Abstract
Resources are essential for organizations to cope with challenges and to achieve their desirable outcomes. Although much scholarly attention has been paid to the type or level of resources allocated or used to enhance organizational effectiveness, relatively little effort has been made to analyze whether and how resource changes influence organizational performance. Considering today's unstable fiscal climate, this study focuses on how government agencies respond to their budget fluctuations-both gains and cuts-and their distinctive impact on agency performance. Using data from the Performance and Accountability Reports from FY 2004 through FY 2014, we analyze the effect of budgetary resource changes on organizational performance in 52 U.S. federal agencies. Findings show that agency effectiveness is significantly influenced by budget changes. In particular, we find an asymmetric relationship between budgetary resource changes and organizational performance. It appears that budget cuts are not associated with changes in agency performance, whereas budgetary resource gains are associated with dampened agency effectiveness. Ultimately, this study provides insights into public organizations' resilience and calls for considering change management perspectives when exploring resource-performance linkages.