The paradox of stability and change: a case study

Abstract

Purpose
The traditional dualism view regards stability and change as opposites and separate, two essential but largely incompatible and mutually exclusive elements in an organization, and it advocates contingency theories to handle the paradox situation; more recent research has adopted the paradoxical lens to highlight both the contradiction and the interdependence between the two elements. This paper aims to address how an organization pursues stability and change simultaneously, i.e., how stability and change contradictorily enable each other to promote the development of an organization.

Design/methodology/approach
By adopting a case study on the strategic and structural change of Signcomplex in China, this paper attempts to explore the paradoxical relationship between stability and change, especially their interdependence. Multiple approaches were used during data collection to meet the criteria for trustworthiness, and the data analysis went through a five-step process. Through this analysis, the main mechanisms of stability and change were identified. An analysis was also conducted on how these stable and variable mechanisms enable each other, and finally, a framework was set up to show this paradoxical relationship.

Findings
The results confirm the paradox of stability and change: stability enables change by supplying security and consistency, offering reserved knowledge and skills and enabling commitment and the provision of resources for a better realization of the change. Change enables a firm to set up a new state of stability through variable mechanisms such as trial-and-error and exploration activities. The results also indicate that the nature of organizational change is to help an organization reach a new stable stage with higher efficiency and that organizational development relies on the paradoxical effects of both stability and change.

Research limitations/implications
This research is constrained by several limitations. The findings need to be further confirmed through the investigation of more organizations; other stable mechanisms, such as habits, tight coupling, commitments, control and low variance, and variable mechanisms, such as search, mindfulness, redundancy and openness, should be considered. As an organization may experience many cross-level or cross-department changes which struggle with each other for resources and with stable mechanisms, to explore the paradox, future research may need to conduct a more in-depth examination of the system of change.

Originality/value
The findings offer some valuable insights for further research and hold important implications for management practices, especially management practices in a Chinese context. The findings extend the existing paradox theory by further revealing how stability and change enable each other and offer a paradoxical perspective to look into the nature of organizational change and organizational development. The results remind managers to rethink the relationship between stability and change, to factor these coexisting concepts into their decision-making and to accept, understand and use this paradoxical relationship to realize synergistic effects for the firm.

Full text

The paradox of stability and
change: a case study
Haifen Lin,Tingchen Qu,Li Li and Yihui Tian
School of Economics and Management, Dalian University of Technology,
Dalian, China
Abstract
Purpose –The traditional dualism view regards stability and change as opposites and separate, two
essential but largely incompatible and mutually exclusive elements in an organization, and it advocates
contingency theories to handle the paradox situation; more recent research has adopted the paradoxical lens
to highlight both the contradiction and the interdependence between the two elements. This paper aims to
address how an organization pursues stability and change simultaneously, i.e., how stability and change
contradictorily enable each other to promote the development of an organization.
Design/methodology/approach –By adopting a case study on the strategic and structural change of
Signcomplex in China, this paper attempts to explore the paradoxical relationship between stability and
change, especially their interdependence. Multiple approaches were used during data collection to meet the
criteria for trustworthiness, and the data analysis went through a five-step process. Through this analysis, the
main mechanisms of stability and change were identified. An analysis was also conducted on how these
stable and variable mechanisms enable each other, and finally, a framework was set up to show this
paradoxical relationship.
Findings –The results confirm the paradox of stability and change: stability enables change by supplying
security and consistency, offering reserved knowledge and skills and enabling commitment and the provision
of resources for a better realization of the change. Change enables a firm to set up a new state of stability
through variable mechanisms such as trial-and-error and exploration activities. The results also indicate that
the nature of organizational change is to help an organization reach a new stable stage with higher efficiency
and that organizational development relies on the paradoxical effects of both stability andchange.
Research limitations/implications –This research is constrained by several limitations. The findings
need to be further confirmed through the investigation of more organizations; other stable mechanisms, such
as habits, tight coupling, commitments, control and low variance, and variable mechanisms, such as search,
mindfulness, redundancy and openness, should be considered. As an organization may experience many
cross-level or cross-department changes which struggle with each other for resources and with stable
mechanisms, to explore the paradox, future research may need to conduct a more in-depth examination of the
system of change.
Originality/value –The findings offer some valuable insights for further research and hold important
implications for management practices, especially management practices in a Chinese context. The findings
extend the existing paradox theory by further revealing how stability and change enable each other and offer
a paradoxical perspective to look into the nature of organizational change and organizational development.
The results remind managers to rethink the relationship between stability and change, to factor these
coexisting concepts into their decision-making and to accept, understand and use this paradoxical
relationship to realize synergistic effects for the firm.
Keywords Stability, Organizational change, Interdependence, Paradox theory
Paper type Case study
The authors are supported by the National Natural Science Foundation of China Project (71572025,
71872026, 71632004, 71402016), Liaoning philosophy and social science planning fund (L18BGL039),
the Fundamental Research Funds for the Central Universities (DUT19RW205).
Paradox of
stability and
change
185
Received 31 October2018
Revised 20 May 2019
3July2019
1August2019
Accepted 16 August2019
Chinese Management Studies
Vol. 14 No. 1, 2020
pp. 185-213
© Emerald Publishing Limited
1750-614X
DOI 10.1108/CMS-10-2018-0725
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1750-614X.htm

1. Introduction
The development of organizations relies on a stable, regular and predictable context where
employees are able to understand and trust the organizational concept and settings and
where they can undertake tasks in a highly efficient manner; in addition, in this context,
organizations are able to concentrate their resources and attention on obtaining key goals
(Biggart and Beamish, 2003). Especially before the 1980s, when the global environment was
relatively stable and the pace of change was comparatively slow, organizations tended to
adopt incremental strategies with a greater emphasis on continuity and stability (Quinn and
Cameron, 1988). Thus, early research regarded organizational stability mechanisms, such as
the institutional relationships (Scott, 2001) and organizational routines (Nelson and Winter,
1982) through which organizations accomplished their objectives, as an important source of
regularity, continuity, accountability and political protection as well as of stagnation
(Thompson et al.,1967). However, an overemphasis on stability may lead to inertia,
inflexibility, mindlessness, deskilling and even competency traps (Ilgen and Hollenbeck,
1991;March, 1991). Particularly, as competition intensifies and globalization accelerates,
organizations increasingly rely on uncertainty, novelty and unpredictability to foil the best
plans and upset existing orders(Birkinshaw et al.,2008;Tushman and O’Reilly, 2002). Firms
are now actively involved in changes, as they realize the critical contribution of change to
the firm’s long-term success (Birkinshaw et al., 2008;Lin and Su, 2014;Mol and Birkinshaw,
2009;Vaccaro et al., 2012). Such change reflects intentional reversals of personnel and
structural growth dynamics in organizations and assists in increasing firm productivity,
improving quality and achieving an enduring firm competitive advantage for continuous
development (Pil and MacDuffie, 1996). In summary, both stability and change are essential:
the former ensures high efficiency, while the latter confirms long-term development.
When considering the conflict between stability and change, the traditional dualism view
regards them as mutually exclusive elements, as in an invariable “either-or”situation (Poole
and van de Ven, 1989). Stability and change and the practices, processes and forms that
support them are incompatible and mutually exclusive (March, 1991). This dualism view
advocates contingency theories and either/or approaches to handle this paradoxical
situation and to reduce the negative effects of the dual coexistence. The view of these
imperatives as separate and opposing elements remains dominant in theoretical and
empirical research and as a guide for practice (Benner and Tushman, 2003;He and Wong,
2004).
However, reflecting their paradoxical coexistence, stability and change are always
pursued simultaneously by firms. For example, McDonald’s, well known for standardization
(a stable mechanism), has been pursing change by adapting its menus, defining its
marketing mix based on some aspects of the local cultures, looking for new marketing tools
and even exploring new business models; however, many corporate giants who have
become well-known through innovation and change (e.g. Toyota Motors’Lean Production
System, General Motors’multidivisional structure and Haier’sefficient market-chain
system), also rely on institutions, rules and processes. The literature has implicitly
recognized that stability and change jointly contribute to organizational effectiveness and
has recently explored some of their complementarities (Feldman and Pentland, 2003;Zollo
and Winter, 2003). For example, the research on organizational routines finds that, reflecting
a paradox of stability and change, routines actually instill flexibility in the face of changing
external conditions (Feldman and Pentland, 2003). When reviewed through a “paradoxical
lens”, the organizational change literature suggests a certain persistent logic trend that is
dominant in organizational change thinking: the evolution or progression from the logic of
exclusion (either-or) to the logic of inclusion. For example, Farjoun (2010) presents an
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alternative duality view that depicts stability and change as conceptually distinct and
contradictory yet “also mutually enabling”(p. 202); Smith and Lewis (2011) confirm this
duality view and to explain tension, advocate the paradox theory as an alternative approach
to the contingency theory. They regard stability and change as a core paradox and present a
dynamic equilibrium model to depict how cyclical responses to paradoxical tensions enable
sustainability (Smith and Lewis, 2011). The idea that paradoxical tensions embed competing
demands that are contradictory yet interdependent has been broadly accepted (Smith et al.,
2017;Rosso, 2014). Nevertheless, the literature still contains gaps in discussing how stability
and change contradictorily rely on each other.
This paper focuses on the paradox of stability and change. Note that paradox actually
refers to both contradiction and interdependence. The contradiction between stability and
change is obvious and has been widely accepted by existingresearch; in this paper, we focus
on their interdependent relationship, thereby addressing both the theoretical and the
practical gaps with three questions.
Q1. How does stability support organizational change?
In recent years, by highlighting both contradiction and interdependence, the paradox theory
in management science has offered new insight into the relationship between contradictory
elements (Audia et al., 2000;Farjoun, 2010). Research studies have found that stability
actually represents a sort of inherent adaptability that enables the creation of support for
innovation and change (Dougherty, 2006). However, little research has explored how
stability actually promotes a change.
Q2. How does change enable the recreation of new stability?
Existing studies have confirmed that mechanisms of change (e.g. redundancy, loose
coupling and trial-and-error learning) enable systematic and long-term stability of an
organization from a theoretical perspective (Farjoun, 2010). However, little research has
explored how change helps a firm set up a new state of stability.
RQ3. How do stability and change mutually promote the development of an
organization? Alternatively, what is the nature of organizational change and
organizational development?
Considering stability and change as two fundamental elements for survival and
development of an organization (Poole and van de Ven, 1989;March, 1991), recent research
have offered a paradoxical lens to look into their relationship. Therefore, how stability and
change mutually enable the development of an organization needs further discussion, in
particular: What is the nature of organizational change? Is it the pursuit of differentiation, or
is it something else that helps a firm reach new stability?
Conducting an in-depth investigation into the company Signcomplex, especially its
transformation from a product diversification strategy to a specialization strategy, this
research attempts to uncover the black box of the paradox between stability and change and
to determine how this paradox facilitates the development of an organization.
2. Literature review
2.1 Definition of paradox
Paradox is a concept with roots in both Eastern and Western philosophy (Schad et al.,2016).
Eastern traditions, especially Buddhist, Hindu and Taoist, highlighted opposites and
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stressed the interdependence between oppositional elements (Chen, 2002); Western
traditions, especially the ancient Greeks, depicted paradox as both contradictory and
interdependent. More modern philosophy, particularly dialectical and existential
approaches, blends Eastern and Western understandings of interdependent contradictions
(Schad et al., 2016). For example, dialectical philosophers posit a natural conflict between
opposing elements (thesis and antithesis), while existentialism articulates the existential
paradox as a persistent ebb and flow between oppositional forces, specifically the finite and
the infinite.
Following this, redefining paradox, scholars introduced this paradoxical lens to
organization science. Lewis (2000) defines “paradox”as “contradictory yet interrelated
elements that seem logical in isolation but absurd and irrational when appearing
simultaneously”(p. 760); Smith and Lewis (2011) regard paradox as “contradictory yet
interrelated elements that exist simultaneously and persist over time”(p. 382); Schad et al.
(2016) define it as “persistent contradiction between interdependent elements”(p. 6). These
definitions identify two characteristics of paradox: contradiction and interdependence.
Contradiction lies at the heart of paradoxical tensions, while interdependence emphasizes
the inextricable links between opposing elements (Schad et al.,2016). Poole and van de Ven
(1989) describe paradoxes as “interesting tensions, oppositions, and contradictions between
theories, which create conceptual difficulties”(p. 564); Smith and Berg (1987) argue that
contradictions are bound together such that:
[...] the more that members seek to pull the contradictions apart, to separate them so that they
will not be experienced as contradictory, the more enmeshed they become in the self-referential
binds of paradox (p. 765).
2.2 Dualism view of stability and change
The traditional dualism view regarded stability and change as opposites and separate, two
essential but largely incompatible and mutually exclusive elements in an organization
(Poole and van de Ven, 1989). They each struggle for scarce resources; each tends to set up a
closed and self-reinforcing system, and each has different requirements for a high-level
organizational design and management mindset, in which the two contradictory elements
cannot be accepted (March, 1991). Therefore, early research advocated either/or approaches
in handling paradoxical tension, e.g. an either/or selection between bureaucracy and organic
structures, in contingency theories (Burns and Stalker, 1961) or between efficiency and
specialization, in models of technological and economic change (Abernathy, 1978). When
considering situations in which the contradictory elements are both essential, particularly in
an exploitation and an exploration scenario, scholars propose a trade-off approach to keep
them coexisting (March, 1991). According to March (1991),“Exploration includes things
captured by terms such as search, variation, risk taking, experimentation, play, flexibility,
discovery, innovation; exploitation includes such things as refinement, choice, production,
efficiency, selection, implementation, execution”(p. 71). Similarly, as Atuahene-Gima (2005)
explains, exploitation hones and extends current knowledge, seeking greater efficiency and
improvements, while exploration entails the development of new knowledge, experimenting
to foster the variation and novelty. Accordingly, exploitation is closely related to stability,
reflecting continuation of direction, local refinements and extensions of existing
competencies, technologies and paradigms and the reliability of experience; alternatively,
exploration is closely related to change, reflecting innovation and dynamic, long-term
efficiency (March,1991, 1996;Farjoun, 2010). Burgelman (2002) suggests setting up a new
department for exploration when maintaining existing departments for exploitation.
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Similarly, March (1994) proposes temporal and spatial separation. Temporal separation
reflects the organization’s sequential adoption of exploitation or exploration, while spatial
separation reflects the exploitation or exploration focus of different units within an
organization. According to this dualism view, exploitation and exploration tend to maintain
internal coherence and exclusion, and organizations can only support one concept at a time.
However, an organization that over-engages in change or exploration may suffer from
the costs of experimentation, while an organization that over-engages in stability or
exploitation may be trapped in a suboptimal stable equilibrium (Farjoun, 2010;March,
1991). Recent research on ambidexterity has attempted to find ways to balance
contradictory elements and avoid the negative effects of exclusion. Lavie et al. (2010) argue
that when firms seek to balance exploration and exploitation within a discrete field of
organizational activity, the traditional way of establishing organizational separation
between exploring and exploiting units or engaging in temporal separation may undermine
organizational performance. Instead, they find that firms that balance exploration and
exploitation across domains gain in profits and market value. Similarly, Eisenhardt et al.
(2010) highlight that balancing efficiency and flexibility comes through unbalancing to
favor flexibility and through cognitively sophisticated, single solutions rather than by
simply holding contradictions. Ambidexterity research confirms the complementariness of
contradictory elements, particularly exploitation and exploration.
2.3 Paradoxical view of stability and change
Paradox theory, which highlights both contradiction and interdependence, offers new
insights for looking into the relationship between contradictory elements, e.g. cooperation
and competition (Raza-Ullah et al., 2014), exploration and exploitation (Andriopoulos and
Lewis, 2009;Raisch and Birkinshaw, 2008), profit and purpose (Smith et al.,2013) and
particularly stability and change (Audia et al., 2000;Farjoun, 2010). A paradoxical lens
suggests a more integrated relationship, depicting the elements as mutually constituted:
each pole containing the seeds of its opposite (Khazanchi et al.,2007) and ontologically
inseparable such that one does not exist without the other (Orlikowski and Scott, 2015).
Thompson et al. (1967) first identify stability and change as two conflicting but also
interrelated elements and regard this paradox as the core within an organization; Weick
et al. (1999) illustrate the ongoing relationship between stability and change by noting that
high-velocity trains remain stable on the tracks because of ongoing shifts in response to
subtle variations. Klein et al. (2006) show how stable emergency room routines enable
doctors to dynamically shift leadership roles in response to changing situations. Farjoun
(2010) particularly conceptualizes stability and change as dualistic forces that not only are
complementary but also define one another. Schad et al. (2016) state that stability only
occurs when the system makes constant changes in response to the variability in the
environment; organizations can only accomplish variability when they have clear, stable
rules or routines.
The relationship between stability and change reflects the two characteristics of
paradox: contradiction and interdependence (Lewis, 2000;Schad et al., 2016). Stability and
change are always struggling for scarce resources and have conflicting requirements for
capabilities, which indicates a pair of oppositional and contradictory elements fostering a
tug-of-war experience. Additionally, stability and change rely on each other to create a
greater sense of wholeness and enable increased effectiveness and creativity (Schad et al.,
2016;Poole and van de Ven, 1989). According to Lewis (2000), the relationship between
stability and change is much like the two sides of a coin: mutually constituted and
ontologically inseparable. He and Wong (2004) regard the interdependence of stability and
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change as the core for the long-term success of an organization. Andriopoulos and Lewis
(2009) explain that exploitation and exploration mutually reinforce each other through
interactively supporting organizational learning: without exploration, there would not be
enough knowledge for exploiting, and without exploitation, there would not be enough
knowledge for building up the absorptive capability and stimulating attempts.
Farjoun (2010) describes stability and change as two-sided elements that “generally support
the same kind of outcomes, but not exclusively”(p. 205). Specifically, variable mechanisms,
such as diversity and experimentation, not only enable change and innovation but are also
instrumental in maintaining stability, particularly amid persistent perturbations;
conversely, stable mechanisms and institutions, such as routines and control, while still
supporting stable outcomes, also promote adaptability, innovation and exploration.
Therefore, attainingstability or change requires both stable and variable mechanisms.
Furthermore, Farjoun (2010) classifies the relationship between stability and change into
four different types: exploitation (stability), exploration (change), change enables stability
and stability enables change. In the “change enables stability”and the “stability enables
change”relationships, indicating the interdependence of stability and change, stability is
viewed as an outcome of change or its medium. Studies show that an innovative
organization relies on variation-enhancing practices and on control systems (Simons, 1995)
and highly disciplined and rigid specifications to guide its innovation processes (Dougherty,
2006). Similarly, Bigley and Roberts (2001) study incident command systems, and consistent
with other studies of high-responsiveness operations (Klein et al.,2006), show how these
flexible organizations benefit from bureaucracy, while avoiding some of its major
weaknesses. The existing research also has shown that variable mechanisms (e.g.
redundancy, loose coupling and trial-and-error learning) enable systematic and long-term
stability of an organization (Farjoun, 2010). The research on the high reliability of
complicated organizations (e.g. space shuttles, nuclear plants) argues that in a continuously
changing environment, to maintain a high-level of stability and a reliable operation, the
success of these organizations relies on redundancy and loose coupling rather than on
perfected parts and tight coupling (Landau and Chisholm, 1995). Wildavsky (1991) finds
that failures, trial and error, experimentation and risk-taking rather than risk aversion are
instrumental for long-term stability. According to Edmondson et al. (2001), in hospitals and
other high-reliability organizations, interpersonal risk-taking is key to finding solutions.
Most previous research on paradox or the relationship between stability and change,
such as Lewis (2000),Farjoun (2010),Smith and Lewis (2011) and Schad et al. (2016), has
adopted theoretical research methods, with the purpose of constructing paradox theories.
More recently, to deeply explore paradox theories, case study methods have been
extensively adopted. For example, Knight and Paroutis (2017) use a longitudinal, embedded
case study to theorize the role of the top management team leader’s practices in enabling
paradox tensions to become salient; Calabretta et al. (2017) draw on case studies to
empirically derive a three-step process for managing the intuition–rationality tension
through paradoxical thinking. Milosevic et al. (2018) employed an instrumental case study of
a multisystem hydroelectric power producer to explore how new knowledge is created in a
context of paradox. However, rather than focusing on the paradox between stability and
change, these case studies focus on issues such as leadership, intuition–rationality tension or
new knowledge creation, in the context of paradox.
In conclusion, the traditional Dualism View and The Paradoxical View show
differentiations in the basic ideas, hypothesis and approaches in handling paradoxical
tension, as shown in Table I. The former regards stability and change as two opposites,
largely incompatible and mutually exclusive elements in an organization, and advocates
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contingency theories and either/or approaches to handle this paradoxical situation, with the
purpose of keeping consistency between the external and internal environment of an
organization; while the latter considers stability and change as conceptually distinct and
contradictory yet “also mutually enabling”elements, and advocates creating a virtuous
cycle between stability and change, to produce greater holistic effects and realize long-term
success. To be noticed, the paradoxical view is not a replacement of the dualism view, but a
new perspective to handle conflicting elements, and look into the nature of organizational
change and development.
Existing research has confirmed that stability and change are a pair of paradoxical
elements and has preliminarily explored their interdependence; however, the literature
contains gaps in discussing how stability and change contradictorily rely on each other and
in examining how stability and change can be balanced such that they could benefitfrom
coexistence when organizations rely on both stability and change. This research attempts to
address these issues.
3. Methodology
3.1 The case study
This paper adopts an interpretive and exploratory case study. Case studies are effective for
theory development, as they are rich, empirical descriptions of particular instances of a
phenomenon and emphasize the real-world context in which phenomena occur and form the
basis for inductive theory development (Eisenhardt, 1989;Yin, 1994). As the theory-building
process is necessarily embedded in rich, empirical data and requires cycling among case
data, emerging theory and extant literature, building theory from cases is likely to produce
theory that is accurate, interesting and testable. Hence, the case study has been extensively
adopted to develop theories in organizational research, especially where basic theoretical
exploration is lacking (Andriopoulos and Lewis, 2009). Because gaps do exist in the
literature on the paradoxical relationship between stability and change, particularly little
research has been conducted on exploring how they support each other; therefore, an
exploratory case study might be appropriate for developing a theoretical framework from
case-based evidence. Additionally, as Yin (1994) suggests, when addressing questions of
“how”or “why,”case studies would be more suitable. In this research, it is a “how”question.
Table I.
Dualism view and
the paradoxical view
of stability and
change
Views Basic ideas Hypothesis
Approaches in handling
paradoxical tension
The Dualism
View
Stability and change are two
opposites, largely
incompatible and mutually
exclusive elements in an
organization
Keeping consistence between
the external and internal
environment of an
organization is fundamental
for its success
This dualism view advocates
contingency theories and
either/or approaches to handle
this paradoxical situation and
to reduce the negative effects
of the dual coexistence, by
considering which context is
suitable for stability and
which is for change
The
Paradoxical
View
Stability and change are
conceptually distinct and
contradictory yet “also
mutually enabling”
Confliction represents the
nature of organizations, and if
it is well managed, it will be
helpful for their success
The Paradoxical View
advocates creating a virtuous
cycle between stability and
change, to produce greater
holistic effects
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Moreover, case studies have been extensively adopted in the field of paradox research, such
as Knight and Paroutis (2017),Calabretta et al. (2017) and Milosevic et al. (2018).
As for the number of cases, though Eisenhardt (1989) and Eisenhardt et al. (2010)
advocate a multiple-cases design by considering the replication logic that each case serves
as a distinct experiment, single cases are also useful for representing a critical case that is an
extreme, unique or revelatory case (Yin, 1994). Therefore, a single case study was adopted in
this research because the case chosen here is a critical one that meets all the necessary
conditions for developing a paradoxical framework of stability and change. Moreover, it
allows us to conduct an in-depth investigation of the phenomena to provide a rich
description and an understanding of the practices in Signcomplex, China.
3.2 The case subject
For our case, we selected Signcomplex Ltd. (Signcomplex) from the LED industry. The LED
industry has experienced a rapid development process, especially in China. First, it has
achieved abundant R&D technology breakthroughs, such as organic panchromatic laser
display panels and micro LED chips. Second, most firms in this industry have improved
their efficiency through organizational innovations. Moreover, Signcomplex not only
services the domestic market but also has taken a large share in the international market.
Founded in 2006, Signcomplex has become a state-level high-tech and TüV ISO 9001:2015
certified and registered firm in China. It owns advanced LED luminaire manufacturing
facilities (e.g. auto SMT machines and reflow soldering machines) and professional test
equipment (e.g. IP68 waterproof level test machines, integrating spheres, AOI testers and
RoHS scanners). Devoting itself to developing new products with state-of-the-art
technologies, Signcomplex, with a sales volume of US$70m and over US$20m profit in 2017,
owns more than 200 patents and exports 95 per cent of its products to 83 countries and areas
around the world. Currently, it enjoys a high reputation throughout the international
market, especially in Europe and the USA. In summary, Signcomplex is a successful
international firm that hasnotonly been able to offer products with high efficiency to ensure
high profit but has also been able to flexibly cater to the high requirements from developed
markets: in its development, Signcomplex can pursue both efficiency and flexibility or
stability and change.
More specifically, Signcomplex is appropriate for our research. First, offering us a good
opportunity to explore paradox in the context of change, Signcomplex experienced a
development process with three important changes: from a foreign trader to a manufacturer;
from a product diversification strategy to a specification strategy, with the transformation
of a line-functional structure to a divisional structure; and from an original design
manufacturer (ODM) to an original brand manufacturer (OBM). Second, through each
developmental change, Signcomplex was able to reach a new state of stability, which
indicates that the success of Signcomplex relied on both change and stability. Third,
Signcomplex offered us the chance to conduct an in-depth investigation into the firm,
especially the process of its strategic change.
3.3 Case description
Table II shows a brief description of the three main changes in Signcomplex. Considering
the importance of strategic change and the length limitation of this paper, note that we only
focused on the second change to explore this paradox issue.
In Shenzhen, one of the most prosperous cities in China, in 2006, Signcomplex was
founded by three co-founders as a foreign trader of luminaire products. Relying on customer
resources accumulated by the co-founders, Signcomplex achieved $2m of sales in the first
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year. Two years later, Signcomplex set up new plants and labs, installed new equipment and
employed technicians, production line staff and office members. Then, a new Signcomplex
focusing on both trade and production was built up. It adopted a line-functional structure
with clear divisions.
As the launch of the “Ban on Incandescent Lamps”policy by the Chinese Government in
2010, a large number of newcomers rushed into LED lighting industry, leading to
increasingly more intensified competition. To enlarge its market, Signcomplex implemented
new measures, such as participating in famous lighting exhibitions (e.g. Lyon International
Lighting Exhibition, Dubai Exhibition), to attract new customers. Consequently,
Signcomplex increased its products to over 300 categories, which led to higher costs and
more difficulty in product management and R&D specialization. Considering that its
customers, such as contractors, wholesalers and retailers, had diversified and fluctuating
requirements but continuously small volumes, Signcomplex decided to shift its strategy
from product diversification to specialization.
Signcomplex kept approximately 100 products that generated large sales and profits or
that had greater potential. The company divided these products into three categories: strip
profiles, panel lights and tube/spotlights. Next, Signcomplex set up a divisional structure
with three independent divisions, namely, the Strip Profile Division, the Panel Lights
Division and the Tube/Spot Lights Division, and an overseas division for marketing, each
with a general and a vice-general manager. Each division had its own departments of R&D,
production, purchasing, administration and quality control and had a warehouse.
Signcomplex also set up a headquarters organization with eight departments, including the
finance, marketing, quality controlling, customs end products, R&D, human resources and
purchasing departments. As its business increased, Signcomplex added divisions for
outdoor lighting, residential lighting and smart control. This shift led to changes in its
business process, responsibilities, functions and concepts. The new strategy with the
divisional structure enabled Signcomplex to specialize and improve its efficiency: by the end
of 2016, the company had achieved a 36 per cent increase in its per capita output over that in
2013.
In the past two years, as the competition in global LED markets continuously intensified,
customers became more sensitive to prices. Making matters worse, the prices of raw
materials, such as hardware, plastics and direct-current boards, continued to increase.
Signcomplex realized that it was time to create its own brands and to have its own agents,
chains and product mix. It selected the USA as a pilot and set up a distribution office from
Table II.
Three main changes
in Signcomplex
Main changes Time Process
Transformation from a foreign
trader to a manufacturer
2008 Set up new plants and labs, installed new
equipment, and employed technicians,
production line staff and office members
Transformation from a product
diversification strategy to a
specification strategy
2013-2015 Set up a divisional structure
Each division had its own departments and
a warehouse
Set up a headquarters with eight
departments
Changed business processes,
responsibilities, functions and concepts
Transformation from an ODM to
an OBM
From 2017 Selected the US as a pilot and set up a
distribution office in the middle area
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which to extend its business over the country. By the time we finished our investigation, this
transformation was still in progress.
3.4 Data collection
The data collection process was conducted from July 2017 to January 2018. To meet the
trustworthiness criteria, we adopted multiple approaches (Lincoln and Guba, 1985;
Yin, 1994), including semistructured interviews, archival data and observation. The
semistructured interviews provided most of the information concerning how stability and
change enabled each other, while the archival materials and natural observations provided
background and expanded our understanding by offering insights that clarified the
interview findings.
Semistructured interviews. As summarized in Table III, a total of 3 sets of 27 interviews
were conducted and transcribed, including 21 individual interviews, 5 telephone interviews
and 1 group interview. The first set was conducted on the July 26 and the 27, 2017, and
included the following: one 4-h group interview with the president and vice presidents;
six 1-h individual interviews with managers of divisions and departments; six individual
interviews with two salesmen, two employees from the end-product department and two
heads of labs. The second set of interviews, which were conducted during July 2017 and
September 2017, included one phone interview with the president and two with his assistant,
focusing on the details of the changes and their implementation. The third interview set,
conducted from September 2017 to January 2018, consisted of two phone interviews with the
manager of the human resources department, a project manager and ten WeChat[1]
interviews with five employees with over five years of experience.
In view of our inductive aims, in the interviews, we encouraged informants to go deeply
into details. Before each set of interviews, an interview protocol was designed with major
themes in mind; during the interviews, questions were not asked in any specific order but
were governed insteadbytheactual situation (Gummesson, 2000).
Archival data. We supplemented the interviews with over 100 documents mainly offered
by the human resources department, which was not only responsible for human resources
Table III.
Quantitative details
of interview data
Interviewees Dates Interviews
President of Signcomplex and 2 Vice
Presidents
The morning, July 26, 2017
(Signcomplex offices,
Shenzhen, China)
1 group interview
Manager of the Trip Profiles Division,
Manager of the Panel Division,
Manager of the R&D Department,
Manager of the Human Resources
Department, Manager of the Overseas
Business Department, and a Project
Manager
The afternoon, July 26, 2017
(Signcomplex offices,
Shenzhen, China)
6 individual interviews
2 salesmen, 2 Employees from the end
product department and 2 heads of labs
July 27, 2017 (Signcomplex
offices, Shenzhen, China)
6 individual interviews
President of Signcomplex and his
assistant
July 2017 to September 2017 3 phone interviews
Manager of the Human Resources
Management Department, a Process
Manager and 5 employees with more
than 5 years of experience
September 2017 to January
2018
2 phone interviews; 10
WeChat individual
interviews
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issues but also served as the company’soffice for handling everyday management issues
and for setting up, implementing and evaluating rules, regulations and processes (stable
mechanisms). These documents provided information on Signcomplex’s market
introduction, R&D process, material purchasing process, material checking process,
structural change reports, employees’information, rules and regulations, meeting notes and
so on. The R&D department for the headquarters organization and the business divisions
provided archival data on product introduction, new product development and technologies.
In addition, we gathered articles, media reports, stories and Web materials regarding
Signcomplex and the LED industry. To support the interviews and our findings, we created
categories for filing, retrieving, and analyzing the archival data.
Observation. During the visit to Signcomplex on July 26 and 27 2017, we observed how
LED products were produced at workshops, how end-products were tested in the lighting
lab, the EMC lab and the reliability lab, and how lights were used to decorate a room. While
waiting for interviews and walking around the firm, we took notes of our informal
observations.
3.5 Data analysis and coding
The process of analysis was guided by Eisenhardt’s notion that “it is the intimate connection
with empirical reality that permits the development of a testable, relevant, valid theory”
(1989, p. 532). Throughout the data analysis and coding, techniques such as constant
comparison and content analysis were used. This not only enhanced data interpretation but
also increased the confidence in the process (Golden-Biddle and Locke, 2007).
The data analysis went through a five-step process. First, data were collated and sorted,
with raw data transformed by recording and transcribing interviews, collating field notes
and writing up observations. Second, a descriptive case about Signcomplex and its main
changes was written, as described in Section 3.3. In the third stage, when exploring deeply
into the concept of strategic change, we identified three main mechanisms of stability:
institutions, processes and organizational routines. The institutions are composed of
cultural-cognitive, normative and regulative elements that, together with associated
activities and resources, provide stability and meaning to social life (Scott, 2001). Here, we
focused on an organizational-level definition that refers to macro, explicit and formal rules,
regulations and standards set up to normalize the behaviors of the staff. The processes
reflect the whole process through which tasks that are not exhibited in formal
documents but commonly accepted by participants are finished. Organizational routines are
defined as “repetitive, recognizable patterns of interdependent actions involving
multiple actors”(Feldman and Pentland, 2003, p. 96): these tasks consist of common
understandings, also referred to as “shared schemata”(Tucker and Edmondson, 2003;Lin
et al.,2017), and a set of mutually coherent action dispositions (Dionysiou and Tsoukas,
2013). Routines are not easily observed, as they reside in the cognitive processes of the
participants (Feldman and Pentland, 2003). Therefore, institutions and processes here
represent explicit and observable stable mechanisms, while organizational routines reflect
implicit and unobservable cognitive mechanisms of stability. Additionally, for strategic
change, we identified specific exploration and innovation activities as variable mechanisms.
Then, we adhered to guidelines specified for methods of naturalistic inquiry and constant
comparison techniques to analyze how these stable mechanisms and change activities
enabled each other. Finally, a framework showing the paradoxical relationship between
stability and change was set up.
Systematic, iterative comparisons of data, emerging categories and existing literature
aided the development of cohesive constructs and an integrative theoretical framework. As
Paradox of
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we discerned codes that were similar, we collated activities or direct descriptions of the
interaction between stability and change into first-order categories; then, we discerned
category linkages that could lead to the development of second-order themes by formulating
concepts at a more abstract level; finally, we assembled the second-order themes into
aggregate themes to develop a framework. The data structure is shown in Figure 1.
4. Case analysis: interdependence of stability and change
Through the case analysis, our research confirmed the interdependence of stability and
change and found that the success of change relied on the establishment of stable
mechanisms and also facilitated the establishment of a new stable state.
4.1 Stable mechanisms set up before the change
Before the strategic change, Signcomplex had established a series of stable mechanisms.
Institutions. Institutions, which were established for the line-functional structure
and product diversification strategy in the early period, efficiently regulated the
behavior of employees to explore more products. These institutions were the
organizational-level systems, workshop/department/lab-level rules, regulations and
instructions and individual-level requirements. For example, unifying forms and
workflows, the organizational-level business management system, which is aimed at
the management of business activities and the improvement in overall efficiency,
covered a team leader responsibility system and a general manager signature system.
Figure 1.
Data structure
1st-Order Activities or Categories 2nd -Order Themes Aggregate Themes
To ensure the continuity of the firm, Signcomp lex kept most institutions
established in the period in which it adopted the line-functional structure.
Newly-established divisions were operated based on existing institution.
Indicators and standards were extracted from the existing performance rules
and regulations.
Existing institutions
supplied security and
consistency
Existing processes
offered reserved
knowledge and skills
Existing organizational
routines enabled th e
commitment and the
provision of resources
The new process was adjusted from the existing one:
We kept the material checking flow, the production flow, the
warehousing flow, all labs and equipment instruments and
processes, and so on.
The common understanding of high quality determined the
definition of division responsibilities and functions.
Managers brought their under standing of high quality and
established coherent action dispositions to their new positions.
First-line employees kept their cognitive skills regarding tasks and
quality, enabling the maintenance of stability in change.
A series of new institutions that were quite different from those
established in the stability-dominated phase of the change were
established.
In the process of performing tasks, the establishment of management
systems and regulations became mature, with more detail.
Support of
stability to
change
Support of
change to
stability
Change activities
facilitated establishment
of new institutions
Change activities facilitated
the establishment of n ew
processes
Change activities
facilitated establishment
of new organizational
routines
The overall process was consolidated with operational details and
specific responsible bodies, particularly smooth links.
The Strip Profile Division established an internal process for
performing its own tasks.
This led to a fundamental change of its organizational routines from
high-quality production to high-quality innovation and development.
The new strategy and structure enabled the activation of their
enthusiasm for innovation.
We are dedicated to creating multiple products for customers.
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Moreover, Signcomplex set up specific instructions for testing and equipment operation
for each lab. For example, in the environment lab, instructions, which covered
equipment construction, operation steps, notes, standard parameters, schedules and
responsible persons, were established for all equipment and tests, such as the thermal
shock test, the IP68 rank test and the salt-fog test. The general manager and the head of
the reliability lab described these institutions as follows:
Though Signcomplex is a technology firm, we pay much attention to institutions [...] Institutions
guarantee smooth operation and enable stability. (President of Signcomplex, July 26, 2017)
Besides instructions and guidelines, we created specific descriptions on each step of tests,
especially parameter standards and exception handlings [...] we had higher standards on anti-
fall, constant temperature and humidity, and waterproof parameters than the national standards.
Especially for the transportation simulation tests, we tried not only to meet standards but also to
avoid potential risks in transportation. (Head, Reliability Lab, July 27, 2017)
Processes. Before the change, Signcomplex operated through a general business process,
starting from order reception through to material purchase and checking, sample research
and development, contract signing, mass production, delivery and customer service;
clarified flows existed at each link, especially the research and development link. For
example, the material check flow consisted of material delivery, number checking, material
inspection, labeling, final notification and so on, with emergent measures for each step. The
vice president described this check flow as follows:
It seems like a simple flow. Actually, it took us a long period to create it and improve it, through
repeatedly purchasing and checking materials. We repeatedly adjusted steps and flows and
finally confirmed it. It guarantees high quality of all materials [...]. (Vice President, Huang, July
26, 2017)
Similarly, Signcomplex set up a stable production flow involving the purchasing of materials,
brushing, QC testing, surface mounting, soldering, functional testing, burn-in testing, high-
voltage testing and packaging, with related interactions and material circulation. Each product
had to go through the process, which was a high and stable quality-controlled process.
Additionally, Signcomplex created a R&D process, starting from market analysis to industrial
design, evaluation, improvement, proofing, test, assembling, evaluation, second-round trial
production and mass production; the company also had a quality-control process involving
product definition, contract approval, product design and planning, trial production and
approval, mass production, quality guarantee assurance and sales and service. These processes
and flows facilitated the accomplishment of the firm’stasks.
Organizational routines. Before the change, reflecting the existence of common
understandings or a shared schemata (a core component of organizational routines) for the
firm’s general task of “developing and providing best lights for more customers around the
world,”the staff of Signcomplex worked together to fulfill tasks. This common
understanding was set up by top managers and then delivered top-down to first-line
employees. The manager of the overseas business department (a leader of a sales team
before the change) and the manager of the R&D department (the head of the residential
lighting workshop) described it as following:
It’s our tradition to offer the best service to customers. When I was a salesman, my boss (Wu) told
us that ‘customers are always right’[...] When I became a sales leader, I kept this concept and
delivered it to my employees. When I heard a complaint from an Italian customer for poor quality,
Iflew there immediately to say that we were sorry and withdraw our products [...] I was sure my
boss would support me [...]. (Manager, Overseas Business Department, July 26, 2017)
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Since 2008, when our company set up the production department and I worked there as a
workshop leader, quality has always been important. Before the change, our workshop focused on
developing residential lights. You know, our customers were from developed countries, including
European countries. They had high requirements for design, styles and quality. Once we got an
order, we focused on analyzing their requirements and developing new products [...] Actually, all
workshops worked in the same way. (Manager, R&D Department, July 26, 2017)
Based on this common understanding that gave priority to the quality of products and
service, all participants engaging in R&D, production, marketing or management formed a
set of mutually coherent action dispositions (another core component of organizational
routines) toward products and service quality. For example, to satisfy a contractor from
Eastern Europe who needed a series of classical lights for a public culture building with
special requirements for local-plant-dominated designs, the R&D department, production
department and quality control department worked together over three months to develop a
product solution. The president described this common understanding and action
dispositions as following:
Our markets and customers are diversified. For example, European customers focus on design,
US customers pay attention to lighting effect, while African customers stress life length. How do
we satisfy them? Quality. Quality determines our future [...] It matters for the whole firm [...]We
try to make our employees understand it. We have adopted quality control methods and training,
such as quality meetings and the use of performance evaluation. Fortunately, our employees kept
quality in their mind from the beginning and exemplified unified behavior. (President, Wu, July
26, 2017)
In summary, before the change, Signcomplex was in a period of stability and had
established institutions, processes and organizational routines, which guaranteed its high
efficiency.
4.2 Stability enabled the change
The established institutions, processes and organizational routines facilitated through
different paths Signcomplex’s strategic and structural change.
4.2.1 Institutions enabled the change by supplying security and consistency. At the
beginning of the change process, Signcomplex retained most of its established institutions to
reduce the perceived uncertainty of the employees, to avoid internal chaos and to ensure the
continuity of the firm; e.g. the company retained the management systems for functional
departments in the headquarters organization, specific operational rules and instructions for
workshops and labs, and rather than creating new requirements, kept most of the existing
job requirements for individuals. Although the responsibilities and functions for the newly
established divisions, the division managers, the vice managers and the departments under
each division were redefined, these responsibilities were actually extracted from those from
the existing institutions. In the new strategy and structure, the business divisions gained
more autonomy in decision-making (e.g. determining the new product development
direction), while the headquarters organization was responsible for evaluating their
performance. Through negotiation, the divisions and the headquarters organization set up
all indicators, standards and methods for evaluation. As a result, new indicators, such as the
new product exploration rate, profit, the warehouse inventory rate and the R&D competence
rate, were set up through extracting, reorganizing or recombining. A manager of the panel
division described this as follows:
Before the change, I worked in the panel workshop. When setting up a new performance system
for our division, we focused on both new product development rates (i.e., 2-3 new products each
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month) and product improvement; we were concerned with visual uniformity, low glare lighting,
LED efficiency, luminaire construction, cost and energy saving and life length. In fact, these
indicators were from the previous workshop. For example, the pervious standard for life length
was 30,000 hours and 3 years, while the new standard was over 40,000 hours and 4 years [...].
(Manager, Panel Division, July 26, 2017)
Similarly, other new systems, rules and regulations, and instructions were set up based on
existing ones, with few brand new ones established. Therefore, this strategic and structural
change did not fundamentally transform the existing institutions but relied on them.
Actually, during the initiation of the change, the institutions served as higher-level premises
that fostered legitimacy and trust, constituted enabling frameworks for emergent action,
facilitated adaptation and regularized change activities. The institutions were able to reduce
the perceived uncertainty of the employees and their anxiety when confronted with change:
this enabled employees to trust the organization and to continue to explore new tasks. We
can draw a conclusion that existing institutions can preserve group autonomy and freedom,
supply security and consistency and provide references for improvement, which enable
change rather than constraining it.
4.2.2 Processes supported the change with reserved knowledge and skills. Process
recreation is the core of Signcomplex’s strategic and structural change. Before the change,
the overall business process was “order reception !material purchase !sample
development !contract signing !mass production !delivery !settlement and after-
sale service”, while the new process turned out to be:
[...] order reception !overall design in headquarters !task breakdown in headquarters !
product design and development in each division !sample production !contract signing by
headquarters !mass production !purchase and stocking by headquarters !delivery !
settlement and after-sale service.
More specifically, the headquarters’marketing department first received orders; then, the
R&D department from the headquarters conducted the industrial design, established the
overall proposal, divided orders into tasks and delivered them to different divisions (e.g.
trip-related tasks to the Trip Profile Division, panel-related tasks to the Panel Division and
smart-control-related tasks to the Smart Control Division). Next, the divisions worked on
sample development and delivered samples to the headquarters, which would sign the
contract with customers after acceptance of the samples. The divisions purchased the
materials, undertook mass production and sold the products to the headquarters purchasing
department; the end-product department stocked and packaged the products, and the
custom department finally handled all customs declaration, delivery and shipment matters.
In the new structure, R&D departments were set up in both the headquarters organization
and in the divisions but were defined differently: the R&D department in headquarters
worked with the marketing department for industrial design and overall proposal
establishment, while the R&D departments in the divisions were responsible for developing
certain products. Additionally, purchase departments were set up in both the headquarters
organization and in the divisions: the former was for purchasing end products from the
divisions, while thelatter was established for purchasing raw materials and accessories.
It appeared that the two processes were quite different, but actually, the new one was
trimmed from the existing one through adding the steps of task division and headquarters’
purchasing and by making some changes in authority. These adjustments were able to
ensure the continuity of the organization and fulfilled the requirements for the new
specialization strategy. The president of the company described this as follows:
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It only took us three months to shift to the divisional structure. We kept the material checking
flow, the production flow, the warehousing flow, all labs, equipment, instruments, processes, and
so on. The main difference was that the new process gave more attention to research and
development [...]. (President, Wu, July 26, 2017)
The new process worked well because it maintained most existing links and details, thereby
enabling the firm to maintain abundant capabilities, knowledge, skills and principles for
performing tasks. As a result, when the employees were involved in a new environment,
they could still rely on lessons retained as rules of thumb or heuristics, informed guesses,
norms or modules, such as those provided by subproblems solved previously, to greatly
reduce the need for trial and error and to equip them to deal with new tasks, thereby
economizing on cognition. As the technician Wang mentioned: “Change is not a terrible
thing because our R&D process is reliable. It reserves every detail, skill and know-how [...]”
Accordingly, the existing processes, including the overall business process and working
flows of each step or subtask, supported the shift to the specialization strategy and the
divisional structure by providing the employees with reserved knowledge and acquired
skills.
4.2.3 Organizational routines helped to release existing objectives and resources to
support change. The existing organizational routines, reflecting both a common
understanding of the general task of “developing and providing the best lights for more
customers around the world”and the coherent action dispositions of working together to
realize the task, offered essential support to this strategic and structural change by enabling
commitment and providing resources. The purpose of the change was to further the firm’s
pursuit of high quality, the core of Signcomplex’s pervious organizational routines. The
president described this as follows: “We are always pursuing our goal of high quality but
using different methods.”During the change, the common understanding of high quality
among top managers determined the definition of the divisions, the relationship between the
divisions and headquarters, the relationship between the divisions and the performance
standards and targets of the divisions. In addition to the traditional indicators (e.g. the
product reach rate and profit rate), Signcomplex also set up research and development
competitiveness indicators, such as the new product development cycle, a new product
number and a marketing response, to enrich its high-quality concept. The change was
intended to enhance the R&D capability of each business division and unite all divisions to
work together for the overall target. Actually, this common understanding helped to release
top managers from their responsibility to handle only daily issues and enabled them to
embrace the unique goal of high quality and to consequently allocate core resources to
support activities of improving quality.
Most of the managers or vice managers of divisions were selected from the best salesmen
or technicians who used to be important participants of organizational routines and
therefore were engaged in a common understanding of high quality. When they took over
divisions, they immediately set up new divisional goals by furthering their understanding of
high quality and delivering the understanding to employees, through both formal authority
approaches and informal interactions. The manager of the Strip Profile Division described
the following:
Before the change, I was responsible for the strip and aluminum groove team. I kept the quality in
my mind and asked my employees to do so [...] After becoming the division manager, I always
treated quality as the core. Therefore, we have attempted to make our products and accessories
more professional, reliable, elegant and with a longer life. So far, we have improved the existing
products, such as the 2216 series, the 3020 series and the 2850 series, and more importantly, have
developed a new series of high voltage and waterproofing strips, follow-spot strips, special color
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temperature strips and photoluminescence strips. They all have been highly evaluated by our
customers [...] (Manager, Strip Profile Division, July 27, 2017)
Similarly, other managers also brought their schemata for high quality and setup coherent
action dispositions to new positions and for the employees in the divisions involved in the
change, fostered theestablishment of new understandings and cohesive actions. This helped
divisions decrease the exploration time involved in change, remove pressure and reduced
the perceived uncertainty of divisional managers, enabling the divisional commitment and
resources to support the accomplishment of the firm’s core tasks.
For the first-line employees, this strategic and structural change meant the relocation of
workshops, labs or production lines. To reduce their anxiety and insecurity, they strived to
turn novelty into familiarity through an analogical transfer, which helped them in
understanding the similarity between the new context and the existing context by mapping
categories and relations from the existing context to a new one. This helped individual
employees to remove perceived uncertainty, to better understand new tasks and to commit
themselves and their resources toward the accomplishment of their individual tasks.
In summary, Signcomplex’s strategic and structural change depended on the
establishment of stable mechanisms, including explicit institutions and processes and
implicit organizational routines. These stable mechanisms helped individuals and groups
save cognitive resources, reduce the need for trial and error in solving problems and enabled
the completion of routine tasks, non-routine tasks and even the pursuit of innovation. These
stable mechanisms enabled the change by supplying security and consistency to ensure the
continuity of Signcomplex, offering reserved knowledge and skills and enabling
commitment and the provision of resources to better facilitate the realization of the change.
4.3 Change enabled the recreation of a new stable state
Through a period of repeatedly performing tasks and interactions under the new strategy
and structure, reflecting how change can support stability, Signcomplex moved to a change-
consolidation phase and finally reached a new state of stability with mature institutions,
processes and organizational routines.
4.3.1 Change enabled the recreation of new institutions. When tasks were repeatedly
performed and accompanied by continuous interactions, the institutions newly established
in previous phases were enriched and improved: a mature general memorandum of
association, clear division responsibility and function descriptions, division management
systems, department responsibility and function descriptions, department regulations and
an improved performance evaluation system were recreated. For example, at the
organizational level, in the early period of the change process, Signcomplex set up a
warehouse administration system based on the previous system’s warehouse entry time,
checking process and standards, warehouse forms and product stock measures. However,
when tasks were performed in the new structure, this new system presented numerous
problems, especially in the connections between the headquarters and divisions. For
example, the system defined an unified warehousing time for all products in an order, which
led to diversified inventory levels in the divisions because each division had its own design
and production cycle. Through repeated attempts and exploration, the development cycle of
each product and its production volume and cycle became clearer, and the communication
between headquarters and the divisions became smoother. The divisions were able to
precisely arrange their activities, progress and delivery. Then, a warehousing system, with
improved regulations for the checking process and standards, warehouse forms, product
stock measures and flexible entry time, was finally recreated. The manager of the Tube/spot
Light Division described the situation as follows:
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The product’s design is always time costly. Particularly, we gave priority to preresearch and
preproduction activities. Only by doing so, we could shorten the new product development cycle
and take a positive position in customer negotiation [...] We tried many ways to improve the
efficiency [...] However, this made our connection to the purchase department of headquarters
complicated. We put forward proposals on end product purchase and warehousing [...] It has
been improved [...] (Manager of the tube/spotlight division, July 27, 2017)
On the divisional and individual levels, through trial-and-error activities and exploration in
performing tasks, the establishment of the management systems and regulations became
mature, encompassing more detail. For example, the Strip Profile Division optimized its
general management system by adjusting its mission and overall goals and by specifying
the details of its management principles, styles, structures, financial management, and its
performance management and evaluation procedures; the division also clarified the
responsibilities and functions of all its departments and work groups, e.g. by defining works
and functions of the welding group, the aging area, the testing group, the quality control
area and the packaging group. Consequently, a new series of institutions was finally set up
through the trial-and-error activities and exploration that occurred during the change.
4.3.2 Change enabled the recreation of new processes. Through strategic and structural
change, the processes of Signcomplex became more reliable and efficient. Overall, the
processes were consolidated with more detail, clearer responsibility and particularly
smoother links between headquarters and the divisions, and among the divisions. For
example, initially defined as a headquarters task, the linking of the overall design, task
breakdown and the settlement and after-sales service functions gradually began to involve
other parties, such as customers, the marketing department, suppliers and particularly the
divisions. Becoming involved in activities leading to more flexible cooperation between
headquarters and the divisions, the divisions engaged in offering ideas for overall design,
began to participate in negotiations and started to provide guidance for product usage.
Moreover, for each link, clear subprocesses were set up for performing tasks. For example,
overall design was a process starting from a customer demand analysis through to feature
definition, project evaluation, project confirmation, project planning, design and
development, the suppliers’evaluation, materials’approval, design outputs and design
confirmation; the production sample reflected the results of the reliability test, the design
confirmation, the sample evaluation, product approval, mass production approval, and mass
production planning.
Similarly, in implementing change, the processes for divisional or departmental tasks
were improved through attempts and exploration. For example, the Strip Profile Division,
for the performance of its own tasks, set up a new process, which began with task reception
from headquarters and continued with design and development, design confirmation,
sample production, mass production, material purchase and checking, standard operating
procedure (SOP) and equipment preparation, welding and production, SMD patching,
assembly, testing and packaging. Moreover, each department under this division set up its
own subprocesses, such as the subprocess for production, material purchasing and checking
and testing and assembly. The head of the purchase department under the Strip Profile
Division described the following:
Compared with the initial process, our new purchase and check process has been improved a lot.
Material checking used to be the key for guaranteeing quality, and it was a major consideration of
our boss (Wu). When designing a new check process for the new strategy, we learned a lot from
the previous one, but we soon found it was too time costly. Considering that our materials, such as
beads, resistance, electronic wire and aluminum plate, were standard and we had set up a stable
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relationship with our suppliers, we tried to simplify the process through repeated attempts [...].
(Head, Purchase Department –Strip Profile Division, July 27, 2017)
Consequently, during the period of change, a process system with multiple levels, confirmed
details and a smooth interaction between headquarters, the divisions and among the
divisions was finally set up through repeated attempts and exploration.
4.3.3 Change enabled the recreation of new organizational routines. The first change
from an international business trader to an LED manufacturer helped Signcomplex shift its
organizational routines from high-quality service to high-quality production, while the
second transformation from a product diversification strategy to a specification strategy
furthered the change of its organizational routines from high-quality production to high-
quality innovation. Though all the routines focused on high quality, they actually reflected
different strategic and operational focuses or different common understandings and
coherent action dispositions around the firm. More specifically, the new routines reflected
the common understanding of the company’s slogan, “We bring innovation and give
inspiration to customers”, which stressed the concept of “Quality presenting dignity and
innovation determining the future”; based on this understanding, all participants engaged in
cohesive behavior to perform the new organizational tasks. Presidents, managers of
divisions, and employees had identical responses toward this change of routines:
The new strategy gave divisions more autonomy and activated their enthusiasm for innovation in
new products. We adopted two ways to realize this. One was to encourage end product
development. We negotiated with the Panel Lights Division and reached an agreement on the goal
of 10, 000 pieces square panel lights, 150, 000 pieces of circular panel lights, and over five new
products each month [...] Similarly, the residential lights division agreed to offer 200000 pieces of
down lights, 50, 000 pieces of Maize lights, 60000 pieces of track lights, and over 10 new products
[...] The other way was to encourage fundamental innovation. By now, all our UL and SAA
series panel lights, ETL-LED tubes, CE-LED tubes and FCC-LED lamps have been certified by
European institutions. We also own abundant patents for designs, inventions and utility models,
such as Luna down lights, VERSAT floodlights, circular high bay lights, LED controllers and
LED tubes. Moreover, we have created an open and active atmosphere for innovation. Now, we
seldom ask our customers what they need, but instead what they expect [...]. (President, Wu,
26th, July, 2017)
My employees and I see (designing) residential lights as our devoted careers. Our customers have
more and more requirements for residential lights, especially industrial projects such as hotels.
We are dedicated to creating the best products. Take the commonly used down lights as an
example: we have improved the existing series and also developed a new series, such as the Jade
down lights, the Ultra-thin down lights, the Do lux down lights, the Luna Par16 down lights, the
Luna COB down lights, and the Ivar COB down lights. In order to address the heat dissipation
problem, we adopted die-casting aluminum for the body of the Ultra-thin down lights and
common Polymethyl Methacrylate (PMMA) for their panel [...]. (Manager, Residential Lights
Division, July 26, 2017)
Ifirst worked in the welding workshop as an apprentice and then became a skilled technician.
Then, (I) became the head of the production department (under the Outdoor Lights Division). In
the past, our boss (Huang) and manager always stressed the importance of quality, but now, I do
not have to do this to my workers. They all know it clearly and work hard for it. It is a part of our
culture [...]. (Head, Production Department –Outdoor Lights Division, July 27, 2017)
How did the change enable the recreation of organizational routines? The individual
participants involved in the change strived to explore new knowledge and create new
solutions beyond their existing cognition and boundaries and consequently were able to
Paradox of
stability and
change
203

improve their capabilities and skills for better realizing new tasks. Meanwhile, the
participants gradually realized the inadaptability of the existing rules and regulations. To
reduce negative feelings, the individuals sought to interact with others or sought help from
others, especially those individuals with whom they had working connections. Through
interaction, they were able to obtain more information on the change and to determine how
to better complete their new tasks, and subsequently, they re-engaged themselvesby finding
their new roles. The frequency of these explicit forms of communication and interactions
made all participants knowledgeable about changes, created their inter-reliance on each
other and led to the emergence of a common understanding for the new context and the new
joint tasks. More specifically, through the general information obtained in the interactions,
participants were gradually able to develop an individual understanding of the roles of
others, including their understandings, ideas, opinions and actions for handling changes and
new tasks, which allowed them to develop a sense of prediction and control. This facilitated
the engagement of participants in role-taking and the reformation of internal cohesion.
Based on this, the participants were able to develop a joint, situated understanding of the
new context and tasks, identify appropriate actions, and align their individual lines of action
accordingly with others. By doing so, they were able to develop a new “self”that reflected
their new roles and contribution to the new task.
The formed common understanding of the new tasks supplied participants with
mutually consistent interpretations and evaluations of information, as well as reciprocal
expectations concerning what actions were appropriate for the new situation. As an
essential component of the execution of new routines, a common understanding facilitated
the realization of compatible, reciprocal behavioral expectations. Each participant was able
to correctly expect that he or she would receive familiar signals from the others and would
respond in familiar ways, even without explicit communications. Consequently, cohesive
action dispositions for new tasks emerged. The creation of a common understanding and
subsequent action dispositions reflected the underlying change of the participants’cognition
and behaviors and the reformation of routines.
In summary, the implementation of the strategic and structural change facilitated the
recreation of a new stable state through activities such as trial,exploration and interaction.
5. Discussion
Building on an exploratory case study on Signcomplex, which experienced several firm-
developmental changes, especially strategic and structural changes, this research explores
the interdependence of change and stability and further uncovers the nature of
organizational change and organizational development. It offers implications for both theory
and practice and provides limitations and future directions.
5.1 Paradox of change and stability
This study confirms the interdependence of the two contradictory elements, namely,
stability and change, in the development of a firm. The success of change relies on existing
stable mechanisms, while change enables a firm to reach a new stable state. In this research,
several stable mechanisms have been identified, including explicit institutions and
processes and implicit organizational routines; moreover, specific trial-and-error and
exploration activities have been regarded as variable mechanisms.
On the one hand, stability enables change by supplying security and consistency to
ensure the continuity of the organization, offering reserved knowledge and skills and
enabling commitment and the provision of resources for better realizing the change. When
transforming from a product diversification strategy to a specification strategy and from the
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line-functional structure to the divisional structure, Signcomplex relied on existing
institutions, processes and organizational routines. First, institutions served as higher-level
premises that fostered legitimacy and trust, constituted enabling frameworks for emergent
action, facilitated adaptation and regularized change activities. They were able to reduce the
perceived uncertainty of employees and their anxiety when confronting with the change,
enabling employees to trust the organization and continue to explore new tasks.
Consequently, the institutions were able to enable change rather than constraining it.
Second, the existing processes, including the overall business processes and working flows
of each step or subtask, supported the change by offering reserved capabilities, knowledge,
skills and principles for performing tasks. As a result, when employees were involved in a
new environment, they could still rely on lessons retained as rules of thumb or heuristics,
informed guesses, norms or modules, such as those provided by subproblems solved
previously, to greatly reduce the need for trial and error and deal with new tasks, thereby
economizing on the need for new cognition. Third, the existing organizational routines
reflecting both a common understanding and cohesive action dispositions released top
managers from their responsibility for managing only daily issues to support the realization
of the unique goal of high quality and to consequently allocate core resources to support
activities of improving quality. The routines also helped divisions to decrease the action
time involved in change: the removal of the pressure and the routines reduced the perceived
uncertainty of divisional managers such that they were released from their divisional goals
and were able to devote resources to realize their core tasks; additionally, the routines helped
to remove the employees perceived uncertainty, to increase their understanding of new
tasks, and enabled them to commit to and provide resources for the realization of their
individual tasks.
On the other hand, change enables the recreation of a new stable state. Through the
repeated performance of new tasks, a new stable state consisting of new institutions,
processes and organizational routines can be recreated. Through strategic change,
Signcomplex was able to set up a mature institutional system involving a new general
memorandum of association, clear division of responsibility and function descriptions, a
division management system, a clear department responsibility and function description,
department regulations, as well as a new performance evaluation system; additionally, the
company was able to build up a process system with multiple levels, confirmed details and
smooth interactions between headquarters and the divisions and among the divisions.
Moreover, reflecting the employees’common understanding of new tasks and new cohesive
behaviors toward realizing these tasks, Signcomplex was able to shift its organizational
routines from high-quality production to high-quality innovation. Variable mechanisms
such as trial-and-error and exploration activities played an important role in facilitating the
firm’s stability.
5.2 Nature of organizational change and organizational development
This study on the strategic and structural change of Signcomplex particularly indicates that
the nature of organizational change is to help an organization reach through trial and error
or exploration a new development stage with higher efficiency. Because organizational
change enables the establishment of a new state for a new environment or for the better
performance of new tasks, it can consequently enhance and renew the capacity of an
organization.
Changes may be located at the strategic level, the functional level or the operational level
of an organization; change may refer to the transformation of strategies, institutions,
marketing policies, organizational structures, processes, management models or
Paradox of
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change
205

organizational culture or may be realized in a gradual or radical way. However, the objective
of change is to break the existing stable state and then to set up a new one through collective
efforts, e.g. to break existing institutions and establish a state consisting of new institutions,
to break existing processes and set up a new state with new processes or to break existing
cognition and set up a new state with new cognition. Therefore, we can conclude that
organizational changes are not isolated events aimed at replacing existing processes,
institutions, management methods or concepts with new ones but a complicated continuous
process to help organizations to evolve from existing states and to facilitate the recreation of
new stable states. Moreover, organizational change reflects the nature of paradox in that it
not only relies on stable mechanisms but also simultaneously attempts to establish a new
state with new mechanisms to promote the development of an organization.
This study also confirms that the nature of organizational development lies in the
paradoxical effects of both stability and change. As Figure 2 shows, the development of an
organization reflects a continuous process of efficiency improvement, with stability and
change as two basic elements[2]. More specifically, through an early starting period, an
organization may reach a state of stability with stability mechanisms of institutions,
processes and organizational routines (i.e. a common understanding and cohesive action
dispositions). Then, it reaches a new state of stability through an organizational change or
changes that break down existing stable mechanisms but also maintain continuity and
establish a series of new mechanisms to create a new environment, better performance of
tasks and the pursuit of higher efficiency. The developing path of an organization consists
of both change and stability, two elements that not only struggle for scarce resources but
also depend on each other.
In fact, the development of an organization may be more complicated than what we
described here. An organization may implement several changes at the same time across
Figure 2.
Stability and change
in development
process of an
organization
Efficiency
stability
Anew state
of stability
Time
ĂĂ
Developing path of
an organizaon
change
Stable instuons;
Stable processes;
Organizaonal
rounes.
Set up new instuons;
Set up new processes;
Set up new organizaonal
rounes.
change
A new state
of stability
change
Change instuons;
Change processes;
Change organizaonal
rounes.
Change instuons;
Change processes;
Change organizaonal
rounes.
Change instuons;
Change processes;
Change organizaona l
rounes.
Set up new instuons;
Set up new processes;
Set up new organizaonal
rounes.
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departments and organizational levels, or an organization may experience a series of
changes across developing periods and even within one period. This indicates that the
relationship between stability and change may be one in which the two concepts intercross,
which is a relationship that is more complicated than the simple relationship described in
the case of Signcomplex. Different types of change may rely on the same existing stable
mechanisms or mutually affect certain mechanisms; a new state of stability may be built up
through a series of cross-department or cross-level changes or when some changes are
dependent on existing mechanisms and others are trying to break them. Moreover, both
stability and change reflect two relatively dynamic situations. Therefore, organizational
development is a continuous and complicated process reflecting conflicting, interdependent
and intercrossing relationships between stability and change.
5.3 Implications for theory
First, following prior research that regards stability and change as a paradox and that
preliminarily explores their interdependence on each other(Farjoun, 2010;Smith et al.,2013),
this research further addresses the issue of contradictory interdependence and shows how
stability and changecontradictorily rely on each other.
This research confirms the paradox of stability and change and clarifies their
paradoxical relationship. Paradox theory, which highlights both contradiction and
interdependence (Lewis, 2000;Schad et al.,2016;Smith et al.,2013), offers new insights for
looking into relationships between contradictory elements such as stability and change.
Therefore, inconsistent with early research that treated stability and change as two essential
but largely incompatible and mutually exclusive elements for an organization (Poole and
van de Ven, 1989) and adopted an either/or trade-off approach to confront the paradoxical
tension (Burns and Stalker, 1961;Abernathy, 1978;March, 1991), this research adopted the
redefinition of contradictory elements as a mutually constituted relationship in which each
pole contains the seeds of its opposite and is ontologically inseparable such that one does not
exist without the other (Khazanchi et al.,2007;Orlikowski and Scott, 2015;Lewis, 2000;He
and Wong, 2004;Andriopoulos and Lewis, 2009;Farjoun, 2010). While most research
focuses on what paradox is, what elements make up a paradox, or why two contradictory
elements are able to create a greater sense of wholeness on a theoretical level, this research
focuses on how stability and change contradictorily depend on each other. Particularly, by
further revealing that the two contradictory elements enable each other to promote the
development of an organization, this research follows Farjoun (2010), who gives particular
attention to stability and change and adopts a duality perspective that:
[...] retains the idea of two essential elements, but it views them as interdependent rather than
separate and opposed [...] These two elements, while conceptually distinct, are mutually enabling
and a constituent of one another (p. 203).
By conducting an in-depth exploration into the case of Signcomplex, this research finds that
the success of change relies on stability, while change enables a firm to set up a new state of
stability.
Consistent with prior studies that regard stable mechanisms as a sort of adaptability
(Simons, 1995;Dougherty, 2006) or theoretically argue that an innovative organization relies
on variation-enhancing practices and on control systems (Simons, 1995) with highly
disciplined and rigid specifications (Dougherty, 2006;Klein et al.,2006), this paper further
identifies three stable mechanisms, including explicit institutions and processes, and
implicit organizational routines, and it explores how they support organizational change.
The results show different effects of stability on change: institutions enable change by
Paradox of
stability and
change
207

supplying security and consistency; processes support change with reserved knowledge and
skills, while organizational routines help to enable commitment and the provision of
resources to support change.
Similarly, consistent with existing research that shows that change enables the
systematic and long-term stability of an organization (Farjoun, 2010;Landau and
Chisholm, 1995;Wildavsky, 1991;Edmondson et al., 2001), our study further explores how
activities of change enable the recreation of a new stable state. Through the repeated
performance of new tasks, a new stable state consisting of new institutions, processes and
organizational routines can be recreated. During the process, variable mechanisms such as
trial-and-error andexploration activities play an important role.
Second, this research contributes to existing organizational change theories that
extensively regard organizational change or innovation as a systematic project potentially
requiring fundamental changes in the routines of the organization (Birkinshaw et al.,2008;
Lin and Su, 2014). Considering the contribution of change to an organization and the
complication of the change process, most research has focused on their antecedents, such as
institutional factors (Guillén, 1994), leadership behaviors (Vaccaro et al.,2012), employees
(Knippenberg et al.,2006), interaction between context and search (Mol and Birkinshaw,
2009) and the process through which a change occurs (Birkinshaw et al.,2008;Lin and Su,
2014;Lin et al.,2016). This research further shows that the nature of organizational change
is to help an organization reach a new stable stage with higher efficiency through variable
mechanisms such as trying and exploring. This study confirms that as organizational
change is able to set up a new state for a new environment or for the better performance of
tasks, it can consequently enhance and renew the capacity of an organization.
Third, this research contributes to the existing organizational development theories by
confirming that the nature of organizational development lies in the paradoxical effects of
both stability and change. Prior research has focused on the roles of organizational climate,
organizational culture, organizational learning, organizational strategies and so on. The
research on organizational climate has focused on the impact of organizational systems on
groups and individuals (Joyce and Slocum, 1984;Koys and DeCotiis, 1991); the research on
organizational culture has focused on the evolution of social systems over time (Mohr, 1982).
Organizational learning literature has explored the learning process, its classification and
effects on behaviors, innovation launches, growth, acquisition patterns and the adoption of
new management practices (Greve, 2008;Schwab, 2007); strategy researchers have defined
strategy as a pattern in a stream of decisions to contrast with a view of strategy as planning
(McKeown, 2011). However, our research offers a paradoxical perspective to look into the
nature of organizational development and finds that the development of an organization
reflects a continuous process of efficiency improvement, with an interaction between
stability and change.
5.4 Implications for practice (especially for significance for Chinese management)
In addition to the contributions to the existing theories, our study offers a number of
important insights for management practices, especially those in a Chinese context.
Adopting the paradoxical lens and making use of the synergy between stability and
change, Signcomplex was able to reach a rapid and smooth development process. During
this process, it simultaneously pursued both stability and change by setting up stable
mechanisms, such as institutions, processes and routines, and by conducting change
activities, such as strategic and structural transformation. Moreover, it made its changes
rely on existing stable mechanisms and a new stable state established through change,
which reflected a paradoxical relationship. Although this approach may restrain
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Signcomplex from implementing a breakthrough, it facilitates the pursuit of both high
efficiency and flexibility in its development, avoiding an either/or choice that may bring the
organization into thetrap of overemphasizing stability or change.
Our research confirms stability and change as a pair of interdependent rather than
separate and opposed organizational elements and offers managers a new perspective to
look into the relationship between stability and change. Considering stability and change
from the traditional view of dualism that defined them as opposites and separate, traditional
Chinese firms tend to rely on stable mechanisms to concentrate their resources and attention
on obtaining goals in high efficiency, while modern firms tend to rely on innovation and
change to cater to environmental change and achieve a sustainable source of competitive
advantage and long-term success. Consequently, one group of firms sticks to the existing
stable mechanisms but refuses to change, while a large number of other firms actively
engage in change but neglect stability. However, this research reveals that stability and
change actually enable each other. This reminds managers to rethink the relationship and to
transform their either/or decisions to coexisting decisions.
When a large number of firms, especially middle and small ones in China, rush into the
wave of organizational change, only a few succeed. The reason may lie in the overemphasis on
pursuing differentiation and growth through changes, such as in realizing a new-to-the-world
business model, management method, structure or process. In fact, only a very small number of
firms are able to realize such new changes; this may be especially difficult for less-developed
firms in China. Our research reveals that the nature of organizational change is to set up a new
state of stability with high efficiency and offers new insights for managers in proposing and
implementing a change. Moreover, as our research indicates that organizational development
depends on the paradoxical effects of both stability and change, firms should pay attention to
both stability and change by accepting, understanding and using this paradoxical relationship
to realize their synergistic effects. The dynamics of stability and change lead to organizational
development, which causes more complexity. In the Chinese context, when firms are affected
by multiple elements, this paradoxical way of thought can be particularly important.
5.5 Limitations and future directions
Our effort toward exploring the paradox of stability and change is constrained by at least
three limitations, which also present opportunities for future research. First, based on a
single case study, our findings need to be further confirmed through investigations of other
organizations. More cases will help to improve the paradox framework and will provide
more details of how stability and change enable each other. We only focus on the single
context of China: future research may go further into more cultures to explore the different
paradoxical relationships. Second, we focus on stable mechanisms of institutions, processes
and organizational routines to explore the paradox: there may be other mechanisms, such as
habits, discipline, tight coupling, limits, commitments, control and low variance, which were
not included. We only focus on certain activities as carriers of change, neglecting a deep
investigation into search, mindfulness, redundancy, openness, preoccupation with failure,
imagination and variety, as proposed by Farjoun (2010). Future research may involve more
interactions of stability and change. Third, to simplify the exploration into the paradoxical
relationship, for our case study, we have selected one change that occurred in an
organization. Actually, in an organization, there may be many cross-level or cross-
departmental changes that struggle for resources and support of the same stable
mechanism. Future research may go deeply into the concept of change to explore how
stability and change enable each other dynamically. Additionally, considering the limitation
Paradox of
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209

of a case study, future research may adopt more methods, such as regression analysis and
structural equation modeling, to produce a deeper finding.
6. Conclusion
This research addresses how stability and change enable each other during a change. Based
on the existing literatureon paradox theory and the interdependence of stability and change,
we set up a framework showing how stability enables change and how change helps to set
up a new stable state, and we reveal the nature of organizational change and organizational
development by adopting an exploratory case study on the strategic and structural change
of Signcomplex in China. The findings offer many valuable insights for further research in
whether stability and change are exclusive or inclusive and how contradictory elements
enable each other to create greater holistic effects. Our study has important implications for
management practices, especially those in a Chinese context. Despite its limitations, our
research makes several important contributions to existing theories of paradox,
organizational change and organizational development. However, more research should
focus on an in-depth examination into more mechanisms of stability and change and more
details of paradox and offer more implications for organizational change and development.
Notes
1. WeChat is a Chinese multipurpose messaging and social media app developed by Tencent. It was
first released in 2011, and by 2018, measured by monthly active users, it was one of the world’s
largest standalone mobile apps, with over one billion monthly active users (902 million daily
active users).
2. The efficiency of an successful organization may decline or fluctuate in a certain period but
exhibits a tendency of increasing from a long-term perspective. To simply the study, we do not
describe the firms’temporary decline or fluctuation here.
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Corresponding author
Haifen Lin can be contacted at: linhaifen@dlut.edu.cn
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