The subject of this research is institutional racism and how it can be addressed as an organisational change process post the Race Relations (Amendment) Act 2000. The research was carried out using a range of methods within an over-arching constructivist approach to grounded theory in a single site case study. The case study was the Royal College of Psychiatrists which provided the researcher with full access to its organisational change programme for race equality. During the five year period of this programme the researcher was a participant observer and was able to use this role to make an in depth study of the organisational change processes. The constructivist grounded theory approach has been used with both qualitative and quantitative methods of data collection and analysis to construct new theory about organisational change and institutional racism. This is an under-developed area of research and there are no examples in the literature of a similar study of this depth and duration. Soft Systems Methodology was used as a sense making tool by which the College's change programme was evaluated. The methodology reveals significant gaps between desirable and culturally feasible change. These gaps arise because standard approaches to organisational change based on systems thinking fail to address the discursive effects of institutional racism. The new contribution to knowledge provided by this research includes the identification of four dimensions of change by which institutional racism can be operationalised: organisational structure, professional boundary, group difference and personal agency. These dimensions of change are used to construct new theory about the discursive effects of institutional racism. The research concludes with the development of a new approach to organisational change based on these insights. This approach takes the professional field as the prime unit of change and uses communicative action as a means of overcoming the discursive effects of institutional racism.