Problems and paradoxes in a model of punctuated organizational change

Administrative Science Quarterly,  June, 1997  by M. Anjali Sastry

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The feedback loops in Figure 1 represent the processes that Tushman and Romanelli propose to explain punctuated change. The diagram can be used heuristically to trace a path of organizational evolution that I elaborate more formally below. The story begins with a description of an organization at founding. Since the model represents general processes that affect the organization throughout its life, rather than events, founding is depicted when the model is initialized with values for the relevant variables that characterize the organization at birth. These organizational attributes include level of inertia, strategic orientation, appropriateness (which measures how well the organization's strategic orientation matches the strategic orientation required by its environment), and competence in executing the strategic orientation. When an organization is first formed, the level of inertia is necessarily low: internal relationships, external networks, and socialization have yet to develop. The strategic orientation set by the organization's founders provides the direction in which social and structural processes coalesce. Social processes include socialization, selection of new personnel, organizational learning, and the development and dissemination of organizational culture. Structural processes include the elaboration of relationships with suppliers, customers, and other organizations, as well as networks among organizational subunits. Tushman and Romanelli argue that organizations build both socially anchored inertia and structural inertia over time. In the model, however, inertia is represented by one variable, consistent with Tushman and Romanelli's argument that the two types of inertia accumulate and dissipate in identical mechanisms. They also do not provide a causal explanation for how the two dimensions differ or interact. Processes that build up inertia are represented by a single loop, denoted by P1 in Figure 1. Once inertia begins to build, it becomes easier to increase, since more developed internal and external relationships provide a basis for their own further extension. Loop P1 provides the self-reinforcing dynamic by which inertia builds upon itself.

As the organization develops, its ability to change decreases. Ability to change is inversely related to inertia: the higher the level of inertia, the lower the organization's ability to change. When inertia is high enough, organizational managers are less able to recognize and respond to the need for a change. Managers of a relatively young organization, with less socialized members and fluid external relationships, are able to recognize and react quickly to signals of poor performance. As inertia builds up, however, signals of poor performance must be stronger for the organization to react, as organizational members are slower to perceive discrepant signals of poor performance after a long period of convergence, and new ideas are more difficult to assimilate into an organization that has not changed in a long while. Thus, ability to change declines. When the organization fails to respond to pressure to change, this allows inertia to build up even more, further reducing the ability to change. As a result, inertia increases further and ability to change falls in a self-reinforcing feedback loop, denoted by P2 in the figure.