ECONOMIC DOWNTURN: AN INVESTIGATION OF PERCEPTIONS AND STRATEGY

The importance of decision maker interpretations in determining organizational responses to performance downturn is underscored and incorporated into a model proposed by Ford and Baucus (1987). In this study, we adapted a Ford and Baucus model to examine 25 organizations in an area of economic downturn. Managerial perceptions of the business environment were related to internal and external organizational responses. Findings were interpreted as supporting the portion of the model dealing with active responses. Logical relationships between variables were observed. Moreover, a series of linkages was suggested. While the model shows distinct categories of responses, an important finding of this research is that firms' responses could not be characterized as falling exclusively into any one specific category as predicted by the model. Instead, we found complex networks of internal and external strategies.