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In Search of an Organizational Decline Mechanism
Tomonori Inukai 한국산업경영학회 2005 한국산업경영학회 발표논문집 Vol.2005 No.1
We try to explain why the excellent organization decline. We develop Hirschman(1970)'s model to clarify internal organizational mechanism of the declining organization. Hirschman used the concept exit and voice to explain that organization recover from the decline. He focused on the relation between a firm and customers in the market. We assume a firm provides goods to its customers. When the quality of the goods deteriorates, the customers have two options. One option is that they switch to other goods of same kind, or that they stop buying it. This option is exit. The other option is that customers request the improvement of the quality to the firm. This option is voice. We develop these concepts into internal organization. In addition, we change a modeling assumption. we assume the organization members can act independently. In consequence, we offer some fresh insight to organization decline.