Implementing Change in Organizations

with Jin Li, Niko Matouschek, and Xi Weng

This paper examines how the process of change influences the efficiency of subsequent routines. In doing so, it provides a theory of how history in a pre-game can account for steady-state selection in a long-run relationship. This theory provides an explanation for heterogeneity in firm- and plant-level performance that persists even after controlling for organizational practices and technology. We also propose several instruments a firm can use to reduce the history-dependence of its long-run outcomes.