Two contrasting theories of change: Theory E and Theory O

Abstract

Proclaims that the hard approach (referred to here as theory E) is the creation of economic value/high returns to shareholders; and that the soft approach (theory O) sees organizations as having many stakeholders, developing employees and their loyalty. Posits that, for organizations to prosper, eventually, theory E must be joined with theory O. Uses an inset with some arguments about change. Gives an example of Asda trying to combine Theories E and O, although, because Wal‐Mart bought Asda in 1999 for eight times its 1991 value, the Asda case could not be tracked over time.