Punctuated and Continuous Change: The UK Water Industry

Punctuated change is usually defined as a discontinuity in organizational development and is traditionally associated with environmental turbulence; it is also associated with step changes in the performance of an organization. Starting from Gersick (1991), we discuss the foundations of the punctuatedà incremental change paradox, and lay out hypotheses regarding the moments when such change is adopted and its economic effect. We explore these ideas through a study of the UK water industry: a contrived macro experiment. Following privatization, the ten major companies all faced similar pressures to adjust, but adopted widely differing responses. We find that the response to privatization was not always punctuated change, and that punctuated change processes were not necessarily superior to continuous processes. We contrast our findings with Romanelli and Tushman (1994), exploring the reasons why our results are so dissimilar.