Resistance to Change

19 Pages Posted: 12 May 2010

See all articles by James Dow

James Dow

London Business School - Institute of Finance and Accounting

Enrico C. Perotti

University of Amsterdam - Finance Group; Centre for Economic Policy Research (CEPR); Tinbergen Institute

Multiple version iconThere are 2 versions of this paper

Date Written: May 10, 2010

Abstract

Established firms often fail to maintain leadership following disruptive market shifts. We argue that such firms are more prone to internal resistance. A radical adjustment of assets affects the distribution of employee rents, creating winners and losers. Losers resist large changes when strong customer goodwill cushions the consequences. Partial adaptation may lead winners to depart to form new firms with no goodwill, but no internal resistance.

Keywords: Resistance to Change, Leadership, Adaptation

JEL Classification: D21

Suggested Citation

Dow, James and Perotti, Enrico C., Resistance to Change (May 10, 2010). FEEM Working Paper No. 48.2010. Available at SSRN: https://ssrn.com/abstract=1603801 or http://dx.doi.org/10.2139/ssrn.1603801

James Dow

London Business School - Institute of Finance and Accounting ( email )

Sussex Place
Regent's Park
London NW1 4SA
United Kingdom
+44 20 7262 5050 (Phone)
+44 20 7724 3317 (Fax)

Enrico C. Perotti (Contact Author)

University of Amsterdam - Finance Group ( email )

Plantage Muidergracht 12
Amsterdam, 1018 TV
Netherlands
+31 20 525 4159 (Phone)
+31 20 525 5285 (Fax)

HOME PAGE: http://www.fee.uva.nl/fm/people/pero.htm

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Tinbergen Institute ( email )

Gustav Mahlerplein 117
Amsterdam, 1082 MS
Netherlands

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