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A simulation model that formalizes the conventional theory of punctuated organizational change highlights a problem: under a wide range of conditions, organizations appear to fail following reorientation. I propose additions to the theory to account for punctuated transformation. The first adds a routine for monitoring organization-environment consistency; the second is a heuristic that suspends change for a trial period following a reorientation. I show the necessity of the trial period in simulations demonstrating that, while external events may set the pace of organizational change in some environments, under turbulent conditions successful change requires internal pacing, which suspends performance evaluation for a period following a reorientation.
How do organizations undergo fundamental change? The question is important to managers in an era of globalization, intense competition, and unpredictability. The question is important to theorists, too: Perrow (1994) has argued that explaining change is--or should be--a central concern for organizational scholars today. Differing theoretical perspectives on organizations have been linked to differing predictions of whether and how organizational change takes place (Astley and Van de Ven, 1983). Despite the important theoretical and practical implications of understanding organizational change, the organizational processes involved in transformational change have not been fully explored. Critics of the existing research argue that, too often, the causal structures of the theories are not fully specified and that theoretical frameworks and empirical results are not well integrated. Recent studies surveying a large number of theories (Van de Ven and Poole, 1995) and reviewing empirical results (Barnett and Carroll, 1995) underscore the need for more work in this area.
To extend our understanding of organizational change, I take an alternative approach: I examine an existing theory in detail, formalizing it to investigate how well the theory accounts for the phenomena its authors set out to explain. My focus is Tushman and Romanelli's (1985) theory of organizational change, in which organizations undergo occasional dramatic revolutions or punctuations to overcome organizational inertia and set a new course for the organization to follow. Because it is relatively detailed and explicit, the causal argument Tushman and Romanelli present serves as an ideal foundation for a systematic exploration. My approach is designed to examine the completeness, consistency, and parsimony of the causal explanation laid out in an existing theoretical model....