Organizational Decline and Innovation: Turnarounds and Downward Spirals

Path dependence and the stabilization of strategic premises: how the funeral industry buries itself

“…The uncontested retention of strategic premises despite the shock-inducing forces of crises indicates that, as opposed to self-reinforcing mechanisms that provide positive feedback on reproducing strategic patterns, self-destructive mechanisms that stabilize and, therefore, avert an update of strategic premises in light of disconfirming feedback must be at work (Geiger and Antonacopoulou 2009;Langley et al 2013;McKinley et al 2014;MacKay and Chia 2013;Schreyögg and Kliesch-Eberl 2007). Because these mechanisms seem to inhibit strategic change by leaving strategic premises uncontested, they may provide further insights into the pathological reproduction of paths (Hutzschenreuter and Kleindienst 2013;Rothmann and Koch 2014;Sydow et al 2012a).…”

“…Instead, these organizations may leave their strategic premises uncontested even in times of crisis and pathologically reproduce their established path instead of conducting strategic change (e.g., Gilbert 2005;Rothmann and Koch 2014;Sull 1999). The uncontested retention of strategic premises even in times of crisis indicates the existence of mechanisms that stabilize strategic premises (e.g., Geiger and Antonacopoulou 2009;McKinley et al 2014;Schreyögg and Kliesch-Eberl 2007). These mechanisms have remained unexplored so far (Bingham and Kahl 2014;Dobusch and Schüßler 2013;Eggers and Kaplan 2013;O'Reilly and Tushman 2013;Tripsas 2009).…”

“…Thus, although prior research has made considerable progress in gaining a better understanding of the pathological reproduction of paths, exploring the mechanisms that inhibit the update of strategic premises may provide valuable complementary insights into this phenomenon (Hutzschenreuter and Kleindienst 2013;Rothmann and Koch 2014;Sydow et al 2012a). Given that only a minor portion of path-dependent organizations seem to be able to leave, and most organizations seem to pathologically reproduce, their path despite threatening crises, it seems that further research on the pathological reproduction of paths is warranted (McKinley et al 2014). Therefore, the present study aims to increase our knowledge on this phenomenon by exploring how path-dependent organizations stabilize strategic premises even in times of crisis.…”

Identity Processes to Trigger Turnaround in Response to Organizational Decline

“…Research has diverged regarding the path ahead for an organization that experiences decline (McKinley, 1993). One body of research suggests that organizational decline triggers adaptation and innovation, while the other body of research argues that inhibited adaptation and innovation is the only fate for a declining organization (Audia & Greve, 2006;McKinley, Latham, & Braun, 2014). As Edwards et al (2002) pointed out, well-intentioned managerial responses to decline, such as increased focus on efficiency, accountability, and cost controls, may act only to deepen the decline.…”

Party decline and response : the effects of membership decline on party organisations in Western Europe, 1960-2010

“…Contrary to that, threat-rigidity theory suggests that a decline in resources inhibits innovation Bozeman and Slusher, 1979;D'Aunno and Sutton, 1992;McKinley, 1993;McKinley et al, 2013;Mone et al, 1998). The idea stems from literature focussing on the limited scope of opportunities that a decline entails, as well as the cognitive effects a state of crisis exerts on managers.…”