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34 Cards in this Set
- Front
- Back
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Founding Process
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There is no single event in which an organization is founded, rather, it is a process of events that leads to the founding of an org.
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Disbanding Process
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Like org'l founding, there is no single event in which an organization is disbanded, rather, it is a process of events that leads to the disbanding of an org.
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Org'l Founding's population level effect
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Increases pop density
Uses resources Introduces new forms and practices into pop. Others outlined by Hannon and Freeman |
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Org'l Disbanding's population level effect
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Reduces pop density
Releases resources into environment Reveals structures/practices that may be poor fit. Others outlined by Aldrich |
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Difference b/t org in nascent stage versus already founded
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- founded if it exists in some tangible way (a store or website)
- transactions occur - start to act on pursuing goals - when participants actually consider themselves an org. - when the org becomes incorporated (a standard of state govs) - Conclusion: there is no one clear point at which an org becomes an org. |
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Org'l knowledge and legitimacy
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both are problems for emerging org's because they lack both
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Org'l legitimacy
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- the perception amongst people that an org is valid, legal, and culturally permissable
- an org can be legal, but illegitimate to culture (head shops, bunny ranches), or culturally legit but illegal (gambling, mowing lawns for cash) |
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Org'l Knowledge
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4 types:
1. Org'l knowledge - general knowledge a/b org's, not necessarily the exact/specific tasks. 2. Procedural knowledge - relating to core competency, knowing how to do what youre trying to do 3. Tacit Knowledge - general, unspoken knowledge (being presentable by coming to work appropriately dressed) 4. Declarative knowledge - literal and objective facts (ex: 50% of startup businesses in US begin w/ less than $5,000 of capital) |
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Selection Bias
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- Studying the successes/failures and of individual org's leads to selection bias...b/c we have no way of knowing if this particular org is representative of the entire org'l population
- Aldrich instead argues that you should avoid selection bias by sutdying entire org'l populations |
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Aldrich's alternative
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- instead of studying individual org's, we should study entire org'l populations. to do this we need to know:
1. K - the carrying capacity - it is estimated (impossible to know concretely) and, it fluctuates (based on several things such as increase in available resources). 2. r - intrinsic growth rate of population...intrinsic means the rate of growth w/o constraints - org'l populations usually grow past the carrying capacity, then drops back down to establish and equilibrium at the carrying capacity |
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R strategists
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- R strategists think that the pop. is below K so they look to expand
- They think there are resources out there yet to be utilized - Both R and K strategists can exist simultaneously in the same org'l pop. b/c no one knows the exact carrying capacity. |
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K Strategists
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- Thinks population is at K so they attempt to make what they have better through internal improvements to better fit the existing market.
- They don't try to grow but rather, they try to survive. - Both R and K strategists can exist simultaneously in the same org'l pop. b/c no one knows the exact carrying capacity. |
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Evolutionary Theory
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- Basically a theory in how organizations live/evolve/change that includes 3 stages of change (variation, selection, and retention).
- All stages are driven by scarcity of resources - Problems with this theory is that its hard to select a unit of analysis, don't know which ones will be significant - selection bias... |
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Evolutionary Theory: Variation
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- 1st stage, very prevalent, there is an introduction of something new to the organization...usually some small unnoticed change
- there are intentional variations and blind/random/accidental variation. |
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Evolutionary Theory: Selection
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- for those variations that are noticed, the reaction of ppl to the variation.
- can be positive, negative, or indifferent selection. - Selection can be offered by anone in org that is affected by the variation...other orgs, customers... |
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Evolutionary Theory: Retention
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3rd step, Choosing what to do, decision to keep part of the variation, based on the reactions in the selection stage - Variations can be retained by workers, org leaders, etc.
It is all within organizations. Community level retention is still done within organizations, just by those who didn't introduce the variation in the first place. Same with pop. level retention 1. org.: org that introduced variation retains it pop: org retains variation introduced by other org in its pop. comm. org retains variation introduced by another org in its community but not in its pop. 2. org level 3. population level 4. community/field level |
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Evolutionary Theory: Struggle
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all of these stages represent the struggle, it is the selection of the variation that is the introduced…. organizations compete over scarce resources. Because there are never enough resources for all orgs, only those best fit for the environment survive. This puts pressure towards fitness on all orgs in the pop. These pressures are realized as selecting forces on variations.
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fitness
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the degree to which an organization is able to survive and succeed in its population is a measure of its fitness
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Organizational Transformation
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a major change occurring along three possible dimensions; goals, boundaries, and activities
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Transformation vs Change
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1. Changes in organizations that qualify as transformations must be either changes in goals, changes in boundaries, or changes in activities. Further, in order for these changes to qualify as transformations they must involve a qualitative BREAK WITH ROUTINES and a SHIFT TO NEW KINDS OF COMPETENCIES that challenge existing organizational knowledge.
2. The three dimensions of transformation are goals, boundaries and activities. Goals: major changes in domain claimed or in breadth of products and services. Boundaries: expansion or contraction involving members or other organizations. Activities: changes in an organization’s activity system that have a major effect on organizational knowledge. |
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Risks of Transformation
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- org can lose its core competency/knowledge
- internal resistance from employees - transaction costs - disrupts pre-existing relationships - loss of legitimacy |
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Process of Transformation (evolutionary)
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variations
selection retention, struggle |
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Neo-Institutionalism (NI)
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Organizations are not trying to differentiate, they are being pushed together by isomorphic pressure. Organizations are driven by efficiency only to a certain point and then isomorphic pressures take over. At some point it is better to conform than to become more efficient. Therefore it is arrational...says that Weber is mostly right in his assessment that EVERYTHING WILL BECOME MORE SIMILAR, BUREAUCRATIZED.
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NI: what is the referent institution(s) in this NI?
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It depends on the type of isomorphism but it will usually be established or influential orgs/institutions in the focal org's environment.
UNC, for instance might mimic UVA, Madison, Berkeley or Harvard...or we might be mimicked by them. |
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NI: Isomorphism
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literally one change….it is the coming together of organizations to be more like each other in one model. Change to become more like the norm.
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NI: Isomorphic pressures
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organizations face the pressures of an environment to tend towards isomorphism – think in terms of goodness of fit!
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NI: 3 types of isomorphic change
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1. Normative – rarest and least specified…origins in training of members pushing orgs closer
2. coercive - Influential orgs/institutions essentially force all orgs in a population/community to be isomorphic in some way. External laws and organizations that enforce governmental involvement Eg. Most firms are isomorphic on wage for low skill workers because gov't coerces them w/ min. wage. Most often coercive isomorphism involves gov't reg. but this isn't necessarily the case. NBA, for instance, can produce coercive isomorphism in basketball teams. 3. Mimetic – organizations copy one so model to become more similar…mimicking decreases risk of organizations. If something is already successful you know it is good enough to stay in business. |
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Inertia
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resistance against change because of selection pressures
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"Demographic characteristics" and inertia
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1. Age – the older, the more inertia, the more resistant to change
2. Size - the larger, the more inertia, the more resistant to change 3. Complexity - the more complex, the more inertia, the more resistant to change |
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Causes of Change
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?
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Consequences of Change
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(org level, pop. Level) – there is risk/uncertainty, expensive to make new infrastructure/time/transaction cost, and there are sunk costs….members of organizations might be resistance to change with in the organization because they are comfortable with it already set in their ways.
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Age, Period, and Cohort Effects
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- Age effect – changes that take place in an organization based on how long it’s been in existence. Older organizations have stronger inertia (more resistance to change). Ex: decay of a founder's initial enthusiasm for a project.
- Period effect – a historical event that creates changes with similar effects on all organizations (ex: the great depression, or breweries producing cereal during prohibition). Ex: deregulation of financial markets applied to all savings and loan financial institutions. - Cohort effect – historical events that effect org’s of different ages in different ways. Ex: breweries during the Great Depression |
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Selection Pressures
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pressure exerted on an organization by environment to change or adapt.
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Oganizations and Social Change:
Life cycle models (esp. w/ evol. Theory) |
Applying the metaphor of a human life to explain changes in orgs/pops. We attribute to orgs age, the ability to learn, growth, and other human characteristics (down to "trimming the fat" w/ layoffs)
It allows us to use techniques from Life Course Sociology. See Aldrich's chapter on org/soc change for more specifics |
