Bringing Politics Back In: The Role of Power and Coalitions in Organizational Adaptation

Abstract

The discussions of organizational politics and processes of organizational adaptation have developed as largely independent streams of work. However, we suggest that organizational politics—in particular, the power dynamics of the dominant coalition—can be a driver for patterns of both “continuity and change” within organizations. Continuity is maintained by two inertial forces. First, a corporate strategy that conforms to the interest of the dominant coalition will tend to reinforce the power of that dominant coalition—an entrenchment effect. Second, even organizational units that were not initially part of the dominant coalition adapt their policies to that corporate strategy and, as a consequence, may come to support this status quo strategy. However, the political dynamics within the organization can also facilitate strategic change because shifts in the environment can alter the power structure of the organization, resulting in a new dominant coalition with a different agenda. The underlying basis is that organizations are multilevel systems in which subunits adapt to the organization’s strategy, and that strategy, in turn, adapts to the subunits’ current policies. We find that a self-interested political process can help “unfreeze” the alignment between subunit policies and an organization’s strategy in a changing environment, facilitating a more timely adaptive response than a strategy process based on the perceived collective interest of the organization as a whole. However, under high levels of goal conflict among subunits, coalitional power inhibits, rather than facilitates, adaptive change because of the entrenchment effect of power. Supplemental Material: The online appendix is available at https://doi.org/10.1287/orsc.2022.16995 .