Predicting Organizational Reconfiguration

  • Timothy N. Carroll
  • Samina Karim
Part of the Information and Organization Design Series book series (INOD, volume 8)


This chapter addresses the issue of structural change within for-profit organizations, both as adaptation to changing markets and as purposeful experimentation to search for new opportunities, and builds upon the “reconfiguration” construct. In the areas of strategy, evolutionary economics, and organization theory, there are conflicting theories that either predict structural change or discuss obstacles to change. Our aim is to highlight relevant theoretical rationales for why and when organizations would, or would not, be expected to undertake structural reconfiguration. We conclude with remarks on how these literatures, together, inform our understanding of reconfiguration and organization design and provide insights for practitioners.


Reconfiguration Organization design Structure Restructuring Reorganization Organizational change Configuration Strategic choice 



The authors wish to thank Anne Bøllingtoft, George Huber, and participants in the 2008 Aarhus Conference on Organization Design for their helpful comments.


  1. Abernathy W, Utterback J (1978) Patterns of Industrial Innovation. Technology Review 80: 40–47.Google Scholar
  2. Amburgey TL, Kelly D, Barnett WP (1993) Resetting the Clock: The Dynamics of Organizational Failure. Administrative Science Quarterly 38(1): 51–73.Google Scholar
  3. Baldwin CY, Clark KB (2000) Design Rules: The Power of Modularity. Boston: MIT Press.Google Scholar
  4. Bergh DD (1998) Product-Market Uncertainty, Portfolio Restructuring, and Performance: An Information-Processing and Resource-Based View. Journal of Management 24 (2): 135–155.CrossRefGoogle Scholar
  5. Blau PM (1970) A Formal Theory of Differentiation in Organizations. American Sociological Review 35(2): 201–218.CrossRefGoogle Scholar
  6. Bowman EH, Singh H (1993) Corporate Restructuring: Reconfiguring the Firm. Strategic Management Journal 14 (Special Issue: Corporate Restructuring): 5–14.CrossRefGoogle Scholar
  7. Burns T, Stalker GM (1961) The Management of Innovation. London: Tavistock.Google Scholar
  8. Burton RM, Lauridsen J, Obel B (2002) Return on Assets Loss from Situational and Contingency Misfits. Management Science 48 (11): 1461–1485.CrossRefGoogle Scholar
  9. Burton RM, Obel B (2004) Strategic Organization Diagnosis and Design: The Dynamics of Fit, 3rd edn. Dordrecht: Kluwer Academic Publishers.Google Scholar
  10. Cafferata GL (1982) The Building of Democratic Organizations: An Embryonic Metaphor. Administrative Science Quarterly 27: 280–303.CrossRefGoogle Scholar
  11. Chandler A (1962) Strategy and Structure: Chapters in the History of the American Industrial Enterprise. Cambridge, MA: MIT Press.Google Scholar
  12. Chattopadhyay P, Glick WH, Huber GP (2001) Organizational Actions in Response to Threats and Opportunities. Academy of Management Journal, 44 (5): 937–955.CrossRefGoogle Scholar
  13. Chesbrough H, Teece D (1996) When is Virtual Virtuous: Organizing for Innovation. Harvard Business Review, 74(1): 65–74.Google Scholar
  14. Child J (1972) Organizational Structure, Environment and Performance: The Role of Strategic Choice. Sociology 6 (1): 1–22.CrossRefGoogle Scholar
  15. Child J, Kieser A (1981) Development of Organizations over Time. In: Starbuck W, Nystrom P (eds), Handbook of Organization Design. New York: Oxford, pp 28–64.Google Scholar
  16. Ciborra CU (1996) The Platform Organization: Recombining Strategies, Structures, and Surprises. Organization Science 7 (2): 103–118.CrossRefGoogle Scholar
  17. Crozier M (1964) The Bureaucratic Phenomenon. Chicago: University of Chicago Press.Google Scholar
  18. Cyert RM, March JG (1963) A Behavioral Theory of the Firm. Cambridge: Blackwell Publishing.Google Scholar
  19. Dalton DR, Daily CM, Ellstrand AE, Johnson JL (1998) Meta-Analytic Reviews of Board Composition, Leadership Structure, and Financial Performance. Strategic Management Journal 19: 269–290.CrossRefGoogle Scholar
  20. Donaldson L (1985) Organization Design and the Life Cycles of Products. Journal of Management Studies 22 (1): 25–37.CrossRefGoogle Scholar
  21. Donaldson L (1987) Strategy and Structural Adjustment to Regain Fit and Performance: In Defense of Contingency Theory. Journal of Management Studies, 24 (1): 1–24.CrossRefGoogle Scholar
  22. Donaldson L (1990) The Normal Science of Structural Contingency Theory. In: Clegg H, Nord W(eds), The Handbook of Organization Studies. London: Sage.Google Scholar
  23. Donaldson L (1995) American Anti-Management Theories of Organization: A Critique of Paradigm Proliferation. New York: Cambridge University Press.Google Scholar
  24. Donaldson L (2001) The Contingency Theory of Organizations. Thousand Oaks, CA: Sage.Google Scholar
  25. Eisenhardt KM, Brown SL (1999) Patching: Re-Stitching Business Portfolios in Dynamic Markets. Harvard Business Review 77(3): 71–82.Google Scholar
  26. Eisenhardt KM, Martin JA (2000) Dynamic Capabilities: What are They? Strategic Management Journal, Special Issue 21(10–11): 1105–1121.CrossRefGoogle Scholar
  27. Feldman MS, Pentland BT (2003) Organizational Routines as a Source of Flexibility and Change. Administrative Science Quarterly 48(1): 94–118.CrossRefGoogle Scholar
  28. Galunic DC, Eisenhardt KM (1996) The Evolution of Intracorporate Domains: Divisional Charter Losses in High-Technology, Multidivisional Corporations. Organization Science 7(3): 255–282.CrossRefGoogle Scholar
  29. Galunic DC, Eisenhardt KM (2001) Architectural Innovation and Modular Corporate Forms. Academy of Management Journal 44 (6): 1229–1249.CrossRefGoogle Scholar
  30. Garud R, Kumaraswamy A (1995) Technological and Organizational Designs for Realizing Economies of Substitution. Strategic Management Journal 16 (Special Issue: Technological Transformation and the New Competitive Landscape): 93–109.CrossRefGoogle Scholar
  31. Greiner L (1972) Evolution and Revolution as Organizations Grow. Harvard Business Review 50(4): 37–46.Google Scholar
  32. Gresov C (1989) Exploring Fit and Misfit with Multiple Contingencies. Administrative Science Quarterly 34(3): 431–454.CrossRefGoogle Scholar
  33. Greve HR (2003) Organizational Learning from Performance Feedback: A Behavioral Perspective on Innovation and Change. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
  34. Hage J, Aiken M (1969) Routine Technology, Social Structure and Organizational Goals. Administrative Science Quarterly 14(3): 366–376.CrossRefGoogle Scholar
  35. Hambrick DC, Mason PA (1984) Upper Echelons: The Organization as a Reflection of its Top Managers. Academy of Management Review 9: 193–206.CrossRefGoogle Scholar
  36. Hannan MT, Freeman J (1984) Structural Inertia and Organizational Change. American Sociological Review 49: 149–164.CrossRefGoogle Scholar
  37. Haveman H (1992) Between a Rock and a Hard Place: Organizational Change and Performance under Conditions of Fundamental Environmental Transformation. Administrative Science Quarterly 37: 48–75.CrossRefGoogle Scholar
  38. Helfat CE, Eisenhardt KM (2004) Inter-Temporal Economies of Scope, Organizational Modularity, and the Dynamics of Diversification. Strategic Management Journal 25(13): 1217–1232.CrossRefGoogle Scholar
  39. Henderson RM, Clark KB (1990) Architectural Innovation: The Reconfiguration of Existing Product Technologies and the Failure of Established Firms. Administrative Science Quarterly 35(1): 9–30.CrossRefGoogle Scholar
  40. Hill CWL, Hitt MA, Hoskisson RE (1992) Cooperative versus Competitive Structures in Related and Unrelated Diversified Firms. Organization Science 3(4): 501–521.CrossRefGoogle Scholar
  41. Hirsch PM, De Soucey M (2006) Organizational Restructuring and its Consequences: Rhetorical and Structural. Annual Review of Sociology 32: 171–89.CrossRefGoogle Scholar
  42. Hoskisson RE, Johnson RA (1992) Corporate Restructuring and Strategic Change: The Effect on Diversification Strategy and R&D Intensity. Strategic Management Journal 13 (8): 625–634.CrossRefGoogle Scholar
  43. Hoskisson RE, Johnson RA, Moesel DD (1994) Corrporate Divestiture Intensity in Restructuring Firms: Effects of Governance, Strategy, and Performance. Academy of Management Journal 37(5): 1207–1251.CrossRefGoogle Scholar
  44. Hoskisson RE, Turk TA (1990) Corporate Restructuring: Governance and Control Limits of the Internal Capital Market. Academy of Management Review 15 (3): 459–477.CrossRefGoogle Scholar
  45. Huber GP (2004) The Necessary Nature of Future Firms: Attributes of Survivors in a Changing World. Boston, MA: Sage.Google Scholar
  46. Jensen MC (1986) Agency Costs of Free Cash Flow. American Economic Review 76: 323–329Google Scholar
  47. Jensen MC (1988) Takeovers: Their Causes and Consequences. Journal of Economic Perspectives 2 (1): 21–48.Google Scholar
  48. Johnson R (1996) Antecedents and Outcomes of Corporate Refocusing. Journal of Management 22 (3): 439–483.CrossRefGoogle Scholar
  49. Karim S (2006) Modularity in Organizational Structure: The Reconfiguration of Internally Developed and Acquired Business Units. Strategic Management Journal 27: 799–823.CrossRefGoogle Scholar
  50. Karim S, Mitchell W (2004) Innovating Through Acquisition and Internal Development. Long Range Planning 37: 525–547.CrossRefGoogle Scholar
  51. Keats BW, Hitt MA (1988) A Causal Model of Linkages Among Environmental Dimensions, Macro Organizational Characteristics, and Performance. Academy of Management Journal 31 (3): 570–598.CrossRefGoogle Scholar
  52. Khandwalla PN (1977) Organizational Design. New York: Harcourt, Brace, Jovanovich.Google Scholar
  53. Kimberley J, Miles RH (1980) The Organizational Life Cycle. San Francisco: Jossey Bass.Google Scholar
  54. Lant TK, Hurley AE (1999) A Contingency Model of Response to Performance Feedback: Escalation of Commitment and Incremental Adaptation in Resource Investment Decisions. Group and Organization Management 24 (4): 421–437.CrossRefGoogle Scholar
  55. Lawrence PR, Lorsch JW (1967) Organization and Environment: Managing Differentiation and Integration. Boston: Harvard Business School.Google Scholar
  56. Lei D, Hitt MA, Goldhar JD (1996) Advanced Manufacturing Technology: Organizational Design and Strategic Flexibility. Organization Studies 17 (3): 501–524.CrossRefGoogle Scholar
  57. Liebeskind J, Wiersema M, Hansen G (1992) LBOs, Corporate Restructuring, and the Incentive-Intensity Hypothesis. Financial Management 21(1): 73–88.CrossRefGoogle Scholar
  58. Lopes LL (1987) Between Hope and Fear: The Psychology of Risk. Advances in Experimental Social Psychology 20: 255–295.CrossRefGoogle Scholar
  59. March JG (1981) Footnotes to Organizational Change. Administrative Science Quarterly 26: 563–577.CrossRefGoogle Scholar
  60. March JG, Shapira Z (1992) Variable Risk Preferences and the Focus of Attention. Psychological Review 99 (1): 172–183.CrossRefGoogle Scholar
  61. Merton RK (1957) Social Theory and Social Structure, Rev. ed. Glencoe, IL: Free Press.Google Scholar
  62. Miller D (1988) Relating Porter’s Business Strategies to Environment and Structure: Analysis and Performance Implications. Academy of Management Journal 31 (2): 280–308.CrossRefGoogle Scholar
  63. Mintzberg H (1980) Structure in 5s: A Synthesis of the Research on Organization Design. Management Science 26 (3): 322–341.CrossRefGoogle Scholar
  64. Nadler D, Tushman ML (1984) A Congruence Model for Diagnosing Organizational Behavior. In: Kolb DA, Rubin JM, McIntyre JM (eds), Organizational Psychology: Readings on Human Behavior in Organizations. Englewood Cliffs, NJ: Prentice-Hall, pp 587–603.Google Scholar
  65. Nadler DA, Tushman M (1997) Competing by Design: The Power of Organizational Architecture. New York: Oxford University Press.Google Scholar
  66. Naman JL, Slevin DP (1993) Entrepreneurship and the Concept of Fit: A Model and Empirical Tests. Strategic Management Journal 14 (2): 137–153.CrossRefGoogle Scholar
  67. Ocasio WC (1995) The Enactment of Economic Adversity: A Reconciliation of Theories of Failure-Induced Change and Threat-Rigidity. In: Staw BM, Cummings LL (eds), Research in Organization Behavior Greenwich, CT: JAI Press, 17: 287–331.Google Scholar
  68. Penrose ET (1959) The Theory of the Growth of the Firm. New York: Wiley.Google Scholar
  69. Porter ME (1987) From Competitive Advantage to Corporate Strategy. Harvard Business Review 65 (3): 43–59.Google Scholar
  70. Phan PH, Hill CWL (1995) Organizational Restructuring and Economic Performance in Leveraged Buyouts: An Ex Post Study. Academy of Management Journal 38 (3): 704–739.CrossRefGoogle Scholar
  71. Quinn RE, Cameron K (1983) Organization Life Cycles and Shifting Criteria of Effectiveness: Some Preliminary Evidence. Management Science 29 (1): 33–51.CrossRefGoogle Scholar
  72. Ravenscraft DJ, Scherer FM (1987) Mergers, Sell-offs, and Economic Efficiency. Washington, DC: Brookings Institution Press.Google Scholar
  73. Romanelli E, Tushman ML (1994) Organization Transformation as Punctuated Equilibrium: An Empirical Test. Academy of Management Journal 34: 141–1166.Google Scholar
  74. Rumelt RP (1974) Strategy, Structure and Economic Performance. Boston, MA: Harvard University Press, Cambridge.Google Scholar
  75. Sanchez R, Mahoney JT (1996) Modularity, Flexibility, and Knowledge Management in Product and Organization Design. Strategic Management Journal 17: 63–76.Google Scholar
  76. Schilling MA (2000) Toward a General Modular Systems Theory and Its Application to Interfirm Product Modularity. Academy of Management Review 25 (2): 312–334.CrossRefGoogle Scholar
  77. Schilling MA, Steensma HK (2001) The Use of Modular Organizational Forms: An Industry-Level Analysis. Academy of Management Journal 44 (6): 1149–1168.CrossRefGoogle Scholar
  78. Seth A, Easterwood J (1993) Strategic Redirection in Large Management Buyouts: The Evidence from Post-Buyout Restructuring. Strategic Management Journal 14 (4): 251–273.CrossRefGoogle Scholar
  79. Sirmon DG, Hitt MA, Ireland RD (2007) Managing Firm Resources in Dynamic Environments to Create Value: Looking Inside the Black Box. Academy of Management Review 32 (1): 273–292.Google Scholar
  80. Starbuck W, Milliken F (1988) Executives’ Perceptual Filters: What They Notice and How They Make Sense. In: Hambrick D (eds), The Executive Effect: Concepts and Methods for Studying Top Executives. Greenwich, CT: JAI Press, pp 35–65.Google Scholar
  81. Staw BM, Ross J (1987) Understanding Escalation Situations: Antecedents, Prototypes, and Solutions. Research in Organizational Behavior 9: 39–78.Google Scholar
  82. Staw BM, Sandelands LE, Dutton JE (1981) Threat-Rigidity Effects in Organizational Behavior: A Multilevel Analysis. Administrative Science Quarterly 26: 501–524.CrossRefGoogle Scholar
  83. Teece DJ, Pisano G, Shuen A (1997) Dynamic Capabilities and Strategic Management. Strategic Management Journal 18 (7): 509–533.CrossRefGoogle Scholar
  84. Thomas J, Clark S, Gioia D (1993) Strategic Sensemaking and Organizational Performance: Linkages among Scanning, Interpretation, Action, and Outcomes. Academy of Management Journal 36: 239–270.CrossRefGoogle Scholar
  85. Tushman ML, Murmann JP (1998) Dominant Designs, Technology Cycles, and Organizational Outcomes. In: Staw B, Sutton R (eds), Research in Organizational Behavior. Greenwich, CT: JAI Press, Vol. 20.Google Scholar
  86. Utterback JM (1994) Mastering the Dynamics of Innovation. Boston, MA: Harvard Business School Press.Google Scholar
  87. Utterback JM, Suárez F (1993) Innovation, Competition, and Industry Structure. Research Policy 22: 1–21.CrossRefGoogle Scholar
  88. Van de Ven AH, Poole MS (1995) Explaining Development and Change in Organizations. Academy of Management Review 20 (3): 510–540.CrossRefGoogle Scholar
  89. Walsh JP (1988) Top Management Turnover Following Mergers and Acquisitions. Strategic Management Journal 9: 173–183.CrossRefGoogle Scholar
  90. Walsh JP (1989) Doing a Deal: Merger and Acquisition Negotiations and Their Impact upon Target Company Top Management Turnover. Strategic Management Journal 10: 307–322.CrossRefGoogle Scholar
  91. Walsh JP, Ellwood JW (1991) Mergers, Acquisitions, and the Pruning of Managerial Deadwood. Strategic Management Journal 12 (3): 201–217.CrossRefGoogle Scholar
  92. Zenger TR, Hesterly WS (1997) The Disaggregation of Corporations: Selective Intervention, High-Powered Incentives, and Molecular Units. Organization Science 8 (3): 209–222.CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media, LLC 2009

Authors and Affiliations

  1. 1.Moore School of BusinessUniversity of South CarolinaColumbiaUSA
  2. 2.School of ManagementBoston UniversityBostonUSA

Personalised recommendations