Corporate Organization Structural Inertia And Strategic Change

Since Strategic Management Journal, the famous international journal on strategic management was founded in 1980; the research on strategic change has been a very exciting field. Many researchers carry on many projects on this field, from different perspectives, including corporate organization and governance, external environment, the initial performance and entrepreneurship cognitive, etc. Especially in this branch of the corporate organization and governance, broadly involves corporate governance, corporate organizational structure, the power allocation in the corporate, the succession of CEO, the tenure of CEO the heterogeneity of top management team, etc, and many achievements have been acquired.In this dissertation, from the perspective of corporate organization and governance, the effect of organizational structural inertia on corporate strategies was discussed. The author contends that corporate structure will affect the strategic change, especially when the organizational structure has strong inertia. Structural inertia is defined as the feature that the organization possesses and can't overcome it. As a philosopher, Max Weber long before predicted that when the organizational structure was born, it has a tendency of strengthening itself. However, the Weber's theories didn't put forward a mature theoretical model and only pay attention to the positive effects of inertia. Based on the definition of organizational inertia, the author classifies the dimensions of inertia, the author contends that the structure is composed of five dimensions: formalization, centralization, integration, complication and institutionalization. The formalization explained the formal degree of organizational structure. The formalization mainly includes whether the members clearly understand their position, roles and duties; and organizational structure chart is explicit and the communication channels are formal. Centralization illustrates what is power. The power includes three types: specialty, personal influence and institutional power. In this project, the author stressed on the organizational power. Integration is on the plasticity dimension. In some of transnational companies, communication and cooperation committee between every department realizes the plasticity. Complication is another important dimension, which explains that whether the numbers of managers is very superabundant comparative to ordinary employees, the branch is redundant or the management levels is overmuch comparative to founding time. Moreover, the author contends that domestic corporate is different from foreign companies. Because domestic corporate has special government background and the problem between the corporate and the government is subtle and can't be solved easily. Also, the Confusion culture leads to the structure of domestic corporate is different from the foreign companies. Therefore, affected by special culture belonging to china, domestic structure is different from foreign companies, especially in the institution. The author names this dimension as institutionalization.In this research, another important construct is strategic change. In the international journals, the construct of strategic is very broadly, mainly lies in four parts: change in the strategic content, change in the orientation, change in the strategic magnitude and enduring time of change. Combining with Chinese cultural background, the author utilizes enough and every perspective variable to explain strategic change. Then the author can use these constructs to illustrate the effects of structure on strategies. In the model, the author contends that if the organizational structure become stronger, then it is very more difficult for the strategic change to carry on. The author choose preventative sample and by mailing, field handout and email, the author successfully collected the data. At the basement of verifying the reliability and validity, the author utilizes hierarchy regression methods and draws such conclusions:I. There are many variables to illustrate strategic change. However, by different variables the author draws different conclusions. For some activities happening in the corporate, the change in strategic content seldom happens but great changes could taken place for change in the strategic magnitude. Then if the researchers utilize the change in strategic content to show the strategic change, the strategic change could be named"not occur"; however if the researchers utilize the magnitude to show the strategic change, the strategic may be a great value.II. Every dimension of corporate structural inertia has an influence on the probability of and magnitude of strategic change. Therefore, the structural inertia is an important factor for the strategic change. According to this, the institutionalization is the most important dimension for the strategic change. The second is the formalization.III. With respect to the orientation of strategic change, some of the coefficients is positive and others are negative, which up to the first strategy the corporate have taken and how to name the dependent variable. For example, when the author regards the defender strategy as the dependent variable, the regression coefficient is positive, however, when the author regards the creator or analyzer strategy as the dependent variable, the regression coefficient is negative. This shows that the sign is greatly relates with the method by which the author illustrate the strategic change.IV. For the continually developing, it is requisite for the corporate to create a dynamic coordination system between organizational structure and corporate development. When the structure is short of inertia, the corporate should strengthen its institutional and process building so as to keep fitting inertia; however, when the inertia is very strong, especially at this time, the corporate is in a high uncertain environment, then the inertia will inevitably affects the strategic change. In such conditions, the corporate should stress on how to overcome structural inertia. There are many methods, including conversion of member's role, promoting the organizational learning and creating a good developing environment.