Organizational Capacity for Change: An Empirical Analysis in Germany

Abstract

Compared to previous decades, organizations today face unprecedented levels of change in the speed, complexity, and diversity in their business environments. Hence, the decisive ability for an organization today is not only to handle change as an episodic one-time event, but even more so to manage it on an ongoing basis. Thus, during the last years organizational capacity for change (OCC) has received increased attention. Building on the emerging literature stream on this construct, our study extends this young research area by addressing the following two questions: First, why are some organizations more capable of change than others? Secondly, are organizations that are better at changing also more successful with regard to the performance of their change projects? By studying a sample of 134 firms in Germany, we found that an organization´s capacity for change is indeed significantly and positively associated with the performance of its change projects. Interestingly, we also found that higher levels of technological turbulence do not strengthen this relationship, but weaken it. Furthermore, the study shows that both higher levels of technological turbulence as well as the perceived positivity of previous change experiences are positively associated with an organization´s capacity for change, whereas higher levels of competitive intensity and the amount of previous change experiences are not. These results not only reveal further insights regarding the OCC construct, but also contribute to the existing literature and research on dynamic capabilities.