By Baum J.A.C., Van Witteloostuijn A., Dobrev S.D.
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Additional info for Ecology And Strategy
Other commitments are cognitive in character, such as the European models that Gilman studied in 1875 and adopted as the organizational form of the new university in Baltimore. When the lag between the initiation of an organization and operational startup is substantial, there is no guarantee that the environmental factors driving those commitments will be consistent with the environment that the organization ultimately competes in. This does not imply, however, that entrepreneurial inertia necessarily handicaps a nascent organization.
American Journal of Sociology, 100, 346–380. Baum, J. A. , & Singh, J. V. (1996). Dynamics of organizational responses to competition. Social Forces, 74, 1261–1297. , & Carroll, G. R. (2000). Custom service: Application and tests of resource partitioning among Dutch auditing firms from 1880 to 1982. Organization Studies, 21, 355–381. , Carroll, G. , & van Witteloostuijn, A. (2004). Size, differentiation and the performance of Dutch daily newspapers. Industrial and Corporate Change, 13, 117–148.
In this chapter, I argue to the contrary that neither assumption is required to generate a boom-and-bust cycle. In fact, I will suggest that it is the most methodical – and in certain respects ‘‘rational’’ – market entrants and entrepreneurs who may pose the greatest threat to the stability of markets and organizational populations. By slowly assembling resources and planning market entry, these actors help to ensure their own success (cf. Dixit, 1992), while contributing to collectively irrational outcomes.