Federalism and Change

Abstract

It can be difficult for an organization transitioning to a new business model to maintain organizational continuity without discouraging innovation. Any change program must combine the benefits of existing structure, innovative thinking, and sound leadership to relieve organizational tension while adopting new standards. The business environment best suited to accept change is usually one that has a flexible management culture and an independent organizational structure. A federalist organization can provide just such an environment. This paper discusses how organizations that face paradigm shifts in their business operations can minimize the difficulty associated with major change by adopting a federalist organizational structure.