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Influence Costs, Structural Inertia, and Organizational Change

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  • Scott Schaefer
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    Abstract

    This paper builds an economic model of the relationship between influence activity and resistance to change in organizations. I show that influence activity can create harmful barriers to change and that the influence costs of change are positively related to the firm's prospects. The model rationalizes the widely held view that firms often must endure a survival-threatening crisis before meaningful change can be achieved. I show that employees' choices of whether to engage in influence activity can depend on their beliefs as to whether the firm will choose to change its organizational form. If employees expect change, their best response is to try to affect the form of the change in their favor. Copyright (c) 1998 Massachusetts Institute of Technology.

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    Bibliographic Info

    Article provided by Wiley Blackwell in its journal Journal of Economics & Management Strategy.

    Volume (Year): 7 (1998)
    Issue (Month): 2 (06)
    Pages: 237-263

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    Handle: RePEc:bla:jemstr:v:7:y:1998:i:2:p:237-263

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    Web page: http://www.kellogg.northwestern.edu/research/journals/JEMS/

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    Web: http://www.blackwellpublishing.com/journal.asp?ref=1058-6407&site=1

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    Cited by:
    1. Meeus, Marius T. H. & Oerlemans, Leon A. G., 2000. "Firm behaviour and innovative performance: An empirical exploration of the selection-adaptation debate," Research Policy, Elsevier, vol. 29(1), pages 41-58, January.
    2. Repenning, Nelson P. (Nelson Peter), 1998. "Drive out fear (unless you can drive it in) : the role of agency and job security in process improvement," Working papers WP 4041-98., Massachusetts Institute of Technology (MIT), Sloan School of Management.
    3. Aerts, Kris & Kraft, Kornelius, 2008. "Profit sharing and innovation," Open Access publications from Katholieke Universiteit Leuven urn:hdl:123456789/198264, Katholieke Universiteit Leuven.
    4. Kräkel, Matthias, 2006. "Firm Size, Economic Situation and Influence Activities," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 167, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    5. Fosfuri, Andrea & Rønde, Thomas, 2009. "Leveraging resistance to change and the skunk works model of innovation," Journal of Economic Behavior & Organization, Elsevier, vol. 72(1), pages 274-289, October.
    6. Delmastro, Marco, 2002. "The determinants of the management hierarchy: evidence from Italian plants," International Journal of Industrial Organization, Elsevier, vol. 20(1), pages 119-137, January.
    7. Phillip Leslie & Paul Oyer, 2008. "Managerial Incentives and Value Creation: Evidence from Private Equity," NBER Working Papers 14331, National Bureau of Economic Research, Inc.

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