Preface

The unfolding of economic events during the 1970s and early 1980s has drawn further attention to the relative decline of the British economy and the continuing loss of competitiveness of large sectors of British industry. In the search for explanations of Britain's declining competitiveness a multiplicity of factors have surfaced. Pollard (1982) has emphasised the short-term focus of British economic policy-making and our failure as a nation to invest in the modernisation of capital equipment. Researchers at the Science Policy Research Unit at Sussex University also dwell on the relationship between technical innovation and British economic performance, pointing to shortcomings in the way certain sectors of British industry develop and improve products and production processes (Pavitt, 1980). Meanwhile economists such as Caves (1980) and Blume (1980) identify the poorer productivity of certain UK industries compared with their US equivalents, and how the UK's financial structures and institutions inhibit our ability to direct savings into appropriate investment channels. The problem of explaining Britain's economic decline has also attracted scholars interested in taking a very long-term view. Wiener (1981) digs into the culture and class system in British society, arguing that there has been a systematic misdirection of talent in Britain into public sector administration, the City, and the universities and away from industry and engineering. Lazonick (1983), on the other hand, argues that the decline in Britain's economy during the twentieth century is due to structural rigidities in its economic institutions that developed in the nineteenth century era of relatively free competition.

But is Britain's declining competitiveness just to be explained by a mixture which includes national economic policies, macro-economic variables, the deep-rooted social and cultural biases of UK society, the peculiarities of our financial institutions and our tax system, and the patterns of trade union activity and industrial relations? I think not. Given the substantial changes in the economic, political, and business environment of large firms over the past two decades, a critical factor affecting the relative competitive position of British firms must be the capacity of firms to adjust and adapt to major changes in their environments and thereby improve their competitive performance. The importance of these adjustment and adaptation processes suggests that the nature of management itself is a crucial input into the competitiveness issue. Part of the management task is to identify and assess changing economic, business, and political conditions, and formulate and implement new strategies to improve the firm's competitive performance. These managerial processes of strategic assessment, choice, and change are not just questions of economic calculation of strategic opportunity carried out by men and women driven by rational imperatives. The process of assessing environmental change and its implications for new strategies, structures, technologies, and cultures in the firm is an immensely human process in which differential perception, quests for efficiency and power, visionary leadership skills, the vicariousness of chance, and subtle processes of additively building up a momentum of support for change and then vigorously implementing change, all play their part.

This volume explores one of the key theoretical and practical problems of the 1980s, how to create strategic and operational changes in large, complex organisations. The theme of managerial processes of creating change is interwoven through a detailed empirical study of one of Britain's largest corporations and its response to the changing environment of the past 20 years. It should be clear this study does not deal with the activities of all ICI's UK divisions, neither is this an officially commissioned history of ICI, although an important feature of the research has been the high level and high quality of research access provided by ICI. The research examines ICI's attempts to change their strategy, structure, technology, organisational culture, and the quality of union management relationships over the period 1960–83. An important and unusual feature of the research strategy has been the collection of comparative and longitudinal data. Interview, documentary, and observational data are available from ICI's four largest divisions – Agricultural, Mond, Petrochemicals, and Plastics – and from the corporate headquarters. These data have been assembled on a continuous real-time basis since 1975, through retrospective analysis of the period 1960–74, and in the case of the divisional chapters by probing into the traditions and culture of each division established long before the last two decades.

The study explores two linked continuous processes. Initially the focus of the research was to examine the birth, evolution, demise, and development of the groups of internal and external organisation development consultants, employed by ICI in order to help initiate and implement organisational change. This analysis of the contributions and limitations of specialist-led attempt to create change, has led to the examination of broader processes of continuity and change in ICI as seen through the eyes and actions of the main board, divisional boards, and senior managers of ICI. The book therefore contributes to knowledge about the part played by very senior executives in corporate-wide strategic changes, the role of divisional boards and directors in making division-wide changes in structure, organisational culture and manpower, and the influence of specialist change resources of the internal and external variety in making changes happen. Throughout the book the emphasis is on describing and analysing processes of change in context, illustrating why and how the content of particular changes and the strategies for introducing them are constrained by and enabled by features of the traditions, culture, structure, and business of ICI as a whole and each of its divisions, and by gross changes in the business, economic, and political environment ICI has faced through time.

The findings of this research on ICI reinforce those writers who have discussed the inertial properties of organisations and the enormous difficulties of breaking down the established ways of looking at and behaving towards the world which develop in large organisations. Once a large organisation develops a coherent strategy of how it is going to deal with its external environment, and that strategy is reinforced by the structures, systems, cultures, and political constraints of the organisation, the dominating ideas and assumptions which are implicit and explicit in the strategy it behaves are extraordinarily difficult to break down. Thus when strategic change does occur it tends to occur in radical packages – revolutionary periods interspersed with long periods of absorbing the impact of the radical changes, of further periods of incremental adjustment, and then a period of education, persuasion and conditioning leading up to the next revolutionary break. In the ICI cases reported in this book the periodic eras of high levels of change activity were precipitated by, but not solely explained by, economic and business-related crises. Behind these periodic strategic reorientations in ICI are not just economic and business events, but also processes of managerial perception, choice, and action. The book provides ample illustrations of the role of executive leadership in intervening in the existing concepts of corporate strategy, and using and changing the structures, cultures, and political processes in the firm to draw attention to the need for change, and lead the organisation to sense and create a different pattern of alignment between its internal character, strategy, and structure and the emerging view of its operating environment.

The book has twelve chapters. Chapter 1 presents a detailed and pointed review of the strengths and weaknesses of existing research on organisational change, organisation development, and strategic change, and thus places the book alongside the three bodies of academic literature connectable to the empirical themes of this research on ICI. Chapter 2 builds on one of the central conclusions of the first chapter, the fact that so much of the previous research on change in organisations has been ahistorical, acontextual, and aprocessual, and describes the particular brand of contextualist and processual research favoured in this study. Chapter 2 also describes the political and cultural view of organisational process behind this research, and the methodology and study questions in this piece of work.

Chapter 3, ‘ICI in its Changing Business and Economic Context’ is a descriptive account of the major trends in the world and UK chemical industry over the past two decades, ICI's broad corporate response to that changing environment, and ICI's business performance over the past 20-plus years compared with its major US and West German competitors.

Chapter 4 begins the process of describing and analysing the use, impact, and fate of organisation development (OD) consultants in ICI. It describes the birth of the central OD resources in the company, and the role those resources played in seeking to justify and implement productivity changes in ICI from the mid-1960s until about 1972. From a company point of view this chapter illustrates the difficulties created when changes fashioned at the company headquarters are thrust upon disinterested and at times recalcitrant divisions.

Chapters 5 and 6 describe and analyse the origins and development of ICI's agricultural chemical interests at Billingham in the north-east of England. The latter part of Chapter 5 describes in some detail the attempt made by George Bridge the personnel director of Billingham Division (as it was known as then) to open up the management culture at Billingham to change, and in so doing to create a new pattern of relationships between management and worker on the Billingham site. Bridge's era of social innovation at Billingham was built on by the OD resources that were created there from 1969 onwards. Their organic bottom-up strategy for creating change in the climate of industrial relations on the site and for improving the processes of commissioning new plant was in stark contrast to Bridge's bow wave of change. Chapter 6 chronicles the organic change strategy of the Agricultural Division OD group and their line manager clients, and takes the story of the use of OD assistance on the Billingham site right up to the quite different business, economic, and political conditions of 1984.

Chapter 7 describes the substantially different business history and management and shop floor culture that developed in Petrochemicals Division, just 10 miles away from the Billingham manufacturing site. Chapter 7 reveals a different context for organisational change and development, and an evolutionary pattern of using OD resources in Petrochemicals Division which was totally different from the Agricultural Division experience. Chapter 7 also illustrates the strengths and limitations of an enforced strategy of change propagated by the Petrochemicals Division Chairman of the early 1970s.

Chapter 8 chronicles the enormously difficult task of using specialist OD change resources in the top management structure and culture that developed in Plastics Division during the 1960s and 1970s. Chapters 9 and 10 offer an important contrast to the absence of change in Plastics Division. The Mond Division chapter chronicles how and why a succession of powerful people on the Mond board, with the assistance of internal and external OD resources, were able to change the process of working on the board, the way the senior managers in the division assessed and dealt with environmental change and industrial relations problems, and eventually build up a coherent view of how the structure, strategy, and manpower of the division should change and did change to meet the harsher business conditions of the post-1979 period.

Chapter 10, ‘Strategic Change and Organisation Development at the Centre of Power: 1973–83’ is a rare look at the processes of top decision-making and change in a major British firm. The chapter describes the long, additive, conditioning process which was necessary to produce the major ideological, structural, and strategic changes which eventually materialised in ICI from about 1979 onwards.

Chapters 11 and 12 try and draw together some of the threads from this account of continuity and change in ICI. Chapter 11 compares and contrasts the five cases of strategic change reported in the book, and relates the patterns evident in those processes of change to the literature in organisation theory, business strategy, and business history which has discussed the what, why, and how of the evolution of the firm. This chapter also discusses the practical messages about the management of strategic change to be derived from the ICI experience.

Finally Chapter 12 compares and contrasts the natural history of development and impact of the various groups of internal and external OD consultants who worked in the corporate headquarters and Agricultural, Mond, Petrochemicals, and Plastics Divisions. This chapter also reviews the practical management lessons to be derived from ICI's use of internal and external OD consultants.