We thank George Dodge, Jane Dutton, Anne Huff, various colleagues, and Christine Oliver and three anonymous reviewers for their helpful comments on various versions of this manuscript that improved both its content and readability. An earlier version was presented at the 52nd Annual Meeting of the Academy of Management. This article is based, in part, on a dissertation by the first author in partial fulfillment of her Ph.D. (Texas Tech University), Kimberly B. Boal and James G. Hunt, co-chairs. The authors contributed equally to the manuscript, and communications may be sent to any of them. Using grounded theory, we examined a "defender" and a "prospector" bank's strategic adaptation to the Community Redevelopment Act across seven years during which they were under increasing regulatory pressure to comply. The interplay of institutional, organizational, and strategic issue context patterns led the defender to an aborted adaptation and the prospector to a reorientation. Each demonstrated a different form of resistance to demands for compliance to the act: identity resistance (change inconsistent with organizational identity) and virtuous resistance (change not needed since already part of the bank's identity). We observed both incremental and punctuated equilibrium change modes, though only incremental change was sustained. Institutional isomorphism and organizational performance exerted counterintuitive pressures for initiating and sustaining change. Drawing on our results, we develop propositions on organizations' adaptations to change.' Do organizations exhibit different processes of change in response to a pressing institutional issue, and if so, how and why does this occur? In spite of the ubiquity of research on change, the when, how, and why aspects are not at all clear. Van de Ven (1992) and Huff, Huff, and Thomas (1992) argued that we know very little about the order and sequence of events or activities that describe how things change over time, how organizations adapt to environmental changes, and whether these events or activities will lead to secondorder change, in which the system itself changes, or to more modest first-order change, which occurs within the system itself. Change is the movement away from a present state toward a future state (George and Jones, 1995). The popularity of studies on changes labeled second order, framebreaking, or radical might lead the casual reader to believe that these are the norm. Several authors have chronicled such changes as responses to environmental upheavals (e.g., Hrebiniak and Joyce, 1985; Meyer, Brooks, and Goes, 1990; Meyer, Goes, and Brooks, 1994; Miller and Friesen, 1980a, 1980b). Still other studies have described such changes in terms of cuspcatastrophe models (e.g., Gresov, Haveman, and Oliva, 1993) or by observing such changes in the organization's strategic orientation (Zajac and Shortell, 1989), structure (Meyer and Rowan, 1977), organizational identity (Dutton and Dukerich, 1991; Dutton, Dukerich, and Harquail, 1994), or even in the cognitive maps o...
