The restructuring and reengineering of AT&T: Analysis of a public relations crisis using organizational theory

Abstract

In this study, five perspectives from organizational theory were used to interpret the public relations crisis surrounding the restructuring and downsizing of AT&T in 1995–1996. Organizational legitimacy and resource dependence theories highlighted two key reasons why efforts to manage the crisis were unsuccessful: AT&T's failure to construct a shared system of beliefs that made sense of the need to downsize, and its inability to cope with the conflicting demands of key external publics. Such insights underscored the value of using organizational theory when trying to understand and respond to crisis situations.