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Downsizing, competition, and organizational change in government: Is necessity the mother of invention?


  • Steven Kelman

    (Harvard University)


One answer to the question of why government organizations don't perform better-common in academic “public choice” literature but also in folk wisdom-is that resources come too easily, independent of performance. Some businessmanagement literature suggests that a crisis in resource flows can force successful change-”necessity is the mother of invention.” However, the literature also presents an alternative view: that crisis promotes rigid preprogrammed responses, not new ways of behaving. This paper examines the impact of crisis on organizational change in government by examining an organizational change effort in the U.S. federal government (procurement reform during the 1990s) that occurred simultaneously with an organizational crisis involving workforce downsizing and introduction of competition for some buying offices. Using a dataset consisting of a survey of approximately 1,600 frontline government contracting officials, the impact of variation in crisis at different buying offices on variation in behavior change is examined. Necessity was found to be the mother of invention, not rigidity. However, these effects were counteracted by two negative effects of crisis on organizational change: 1) employee resentment over violation of a “social contract at work” reduced behavior change, 2) employee association of the change effort with downsizing reduced attitudinal support for the change, which translated into reduced behavior change. On balance, crisis inhibited organizational change, rather than promoting it. © 2006 by the Association for Public Policy Analysis and Management

Suggested Citation

  • Steven Kelman, 2006. "Downsizing, competition, and organizational change in government: Is necessity the mother of invention?," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 25(4), pages 875-895.
  • Handle: RePEc:wly:jpamgt:v:25:y:2006:i:4:p:875-895
    DOI: 10.1002/pam.20212

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    References listed on IDEAS

    1. Canice Prendergast, 1999. "The Provision of Incentives in Firms," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 7-63, March.
    2. Rafael La Porta & Florencio López-de-Silanes, 1999. "The Benefits of Privatization: Evidence from Mexico," The Quarterly Journal of Economics, Oxford University Press, vol. 114(4), pages 1193-1242.
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    Cited by:

    1. Gerhard Riener & Simon Wiederhold, 2011. "On Social Identity, Subjective Expectations, and the Costs of Control," Jena Economic Research Papers 2011-035, Friedrich-Schiller-University Jena.
    2. Simon Wiederhold, 2012. "The Role of Public Procurement in Innovation: Theory and Empirical Evidence," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 43, November.
    3. Rhys Andrews & Morgen Johansen, 2012. "Organizational Environments and Performance: A Linear or Nonlinear Relationship?," Public Organization Review, Springer, vol. 12(2), pages 175-189, June.
    4. Charles E. Stevens & En Xie & Mike W. Peng, 2016. "Toward a legitimacy-based view of political risk: The case of Google and Yahoo in China," Strategic Management Journal, Wiley Blackwell, vol. 37(5), pages 945-963, May.

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