Constrained growth: How experience, legitimacy, and age influence risk taking in organizations

Organization Science

Volumn 19, Issue 4, 2008, Pages 594-608

  Desai, Vinit M ^a  

^a UNIVERSITY OF COLORADO   (United States)

Author keywords

Age; Aspiration performance; Failures; Inertia; Legitimacy; Organizational learning; Risk taking

Indexed keywords

EID: 61349168431     PISSN: 10477039     EISSN: 15265455     Source Type: Journal    
DOI: 10.1287/orsc.1070.0335     Document Type: Article

References (80)

1. Argote, L. 1996. Organizational learning curves: Persistence, transfer and turnover. Internal. J. Tech. Management 11(7-8) 759-769.
2. Argote, L., S. L. Beckman, D. Epple. 1990. The persistence and transfer of learning in industrial settings. Management Sci. 36(2) 140-154.
3. Argote, L., B. McEvily, R. Reagans. 2003. Managing knowledge in organizations: An integrative framework and review of emerging themes. Management Sci. 49(4) 571-582.
4. Audia, P. G., H. R. Greve. 2006. Less likely to fail: Low performance, firm size, and factory expansion in the shipbuilding industry. Management Sci. 52 83-94.
5. Audia, P. G., E. A. Locke, K. G. Smith. 2000. The paradox of success: An archival and a laboratory study of strategic persistence following radical environmental change. Acad. Management J. 43(5) 837-853.
6. Bansal, P., I. J. Clelland. 2004. Talking trash: Legitimacy, impression management, and unsystematic risk in the context of the natural environment. Acad. Management J. 47 93-103.
7. Barron, D. N., E. West, M. T. Hannan. 1995. A time to grow and a time to die: Growth and mortality of credit unions in New York City, 1914-1990. Amer. J. Social. 100 381-421.
8. Baum, J. A. C., K. Dahlin. 2007. Aspiration performance and railroads' patterns of learning from train wrecks and crashes. Organ. Sci. 18 368-385.
9. Baum, J. A. C., P. Ingram. 1998. Survival-enhancing learning in the Manhattan hotel industry, 1898-1980. Management Sci. 44(7) 996-1016.
10. Baumard, P., W. H. Starbuck. 2005. Learning from failures: Why it may not happen. Long Range Planning 38(3) 281-298.
11. Boeker, W., J. Goodstein. 1991. Organizational performance and adaptation: Effects of environment and performance on changes in board composition. Acad. Management J. 34 805-826.
12. Boyer, K. D. 1987. The costs of price regulation: Lessons from railroad deregulation. RAND J. Econom. 18 408-416.
13. Bromiley, P. 1991. Testing a causal model of corporate risk taking and performance. Acad. Management J. 34 37-59.
14. Cyert, R. M., J. G. March. 1963. A Behavioral Theory of the Firm. Prentice-Hall, Englewood Cliffs, NJ.
15. Darr, E. D., L. Argote, D. Epple. 1995. The acquisition, transfer, and depreciation of knowledge in service organizations: Productivity in franchises. Management Sci. 41(11) 1750-1762.
16. de Holan, P. M., N. Phillips. 2004. Remembrance of things past? The dynamics of organizational forgetting. Management Sci. 50(11) 1603-1613.
17. Deephouse, D. L. 1996. Does isomorphism legitimate? Acad. Management J. 39(4) 1024-1039.
18. Deephouse, D. L. 1999. To be different, or to be the same? It's a question (and theory) of strategic balance. Stategic Management J. 20(2) 147-166.
19. Deephouse, D. L., S. M. Carter. 2005. An examination of the differences between organizational legitimacy and organizational reputation. J. Management Stud. 42(2) 329-360.
20. DiMaggio, P. J., W. W. Powell. 1983. The iron cage revisited- Institutional isomorphism and collective rationality in organizational fields. Amer. Sociol. Rev. 48(2) 147-160.
21. Drury, G. H. 2000. The Historical Guide to North American Railroads. Kalmback Publishing, Waukesha, WI.
22. Greve, H. R. 1998. Performance, aspirations, and risky organizational change. Admin. Sci. Quart. 43(1) 58-86.
23. Greve, H. R. 2002. Sticky aspirations: Organizational time perspective and competitiveness. Organ. Sci. 13 1-17.
24. Greve, H. R. 2003a. Investment and the behavioral theory of the firm: Evidence from shipbuilding. Indust. Corporate Change 12 1051-1076.
25. Greve, H. R. 2003b. Organizational Learning from Performance Feedback: A Behavioral Perspective on Innovation and Change. Cambridge University Press, Cambridge, UK.
26. Hannan, M. T. 1998. Rethinking age dependence in organizational mortality: Logical formalizations. Amer. J. Sociol. 104(1) 126-164.
27. Hannan, M. T., J. Freeman. 1984. Structural inertia and organizational-change. Amer. Sociol. Rev. 49(2) 149-164.
28. Harris, J., P. Bromiley. 2007. Incentives to cheat: The influence of executive compensation and firm performance on financial misrepresentation. Organ. Sci. 18 350-367.
29. Haunschild, P. R., M. Rhee. 2004. The role of volition in organizational learning: The case of automotive product recalls. Management Sci. 50(11) 1545-1560.
30. Haunschild, P. R., B. Sullivan. 2002. Learning from complexity: Effects of prior accidents and incidents on airlines' learning. Admin. Sci. Quart. 47(4) 609-643.
31. Heckman, J. J. 1979. Sample selection bias as a specification error. Econometrica 47 153-161.
32. Henderson, J., K. Cool. 2003a. Corporate governance, investment bandwagons and overcapacity: An analysis of the worldwide petrochemical industry, 1975-95. Stategic Management J. 24(4) 349-373.
33. Henderson, J., K. Cool. 2003b. Learning to time capacity expansions: An empirical analysis of the worldwide petrochemical industry, 1975-95. Stategic Management J. 24(5) 393-413.
34. Hicks, J. P. 1986. Notes on the new year of industry; cost-cutting railroads. New York Times (January 5) 3-4.
35. Ketchen, D. J., T. B. Palmer. 1999. Strategic responses to poor organizational performance: A test of competing perspectives. J. Management 25 683-706.
36. Lant, T. K., A. E. Hurley. 1999. A contingency model of response to performance feedback-Escalation of commitment and incremental adaptation in resource investment decisions. Group Organ. Management 24(4) 421-437.
37. Lant, T. K., F. J. Milliken, B. Batra. 1992. The role of managerial learning and interpretation in strategic persistence and reorientation: An empirical exploration. Stategic Management J. 13 585-608.
38. Levin, D. Z. 2000. Organizational learning and the transfer of knowledge: An investigation of quality improvement. Organ. Sci. 11(6) 630-647.
39. Levitt, B., J. G. March. 1988. Organizational learning. Annual R. Social. 14 319-340.
40. March, J. G., Z. Shapira. 1987. Managerial perspectives on risk and risk-taking. Management Sci. 33(11) 1404-1418.
41. March, J. G., Z. Shapira. 1992. Variable risk preferences and the focus of attention. Psych. Rev. 99(1) 172-183.
42. Meyer, J. W., B. Rowan. 1977. Institutionalized organizations-Formal structure as myth and ceremony. Amer. J. Social. 83(2) 340-363.
43. Miller, D., M. J. Chen. 1994. Sources and consequences of competitive inertia-A study of the United States airline industry. Admin. Sci. Quart. 39(1) 1-23.
44. Miller, K. D., W. Chen. 2004. Variable organizational risk preferences: Tests of the March-Shapira model. Acad. Management J. 47 105-115.
45. Milligan, B. 2000. Ocean ports expand, but worry about service. Purchasing 128(9) 77-78.
46. Milliken, F. J., T. K. Lant. 1991. The effect of an organization's recent performance history on strategic persistence and change: The role of managerial interpretations. Adv. Strategic Management 7 129-156.
47. Mone, M. A., W. McKinley, V. L. Barker. 1998. Organizational decline and innovation: A contingency framework. Acad. Management Rev. 23 115-132.
48. Nystrom, P. C., W. H. Starbuck. 1984. To avoid organizational crisis, unlearn. Organ. Dynam. 12(4) 53-65.
49. Ocasio, W. 1995. The enactment of economic adversity: A reconciliation of theories of failure-induced change and threat rigidity. Res. Organ. Behav. 17 287-331.
50. Ocasio, W. 1997. Towards an attention-based view of the firm. Stategic Management J. 18 187-206.
51. Oliver, C. 1991. Strategic responses to institutional processes. Acad. Management Rev. 16(1) 145-179.
52. Palmer, T. B., R. M. Wiseman. 1999. Decoupling risk taking from income stream uncertainty: A holistic model of risk. Stategic Management J. 20 1037-1062.
53. Park, K. M. 2007. Antecedents of convergence and divergence in strategic positioning: The effects of performance and aspiration on the direction of strategic change. Organ. Sci. 18 386-402.
54. Pfeffer, J., G. R. Salancik. 1978. The External Control of Organizations: A Resource Dependence Perspective. Harper & Row, New York.
55. Pollock, T. G., V. P. Rindova. 2003. Media legitimation effects in the market for initial public offerings. Acad. Management J. 46(5) 631-642.
56. Railroad Ten-Year Trends, Vol. 1. 1984. Economics and Finance Department, Association of American Railroads, Washington, D.C.
57. Ranger-Moore, J. 1997. Bigger may be better, but is older wiser? Organizational age and size in the New York life insurance industry. Amer. Social. Rev. 62(6) 903-920.
58. Rao, H. 1994. The social construction of reputation: Certification contests, legitimation, and the survival of organizations in the American automobile industry: 1895-1912. Stategic Management J. 15 29-44.
59. Roberts, P. W., G. R. Dowling. 2002. Corporate reputation and sustained superior financial performance. Stategic Management J. 23(12) 1077-1093.
60. Ruef, M. 1997. Assessing organizational fitness on a dynamic landscape: An empirical test of the relative inertia thesis. Stategic Management J. 18(11) 837-853.
61. Ruef, M., W. R. Scott. 1998. A multidimensional model of organizational legitimacy: Hospital survival in changing institutional environments. Admin. Sci. Quart. 43 877-904.
62. Schulz, M. 1998. Limits to bureucratic growth: The density dependence of organizational rule births. Admin. Sci. Quart. 43 845-876.
63. Scott, W. R. 1995. Institutions and Organizations. Sage, Thousand Oaks, CA.
64. Shimizu, K., M. A. Hitt. 2005. What constrains or facilitates divestitures of formerly acquired firms? The effects of organizational inertia. J. Management 31(1) 50-72.
65. Singh, J. V. 1986. Performance, slack, and risk taking in organizational decision making. Acad. Management J. 29 562-585.
66. Siomkos, G., P. Shrivastava. 1993. Responding to product liability crises. Long Range Planning 26(5) 72-79.
67. Sitkin, S. 1992. Learning through failure: The strategy of small losses. Res. Organ. Behav. 14 231-266.
68. Smith, K. G., C. M. Grimm. 1987. Environmental variation, strategic change and firm performance-A study of railroad deregulation. Stategic Management J. 8(4) 363-376.
69. Sorenson, O. 2003. Interdependence and adaptability: Organizational learning and the long-term effect of integration. Management Sci. 49 446-463.
70. Starbuck, W. H., B. L. Hedberg. 1978. Saving an organization from stagnating environments. H. Thorelli, ed. Strategy + Structure = Performance. University Press, Bloomington, IN, 249-259.
71. Staw, B. M., L. E. Sandelands, J. E. Dutton. 1981. Threat-rigidity effects in organizational-behavior-A multilevel analysis. Admin. Sci. Quart. 26(4) 501-524.
72. Suchman, M. C. 1995. Managing legitimacy-Strategic and institutional approaches. Acad. Management Rev. 20(3) 571-610.
73. Thornhill, S., R. Amit. 2003. Learning about failure: Bankruptcy, firm age, and the resource-based view. Organ. Sci. 14(5) 497-509.
74. Transportation Statistics Annual Report. 1994-2004. U.S. Dept of Transportation, Bureau of Transportation Statistics, Washington, D.C.
75. Watson, R. 1997. 60 rail inspectors blitz UP to check safety procedures. J. Commerce 413 13.
76. Weber, R. P. 1990. Basic Content Analysis, 2nd ed. Sage, Newbury Park, CA.
77. Wezel, F. C., A. Saka-Helmhout. 2006. Antecedents and consequences of organizational change: "Institutionalizing" the behavioral theory of the firm. Organ. Stud. 27(2) 265-286.
78. Wiseman, R. M., P. Bromiley. 1996. Toward a model of risk in declining organizations: An empirical examination of risk, performance and decline. Organ. Sci. 7 524-543.
79. Zellmer-Bruhn, M. E. 2003. Interruptive events and team knowledge acquisition. Management Sci. 49 514-528.
80. Zimmerman, M. A., G. J. Zeitz. 2002. Beyond survival: Achieving new venture growth by building legitimacy. Acad. Management Rev. 27 414-431.