The Role of Networks in Fundamental Organizational Change

Abstract

Utilizing a grounded-theory approach, this study examines 8 organizations and finds that social networks make a difference in the capability of organizations to implement fundamental organizational change. Specifically, this study examines whether networks enable the learning required for local units to develop the new schemata—understandings, behaviors, and interaction patterns—required to adopt and appropriate planned organization-wide change. A mixture of organization-wide and local learning networks in organizations successfully implemented change, whereas the unsuccessful organizations relied primarily on hierarchical change implementation networks. In accelerated change units compared to those that are lagging, a greater abundance and diversity of networks, strong and weak, internal and external, and across system levels were found. These network connections facilitate change implementation not only by sharing information but also by providing the capabilities to exchange and combine knowledge and by enabling local self-design.