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Structural changes often trigger further, unanticipated changes. Altering one organisational feature might induce many additional alterations, initiating cascading change. Recent elaboration of inertia theory claims that change process effects result from the length of time it takes to complete a transformation. The time to complete change depends in turn on the centrality and connectedness of the units in the organisation(Barnett and Freeman, 2001), which the ecologists call intricacy and viscosity (Hannan et al., 2007). Intricacy is defined as ³a strong and complex pattern of interconnections among an organization¶s component units. Specifically, intricacy is the PHDQRIWKH FHQWUDOLWLHVRIWKHXQLWVLQWKHRUJDQL]DWLRQ´ (Hannan et al., 2007: P309). And viscosity iV GHILQHG DV ³ the expected time it takes for an organisational unit to respond to induced architectural code violations and bring local architecture into code FRQIRUPLW\´ (Hannan et al., 2007: P312). They are discussed in this section.

Generally, ³a cascade can be characterized by (1) number of stages. (2) the number of units that experience induced violations during the cascade, and (3) its temporal character, including the time elapsed from origin to conclusion and the total time units spend reorganizing even iI LQ SDUDOOHO´ (Hannan et al., 2007: P239). The unit which

experiences induced violation of new architecture code suffers pressure to respond in an effort to resolve it. Seeking to remove the code violation, the unit conducts rational search until it finds a simple adjustment that eliminates the code violation (Hannan et al., 2007). If the unit does not put in the effort to solve the problem, the cascade will not happen. When a unit decides to implement a set of changes for eliminating of code violations, it induces the second-order changes in other elements. The hidden codes provide another possible source of cascading. That means at any step a change might induce multiple branches in the cascade. Local adjustment might tend to undo these steps. However it is unlikely to trace back along the initial path.

The time it takes to complete the changes has strong implications for outcomes. In order to compare change processes of different organizations, three patterns of inter-unit connections have been introduced by Hannan et al. (2003b): flat hierarchy, vertical hierarchy and non-hierarchical model, as figure 3.1 shows below. The patterns of inter-unit relations shape the variety of cascades which relate the level of coupling among units to the likely pattern of cascades.

This framework makes it possible to predict certain characteristics of cascades, including the total time of transformation. Firstly, flat hierarchy (a) presents that unit one (U1) directly constrains unit two (U2) and unit three (U3) which are disconnected between them. U2 and U3 can independently solve the problem changing local architecture. Thus, the cascade is one stage, the temporal span of the cascade is the duration of the resolving code violations in the two units maximum. Secondly, pattern

(b) shows that if U1 constrains U2 directly and U3 indirectly, it is a vertical hierarchy model, which implies that U2 adjusts to the initial change, and U3 adjusts to the induced change by U2. Hence, the temporal span is the sum of duration of the unresolved code violations in the two units. Thirdly, the non-hierarchy case (c) unfold in two stages, U1 constrains U2 directly, but it constrains U3 both directly and indirectly. U3¶s reaction will last longer than other units generally. If U3 finishes changes induced by U1 before U2 does, it still has to adapt to the unfinished changes in U2, so the total time is greater. If U3 completes violation adjustment induced by U1 after U2 does, U3 will take additional adjustment induced by U2 when it reacts to U1 (Hannan et al., 2007). This complicates the total time of resolution. So these models indicate that the number of stages will increase both the total time of reorganisation and temporal span of a cascade, the complexity of the pattern of XQLWV¶ connection will make the time of reorganisation longer. Mintzberg et al.(1998) similarly argue that change cannot be managed in some orderly step by step process. Change solutions create further problem. In any change stage, the process could be ended by certain specific solutions, but these solutions are not those which are applied to the initial problems (Greiner, 1972).

Hannan et al. (2007) further examine centrality and change¶V inducement probability. They argue that the most central unit in flat model has lower centrality (depends on the units that it constrains) than the most central one in the vertical hierarchy pattern. Inducement probability examines that inducement of violation might or might not happen in a subordinate unit, according to the level of coupling in organization. Each organisation has one characteristic probability, which means the inducement probability would not vary over dyads within an organisation or over time for an organization. The point of the model is the expected number of induced violations in a known cascading change initiated by an architectural change in organization, presumably equal to the centrality score of that unit in one specific cascade (Hannan et al., 2007). The total duration of reorganisation is the sum of the durations of all units triggered in the process of reorganization. For a random cascade, the expected number of induced violations is presumably equal to the organization¶s intricacy (the mean of the centralities of its units) (Hannan et al., 2003a) the total expected time in a cascade equals the products of

intricacy and viscosity (Hannan et al., 2007). The organisational characteristics of intricacy and viscosity discussed here are the major criteria for the distinction of different type of organisational change, as we mentioned in the last chapter. Their effects on the change length and the effect of change length on change consequences will be empirically examined in this study. The time effect on change consequences will be discussed further in the next section relating to the cost and benefits of change processes.

3.3 Cost and Benefit of Change Process

Hannan et al., (2007) claim that architectural changes damage organisations if the cascades are long lasting. Because the changes divert the organizational members¶ attention, the tasks which generate revenue are interrupted by a reallocation of resources and reallocation of responsibility. The diversion results in the organisation missing opportunities during the change process, hence the changes must entail substantial opportunity cost. It is a complicated and dynamic trade-RIIEHWZHHQWKHµULJKW¶FKDQJH PRGHO DQG WKH FRVW DVVRFLDWHG ZLWK WUDQVLWLRQ µ7KH H[SHFWHG QXPEHU RI RSSRUWXQLWLHV missed by an organisation during a cascade presumably increase with the total time VSHQW UHRUJDQLVDWLRQ E\ LWV XQLWV GXULQJ WKH FDVFDGH¶ (Hannan et al., 2007: P249), and this number grows with the viscosity and intricacy of the organisation.

The key implication of opportunity cost is related to the fitness and market position of the organisation. If it fails to capitalise on an opportunity, while its competitors do, the RUJDQLVDWLRQ¶V performance and level of fitness will decrease. So the more time that is spent on reorganisation, the less fit an organisation can expect to be (Hannan et al., 2007). The more opportunities missed, the higher the cost of the process, and the lower the level of efficiency and performance (Nee and Su, 1990). However, Burgelman (1991) argues that the opportunities should be categorised by whether they could leverage existing assets or not in an organisation. Baron et al. (2001) suggest that it might be preferable to stick to first-best model or models, and make any necessary adaptation rapidly within or among those models, in order to balance stability versus change.