A longitudinal study of organizational change: How change in individual perceptions of transformational and transactional constructs predicts change in organizational performance

The main focus of the present study is how fundamental change in key variables affect (or effect) organizational performance. This study represents an attempt to counter the paucity of theory-based fundamental change models by testing the power of the Burke-Litwin model for application in organizations attempting fundamental change. A longitudinal design was used to explore the role of leadership, organizational culture, management practices, work unit climate and organizational performance, in fundamental change efforts.; In addition to testing the effect of organization development interventions on major organization dimensions, further tests of the reliability of the model were made. The longitudinal research design of the present study affords a better opportunity for stronger causal statements about the relationships among the dimensions of the Burke-Litwin model.; The variables in the model were defined operationally by creating scales from survey items designed to measure the constructs of leadership, culture, climate, and managerial practices. Due to the nature of the organization (government-sponsored), organizational effectiveness was used as a surrogate measure for the more traditional financial measures of organizational performance. A stratified random sample of twenty-five percent of the employees of a large European government-sponsored organization participated in the first data gathering phase by completing a 150-item survey. The second data gathering was a census of the organization (N = 22,000); respondents participated by filling out a survey containing 144 items. Efforts were made to match time one and time two respondents for longitudinal comparisons.; Structural equation models were used to test the relationships among five of the organizational dimensions presented in the Burke-Litwin model. The structural equation model clearly confirmed the central role of culture and leadership in the change in organizational performance. T-tests were employed to test changes in perceptions of organizational dimensions from time 1 to time 2. As expected, leadership, climate and management practices showed greater change than culture.; The Burke-Litwin model appears to be a functional tool for modeling fundamental organization change. Further research would benefit from obtaining a reliable and valid measure of external environment, a shortcoming of the present study.