Do reputational threats influence the rigidity of US agencies? A dynamic panel data approach

Abstract

What happens to organizational rigidity when public organizations faced reputational threats over time? Do they take external criticism as incentives to become less rigid and more innovative and flexible through employee involvement and empowerment? Or do reputational threats paradoxically contribute to the very rigidity that is often stereotyped as inherent parts of government? Building on threat‐rigidity theory, we test the temporal relation between reputational threats (both in terms of the direction of reputation and its turbulence) and organizational rigidity. We apply a dynamic panel data approach combining different data sources on 34 US agencies over a period of 13 years. The results show that organizational rigidity increased, both when reputations evolved negatively over time and when reputations evolved more turbulently. No combined effect of negative reputations and reputational turbulence was observed. Both sources of reputational threats independently precluded organizations from creating a climate of employee empowerment, involvement, flexibility and innovation.This article is protected by copyright. All rights reserved.

It's about time! Temporal dynamics and longitudinal research designs in public administration

“…This would rule out, for instance, repeated cross‐sectional survey data (Fernandez et al, 2015; Yackee & Yackee, 2021) or so‐called “a posteriori” comparisons (de Sá e Silva & de Oliveira, 2023; Montero & Baiocchi, 2022) since different samples are studied at different points in time. It would likewise exclude “pseudo‐panels,” which aggregate individuals within groups to calculate intra‐group means for comparison over time (Bertelli et al, 2015; Boon et al, 2023; Fernandez et al, 2015; Jensen et al, 2018; Oberfield, 2014). Pseudo‐panels generally do not refer to the exact same set of cases due to potential shifts in each group's composition across survey waves.…”

“…Boon et al (2023) also work at the organizational level, but their analysis employs individual ‐level data from repeated cross‐sectional surveys aggregated up to the level of the public organizations within which these individuals work (in this case, US agencies). The creation of this pseudo‐panel (see Bertelli et al, 2015) allows them to take an explicitly dynamic approach to the study of how reputational threats affect the rigidity of public organizations (defined as a work environment that “discourages employee involvement, innovation, creativity, flexibility and empowerment”; Boon et al, 2023: p. 17). Using dynamic panel data models over the 1998–2010 time period, the main results illustrate that negative reputation shocks as well as increased inter‐temporal variability in organizational reputations are linked to statistically significantly higher levels of organizational rigidity.…”

“…Yet, the temporal dimension that is inherent to them is rarely identified.5 We are grateful to Ken Meier for pointing this literature and these insights out to us.6 Naturally, these data-once available-should be analyzed using appropriate methods. We do not discuss such methodological tools here, but refer the interested reader to, for instance,Gill and Meier (2000),Zhu (2012), van Thiel (2022), and Boon et al (2023 as useful starting points. 7 One interesting recent exception concerns Houtgraaf's (2023) longitudinal digital diary study, which collected biweekly information on the "work-related creative experiences" of 141 public employees across a six-month period.…”

“…6 6 Naturally, these data—once available—should be analyzed using appropriate methods. We do not discuss such methodological tools here, but refer the interested reader to, for instance, Gill and Meier (2000), Zhu (2012), van Thiel (2022), and Boon et al (2023) as useful starting points. …”