Organizational Decline and Cutback Management

Author(s): Charles H. Levine

Source: Public Administration Review, Vol. 38, No. 4 (Jul. - Aug., 1978), pp. 316-325
Published by: Wiley on behalf of the American Society for Public Administration
Stable URL: http://www.jstor.org/stable/975813 .
Accessed: 17/05/2014 22:18

Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at .
http://www.jstor.org/page/info/about/policies/terms.jsp

.
JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of
content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms
of scholarship. For more information about JSTOR, please contact support@jstor.org.

Wiley and American Society for Public Administration are collaborating with JSTOR to digitize, preserve and
extend access to Public Administration Review.

http://www.jstor.org

This content downloaded from 193.104.110.57 on Sat, 17 May 2014 22:18:23 PM

All use subject to JSTOR Terms and Conditions
316 PUBLIC ADMINISTRATION REVIEW

O RGANIZATIONAL DECLINE AND CUTBACK MANAGEMENT

CharlesH. Levine, University

ofMaryland

Government organizations areneither immortal norun- causeeventhoughsomefederalagenciesliketheWorks

shrinkable.'Like growth,organizationaldecline and Progress Administration, EconomicRecovery Administra-
death,by erosionor plan, is a formof organizational tion,Department of Defense,NationalAeronautics and
change;butall theproblems of managing organizational Space Administration, the Officeof EconomicOppor-
changeare compounded bya scarcity of slackresources.2 tunity, and manystateand local agencieshaveexpanded
Thisfeature ofdeclining organizations-the diminution of and thencontracted,7 or evendied,thepublicsectoras a
thecushionof spareresources necessary forcopingwith wholehas expandedenormously overthelast fourdec-
uncertainty, risking innovation, andrewarding loyaltyand ades. In thisperiodof expansionand optimism among
cooperation-presents forgovernment a problemthatsi- proponents of an activegovernment, isolatedincidents of
multaneously challenges theunderlying premises andfeasi- zerogrowth anddeclinehavebeenconsidered anomalous;
bilityof bothcontemporary management systems and the and thedifficulties facedbythemanagement of declining
institutionsofpluralist liberaldemocracy.3 agenciescopingwithretrenchment havebeenregarded as
Growthand declineare issuesof a grandscaleusually outsidethemainstream ofpublicmanagement concerns. It
tackledbyonlythemostbraveor foolhardy of macroso- is a signofourtimes-labeledbyKenneth Bouldingas the
cial theorists.The divisionof scholarly laborbetween so- "Era of Slowdown"-thatwe are nowreappraising cases
cial theorists and students of management is nowso com- ofpublicorganization declineanddeathas exemplars and
pletethatthelinkbetween thegreatquestionsof political forerunners in orderto providestrategies forthedesign
economy andthemoreearthly problems ofmanaging pub- andmanagement ofmainstreampublicadministration ina
licorganizations is rarelyforged.Thisbifurcation is more future dominated byresource scarcity.8
understandable whenoneacknowledges thatmanagers and Thedeclineand deathofgovernment organizations is a
organization analystshavefordecades(at leastsincethe symptom, a problem, and a contingency. It is a symptom
RooseveltAdministration and the wide acceptanceof of resource scarcity at a societal,evenglobal,levelthatis
Keynesian economics) beenable to subsumetheirconcern creating thenecessity forgovernments to terminate some
forsocietallevelinstability underbroadassumptions of programs, lowertheactivity levelof others,and confront
abundance andcontinous andunlimited economic growth.4 tradeoffs between newdemandsand old programs rather
Indeed,almostall ofourpublicmanagement strategies are thanto expandwhenever a newpublicproblem arises.It is
predicated onassumptions ofthecontinuing enlargement of a problem formanagers whomustmaintain organizational
publicrevenues and expenditures. Theseexpansionist as- capacitybydevising newmanagerial arrangements within
sumptions are particularly prevalent in publicfinancial prevailing structures thatweredesigned underassumptions
management systems thatanticipate budgeting by incre- ofgrowth. It is a contingency forpublicemployees andcli-
mentaladditionsto a securebase.5 Recenteventsand ents;employees whomustsustaintheirmoraleand pro-
gloomyforecasts, however, havecalledintoquestionthe ductivity in thefaceof increasing controlfromaboveand
validityand generality of theseassumptions, and have shrinking opportunities forcreativity andpromotion while
createda needtoreopeninquiry intotheeffects ofresource clientsmustfindalternative sourcesfortheservices gov-
scarcity onpublicorganizations andtheirmanagement sys- ernments maynolongerbe abletoprovide.
tems.Theseeventsand forecasts, rangingfromtaxpayer
revoltslike California'ssuccessful Proposition13 cam- OrganizationalDecline and Administrative Theory
paignand financial criseslikethenearcollapseintobank-
ruptcy of NewYorkCity'sgovernment and theagonizing Growth is a commondenominator thatlinkscontempo-
retrenchment ofitsbureaucracy, to theforeboding predic- rary management theory to itshistorical antecedents and
tionsofthe"limitsofgrowth" modelers, also relinkissues management practiceswithpublicpolicychoices.William
ofpoliticaleconomy ofthemostmonumental significance Scott has observedthat ". . . organizationgrowthcreates
topractices ofpublicmanagement.6 organizational abundance,or surplus,whichis used by
Weknowverylittleaboutthedeclineofpublicorganiza- management tobuyoffinternal consensus fromthepoten-
tionsand themanagement of cutbacks.Thismaybe be- tiallyconflicting interestgroupsegments thatcompetefor
resources in organizations."I As a commondenominator,
An earlierversion
ofthispaperwaspresentedat the1978Annual
MeetingoftheAmerican SocietyforPublicAdministration,
Phoe- CharlesH. Levine(Ph.D. Indiana)is director
ofgraduate
studies
nix,Arizona,April12,1978.I wishtothankthefollowingpeople at theUniversity
ofMaryland's InstituteforUrbanStudies.He is
forprovidingvaluablecomments aboutthatdraft:PierreClavel, theauthorofRacialConflictandtheAmerican Mayor(1974)and
Pat Conklin,RichardCyert,Paul Gallagher,EugeneLewis, editorand contributor
to ManagingHumanResources: A Chal-
LaurenceO'Toole,NancyPetrovic, Sam Postbrief,
AllenSchick, lengeto UrbanGovernments, theUrbanAffairs AnnualReview
FrankSherwood,FredThayer,RichardSchramm, and Dwight for1977.From1973to 1976he servedas founding co-editor
of
Waldo. Administration
andSociety.

JULY/AUGUST1978

This content downloaded from 193.104.110.57 on Sat, 17 May 2014 22:18:23 PM

All use subject to JSTOR Terms and Conditions
ORGANIZATIONAL DECLINE AND CUTBACK MANAGEMENT 317

growth has provided a criterion to gaugetheacceptability perativeis to minimize theperturbations of adjustingto

ofgovernment policiesandhasdefined manyoftheprob- new organizational equilibriums at successively lower
lemsto be solvedby management actionand organiza- levelsoffunding andactivity. 'I3
tionalresearch. So greatis ourenthusiasm forgrowth that
evenwhenan organizational declineseemsinevitable and ... wearenowreappraising casesofpub-
irreversible,itis nearlyimpossible to getelectedofficials,
publicmanagers, ormanagement theorists tocon-
lic organization decline and death as exem-
citizens,
front cutbackanddecremental planning situations as any- plars and forerunnersin order to provide
thingmorethantemporary slowdowns. Nevertheless, the strategies for thedesignand managementof
realityofzerogrowth andabsolutedecline, at leastinsome mainstreampublic administrationin a fu-
sectors,regions,communities, and organizations, means turedominatedbyresourcescarcity.
Y
thatmanagement and publicpolicytheorymustbe ex-
pandedto incorporate non-growth as an initialcondition Lackofgrowth also createsa number ofseriousperson-
thatappliesin somecases.If Scott'sassertions aboutthe nelproblems. For example,theneedto rewardmanagers
pervasiveness ofa growth ideology inmanagement arecor- fordirecting organizational contraction andtermination is
rect,ourmanagement andpolicyparadigms willhavetobe a problembecausewithout growth thereare fewpromo-
replacedoraugmented bynewframeworks tohelptoiden- tionsandrewards availabletomotivate andretainsuccess-
tifycriticalquestionsand strategiesfor action. Put fuland loyalmanagers-particularly whencomparedto
squarely, without growth, howdo wemanagepublicorga- job opportunities fortalented managers outsidethedeclin-
nizations? ingorganization." Also,without expansion, publicorga-
We have no readyor comprehensive answersto this nizationsthatare constrained bymeritand careertenure
question,onlyhunches and shardsof evidence to serveas systems areunabletoattract andaccommodate newyoung
pointsofdeparture. Underconditions andassumptions of talent.Without an inflowofyounger employees, theaver-
decline,theponderables, puzzles,and paradoxesof orga- age age of employees is forcedup, and theorganization's
nizationalmanagement take on new complexities. For skillpool becomesfrozenat theverytimeyounger, more
example,organizations cannotbe cutbackbymerely re- flexible,moremobile,less expensiveand (some would
versing thesequenceofactivity andresource allocationby argue)morecreative employees areneeded. '5
whichtheirpartswereoriginally assembled. Organizations Declineforcesus to setsomeof ourlogicforrationally
areorganicsocialwholeswithemergent qualitieswhichal- structuring organizations on endandupsidedown.Forin-
low theirpartsto recombine intointricately interwoven stance,underconditions of growthand abundance,one
semi-lattices whentheyare brought together. In hisstudy problem formanagers andorganizational designers is how
ofNASA'sgrowth anddrawdown, Paul Schulman hasob- tosetupexclusionary mechanisms toprevent "freeriders"
servedthatviablepublicprograms mustattain"capture (employees and clientswhosharein theconsumption of
points"of publicgoal and resourcecommitments, and theorganization's collectivebenefits withoutsharingthe
theseorganizational thresholds or "criticalmasses" are burdenthatproducedthebenefit) fromtakingadvantage
characterized by theirindivisibility.'0 Therefore, to at- of theenriched commonpool of resources.In contrast,
temptto disaggregate andcutbackon oneelement ofsuch underconditions ofdeclineandausterity, theproblem for
an intricate and delicatepoliticaland organization ar- managers andorganizational designers is howto setup in-
rangement mayjeopardizethefunctioning andequilibrium clusionary mechanisms to prevent organizational partici-
ofan entire organization. pantsfromavoidingthe sharingof the "publicbads"
Moreover, retrenchment compounds thechoiceofman- (increasedburdens)thatresultfromthedepletionof the
agement strategies withparadoxes.Whenslackresources commonpool of resources. 6 In otherwords,to maintain
abound,moneyforthedevelopment ofmanagement plan- orderandcapacity whenundergoing decline, organizations
ning,control,information systems, and theconductof needmechanisms likelong-term contracts withclausesthat
policyanalysisis plentiful eventhoughthesesystems are makepensionsnon-portable if brokenat theemployee's
relatively irrelevant to decisionmaking."Undercondi- discretion. These mechanisms need to be carefully de-
tionsof abundance,habit,intuition, snapjudgments and signedto penalizeand constrain "freeexiters"and cheap
otherformsofinformal analysiswillsuffice formostdeci- exitsat theconvenience oftheemployees whilestillallow-
sionsbecausethecostsof makingmistakes can be easily ingmanagers to cutandinduceintoretirement marginally
absorbedwithout threatening theorganization's survival. 12
performing andunneeded employees.
However, intimesofausterity, whenthesecontrol andan- As a finalexample,inflation erodessteadystatesso that
alytictoolsareneededto helptominimize theriskofmak- stayingevenactuallyrequiresextracting moreresources
ingmistakes, themoneyfortheirdevelopment and imple- fromthe organization'senvironment and effectuating
mentation is unavailable. greaterinternaleconomies. Theironyofmanaging decline
Similarly,withoutslack resourcesto produce"win- inthepublicsectoris particularly compelling undercondi-
win consensus-building solutions andtoprovidesidepay- tionsofrecession or so called"stagflation." Duringthese
mentsto overcome resistance tochange,organizations will periodsof economichardship and uncertainty, pressure is
havedifficulty innovating andmaintaining flexibility.Yet, puton thefederal government to followKeynesian dictates
theseare precisely theactivities neededto maintain capa- and spendmorethroughdeficitfinancing; at thesame
citywhilecontracting, especially whentheoverriding im- time,criticalpublicopinionand legal mandatesrequire

JULY/AUGUST
1978

This content downloaded from 193.104.110.57 on Sat, 17 May 2014 22:18:23 PM

All use subject to JSTOR Terms and Conditions
 318 PUBLIC ADMINISTRATION REVIEW

someindividual agencies(andmanystateandlocalgovern- tractions aftertheproblemhas beensolved,alleviated, or

ments)to balancetheirbudgets, and in someinstances to hasevolvedintoa lesstroublesome stageorpolitically pop-
spendless. ularissue.20
Thesecharacteristics of declining publicorganizations Problemdepletion is largely a productof forcesbeyond
arelikepiecesof a subtlejigsawpuzzlewhoseparameters the controlof the affectedorganization. Threespecial
can onlybe guessedat and whoseabstruseness deepens formsof problemdepletioninvolvedemographic shifts,
witheach newattempt to fititsedgestogether. To over- problemredefinition, and policytermination. Theimpact
comeour tendency to regarddeclinein publicorganiza- ofdemographic shiftshasbeenvividly demonstrated inthe
tionsas anomalous,we needto developa catalogueof closingof schoolsin neighborhoods wheretheschoolage
whatwe alreadyknowabout declining publicorganiza- populationhas shrunk.Whilethecause formostschool
tions.A typology of causesof publicorganizational de- closingsis usuallyneighborhood aging-a factoroutside
clineand corresponding setsof tacticsand decisionrules thecontrolof theschoolsystem-thedecisionto closea
availableformanaging cutbacks willserveas a beginning. schoolis largelypolitical.The effect of problemredefini-
tionon publicorganizations is mosteasilyillustrated by
The Causes of Public OrganizationDecline movements to deinstitutionalize thementally ill. In these
cases,thecorebureaucracies responsible fortreating these
Cutting backanykindoforganization is difficult,buta populations in institutions has shrunk as therisingperpa-
good deal of theproblemof cutting backpublicorgani- tientcostof hospitalization has combinedwithpharma-
zationsis compounded bytheirspecialstatusas authorita- ceuticaladvancesin anti-depressants and tranquilizers to
tive,non-market extensions ofthestate." Publicorganiza- causepublicattitudes andprofessional doctrine toshift.2I
tionsareusedtodeliver servicesthatusuallyhavenodirect Policy termination has both theoretical importand
or easilymeasurable monetary valueor whenmarketar- policysignificance. Theoretically, itis thefinalphaseofa
rangements failto providethenecessary levelof revenues publicpolicyintervention cycleand can be definedas
to supportthe desiredlevelor distribution of services. ". . . the deliberateconclusionor cessationof specific
Sincebudgets dependon appropriations andnotsales,the government functions, programs, policies,or organiza-
diminution or termination of publicorganizations and tions."22Its policyrelevance is underscored byrecentex-
programs, or conversely theirmaintenance and survival, periments andproposalsforsunsetlegislation whichwould
are politicalmatters usuallycallingfortheapplication of requiresomeprograms to undergoextensive evaluations
the mostsophisticated attackor survivaltacticsin the aftera periodof usuallyfiveyearsandbe reauthorized or
arsenalof theskilledbureaucrat-politician.'I Thesestrat- beterminated ratherthanbe continued indefinitely.23
egiesare notuniversally propitious; theyare conditioned Environmentalentropyoccurswhenthe capacityof the
bythecausesfordeclineandthehoped-for results. environment to support thepublicorganization at prevail-
The causesof publicorganization declinecan be cate- inglevelsof activity erodes.24 Thistypeof declinecovers
gorizedintoa four-cell typology as showninFigure1. The thenowfamiliar phenomena of financially troubled cities
causesaredividedalongtwodimensions: (a) whether they andregions withdeclining economic bases.Includedinthis
areprimarily theresultofconditions locatedeither internal category are: marketand technological shiftslikethede-
or externalto theorganization, or (b) whether theyare clinein demandfordomestic textilesand steeland itsef-
principally a productof politicalor economic/technicalfectontheeconomies andqualityoflifeinplaceslikeNew
conditions.19 Thisis admittedly a crudeschemeforlump- Englandtextiletownsand steelcitieslikeGary,Indiana,
inginstances of decline,butit does covermostcasesand Bethlehem, andYoungstown,
Pennsylvania, Ohio;25 trans-
allowsforsomeabstraction. portation changesthathaveturnedmajorrailroadhubs
Figure1. TheCausesofPublicOrganization Decline and riverports of earlierdecades into stagnating and
declining economies; mineral depletion whichhascrippled
Internal External mining communities; and intrametropolitan shiftsof eco-
Political ProblemDepletion nomicactivity fromcentralcitiesto theirsuburbs.26 In
Political Vulnerability thesecases,population declinesoftenhaveparalleled gen-
eral economicdeclineswhicherodetax bases and force
Economic/ Organizational Environmental citiesto cutservices. Oneofthetragicsideeffects ofenvi-
Technical Atrophy Entropy ronmental entrophy is thatit mostseverely affectsthose
whocannotmove.27 Caughtinthedeclining cityandregion
Of thefourtypes, problemdepletion is themostfamil- aretheimmobile anddependent: theold,thepoor,andthe
iar.It coversgovernment involvement in short-term crises unemployable. For thesecommunities, theforcedchoice
like naturaldisasterssuch as floodsand earthquakes, of cutting servicesto an evermoredependent and needy
medium length governmental interventions likewarmobil- population is thecrueloutcome ofdecline. 28
izationand countercyclical employment programs,and Environmental entrophy also has a politicaldimension.
longer-term publicprograms likepolioresearch andtreat- As Proposition 13 makesclear,thecapacityof a govern-
mentandspaceexploration-all ofwhichinvolvedevelop- mentis as mucha function ofthewillingness of taxpayers
mentcycles.Thesecyclesare characterized bya political to be taxedas it is of theeconomicbase of thetaxing
definition of a problemfollowed bytheextensive commit- region.Sincethedemandforservicesand thesupplyof
mentof resources to attaincriticalmassesand thencon- fundsto support themareusuallyrelatively independent in

JULY/AUGUST
1978

This content downloaded from 193.104.110.57 on Sat, 17 May 2014 22:18:23 PM

All use subject to JSTOR Terms and Conditions
ORGANIZATIONAL DECLINE AND CUTBACK MANAGEMENT 319

thepublicsector,taxpayer resistance can producedimin- estimating theappropriateness of strategies formanaging

ishedrevenues whichforceservicereductions eventhough declineand cutbacks.Thisactivity is usefulbecausewhen
thedemandandneedforservices remains high. undergoingdecline,organizationsface threedecision
Thepoliticalvulnerability of publicorganizations is an tasks:first, management mustdecidewhether itwilladopt
internalproperty indicating a highlevelof fragility and a strategy toresistdeclineorsmoothit(i.e., reducetheim-
precariousness whichlimitstheircapacityto resistbudget pactoffluctuations intheenvironment thatcauseinterrup-
decrements and demandsto contract fromtheirenviron- tionsin theflowof workand poorperformance); second,
ment.Of the factorswhichcontribute to vulnerability,giventhischoiceof maneuvering strategiesit willhaveto
someseemto be moreresponsible fordeclineand death decidewhattacticsare mostappropriate;30 and third,if
thanothers.Smallsize,internal conflict,and changesin necessary, it willhaveto makedecisionsabouthowand
forexample,
leadership, seemlesstelling thanthelackofa wherecutswilloccur.Ofcourse,thecauseofa declinewill
base of expertise or theabsenceof a positiveself-image greatly affect thesechoices.
andhistory of excellence. However,an organization's age
maybe themostaccuratepredictor ofbureaucratic vulner- StrategicChoices
ability.Contrary to biologicalreasoning, aged organiza-
tionsare more flexiblethan youngorganizations and Publicorganizations behaveinresponse to a mixofmo-
thereforerarelydie or evenshrinkverymuch.Herbert tives-someaimedat servingnational(or stateor local)
Kaufmanarguesthatone of theadvantages of organiza- purposes,someaimedat goals fortheorganization as a
tionsover solitaryindividualsis thattheydo provide whole,andothersdirected towardtheparticularistic goals
longerinstitutionalmemories thana humanlifetime, and of organizational subunits.Underconditions of growth,
this means that older organizations oughtto have a requestsformoreresourcesby subunitsusuallycan be
broaderrangeof adaptiveskills,morecapacityforlearn- easilyconcerted withthegoals of theorganization as a
ing, more friendsand allies, and be more innovative wholeand itslargersocialpurposes.Underdecline,how-
becausetheyhavelessto fearfrommakinga wrongdeci- ever,subunits usuallyrespondto requests to makecutsin
sionthana younger organization.29 termsof theirparticular long-term survivalneeds(usually
Organizationalatrophy is a commonphenomenon inall defended in termsof theinjurywhichcutbackswouldin-
organizations but government organizations are particu- flicton a program withloftypurposesor on a dependent
larlyvulnerable becausetheyusuallylack marketgene- clientele)irrespective of impactson theperformance of
ratedrevenues to signala malfunction andto pinpoint re- government ortheorganization as a whole.
sponsibility.Internalatrophyand declining performance Thepresence of powerful survival instinctsin organiza-
whichcan lead to resource cutbacksor to a weakening of tionalsubunits helpstoexplainwhythepolitical leadership
organizational capacitycomefroma hostof system and ofpublicorganizations canbe trying to respondto legisla-
management failuresalmosttoo numerous to identify. A tiveor executive directivesto cutbackwhileat thesame
partiallistwouldinclude:inconsistent andperverse incen- timethecareerandprogram leadership ofsubunits willbe
tives,differentiation without integration, roleconfusion, takingactionto resistcuts.31 It also helpsto explainwhy
decentralized authoritywith vague responsibility, too growth can havetheappearanceof a rationaladministra-
manyinappropriate rules,weakoversight, stifleddissent tiveprocesscompletewitha hierarchy of objectivesand
and upwardcommunication, rationalization of perform- broadconsensus, whiledeclinetakeson theappearanceof
ance failureby "blamingthevictim,"lack of self-eval- whatJamesG. Marchhas calleda "garbagecan prob-
uatingand self-correcting capacity,highturnover, con- lem"-arational,polycentric, fragmented, anddynamic.32
tinuouspoliticking forpromotions and not forprogram Finally,itallowsus to understand whytheofficial rhetoric
resources,continuousreorganization, suspicionof out- aboutcutbacks-whether it be to "cut thefat," "tighten
siders,and obsolescence causedby routineadherence to our belts," "preservefutureoptions,"or "engagein a
past methodsand technologies in the face of changing processof orderly and programmed termination"-is of-
problems. No organization is immune fromtheseproblems tenat widevariancewiththeunofficial conductofbureau
and no organization is likelyto be afflicted bythemall at chiefswho talk of "minimizing cutbacksto mitigate
once,buta heavydose of someof thesebreakdowns in catastrophe," or "makingtokensacrifices untiltheheat's
combination can contribute to an organization's decline off."
andevendeath. Retrenchment politicsdictatethatorganizations willre-
spondto decrements witha mixofespousedandoperative
So greatis our enthusiasmfor growththat strategies thatarenotnecessarily consistent.33Whenthere
even when an organizationaldecline seems is a widedivergence between theofficialpronouncements
inevitableand irreversible,it is nearlyim- aboutthenecessity forcutsand theactualoccurrence of
possible ... to confrontcutback and dec. cuts,skepticism, cynicism, distrust, and noncompliance
willdominate theretrenchment processand cutbackman-
rementalplanning situationsas anything agement will be an adversarialprocesspittingtop and
morethantemporary slowdowns. middlemanagement againstone another.In mostcases,
however,conflict willnotbe rancorous, and strategies for
Identifyingand differentiating amongthesefourtypes dealingwithdeclinewillbe a mixedbagoftacticsintended
ofdeclinesituations provides a starttowardcataloging and eitherto resistor to smoothdecline.Thelogichereis that

JULY/AUGUST 1978

This content downloaded from 193.104.110.57 on Sat, 17 May 2014 22:18:23 PM

All use subject to JSTOR Terms and Conditions
320 PUBLIC ADMINISTRATION REVIEW

no organization accedesto cutswithenthusiasm and will tionswhichare renewedon a semester-to-semester basis.

tryto finda wayto resistcuts;butresistance is risky.In So whileretrenchment is smoothed andorganization flexi-
additionto the possibility of beingchargedwithnon- bilityincreased, it is attainedat considerable costto the
feasance,no responsible managerwantsto be facedwith careersandjob security oftheexploited teachers.
theprospect ofbeingunabletocontrol wherecutswilltake Cutbackmanagement is a two-crucible problem:be-
placeor confront quantumcutswithunpredictable conse- sidesselecting tacticsforeitherresisting or smoothing de-
quences.Instead,managers willchoosea lessriskycourse cline,ifnecessary, management mustalso selectwhowill
and attempt to protect organizational capacityandproce- be let go and whatprogramswill be curtailedor ter-
duresbysmoothing declineand itseffects on theorgani- minated. Decidingwhereto makecutsis a testofmanage-
zation. rialintelligenceand couragebecauseeachchoiceinvolves
An inventory of some of thesecutbackmanagement tradeoffs and opportunity costs thatcannotbe erased
tacticsis presented inFigure2. Theyarearrayed according through thegeneration of newresources accruedthrough
to thetypeofdeclineproblem whichtheycanbe employed growth.
to solve.Thiscollection of tacticsby no meansexhausts As withmostissuesofpublicmanagement involvingthe
thepossibleorganizational responses to declinesituations, distribution of costs,thechoiceof decisionrulesto al-
norareall thetacticsexclusively directed towardmeeting a locatecutsusuallyinvolvesthetradeoff betweenequity
singlecontingency. Theyarecategorized in orderto show and efficiency." In thiscase, "equity"is meantto mean
thatmanyfamiliar copingtacticscorrespond, evenifonly thedistribution of cutsacrosstheorganization withan
roughly, to an underlying logic.In thiswaya greatdealof equal probability of hurting all unitsand employees ir-
information aboutorganizational responses to declinecan respective ofimpacts onthelongtermcapacity oftheorga-
be aggregated withoutexplicating each tacticin great nization."Efficiency"is meantto mean the sorting,
detail.
34 andassignment
sifting, ofcutstothosepeopleandunitsin
theorganization so thatfora givenbudgetdecrement, cuts
. .. characteristicsof decliningpublic or- areallocatedto minimize thelong-term lossin totalbene-
ganizationsare likepieces ofa subtlejigsaw fitstotheorganization as a whole,irrespective oftheirdis-
tribution.
puzzle whose parameters can only be Makingcutson thebasisofequityis easierformanagers
guessedat and whose abstrusenessdeepens becauseit is sociallyacceptable,easierto justify,and
with each new attemptto fit its edges to- involvesfewdecisionmakingcosts."Sharingthepain" is
gether. politicallyexpedient becauseit appealsto commonsense
idealsof justice.Further, simpleequitydecisionmaking
The tacticsintended to removeor alleviatetheexternal avoidscostsfromsorting, selecting,andnegotiating cuts.36
politicaland economiccausesof declineare reasonably In contrast, efficiency cutsinvolvecostlytriageanalysis
straightforward means to revitalizeeroded economic becausethedistribution ofpainandinconvenience requires
bases,reduceenvironmental uncertainty, protectniches, thatthevalueof peopleand subunits to theorganization
retainflexibility, orlessendependence. Thetacticsforhan- haveto be weighed in termsof theirexpected futurecon-
dlingtheinternal causesof decline,however, tendto be tributions.In the public sector,ofcourse,things arenever
moresubtlemeansforstrengthening organizations and quitethisclearcutbecausea hostofconstraints likecareer
managerial control.For instance, themanagement of de- status,veteran's preference, bumping rights,entitlements,
clinein theface ofresistance canbe smoothed bychanges and mandatedprogramslimitmanagersfromselecting
in leadership. Whenhardunpopular decisionshaveto be optimalrulesformakingcuts.Nevertheless, thevaluesof
made,newmanagers can be brought in to makethecuts, equityand efficiency are centralto allocativedecision
taketheflak,andmoveon toanother organization. Byro- makingand provideusefulcriteria forjudgingtheappro-
tating managers intoandoutofthedeclining organization, priateness of cutbackrules.By applying thesecriteriato
interpersonal loyalties builtup overtheyearswillnotin- fiveof the mostcommonly used or proposedcutback
terferewiththecutbackprocess.Thisis especially usefulin methods-seniority, hiringfreezes,even-percentage-cuts-
implementing a higherleveldecisionto terminate an or- across-the-board, productivity criteria,andzerobasebud-
ganizationwheremanagerswillmakethenecessary cuts geting-weareable to makeassessments of theirefficacy
knowingthattheirnextassignments willnot dependon as managerial tools.
theirsupport intheorganization tobeterminated.
The"exploittheexploitable" tacticalsocallsforfurther . . . an organization'sage may be the most
explanation. Anyonefamiliar withthepersonnel practices accurate predictorof bureaucraticvulner-
of universities duringthe1970'swillrecognize thistactic.
It has beenbrought aboutbytheglutted marketforaca-
ability. Contraryto biological reasoning,
demicpositionswhichhas made manyunluckyrecent aged organizationsare more flexible than
Ph.D's vulnerable and exploitable.This buyers'market young organizationsand, therefore, rarely
has coincidedneatlywiththeneedof universities facing die or evenshrinkverymuch.
steadystatesanddeclining enrollments to avoidlong-term
tenurecommitments to expensive faculties.Theresultis a Seniorityis themostprevalentand mostmalignedof the
markedincreasein part-time and non-tenure trackposi- fivedecisionrules.Seniority guarantees havelittleto do

JULY/AUGUST 1978

This content downloaded from 193.104.110.57 on Sat, 17 May 2014 22:18:23 PM

All use subject to JSTOR Terms and Conditions
ORGANIZATIONAL DECLINE AND CUTBACK MANAGEMENT 321

Figure2: Some CutbackManagementTactics

Tacticsto ResistDecline Tacticsto SmoothDecline

(ProblemDepletion)
External 1. Diversifyprograms,clientsand constituents 1. Make peace withcompetingagencies
Political 2. Improvelegislativeliaison 2. Cut low prestigeprograms
3. Educate thepublicabout theagency'smission 3. Cut programsto politicallyweak clients
4. Mobilize dependentclients 4. Sell and lendexpertiseto otheragencies
5. Become "captured" bya powerfulinterest 5. Shareproblemswithotheragencies
groupor legislator
6. Threatento cutvitalor popularprograms
7. Cut a visibleand widespreadservicea littleto
demonstrate clientdependence

(Environmental Entropy)
Economic/ 1. Find a widerand richerrevenuebase (e.g., 1. Improvetargeting on problems
Technical metropolitan reorganization) 2. Plan withpreservative objectives
2. Develop incentivesto preventdisinvestment 3. Cut losses bydistinguishingbetweencapital
3. Seek foundationsupport investments and sunkcosts
4. Lure newpublicand privatesectorinvestment 4. Yield concessionsto taxpayersand employers
5. Adopt userchargesforserviceswherepossible to retainthem

(PoliticalVulnerability)
Internal 1. Issue symbolicresponseslike formingstudy 1. Changeleadershipat each stagein thedecline
Political commissionsand task forces process
2. "Circle thewagons," i.e., developa seige 2. Reorganizeat each stage
mentality to retainespritde corps 3. Cut programsrunbyweak subunits
3. Strengthen expertise 4. Shiftprogramsto anotheragency
5. Gettemporaryexemptionsfrompersonnel
and budgetaryregulationswhichlimit
discretion
(OrganizationalAtrophy)
Economic/ 1. Increasehierarchicalcontrol 1. Renegotiatelongtermcontractsto regain
Technical 2. Improveproductivity flexibility
3. Experimentwithless costlyservicedelivery 2. Install rational choice techniques like
systems zero-basebudgetingand evaluationresearch
4. Automate 3. Mortgagethefuturebydeferring maintenance
5. Stockpileand rationresources and downscalingpersonnelquality
4. Ask employeesto makevoluntarysacrifices
liketakingearlyretirements and deferring
raises
5. Improveforecasting capacityto anticipate
further cuts
6. Reassignsurplusfacilitiesto otherusers
7. Sell surplusproperty,
lease back whenneeded
8. Exploittheexploitable

witheitherequityorefficiency,
perse. Instead,theyaredi- greatestharmto minoritiesand womenwho are recenten-
rectedat anothervalueof publicadministration; thatis, trantsin mostpublicagencies.
theneedto providesecurecareer-longemployment to neu- A hiringfreezeis a convenientshort-runstrategyto buy
trallycompetentcivilservants.3"
Becauseseniority is likely timeand preserveoptions. In theshortrunit hurtsno one
tobe spreadabouttheorganizationunevenly, usingsenior- already employed by the organization because hiring
itycriteria
formakingcutsforcesmanagers to implicitly freezesrely on "natural attrition"throughresignations,
surrendercontrolovertheimpactof cutson services and retirements,and deathto diminishthesize of an organiza-
the capacityof subunits.Furthermore, since seniority tion's workforce.In thelong run,however,hiringfreezes
usuallydictates
a "last-in-first-out"
retention system, per- are hardlythe most equitable or efficientway to scale
sonnelcuts usingthis decisionrule tendto inflictthe down organizationalsize. First,even thoughnaturaland

JULY/AUGUST
1978

This content downloaded from 193.104.110.57 on Sat, 17 May 2014 22:18:23 PM

All use subject to JSTOR Terms and Conditions
 322 PUBLIC ADMINISTRATION REVIEW

selfselection relieves thestresson managers, italso takes overrankings, tradeoffs, and the assignment of decre-
controloverthedecisionof whomand whereto cutaway ments. 39
frommanagement and thereby reducesthepossibility of Thesefivedecisionrulesillustrate howstrategic choices
intelligent long rangecutbackplanning.Second,hiring aboutcutbackmanagement can be madewithor without
freezes aremorelikelyto harmminorities andwomenwho expediency, analysis,courage,consideration oftheorgani-
aremorelikelyto be thenexthiredrather thanthenextre- zation'slong-term health,ortheeffect ofcutson thelives
tired.Third,attrition willlikelyoccurat different rates of employeesand clients.Unfortunately, forsome em-
amongan organization's professional and technicalspe- ployeesandclients, andthepublicinterest, thechoicewill
cialities.Since resignations will mostlikelycome from usuallybe madebymanagers to "go along" quietlywith
thoseemployees withthemostopportunities foremploy- across-the-board cutsand exitas soon as possible.The
mentelsewhere, duringa longhiringfreezean organiza- alternative forthosewhowouldprefermoreresponsible
tionmayfinditselfshorton somecritically neededskills and toughmindeddecisionmakingtofacilitatelongrunor-
yetunableto hirepeoplewiththeseskillseventhough they ganizationalsurvivalis to develop in managersand em-
maybe available. ployeesstrongfeelingsof organizational loyaltyand
Even-percentage-cuts-across-the-board areexpedient be- loyalty to clients,to providedisincentives to easyexit,and
causetheytransfer decision-making costslowerin theor- to encourage participation so thatdissenting viewson the
ganization, but theytendto be insensitive to theneeds, locationof cutscouldemergefromtheranksof middle
production functions, andcontributions ofdifferent units. management, lowerlevelemployees, andclients.40
The samepercentage cutmaycall forhardlymorethan
somemildbelttightening insomelargeunspecialized units Ponderables
butwhentranslated intotheelimination ofoneortwopo-
sitionsina highly specialized, tightly integratedsmallunit, The worldof thefutureis uncertain, butscarcity and
itmayimmobilize thatunit. tradeoffs seeminevitable. Bouldinghas argued,"in a sta-
Criticizing productivity criteriais moredifficult but tionary society roughly halfthesociety willbeexperiencing
nevertheless appropriate, especiallywhenthe conceptis declinewhiletheotherhalfwillbe experiencing growth."4'
appliedto thepractice of cutting lowproducing unitsand Ifwe areentering an eraofgeneralslowdown, thismeans
peoplebasedon theirmarginal productperincrement of thatthebalanceinthedistribution between expanding and
revenue. Thismethod is insensitivetodifferences inclients contracting sectors,regions,and organizations will be
served,unitcapacity,effort, and need.A moreappro- tippedtowarddecline.Itmeansthatwewillneeda govern-
priatecriterion is one thatcutsprograms, organization mentalcapacityfordeveloping tradeoffs between growing
units,and employeesso thatthemarginalutilityfora anddeclining organizations andforintervening inregional
decrement of resources is equal acrossunits,individuals, and sectorialeconomiesto avoidthepotentially harmful
andprograms thereby providing forequalsacrifices based effects ofradicalperturbations fromunmanaged decline.
on theneedforresources. However, thiscriterion assumes So farwe havemanagedto getalongwithout havingto
organizations are fullyrationalactors,an assumption makeconscioustradeoffs between sectorsandregions.We
easilydismissed. Morelikely,cutswillbe distributed bya have metdeclineson a "crisis-to-crisis" basis through
mixofanalysisandpolitical bargaining. emergency legislation and financial aid. Thisis a strategy
Aggregating incompatible needsandpreferences is a po- thatassumesdeclinesare specialcasesof temporary dis-
liticalproblemand thisis whyzero base budgeting gets equilibrium, boundedin timeand space,thatare usually
suchhighmarksas a methodformakingdecisionsabout confined toa singleorganization, community, orregion.A
resource allocationunderconditions ofdecline.First,ZBB broad scale long-runsocietal level decline, however,is a
is future directed; insteadofrelying on an "inviolate-base- problem of a different magnitude andto resolveit,patch-
plus-increment" calculus,itallowsfortheanalysisofboth worksolutions willnotsuffice.
existing and proposednewactivities. Second,ZZB allows
fortradeoffs between programs or unitsbelowtheirpre-
sentfunding levels.Third,ZBB allowsa ranking
Retrenchmentpolitics dictate that organi-
of deci-
sionpackagesby politicalbargaining and negotiation so zations will respond to decrementswith a
thatattention is concentrated on thosepackagesor activ- mix of espoused and operative strategies
itiesmostlikelyto be affected bycuts.38 As a result,ZBB thatare notnecessarilyconsistent.
allowsbothanalysisandpolitics toenterintocutbackdeci-
sionmakingand therefore can incorporate an expression Thereseemtobe twopossibledirections inwhichtoseek
of the intensity of need for resourcesby participating a wayout of immobility. Firstis theauthoritarian possi-
managers and clientswhilealso accommodating estimates bility;whatRobertL. Heilbroner has calledtheriseof
of how cuts will affectthe activitylevels of theirunits. "irongovernments" withcivillibertiesdiminished andre-
Nevertheless, ZBB is notwithoutproblems.Its analytic sourcesallocatedthroughout societyfromthe central
component is likelyto be expensive-especially so under government without appeal.42Thisis a possibility abhor-
conditions of austerity-and to be subjectto all thelimi- renttothedemocratic tradition,butitcomprises a possible
tationsandpitfalls ofcost-benefit analysis,whileitspolit- future-ifnotfortheUnitedStatesin thenearfuture, at
ical component is likelyto be costlyin politicaltermsas leastforsomeotherlessaffluent nations.So farwe have
unitsfightwitheachotherand withcentralmanagement had littleexperience withcutting back on rights, entitle-

JULY/AUGUST 1978

This content downloaded from 193.104.110.57 on Sat, 17 May 2014 22:18:23 PM

All use subject to JSTOR Terms and Conditions
ORGANIZATIONAL DECLINE AND CUTBACK MANAGEMENT
ments,and privileges;but scarcitymay dictate "decou-
pling" dependent and less powerful clients and
overcomingresistancethroughviolent autocraticimple-
mentationmethods.
The otherpossible futuredirectioninvolvesnew images
and assumptionsabout thenatureof man, thestateand the
ecosystem.It involveschangesin values away frommate-
rial consumption,a gradual withdrawalfromour fascina-
tion with economic growth,and more efficientuse of
resources-especiallyraw materials.For thispossibilityto
occur, we will have to have a confrontation
withour pro-
pensityforwishfulthinkingthatdeniesthatsome declines
are permanent.Also requiredis a widespreadacceptance
of egalitariannorms and of anti-growthand no growth
ideologies which are now only nascent,and the develop-
mentof a politicalmovementto promotetheirincorpora-
tion into policy making.43By backing away from our
obsessionwithgrowth,we willalso be able to diminishthe
"load" placed on central governmentsand allow for
greater decentralizationand the devolvementof func-
tions.44In thisway,we maybe able to preservedemocratic
rightsand processeswhilemeetinga futureof diminished
resources.
However, the preferablefuturemightnot be the most
probablefuture.This prospectshouldtroubleus deeply.
Notes
1. Theintellectual foundationsof thisessayaretoo numerous
to list.Threeessaysin particular
sparkedmythinking: Her-
bert Kaufman'sThe Limits of Organizational Change
(University, Alabama:The University of AlabamaPress,
1971) and Are Government OrganizationsImmortal?
(Washington, DC: TheBrookings 1976)andHer-
Institution,
bertJ. Gans, "PlanningforDecliningand Poor Cities,"
Journalof theAmerican Instituteof Planners(September,
1975),pp. 305-307.Theconcept of"cutbackplanning" isin-
troduced intheGansarticle.Myinitialinterest inthissubject
stemmed frommyworkwitha panelof theNationalAcad-
emyofPublicAdministration on a NASA-sponsored project
thatproducedReportof theAd Hoc Panel on Attracting
NewStaffandRetaining CapabilityDuringa PeriodofDe-
cliningManpower Ceilings.
2. Foran explication of theconceptof "organizational slack"
see RichardM. Cyertand JamesG. March,A Behavioral
Theory of theFirm(Englewood Cliffs,N.J.:Prentice-Hall,
1963),pp. 36-38.Theyarguethatbecauseof market imper-
fectionsbeweenpayments anddemands "thereisordinarilya
disparitybetween theresourcesavailableto theorganization
and thepayments requiredto maintain thecoalition.This 9.
difference betweentotal resourcesand total necessary 10.
payments is whatwe havecalledorganizational slack.Slack
consistsinpayments to members ofthecoalitioninexcessof
what is required to maintain the organization.... Many
forms ofslacktypicallyexist:stockholders
arepaiddividends
in excessof thoserequired to keepstockholders(or banks)
withintheorganization; pricesaresetlowerthannecessaryto 12.
maintain adequateincomefrombuyers;wagesin excessof
thoserequiredto maintainlabor are paid; executives are
providedwithservicesand personalluxuriesin excessof
thoserequired to keepthem;subunits arepermitted
to grow 13.
withoutreal concernfor the relationbetweenadditional
payments and additionalrevenue;publicservicesare pro-
JULY/AUGUST 1978
This content downloaded from 193.104.110.57 on Sat, 17 May 2014 22:18:23 PM
All use subject to JSTOR Terms and Conditions
323
vided in excessof those required.. . . Slack operatesto sta-
bilize the system in two ways: (1) by absorbing excess
resources,it retardsupwardadjustmentof aspirationsduring
relativelygood times; (2) by providinga pool of emergency
resources, it permits aspirations to be maintained (and
achieved)duringrelatively bad times."
3. See William G. Scott, "The Managementof Decline," The
ConferenceBoard RECORD (June, 1976), pp. 56-59 and
"Organization Theory: A Reassessment,"Academy of
ManagementJournal(June,1974)pp. 242-253;also RufusE.
Miles, Jr.,A wakening fromtheAmericanDream: The Social
and PoliticalLimitsto Growth(New York: UniversalBooks,
1976).
4. See Daniel M. Fox, The Discoveryof Abundance: SimonN.
Patten and the Transformationof Social Theory(Ithaca,
N.Y.: CornellUniversity Press, 1967).
5. See Andrew Glassberg's contributionto this symposium,
"OrganizationalResponsesto MunicipalBudgetDecreases,"
and Edward H. Potthoff,Jr., "Pre-planningfor Budget
Reductions,"PublicManagement(March, 1975),pp. 13-14.
6. See Donella H. Meadows, Dennis L. Meadows, Jorgen
Randers,and WilliamW. BehrensIII, TheLimitsto Growth
(New York: Universe Books, 1972); also Robert L.
Heilbroner,An Inquiry into the Human Prospect (New
York: W.W. Norton, 1975) and BusinessCivilizationin De-
cline(New York: W.W. Norton,1976).
7. See AdvisoryCommissionon Intergovernmental Relations,
City Financial Emergencies: The Intergovernmental
Dimension (Washington,D.C.: U.S. GovernmentPrinting
Office,1973).
8. Kenneth E. Boulding, "The Management of Decline,"
Change (June, 1975), pp. 8-9 and 64. For extensiveanalyses
of cutbackmanagementin the same fieldthatBouldingad-
dresses,universityadministration, see: FrankM. Bowen and
Lyman A. Glenny,State Budgetingfor Higher Education:
State Fiscal Stringencyand Public Higher Education
(Berkeley,Calif.: Centerfor Researchand Developmentin
Higher Education, 1976); Adam Yarmolinsky, "Institu-
tional Paralysis," Special Report on American Higher
Education: Towardan UncertainFuture2 Vol, Daedalus 104
(Winter,1975), pp. 61-67; FrederickE. Balderston,Varieties
of Financial Crisis,(Berkeley, Calif.: Ford Foundation,
1972); The Carnegie Foundation for the Advancementof
Teaching,More Than Survival(San Francisco: Jossey-Bass,
1975); Earl F. Cheit, The New Depression in Higher
Education (New York: McGraw-Hill, 1975) and The New
Depression in Higher Education-Two Years Later
(Berkeley,Calif.: The CarnegieCommissionon HigherEdu-
cation, 1973); Lyman A. Glenny,"The Illusions of Steady
States," Change 6 (December/January 1974-75),pp. 24-28;
and JohnD. Millett,"What is EconomicHealth?" Change 8
(September1976),p. 27.
Scott,"OrganizationalTheory:A Reassessment,"pp. 245.
Paul R. Schulman,"NonincrementalPolicy Making: Notes
Toward an AlternativeParadigm," American Political
ScienceReview(December,1975),pp. 1354-1370.
11. See Naomi Caiden and Aaron Wildavsky, Planning
Budgetingin Poor Countries(New York: JohnWiley& Sons,
1974).
See JamesW. Vaupel, "MuddlingThroughAnalytically,"in
WillisD. Hawley and David Rogers(eds.) ImprovingUrban
Management(BeverlyHills, Calif.: Sage Publications,1976),
pp. 124-146.
See Richard M. Cyert's contributionto this symposium,
"The Managementof Universities of Constantor Decreasing
Size."
324 PUBLIC ADMINISTRATION REVIEW

14. See National Academyof Public Administration Reportand 26. See RichardP. NathanandCharlesAdams,"Understanding
Glassberg, "Organizational Response to Municipal Budget CentralCityHardship,"PoliticalScienceQuarterly (Spring,
Decreases." 1976),pp. 47-62;TerryNicholsClark,IreneSharpRubin,
15. See NAPA Report and Cancelled Careers: The Impact of LynneC. Pettler, andErwinZimmerman, "How ManyNew
Reduction-In-ForcePolicies on Middle-Aged Federal Em- Yorks?The New York Fiscal Crisisin Comparative Per-
ployees, A Report to the Special Committeeon Aging, spective."(ReportNo. 72 of Comparative Studyof Com-
United States Senate (Washington,D.C.: U.S. Government munityDecision-Making, Universityof Chicago,April,
PrintingOffice,1972). 1976);andDavidT. Stanley, "The MostTroubled Cities,"a
16. See Albert 0. Hirschman, Exit, Voice and Loyalty: discussiondraftpreparedfora meetingof the National
Responses to Decline in Firms, Organizationsand States Urban Policy Roundtable,Academyfor Contemporary
(Cambridge,Mass.: Harvard UniversityPress, 1970); also Problems, Summer, 1976.
Mancur Olson, The Logic of CollectiveAction (Cambridge, 27. See RichardChild Hill, "Fiscal Collapse and Political
Mass.: HarvardUniversity Press, 1965). Struggle in Decaying CentralCitiesintheUnitedStates,"in
17. The distinctivefeaturesof publicorganizationsare discussed WilliamK. Tabb andLarrySawers(eds.)Marxism and The
at greaterlengthin Hal G. Rainey,RobertW. Backoff,and Metropolis (NewYork:OxfordUniversity Press,1978);and
Charles H. Levine, "Comparing Public and PrivateOrgani- H. Paul Friesema,"Black Controlof CentralCities:The
zation," Public Administration Review(March/April,1976), Hollow Prize," Journalof the AmericanInstituteof
pp. 223-244. Planners (March,1969),pp.75-79.
18. See RobertBehn's contribution to thissymposium,"Closing 28. SeeDavidT. Stanley, "The MostTroubled Cities"and"The
a GovernmentFacility,"BarryMitnick's"Deregulationas a Survivalof TroubledCities,"a paperprepared fordelivery
Process of OrganizationalReduction," and HerbertA. Si- atthe1977AnnualMeeting oftheAmerican PoliticalScience
mon, Donald W. Smithburg,and Victor A. Thompson, Association,The Washington HiltonHotel, Washington
Public Administration (New York: Knopf, 1950) fordiscus- DC, September 1-4,1977;and MartinShefter, "New York
sionsof thesurvivaltacticsof threatened bureaucrats. City's Fiscal Crisis: The Politicsof Inflationand Re-
19. This schemeis similarto thosepresentedin Daniel Katz and trenchment," The Public Interest(Summer,1977), pp.
Robert L. Kahn, The Social Psychologyof Organizations 98-127.
(John Wiley & Sons, 1966), p. 166, and Gary L. Wamsley 29. See Kaufman,Are Government Organizations Immortal?
and Mayer N. Zald. The Political Economy of Public Or- and "The NaturalHistoryof Human Organizations,"
ganizations:A Critiqueand Approach to theStudyof Public Administration and Society(August,1975),pp. 131-148;I
Administration (Lexington,Mass.: D.C. Heath, 1973),p. 20. havebeenworking on thisquestionforsometimein col-
20. See Schulman, "Nonincremental Policy Making," and laborationwith Ross Clayton.Our partiallycompleted
Charles0. Jones,"SpeculativeAugmentation in FederalAir manuscript is entitled,
"Organizational Aging:Progression
Pollution Policy-Making,"Journalof Politics (May, 1974), or Degeneration." See also EdithTiltonPenrose,"Biolog-
pp. 438-464. ical Analogiesin theTheoryof theFirm,"American Eco-
21. See Robert Behn, "Closing the Massachusetts Public nomicReview(December,1952),pp. 804-819and Mason
Training Schools," Policy Sciences (June, 1976), pp. Haire,"BiologicalModelsand EmpiricalHistoriesof the
151-172;Valarie J. Bradley,"Policy Terminationin Mental Growth ofOrganizations" inMasonHaire(ed.)ModernOr-
Health: The Hidden Agenda," Policy Sciences(June,1976), ganizationTheory(NewYork:JohnWiley& Sons, 1959),
pp. 215-224;and David J. Rothman,"Prisons, Asylumsand pp.272-306.
Other Decaying Institutions,"The Public Interest(Winter, 30. Fora fuller explanation of "smoothing" or "leveling,"see
1972),pp. 3-17. A similarphenomenais occuringin some of JamesD. Thompson, Organizationsin Action(NewYork:
the fieldsof regulationpolicy where deregulationis being McGraw-Hill, 1967),pp. 19-24.
made morepoliticallyfeasibleby a combinationof technical 31. For recentanalysesof relatedphenomenasee Joel D.
and economicchanges.See Mitnick,"Deregulationas a Pro- Aberbachand BertA. Rockman,"ClashingBeliefsWithin
cess of OrganizationalReduction." theExecutive Branch:The NixonAdministration Bureauc-
22. Peter deLeon, "Public Policy Termination:An End and a racy,"American PoliticalScienceReview(June,1976),pp.
Beginning,"an essaypreparedat therequestof theCongres- 456-468and Hugh Heclo, A Government of Strangers:
sional ResearchServiceas backgroundforthe SunsetAct of ExecutivePoliticsin Washington (Washington, D.C. The
1977. Brookings Institution,1977).
23. There are many variationson the theme of Sunset. Gary 32. See JamesG. Marchand JohanP. Olsen,Ambiguity and
Brewer's contributionto this symposium,"Termination: Choice in Organizations(Bergen, Norway: Univer-
Hard Choices-Harder Questions" identifiesa number of sitetsforlaget, 1976); and MichaelD. Cohen, JamesG.
problemscentralto mostsunsetproposals. March,and JohanP. Olsen,"A GarbageCan Model of
24. For two treatmentsof this phenomenain the literatureof Organizational Choice,"Administrative ScienceQuarterly
organizationtheorysee BarryM. Staw and Eugene Szwaj- (March,1972),pp. 1-25.
kowski, "The Scarcity-Munificence Componentof Organi- 33. See CharlesPerrow, OrganizationalAnalysis:A Sociological
zational Environments and theCommissionof Illegal Acts," View (Belmont,Calif.: Wadsworth Publishing Company,
AdministrativeScience Quarterly(September, 1975), pp. 1970)and ChrisArgyris and DonaldA. Schon,Theoryin
345-354, and Barry Bozeman and E. Allen Slusher, "The Practice:Increasing Professional Effectiveness(San Fran-
Future of Public Organizations Under Assumptions of cisco,Calif.:Jossey-Bass, 1974)fordiscussions of thedis-
Environmental Stress," paper presentedat theAnnual Meet- tinctionbetweenespousedand operative(i.e., "theory-in-
ing of the American Society for Public Administration, use") strategies.
Phoenix,Arizona,April9-12, 1978. 34. Forextensive treatmentsof thetacticsof bureaucrats,some
25. See Thomas Muller,Growingand DecliningUrbanAreas: A ofwhicharelistedhere,seeFrancesE. Rourke, Bureaucracy,
Fiscal Comparison (Washington, DC: Urban Institute, Politics,and PublicPolicy(secondedition,Boston:Little,
1975). BrownandCompany, 1976);AaronWildavsky, ThePolitics

JULY/AUGUST 1978

This content downloaded from 193.104.110.57 on Sat, 17 May 2014 22:18:23 PM

All use subject to JSTOR Terms and Conditions
ORGANIZATIONAL DECLINE AND CUTBACK MANAGEMENT 325

of theBudgetary Process(secondedition,Boston:Little, 40. See Hirschman, Exit, Voiceand Loyalty,especially Ch. 7,

BrownandCompany,1974);EugeneLewis,American Poli- "A Theoryof Loyalty,"pp. 76-105;Despitetheattractive-
ticsin a Bureaucratic Age (Cambridge, Mass.: Winthrop nessof "responsibleandtoughminded decisionmaking"the
Publishers,1977);and Simon,Smithburg and Thompson, on managerial
constraints discretionincontraction decisions
PublicAdministration. should not be underestimated. At the local level, for
35. See ArthurM. Oken, Equityand Efficiency: The Big example,managers oftenhavelittleinfluence on whatfed-
Tradeoff(Washington, D.C.: The BrookingsInstitution, erallyfunded programs willbe cutbackorterminated. They
1975). are ofteninformed afterfunding cutshavebeenmadein
36. Fora discussion of thecostsof interactivedecisionmaking Washington and theyare expected to makeappropriate ad-
seeCharlesR. AdrianandCharlesPress,"DecisionCostsin justmentsintheirlocalworkforces. Thesedownward adjust-
CoalitionFormation," AmericanPoliticalScienceReview mentsoftenarealso outsideofa manager's control because
(June,1968),pp. 556-563. in manycitieswithmeritsystems, veteran's
preference,and
37. See HerbertKaufman,"Emerging Conflictsin theDoctrine strong unions,elaboraterulesdictatewhowillbe dismissed
of PublicAdministration," American PoliticalScienceRe- andthetiming ofdismissals.
view(December,1956),pp. 1057-1073and Frederick C. 41. Boulding,"TheManagement ofDecline,"p. 8.
Mosher,Democracy andthePublicService(NewYork:Ox-
fordUniversity Press, 1968). Seniority 42. See Heilbroner,An InquiryintotheHumanProspect;also
criteriaalso have
rootsinthewidespread beliefthatorganizationsoughttorec- MichaelHarrington, TheTwilight ofCapitalism (NewYork:
ognizepeoplewhoinvestheavily inthembyprotecting long Simon& Schuster, 1976
timeemployees whenlayoffs becomenecessary. 43. Fora discussionofanti-growth politics
seeHarveyMolotch,
38. See Peter A. Pyhrr,"The Zero-Base Approach to "The Cityas a GrowthMachine,"AmericanJournalof
Government Budgeting,"Public Administrative Review Sociology(September, 1976),pp. 309-332.
(January/February, 1977),pp. 1-8;GraemeM. Taylor,"In- 44. RichardRose has madea penetrating argument aboutthe
troductionto Zero-base Budgeting,"The Bureaucrat ofgovernments
potential tobecome"overloaded"in"Com-
(Spring,1977),pp. 33-55. ment:WhatCan Ungovernability Mean?" Futures(April
39. See Brewer, "Termination:Hard Choices-Harder 1977),pp. 92-94.For a moredetailedpresentation, see his
Questions";AllenSchick,"Zero-baseBudgeting andSunset: "On the Prioritiesof Government: A Developmental
Redundancy or Symbiosis?" TheBureaucrat (Spring,1977), Analysisof PublicPolicies,"EuropeanJournal ofPolitical
pp. 12-32and "The Road FromZBB" PublicAdministra- Research(September 1976),pp. 247-290.Thisthemeis also
tionReview(March/April, 1978),pp. 177-180;and Aaron developedby Rose in collaboration withB. GuyPetersin
Wildavsky,"The PoliticalEconomyof Efficiency," Public Can Governments Go Bankrupt? (NewYork:BasicBooks,
AdministrationReview(December, 1966),pp.292-310 forthcoming 1978).

O RGANIZATIONAL RESPONSES TO MUNICIPAL

BUDGET DECREASES

Andrew
Glassberg,
CityUniversity
ofNew York

Mostliteratureon budgetingassumesthatincreasing
re- theabsence of thistopicfrommostpreviousworkon bud-
sourceswillsteadilybe madeavailableto publicorgani- getingcan be foundin thegenerallyrisingpatternof public
zations.In Wildavsky's
Politicsof theBudgetary
Process, expenditurein the United States, for virtuallyall govern-
for example, three successivesectionsare entitled, mentallevels.
"DefendingtheBase: GuardingAgainstCutsin theOld
Programs,""Increasingthe Base; InchingAhead with
ExistingPrograms,"and "Expandingthe Base: Add- Andrew D. Glassbergis an assistant ofpoliticalscience
professor
ingNew Programs."Indeed,the"DefendingtheBase" at HerbertH. LehmanCollegeof theCityUniversity of New
sectionbeginsby arguingthat,"A majorstrategy in re- York.In additionto teaching at theCityUniversity,
he servedas
sisting
cutsis tomaketheminsucha waythattheyhaveto specialassistant
tothedeputy mayorinNewYorkCity(inthead-
beputback."' ministrationof MayorJohnLindsay).He servesas chairman of
theUrbanStudiesCommittee at LehmanCollege,andhaswritten
Recenturbanexperiences, of whichNewYork'sis the on thelinkagebetween urbanpolicyoutputs andvotingbehavior
mostdramaticbutby no meansunique,clearlyindicate in NewYorkand London.He is currently engagedin further re-
that a chapteron "Decreasingthe Base" could ap- searchon thetopicofthispaperundera grantfromtheResearch
propriatelybeaddedtothenextedition.Anexplanationof Foundation oftheCityUniversity.

JULY/AUGUST
1978

This content downloaded from 193.104.110.57 on Sat, 17 May 2014 22:18:23 PM

All use subject to JSTOR Terms and Conditions