ICC Advance Access originally published online on August 8, 2006
Industrial and Corporate Change 2006 15(5):755-784; doi:10.1093/icc/dtl020
Organizational identities and the hazard of change
Correspondence: Michael T. Hannan, Graduate School of Business, Stanford University, Stanford, CA 94305-5015, USA. e-mail: hannan{at}stanford.edu.
Correspondence: James N. Baron, Yale School of Management, 135 Prospect Street, Box 208200. New Haven, CT 06520-8200, USA. e-mail: james.baron{at}yale.edu.
Correspondence: Greta Hsu, Graduate School of Management University of California, Davis, One Shields Avenue, Davis, CA 95616, USA. e-mail: grhsu{at}ucdavis.edu.
Correspondence: Özgecan Koçak, Sabanci University, Orhanli Tuzla, Istanbul, 34956, Turkey. e-mail: okocak{at}sabanciuniv.edu.
We examine how the life chances and financial performance of nascent high-technology firms were affected by two kinds of organizational changes: altering founders’ blueprints for the employment relation and replacing a founder–chief executive officer (CEO) by an outsider. We argue that both events destabilize organizations but that changes in employment blueprints are tied more tightly to the organization’s identity and thus are more destabilizing. We analyze three dimensions of organizational performance among a sample of young high-technology companies in California’s Silicon Valley: survival versus failure, launching an initial public offering (IPO), and changes in financial valuations among organizations that underwent an IPO. As predicted, changing the employment blueprint increased the hazard of failure and diminished growth in market value. Appointing an outsider as CEO did not affect the hazard of failure appreciably but did depress the rate of growth in market capitalization. The implications of these results for ecological and institutional perspectives on organizations are discussed.
CiteULike 
Connotea 
Del.icio.us What's this?
This article has been cited by other articles:
|
|
 |
|
  S. Olzak and N. Kangas Ethnic, Women's, and African American Studies Majors in U.S. Institutions of Higher Education Sociology of Education, April 1, 2008; 81(2): 163 - 188. [Abstract] [PDF]
|
|
|
|
 |
|
 J. N. Baron, M. T. Hannan, G. Hsu, and O. Kocak In the Company of Women: Gender Inequality and the Logic of Bureaucracy in Start-Up Firms Work and Occupations, February 1, 2007; 34(1): 35 - 66. [Abstract] [PDF]
|
|