argue that their tendency to inertia can provide organizations with some short-term competitive advantage. From organization theory and much research, we know that organizations do not adapt readily or easily; many organizations that change do so in ways that are neither successful nor effective. Organizations must continually balance the forces of stability and the push for change.

Nevertheless, organization theory and managerial wisdom suggest that, to survive, organizations must be compatible with their environments, which include all the external social, economic, and political conditions that influence their actions. In the current environment of rapid technological and societal change, organizations must adapt quickly enough to maintain their legitimacy and the resources they need to stay viable. In the committee's judgment, the greatest opportunities for enhancing organizational performance today are likely to be found on the change side of the equation. The major focus of this book is therefore on considering organizations in the context of change.

The Context Of Change

Organizations today must function and attempt to flourish under conditions that are complex, rapidly changing, and in some respects unprecedented. The stakes are high and the risks are great. Of the 500 largest firms on the first such list published by Fortune magazine in 1956, only 29 remain. Voluntary mergers and joint ventures, hostile takeovers and poison-pill resistance to them, conglomerations and divestitures have created an organizational environment of prolonged turbulence.

These changes are manifestations of a deeper and more general transformation: the shift in the developed world from an industrial to an information economy. As recently as 1960, about half the workers in industrialized countries were involved in making things. By the year 2000, no developed country is likely to have more than one-eighth of its workforce performing such tasks. Only the earlier Industrial Revolution and the more gradual mechanization of agriculture were comparable in their magnitude of change and ramifying societal effects.

The driving force of these changes is technological and primarily involves information technology. This technology, which has been created within the lifetime of today's adults and which today's children take for granted, has developed at a remarkable pace. To illustrate: a musical greeting card that plays ''Happy Birthday" has more computer power than existed in the entire world before 1950. A home video camera has more processing power than the original IBM 360 mainframe computer.

Our computer-transformed capacity to generate, store, analyze, and communicate information is changing the way we live, work, and think. New



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