Abstract
This article develops a general model of response to loss. Based on original empirical research of the U.S. auto industry and dual literature analyses of macro-organizational behavior and clinical psychology, I observe that organizational response to major environmental change is remarkably similar to individual respond to loss. To explain this similarity, I propose that a common identity maintenance and adaptation imperative drives the process at all social levels through all phases. I explain loss as a chasm between two forms of identity – structural and cognitive – that a viable entity must hold in some reasonable congruence. The analysis suggests a logic underlying Kübler-Ross’ (1969) stage theory of loss, a model that has enjoyed widespread clinical acceptance but has met with scientific skepticism. Based on this stage theory, I develop a modified, general model of loss that explains important anomalous findings about loss including loss aversion, escalation, and rigidity under threat, and, more generally, why it usually takes so long to respond and adapt. Practical applications for understanding and managing change processes are proposed.
Full Text pdf file (227 KB) Image (5.6 MB)