Abstract
While studies have investigated the moral issue associated with downsizing, little research attention has been directed to leaders' behaviors that result in organizational decline and eventually lead them to make a downsizing decision. This study tests a sequence-based model to assess (1) the impact of leaders' risk-aversion and self-centeredness on organizational decline and downsizing and (2) the impact of organizational and industry decline on organizational downsizing. We address a gap in the decline literature that has only implicitly alluded to leadership characteristics as forerunners of decline. Data collected from 85 firms indicate that both leadership risk-aversion and self-centeredness are significantly related to organizational decline. This results in intensified organizational downsizing. However, industry decline affects downsizing more significantly.
Original language | English |
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Pages (from-to) | 363-378 |
Number of pages | 16 |
Journal | Journal of Business Ethics |
Volume | 86 |
Issue number | 3 |
DOIs | |
State | Published - May 2009 |
Externally published | Yes |
Keywords
- Industry decline
- Leadership
- Organizational decline
- Organizational downsizing
ASJC Scopus subject areas
- Business and International Management
- General Business, Management and Accounting
- Arts and Humanities (miscellaneous)
- Economics and Econometrics
- Law