This paper examines the challenges of organizational change through the lens of CMIG's experience during a merger. Drawing on structural inertia theory as formulated by Hannan and Freeman and extended by Amburgey, Kelly, and Barnett (1993), the paper explores why organizations resist change even when change is necessary, and how they can overcome that resistance. It argues that the same characteristics that give an organization stability — routinized behavior, institutional goals, and stakeholder expectations — also generate the strongest pressures against change. The paper uses CMIG's shifting personnel, priorities, and resources to illustrate these dynamics in practice.
One of the hardest things for any company to accomplish is graceful change. This is true for at least several reasons. The first is that change is psychologically difficult: letting go of the known for the unknown, even when the unknown is likely to be a good deal better, can seem fraught with numerous perils. The other major reason that change can be so difficult for companies and other large organizations is that group enterprises require a relatively high level of stability and predictability to thrive. Even an organization composed of highly skilled, intelligent, and flexible people cannot change as quickly as a single individual can. There is simply too much inertia in the system, and too many specific relational dynamics that have to be shifted, for change to occur at the pace it might for an individual.
That said, organizations do have to change — sometimes relatively quickly and often quite dramatically. How effectively they are able to do so depends on a wide-ranging set of factors, including the nature of the organization, how large it is, the reasons for the changes, and the type of leadership it has access to. This paper examines some of the dramatic changes that occurred at CMIG and how the company and its leaders acted and reacted during a merger and the consequent shifting of personnel, priorities, and resources.
CMIG, like any other business or organization facing change, experienced a certain amount of inertia. In organizational terms, inertia can be analyzed in the following way, according to Amburgey, Kelly, and Barnett (1993). Organizations can be assessed as belonging to either a flexible framework or an inflexible one, but a more productive analytical model should combine the two. These researchers defined the concept of the "structural inertia model" as existing in organizations conceived of as "structured systems of routines embedded in a network of interactions with the external environment."
Structural inertia theory, as developed by Hannan and Freeman (1984), offers a model of the process of organizational change that includes both internal and external constraints. The first part of their argument addresses the probability of organizational change. They argued that organizations exist because they are able to perform with reliability and, if questioned, to account rationally for their actions. Reliability and accountability are high when organizational goals are institutionalized and patterns of organizational activity are routinized — but institutionalization and routinization also generate strong pressures against organizational change. Thus, the very characteristics that give an organization stability also generate resistance to change and reduce the probability of change.
The second part of their argument deals with the effect of organizational change on survival. They argued that because both internal and external stakeholders prefer organizations that exhibit reliable performance, and because change disrupts both internal routines and external linkages, organizational change is inherently hazardous (Amburgey, Kelly, & Barnett, 1993).
"Extending inertia theory to account for successful change"
"Applying theory to CMIG's merger experience"
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