Deliberate or not: Why do Firms Show a Pattern of Reversal in Reorganisations?

Date, Time, Venue

29 September 2011, Thursday 

15.00-16.30


University College London

1st floor Exec-ed room, Engineering Front Building
("Malet place" in Google maps)

Abstract

In this paper I empirically investigate whether firms show a systematic tendency to revert back to the structure they previously abandoned and why this may be so. I extend  existing theory that explains this phenomenon by highlighting that the time to the next reorganization is conditional on the nature of the current structure. I argue that the choice of reversal is driven by top management’s sequential attention to recurrent problems. While the employees adjust their collaboration behavior to the new structure after each change, I propose that the timing of the next reorganization is driven by their relative adjustment speed to those new structures. I test this theory using hand-coded data of the mobile phone manufacturing industry on reported reorganizations from the inception of the industry in 1983 to 2008. For this purpose, I introduce a novel empirical operationalization of structure. I find empirical support for the reversal as well as for the difference in timing of reorganizations, highlighting the potential impact of employees’ collaboration behavior on reorganization decisions.

Bio

Marlo Raveendran is a PhD candidate in Strategy and Entrepreneurship at London Business School. Her research interests are in coordination, interdependence and organization design; and decisions of structural organizational change.