research that has been the underpinning of accepted
OB and OD
references and classics. However, the model has several
limitations that are identified
impacting upon its universal acceptance and popularity that will
be explored later
in this paper.
One of the most interesting aspects of the 1996 classic book is
that there are neither
footnotes nor references. A bibliography cannot be found yet
this work has had
tremendous academic as well as practical success. This paper
traces the evolution of
the literature and thinking originally selected by Kotter to the

formulation of the eight
step model. Finally it explores the current validation of the
model by an updated 2011
literature search to compare/contrast the 1996 foundation. This
paper attempts to
“test” the “how-to-do-change management” with empirical and
practitioner literature
that was not evident in the original text 15 years ago.
This paper will present a short review of articles related to each
of the eight
components of Kotter’s model in the attempt to highlight the
value of each. According
to Kotter – the eight steps to transforming your organization are
as follows (Kotter,
1996; Smith, 2005):
(1) establish a sense of urgency about the need to achieve
change – people will not
change if they cannot see the need to do so;
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(2) create a guiding coalition – assemble a group with power
energy and influence
in the organization to lead the change;
(3) develop a vision and strategy – create a vision of what the
change is about, tell

people why the change is needed and how it will be achieved;
(4) communicate the change vision – tell people, in every
possible way and at
every opportunity, about the why, what and how of the changes;
(5) empower broad-based action – involve people in the change
effort, get people
to think about the changes and how to achieve them rather than
thinking about
why they do not like the changes and how to stop them;
(6) generate short-term wins – seeing the changes happening
and working and
recognizing the work being done by people towards achieving
the change is
critical;
(7) consolidate gains and produce more change – create
momentum for change by
building on successes in the change, invigorate people through
the changes,
develop people as change agents; and
(8) anchor new approaches in the corporate culture – this is
critical to long-term
success and institutionalizing the changes. Failure to do so may
mean that
changes achieved through hard work and effort slip away with
people’s
tendency to revert to the old and comfortable ways of doing
things.
The following sections critically discuss each of the eight steps.
Step 1: establish a sense of urgency

According to Kotter (1995), successful change efforts must
begin with individuals
and groups evaluating a company’s “competitive situation,
market position,
technological trends and financial performance”. Bold or risky
actions normally
associated with good leadership are generally required for
creating a strong sense
of urgency (Kotter, 1995, p. 43). Kotter (1995) further states
that leaders must find
ways to communicate this information “broadly and
dramatically”. He claims that the
first step is essential as the start of organizational changes
require aggressive
cooperation of many individuals. This need for change must be
understood;
otherwise, the change agents will not have enough “power and
credibility to initiate
the required change program” (Kotter, 1997). Kotter (1996, p.
44) also recommends the
use of consultants as a tactic for creating a sense of urgency and
challenge the status
quo. Armenakis et al. (1993) strengthen Kotter’s statement by
suggesting the
recruitment of sources outside the organization, as they can
reinforce the change
agent’s message.
A diagnostic report compiled by a consulting firm, for instance,
can be utilized as a
tool to add credibility to the need for change message. A study
by Gist et al. (1989)
supports the assertion that a message generated by more than
one source, particularly
if external to the organization, is given a greater air of
believability and confirmation.

The news media, for example, is also an external source that can
be instrumental in
creating a sense of urgency and as a result, a readiness for
change (Armenakis et al.,
1993). Radio and television broadcasts, magazines, and
newspapers can all be sources
of information affecting employee knowledge and since such
sources tend to have an
air of objectivity, they are often persuasive in the creation of
readiness for change
(Armenakis et al., 1993). However, this information is not
easily managed by the
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change agent. Belasco (1990) speaks of the change agent as
having the individual
inertia to accomplish goals.
Five key change sentiments were proposed by Armenakis et al.
(1999). The authors
argued that the sentiments were essential to “encourage change
readiness, adoption
and institutionalization”. Discrepancy, one of the five
sentiments used to explain
the reactions of the change recipients, was deemed important in
38 per cent of studies
as identified by Armenakis et al. (1999). It is the term used
when describing
“a deviation from acceptable performance” and “captures the
sentiment that a need for

change does in fact exist” (Armenakis et al., 1999). The authors
referred to discrepancy
as the “burning platform” which Kotter (1995) claims
establishes a sense of urgency for
change, and in turn motivates strategic change (Armenakis et
al., 1999). Numerous
studies (Lewin, 1946; Coch and French, 1948; Bandura, 1986;
Pettigrew, 1987; Nadler
and Tushman, 1989) have demonstrated the need for change
recipients to believe a
discrepancy exists.
Different forms of persuasive communication, a source of
information regarding
discrepancy, send “symbolic information” regarding a number
of aspects of the change
effort: commitment to the change effort, its prioritization, and
urgency for the change
effort (Armenakis et al., 1993). Armenakis et al. (1993) cite the
example of a CEO who
travels to various corporate locations in order to discuss the
need for change. This
type of oral persuasive communication not only allows the
message itself to be
communicated, but also, the importance of the issues to be
symbolically magnified by
the fact that time, effort, and resources are utilized to
communicate the changes
directly. Additionally, frequency of interaction regarding
change is expected to create
momentum. Ginsberg and Venkatraman (1995), and Kotter
(1995) state that “the more
the change is a topic of conversation, the greater its implied
urgency”. Jansen (2004)
deduces that apathy is conveyed if there is little interaction
regarding the change,

thus deeming it unimportant. Discussions about the change,
whether negative or
positive, indicate that the change is progressing and employees
are feeling the need to
rationalize of events ( Jansen, 2004). As a result, energy for
change is created by the
implication of change.
Buchanan et al. (2005) state that “the timing, sequencing and
pacing of events can
also be fateful for sustainability”, thus supporting Kotter’s first
step. They also claim
that delayed change may not deliver benefits, whereas change
that is rushed “may not
allow time to adapt, and create initiative fatigue, encouraging
decay”.
Finally, Kobi (1996) presented a few aspects in order to support
the need for urgency
of change: showing the attractiveness of the change, confronting
employees with
clear expectations, showing that it can be done and creating a
positive attitude to the
change. In order for these aspects to be adequately supported, a
“guiding coalition” will
be created to lead the changes. In essence, Step 1 still appears
to be significant in 2011
as it was in 1996.
Step 2: create a guiding coalition
According to Kotter (1996, p. 52), no one person is capable of
single-handedly leading and
managing the change process in an organization and putting
together the right “guiding
coalition” of people to lead a change initiative is critical to its
success. This guiding coalition

should be made up of people with the following characteristics
(Kotter, 1996, p. 53):
. position power: enough key players on board so that those left
out cannot block
progress;
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. expertise: all relevant points of view should be represented so
that informed
intelligent decisions can be made;
. credibility: the group should be seen and respected by those in
the firm so that
the group’s pronouncements will be taken seriously by other
employees; and
. leadership: the group should have enough proven leaders to be
able to drive the
change process.
Each of these characteristics has some support in organizational
change literature.
Lines (2007) explored the relationship between two of these
characteristics (amounts
of expert power and position power) at a large
telecommunications firm and their
influence in implementing organizational change. Lines (2007)

concluded that change
agents with a high amount of position power are more
successful at implementing
change than change agents with low amounts of position power
but high expertise;
however, both have positive relationships to implementation
success of organizational
change. Kotter’s change leading coalition requires people with
position power so that
the change initiatives cannot be blocked; however, Kotter does
not advocate a
monarchical attitude in the change leader (Kotter, 1996, p. 53).
In fact, as the case study
on organizational change at Honeywell Inc concludes, if the
managerial attitude
remains that of “command and control” and this behaviour does
not change,
transformation will most likely fail (Paper et al., 2001). Success
of the change initiative
depends on facilitative management and visible and continuous
support from the top.
A guiding coalition with good managers and poor leaders will
not succeed
(Kotter, 1996, p. 58). Good managers keep the change
management process under
control while good leaders create the vision to drive the change
(Kotter, 1996, pp. 57-9).
This is further supported by Caldwell (2003) in his analysis of
change leaders and
change managers. Caldwell (2003) and a panel of industry
leaders analysed the key
attributes for each of these roles and concluded that “change
leaders are those
executives or senior managers at the very top of the
organization who envision, initiate

or sponsor strategic change of a far-reaching or
transformational nature. In contrast,
change managers are those middle level managers and
functional specialists who carry
forward and build support for change within business units and
key functions”.
In a review of organizational change in three specific case
studies (Cool aid case,
Municipality of Saanich, First nations Mountain Pine Beetle
initiative), Cunningham
and Kempling (2009) concluded that the cases illustrate the
importance of a guiding
coalition in assisting the change process. Although the other
principles might also be
useful in the change effort, progress would not have been made
without the guiding
coalition. Change initiatives supported by the leader have a
greater likelihood of
gaining support from work-group members, and thus make them
easier to implement
(Self et al., 2007).
There is some literature that casts doubt on the importance of
Kotter’s guiding
coalition. In his analysis of the organizational change process at
the University of
Newcastle, Sidorko (2008) credits Kotter’s model for the
successful outcome of the
change process. He argues, however, that Kotter makes no
concessions to the fact that
his model is sequentially ordered and that all steps must be
followed (Kotter, 1996,
p. 23). Sidorko’s (2008) analysis revealed the need for building
multiple guiding
coalitions on multiple occasions to deal with different aspects

of the change process,
something that Kotter does not acknowledge. Another paper that
set out to analyse
Kotter’s model in a university setting focused on a multi-year
effort to change the
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organizational culture at an information services unit at the
University of Memphis
(Penrod and Harbor, 1998). In this paper the authors suggest
that while a guiding
coalition has its advantages, change will not come unless
frontline staff engages in
adaptive behaviour. Note that Kotter (1996) does ask for the
right makeup of the
guiding coalition so it could be argued that the reason that the
guiding coalition does
not achieve its desired purpose at these universities is that the
correct people were not
chosen for the coalition.
Step 2 still appears to be as significant in 2011 as it was in 1996
but some critics have
illuminated unique issues today. The initial task of the guiding
coalition is to formulate a
vision for the change effort and to ensure that it is
communicated throughout the
organization (Kotter, 1996). This is Step 3 of Kotter’s model
which we explore next.

Step 3: develop a vision and strategy
The first task of the guiding coalition from Kotter’s Step 2 is to
formulate a “clear and
sensible vision” for the transformation effort (Kotter, 1996, p.
70). Without such a
vision, the change objectives can easily dissolve into a list of
confusing and
incompatible projects that can take the organization in the
wrong direction or nowhere
at all (Kotter, 1996, p. 70).
The importance of a well-defined vision for the change process
is well documented
in research literature. A key lesson from the case study on the
human resource systems
at the US Environmental Protection Agency found that a shared
vision of the project’s
outcome is essential (Wright and Thompsen, 1997). Whelan-
Berry and Somerville
(2010) agree and define the change vision as a key part of
change process. According
to Kotter (1996, pp. 68-9), an effective vision is essential in
breaking the status quo
and looking beyond the immediate goals of the organization. A
study at Countrywide
Financial Corporation (Flamholtz and Kurland, 2006) revealed
that vision and strategic
planning was necessary to extend management’s thinking
beyond incremental
performance improvement goals and to address longer-term
issues and changing
competitive dynamics.
A clearly defined vision is easier for employees to understand
and to act on, even if
the first steps required are painful (Kotter, 1996, pp. 67-84).

Washington and Hacker
(2005) found that managers who understand the change effort
are more likely to be
excited about the change and less likely to think that the change
effort would fail.
Staniforth’s (1996) study of organizational change at AB Ltd
further reinforced the
need for the vision to be “clear, consistent and well articulated”
so that managers can
reflect on the issues at stake in a “calm, rational and thoughtful
way”. A significant
relationship exists between the perception of planned
organizational change and
the response to change along cognitive, emotional, and
intentional dimensions (Szabla,
2007). The change vision should therefore be desirable, as
Kotter (1996, pp. 67-84)
suggests, so that it appeals to the long-term interest of
employees, customers,
shareholders, and others who have a stake in the enterprise.
Though the research literature broadly accepts the importance
of a clear vision on
the change management effort in an organization, some argue
that the vision itself
is much less important than the implementation of that vision.
In their survey of
upper- and middle-level managers of a Fortune 500 US
manufacturer, Cole et al. (2006)
found vision clarity to be less important than the actual
execution of the change
coupled with the appropriateness of the change. Similarly a case
study at Honeywell
found that while “people need a systematic methodology to map
processes”, “execution
is the real difference between success and failure” (Paper et al.,

2001). Step 3 still
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appears to be as significant in 2011 as it was in 1996 and even
more so per some case
studies presented.
Step 4: communicate the change vision
Communication is a critical element of the organizational
change process as it can
reduce uncertainty (Bordia et al., 2004), decrease ambiguity and
can even affect the
type of positive or negative responses to organizational change
(Nelissen and van
Selm, 2008). Uncertainty is defined by Salem and Williams
(1984), as an inability to
describe, predict, or explain. Complaints of inadequate
information are common in
organizations (Daniels and Spiker, 1983). A study conducted by
Nelissen and van Selm,
(2008) served to explore the correlation between responses of
survivors of an
organizational restructuring and downsizing and the role of
management
communication. Their studies found that the most significant
correlations were
between employee satisfaction and management communication.
It was determined

that employees who are satisfied with the management
communication saw more
personal opportunities and had a positive state of mind on the
organizational change,
lending support to Kotter’s fourth step (Nelissen and van Selm,
2008). Furthermore,
these employees felt confident in the successful enrolment of
the change (Nelissen and
van Selm, 2008). Employees who felt the survival of the
company depends on the
organizational change showed positive responses regarding the
high quality of
management communication (Nelissen and van Selm, 2008).
Another study conducted by Frahm and Brown (2007)
investigated whether
communication during organizational change was linked to
employees’ receptivity to
change. The researchers found that weekly team meetings
allowed employees to be
trusting and open (Frahm and Brown, 2007). They were able to
discuss the changes
as well as their subsequent implications with the manager. The
study results showed
that frustrated employees typically felt this way due to a lack of
involvement in the
change process and due to a lack of information regarding the
changes. However, much
like the Nelissen and van Selm, (2008) study, there were sub-
groups of employees who
had a positive outlook about the changes. Such employees
viewed the necessary
changes as an “opportunity for personal gain” and perceived
change as “a welcome
response to perceived organizational problems carried over from
the past”. It was

determined that these were also participants who were more
involved in the change
process compared to others. Therefore, like the participants in
the Smith et al. (1995)
research, employees with a higher level of participation and
greater dialogue
responded more positively to change.
Klein (1996) suggests a number of effective communication
strategies based on
empirical principles found in the literature in order to apply
them to various stages of
organizational change. These strategies, as listed, strongly
support Kotter’s overall
communication requirement:
. People’s memory can be increased by diffusion and repetition
of the message
through several media, leading to message retention (Bachrach
and Aiken, 1977;
Daft and Lengel, 1984; Dansereau and Markham, 1987). This
point supports
Kotter’s suggestion to ensure that the change message and
vision is repeatable
as “ideas sink in deeply only after they have been heard many
times” (Kotter,
1996, p. 90).
. Kotter maintains that “two-way communication is always more
powerful than
one-way communication” (Kotter, 1996, p. 90). This is
confirmed by D’Aprix
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(1982) and Jablin (1979, 1982), who demonstrated that face-to-
face
communication taken by itself is the medium with the greatest
impact. The
interactive potential of face-to-face communications is in fact
what works,
concluded Gioia and Sims (1986). The two-way process allows
involvement,
irons out ambiguities, and increases the chances of the
communicators
connecting adequately (Klein, 1996). According to O’Connor,
1990, face-to-face
communication is “the best way that feedback can be used to
correct deficiencies
immediately in the communication process”. O’Connor’s
finding supports
Kotter’s following statement: “unaddressed inconsistencies
undermine the
credibility of all communication”. Additionally, face-to-face
communication in a
group context can be key for carrying out successful change.
Weick (1987)
states that it allows for opportunities to be seen from different
perspectives
and interpretations, which can, in turn, be generated from
explanations and
clarifications related to variations of understanding.
. Employees expect to hear important, officially sanctioned
information from their
immediate supervisor or boss, and therefore, this is the most
effective source as

they are also presumed to be well informed (Klein, 1996). These
supervisors can
subsequently keep supervisees aware of the changes (Higginson
and Waxler,
1989; Smeltzer and Fann, 1989).
Roberto and Levesque (2005) studied six strategic initiatives
undertaken over the
course of several years at Apparelizm Corps. One of the four
critical processes outlined
in their study clearly support Kotter’s view pertaining to
“vivid” communication:
“a verbal picture is worth a thousand words – use metaphor,
analogy and example”. By
engaging in storytelling and symbolic action, the managers at
Apparelizm created
a “compelling account of the need for the initiative”. They were
also able to explain the
specific changes that would be made (Roberto and Levesque,
2005). The use of
metaphors served a few purposes; relaying of the details of the
programme and
creating excitement and support for the programme. The core
team used an auto
racing metaphor. It compared a NASCAR race crew to the store
staff. A video was even
created in order to solidify the metaphor, thereby employing
Kotter’s recommendation
to use many forums to relay the message (Kotter, 1996, p. 90).
Roberto and Levesque
(2005) concluded that the metaphor was in fact effective.
Employees understood the
link between the need to be “fast, responsive and highly
knowledgeable”, much like
a NASCAR team. They also understood the importance of
communication and

teamwork within a NASCAR team, and were then able to make
the correlation with
their role in the initiative. Links were drawn carefully in order
for the connection to be
easily made by the employees (Tsoukas, 1991). Step 4 still
appears to be significant in
2011 as it was in 1996.
Step 5: empower broad-based action
Employees are emboldened to try new ideas and approaches,
often just simply by the
successful communication of the vision across the organization
(Kotter, 1995).
However, communication is never sufficient by itself and
employees often need help in
getting rid of obstacles to the change vision (Kotter, 1995).
Typically, empowering
employees involves addressing four major obstacles: structures,
skills, systems, and
supervisors (Kotter, 1996, p. 102). An analysis of empowerment
in frontline employees
at 16 luxury hotels in seven European countries revealed that
structure, supervisor
attitudes, and training all play a role in employee empowerment
(Klidas et al., 2007).
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Obstacles created by supervisors and the hierarchical structure

of organizations were
also acknowledged by the organizational consultants at
Burswood Resort Hotel in
Western Australia who found that empowered actions and
independent thinking were
often were frowned upon by supervisors who were more used to
the existing
structured hierarchy (Cacioppe, 1998).
Kotter (1996, pp. 107-9) stresses the pivotal role of training in
the empowerment
process and he has broad empirical support for this assertion.
Denton (1994) has
described how Ford and its union, the United Auto Workers,
jointly created an effective
training programme that emphasized changing Ford’s corporate
culture. He suggested
that training was successful because it helped build a sense of
responsibility and
empowerment in the employees (Denton, 1994). Likewise, a
study on the influences of
communication and training on third-party logistics providers
found communication,
training, and coaching to be the mechanisms through which
companies develop
empowered employees (Ellinger et al., 2010). Similar results
have also been reported by
Kappelman and Richards (1996).
There is wide support for employee empowerment in change
literature. A case
study on organizational change at Honeywell Inc found that
creating team ownership
and a bottom-up or empowered employee base is important to
help an organization
transform successfully (Paper et al., 2001). Similarly, results

from research at a large
telecommunication company have provided support for a
positive relationship
between participation and the successful implementation of
strategic change (Lines,
2007). In his PhD dissertation on understanding the approach of
bringing the Toyota
Production System’s lean concepts to a traditional operational
model, Pinheiro (2010)
concluded that “organizational change cannot occur without a
paradigm shift in the
culture of the organization and the empowerment of workers at
the functional frontline
level”. Often, however, even giving employees a small
empowering opportunity can
have a profound effect on employee attitudes as this can provide
them with some sense
of control over the change process and help move the change
effort along (Kappelman
et al., 1993). In essence, Step 5 still appears to be significant in
2011 as it was in 1996.
Step 6: generate short-term wins
Seeing the changes happening and working and recognizing the
work being done by
people towards achieving the longer-term goals is critical in
Kotter’s (1995) view.
The former President of Lever Brothers’ Foods Division in the
USA, Willie
Pietersen, says that large-scale change can be a long, formidable
undertaking, so it is
important to create short-term wins (Pietersen, 2002). A number
of early victories, he
insists, even if they are small, create self-confidence and the
belief that bigger successes

are possible and this builds up the momentum towards the
longer-term goals
(Pietersen, 2002). Rewarding opportunities and celebrating
small wins also provide
employees and management reassurance that their efforts are on
the right track
(Reichers et al., 1997; Marks, 2007). Note, however, that while
focusing solely on
short-term gains may increase the frequency of organizational
change initiatives,
finding the right balance between the short-term gains and the
long-term effects of
change on employee perception can become a complex issue for
organizational leaders
(Boga and Ensari, 2009).
Short-term wins demonstrate that the change effort is paying off
(Kotter, 1996,
pp. 122-4). Such wins help the guiding coalition test the vision
against real conditions
and make adjustments (Kotter, 1996, pp. 122-4). Ford et al.
(2008) found this “proof ”
to be critical for the change management effort and stated that
managers seeking to
772
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31,8
implement change should find evidence that the change has
achieved the desired
results (Ford et al., 2008). Short-term wins also help remove
obstacles to change by

reinforcing the change vision in the minds of employees (Drtina
et al., 1996). Short-term
wins also provide opportunities to celebrate and reward those
working for change
(Kotter, 1996, pp. 122-4). Throughout the transformation
process, the leader should set
high-performance expectations and reward behaviours that are
directed toward
fulfillment of the vision. It is also important that the leader
models the behaviours that
are required to institutionalize the change and sets the standards
for the rest of the
organization to emulate (Eisenbach et al., 1999). Step 6 appears
to be significant in 2011
as it was in 1996.
Step 7: consolidate gains and produce more change
Kotter states that it may be tempting for managers to declare
victory after the first
signs of performance improvement are visible. However, as new
processes can regress,
it’s crucial for leaders to use these short-term gains in order to
tackle other issues, such
as systems and structures that are not in line with the recently
implemented changes
(Kotter, 1995). Pfeifer et al. (2005) argue that verifying the
credibility of vision and
strategy through the use of measurable results is the main goal
for gathering first
successes. Management will require these first successes to plan
for the further change
process, and be able to partially justify the short-term costs
incurred through change
(Pfeifer et al., 2005). This is further supported by Kotter, as he
maintains that leaders
will need to prove the “new way is working” (Kotter, 1995).

First successes can also
serve to “neutralize cynics and self-centered opponents”
(Kotter, 1997). Company P3
GmbH, for example, decided to enter into the
telecommunications advisory business
and a first success was achieved through the production of the
study results which
were published in major German newspapers (Pfeifer et al.,
2005). These results
showed P3 GmbH’s competence and as a result, several projects
took shape and market
participants were interested. The change lead to the creation of
the company P3
Solution
GmbH, devoted to the telecommunications market (Pfeifer et
al., 2005).
On a different topic, gambling, sporting events, and political
campaigns all have a
particular energy pattern in common termed momentum (
Jansen, 2004). Jansen (2004)
qualifies momentum as being “recognizable” and “imputed by
participants and
observers”. We can easily relate momentum to the process of
organizational change as
the energy and enthusiasm required to carry out the change is

crucial (Coleman and
White, 1998; Jick, 1995). As there are few studies dedicated to
understanding
momentum in the context of organizational change, there were
two goals driving the
Jansen study. One of the goals was to examine the events and
activities creating initial
momentum and causing fluctuations over time through the use
of quantitative
and qualitative analyses during the first few months of an
organizational culture
change. The path of change and its success or failure can be
predicted by
understanding these events or activities that contribute to
momentum fluctuations in
order to improve the change management process as well as its
impact on the company
( Jansen, 2004). Kotter (1995), Linstead and Chan (1994) both
state that “change-based
momentum incorporates the prescriptions of transformational
change agents, where
momentum is described as a dynamic force whose presence or
absence determines the
ultimate success of a transformation”. For example, Elmes and
Wynkoop (1990) argue

that there must be sufficient change-based momentum or initial
energy in order to
allow organizational transformation to occur. Furthermore,
change-based momentum
can be initially created by “attaining a critical mass of
accumulating support”
773
Revisiting
Kotter’s 1996
change model
( Jansen, 2004). Therefore, a positive relationship between
employee commitment to
change and change-based momentum must exist. Jansen (2004)
also states that
employees become part of the accumulating support the change
is collecting as
individuals choose to commit to the change process, thereby
increasing their
perception of the change-based momentum. Committed

employees are subsequently
less resistant and less likely to want to maintain the status quo (
Jansen, 2004).
On the other hand, uncommitted employees or those who have
lost their commitment
over time are more likely to resist the change-based path
(Hambrick et al., 1993). As a
result, this can lead to a decrease in perception of change-based
momentum. However,
when “victory is declared too soon” (Kotter, 1996, p. 66) or
when management celebrate
“the first clear performance improvement”, this can kill
momentum. According to
Kotter (1996, p. 66) momentum is also lost when, “the urgency
level is not intense
enough, the guiding coalition is not powerful enough, and the
vision is not clear
enough”.
Kerber and Buono (2005) suggests that “changes associated
with continuous
improvement methods” (Choi, 1995) and “transformative,
breakthrough changes”
(Kerber, 2001) can be made by “encouraging people to initiate
and experiment with

changing”. Such actions can empower employees to lead and
this is necessary for the
production of additional change (Kotter, 1996). In essence, Step
7 still appears to be
significant in 2011 as it was in 1996.
Step 8: anchor new approaches in the corporate culture
Kotter (1995) believes that new behaviours are subject to
degradation if they are not
rooted in social norms and shared values once the pressure for
change is alleviated.
He cites two factors that are critical to the institutionalization
of change in corporate
culture:
(1) showing employees “how the new approaches, behaviours
and attitudes have
helped improve performance” (Kotter, 1996, p. 67); and
(2) ensuring that “the next generation of management
personifies the new
approach” (Kotter, 1996, p. 67).
Reisner (2002) examined the US Postal Service which, during
the 1990s, “transformed

itself from the butt of sitcom jokes into a profitable and
efficient enterprise” (Buchanan
et al., 2005). However, the change was not sustained going into
2001 and analyses
determined that morale and performance were low, and losses
were predicted (Reisner,
2002). It was observed that there were three “momentum
busters”: “the indifference of
senior managers, who regarded some aspects of strategy as a
‘distraction’; resistance
from trade unions, whose role and voice had been marginalized;
inability to steer
funding through a budget process which favoured traditional
initiatives over
innovations” (Reisner, 2002; Buchanan et al., 2005). Senge et
al. (1999) argued that to
sustain any profound change, a “fundamental shift in thinking”
was required.
However, an understanding of the forces and challenges that
impede the growth and
change processes must be present in order to deal with such
challenges (Senge et al.,
1999). Jacobs (2002) defines institutionalization as change that
has relative endurance
and staying power over a length of time or that “has become

part of the ongoing,
everyday activities of the organization”. From this, we can
determine that the US
Postal Service must not have undergone a fundamental shift in
thinking as the changes
were not sustained.
774
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31,8
According to Massey and Williams (2006) a support structure
for change agents is
required in order for change to be sustained. This structure
should offer mentoring,
training, and shadowing opportunities. Different forms of
communication and
recognition of change initiatives should be used: newsletters,
seminars, informal
meetings, web sites, conferences/seminars, and visual
display/storyboards of projects
and progress (Massey and Williams, 2006). Buchanan et al.

(2005) mention that
institutionalization processes include training to establish
competence and commitment,
meeting reward expectations, the further spread of new ideas
and monitoring, and
control processes. These steps and aforementioned studies allow
the solidification of the
change in the corporate culture of a company, lending support
to Kotter’s final step.
Therefore, Step 8 still appears to be significant in 2011 as it
was in 1996. The eight-step
model has significant contributions to organizational behaviour
and development but
there are issues that impact upon its universal acceptance that
will be covered next.
Limitations of Kotter’s eight-step model
Kotter’s eight-step model was fully elaborated to address
“fundamental changes in how
the business is conducted in order to help cope with a new,
more challenging
market environment” (Kotter, 1995). This statement implicitly
states a framework in
which the model is applicable; therefore it is not expected to be
applicable to all types of

changes. Following are a few examples where the model might
not be applicable
without modifications.
A rigid approach
Kotter argues that the eight steps should be followed in
sequence and that extended
overlapping of the steps will compromise success, implying that
steps are requisite of
one another. Therefore, not implementing the first step will
make it difficult or
impossible to implement the subsequent steps. Burnes (1996)
argues that such a
prescriptive approach does not correlate well with studies that
suggest that
organizations prefer to use approaches to change that stems
from their culture and
thus cannot easily be amended or replaced (Cummings and
Huse, 1989; Schein, 1985;
Burnes and James, 1995). “Indeed, this may well give a clue as
to why so many change
projects are said to fail owing to the apparent inability of
managers to follow the
prescriptions for successful change laid down in the literature
(Schein, 1985; Juran,

1988; Kearney, 1989; Kotter, 1995; Zairi et al., 1994)” (Burnes,
1996). A plausible
explanation is that, where such prescriptions run counter to the
organization’s culture,
they will be either ignored or be ineffective (Burnes, 1996).
Some steps are not relevant in some contexts
Some transformations do not require nor are able to go through
certain steps. A simple
example is the replacement of major software used to process
operation, or the change of
equipment on a manufacturing line. In these cases the changes
are often irreversible, and
so Steps 7 and 8 might not be has relevant. Other examples
could include changes with
need for a great deal of secrecy, were Steps 1 and 4 will be
significantly undermined.
Dealing with difficulties during change management
Companies implementing changes face many difficulties.
Planning changes according
to Kotter’s framework should limit those obstacles, but the
model is not detailed
enough to provide help in all scenarios. For example, resistance
to change and

commitment to change are major aspects of change management
and complementary
775
Revisiting
Kotter’s 1996
change model
components outside Kotter’s model, such Stephen Jaros’s
(2010) predictors to determine
commitment to change, might be needed to address these.
Difficulties of studying change management projects
Studying major change management projects is inherently
difficult, due to their sheer
complexity. This is probably why we found only a few case
studies that tried to
formally document a change process using Kotter’s model.
Major obstacles to those
studies included:

. The difficulties of implementing all of the eight steps
(Sidorko, 2008; Penrod and
Harbor, 1998).
. The need for a long follow-up of the change project, to cover
all the steps.
Changes usually require many years to take form, making the
study time
consuming. Validation of Steps 7 and 8 are therefore more
complicated to
evaluate (Penrod and Harbor, 1998; Betters-reed et al., 2008).
. Difficulties encountered in evaluating the level of
implementation of the steps,
and the challenge of corroborating implementation level with
implementation
success level (Sidorko, 2008; Penrod and Harbor, 1998; Dianis
et al., 1997).
Conclusion
This exhaustive review of the relevant empirical and
practitioner literature to find
congruence or lack thereof on individual aspects of Kotter’s
change model, found that
not many studies set out to validate the full eight steps. In fact

most of the evidence
found during the search points to data that has been compiled by
Kotter himself in his
book titled The Heart of Change, which is a 2002 follow-up to
the book Leading
Change. In essence Kotter validated Kotter.
Integration of all eight steps in an orderly fashion is an
important part of Kotter’s
model, but the importance of maintaining this order remains
under investigated in
empirical literature. Despite this major gap in the validation of
this theory, the model
remains very popular. To explain this popularity, we considered
the target audience for
these references. Neither the 1995 article nor the 1996 book
were addressed primarily to
a scholarly audience. Rather, these were meant for end users
such as stakeholders
involved in managing the change. The reliance of managers on
“evidence-based
practice” remains limited (Rousseau, 2006). They are more
likely to look into grey
literature written from a practical point of view, since this is a
lot easier to understand

and implement than scholarly empirical literature. The eight-
step model is presented in
action points arranged in a practical sequence. The model is
intuitive and relatively
easy to accept since it is based on Kotter’s real-life experiences
and is well presented
with examples. Finally, given the popularity of the book
Leading Change as evidenced
by its “best seller” status, one has to assume that the audience
(change managers
and stakeholders) feel directly addressed by it’s content. But
academics have relied
upon the findings as if they were tested and supported. This is
one of the enigmas of
this undertaking.
While Kotter’s eight steps remain an excellent starting point for
managers
implementing change in their organizations, and applying the
model is likely to
improve the chances of success, the model should not be
considered as something that
guarantees success. In practice, it may be useful to account for
contextual variables
and adapt the model accordingly (Graetz and Smith, 2010;

Dopson et al., 2008). It may
776
JMD
31,8
also be constructive to combine Kotter’s planned framework
with some of the other
leading change models such as emergent, contingency, or choice
models and theories in
change management literature (Todnem, 2005) and find the best
mix based on the
organization and the change being implemented.
In the prefix of his book The Heart of Change, Kotter and
Cohen (2002)
acknowledges that “many interesting questions were left
unanswered” in Leading
Change. In The Heart of Change, which is beyond the scope of
this review, Kotter
determines that the core problems people face while
implementing his eight steps are

never due to “strategy, structure, culture or systems” but rather
are about “changing
the behaviour of people” (Kotter and Cohen, 2002). This
continues to be in evidence
15 years after the initial model was presented.
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The Transparent Supply Chain:
from Resistance to Implementation at Nike
and Levi-Strauss David J. Doorey
ABSTRACT. Information disclosure is a common reg-

ulatory tool designed to influence business behavior. A
belief is that transparency can provoke learning and also
positive institutional change by empowering private
watchdogs to monitor and pressure business leaders to
alter harmful behavior. Beginning in the late 1990s, a
private movement emerged that pressured corporations to
disclose the identify of their global supplier factories.
These activists believed that factory disclosure would lead
to greater accountability by corporations for the working
conditions under which their products are made, which
in time would improve labor practices. In 1995, Nike and
Levi-Strauss (Levis) surprised the business community by

publishing their supplier lists. This paper describes case
studies of Nike and Levis, tracking the evolution from
resistance to supply chain transparency through to the
decision to be industry leaders in factory disclosure. The
paper evaluates the contribution of factory disclosure and
proposes that other companies should be urged to move
toward supply chain transparency.
KEY WORDS: labor practices, information disclosure,
transparency, corporate social responsibility, supply
chains, Nike, Levi-Strauss
Louis Loss once wrote that ‘‘people who are forced
to undress in public will presumably pay some
attention to their figures’’ (Loss, 1988, p. 33). He

was describing securities disclosure laws, but his
colorful metaphor describes a philosophy underlying
much modern information disclosure regulation.
The idea is that transparency can provoke institu-
tional learning and behavioral changes of the sort
desired by the state. By forcing corporations to
publicly report on performance indicators that
may reflect poorly on the company’s financial or
ethical management, transparency requirements might
encourage corporate managers to improve their per-
formance.
While transparency has long been used as a means

to influence corporate behavior in areas such as
securities and environmental law, it has played a less
prominent role in the governance of work practices.
That may be changing. In recent years, scholars have
proposed a range of laws that would require com-
panies to disclose information about how they treat
their own employees (Estlund, 2009; Williams,
1999). In Australia, laws have already been enacted
that require the identity and location of suppliers
throughout domestic supply chains to be disclosed in
order to help improve compliance with labor stan-
dards and industry-wide collective agreements in the
apparel industry (Marshall, 2010; Rawling, 2006).

Transparency advocates have also targeted labor
practices within the vast global supply chains of
multinational corporations. A range of private actors
and organizations have in recent years promoted the
idea of transparency of information about supply
chain labor practices as a means of encouraging
better management of those practices, with the
expectation that better management will ultimately
lead to better labor practices (Doorey, 2005; Sabel
et al., 2001). One proposal that has garnered atten-
tion is a requirement that corporations be ordered to
disclose the identity and address of their global

suppliers in a manner similar to ‘‘country of origin’’
labeling that is common in many countries. Advo-
cates of ‘‘factory disclosure’’ argue that, if corpora-
tions knew that the identity of their suppliers would
become public, they would pay closer attention to
what goes on in those factories, including working
conditions under which their products are manu-
factured (ETAG, 2003).
Journal of Business Ethics (2011) 103:587–603 � Springer 2011
DOI 10.1007/s10551-011-0882-1
For example, in a consultation commissioned by
the Canadian government on a proposal to require

factory disclosure for apparel goods sold in Canada, a
labor rights nongovernmental organization (NGO)
called the Ethical Trading Action Group (ETAG)
argued that a factory disclosure law would encourage
companies ‘‘to become more knowledgeable about
their supply chains, establish longer-term business
relationships with trusted suppliers, and better moni-
tor labor practices in their supply chains’’ (Doorey,
2005, p. 394). ETAG theorized that these positive
responses would occur because factory disclosure
empowers the many antagonistic actors (includ-
ing NGOs, unions, journalists, and academics) who
research supply chain labor practices, making it

easier for them to discover labor abuses, link those
abuses to specific brands, and then target those
brands in negative consumer campaigns. Rational
corporations would be expected to take measures to
reduce the risk of being targeted by such campaigns,
including paying closer attention to working con-
ditions in their suppliers’ factories and perhaps
making changes to improve the probability that local
laws or vendor codes of conduct were complied
with.
This remains just a theory, because there are
presently no laws that require disclosure of the

identity of the factories within global supply chains.
The demands of labor activists for corporations to
disclose the identity of their suppliers have been met
with hostile reaction from most corporate officials,
who argue that this information is of great proprie-
tary, economic, and competitive value (Doorey,
2011, p. 995). Nike Inc. (Nike) once led the charge
against supplier factory disclosure. However, in
2005, Nike surprised its competitors by publishing a
list of its global suppliers on its website, followed
several months later by Levi-Strauss (Levis), and then
others.
1

Although relatively few corporations have
adopted it to date, factory disclosure has become a
new corporate social responsibility (CSR) strategy to
deflect criticism about supply chain labor practices, a
strong signal that corporations have ‘‘nothing to
hide.’’
This paper explores the events that led to this
unlikely development. It provides case studies of the
decisions by Nike and Levis to disclose their global
supply chains. The paper examines the period from
the early 1990s, when labor advocates began to push
for factory disclosure, through the decision by the
companies to disclose their factory lists in 2005, and

then the 2-year period after the disclosure in order to
track the immediate effects of the move to supplier
transparency of two of the world’s largest brand-
based corporations. It draws on interviews with
senior executives of both companies, as well industry
professionals experienced in the management of
supply chain labor practices, and representatives of
unions and NGOs who were involved in the push
for factory disclosure and active in campaigns
targeting labor conditions at both companies.
The paper makes no claims about whether factory
disclosure has in fact led to improvements in labor

conditions in the companies’ supplier factories. That
is the task for a follow-up study. The purpose of this
paper is to provide an analysis of the developments
that led the corporations to publish their global
supplier lists while virtually all of their competitors
refused to do so. The story is useful for what it tells
us about how companies perceive and respond to
risks associated with the efforts of nonstate actors to
influence business practices by means of private
investigations and corporate campaigns that seek to
tarnish brand image in the eyes of consumers and
investors. The developments at Nike and Levis are
also pertinent to the ongoing dialog about whether

legislated factory disclosure might produce useful
changes in how corporations manage their supply
chain labor practices.
2
By observing what steps these
prominent companies took to prepare for voluntary
factory disclosure, we further our understanding of
how other companies might prepare for mandatory
factory disclosure.
Finally, the decision of some prominent corpo-
rations to adopt supplier transparency raises ques-
tions about the claim of other companies that factory
identity is valuable proprietary information. This is a

claim that attracts considerable suspicion and deri-
sion from labor activists, who doubt there is any
great secrecy among competitors in terms of iden-
tifying supplier factories. Critics assert that resistance
to factory disclosure is based more on a desire to
impede private oversight of factory conditions than
on competitive reasons. If supplier identity is in fact
so valuable to competitors, then we must question
why Nike and Levis would give it up for free. On
the other hand, if the value lies in helping corpo-
rations avoid oversight of labor practices by private
588 David J. Doorey

inspectors (such as NGOs, journalists, academics,
and unions) who might use the information to
pressure the corporations to improve those practices,
then different questions arise. Is it appropriate for
corporations to adopt supply chain secrecy as a
business strategy in the global economy? Should
factory disclosure be mandated by regulation in or-
der to level the playing field and push laggards closer
to the transparency standard set by companies such as
Nike and Levis?
The paper begins with a description of the origins
of factory disclosure advocacy from its seeds in the

United Students Against Sweatshop (USAS) move-
ment of the 1990s. It then provides case studies of
the decisions by Nike and then Levis to disclose their
supplier lists. The paper concludes by reflecting on
what these case studies tell us about how corpora-
tions interact with and respond to pressures generated
by private actors, on whether supplier transparency is
likely to improve supply chain labor practices, and
finally on whether supplier transparency should
become a norm of ethical business practices rather
than the exception it is presently.
The origins of factory disclosure

Factory disclosure has its origins in grassroots
movements of private, nonstate actors seeking to
address perceived failures by states to protect work-
ers. The story begins in the summer of 1997 at the
New York offices of the trade union UNITE
(Featherstone, 2002, p. 11). Student interns investi-
gating how universities source their branded apparel
questioned university administrators and quickly
learned that the universities did little to ensure that
their branded clothing was made under decent
working conditions. In fact, the universities usually
had no idea where the clothes were made. The in-
terns also reviewed the many corporate codes of

conduct that had surfaced during the early 1990s in
the apparel industry and noted that none required
factories to be identified, as one intern noted:
…we noticed that not a single company included a
provision for public disclosure of factory locations or
independent monitoring reports. The conclusion was
obvious: if we were to hold the manufacturers of our
college merchandise accountable, we were going to
have to force them to open themselves to public
scrutiny. (Featherstone, 2002, p. 16)
The seeds of the factory disclosure movement had
been planted.
United Students Against Sweatshops

The interns’ investigation led to a wave of student
campaigns at universities such as North Carolina,
Duke, Michigan, Wisconsin, and California, as stu-
dents sought affirmations from administrators that
university branded clothing was not being made in
factories in which labor laws were violated. By early
1998, a significant grassroots movement of students
had emerged. That spring, students from over 30
schools converged on New York City, where they
formed a new NGO, USAS. These events coincided
with negotiations under the Apparel Industry Part-
nership (AIP), an initiative introduced by the Clin-

ton Administration in 1997 designed to deflect
public criticism of the apparel industry by creating a
model of private governance targeting labor abuses
in apparel factories both in the USA and abroad
(Gillen, 2000).
In 1998, with its credibility bloodied by the late
defection of its only two union participants, the AIP
announced the creation of the Fair Labor Associa-
tion (FLA). Thereafter, the USAS sought to estab-
lish itself as an alternative to the FLA model, which
it characterized as an industry-led smokescreen
enabling corporations to claim they were dealing
with abusive supply chain labor practices, without

any effective accountability or transparency. Few
apparel companies welcomed the arrival of USAS,
and the FLA and its supporters attempted to co-opt
the student movement and university administra-
tions into supporting the FLA model rather than
that being proposed by USAS (Featherstone, 2002,
p. 13).
An important concern of the apparel corporations
was USAS’s focus on disclosure and transparency. In
1998, voluntary public disclosure of the identity of
global supply chain factories was virtually unheard of
in the apparel industry. However, in January 1999,

after a student sit-in, Duke University administrators
promised to ensure that the identity of all factories
supplying Duke-branded apparel would be disclosed.
589The Transparent Supply Chain
This victory spawned similar campaigns at other US
colleges. In July 1999, buoyed with confidence from
these victories, the students decided to develop a
new organization to help manage the growing
database of global apparel factories, and to develop a
structure for monitoring and reporting on working
conditions in those factories that could challenge the
FLA model.

3
The new organization was named the
Workers’ Rights Consortium (WRC).
The approach of the WRC was distinct from the
FLA’s in a number of important ways. For one
thing, it did not include industry representation on
its governing board, thereby permitting it to claim
independence from the industry it sought to moni-
tor. The board consisted of representatives from
university administrations, unions, students, and
academics. The WRC did not accredit factories or
monitors, because its organizers did not believe that
occasional monitoring and sporadic investigations

could determine with any certainty what working
conditions were during any particular production
run. The WRC required schools to adopt a code of
conduct and to impose it on their supplier factories.
Workers or organizations could file complaints
alleging a breach of a code, and those complaints
would then be investigated by a WRC team, whose
report would be made public.
Schools that affiliated with the WRC were re-
quired to obtain from their suppliers a list of all of the
factories used in the production of the university
clothing and provide the list to the WRC, which

would then post a consolidated list of all factories on
its website in a searchable format. As a result, the
apparel companies that supplied schools affiliated
with the WRC found themselves faced with a new
conundrum: to publicly disclose their supplier fac-
tories, or risk losing their university apparel contracts.
Some companies did not initially respond favorably
to this demand, including Nike, which walked away
from lucrative contracts with Brown University and
Michigan University when those schools became
WRC members. Nevertheless, by the late 1990s,
support for factory disclosure was gaining momen-
tum within university administrations, as well as at

various stakeholder activist organizations; for exam-
ple, in 1999, an NGO called the National Labor
Committee (NLC), in coordination with a religious-
based human rights organization People of Faith
Network, initiated a campaign they called ‘‘People’s
Right to Know,’’ which called upon American
companies to publicly disclose their factory lists.
For those companies that relied heavily on the
university apparel market, the loss of business that
would be associated with walking away from WRC-
affiliated schools probably made the decision a rel-
atively easy one. At Gear for Sports, for example, the

collegiate market represented US $40 million in
annual sales, or about 20% of its total sales.
4
In
February 2000, it began publishing its factory data-
base on its website, making it the first company
supplying the collegiate market to do so, a point it
then emphasized on its corporate website as evi-
dence of its commitment to social responsibility.
Other companies were far less enthusiastic. The
collegiate market accounted for approximately 1% of
Nike’s revenues in 1999, and nearly 10% of its total
factory supplier list. However, after a period of resis-

tance, Nike decided that the cost of foregoing the
university market was too high, and in October 1999,
it reluctantly agreed to disclose its suppliers to its
university customers that demanded factory list dis-
closure.
5
Critics challenged Nike to go further, and to
disclose its entire factory list, but the company refused.
Its spokesperson argued that while it was prepared to
disclose this portion of it supplier list, there were im-
portant business reasons for resisting complete factory
disclosure: ‘‘Disclosing our addresses definitely does
give our competitors a slight advantage. But because of

the intellectual property involved, we believe that’s a
tradeoff we have to make’’ (Stroup, 1999).
Industry slowly comes on board
By the turn of the century, many apparel compa-
nies had their first taste of public factory disclosure
as a direct result of the USAS movement. Some
companies saw a marketing opportunity in this
transparency, and began to advertise their new
transparency as evidence of their commitment to
respectable labor practices. Factory disclosure had
begun a slow ascent as a new badge of honor within
the apparel industry. Corporations were taking
possession of the idea and were using it as evidence

that they ‘‘had nothing to hide’’ from the public.
Even Phil Knight, CEO of Nike, who had initially
been at the forefront of corporate resistance to the
USAS approach and factory disclosure, bragged in
590 David J. Doorey
2000 that Nike’s agreement to disclose the factories
supplying its university customers was evidence of its
renewed commitment to improving labor practices
in its supplier factories.
6
In a 2003 opinion piece in the British Guardian
newspaper, the founder and former CEO of The

Body Shop argued that factory disclosure was a
crucial ‘‘first step’’ toward eradicating labor abuses
around the world:
Corporations continue to hide the factories they use
around the world to make the goods we purchase.
Wal-Mart, for example, uses 4400 factories in one
Chinese province alone. As a first step, we need full
public disclosure of all factory names and locations.
Such transparency will make it much harder to hide
abuses. (Roddick, 2003)
The USAW/WRC model created a controlled
experiment for participating companies by allowing

them to disclose a segment of their factories in a
context in which many of their competitors were
doing likewise. To their pleasant surprise, little harm
seemed to come from this exercise in transparency.
Understanding Nike’s decision to disclose
its factory list
The context just described helps explain the unlikely
events of 2005. In April, Nike surprised the business
community by suddenly releasing its global factory
database, at that time, amounting to nearly 750
factories worldwide. Some of Nike’s major com-
petitors followed soon afterward with their own
factory disclosure lists, including Levis in October

2005, and then Timberland, Puma, Adidas, and
Reebok. This section describes the process and
events that led Nike to take the lead on factory
disclosure after it had so strongly resisted the idea less
than a decade earlier.
In a speech to the National Press Club in the
spring of 1998, Phil Knight conceded that ‘‘the Nike
product has become synonymous with slave wages,
forced overtime, and arbitrary abuse’’ (Cushman,
1998). He was using the speech to introduce new
initiatives that Nike hoped would stall the onslaught
of negative publicity the company had endured over

the previous decade for the working conditions in its
global supplier factories. Knight told the audience
that consumers do ‘‘not want to buy products made
in abusive conditions.’’ Those words reflected an
important transformation at Nike that occurred
during the 1990s. Nike’s business model has always
been based on global outsourcing to low-cost
jurisdictions. It has used its own production facilities
at various times in its history, but this is the excep-
tion to the general rule that Nike is principally a
design and marketing company. Production is out-
sourced to hundreds of contractor factories dispersed
globally.

For decades, Nike asserted that it had no
responsibility for working conditions in its suppliers’
factories. John Woodman, a senior Nike employee,
expressed this sentiment in 1991, when he told a
reporter that it was ‘‘not within our scope to
investigate’’ conditions of work in contractor fac-
tories (Barnet and Cavanagh, 1994; Katz, 1994).
This was a common attitude at the time, not only at
Nike, but within industry generally. However,
during the 1990s, the interests of various private
actors – labor activists, unions, human rights and
religious NGOs, academics, and investigative jour-

nalists – converged on the subject of factory condi-
tions within the supply chains of global corporations.
Nike, perhaps more so than any other company at
the outset of this movement, became the target of
these campaigns.
Media images of children sewing Nike soccer balls
and running shoes juxtaposed against the millions of
dollars Nike paid sports celebrities to market their
products proved an effective formula for a new
generation of social activists who exploited the
Internet in a global anti-Nike campaign (Murphy
and Mathew, 2001). Nike’s traditional line denying
responsibility for conditions in contractor factories

quickly proved untenable to a growing number of
skeptical shoppers, a point that Nike executives had
realized by the early 1990s. Nike’s Vice President of
Labor Compliance during that time reflected on the
company’s early reactions to the corporate cam-
paigns as follows:
Nike made a real mistake. I think we reacted nega-
tively to the criticism. We said, wait a minute, we’ve
got the best corporate values in the world, so why
aren’t you yelling at the other folks. That was a stupid
thing to do and didn’t get us anywhere. If anything it

raised the volume louder. (Murphy and Mathew,
2001, p. 7)
Nike executives had begun to perceive the persistent
reports of abusive labor conditions in their supplier
factories as a threat to their brand image. A new
strategy was needed to deflect the growing criticism.
The Nike code of conduct
Nike initially treated the growing public criticism as
a public relations problem. In 1991, the company
hired Dusty Kidd, a journalist, to be its new PR
Director. One of Kidd’s first tasks was to prepare a
new supplier code of conduct. Nike’s code of con-

duct was released in 1992 and was modeled loosely
on Levis’ code (discussed below), which had been
released earlier that year. The Nike code described a
set of labor standards that Nike would expect its
contractors to apply. This marked a shift in Nike’s
position by acknowledging that Nike shared respon-
sibility for working conditions in its supplier factors.
7
However, the code did not describe how compli-
ance would be monitored, nor did it include any
commitment by Nike to disclose which factories it
used or information about the results of monitoring.
The code was initially implemented by the pro-

duction departments within the different business
units (apparel, footwear). However, the production
personnel were neither labor experts nor especially
focused on the code’s implementation (Murphy and
Mathew, 2001, p. 7). The code was distributed to
factory owners, with an instruction to sign the
document, comply with it, post it in the factory, and
report to Nike on compliance biannually. Nike did
not initially monitor compliance in any systematic
way, and the introduction of the code did not
diminish the level of scrutiny and criticism being
leveled at Nike by the many activists and journalists

interested in supply chain labor practices.
Improvements to information flow and monitoring
Beginning in 1996, Nike implemented a series of
organizational changes designed to enable head of-
fice officials to better monitor sources of risk asso-
ciated with their suppliers’ labor practices. That year,
Nike introduced a new labor practices department,
which assumed the function of implementing and
monitoring the code. Afterward, additional steps
were taken incrementally to improve the company’s
institutional knowledge of its suppliers and their
labor practices. Those steps included the following:
• The SHAPE internal monitoring system was

introduced in 1997. This basic audit was in-
tended to provide Nike with an initial assess-
ment of whether a proposed new factory
was at least in the ballpark in terms of satis-
fying the code. While the SHAPE audit was
therefore not a strong indication of whether
the code was actually being complied with,
it introduced a formalized system in which
Nike personnel were required to open a
SHAPE file for each supplier factory.
• In 1998, Nike created a corporate responsi-
bility and compliance division (CRD). CRD
housed several departments, including com-

pliance and the oddly named ‘‘considered,’’
which was intended to facilitate the integration
of corporate responsibility issues throughout
the business by bringing together sustainability
and compliance people working within the
various Nike product groups.
• Four field managers housed within CRD
were assigned to Nike’s regions: the Ameri-
cas, South Asia (Thailand, Indonesia, Bangla-
desh, India, Sri Lanka, and Malaysia), North
Asia (China, Vietnam, Cambodia, Taiwan,
and Korea), and EMEA (Europe, Middle
East, and Africa). These managers were made

responsible for monitoring day-to-day over-
sight of factory compliance with labor laws
and the Nike code, as well local stakeholder
engagements. Over time, staff were assigned
to the field offices to assist in these functions.
By 2006, there were about 50 field staff,
whose job it was to visit the supplier facto-
ries and conduct code audits.
• In the early 2000s, Nike developed a global
factory database to help Nike’s head office
track its global supply chain and to enable
head office access to the various audits being
conducted in the field, which were now

entered into the database by field staff on a
regular basis.
592 David J. Doorey
• In 2002, having now staffed field offices
with CRD auditors, Nike brought the audit-
ing and monitoring function back in house
after a highly criticized experiment with
external auditing firms Ernst & Young and
Price Waterhouse Cooper. The methodolo-
gies and competence of these firms had been
the subject of sustained and scathing criticism
by academics and the NGO community

(Murphy and Mathew, 2001, p. 6; O’Rou-
rke, 1997, 2002).
• In 2003, Nike introduced a multistep factory
compliance model named the ‘‘new source
approval process.’’ In addition to the SHAPE
audit that all new factories required, approxi-
mately 25–33% of Nike factories would
now also undergo a more comprehensive
‘‘M-audit.’’ Factories flagged as high risk in
previous audits or as a result of a particular
incident were targeted for these audits. Fac-
tories that failed either a SHAPE or M-audit
inspection were either not approved or were

permitted an opportunity to implement a
master action plan, which set out what the
factory needed to do to be accepted as a
Nike contractor.
External engagement and transparency
The moves described above generated a growing
confidence at Nike that the organization had a much
better grasp of prevailing working conditions at their
global suppliers than in the past. Nike executives
were also gaining confidence with external engage-
ment and controlled transparency. Nike’s participa-
tion in the 1997–1998 AIP process and its
subsequent involvement with the FLA forced its

people to engage in ongoing dialog with external
stakeholders and NGOs, something Nike had not
actively pursued in the past. Its reluctant agreement
to disclose approximately 10% of its global supplier
list through the WRC process had given Nike a taste
of transparency, with no discernible negative effects.
This very subtle shift toward transparency and
external engagement carried over into the new
millennium. In July 2000, Nike became one of the
first corporations to support the United Nation’s
Global Compact, an initiative that asks companies to
report on their efforts to ensure compliance in their

factories with a set of core labor standards. That same
summer, Nike introduced an initiative called
‘‘Transparency 101,’’ through which it announced it
would begin posting on its website the results of
audits of some of its factories (without identifying
the particular factories). Vada Manager, Nike’s
Director of Global Issues at that time, explained:
We needed a defense against investigations into our
factories from outside forces. It’s a way to pre-empt
nongovernmental organizations and the media from
playing ‘gotcha.’ For us, that level of transparency was
necessary and appropriate to send the message that we
have nothing to hide. (Van Yoder, 2001)

In November 2000, Nike joined CERES, an envi-
ronmental sustainability NGO that encourages
companies to engage external stakeholders on envi-
ronmental issues and to publicly report, using the
Global Reporting Initiative, on environmental issues.
The following year, Nike introduced a corporate
responsibility committee on its executive board that
was assigned the role of overseeing the company’s
social performance in areas such as labor, the envi-
ronment, and charitable endeavors. Its first CSR
report was also published in 2001. It included
information by country, including the number of

factories used, the number of employees, average
wages, and other work-related information. Slowly
and cautiously, Nike was beginning to move toward
greater transparency.
Then, in a move that would ultimately push Nike
toward full factory disclosure, a panel of external ex-
perts was invited to review a draft of its 2004 corporate
responsibility report. The group, known formally as
the Nike report review committee (‘‘review com-
mittee’’), included Neil Kearney, the General Secre-
tary of the International Textile, Garment, and
Leather Workers Federation and one of Nike’s
harshest critics. The review committee was asked to

read drafts of the Nike CR 2004 report, and then
present Nike with a list of suggestions and recom-
mendations. Neil Kearney made the case that Nike
would not receive the credit it craved from the NGO
community unless it released the names and addresses
of its entire factory database. The review committee’s
recommendations, including factory disclosure, were
presented to Nike executives in the early months of
2005. The executives sent it back to the corporate
responsibility division with instructions to consider a

Kotter's 1996 change model revisited after 15 years

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