Structural Inertia and Organizational Change Revisited I: Architecture, Culture and Cascading Change*

This paper develops a formal theory of the structural aspects of organizational change. It concentrates on the significance of changes in an organization’s architecture and culture, each represented as a code system. A change is significant when it prompts other changes and generates a cascade of change. The argument ties significance to the time that it takes an organization to complete reorganizations and the associated opportunities costs. The central theorem holds that the magnitude of the effects of a change in architecture on an organization’s hazard of mortality increases with the architectural and cultural significance of the change. A related theorem holds that the chances of mortality rise monotonically with the length of time in reorganization (positive duration dependence).