The problem and the solution. Beer and Nohria propose that there is an inherent tension between organizational strategies designed to improve economic performance (Theory E) and organizational strategies designed to build organizational capacity (Theory O). They argue that the most effective approach to change integrates the two theories along six dimensions: goals, leadership, focus, process, rewards, and use of consultants. This article assesses the efficacy of the Beer and Nohria hypothesis in explaining organizational change by examining four senior leadership initiatives at Cornell University during the past decade and the organizational development strategies that emerged to support them. The article concludes with some lessons learned and the observation that an evolutionary approach to organizational development may provide a useful model for other universities.
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