Organizational Decline and Cutback Management

Like growth, organizational decline and death, by erosion or plan, is a form of organizational change; but all the problems of managing organizational change are compounded by a scarcity of slack resources. Cutting back any kind of organization is difficult, but a good deal of the problem of cutting back public organizations is compounded by their special status as authoritative, non-market extensions of the state. This chapter categorizes the causes of public organization decline into a fourcell typology: problem depletion, environmental entropy, political vulnerability, and organizational atrophy. Identifying and differentiating among these four types of decline situations provides a start toward cataloguing and estimating the appropriateness of strategies for managing decline and cutbacks. The chapter presents an inventory of cutback management tactics. The tactics intended to remove or alleviate the external political and economic causes of decline are reasonably straightforward means to revitalize eroded economic bases, reduce environmental uncertainty, protect niches, retain flexibility, or lessen dependence.