In this book, Lex Donaldson, one of the leading scholars in the field of organization theory, introduces a compelling theory of performance-driven organizational change, Organizational Portfolio Theory. In explaining why organizations change and also why they fail to change, the theory reconceptualizes the organization as a portfolio with a number of different causes of organizational performance varying over time. The author argues that without a performance crisis there is a good chance that necessary organizational changes will not be forthcoming, and that moreover, the adaptive change induced by the crisis creates the capacity for fresh organizational growth.
Chapter 10: Conclusions
In this book, we have advanced the model of the organization as a portfolio of variables that interact with each other to affect the performance of the organization. The portfolio characteristics affect organizational performance and risk. These feed back to determine the occurrence and timing of organizational change. This model generates a set of new theoretical propositions that may be used to guide future research efforts. This chapter first summarizes the arguments of the previous chapters, considers interactions, draws together implications of the theory for the divisionalized corporation, and then presents an agenda for future research using the new theory.
Summary of Organizational Portfolio Theory
The structural adaptation to regain fit theory treats organizational performance as the crucial intermediary variable between misfit and organizational change. This ...