Organizational resilience: Sustained institutional effectiveness among smaller, private, non-profit US higher education institutions experiencing organizational decline.

Abstract

Recent changes in the United States (US) economy have radically disrupted revenue generation among many institutions within higher education within the US. Chief among these disruptions has been fallout associated with the financial crisis of 2008-2009, which triggered a change in the US higher education environment from a period of relative munificence to a prolonged period of scarcity. The hardest hit by this disruption have been smaller, less wealthy institutions which tend to lack the necessary reserves to financially weather the economic storm. Interestingly, a review of institutional effectiveness among these institutions revealed that while many are struggling, some institutions have found ways to not only successfully cope with the impact of declining revenue, but have been able to capitalize on the disruption and thrive. Organizational response is an important factor in successfully coping with conditions of organizational decline. The study examined the impacts of organizational response on institutional effectiveness among higher education institutions experiencing organizational decline. The study's research question asked why some US higher educational institutions are more resilient at coping with organizational decline than other institutions operating within the same segment of the higher education sector. More specifically, what role does organizational resilience have in helping smaller, private non-profit institutions cope and remain effective during organizational decline? A total of 141 US smaller, private non-profit higher educational institutions participated in the study; specifically, the study included responses from participant institutions' key administrators. 60-item survey evaluated administrator responses corresponding to organizational response and institutional effectiveness. Factor analysis was used to specify the underlying structures of rigidity response, resilience response, and institutional effectiveness. Multiple regression analysis was used to examine the direct and interaction effects between organizational decline, organizational rigidity response, organizational resilience response, and institutional effectiveness, controlling for age of institution and level of endowment. The study validated previous threat-rigidity response findings that organizational decline alone does not adversely impact institutional effectiveness. The direct effect of Goal-Directed Solution Seeking and Role Dependency organizational resilience factors had a positive, significant correlation with the Student Personal Development institutional effectiveness factor. The interactive effect of Goal-Directed Solution Seeking organizational resilience factor during organizational decline had a positive, significant correlation with the Professional Development and Quality of Faculty institutional effectiveness factor. The interactive effect of Avoidance during organizational decline had a positive, significant correlation with the Faculty and Administrator Employment Satisfaction institutional effectiveness factor. The interactive effect of Diminished Innovation, Morale, and Leader Credibility rigidity response factor and Avoidance organizational resilience factor during organizational decline had a positive, significant correlation with the Professional Development and Quality of Faculty institutional effectiveness factor. Lastly, the interactive effect of Increased Scapegoating of Leaders, Interest group Activities, and Conflict rigidity response factor and Avoidance organizational resilience factor during organizational decline had a positive, significant correlation with the Faculty and Administrator Employment Satisfaction institutional effectiveness factor. Factors of organizational resilience were found to have a positive effect among smaller, private non-profit higher educational institutions associated with this study toward sustaining institutional effectiveness during organizational decline. Specifically, the organizational resilience factors of Goal-Directed Solution Seeking (i.e., mission-driven solutions) and Avoidance (i.e., skepticism toward new ideas) play a significant, collaborative role among smaller, private non-profit higher educational institutions when it comes to sustaining institutional effectiveness during organizational decline.