Organizational Change and Employee Stress

This article analyzes the relationship between organizational change and employee health. It illuminates the potentially negative outcomes of change at the level of the employee. In addition, it relates to the ongoing debate over how employees react to and respond to organizational change. I hypothesize that change increases the risk of negative stress, and I test this hypothesis using a comprehensive panel dataset of all stress-related medicine prescriptions for 92,860 employees working in 1,517 of the largest Danish organizations. The findings suggest that the risk of receiving stress-related medication increases significantly for employees at organizations that change, especially those that undergo broad simultaneous changes along several dimensions. Thus organizational changes are associated with significant risks of employee health problems. These effects are further explored with respect to employees at different hierarchical levels as well as at firms of different sizes and from different sectors. Acknowledgments: This project was funded by the Danish Social Science Research Council at the Danish Agency for Science, Technology and Innovation (Grant No. 09-065803). I am indebted to Jimmi Nielsen, MD from the Research Unit at the Aalborg Psychiatric Hospital, Aarhus University Hospital for advice and help with the identification of symptoms of negative stress and their related prescription drugs. I thank Olav Sorenson and Lamar Pierce for invaluable discussions. In addition, I thank Department Editor Jesper Sørensen, the Associate Editor and three reviewers at Management Science for helpful suggestions. Comments from and discussions with Christophe Boone, Glenn Carroll, Woody Powell, Sampsa Samila, Ezra Zuckerman, and conference/seminar participants at the Nagymaros Group Meeting on Organizational Ecology in Istanbul, EMAEE Conference 2009, DRUID Summer Conference 2009, Annual Meeting of the Academy of Management 2009, Universidad Carlos III de Madrid, and Stanford University (Scancor) are gratefully acknowledged. The usual disclaimer applies. In the memory of my friend and PhD advisor, Bent Dalum.