Generation And Overcoming Of Organizational Inertia

In the uncertain environment, the organizational inertia has been gradually become the main factor conditioning the enterprise's development. Based on research results synthesizing organizational evolution theory and dynamic capabilities theory, this essay, going from the interaction of organizations and environment, tries to establish the theoretical framework of researching organizational inertia.Superficially, enterprises'organizational inertia shows the solidifying of the organization model. Analyzing deeply, however, it will present that organizational inertia is an "lock-in" which is due to enterprises adapting to and changing the environment. Firstly, the "lock-in" is the lock-in of the technical environment, institutional environment and cultural environment choosing the environmental legitimacy. Fitting for the demands of the environment is the survival premise of the enterprise, which is the basis of the enterprise obtaining the "legitimacy", while the environmental change causes this premise's change. Secondly, the "lock-in" is due to the combination of the enterprise's technology, systems and concept. The premise of the enterprise's development is the innovation based on adapting to the environment, as is the condition of the enterprise getting completive advantages. But the organization model depending on the innovation's combination finally confines the capability of the organization suiting environmental changes. From Chapter 3 to Chapter 5, this paper discusses how the "lock-in" forms from the technical, systems and cultures respectively.On the aspect of the technology, the characteristics of the industrial technology life cycle makes that enterprises in the specific industry inevitably loses their survival condition along with the industry's decline. Organizational populations adapting to the specific technical environment simultaneously trends to decline collectively. It is uncontrolled for this organizational inertia based on technical environment's changes. Diversity enterprise's technology life cycles exist in the technology life cycle of the specific industry. Although the enterprise endeavors to hold up its technology life cycle, technological "self-enhancing" decides that the enterprise hardly gets rid of relying on technological route after its technology choose. Though depending on technological route does good to enterprise's technology innovation, it also causes the solidification of the enterprise's technological organizational model, then which leads to the enterprise's technology inertia. There are two methods for enterprises' technological breakthrough. One is the progressive breakthrough, namely the enterprise perfecting and improving its present technology systems; the other is the disruptive breakthrough, namely breaking the enterprise's present technology path and establishing new technology systems. Whether the enterprise can implement the technological breakthrough effectively lies in its cost, which includes the direct technical cost, psychological cost and sunk cost. In the light of initiative degree of the enterprise's technological breakthrough, the organization position in the technological breakthrough can be divided into the dominance and follow-up. The dominant organization position emphasizes the importance of the "innovation", seeking the "priority advantage" in the technological breakthrough. While the follow-up organization position stresses the importance of the "imitation", pursuing the "late advantage" during the technological breakthrough.In terms of systems, the institutional environment sets a basic set of constraints for enterprises' survival and development with the legitimacy, reliability, interpretability and other characteristics, which are the performance of business organizations adapting to the institutional environment. But these features are the root causes which lead to companies not adapting quickly to environmental changes during that of the institutional environment as well. In the process of enterprises fitting for the institutional environment, they can break the shackles of the institutional environment and thus change the system environment or promote the institutional environment changes. However, in reality, only a few companies can take the initiative to do this. Enterprises achieve the coupling with the institutional environment in the process of interaction with the system environment, on the one hand, which reflects the acquisition for the organization of "legitimacy"; on the other hand, which expresses the formation of the business routines. The enterprise system similarly has the characteristic of the path-dependent. When the developing path of will be locked into the system path.In the cultural field, the system, in the term of the relation between the system and the culture, is based on the culture and the culture counters in the system. They both have internal consistencies. Management also roots in the culture, and the value orientation of cultural patterns determines that of management patterns; the exclusive of the cultural patterns decides the portability and migration management level of the management; the diversity of cultural patterns determines that of the management patterns. The migration of cultural patterns must follow the general laws the cultural integration. Meanwhile, the migration of management patterns also must obey the requirement of the internal consistency between cultural patterns and management patterns. The pursuit of the organizational intrinsic value is consistent with that of the organizational members, which is the premise of the organizational culture playing a role. The value of entrepreneurs produces the organizational culture and strategy, both them having the internal consistency. Objectively, the organizational tragedy' change requires the organizational culture's corresponding adjustments. Once the organizational culture formed, it will bound entrepreneurs' strategic cognitive ability and prevents the organizational strategy from shifting. In the developing process of the organizational culture, there are four stages-formation, active inertia, inactive inertia and recession. The length of the active inertia depends on the stability of the environment where the organization locates. The organizational culture, existing in the stable environment in the long-term, is not easy to overcome. Therefore, the inertia of the organizational culture is the objective results that the organization pursuits the ideal culture state.For analyzing systematically causes of the organizational inertia in enterprise, this paper, based on the theory of the life cycle, puts forward to the model of organizational adaptation cycle (Chapter 6), which proposes that factually the formation and development of the enterprise is the process that the organization owing to environmental changes constantly adjusts or innovates organizational strategies, technology and structures. Each adjustment or innovation will bring a period of steady development, namely organizational adaptation period. The adaptation effectiveness of the organization depends on the internal consistency of chooses for strategies, technology and organizational ways. Only simple changes in one level can not effectively solve the adaptability of the organization. With the systemic dynamic model, this paper believes ,in the established cycle, that organizational capabilities formed by coupling the organizational strategies, technology and structure is the source of the enterprise's competitive advantage, but also lead to the organizational inertia. With neo-classical economics' marginal analysis, in this paper, the organization proposes progressive decrease law of marginal revenue, namely the enterprise's receipts based on innovation will be gradually reduced in the process of the business' operations. When the organizational culture has become mature and the organization has operated standard, the organization starts entering into the "inertia" stage. Oppositely, when the organization has no breakthroughs in technology and the degree of monopoly is relatively high at the same time, the organization will enter into the "inert" stage. There are two ways on overcoming the organizational inertia, namely progressive and disruptive. Which way will be selected depends on the compare between the cost and revenue for the change, while the size of that depends on the degree of the organizational environment changes. In this essay, Chapter 7 discusses the dynamic mechanism to overcome the organizational inertia.The continuation of the entrepreneurship and the enterprise's dynamic capabilities under its guidance decide to overcome the organizational inertia. Integration of the relevant research on traditional organizational capabilities, core capabilities and dynamic capabilities, this paper, according to the environment changes and the "dynamics" of organization capabilities in varying degrees, divides dynamic capabilities into three levels—junior, senior and middle, and analyses composition of the enterprise's dynamic capabilities on basis of this. It also holds that sharp awareness of the environmental change, identification of market opportunities, learning and absorption of relevant knowledge and skills existing in or out of the organization, and the rapid co-ordination and integration of related knowledge, skills and resources will establish the competitive advantages in the shortest time, which are the basic requirements of the dynamic capabilities.This paper argues that the organization and management process, which are beneficial for the formation of the dynamic capabilities, emphasize the construction organizational mechanism adapting to the dynamic environment is not dependent on or limited to a particular kind of organization. Its impetus for role comes from the organizational culture formed by combining the common organizational concepts, based on the contingent thought and innovative sprit, and the specific entrepreneurs cognitive. Based on this, this paper presents the systemic dynamic model generated by a dynamic ability:"the contingent thought and the innovative sprit→organizational learning and changing with circumstance→the responsive capability and the innovation abilities→personal mastery and abandon polices→experience incentives→the contingent thought and the innovative sprit". This article also points out that it is particularly necessary to build a kind of transformation mechanism for efficiency learning and efficacy study in the organizational mechanism formed by the dynamic capabilities. Efficacy study and abilities'destroy are linked with innovation, and efficiency learning is correspond with the capacity development. However, the efficacy learning process is the antithesis of the efficiency learning process. In order to strengthen the existing advantages, we must move forward along the normal route, which strengthens the core capabilities' inherent reliability, focus on the reconstruction about advantage capabilities in the need to forget the existing capacity, and takes challenge for logics dominating in the conventional procedure and rules. In the process of the efficacy study and efficient learning, the entrepreneurship is the power carrying on and shifting them. In the organization mechanism formed by the dynamic capabilities it also needs to include a coordination mechanism which takes advantages to absorb in knowledge, skills and resources outside the organization. Among them, the independent department's experimental mechanism is beneficial for the new organization capability's formation, while the network with external-oriented and aiming at inter-firm cooperation can change or constraint the rigidity and path dependence for building new competitive advantages.