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Sometimes inertia comes from a company`s customers rather than the company itself. If a company`s customers have not yet changed their buying habits in response to a change in the industry, the company may resist a change because it does not want to abandon the sales they relied on. This type of indirect inertia has the same result as when a company has internal inertia because it prevents a company from adapting to the changing landscape. A company that suffers from indirect inertia is vulnerable to competition because its competitors feel that they can play a game for the company`s business without the company responding. Huang, H.-C., Lai, M.-C., Lin, L.-H., and Chen, C.-T. (2013). Overcoming Organizational Inertia to Strengthen Business Model Innovation. J. Organ. Chang. Manag. 26, 977–1002.

doi : 10.1108/jocm-04-2012-0047 The causes of organizational inertia are a flawed mindset and an inefficient corporate structure. Now more than ever, leaders must find ways to generate heat, innovate at the keystone, revolutionize the market and stay ahead of the competition. We need to be aware of when a high level of inertia has established itself in the organization. It is the contributors who lead to organizational inertia. Mallette, P. and Hopkins, W. E. (2013).

The structural and cognitive precursors of middle managers influence strategic inertia. J. Glob. Bus. Manag. 9, 104-115. Sharma, P., Chrisman, J. J., & Gersick, K. E. (2012). 25 years of family business review.

Fam. Bus. 25, 5-15. doi: 10.1177/0894486512437626 Sillic, M. (2019). Critical effects of organizational and individual inertia to explain non-compliant security behavior in the context of shadow IT. Calculate. Secur. 80, 108-119. doi: 10.1016/j.cose.2018.09.012 An example of this was the Philadelphia Savings Fund Society (PSFS), a bank that continued to offer savings accounts with a five percent interest yield, even though the prime rate set by the government reached 20 percent in 1980 and other banks began offering savings accounts with much higher interest rates. PSFS chose not to follow the lead of its competitors because it argued that its average depositor was retired, had not matured and was unaware of the higher interest rates of other banks, and that, therefore, the bank could get away with keeping interest rates low simply because its customers were inert. This left the door open for competitors who could easily poach their customers without the bank showing a meaningful response.

Organizational willingness to make positive changes to improve business processes Boyer, M., & Robert, J. (2006). Organizational inertia and dynamic incentives. J. Econ. Behave. Organ. 59, 324-348.

doi: 10.1016/j.jebo.2004.06.024 Economic experts repeatedly call for transparency and communication in organisations. The benefits of clear communication are many, and combating organizational inertia is just one of them. Process excellence and the need to improve or change are encouraged in this endeavor with a dedicated focus. Leaders have the right mix of people who are constantly measuring the status quo and exploring new ways to continually improve processes. A long-term roadmap, business goals combined with well-structured process goals and process improvements are a common location! Moradi, E., Jafari, S. M., Doorbash, Z. M., & Mirzaei, A. (2021). Influence of organizational inertia on business model innovation, open innovation and business performance.

Asia-Pacific. Manag. 26, 171-179. doi: 10.1016/j.apmrv.2021.01.003 Stanford Business School has published a study examining the role that business complexity and opacity can play in organizational inertia. They found that the more complex and opaque an organization is, the harder it is to change it. Allcorn, S., & Godkin, L. (2011). Psychodynamics in the workplace and the management of organizational inertia. Compete. 21, 89-104.

doi: 10.1108/10595421111106247 Business inertia is a term used to describe an established company that remains rigid in its thoughts and actions, rather than being open to changing industry and business dynamics. It`s easy for business leaders to become complacent when things are going well. Ultimately, inertia leads to a loss of competitive advantage that keeps companies trapped in traditional operating models and halts growth. Culture inertia can also prevent a company from responding quickly to competitive challenges. “Culture” describes elements that are stable and resistant to change in social behaviour. Cultural inertia often manifests itself in overly complex processes and routines that a company has built into its day-to-day operations, such as managers making virtually every decision in committee, holding endless meetings instead of delegating decision-making authority to individuals. When your business suffers from inertia, it is less able to adapt to competitive changes. There are three types of organizational inertia: The law of inertia states that objects remain at rest or move in a straight line in constant motion, unless they are affected by an unbalanced external force. Simply put, things like to stay the way they are, things want to do what they already do. There are many forces pushing and pulling other things; When an object exerts an unbalanced force on itself, it changes direction and/or speed. Dew, N., Goldfarb, B., & Sarasvathy, S.

(2006). Optimal inertia: when organizations should fail. School. Strategy 23, 73-99. doi: 10.1016/s0742-3322(06)23003-1 Indirect inertia can be resolved when an organization ultimately decides to incur short-term losses for long-term gain. If this happens quickly enough, a company may be able to regain some of the missed opportunities. However, if this change is delayed for too long, it may allow a competitor to establish a dominant position in the new landscape and may not win back the new company. In the same way, the distortion of negativity can lead us to inertia. And the tendency to this distortion is amplified only in one group.

This means that when company management meets to discuss an important decision, your individual fears will come together and multiply. This, in turn, makes it even less likely that you will consider the radical change that could keep your business alive. Disruption has recently become a hot topic in the business world. And it`s easy to see why. We`ve seen giants like Polaroid and Blockbuster beaten, and we`ve seen entire industries like traditional taxi and auto services and publishing disrupted by radical changes in the ecosystem in which they operate. Business model design is becoming an essential source of business innovation in today`s competitive world. Business model innovation refers to the creation or reinvention of existing business models by developing new value creation systems, proposing new value propositions and building original value capture mechanisms. However, to adopt the innovative business model in an organization, inertia to change is a major obstacle, and its role has not been fully studied. The objective of this study is to examine the effects of organizational inertia on open innovation, business model innovation and business performance. Using the survey as a research model, the data was collected from 160 companies operating in the IT industry in the city of Tehran. These companies were selected through an evaluation sample.

The hypotheses were tested using the structural equation modeling technique via SmartPLS2 software. The results indicate that organizational inertia has a negative relationship with business model innovation and open innovation; However, business model innovation and open innovation have a positive effect on performance. Hirschmann, G. (2021). The reactions of international organisations to Member States` challenges: from inertia to resilience. 97, 1963–1981. doi: 10.1093/ia/iiab169 It would be fair to assume that most companies at large understand a company`s key business processes and their importance to business growth and results. Oyadomari, J. C. T., Afonso, P.

S. L. P., Dultra-de-Lima, R. G., Mendonça Neto, O. R. R. and Righetti, M. C. G.

(2018). Flexible budgeting influences organizational inertia and flexibility. J. Product. Execute. Manag. 67, 1640-1656. doi: 10.1108/ijppm-06-2017-0153 Simply put, organizational inertia is when a company is “fixed in its own way.” According to Richard P. Rumelt, author of Good Strategy, Bad Strategy, inertia generally falls into one of three categories: 1) habit inertia, 2) cultural inertia, and 3) indirect inertia.