The effect of core change on performance: Inertia and regression toward the mean

This paper examines the consequences of changes in the organization's marke t position on its market share, testing arguments of inertia and regression toward the mean and taking into account recent methodological critiques of studies on the consequences of organizational change. A study of format ch ange in the U.S. radio industry, 1984-1992, shows that changes cause perfor mance to decline, as inertia theory predicts, but this is moderated by orga nizational size and performance before the change, so change can be benefic ial for low-performing organizations but may be harmful for large and succe ssful organizations.