Strategic Change Implementation and Performance Loss in the Front Lines

Abstract

Adopting a frontline employee (FLE) perspective, this study models a performance loss process during an organization's strategic change implementation. The process is activated by changes in unit management's emphases on cost containment and revenue-generating strategies and is governed by FLE detachment. The authors also examine an intervention mechanism for mitigating performance loss by including the influence of FLE participation in change decisions. The model is tested with data from five service organizations that employ 843 FLEs. The results indicate that (1) FLE detachment is effective in separating out the negative and positive effects of change, (2) FLE change perceptions are sensitive to the focus of strategic change (cost containment versus revenue enhancement strategies), and (3) FLE participation significantly enhances the positive effects of change and mitigates performance loss.