Are Retrenchment Decisions Rational? The Role of Information in Times of Budgetary Stress.
In recent years, slow economic growth, recession, and a cutback in public spending have forced organizations to contract. Like many others, educational organizations have also experienced decline [42]. Moreover, many predictions about the future of colleges and universities foresee continuous conditions of decline and financial difficulties [13, 19]. In declining organizations, under diminishing resources, allocation decisions are critical. For some organizational units, allocation decisions determine their very continuation and existence. Almost always, extensive information search and analysis precede decision making. In institutions of higher education, for example, review processes, selfstudies, academic program assessments and planning processes are the mechanisms for the generation, collection and analyzing of information. Yet, retrenchment decisions are relatively new to administrators in these institutions. Discussing inhibitors to managing decline in institutions of higher education, Cameron [8], among others, indicates lack of experience and insufficient organizational theory and research that could assist practitioners who face decline. What is implied in Cameron's claim is that there is a need to clarify and develop further organizational theory and research on declining organizations.