Tales From the Grave: Organizations' Accounts of Their Own Demise

Competing theories of organizational behavior offer a variety of reasons why organizations cease to exist. Some reasons are internal to the organization, such as losing control over financial matters and being unable to routinize procedures. Other reasons are environmental, such as changing market conditions, lacking social capital, outside regulation, and not being perceived as legitimate by external power holders. The authors interviewed representatives from dead nonprofit organizations to determine the extent to which these theoretical explanations match with respondent understandings of why their organizations closed. Respondents were more likely to attribute death to their smallness, youth, financial difficulties, personnel turnover, being perceived as unimportant, or decreased demand for their services. Organizations that said they were “too young” or “too small” were more likely to say that they were too disconnected from other organizations in the community, thus shedding light on why youth and smallness are such a liability for organizations.