A Piecewise Regression Model for Identifying the Strategic Inflection Point for Organizational Change

Debora D’Avino
Department of Aeronautical Engineering, University of Naples Federico II, Italy

Pasquale Erto
Department of Aeronautical Engineering, University of Naples Federico II, Italy

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Publicerad: 2008-02-15


ISSN: 1650-3686 (tryckt), 1650-3740 (online)


Nowadays; organizational change has become a mandatory condition to survive in the marketplace for all companies. In fact; a business needs to be able to adapt to changes of its external environment in order to remain competitive (Black and Crumley; 1997). In particular; since the late 1970s a number of change drivers; i.e. new technologies; new knowledge; new customer preferences; the deregulation of several industries and the increased globalization of trade; have caused an acceleration of environmental change (Dervitsiotis; 2003). Consequently; it was found that in 1991; between 60-70 per cent of the Fortune 100 largest global companies did not exist at all or in any form similar to what they were like in 1970 (Stockport; 2000). Therefore; many business school academics tried to identify the reasons of these failures. A typical example of the examined case studies is the history of the disk drive industry; where changes in technology; market structure; global scope and vertical integration have been very pervasive; rapid and unrelenting (Christensen; 1997). For this case; some scholars have attributed the high mortality rate to the unfathomable pace of technological change. On the contrary; a deeper study of the history of the disk drive industry revealed that the different impact of technological change were at the root of the leading firms’ failures (Christensen; 1997). Two types of technological change were identified: the technological changes that sustain or reinforce established trajectories of product performance (sustaining technologies) and the technological changes that disrupt or redefine performance trajectories (disrupting technologies). The last ones result in the failure of the industry’s leading firms.

In the same way; we can characterize two different environmental changes: sustaining changes and disrupting changes. Therefore; when a sustaining change occurs; an organization can survive in the marketplace with minor adjustments or adaptation. Instead; when a disrupting change occurs; an organization has to face with a larger strategic transformation.


Organizational change; Piecewise regression; S-curve; Strategic inflection point


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