Decline in Organizations: A Literature Integration and Extension

Abstract

The authors express their appreciation to their colleagues who reviewed earlier versions of this paper and made valuable suggestions, especially to Professors M. Ronald Buckley, George W. England, Thomas A. Mahoney, Daniel A. Wren, and to three unnamed ASO reviewers. This paper reviews current perspectives on organizational decline and integrates important underlying factors into a conceptual framework that refines the definition of decline in organizations. In the model developed here, decline moves through the following stages: (1) the organization is blind to the early stages of decline; (2) it recognizes the need for change but takes no action; (3) it takes action, but the action is inappropriate; (4) it reaches a point of crisis; and (5) it is forced to dissolve. The discussion of this model points to areas in which additional research is needed to develop sensitivity to the conditions leading to decline and a better understanding of conditions that are common to declining organizations.'