RESETTING THE CLOCK - THE DYNAMICS OF ORGANIZATIONAL-CHANGE AND FAILURE

This paper suggests that, when viewed dynamically, organizational change can be both adaptive and disruptive. Similarly, when viewed over time, the same forces that make organizations inert also make them more malleable. These ideas are supported by dynamic models of organizational failure and change estimated on a population of 1,011 Finnish newspaper organizations over 193 years. Organizational changes are found to have two consequences: The first is an immediate increase in the hazard of organizational failure, and the second is an immediate increase in the likelihood of additional changes of the same type. In both cases, however, the immediate effect declines over time. Finally, the effects of change also depend on timing within the organization's life cycle.