Relationship between legitimation, competition and organizational death: current state of the art

Abstract

There is agreement among ecology researchers that the concepts of legitimation and competition are partly responsible for organizational selection. Finding adequate measures to represent these concepts, however, has been elusive and has been the main obstacle to the development of this stream of investigation. On the basis of the germinal density dependence model, we identify two lines of research, which have generated seven distinct models. This survey shows that there has been a general tendency to use only three variables to measure legitimation and competition, which are often measured together. However, we argue that fruitful results have emerged when efforts have been made to separate both concepts and that there is some potential in using new measures (mass or concentration) which have so far only found limited application in the field of population demography. These findings, together with the inconclusive results of this stream of research, allow us to identify the existing gaps in the literature and comment on directions for future research.

Evolution and Firm Survival in Vertically Related Populations: The Case of the German Piano Industry

“…Prior year exits piano producers have a positive effect and thus seem to signal adverse environmental conditions. As the baseline model has precedents in prior ecological research (Núñez Nickel/Moyano Fuentes 2004), it provides confidence that the population or maybe the collected data are not special or deviating from stylized facts of industrial evolution. Efron (1977) approximation for ties in industry tenures; *** p≤0.01; ** 0.01<p≤0.05; * 0.05<p≤0.1 (two-sided test); + Model 6: 1870+ Model 6: -1929 In model 2 the firm-specific control variables are included.…”

“…In order to control for population dynamics effects, the numbers of prior year industry entries into and exits from the end product manufacturer population are included as control variables (prior year entries piano producers; prior year exits piano producers) (Delacroix et al 1989;Núñez Nickel/Moyano Fuentes 2004).…”

“…Research on the evolution of industries has led to a number of theoretical models dealing with the co-evolution of technology, innovation, legitimation and competition with industrial dynamics and the composition of organizational populations (Mueller/Tilton 1969;Utterback/Abernathy 1975;Carroll/Hannan 1989a, b, 2000Nelson 1994;Klepper 1997Klepper , 2000Núñez Nickel/Moyano Fuentes 2004). However, those models devote little attention to the development of vertical structures of firms and the emergence of new, specialized supplier populations along the value chain of an industry as industries mature (Klepper 1997).…”

“…The change of the vertical industry structure leads to the creation of an interdependent community of organizational populations along the value chain of an industry. However, one major shortcoming of most of the existing empirical research on industry evolution and firm survival over long periods of time is that this change of the vertical industry structure and the emerging subpopulations of suppliers are often neglected as either only intra-population effects in end product manufacturer populations are investigated (see among others Suár-ez /Utterback 1995;Klepper 2002Klepper , 2007Carroll/Hannan 2000;Núñez Nickel/Moyano Fuentes 2004) or inter-population effects of more or less overlapping horizontally related populations are explored (Rao 2005;de Figueiredo/Silverman 2012). Only de Figueiredo and Silverman (2012) started to investigate the influence of vertically related populations, analyzing the effect of the number of upstream laser engine producers on the survival of downstream laser printer manufacturers.…”

Density dependence in corporative systems: Development of the population of Danish patient groups (1901–2011)

“…The theory describes the relationship between the density and founding rate of a population, defined as the number of groups founded in a specific year. The theory has previously been tested and has found support on other organizations than interest groups (see Nickel and Fuentes, 2004 for a review) and on interest groups in an American context (Gray and Lowery, 2001;Hannan and Freeman, 1987;Hannan and Freeman, 1988b;Nownes, 2004;Nownes and Lipinski, 2005;Nownes, 2010). One of the few studies that test population theories on interest group populations outside the United States is Messer et al (2011).…”