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Structural Inertia and Organizational Change Revisited I: Architecture, Culture and Cascading Change

Author

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  • Hannan, Michael T.

    (Stanford U)

  • Polos, Laszlo

    (Lorand Eotvos U and Erasmus U Rotterdam)

  • Carroll, Glenn R.

    (Stanford U)

Abstract

This paper develops a formal theory of the structural aspects of organizational change. It concentrates on the significance of changes in an organization's architecture and culture, each represented as a code system. A change is significant when it prompts other changes and generates a cascade of change. The argument ties significance to the time that it takes an organization to complete reorganizations and the associated opportunities costs. The central theorem holds that the magnitude of the effects of a change in architecture on an organization's hazard of mortality increases with the architectural and cultural significance of the change. A related theorem holds that the chances of mortality rise monotonically with the length of time in reorganization (positive duration dependence).

Suggested Citation

  • Hannan, Michael T. & Polos, Laszlo & Carroll, Glenn R., 2002. "Structural Inertia and Organizational Change Revisited I: Architecture, Culture and Cascading Change," Research Papers 1732, Stanford University, Graduate School of Business.
    • Handle: RePEc:ecl:stabus:1732
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    File URL: http://gsbapps.stanford.edu/researchpapers/library/RP1732.pdf
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    References listed on IDEAS

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    1. William P. Barnett & Olav Sorenson, 2002. "The Red Queen in organizational creation and development," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 11(2), pages 289-325.
    2. David G. McKendrick & Glenn R. Carroll, 2001. "On the Genesis of Organizational Forms: Evidence from the Market for Disk Arrays," Organization Science, INFORMS, vol. 12(6), pages 661-682, December.
    3. Hannan, Michael T. & Polos, Laszlo & Carroll, Glenn R., 2002. "Structural Inertia and Organizational Change Revisited II: Complexity, Opacity, and Change," Research Papers 1733, Stanford University, Graduate School of Business.
    4. L·szlÛ PÛlos & Michael T. Hannan, 2002. "Foundations of a theory of social forms," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 11(1), pages 85-115, February.
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    Cited by:

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    2. Schweizer, T.S., 2002. "Managing interactions between technological and stylistic innovation in the media industries, insights from the introduction of ebook technology in the publishing industry," ERIM Report Series Research in Management ERS-2002-16-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
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    5. Narula, Rajneesh, 2013. "Using a 'Systems' Perspective to Explain the Limits of 'New' Multinational Enterprises: the role of 'members-only' location advantages," MERIT Working Papers 2013-033, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
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