Causes of Early and Later Organizational Adoption: The Case of Corporate Downsizing

Abstract

While the causes of organizational adoption of new practices often vary across social contexts, organizational theories seldom recognize this fact. One of the few contextual theories on adoption views the causes of adoption as varying according to the timing of adoption: Economic causes should govern early adoption and institutional causes should govern later adoption. Tests of this theory generally have focused on gradual adoption among noneconomic organizations. Recognizing the need to expand our understanding of the timing of organizational adoption, I examine rapid adoption among economic organizations. More specifically, I focus on the adoption of downsizing programs among Fortune 100 firms and report that economic and institutional factors have affected downsizing throughout the downsizing era. Interpretation of these findings sheds light on the genesis and continuation of the downsizing era and on the impact that the rise of investor capitalism has had on shifts in the specific causes of early and later downsizings. I conclude by stressing the theoretical and practical utility of investigating how new practices spread across organizations in different contexts.

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