Managers and students of organizations are increasingly concerned about the capacity of organizations to adapt to rapidly changing environments. The rate of technological, economic, political, and sociocultural change is increasing, and organizations are, therefore, finding it more and more important to figure out how to adapt.

Adaptation in turbulent environments involves more than minor adjustments. It often requires genuinely innovative thrusts: new missions, new goals, new products and services, new ways of getting things done, and even new values and assumptions. Most important, adaptation involves managing perpetual change. Organizations will have to learn how to learn and to become self-designing.

The difficulty is that organizations are by nature, and often by design, oriented toward stabilizing and routinizing work. They develop cultures expressed in structures and processes that permit large numbers of people to coordinate their efforts and that permit new generations of members to continue to perform effectively without having to reinvent the organization each time. How then, can one conceptualize an organization that can function effectively yet be capable of learning so that it can adapt and innovate in response to changing environmental circumstances? How can one conceive of an organization that can surmount its own central dynamic, that can manage the paradox of institutionalizing and stabilizing the process of change and innovation?

In this chapter, I want to address some aspects of these questions and to present a point of view based on my research into the dynamics of organizational culture.