Environmental Turbulence, Organizational Stability, and Public Service Performance

Abstract

A turbulent external environment is widely believed to have damaging effects on public service performance. Much less consensus has been reached on whether the best response to turbulence is to retain or alter existing organizational structures. We provide the first comprehensive empirical analysis of these issues by testing the links between turbulence, structural stability, and performance in a large sample of public organizations. Our results show that turbulence has a negative effect on performance, and that this is compounded by internal organizational change. Thus public managers can mitigate the harmful effects of volatility in the external environment by maintaining structural stability.