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Dynamics of Organizational Change
Özge Pala
Jac A. M. VennixNijmegen School of Management
Nijmegen University, The Netherlands
Contents
• Previous SD models on organizational change • New model:
– Base model
– Appropriateness of strategy
– Implementation success
• Behavior of the model• Conclusions• Future research
Previous Models on Organizational Change • 1965: McPherson - Organizational Change: An
Industrial Dynamics Approach.• 1989: Jacobsen&Samuel - Planned Organizational
Change: Theory, Model, Data, and Simulation. • 1991: Frechette&Spital - A Model of Organizational
Change. • 1996: Larsen&Lomi - The Dynamics of
Organizational Inertia, survival, and Change. • 1997: Sastry - Problems and Paradoxes in a Model
of Punctuated Organizational Change
Base model
fit of SO
change inprocess
internalconsistency
avg perf gap
sust perf gap
pressure tochange
inertia
perceived fitperformance
consistencyincrease
consistencydecrease
change percentage
new changesstarted
completed changes
ability tochange threshold
change in fit+
-
+
-+
+
++
-
++
--
+
+
+
+fit gapeffectiveness
-
+
+
-
inertia incr
inertia decr+
-
+
+
+
-
STRATEGIC FIT
-
PERFORMANCE
INERTIA
fit decrease
-
Time
fit_of_SO
0 100 200 300 400 500
0
50
1001
2 1
2 1 2 1 2 1 2 1
Time
n_change_st
0 200 400 600 800 1,000
0
1
2
3
4
1 2 1 2 1 2 1 2 1 2 1
Time
total_number_of_ch anges
0 100 200 300 400 500
-0.4
-0.2
0.0
0.2
0.4
1 2 1 2 1 2 1 2 1 2 1
Appropriateness added
fit of SO
change inprocess
internalconsistency
avg perf gap
sust perf gap
pressure tochange
inertia
perceived fitperformance
consistencyincrease
consistencydecrease
change percentage
new changesstarted
completed changes
ability tochange threshold
change in fit
+
-
+
-
+
+
++
-
++
-
-
+
+
+
+fit gap
effectiveness
-
+
+
-
inertia incr
inertia decr
+
-+
+
+
-
STRATEGIC FIT
-
PERFORMANCE
INERTIA
fit decrease
-
perc press tochange
quality of informationprocessing
informationprocessing capacity
accuracy ofperception
appropriateness
+
++
+
+
INFO PROCESS
Appropriateness addedOld organization
1: base model
2: base model with appropriateness
Young organization
1: base model
2: base model with appropriateness
Old organization
High initial inertia.
Change starts too late when pressure is high and appropriateness low
Time
fit_of_SO
0 50 100 150 200 250 300
0
50
1001
2 1 2 1 2
12
1 2 1 2 1
Time
fit_of_SO
0 50 100 150 200 250 300
0
50
1001
2
1 21 2 1 2 1 2 1 2 1
Time
fit_of_SO
0 100 200 300 400 500
0
50
100
Implementation Success
fit of SO
change inprocess
internalconsistency
avg perf gap
sust perf gap
pressure tochange
inertia
perceived fitperformance
consistencyincrease
consistencydecrease
change percentage
new changesstarted
completed changes
ability tochange threshold
change in fit
+
-
+
-
+
+
++
-
++
-
-
+
+
+
+fit gap
effectiveness
-
+
+
-
inertia incr
inertia decr
+
-+
+
+
-
STRATEGIC FIT
-
PERFORMANCE
INERTIA
fit decrease
-
perc press to change
quality ofinformationprocessing
informationprocessing capacity
accuracy ofperception
appropriateness
+
++
+
+
INFO PROCESS
duration ofchange
resistance tochange
implementationsuccess
normal resistanceto change
communicativenature
- -
-
effect of durationeffect of ch in
process
++
change inresistance
++
+
+
-
-
IMPLEMENTATIONSUCCESS
+
Appropriateness and success added
Old organization Young organization
Old organization with high inertia Old organization with high inertia, without threshold
Time
fit_of_SO
0 100 200 300 400 50040
50
60
70
80
90
1001
2 3 123
1 2
3
1 2
3
1 23
1
Time
fit_of_SO
0 100 200 300 400 50040
50
60
70
80
90
1001
23
1 2
3
1 2
3
1 2
3
1 2 3 1
Time
fit_of_SO
0 100 200 300 400 500
0
50
100
Time
fit_of_SO
0 100 200 300 400 50040
50
60
70
80
90
100
Different kinds of environment
Old organization Young organization
1: one time (punctuated) change, pulse function
2: incremental changes, fit decay function
3: one time (punctuated) change and incremental changes together
Time
fit_of_SO
0 100 200 300 400 500
0
50
10012
31 2
3
1
2
3
1
2 3
1
2 3
1
2
Time
fit_of_SO
0 100 200 300 400 500
0
50
10012
3
12
3
1
2
3
1
2 3
1
2 3
1
2
Decay + pulse, old organization
old organization, better communication
Under severe circumstances, e.g. faster incremental changes
W/o info-processing loop, assume appropriateness =1
Time
fit_of_SO
0 100 200 300 400 500
0
50
100
Time
fit_of_SO
0 100 200 300 400 500
0
50
100
Time
fit_of_SO
0 100 200 300 400 50030
40
50
60
70
80
90
1001
2
1
2
1 21 2 1 2 1
Time
total_number_of_ch
anges
0 100 200 300 400 5000
100
200
300
400
1 2
12 1
2 1
21
21
2
Conclusions
• Not scanning the environment continuously can have detrimental effects for old, highly inert organizations
• In environments in which there are incremental changes, organizations should – Scan their environment better– Be more alert to changes and– Have strategies other than punctuated change
• Both reacting too fast and too slow can be harmful. – Too fast => unnecessary amount of changes, – Too slow => death – Organizational theorists should try to come up with criteria on
how soon an organization should react to changes in the environment.
