Organizational transformation, involving concurrent major changes in dimensions such as strategy and structure, has sparked considerable interest among researchers and practitioners. However, its performance consequences have barely been systematically examined. We review three conceptual streams-rational models of organization, population ecology, and institutionalism-and empirically explore the extent to which their divergent views on the performance effects of organizational changes apply to a sample of U.S. bank holding companies. Our results show that organizational transformation neither has a positive nor a negative effect on organizational performance, independently of whether organizational transformation is undertaken in response to environmental shifts.
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