Organizational Inertia and Momentum: A Dynamic Model of Strategic Change

This study provides an empirical test of Hannan and Freeman's theory of structural inertia. We examined the changes organizations undertook in response to a major environmental change. In addition, we examined the effects of the organizational changes on organizational survival. Contrary to ine...

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Bibliographic Details
Published inAcademy of Management journal Vol. 34; no. 3; pp. 591 - 612
Main Authors Kelly, Dawn, Amburgey, Terry L.
Format Journal Article
LanguageEnglish
Published Ada, Ohio, etc Academy of Management 01.09.1991
Subjects
Air transportation industry
Airline industry
Airlines
Business failures
Comparative studies
Control variables
Correlation analysis
Effects
Failure analysis
Industrial regulation
Inertia
Management science
Momentum
Organization theory
Organizational change
Population dynamics
United States > US
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Summary:This study provides an empirical test of Hannan and Freeman's theory of structural inertia. We examined the changes organizations undertook in response to a major environmental change. In addition, we examined the effects of the organizational changes on organizational survival. Contrary to inertia theory predictions, discontinuous environmental change was not associated with an increased probability of organizational change. Further, organizational change was unrelated to an organization's chances of survival. We evaluate inertia theory in light of these findings and suggest a revised formulation of the concept of inertia.
ISSN:0001-4273
1948-0989
DOI:10.5465/256407