An Historical Analysis of Continual Change

We use a systemic process model of continual change to examine patterns of continuity and discontinuity in the policy processing systems of four auto insurance companies. The model draws on theories of deep structure, inertia and punctuated equilibrium. It demonstrates how variation across the units of an organization resulting from diversity in local competitive environments, coupled with continual changes, creates emergent and dynamic patterns of influence at the unit and organizational system level that complicate the innovation diffusion process. Field research using historical methods for data collection enabled us to trace the development of each organization s primary processing system back to its beginnings and provided substantive support for the oscillations that organizations face as they struggle with the tension between the need to innovate and the complexity that results. The model provides a sensitizing lens that reveals the tensions between the need to differentiate products to address local competitive needs and the role of standards, which enable units to more easily share existing processes and to adopt wholesale system changes en mass.