Delaying Change: Examining How Industry and Managerial Turbulence Impact Structural Realignment

Karim, Samina, Timothy N. Carroll and Chris P. Long (2016). “Delaying change: Examining how industry and managerial turbulence impact structural realignment.” Academy of Management Journal 59(3): 791-817.

Posted: 20 Feb 2012 Last revised: 19 Jun 2016

See all articles by Samina Karim

Samina Karim

Northeastern University

Timothy Carroll

University of South Carolina - Department of Management

Christopher P Long

Georgetown University - Department of Management

Date Written: 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.

Keywords: industry turbulence, firm turbulence, firm reconfiguration, unit recombination, business units

Suggested Citation

Karim, Samina and Carroll, Timothy and Long, Christopher P, Delaying Change: Examining How Industry and Managerial Turbulence Impact Structural Realignment (2016). Karim, Samina, Timothy N. Carroll and Chris P. Long (2016). “Delaying change: Examining how industry and managerial turbulence impact structural realignment.” Academy of Management Journal 59(3): 791-817., Available at SSRN: https://ssrn.com/abstract=2008236 or http://dx.doi.org/10.2139/ssrn.2008236

Samina Karim (Contact Author)

Northeastern University ( email )

Boston, MA 02115
United States

HOME PAGE: http://www.damore-mckim.northeastern.edu/faculty/k/karim-samina/

Timothy Carroll

University of South Carolina - Department of Management ( email )

United States

Christopher P Long

Georgetown University - Department of Management ( email )

3700 O Street, NW
Washington, NY 20057
United States

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