Momentum or Deceleration: The Effect of Previous Change

ABSTRACT

A conventional consensus on organizational change is the momentum view, which claims that prior changes of a given kind increase the probability of a subsequent change of the same kind. This consensus has been recently challenged by the deceleration view, which argues that prior changes decrease the probability of a subsequent change. By making a distinction between experienced changes and internalized changes, this study postulates that the two views complement and coexist with each other. A change of a given kind is less likely to occur with more experienced changes of the same kind, while it is more likely to occur with more internalized changes of the same kind. This integrated view is supported in a sample of 477 U.S. local governments making decisions about whether to outsource public services during 1982–2007. This study also looks into how relatedness to internalized changes affected the occurrence of a subsequent change of the same kind. The impact of operational relatedness was positive at an early time and increasingly negative in the long run. The impact of skill relatedness, however, was positive and steadily increased as time went on.

MAD statement

An important debate on organizational change is how prior changes of a given kind affect the probability of a subsequent change of the same kind. Whereas the momentum view claims that prior changes breed a subsequent change, the deceleration view contends that prior changes prevent a subsequent change. By distinguishing between experienced and internalized changes, this study argues and demonstrates, with a sample of U.S. local governments, that the two views complement and coexist with each other. A change is less likely to occur with more experienced changes, while it is more likely to occur with more internalized changes.

KEYWORDS:

• Organizational change
• internalization
• routines
• organizational learning
• relatedness

Disclosure Statement

No potential conflict of interest was reported by the author(s).

Notes

1 The 45 states and the number of local governments from each state (in parentheses) are: Alabama (5), Arkansas (5), Arizona (9), California (59),Colorado (11), Connecticut (8), Delaware (2), Florida (21), Georgia (12), Iowa (10), Idaho (2), Illinois (25), Indiana (8), Kansas (10), Kentucky (7), Massachusetts (6), Maryland (9), Maine (4), Michigan (23), Minnesota (11), Missouri (11), Mississippi (3), Montana (3), North Carolina (25), North Dakota (4), Nebraska (4), New Hampshire (2), New Jersey (13), New Mexico (6), Nevada (2), New York (15), Ohio (21), Oklahoma (5), Oregon (13), Pennsylvania (12), South Carolina (7), South Dakota (2), Tennessee (5), Texas (30), Utah (2), Virginia (12), Washington (10), Wisconsin (20), West Virginia (1), and Wyoming (2).

2 Admittedly, the number of outsourced services in the 1982 data might not be the number of experienced changes prior to 1982, even though the NPM movement emerged in the 1980s. However, in the final sample the number of observations for a local government ranged from 5 to 210, and all experienced changes after 1982 were counted. As a result, the regression results were not affected because the number of experienced changes prior to 1982 was automatically cancelled out in conditional (fixed effect) logistic regression.

Additional information

Funding

This work was supported by Technology Management Research Center, Rutgers Business School [Dissertation Research Award (Li, 2012)].

Notes on contributors

Jun Li

Jun Li is an Associate Professor of Management at Metropolitan State University (Minnesota). His research interests include institutional theory and the behavioural theory of the firm. His current projects investigate how organizations respond to competing institutional logics in the public sector.