Problems and Paradoxes in a Model of Punctuated Organizational Change

M. Anjali Sastry

Definition:

Punctuated Organizational Change: It is the process where organization after a phase of

equilibrium undergoes occasional dramatic revolutions or punctuations to overcome
organizational inertia and set a new path for the organization to follow

Inertia: According to the research, inertia in an organization is one of the main causes of
punctuated change. It is the hindering agent that stops any process from taking place in an
organization. Inertia of the company is inversely proportional to its ability to make changes.
This means more the inertia, lesser is the ability to change and vice-verse. Newer companies
are more likely to observe less inertia and more susceptible to rapid change due to lack of
inertia. Whereas, older organizations because of its years of formalized process and routines
have higher level of inertia and is less likely to undergo fundamental change easily

Inertia is built in an organization by strength of relationship it develops over it course of

functioning

“Competence” is a function of inertia, if members of the organization spends time in a role,

they become competent, and deliver performance. These perceived performance because of
competence stops the organization from changing. People rely on previous good performance
and are reluctant to change. Building competency can be understood by looking at people
who has stayed in a role for a long period of time, an accountant working in an organization
for a long time, knows all its tricks and shortcuts, naturally being able to do the work quickly,
this in turn stops the organization to look for new avenues in accounts, thereby discarding
new change agent, irrespective of its optimal outcome

Inertia is also built up by Social process (selecting members) and Structural process
(relationships). Social process are the ideas and values an organization adheres to, and these
contributes in building up of organizational inertia. Structural process are the relationships
that we build while doing business. Relationships built with clients, vendors, colleagues, etc.
over a phase blindsight the organization to look for optimal options, hereby restricting change
Convergence in the organization: long stable period in an organization’s life, here change is
restricted to only small minor incremental adjustments to the already chosen organizational
strategy

Reorientation or recreation: the organization experiences revolutionary shifts in relatively

infrequent and short period of dramatic changes.

Strategic orientation: It is the alignment of long-range vision to daily work. Change in

strategic orientation of the organization can be seen only in two conditions and they are:
when there is an impetus to change results and from pressure due to poor performance and
the effects of the pressure for change. Functions of strategic orientation are core values,
market, technology, org structure, control system

Performance: Two factors that determine performance are: appropriateness (being suitable
for the condition) and competence. High levels of performance need appropriate political and
economic activities and consistencies in among those activities. It also requires high levels of
competence. If the external environment matches with the internal functioning then
performance is maximized, if there is a mismatch then we see decreasing performance. Now
the perceived performance is not related to actual performance, whereby organization
because of its inertia develops competency for a role/function and may give a notion of
perceived performance. The need for change comes when the perceived performance low,
irrespective of the actual performance

Pressure for change: Low performance and competence leads to accumulation of pressure for
change. This pressure for changed can be caused by two main factors: sustained low
performance or poor performance for an extended period; and major changes in competitive,
technological, social and legal conditions. If an organization is not doing well, then the
pressure for change develops.

“Failure of a system or process is defined as a phase of continuous low performance.”

How discontinuous change takes place?

- It is the opposing pressure of performance and inertia that brings in a discontinuous

change, the demand for performance is so high that the hindering agent (inertia) is
overcome to bring in organizational change

There are a range of theoretical perspectives offered by various scholars regarding how
organisational change take place. However, according to Sastry, theoretical and practical
implications to understanding Organisational Change hasn’t been explored. An integration
between theoretical framework and empirical results is imperative. Sastry draws on to Tushman
and Romanelli’s existing theory on punctuated equilibrium in order to understand the
completeness, consistency, and parsimony of the causal explanation laid out in an existing
theoretical mode (Sastry, 1997, 1).

Punctuated Change Model by Tushman and Romanelli

Organisations alternate between two sets of behaviour: convergence and reorientations. This
process has been examined by Tushman and Romanelli as an evolutionary process and has
subsequently attempted at theorising the process reflecting that the two modes of organisational
behaviour: adaptive and inertial. The punctuated change models integrate the strategic
management and adaptationist views of organisations and readily changeable. However, Sastry
observes that most tests of the theory have not been able to identify how decisions or processes
within the organisations affect the successfulness of change efforts (Sastry, 1997, 3).

Sastry’s Deconstruction of the Punctuated Change Model

The model that Sastry develops focuses in the top-down reorientation rather than emergent,
bottom up change. She develops the model following a rich tradition of research of scholars
such as Cyert and March, and Nelson and Winter, whereby the organisation is not conceived
as a black box but a collection of function carried out by people who are influenced by the
norms and culture of the respective organisation and who in turn influence the organisational
phenomena. Her theory adopts a managerialist view, whereby she implies that transforming
changes result from decisions of the organisation’s leaders. A change in organisational routine
is triggered when poor performance creeps in prompting the organisation to search for avenues
to adopt a change. Bounded rationality view developed by Simon explains the formulation of
the search, performance and change routines.

Sastry tries to capture organisational change over time by simulating the evolving behaviour
of interrelated variables and by adopting the systems dynamics approach. System dynamics
highlights feedback processes, or causal relationships. An explicit representation of
behavioural decision making is central to Sastry’s approach as in the simulation model,
decision making experiences bounds on account of factors such as imperfect knowledge.

The premise for formalising the model is to identify constructs and understanding the
relationship between these constructs. State variables (organisational properties accumulated
over time and can’t be changed instantaneously) such as strategic orientation, inertia, perceived
performance, and pressure for change, provide the starting point for constructing Sastry’s
causal framework of the model.

Sastry has created a set of interlinked feedback loop by connecting the variables with each
other to represent the processes of organisational change. She has also used positive and
negative signs to indicate positive and negative relationship (direction of change) between two
variables. The following figure represents the processes that Tushman and Romanelli explored
in order to explain punctuated change:

When an organisation is formed, the level of inertia is negligent. Tushman and Romanelli argue
that organisations build both socially anchored inertia and structural inertia over time. P1 in
the diagram is a single loop representing processes that build up inertia.
As the organisation develops, its ability to change decreases and as the inertia increases the
organisation leaders’ ability to recognise and respond to the need for a change. As inertia builds
up signals of poor performance must be strong for the organisation to react. Thus, the next
phase the organisation reached is a self-reinforcing feedback loop P2. The other loops represent
performance and organisational change through the key processes of convergence and
reorientation.

If the level of performance is high enough, then the impetus to change is low. The loop P3
generates convergence in the absence of change. The organisational members learn to perform
their tasks more efficiently. Higher levels of competence imply an increased level of
performance which reduces the pressure for change.

Due to exogenous forces, i.e., factors outside the model, strategic orientation may change over
time. The consequence being that the level of increasing competence no longer benefits the
organisation. High level of inertia delay and increase the difficulty of change process. When
the pressure for change is high enough to overcome the effects of inertia, management relieves
the pressure by shifting the organisation’s strategic orientation. N1, the negative loop ensures
that a reduction in appropriateness which causes a drop-in performance is addressed through a
strategic orientation. N1, the negative loop ensures a reduction in appropriateness which causes
a drop-in performance and is addressed by a change in strategic orientation.

Conclusion:
To bring in a change in an organization we must overcome the inertia that has been created.
Here we see that the loop is self-reinforcing and will keep on building more inertia over time.
To disrupt stable patterns and loops we must disrupt the pattern of competence. The change is
produced by a negative or self-correcting loop and not a positive loop. The change affects the
organization throughout its life and the ability to change is inversely proportional to inertia
which means that the more inertia, the lesser is the ability of the organization to bring about
change and vice versa. In order to survive an organization must undergo trial period routine
under rapid response strategy