On the Dynamics of Organizational Mortality: Age-Dependence Revisited

Stanford Graduate School of Business Research Paper No. 2062

39 Pages Posted: 5 Aug 2010

See all articles by Michael Hannan

Michael Hannan

Stanford Graduate School of Business

Gael Le Mens

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences; Barcelona Graduate School of Economics (Barcelona GSE)

Laszlo Polos

Erasmus Research Institute of Management (ERIM)

Date Written: August 3, 2010

Abstract

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.

Suggested Citation

Hannan, Michael and Le Mens, Gael and Polos, Laszlo, On the Dynamics of Organizational Mortality: Age-Dependence Revisited (August 3, 2010). Stanford Graduate School of Business Research Paper No. 2062 . Available at SSRN: https://ssrn.com/abstract=1652988 or http://dx.doi.org/10.2139/ssrn.1652988

Michael Hannan (Contact Author)

Stanford Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States
650-723-1511 (Phone)
650-725-7692 (Fax)

Gael Le Mens

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences ( email )

Ramon Trias Fargas 25-27
Barcelona, 08005
Spain

Barcelona Graduate School of Economics (Barcelona GSE) ( email )

Ramon Trias Fargas, 25-27
Barcelona, Barcelona 08005
Spain

Laszlo Polos

Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

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