Organizational decline: A synthesis of insights from organizational ecology, path dependence and the resource‐based view

The aim of this paper is to propose an integrative framework of organizational decline on the firm‐level.

In recent years, there has been a growing number of contributions to the research field of organizational decline from diverse theoretical perspectives and different levels of analysis. In this paper, an integrative framework of organizational decline on the firm‐level is proposed that relies on a process perspective, combining insights from organizational ecology, path dependence and the resource‐based view.

Different theoretical perspectives are used to explore various aspects of the problem of organizational decline. A theoretical framework as a theoretical perspective is developed to guide research and to interconnect diverse theoretical findings. Based on the suggested framework, two archetypes are distinguished which lead an organization to insolvency: malabsorptive incompetence and maladapted competencies.

The proposed framework allows the capture of the dynamic process of organizational decline and the identification of the triggers driving organizational decline.