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This article responds to criticism that structural inertia theory neglects the internal influences on organizational adaptation. It develops a model exploring the logic of key decision makers in purposely endorsing structural inertia during organizational change. This response is labeled deliberate inertia, which is part of a typology delineating s...
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... Referring to CDOs' power, we, therefore, argue that CDOs can directly affect certain factors to enlarge their power base. Regarding formal power, many companies' hierarchical configuration, organizational structure, and resource distribution are determined for an extended period (Schwarz, 2012 ...
Organizations are increasingly installing Chief Digital Officers (CDOs) to cope with the challenges of digital transformation (DT). Due to DT’s cross-functional nature and the far-reaching tasks involved, CDOs must wield sufficient influence to manage DT effectively. Thus far, we lack a profound understanding of how CDOs’ power is composed. To address this research gap, we conducted a multiple-case study drawing on 25 interviews across six case companies. We identify several drivers of CDOs’ power, both in terms of formal and informal power types. Particularly, we demonstrate that CDOs’ power depends not only on organizational contingencies but also on the managers’ personal characteristics. We contribute to literature by adding a power notion to discussions on DT in general and CDOs specifically. Further, we sensitize practitioners to establish the CDO role in a way that is endowed with sufficient power and shed light on how CDOs can increase their power base.
... Processes and organizational routines as a source of inertia are a well-researched form of structural inertia (Hannan and Freeman, 1984;Schwarz, 2012). Yet, organizations aiming to implement digital innovations and transform their processes and structures are a core impediment for pre-digital companies (Vial, 2019;Drechsler et al., 2020). ...
... It is manifested in structural resistance against fundamental reorganisation, assuming that the core features of organisations change slowly due to inertial pressures. Traditionally, this inertial effect has focused on the environment, age, and size dependencies (Schwarz, 2012). ...
The managing of transition from a centralised to a decentralised service provision strategy has been touted as a solution to the complex challenges of delivering services in many organisational settings, including public health services in developing countries like Malawi.
The main objective of this qualitative study was to develop a substantive grounded theory that elaborates on the transition of a health system from a centralised to a decentralised model in Machinga, Malawi. This study used the prescripts of the Straussian version of the grounded theory method proposed by Strauss and Corbin (1990). Participants in this study were members of the district health management team (DHMT) for Machinga, and central decision-makers from the Ministry of Health, Ministry of Local Government, the Department of Human Resource Management and Development, and the office of the President and Cabinet (OPC) in Lilongwe, selected initially using purposive sampling and subsequently through theoretical sampling.
Various critical incidents depicting the process of decentralising the health system were gathered through 34 in-depth, individual and semi-structured interviews conducted with 25 research participants. These were central decision-makers and members of the DHMT in Machinga District. Data were analysed using open coding, axial coding, and conditional matrix, as prescribed by the Straussian version of grounded theory.
The results of this study reveal a grounded theory labelled as decentralisation derailed by organisational inertia, which depicts the complex process of transition from a centralised to a decentralised strategy of health service provision in Machinga, characterised by two distinct and opposing interactional sub-processes of enabling and impeding patterns of activities. In the grounded theory generated by this study, enabling governance and threshold capabilities and collaborating for local health service delivery were parts of the enabling sub-process. However, these activities were undermined by four different activities that constitute the impeding sub-process. These impeding activities were: (1) central decision-makers striving to decentralise the health system when they did not support the process wholeheartedly due to personal fear of losing influence and power; (2) central decision-makers directing the transition to the decentralised model of health service provision, but without alignment and
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commitment; (3) members of the DHMT struggling to gain internal organisational efficiency, in a context characterised by understaffing and persistent underfunding; and (4) the perpetuation of a culture of lack of maintenance of hospital assets (e.g. ambulances, equipment, and buildings). Ultimately, the imbalance and resistance arising from the interaction between the enabling and impeding sub-processes are at the core of the theory of decentralisation derailed by organisational inertia developed in this study. The variety of consequences of the inertia derailing the transition process of the health system is manifested through organisational inefficiency and ineffectiveness, poor service delivery, and dilapidated physical assets in the decentralised health system model.
The central feature in this theory is the dominance of resistance in various ways at different stages in the transition process from centralised to decentralised health service provision in Machinga. The grounded theory that is generated in this study is discussed in relation to the literature on managing transitions in complex adaptive systems, systems thinking, and organisational inertia, thereby contributing new knowledge to the processual understanding of the micro-level activities and practices which depict the derailed decentralisation of a health system in an under-resourced, corrupt, and challenging environment. This study concludes that an integrative understanding of the processual dynamics, multi-level transition of a health system, and efforts to address the various dimensions of organisational inertia are critical to enhancing the process of decentralising a model of health service provision in an under-resourced context.
... Structural inertia refers to the propensity of an organization to "resist deviating from existing structural schemes" (Schwarz, 2012, p. 4), from which it follows that organizations with higher structural inertia will have a higher capacity to resist change (Hannan & Freeman, 1984;Schwarz, 2012). There are several important components of structural inertia, including the size and legitimacy of the organization (Schwarz, 2012). ...
... Structural inertia refers to the propensity of an organization to "resist deviating from existing structural schemes" (Schwarz, 2012, p. 4), from which it follows that organizations with higher structural inertia will have a higher capacity to resist change (Hannan & Freeman, 1984;Schwarz, 2012). There are several important components of structural inertia, including the size and legitimacy of the organization (Schwarz, 2012). For example, high levels of investment in equipment or infrastructure may make an organization less likely to deviate from their current patterns of work (Hannan & Freeman, 1977). ...
... The results suggest organizations with more assets and expenses are also more likely to alter their niche. This is inconsistent with ecological perspectives on inertia and hypothesis 2.2, which posits that larger organizations are more stable and deeply routinized, and consequently more inert (Hannan & Freeman, 1984;Schwarz, 2012). Theories of strategic change however suggest that size and assets may give organizations increased flexibility, enhancing their ability to execute changes (Rajagopalan et al., 1997). ...
The organizational niche is a concept integral to organizational ecology, reflecting an organization’s mission, expertise, capacity, and resource requirements. The choice of niche is crucial to the viability of the organization; however, the reasons organizations alter their niche are poorly understood. We hypothesize that nonprofit organizations alter their niche to reduce environmental pressure and gain access to resources. The results indicate that niche alteration predicts increases in total revenue with average increases in revenue from program services and contributions (depending on measure). Additionally, nonprofits that are younger, larger, and have more concentrated revenue, are more likely to alter their niche.
... Studies also link inertia to key elements of the firm's deep structure, showing how embeddedness in existing knowledge, values, routines, technology, organizational structure, control systems, and distribution of power generates rigidities that hinder change and increase the likelihood of negative transformation outcomes (Audzeyeva & Hudson, 2017;Gersick, 1991;Silva & Hirschheim, 2007). Indeed, the extant literature provides a solid foundation for understanding the antecedents, moderators, and consequences of organizational inertia (Colombo & Delmastro, 2002;Fairhurst et al., 1995;Gilbert, 2005;Hannan & Freeman, 1984;Haskamp et al., 2021;König et al., 2021;Rumelt, 1995;Schwarz, 2012;Tripsas & Gavetti, 2000). At the same time, indepth empirical examinations of the process for overcoming inertia and the role of agency in this process remain scarce (Mikalef et al., 2018(Mikalef et al., , 2019Schmid, 2019;Schmid et al., 2017). ...
Digital transformation is often described as organizational change that is simultaneously triggered and enabled by digital technologies. As with other types of organizational transformation, overcoming organizational inertia lies at the heart of digital transformation. However, our understanding of the specific processes employed by incumbent firms to overcome organizational inertia in digital transformation is currently limited. In this paper, we draw on the case study of AsiaBank, a large traditional bank in Asia, to explore the microfoundations of how incumbent firms tackle different types of inertia as they embark on a digital transformation journey. We identify four key digital transformation processes—i.e., embracing the consumerization of digital technologies, diffusing and appropriating digital business practices, enabling distributed organizing, and revamping IT architecture—that combine to reduce negative psychology, sociocognitive, sociotechnical, political, and economic inertia in digital transformation. Our findings expand the extant view on the role of agency in overcoming organizational inertia and contribute to the literature at the intersection of digital innovation and transformation.
... As more and more outputs are generated, they are fed back as inputs to help maintain the system's basic levels of operation (Von Bertalanffy, 1972). Eventually, the system reaches a steady state of dynamic equilibrium in which the total levels of outputs remain constant regardless of the amount of inputs received and processed (Romanelli & Tushman, 1994;Schwarz, 2012). At this point, the rate of change in the input-output relationship becomes self-stabilizing, returning any fluctuations to preexisting levels. ...
... It is, however, important to distinguish between institutional inertia (stagnation) and an organization's unwillingness to change. Organizational unwillingness to change is characterized by behaviors and actions that discredit or prevent the implementation of new initiatives designed to move the organization forward (Schwarz, 2012). Institutional inertia, on the other hand, relates to the tendency of a mature organization to maintain its existing balance of established processes, structures, and practices, despite relative changes in its operating environment. ...
... Institutional inertia, on the other hand, relates to the tendency of a mature organization to maintain its existing balance of established processes, structures, and practices, despite relative changes in its operating environment. Such inertia is often triggered by institutional forces that create routine rigidity within organizations and tend to balance change with stability (Gilbert, 2005;Schwarz, 2012). ...
The last three decades have seen a growing interest in understanding the influence of human resource management (HRM) practices on employee job satisfaction and organizational performance. While the results have been generally positive, most studies have utilized cross‐sectional research designs, which limit causal inferences. Recently, several studies have used longitudinal data but have not consistently found significant causal links between HRM practices and outcomes after controlling for past outcomes. This points to a tension in the literature that merits further investigation. Drawing on general systems theory (GST), we explore this issue by proposing and testing a set of null causal relationships involving HRM practices, organizational performance (i.e., patient satisfaction), and job satisfaction. We show that average scores on HRM practices and outcomes remain relatively stable at the organizational level over time, such that any observed within‐organization change is likely negligible or non‐significant. Using four‐wave longitudinal data (with two, four, and six‐year time lags) from the public healthcare sector, we argue that the causal links between HRM practices and outcomes are indeed sensitive to the forces of dynamic equilibrium operating within a highly institutionalized context. We use GST to highlight the self‐sustaining nature of HRM systems and discuss the ramifications of this stability for strategic HRM research and practice.
... Acquisition is a widely used strategy, especially for established firms. As firms become more seasoned, their successful procedures can quickly become rigid routines (Hannan & Freeman, 1984;Schwarz, 2012). This can constrain a firm's capacity to fit its operating context. ...
Plain English Summary
Many acquirers consider target CEO characteristics when deciding whether to buy a venture. Analyzing a sample of acquisitions within the U.S. computer industry, we find that the extent to which target CEOs have excessive self-confidence reduces the likelihood of acquisition completion. This is because CEOs with excessive self-confidence can be direct and aggressive when negotiating with acquirers. This effect is stronger both when ventures have more technological resources and exhibit higher growth, and also when acquisition exits within an industry are more prevalent. Buyers are advised to be more flexible and prepared when interacting with highly confident entrepreneurs.
... Deliberate inertia is labelled as purposely endorsing persistence on the status quo even during organizational change [30]. According to Schwarz [31], there are four types of inertia which are listed as 'spontaneous' inertia, 'deliberate inertia', 'forced' inertia, and 'unobtrusive'. The typology of structural inertia was based on dimensions of motivation for change and influencing condition: spontaneous inertia and deliberate inertia were low motivated while forced inertia and unobtrusive inertia were highly motivated; on the other hand, spontaneous inertia and forced inertia were motivated externally while deliberate inertia and unobtrusive inertia were motivated internally. ...
... Third, we discover that intentional inertia is the most important predictor of brand loyalty among consumers in our work, which is the same as the results in Shi et al. [6]. Customers may actively seek reasons to resist the marketing appeal of competing companies [31]. Finally, brand loyalty and commitment have a substantial positive relationship, which is similar to the work of Jang et al. [40]. ...
... Customer inertia is an attachment, persistence, to the behavior patterns that exist in the minds of consumers to stay afloat (on the status quo), even if there are better alternatives [11]. The status quo is the tendency of consumers to continue the choice of the brand that is being used (because they are used to it) rather than looking for alternative actions [12]. Inertia reflects a reluctance to abandon old products/services even in new and better alternatives [11]. ...
... Inertia is described as a non-conscious form of emotion, uni-dimensional in nature entailing "passive service patronage without true loyalty" (Huang and Yu 1999). Deliberate inertia entails an intentional persistence to maintain status quo, when there are better alternatives and incentives available in market (Schwarz 2012). Schwarz (2012) categorized inertia as spontaneous, forced, unobtrusive, and deliberate inertia. ...
... Deliberate inertia entails an intentional persistence to maintain status quo, when there are better alternatives and incentives available in market (Schwarz 2012). Schwarz (2012) categorized inertia as spontaneous, forced, unobtrusive, and deliberate inertia. The grouping is based on motivation for change (high vs low value) and the influencing condition (external vs internal). ...
The aim of the study is to understand the role of insurance company reputation, performance, and positive/negative affect on health insurance policy customer retention and the moderating influence of customer inertia. A structured questionnaire was used for data collection. Covariance-based structural equation modeling was employed to assess the hypothesized relationships between the variables. The findings revealed that reputation, performance, and affect influenced customer retention in insurance sector. Positive affect had greater impact on customer retention in comparison to other constructs. Further, customer inertia was an important moderating influence on the negative affect for health insurance policy customer retention. To the best of our knowledge, the present study is the first of its kind that attempts to investigate customer inertia in the health insurance sector in an emerging market context, i.e., India. Customer inertia has not been much studied in light of company reputation, performance, and positive and negative affect in the health insurance milieu. The research findings may help health insurance companies understand the importance of reputation, performance, customer retention, and inertia while marketing insurance services.
