Organizational Turnaround Research Articles

Organizational Failure and Turnaround: Lessons for Public Services from the For-Profit Sector

As the performance of public services is increasingly scrutinized, it is now commonplace for some schools, hospitals, local authorities and other public organizations to be deemed ‘failing’ and for attempts to be made at creating a turnaround in their performance. This article explores the literature on failure and turnaround in for-profit organizations, presents a number of models or frameworks for describing and categorizing failure and turnaround, and examines the relevance and transferability of theoretical and empirical studies in the for-profit sector to the emerging field of failure and turnaround in public services.

Lend me your wallets: the effect of charismatic leadership on external support for an organization

AbstractWe argue that charismatic leadership can influence external support for the organization, particularly in making the company more attractive to outside investors. Two studies were conducted to test this general hypothesis. First, an archival study demonstrated that the stock of companies headed by charismatic leaders appreciated more than the stock of comparable companies, even after differences in corporate performance were controlled. It was also found that the effect of charismatic leadership was heightened under more difficult economic conditions. Second, an experiment was conducted in which the salience of charismatic leadership was manipulated, along with information about the prospects for an organization's turnaround. Results showed that appeals from a charismatic leader led to increased investment in the firm, and the leader's influence was greater when the prospects for an organizational turnaround were more difficult. It was also found that an endowment of stock enhanced the influence of charismatic appeals and that charismatic leadership may have affected the general risk propensities of followers. These findings were interpreted in terms of an external perspective on leadership, illustrating how leaders can manage the firm's economic and social environment. Copyright © 2004 John Wiley & Sons, Ltd.

When Things Go Wrong: Organizational Failures and BreakdownsWhen Things Go Wrong: Organizational Failures and Breakdowns, edited by Anheier Helmut K.. Thousand Oaks, CA: Sage, 1999.

The book, ‘When Things Go Wrong: Organizational Failures and Breakdowns,’ edited by Helmut K. Anheier, is a collection of essays and articles concerning organizational failure. Some of the contributions appeared earlier in a 1996 special issue of ‘American Behavioral Scientist,’ in which this same topic was addressed. The reviewer, who has spent the last decade researching organizational decline, downsizing, and turnaround, found that, despite some weaknesses, the chapters of the book were a coherent package that stimulated new thoughts about organizational failure.

Organizational turnaround: understanding the role of cutbacks, efficiency improvements, and investment in technology

This paper examines strategies attempted by managers of 204 manufacturing firms which experienced performance decline. Of these, 89 firms turned around, i.e., reversed their performance decline, while 115 firms failed to turnaround and continued to decline in performance over the entire eight-year period of observation. The authors paid particular attention to cutbacks (or retrenchment), improvements in efficiency, and increased investment in technology (specifically, plant and research and development (R&D) expenditure). Results suggest that cutbacks, commonly assumed as essential to organizational turnaround, are adopted by both turnarounds and nonturnarounds. Further, some firms turned around even without resorting to cutbacks, suggesting that the role of cutbacks may need to be reconsidered. Significant differences between turnarounds and nonturnarounds emerged in the ability of managers at turnaround firms to convert cutbacks into efficiency increases. Results also suggest that although efficiency increases were important for turnaround, most turnaround organizations supplemented improved efficiency with increased investment in technology.

Organizational Decline and Adaptation: Theoretical Controversies

In 1980, David Whetten published a seminal paper that urged organization scientists to revise their underlying assumptions of continuous organizational growth, and develop an agenda of research and teaching on organizational decline (Whetten 1980a). Since then, the organization science literature on decline has mushroomed. Some of this work has attempted to define the construct of organizational decline, using such definitions as maladaptation to the environment (Greenhalgh 1983), a downturn in organization size or performance (McKinley 1987), reductions in force (Ford 1980a), decrease in an organization's resource base (Cameron, Kim and Whetten 1987), and failure to anticipate and neutralize external threat (Weitzel and Jonsson 1989). Cameron, Sutton and Whetten (1988), Weitzel and Jonsson (1989), and Whetten (1980b, 1987) attempted to review and integrate the diverse literature on decline. Harrigan (1980), Sutton (1990), Sutton and D'Aunno (1989) and Zammuto and Cameron (1985) have developed theoretical models of decline in organizations, and still other research has reported on large-scale empirical studies of decline and its consequences (Cameron, Whetten and Kim 1987; D'Aveni 1989; Hambrick and D'Aveni 1988). Research on resource scarcity and its effects on organizations and their members is also closely related to organization decline (see discussion on Necessity: The Mother of Rigidity or Invention? later in this introduction). Brockner (1988), Brockner, Davy and Carter (1985), Brockner, Grover, Reed and DeWitt (1992), Brockner, Grover, Reed, DeWitt and O'Malley (1987), Cornfield (1983), Feldman and Leana (1989), Perry (1986) and Worrell, Davidson and Sharma (1991) have studied the many effects of layoffs, and the social and psychological processes that characterize organizational death have been investigated by Harris and Sutton (1986), and Sutton (1983, 1987). Since organizational death is not inevitable, and practitioners and scholars are both interested in how organizations can avoid it, a large literature on organizational turnaround has also developed (Bibeault 1982; Castrogiovanni, Baliga and Kidwell 1992; Grinyer, Mayes and McKiernan 1988; Hambrick and Schecter 1983; Hofer 1980; Hoffman 1989; Robbins and Pearce 1992; Schendel, Patton and Riggs 1976; Slatter 1984; Stopford and Baden-Fuller 1990). A common theme that threads through much of the related research on decline summarized above is how, and whether, organizations adapt to conditions of organizational decline. The literature relevant to the theme of organizational decline and adaptation has now matured to the point that several important theoretical controversies are becoming apparent. One controversy concerns a particular type of adaptation to organizational decline: organizational downsizing (Cameron, Freeman and Mishra 1991; Tomasko 1987). A second controversy involves the issue of whether organizational decline is usually an inhibitor or stimulus for adaptation. These two controversies form the framework for this focused issue, and for the introduction to the six papers that make up the issue.

Permanently Failing Organizations.Marshall W. Meyer , Lynne G. Zucker

Previous articleNext article No AccessBook ReviewsPermanently Failing Organizations. Marshall W. Meyer , Lynne G. Zucker Kenneth DauberKenneth Dauber Search for more articles by this author PDFPDF PLUS Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinkedInRedditEmail SectionsMoreDetailsFiguresReferencesCited by American Journal of Sociology Volume 95, Number 5Mar., 1990 Article DOIhttps://doi.org/10.1086/229456 Views: 8Total views on this site Citations: 1Citations are reported from Crossref Copyright 1990 The University of ChicagoPDF download Crossref reports the following articles citing this article:Simeon John Moore SPA©E: A New Synthesis of Ideas for Organizational Turnaround, Journal of Change Management 7, no.11 (Mar 2007): 51–68.https://doi.org/10.1080/14697010701295733