On the Dynamics of Organizational Mortality: Age-Dependence Revisited
Stanford Graduate School of Business Research Paper No. 2062
39 Pages Posted: 5 Aug 2010
Date Written: August 3, 2010
This paper proposes a novel theoretical framework to model the dynamics of organizational mortality. The main theoretical contribution is a clarification of the relations between organizational fitness, endowment, organizational capital and mortality hazard. If the mortality hazard is a function of the stock of organizational capital, and the rate of accumulation of organizational capital is function of the level of organizational fitness, organizational fitness becomes the key factor in predicting the evolution of the mortality hazard. The paper demonstrates how this new perspective can cast a new light on the much studied relation between organizational age and the hazard of organizational mortality.
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