To stay competitive in a changing environment, many companies attempt radical transformation by adopting a brand-new business model, entering a different industry, merging with another firm or deploying a new global strategy. Often, these efforts fail. The management literature offers many explanations, focusing on issues such as sunk costs, cognitive inertia, organizational routines, resource bases, core competences and organizational politics, among others.1 While none of those explanations is wrong, per se, none recognizes that an organization’s fundamental identity can be the primary constraint on its adaptive capacity.
Just as individuals develop, often unconsciously, a narrative of who they are,2 so do organizations, reflecting the context of their founding and the identities, motivations and values of their founders.3 Just as individuals with ambiguous identities have trouble maintaining internal balance and healthy relationships with people around them, so organizations with ambiguous identities have trouble maintaining internal balance and building lasting and productive relationships with vital stakeholders. And, just as the identity of individuals may come to be anchored in some combination of gender, nationality, profession, social group, life style, educational achievements or skills, so an organization’s may be anchored in some combination of geographical place, nationality, strategy, core business, technology, knowledge base, organization design, operating philosophy or governance structure.
For each organization, its particular combination of identity anchors imbues... To read the complete article, login or sign-up using the form below.
Become a premium subscriber today to read this and all MIT Sloan Managmeent Review articles.
Buy this article. Purchase one or more copies of this article in PDF form.
Become a premium subscriber today to read this article and the entire archive of MIT SMR articles.
Upgrade your existing subscription to premium
Sign in if you are a premium subscriber.
Do you subscribe the MIT Sloan Management Review in print? Enter the email address and password you used when ordering. Don't remember? Lookup your subscription account information
- Register for free access to recent articles and the current issue of MIT Sloan Management Review.
- Subscribe and read articles from the past three years online.
- Premium subscription give you access to the entire archive of articles.
