The Psychology of Why Organizations Can be Slow to Adapt and Change

Abstract

This article discusses what can be done about bias in human decision making to make organizations adapt to change. In conclusion, individuals follow cognitive habits, seeing challenging situations through a singular frame of reference that makes assumptions about the nature of problems or opportunities that arise. Additionally, we feel that our judgment is good. Furthermore, this perception is reinforced by both the confirmation bias and the hindsight bias that underpin an inappropriate confidence in our judgment. Such over-confidence will lead to inappropriate best-guess thinking about the future--as illustrated in our earlier case studies of strategic inertia or business-as-usual thinking. Our analysis illustrated that the risks were perceived to be serious if the company did not change its current failing strategy and, also, that the risks were seen to be serious if the company did change the strategy. There was strong evidence that the senior management team attempted to shift responsibility for its adherence to the current strategy to the top level board of directors--that is, buck passing. Additionally, the management team also evidenced delay and procrastination--whilst bolstering the current failing strategy