Dynamics of Organizational Adaptation, Inertia, and Routines: Generic Contributions from a Study of Change

Inertia and routines are important organizational characteristics affecting organizations’ evolution. Empirical research has found mixed results concerning the question whether change establishes change routines that make organizations more malleable or whether transformations inhibit further alterations. Reasons for these results are analyzed in this paper by means of a case study of organizational change at the New York Stock Exchange and respective system dynamics modeling. The analysis reveals that there are multiple forces working which dynamically interact and become important determinants of change and adaptation. The simultaneous consideration of balancing and reinforcing effects of inertia, routines, and change sheds light on the ambiguous empirical results.