While prior research has examined how organizations can respond to external pressures through various stakeholder-oriented actions, such as conformance or resistance, less is known about what happens inside an organization when it faces external pressure that top management cannot fend off. Recent research has found that external pressure on an organization can result in communication breakdowns, intense emotional reactions, and, in extreme cases, even drive management to engage in criminal activity to cope with the pressure. Building on this recent work and our own empirical analysis, we develop theory on how external pressure influences organizational functioning by activating faultlines and how organizational design mediates its influence on organizational outcomes. We focus on the effects of external pressure on internal collaboration and the coordination of organizational activities. Drawing on a revelatory case study of a leading French mountain and outdoor sports company acquired by a diversified Swiss clothing group, we find counterintuitively that applying high pressure on the performance of an underperforming company can activate dormant internal faultlines, causing different parts of the acquired firm to decouple, disintegrate, and ultimately deteriorate further organizational performance. Our findings contribute to theory development on the influence of external pressure on organizations, activation of dormant organizational faultlines, and acquisition integration. We contribute to theory development on the influence of external pressure on organizations, the internal dynamics it can trigger, and the importance of organizational cohesion in high-pressure contexts.
