Organizational decline and turnaround management: a contingency framework
Abstract
This study examines the reasons for organizational
decline and suggests context-specific
turnaround process. The decline is
primarily an outcome of inaction of managers
and inappropriate actions of managers
in response to environmental reality. The
causality variables to explain inaction and
inappropriate actions are of two types: a)
organization-specific like past experiences,
sunk investment, specialized assets, bureaucratic
control, internal political and cultural
constraints, managerial commitment to
status quo and b) environment-specific like
legal, political, social, and economic constraints.
The turnaround process of declining
organizations needs to be tailored to match
the contextual reality. This paper develops
a contingency framework to explain context-action
choice relationship.
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