Lex Donaldson: Performance-driven Organizatonal Change — The Organizational Portfolio. - Review - book review

1999, Thousand Oaks: Sage. 231 pages.

Performance-driven Organizational Change -- The Organizational Portfolio presents a new theory of organizational adaptation and growth. The author argues that crises of poor organizational performance are required to induce the adaptive change necessary for organizations to grow and become more effective.

This book advances the model of the organization as a portfolio of variables that interact with each other to affect the performance of the organization. The portfolio characteristics affect organizational performance and risk. These feed back to determine the occurrence and timing of organizational change. Low firm performance leads to organizational adaptation, whereas high performance leads to organizational growth.

The author develops a causal model of corporate-level change and distinguishes eight portfolio factors that affect firm performance. The model includes a number of portfolio factors that lead to corporate-level change: e.g. the business cycle, competition, debt and divisional risk. Additionally he addresses portfolio factors leading to a lack of corporate-level change: diversification, divisionalization, divestment and directors.

COPYRIGHT 2000 Walter de Gruyter und Co.
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