Organizational conservatism: the good, the bad and the ugly

Abstract

This paper aims to provide a comprehensive analysis of the advantages and disadvantages of conservative companies, which are sometimes criticized for their tendency to avoid risks and prefer stability. They distinguish themselves through their financial stability and resistance to economic fluctuations, making them well-suited to markets that value predictability, especially in mature markets or those with significant entry barriers. Nevertheless, their caution can also result in rigidity, a lack of innovation, and a culture of fear among employees. These companies can represent an interesting option for investors seeking reliable and stable companies, but it is important to note that their cautious approach may impede their ability to innovate and transform, ultimately hindering their short-term competitiveness. This critical article analyzes the advantages and disadvantages of conservative companies, advocating for a balanced approach that acknowledges both the need for stability and the need for innovation.

Keywords: Organizational conservatism, business performance, resistance to change, innovation, values.

JEL Classification: D21

Paper Type: Theoretical research