Shifting Administrative Intensity and Employee Composition: Cutback Management in Education

Abstract

Many public organizations are increasingly confronted with substantive and unpredictable reductions of financial resources. Despite growing research attention to this issue, empirical investigation of the organizational consequences of decline and turbulence has been limited. This article aims to understand the combined effects of decline and turbulence on personnel, one of the largest expenditure categories in organizations. Analyses use data from 2- and 4-year public institutions of higher education in the United States from 1988 to 2012. Findings in this context suggest that while decline alone has little to no effect on staffing, turbulence is associated with larger effects that are moderated by decline. Two-year institutions more closely resemble operational, efficiency-oriented responses to turbulence, and 4-year institutions reflect a more strategic reaction.