Document Type
Article
Publication Title
Academy of Management Journal
ISSN
0001-4273
Volume
59
Issue
3
DOI
10.5465/amj.2012.0409
First Page
791
Last Page
817
Publication Date
1-1-2016
Abstract
This paper examines when firms pursue structural realignment through business unit reconfiguration, specifically by recombining business units. Our results refine and extend contingency theory and studies of organization design by drawing on theories of decision avoidance and delay to describe environmental conditions when firms pursue or postpone structural realignment. Our empirical analysis of 46 firms from 1978 to 1997, operating within the U.S. medical device and pharmaceutical sectors, demonstrates that while decision makers initiate structural recombination during periods of industry growth (i.e., munificence), they reduce their recombination efforts during periods of industry turbulence (i.e., dynamism), and managerial turbulence (i.e., growth in top management team size). We also find evidence that firms delay realignment and bide their time for better environmental conditions of declining turbulence and industry growth before pursuing more structural realignment. Together, these findings suggest that decision makers often delay initiating structural recombination until they can effectively process information and assess how structural changes will help them realign the organization to the environment.
Recommended Citation
Karim, S.,
Carroll, T. N.,
&
Long, C. P.
(2016).
Delaying Change: Examining How Industry and Managerial Turbulence Impact Structural Realignment.
Academy of Management Journal, 59(3), 791–817.
DOI: 10.5465/amj.2012.0409
https://scholarlycommons.pacific.edu/esob-facarticles/124
Comments
We wish to thank seminar participants at Boston University, Ohio State University, Tulane University, the University of Illinois, University of Minnesota and University of Wisconsin, as well as attendees of the 2010 Strategy Research Forum, 2009 Organization Science Winter Conference and Strategic Management Society Conference, and 2008 CORE Organization Design Workshop for their comments and suggestions on earlier versions of this paper. We are also grateful for the constructive feedback from the anonymous reviewers and our associate editor, Kyle Mayer. We gratefully acknowledge research assistance by Victoria Lee, Chien-Chun Liu, and Marketa Sonkova.