Organizational restructuring, government control and loss of legitimacy following an organizational crisis: the case of Israel's nonprofit human services.

Rita Mano, Dennis Rosenberg

Research output: Contribution to journalArticlepeer-review

Abstract

The study explores organizational restructuring following the occurrence of a crisis. Restructuring activities following an intervention are considered here to be indicators of an organization's loss of legitimacy because they have lost their independent status, a basic characteristic of nonprofit human settings. The study shows that according to the Resource Based View of organization restructuring--experienced as downsizing, neglecting and abandoning of projects--organizations are affected by (a) government intervention in decision making; (b) higher demands for accountability; and (c) higher evaluations of performance gaps. On the basis of the study of a sample of 138 Nonprofit Human Services in Israel, the results show that the higher the level of restructuring, the higher the level of legitimacy. However, organization location in metropolitan areas moderates the link between restructuring and legitimacy loss. We conclude that Israel's nonprofit human services being overly dependent on goverhment funding are more prone to restructuring and losing legitimacy following organizational crisis.

Original languageEnglish
Pages (from-to)460-497
Number of pages38
JournalJournal of Health and Human Services Administration
Volume36
Issue number4
StatePublished - 2014

ASJC Scopus subject areas

  • Leadership and Management
  • Health Policy
  • Public Health, Environmental and Occupational Health
  • Organizational Behavior and Human Resource Management

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