Introduction
Empirically testing the
impact of change
management
effectiveness on
company performance
Tor Guimaraes and
Curtis Armstrong
The authors
Tor Guimaraes holds the Jesse E. Owen Chair of
Excellence, Tennessee Technological University, Tennessee,
USA.
Curtis Armstrong is based in the Decision Sciences
Department, Tennessee Technological University.
Abstract
The literature is abundant with articles extolling the
importance of change as a necessity for business survival
and growth. Specifically, business change means the
redesigning of business processes, the improvement of the
company’s products and/or services, and organizational
changes to organizational structure and/or culture deemed
necessary for better performance. Despite the importance
of the topic, the existing literature contains little empirical
evidence. Mostly superficial analyses and personal opin-
ions have been published in this basic area. A field test of
how effectively business organizations are implementing
business changes, and use IS technology to do so, was
undertaken to understand the important characteristics of
the business change processes involved and to empirically
test the relationships among these constructs. Despite the
relatively small sample size, the results provide clear
evidence about the importance of effectively managing
business change for business success. The items used for
measuring the main constructs provide further insights
into how managers should go about managing necessary
business changes, including IS department support for the
change process to improve business performance.
European Journal of Innovation Management
Volume 1 · Number 2 · 1998 · pp. 74–84
© MCB University Press · ISSN 1460-1060
74
As the dramatic increases in business global-
ization and free trade continue to increase
business competition, the importance of
business innovation has become quite obvious
to most managers. However, success imple-
menting the required changes is far from
assured, with many organizations reporting
very disappointing results given the cost and
turmoil caused by the changes. On the other
hand, American business organizations have
derived substantial benefits from widespread
changes to the old ways of doing business. For
example, the American manufacturing sector
is thought to have become more productive
(Howard, 1994). The erosion of our manu-
facturing base and the loss of initiative to
Japan and Europe has been reversed. From
1982 to 1990, the productivity of US manu-
facturing workers increased 4.5 percent per
year, a record for any period since the end of
World War II (Howard, 1994). In the process
of exploring the basic differences between the
Japanese and American manufacturing man-
agement approaches and applying a host of
new methods and techniques, many US firms
have been redefining the very nature of their
businesses (Patterson and Harmel, 1992).
Over the past decade the main emphasis
worldwide has been on improving quality.
Many companies have adopted a new man-
agement and operations philosophy widely
known as total quality management (TQM).
The major underpinnings of TQM are a
continuous effort to improve products,
processes, and operations to better satisfy
customer needs; employee empowerment in
decision making and a team approach to
identify, prioritize, and change targets for
improvement; and a company-wide commit-
ment to TQM strong enough to change what
is necessary, including organization values
and culture. The modern view of quality
holds that it is not sufficient for product
attributes to meet customer requirements;
they must exceed them (Ramberg, 1994).
Managers in companies which have embraced
the principles of TQM know that everybody
inside the company should be focused on the
customer, not just the marketing department
The authors are grateful to Mark Boshart, Melena
Brackins and Jane Wall for their invaluable assis-
tance with this project.
 Empirically testing the impact of change management effectiveness
Tor Guimaraes and Curtis Armstrong
or those in production who need to under-
stand customer specifications (Oliver, 1990).
Although there has been a significant
amount of success with TQM, managers have
realized that in many cases there is need for
more dramatic improvements in productivity,
competitiveness and profitability. This can be
accomplished by major paradigm shifts which
focus on value-added activities as well as other
underpinnings for successfully implementing
the concept of business process reengineering
(BPR) (Goll and Cordovano, 1993; Teng et
al., 1994). Essentially, BPR amounts to mak-
ing radical changes to one or more business
processes affecting the whole organization. It
also requires a cross-functional effort usually
involving innovative applications of technolo-
gy. Reengineering is a pioneering attempt to
change the way work is performed by simulta-
neously addressing all the aspects of work that
impact performance; including the process
activities, the people’s jobs and their reward
system, the organization structure and the
roles of process performers and managers,
plus the management system and the underly-
ing corporate culture which holds the beliefs
and values that influence everyone’s behavior
and expectations (Cypress, 1994). With BPR,
rather than simply eliminating steps or tasks
in a process, the value of the whole process
itself is questioned (Gotlieb, 1993). In confor-
mance with TQM principles, the focus of
change is also market driven (Guimaraes and
Bond, 1996).
BPR differs from TQM in two important
respects. First, while TQM is focused on
continuous improvement, an incremental
performance improvement approach, reengi-
neering was founded on the premise that
significant corporate performance improve-
ment requires discontinuous improvement –
breaking away from the outdated rules and
fundamental assumptions that underlie oper-
ations. Second, reengineering makes a signifi-
cant break with previous performance
improvement approaches by requiring a high
level of state-of-the-art information technolo-
gy awareness among the entire reengineering
team prior to, rather than after, the definition
of process changes or improvements
(Cypress, 1994). Some technologies (i.e.
imaging systems and expert systems) can
provide substantial opportunities for the
redesign of business processes (Guimaraes,
1993; Guimaraes et al., 1997).
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Regardless of the change methodology
being employed (i.e. BPR or TQM) the fac-
tors important to innovation success or failure
as defined by company business performance
are many, but most authors would agree that
the change process has to bear certain charac-
teristics. Further, effective Information Sys-
tems (IS) support is a critical requirement for
successfully implementing most modern
business changes. While these two hypotheses
are exceedingly important, the existing litera-
ture contains little empirical evidence sup-
porting them. The literature is mostly com-
prised of single company descriptions or
personal opinions expressed by people direct-
ly involved with the change process within
individual organizations. This field test was
undertaken to address the questions of how
business organizations implement change
along a predefined set of dimensions, how
effectively they implement business changes
and use IS technology to do so, and to empiri-
cally test the relationships between these
constructs.
Conceptual framework and proposed
hypotheses
The relationships among the main variables
studied here have been discussed widely in the
literature. However, much of the discussion is
comprised of personal opinions or is based on
single company anecdotal evidence. While the
conceptual framework is fairly intuitive, the
constructs have been measured in specific
ways, and the results are based on empirical
evidence from many organizations. Figure 1
shows the major constructs addressed in this
study and the three hypotheses being tested.
A more detailed discussion of each construct
is presented next.
Figure 1 Research model for change management
Change Process
Characteristics H2
Effectiveness
Company
Implementing Performance
Business Change H3
IS Effectiveness in H1
Supporting Business
Activities
 Empirically testing the impact of change management effectiveness
Tor Guimaraes and Curtis Armstrong
Company performance or business
success
Company performance has been measured in
many different ways (Gupta and Govindara-
jan, 1984; Steers, 1977; Venkatraman and
Ramanujam, 1986). Many authors have used
single items to measure company perfor-
mance, such as company profitability (return
on total assets) (Snow and Hrebniak, 1980).
Given the wide variety of ways in which infor-
mation technology may contribute to a com-
pany’s performance, and the importance of
content validity for such a significant mea-
sure, we chose a multidimensional scale
comprised of company image with customers,
market share, revenues, profits, and overall
company performance.
Business change implementation
The dependent variable in this case is the
degree of company effectiveness in imple-
menting business change. Initiatives such as
TQM, BPR and others require a significant
change to the policies and procedures used by
firms. It is obvious that to take advantage of
strategic opportunities and address problems,
companies have to implement changes to their
business processes, products, and/or to the
organization itself. However, the literature
contains numerous stories of company failure
while implementing change. For example, in
the context of BPR projects, 70 percent have
been estimated to end in failure (Cafasso,
1993). Nevertheless, company ability to
effectively implement changes is widely pro-
posed as essential for organizational competi-
tiveness. Thus, we propose the hypothesis:
H1: effectiveness implementing business
change is directly related to company perfor-
mance.
Important characteristics of the change
process
A survey of the literature on business change
management reveals several pre-requisites for
successfully implementing business change
such as conformity to company objectives,
employee and department participation in the
change process, customer input, reasonably
balancing risk taking with cost benefit analy-
sis, monitoring progress, and communication
regarding the change process. In other words,
how change is implemented is an important
determinant of success. Specifically, the
important characteristics of the change
process enumerated above are expected to
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European Journal of Innovation Management
Volume 1 · Number 2 · 1998 · 74–84
influence the company’s ability to change its
products, processes, and its organizational
structure and culture. Thus, we propose the
hypothesis: H2: the extent to which the
change process bears the desirable character-
istics will be directly related to company
effectiveness implementing business change.
Using IS technology to support business
change
As business competitiveness increases, many
business organizations have reacted to expand
the value of their products and services to
customers by redesigning their business
processes to increase efficiency, deliver new
products and services, and improve the
quality of their offerings. Despite the cost and
risk involved, there are several reasons for the
introduction of major business changes such
as when incremental process improvements
have not met expectations, when there are
large gaps between current and target levels of
company productivity/performance, when
there is major loss of market share due to
customer dissatisfaction and products/ser-
vices becoming commodities (Tsang, 1993).
The literature abounds with articles recog-
nizing that IS technology continues to play an
increasingly critical supporting role in busi-
ness changes. Concurrently, the dramatic
changes to the organization and the pressing
nature of many projects provide a unique
opportunity for studying the impact of infor-
mation systems on business organizations.
Many authors have proposed the impor-
tance of a wide variety of IS technologies to
support business innovation. Computer
Telephony Integration has been touted as a
powerful tool to improve the relationship with
customers (McCarthy, 1996). The use of IS
for data mining and warehousing is seen as
essential for decision support (Anonymous,
1995). Friedenberg and Rice (1994) and
Guimaraes et al., (1997) have proposed
Expert Systems as viable implementation
vehicles for business change because they are
effective in capturing and distributing knowl-
edge and knowledge processing capability
across an organization. The list of IS tech-
nologies available to support the necessary
business changes is endless: DSS, Group
DSS, EDI, Client Server Systems, Imaging
Systems, the Internet, and Intranets. Without
effective IS support, the change implementa-
tion processes would be severely hindered and
in many cases rendered impossible. Based on
 Empirically testing the impact of change management effectiveness
Tor Guimaraes and Curtis Armstrong
the above discussion a third hypothesis is
proposed: H3: IS effectiveness in supporting
business activities effectiveness is directly
related to effectiveness implementing business
change.
Study methodology
Data collection procedure
This field test used a questionnaire to collect
the relevant data from a convenience sample
of 49 top managers from 19 organizations in
the Southeast USA. While the questionnaire
had a cover letter describing the purpose of
the study and providing instructions for the
respondents, the data was collected mostly
through personal interviews with the man-
agers. The questionnaire was developed based
on a survey of the literature and it was tested
for readability and content relevancy and
completeness in relation to the study objec-
tives. This testing was conducted through
several meetings and phone conversations
with managers and employees. These man-
agers are known personally to the researchers
and have expressed their personal opinions
about their companies’ processes and activi-
ties for identifying strategic problems and
opportunities, business changes, and IS
support to business activities.
Sample description
The companies represented in the sample
range widely in terms of their industry sector
and size. Fifty-five percent of the firms identi-
fied their primary business as manufacturing
with the remaining companies being distrib-
uted fairly evenly across various other sectors.
In terms of gross revenues, 40 percent of the
firms were 50 million dollars in annual sales
or less, 40 percent were between 50 million
and 500 million dollars and the remaining 20
percent were above 500 million dollars. Twen-
Table I Sample distribution for industry, gross revenue and number of employees
Industries Gross revenue
Manufacturing 55% Less than $10 million
Government 4% $10 to $30 million
Communications 10% $31 to $50 million
Health Care 6% $51 to $100 million
Transportation 4% $101 to $200 million
Banking 6% $201 to $500 million
Other 15% $501 to $1000 million
over $1 billion
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Volume 1 · Number 2 · 1998 · 74–84
ty-three percent of the respondents identified
that their number of employees were 100 or
less, 46 percent of the companies employed
between 100 and 500 people, and the remain-
ing companies (31 percent) had more than
500 employees. The specific distributions of
the sample in terms of industry, gross rev-
enue, and number of employees are shown in
Table I. Finally, 87 percent of the sampled
companies currently have a continuous and
systematic process for identifying strategic
opportunities and problems. Thus, despite
the relatively small sample size, there is broad
representation of business sectors and compa-
ny size, allowing a fairly good degree of results
generalizability.
Variable measurement
Company performance or business success is the
company’s ability to achieve its objectives in
terms of customer satisfaction, market share,
revenue, and profits. It was determined by
asking the respondents to rate the success of
the company in terms of five areas: company
image with its customers, market share, rev-
enues, profits, and overall performance com-
pared to the company’s competitors. Each
item was rated on a seven-point Lickert-type
scale ranging from extremely below average to
extremely above average (average being the
company’s main competitors). The ratings in
these five areas were averaged, resulting in a
single measure of each firm’s business suc-
cess.
Effectiveness implementing business changes
represents the company’s ability to alter its
business practices in the desired manner. It
was measured by the respondents rating the
effectiveness of the firm in changing four areas
to address strategic problems and opportuni-
ties: products, processes, organization struc-
ture and organization culture. This was done
using the same seven-point Likert-type scale
Number of employees
15% Less than 50 4%
17% 51 to 100 23%
21% 101 to 500 46%
15% 501 to 1000 10%
4% 1001 to 5000 4%
6% over 5000 13%
13%
 Empirically testing the impact of change management effectiveness
Tor Guimaraes and Curtis Armstrong
as mentioned above. The ratings for the four
areas were averaged to produce a single mea-
sure for effectiveness in implementing busi-
ness changes.
Characteristics of the change process is defined
as the degree to which companies promote
“desired” change process activities. It was
assessed by asking the respondents to rate the
importance or focus that the company places
on ten areas of change process characteristics.
These consisted of: all significant changes
must conform to company objectives, all
affected departments participate in the
change process, individual employee input is
considered important, customers’ input is
considered important, business partners’
input is considered important, ability to
balance risk taking with cost/benefit, clearly
defined measures to monitor progress, change
objectives and progress are clearly communi-
cated, responding quickly to required change,
and responding effectively to required change.
The same seven-point Likert-type scale was
used, and the overall rating of characteristics
of the change process for each firm was deter-
mined as the average of the ten areas.
IS effectiveness in supporting business activities
is the extent to which the company’s needs for
IS technology have been met. It was measured
by asking the respondents to rate this for the
overall company and in four specific areas:
technology leadership in the industry, knowl-
edge of how to get the best technology, effec-
tiveness with which technology has been used
over the years, and effectiveness in using
technology in comparison with main competi-
tors. The respondents were asked to use the
same seven point scale described above. The
measure for IS effectiveness in supporting
business activities is the average of the ratings
for these five items.
Data analysis procedures
The relatively small sample size requires the
use of simple but robust statistical analysis
techniques. Responses from each manager
regarding the main constructs were classified
into two groups: above and below the median
to produce the cross-tabulations. Chi-square
statistics for cross-tabulations were used to
test the relationships between main
constructs. To further understand these
relationships, t-tests for each component item
of a dependent variable were computed for
the above/below average groups for the aggre-
gated dependent variables.
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Volume 1 · Number 2 · 1998 · 74–84
Results
Table II lists the means and standard devia-
tions for the aggregated research variables and
their respective component items. On the
average, the companies in the sample are
thought to be performing slightly above aver-
age in the areas of characteristics of change
process, IS support, implementing business
changes and business success. Similarly,
average performance along the component
items vary from slightly below average
(change objectives and process are clearly
communicated) to well above average (busi-
ness success in company image with its cus-
tomers). The relatively large standard devia-
tions (mostly above 1.0) indicate significant
differences in performance from company to
company along the main variables and their
components.
Results from hypothesis one testing
Hypothesis one proposes that the effective-
ness implementing business change is directly
related to business success. This was tested by
cross-tabulating company effectiveness in
implementing business change against com-
pany performance, as shown in Table III. For
each cell in Table III, the number of observa-
tions and the percentage that it represents is
shown. The Chi-square test indicates a signif-
icant relationship between these two con-
structs (Chi-square = 6.60; p < 0.01). There
is one company rated above average in effec-
tiveness implementing business change which
is performing below average. The changes
may have been implemented according to
plan but the changes did not translate into
company business performance as measured
in this study. Also there are 18 companies
rated below average in effectiveness imple-
menting business change which were rated
above average in terms of company perfor-
mance. One may surmise that these organiza-
tions are not in highly competitive industries
and/or the business environment is such that
they have been able to learn by trial and error
without greatly affecting their business perfor-
mance.
As shown in Table IV, to further empirical-
ly test this relationship, respondents were
separated into two groups: those with above
and those with below average effectiveness
implementing business change. A t-test was
performed to determine if, as an aggregate
measure, companies’ business success was
 Empirically testing the impact of change management effectiveness European Journal of Innovation Management
Tor Guimaraes and Curtis Armstrong Volume 1 · Number 2 · 1998 · 74–84

Table II Means and standard deviations of study variables

Aggregated variables and individual items N Mean S.D.

Characteristics of change processes 48 4.58 1.06
• all significant changes must conform to company objectives 48 4.92 1.30
• all affected departments participate in the change process 48 4.17 1.48
• individual employee input is considered important 48 4.46 1.43
• customers’ input is considered important 48 5.42 1.43
• business partners’ input is considered important 48 4.89 1.30
• ability to balance risk taking with cost/benefit 47 4.26 1.45
• clearly defined measures to monitor progress 47 4.51 1.50
• change objectives and progress are clearly communicated 48 3.97 1.36
• responding quickly to required change 48 4.44 1.36
• responding effectively to required change 48 4.67 1.32

Effectiveness implementing business change 48 4.4 1.0

• products 48 4.8 1.0
• processes 48 4.7 1.1
• organization structure 47 4.2 1.4
• organization culture 48 4.0 1.4

IS support effectiveness 46 4.5 1.1

• overall support 45 4.2 1.1
• company’s technology leadership position in the industry 45 4.6 1.4
• knowledge of how to get the best technology 46 4.7 1.4
• effectiveness with which technology has been used over the years 46 4.6 1.3
• effectiveness using technology in comparison with main competitors 46 4.5 1.3

Business success relative to main competitors 48 5.31 1.04

• company image with customers 48 5.56 0.89
• market share 46 5.26 1.23
• revenues 44 5.20 1.33
• profits 44 5.00 1.55
• overall 47 5.40 0.99

Rating scale: 1 (extremely lower than average), 2 (very much lower), 3 (somewhat lower), 4 (average), 5
(somewhat higher than average), 6 (very much higher), and 7 (extremely higher).
* Means and standard deviations rounded to the nearest decimals.

Table IV T-tests for the effectiveness implementing business change and

Table III Cross tabulations of effectiveness implementing business change company performance relationship (Hypothesis 1)
and company performance (Hypothesis 1)
Effective Effective
Company performance business business
Below Above change change
average average Aggregated variable above below
and individual items average average p-value
Effectiveness Below 10 18
implementing average 20% 37% Company performance 5.76 5.11 0.02
business change • company image with customers 5.95 5.26 0.005
Above 1 20 • market share 5.75 4.88 0.01
average 2% 41% • revenues 5.73 4.80 0.02
• profits 5.58 4.56 0.02
Chi-square = 6.60 (p = 0.01)
• overall 5.76 5.12 0.02

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significantly different for these two groups. Table VI T-tests for the characteristics of change and effectiveness imple-
The results shown on Table IV demonstrate menting change relationship (Hypothesis 2)
that firms with above average business change
Desirable Desirable
effectiveness performed significantly higher
char. of char. of
than those below average on business change
change change
effectiveness. In addition, the t-tests for each
Aggregated variable above below
of the individual items that make up company and individual items average average p-value
performance show significant differences in
Effectiveness implementing
every area: company image, market share,
business change 4.85 3.71 0.0001
revenues, profit, and overall. Based on the
• products 5.22 4.33 0.0029
above results, we conclude that there is strong
• processes 5.18 4.00 0.0003
empirical support for hypothesis one.
• organization structure 4.74 3.50 0.0014
• organization culture 4.59 3.26 0.0028
Results from hypothesis two testing
Hypothesis two proposes that the extent to above average effectiveness managing the
which the change process bears the desirable change process, as defined in this study, tend
characteristics will be directly related to its to have a significantly higher level of effective-
effectiveness. This was tested in a similar ness implementing business change in terms
manner to hypothesis one. The results in of products, processes, organizational, and
Tables V and VI provide strong support for cultural changes. The t-tests for each of the
hypothesis two. The Chi-square statistic was individual items that make up effectiveness
significant for this cross-tabulation (Chi- implementing business change also support
square = 6.60; p < 0.01). By inspection one such conclusions at a more detailed level.
notices that companies which were rated Based on the above results, we find strong
below average along the set of defined charac- support for hypothesis two.
teristics for the change process also tend to be
below average in their effectiveness in imple- Results from hypothesis three testing
menting change (34 percent). The same The final hypothesis (H3) states that IS sup-
relationship tends to hold for companies rated port effectiveness is directly related to effec-
above average in these two constructs (33 tiveness implementing business change. This
percent). It is interesting to note that above was again tested in a similar fashion as the
average focus on the change process is no first two hypotheses. Tables VII and VIII show
guarantee of effective implementing of change the results of the cross-tabulations for IS
(22 percent). support effectiveness and effectiveness in
Table VI shows the results of the t-test implementing business change. The Chi-
similar to the one conducted for hypothesis square statistic was calculated and found
one. In this case we divided the companies significant (Chi-square = 4.60; p < 0.03).
into two groups: those which on the average Two thirds of the companies that were below
were rated above and below along the defined average in IS support effectiveness are also
characteristics of change process. The results below average in their effectiveness imple-
on Table VI demonstrate that firms with menting business changes. Few companies

Table V Cross tabulation of characteristics of change process and effective- Table VII Cross tabulation of IS support effectiveness and effectiveness
ness implementing business change (Hypothesis 2) implementing business change (Hypothesis 3)
Effectiveness implementing business change Effectiveness implementing business change
Below Above Below Above
average average average average

Characteristics Below 17 5 IS support Below 18 7

of change process average 34% 10% effectiveness average 37% 14%

Above 11 16 Above 10 14
average 22% 33% average 20% 29%

Chi-square = 6.60 (p = 0.01) Chi-square = 4.60 (p = 0.03)

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 Empirically testing the impact of change management effectiveness
Tor Guimaraes and Curtis Armstrong
Table VIII T-tests for IS support effectiveness and effectiveness implementing
business change relationship (Hypothesis 3)
IS IS
support support
effective effective
Aggregated variable above below
and individual items average average p-value
Effectiveness implementing
business change 4.8 3.9
• products 5.1 4.5
• processes 5.0 4.3
• organization structure 4.5 3.9
• organization culture 4.7 3.4
(7) are below average IS providers but
manage to effectively (above average) imple-
ment business changes. Further, above aver-
age IS support effectiveness in 14 organiza-
tions has not resulted in effective implementa-
tion of business change in general.
As shown in Table VIII, to further explore
the evidence regarding this hypothesis, t-tests
were performed by separating the companies
into two groups: those above and those below
average in IS support effectiveness. The level
of effectiveness in implementing business
change was found to be significantly higher
for the firms with above average IS support
effectiveness. The individual items that make
up effectiveness in implementing business
change were examined using the same t-test.
Except for changes in organization structure
where the groups providing IS support below
and above average are different only at a
significance level of 0.10, the two groups
differ significantly along all other items
making up the measure for effectiveness in
implementing business change. These results
strongly corroborate hypothesis three.
Other interesting results
Table IX shows any significant differences
between more/less successful companies in
terms of company performance along the four
business change areas. While business change
as an aggregate measure is considered signifi-
cantly different between the two groups, only
effectiveness in implementing organization
culture changes is statistically significant
between the high/low performance compa-
nies. By inspection one can see that compa-
nies in the low company performance group
on the average consistently show lower ratings
than the companies in the higher performance
European Journal of Innovation Management
Volume 1 · Number 2 · 1998 · 74–84
Table IX T-tests for effectiveness implementing business change items
between companies with high/low company performance
Company Company
performance performance
Aggregated variable above below
and individual items average average p-value
Effectiveness implementing
business change 4.58 3.85 0.005
0.005 • products 4.92 4.50 0.25
0.05 • processes 4.79 4.20 0.23
0.05 • organization structure 4.35 3.70 0.19
0.10 • organization culture 4.33 3.00 0.01
0.005
group. Perhaps due to the relatively low
sample size the differences are not statistically
significant for effectiveness in changing prod-
ucts, business processes, and organization
structure. Table X indicates that companies
grouped as more effective in terms of business
change as an aggregate measure differ signifi-
cantly from companies in the low effectiveness
group along every characteristic of the change
process. In every case, on the average compa-
nies in high change effectiveness group rate
higher than their below average counterparts.
Last, Table XI shows that on the average
companies in the high change effectiveness
group consistently have higher ratings along
IS support effectiveness items. However,
probably due to the relatively small sample
size, the difference between the two groups
along the “effectiveness with which IS tech-
nology has been used over the years” is not
statistically significant.
Conclusions
The main objective of this study was to empir-
ically test the relationship between a compa-
ny’s ability to implement changes to its prod-
ucts, processes, organizational structure and
culture, and the company’s business perfor-
mance. Another major objective was to empir-
ically test the relationship between previously
proposed desirable characteristics of the
change process used, the role that IS support
plays in enabling change, and the company’s
ability to implement change in the areas
mentioned above. Despite the relatively small
sample size, the results provide strong evi-
dence regarding the importance of effective IS
support and the characteristics of the change
process if organizations are to successfully
implement business changes to their
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Tor Guimaraes and Curtis Armstrong Volume 1 · Number 2 · 1998 · 74–84

products, business processes, organization To improve IS support while implementing

structure, and organization culture to improve
company performance.
In general the companies participating in
this study are rated only slightly above average
(represented by each company’s main com-
petitors) in terms of their effectiveness in
providing IS support, having change process-
es with the desirable characteristics, and
implementing business changes. However,
there are significant inter-company differ-
ences along the main variables and their
respective component items. Given the
importance of effective business change
implementation in these days of hyper-com-
petitiveness, it behoves top managers to do
whatever they can to improve their company’s
IS effectiveness in supporting business activi-
ties and promote the desired change process
activities.
business improvements, managers must look
at company performance in terms of its IS
technology leadership position in its main
industry sectors, knowledge of how to get the
best technology available, effective use of
specific technologies, and benchmarking the
use of specific technologies against the com-
pany’s main competitors or best-in-class
target organizations. An important require-
ment to accomplish these objectives is the
clear definition of the more important tech-
nologies necessary to support company main
products and business processes, and tech-
nologies which will enable the structural and
cultural changes considered important to
improve company competitiveness. Another
important requirement is management
recognition that the implementation of each
of the various technologies deemed important

Table X T-tests for characteristics of the change process between companies with high/low effectiveness implementing
business change

Effective Effective
business business
change change
above below
Aggregated variable and individual items average average p-value
Characteristics of change process 5.11 3.75 0.0001
• all significant changes must conform to company objectives 5.27 4.36 0.02
• all affected departments participate in the change process 4.55 3.57 0.03
• individual employee input is considered important 5.03 3.58 0.001
• customers’ input is considered important 6.00 4.52 0.0005
• business partners’ input is considered important 5.33 4.26 0.006
• ability to balance risk taking with cost/benefit 4.85 3.36 0.0002
• clearly defined measures to monitor progress 5.10 3.63 0.001
• change objectives and progress are clearly communicated 4.62 3.00 0.0001
• responding quickly to required change 5.03 3.52 0.0001
• responding effectively to required change 5.27 3.73 0.0001

Table XI T-tests for IS support effectiveness items between companies with high/low effectiveness implementing
business change

Effective Effective
business business
change change
above below
Aggregated variable and individual items average average p-value
IS support effectiveness 4.88 4.04 0.01
• overall support 4.50 3.79 0.03
• company’s technology leadership position in the industry 5.15 3.95 0.004
• knowledge of how to get the best technology 5.00 4.15 0.04
• effectiveness with which technology has been used over the years 4.85 4.31 0.17
• effectiveness using technology in comparison with main competitors 4.88 4.00 0.03

82
 Empirically testing the impact of change management effectiveness
Tor Guimaraes and Curtis Armstrong
to the organization are dependent on specific
success factors. The success factors for the
various technologies have been identified and
discussed elsewhere (Guimaraes et al.,1992;
Guimaraes and Igbaria, 1997; Udo and
Guimaraes, 1994; Yoon et al., 1997;
Guimaraes et al., 1995; Yoon et al., 1995) and
are considered beyond the scope of this paper.
Further, top managers must ensure that
their company’s change process bears the
desirable characteristics studied here: all
significant changes must conform to company
objectives, all affected departments partici-
pate in the change process, individual employ-
ee input is considered important, customers’
input is considered important, business part-
ners’ input is considered important, managers
ability to balance risk taking with cost/benefit,
the existence of clearly defined measures to
monitor progress, that clearly defined mea-
sures to monitor progress exist, that change
objectives and progress are clearly communi-
cated, and that the change management team
respond quickly and effectively to required
change. Last, while the importance of effec-
tively implementing changes to products,
business processes, and organization structure
cannot be denied, the importance of effective-
ly implementing cultural changes seems to be
a clear discriminate between low and high
performance companies. This finding while
unexpected should not come as a surprise
given the widely discussed importance of
organization culture to survival and growth in
hyper competitive business environments.
Perhaps effectiveness in implementing change
in all the business areas studied here is ulti-
mately dependent on changing company
culture.
Study limitations and research
opportunities
Based on an extensive survey of the relevant
literature, this study is the first attempt at
empirically testing the importance of the role
IS support and desirable change process
characteristics play in the implementation of
necessary business changes to improve com-
pany competitiveness. While the constructs
studied here are well established, much can be
done for further testing and perhaps improv-
ing the measures used. It would be useful for
other researchers to further explore their
psychometric properties with larger sample
size, and attempt to develop and test new
measures. Further, this study deliberately
83
European Journal of Innovation Management
Volume 1 · Number 2 · 1998 · 74–84
used a highly focused model which needs to
be expanded to include other factors poten-
tially important to effective implementation of
strategic business change. Last, the results
may have provided a glimpse at the great
importance of companies being able to
change their cultures as a major prerequisite
to successfully implementing changes in other
areas more directly related to company busi-
ness performance.
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