Balance between Managerial Inertia and Managerial Flexibility during Organizational Change: A Dynamic Model

Based on the debate between strategic management theory and organizational ecology theory about managerial inertia and managerial flexibility, the paper proposes a model for deciding the optimal balance between managerial inertia and managerial flexibility. In the model, inertia and flexibility are not recognized to be static, instead, they are changing with specific organizational changes. Managerial inertia can be measured by political cost of change, while managerial flexibility can be measured by efficiency improvement of change. There is no absolute flexibility, otherwise organizational change can´t last. And there is no absolute inertia either, otherwise, the efficiency will decrease much. During organizational change, inertia and flexibility are balanced through dynamic games that decide the optimal status of managerial inertia and managerial flexibility.