Theory E and Theory O - Explained
What is Theory E? What is Theory O?
Written by J. Mance Gordon
Updated at April 22nd, 2024
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What are Theory E and Theory O?
Theory E and Theory O, both proposed by Beer and Nohria, are alternative approaches to deal with organizational change.
Managers often use both theories in concert to deal with organizational change.
What is Theory E?
Theory E is a hard approach to dealing with change that focuses on creating economic value for shareholders. It generally employed economic incentives to effectuate change.
What is Theory O?
Theory O is a soft approach to dealing with change that focuses on improving the Organization through developing a corporate culture, human capability, and organizational learning. It involves the process of changing, obtaining feedback, reflecting, and making further changes.