Deliberate or not: Why do Firms Show a Pattern of Reversal in Reorganisations?
Date, Time, Venue
29 September 2011, Thursday
University College London
1st floor Exec-ed
room, Engineering Front Building
("Malet place" in Google maps)
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.
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.