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Organizational decline and innovation: Turnarounds and downward spirals


McKinley, William; Latham, Scott; Braun, Michael (2014). Organizational decline and innovation: Turnarounds and downward spirals. Academy of Management Review, 39(1):88-110.

Abstract

We consider four scenarios that can unfold when organizations either innovate or respond rigidly to organizational decline. Two of the scenarios are downward spirals that threaten an organization with possible death, and two of the scenarios are turnarounds. These scenarios are important because they can determine the fate of an organization—survival or death. We explore the conditions under which each of these scenarios is likely to emerge, developing original theory and specifying propositions about those conditions. In developing this theoretical framework, we distinguish between flexible and inflexible innovations as factors in turnaround success or failure. Our model extends current theory on organizational decline to highlight the feedback effects of the consequences of decline and to explain the circumstances in which particular feedback effects are likely to occur.

Abstract

We consider four scenarios that can unfold when organizations either innovate or respond rigidly to organizational decline. Two of the scenarios are downward spirals that threaten an organization with possible death, and two of the scenarios are turnarounds. These scenarios are important because they can determine the fate of an organization—survival or death. We explore the conditions under which each of these scenarios is likely to emerge, developing original theory and specifying propositions about those conditions. In developing this theoretical framework, we distinguish between flexible and inflexible innovations as factors in turnaround success or failure. Our model extends current theory on organizational decline to highlight the feedback effects of the consequences of decline and to explain the circumstances in which particular feedback effects are likely to occur.

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Citations

22 citations in Web of Science®
27 citations in Scopus®
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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Business Administration
Dewey Decimal Classification:330 Economics
Language:English
Date:2014
Deposited On:27 Feb 2014 16:31
Last Modified:08 Dec 2017 01:53
Publisher:Academy of Management
ISSN:0363-7425
Publisher DOI:https://doi.org/10.5465/amr.2011.0356
Other Identification Number:merlin-id:8870

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