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This study aims to examine how open innovation can be effective in changing organizational inertia to create business model innovation and improve firm performance. It also seeks to explore whether the existence of open innovation has a mediating effect and influence.

This study constructs a theoretical model to explore the relationship between latent variables and uses a questionnaire to collect research data. In the conceptual framework, organizational inertia is a second-order latent variable and comprises three first-order latent variables: insight inertia, action inertia, and psychological inertia. Open innovation is also a second-order latent variable, and consists of two first-order latent variables: outbound and inbound open innovation. To clarify the relationship between these latent variables, structural equation modeling (SEM) is used to test the goodness of fit of the theoretical model and research hypotheses. This study uses 141 small to medium-sized manufacturing enterprises (SMEs) in Taiwan as the research subjects.

The SEM analysis revealed that open innovation has a significant mediating effect on the relationship between organizational inertia and business model innovation, and the relationship between organizational inertia and firm performance; business model innovation also has a positive influence on firm performance.

This study contributes the empirical analysis of SMEs to illustrate the role of open innovation on business model innovation processes.

Knowledge management (KM) is associated with higher performance and innovative culture; KM can help the public sector to be fiscally lean and meet diverse stakeholders’ needs. However, hierarchical structures, bureaucratic culture and rigid processes inhibit KM adoption and generate inertia. This study aims to explore the nature and causes of this inertia within the context of the United Arab Emirates (UAE) public sector.

Using an in-depth case study of a UAE public sector organisation, this study explores how organisational inertia can be countered to enable KM adoption. Semi-structured interviews are conducted with 17 top- and middle-level managers from operational, management and strategic levels. Interview data is triangulated with content analysis from multiple sources, including the UAE Government and case organisation documents.

The results show transformation leadership, external factors and organisational culture mediate the negative effect of inertia on KM practices adoption. We find that information technology plays a key role in enabling knowledge creation, access, adoption and sharing. Furthermore, we uncover a virtuous cycle between organisational culture and KM practices adoption in the public sector. In addition, we develop a new model (the relationship between KM practices, organisational inertia, organisational culture, transformational leadership traits and external factors) and four propositions for empirical testing by future researchers. We also present a cross-case comparison of our results with six private/quasi-private sector cases who have implemented KM practices.

Qualitative data is collected from a single case study.

Inertia in a public section is a result of bureaucracy and authority bounded by the rules and regulations. Adopting a qualitative methodology and case study method, the research explores the phenomena of how inertia impacts KM adoption in public sector environments. Our findings reveal the underlying mechanisms of how internal and external organisational factors impact inertia. Internally, supportive organisational culture and transformational leadership traits positively effect KM adoption, which, in turn, has a positive effect on organisational culture to counter organisational inertia. Externally, a progressive national culture, strategy and policy can support a knowledge-based organisation that embraces change. This study develops a new model (interactions between internal and external factors impacting KM practices in the public sector), four propositions and a new two-stage process model for KM adoption in the public sector. We present a case-comparison of how the constructs interact in a public sector as compared to six private/quasi-private sector cases from the literature.

The purpose of this paper is to provide a process model on how mindfully performed organisational routines can simultaneously enable organisational stability and organisational change.

Via conceptual analysis, the authors develop several propositions and a process model integrating the theory of mindfulness and performative aspects of organisational routines with organisational stability and change. To do so, the authors review the literature on organisational routines, mindfulness, stability, inertia and change.

First, the authors demonstrate that, based on levels of mindfulness employed, performative aspects of organisational routines can be categorised as mindless, mindful and collectively mindful (meta-routines). Second, in the process model, the authors position the mindless performance of routines as enabling organisational stability, mediated through inertial pressure and disabling change, mediated through constrained change capacities. Finally, the authors state that engaging routines with mindfulness at an individual (mindful routines) or collective (meta-routines) level reduces inertia and facilitates change. Such simultaneous engagement leads to either sustaining stability when required or implementing continuous organisational change.

The framework uses continuous, versus episodic, change; future research can consider the model’s workability with episodic change. Future research can also seek to empirically validate the model. The authors hope that this model informs research in organisational change and provides guidance on addressing organisational inertia.

To the best of the authors’ knowledge, this study is the first to categorise the performative aspects of organisational routine based on the extent of mindfulness employed and propose that mindfulness-based practice of routines stimulates either inertia-induced or inertia-free stability and continuous change.

Although recent public attention has focused on boom-and-bust cycles in industries and financial markets, organizational theorists have made only limited contributions to our understanding of this issue. In this chapter, I argue that a distinctive strategic insight into the mechanisms generating boom-and-bust cycles arises from a focus on entrepreneurial inertia – the lag time exhibited by organizational founders or investors entering a market niche. While popular perceptions of boom-and-bust cycles emphasize the deleterious effect of hasty entrants or overvaluation, I suggest instead that slow, methodical entries into an organizational population or market may pose far greater threats to niche stability. This proposition is explored analytically, considering the development of U.S. medical schools since the mid-18th century.

This paper aims to examine the influence of the dynamic capabilities of small and medium enterprises (SMEs) on organizational performance, and the interaction between dynamic capabilities and organizational inertia in a volatile environment.

A quantitative survey was carried out in Lithuania's SME sector. In order to achieve the aim of this empirical research, a sample of 360 SMEs was analyzed.

This exploratory study offers a conceptual model for dynamic capabilities and organizational inertia in a volatile environment. The findings suggest that dynamic capabilities have positive effects on non-financial relative organizational performance, though no impact on financial relative organizational performance has been revealed. The authors argue that organizational inertia moderates dynamic capabilities and relative organizational performance.

One suggestion for further research is to investigate the interaction between dynamic capabilities and organizational inertia in a stable environment and to perform longitudinal research embracing a broader sample of organizations.

The study addresses a gap in strategic management literature and practice, examining the interaction between SME dynamic capabilities and organizational inertia in a volatile environment during an economic crisis.

The literature of organizational change hints that adaptability and inertia not only counterbalance but also reinforce each other, and the inertia-adaptability balance over time is nonlinear. The author aims to address this view more clearly by presenting a multi-stage conceptual model that delineates how adaptability and inertia take turns to override each other. In addition, data collected from over 400 nonprofit organizations within the USA were used to test this model.

This study uses polynomial regression to examine the multi-stage conceptual model. More precisely, it tests how organizational age influences an organization's innovativeness, managerial risk aversion, and red tape.

The findings support the multi-stage conceptual model. The results imply that organizational ecology and rational adaptation are mutually compatible perspectives in explaining organizational age dynamics.

This study introduces a multi-stage model that more clearly examines how adaptability and inertia counterbalance and reinforce over time. More importantly, the author empirically examines the nonlinear organizational age dynamics using quantitative data.

This study aims to explore the impact of organizational search (local and boundary-spanning search) on business model innovation (efficiency-centered/novelty-centered business model innovation) and the moderating role of knowledge inertia between them.

The relationships are examined through data provided by a sample of Chinese firms and by multiple hierarchical regressions.

Local search has a stronger effect on efficiency-centered business model innovation, whereas boundary-spanning search plays a stronger role in novelty-centered business model innovation. Knowledge inertia strengthens the effect of local search on efficiency-centered business model innovation but weakens the effect of boundary-spanning search on efficiency-centered business model innovation and the effect of local search on novelty-centered business model innovation.

The findings enable firms’ managers to understand the subtle ways in which organizational search interacts with knowledge inertia to affect business model innovation and may help them to make knowledge management efforts to harvest the full value of organizational search.

Previous studies have not examined the effect of different organizational search on different business model innovation from knowledge management perspective. With knowledge inertia as the moderator, the results reveal the contingent impact mechanism of organizational search on business model innovation, the findings provide fresh evidence that can bridge the gap between knowledge management and business model innovation.

This study aims to investigate the direct effect of intellectual capital on the organizational performance of Indonesian state-owned enterprises (SOEs) and their subsidiaries. Furthermore, it also examines whether the relationship is mediated by open innovation and moderated by organizational inertia.

This study is designed as quantitative research. A survey method is employed to collect data by distributing questionnaires to the upper-level managers of the SOEs and their subsidiaries. A total of 293 questionnaires were distributed to the respondents, and 97 responses were obtained for further analysis. The partial least square structural equation modeling (PLS-SEM) is used to test the hypotheses. A mediation-moderation research framework is employed.

The results show that intellectual capital has a positive effect on organizational performance. Further results also demonstrate that open innovation mediates the intellectual capital–organizational performance relationship and organizational inertia moderates the intellectual capital–organizational performance relationship. Theoretically, the findings contribute to the resource-based view (RBV) and knowledge-based view (KBV) by providing empirical evidence of the importance of distinctive internal resources in achieving superior organizational performance. Practically, the findings provide strategic information for managers that they should properly manage intellectual capital, open innovation and organizational inertia because of their effects on organizational performance.

First, this study addresses the previous research gaps by confirming that intellectual capital has a positive effect on organizational performance in the research setting of an emerging market. Second, by using a mediation research framework, this study shows that open innovation mediates the relationship between intellectual capital and organizational performance. Third, by using a moderating research framework, this study also reveals that organizational inertia weakens the relationship between intellectual capital and organizational performance. Those associations are rarely researched.

The adaptation perspective dominates the issue of organizational change and assumes that organizational inertia increases organizational mortality. This assumption is inadequate to analyze organizational change in risky activities. The purpose of this paper is to underline the relevance of organizational inertia when organizations face risky environments.

A conceptual framework was built that combines the adaptation and selection perspectives from the evolutionary approach and the high‐reliability organizations literature and apply it to space activities.

First, it was found that to prevent catastrophic failures, space organizations reproduce routines validated in previous successful programs, which leads to situations of organizational inertia; and second, the opposing perspectives of selection and adaptation become complementary when the author focus on the level of risk faced by organizations.

This paper focuses on space organizations and not more general types of organizations. However, the findings could be generalized to organizations manufacturing complex products and systems.

The originality of the paper is based on the new empirical and theoretical frameworks provided to analyze organizational inertia. Organizational inertia may be a satisfying response to environments favoring organizations with high levels of reliability. This new way of viewing inertia would be of value to scholars studying organizations in which errors can have catastrophic consequences.

The purpose of this paper is to investigate how the use of flexible budgets may influence different institutional logics (organizational inertia and flexibility).

A qualitative research based on a single case study in a multinational subsidiary company was carried out. The data were mainly collected using the dialog technique through open-ended and semi-structured interviews and complemented with direct observation in informal and formal meetings and the analysis of internal documents. Content analysis was used for the analysis of the findings.

The use of flexible budgets, which isolates the negative variations due to the decrease in sales volume, may contribute to organizational inertia. However, this can be counterbalanced if the managers try to minimize the decline in performance through initiatives that promote organizational flexibility. In this case study, it was found that the alignment between the production director and the controller, who frequently work under different institutional logics, was important to stimulate organizational flexibility particularly in continuous improvement projects.

The findings of this paper are based on only one in-depth case study. Hence, the results cannot be generalized, but a theoretical contribution can be made. Furthermore, the findings are constrained by the constructs used and the specific managerial and theoretical perspectives that have supported the analysis.

These results can be useful particularly for companies that are dealing with the abrupt drop in the sales volume and use the flexible budget as a performance assessment technique. These firms must pay attention because this combination can stimulate organizational inertia. To counteract this problem, it is necessary that controllers and the managers work by understanding the initiatives that promote organizational flexibility, mainly by Kaizen projects, which can minimize performance decline.

The main contribution may be how to deal with the different managers’ behaviors, given the decrease in sales volume, and it can help an organization survives in times of economic recession and fierce competition environments.

This paper contributes to both practical and academic dimensions. Indeed, despite being widely used, flexible budgeting is not a widely researched topic.