Age-Related Structural Inertia: A Distance-Based Approach

Abstract

This paper proposes a distance-based characterization of age-related structural inertia as an increasing constraint on the speed of change as organizations age. Our framework regards organizations as points in multi-dimensional metric spaces of architectures. Organizational change means movement in this space. The speed of change is the ratio of the distance between positions in a space and the time it took for the organization to make the move. We illustrate how our distance-based approach can be used to formulate theories of age-related organizational inertia by using this representation to develop a model for a possible mechanism: age-related cultural resistance to change based on the dynamics of exposure of organizational members to architectural features. Our proposed mechanism is distinct from prevailing explanations and leads to new predictions. We also illustrate the value of our distance-based approach in a re-analysis of Sørensen and Stuart’s (2000) study of age variations in firms’ patenting behavior. On the basis of patent citations, we construct a space that allows us to characterize the positions of organizations, and the speed at which they change. We find that organizational age has a negative effect on the speed of change.

Gaël Le Mens is an Associate Professor of Economics and Business at Pompeu Fabra University. He holds a PhD from the Stanford Graduate School of Business, Stanford, USA. His research focuses on learning by individuals and organizations, and the dynamics of collective judgments and behavior. His work has been published in top international scientific journals such as Psychological Review, the Proceedings of the National Academy of Science of the USA (PNAS), Cognition, Behavioral and Brain Sciences, and Administrative Science Quarterly. Popular publications have appeared in the New York Times, the Times (London), WSJ.com, FT.com, USA Today, ABCNews.com, Focus and other print and online periodicals. Gaël Le Mens teaches Organizational Behavior at the UPF Barcelona School of Management.

Michael T. Hannan, Graduate School of Stanford Business http://www.gsb.stanford.edu/faculty-research/faculty/michael-hannan

Laszlo Polos, Durham Univesity https://www.dur.ac.uk/research/directory/staff/?mode=staff&id=892