The Relationship Between Change Across Multiple Organizational Domains and the Incidence of Latent Errors

The authors examined the relationship between types of organizational change (i.e., changes across multiple domains, e.g., employees, structure, and technology) and the incidence of latent errors (i.e., potentially consequential deviations from rules and procedures), using data from internal audit reports and interviews with managers in 80 business units in a large financial institution. Consistent with their premise that latent errors result from the increased demands on organizational attention associated with organizational change, the authors found that changes in multiple organizational domains was positively related to the frequency of latent errors. Moreover, this relationship was only observed for changes that had an adverse impact on managerial time, expertise, and/or work coordination. Implications for research on organizational change and latent errors, as well as for managers, are discussed.