This paper presents a crisis decision-making model for understanding the decision processes and actions of organizations in labour oversupply situa tions. A number of macro-organizational and environmental variables, intra- organizational process variables, and managerial experience with oversupply situations are predicted to affect whether organizations perceived a labour oversupply as a 'crisis'. Crisis level was predicted to affect decision-making and actions taken to deal with the oversupply. An initial test of the model was made using data collected from 82 Australian organizations. Although some aspects of the model operated as predicted, critical relationships between crisis variables and decision-making processes were opposite to prediction. These contradictory findings are explained using a stress response-based model. While alterations in the crisis model are needed, canonical correlation analyses indicated that the variables measured did relate to how organiza tions reacted to labour oversupply.