institutional linkages and organizational morlity. baum and oliver

Institutional Linkages and Organizational MortalityAuthor(s): Joel A. C. Baum and Christine OliverSource: Administrative Science Quarterly, Vol. 36, No. 2 (Jun., 1991), pp. 187-218Published by: Sage Publications, Inc. on behalf of the Johnson Graduate School of Management,Cornell UniversityStable URL: http://www.jstor.org/stable/2393353 .

Accessed: 27/04/2014 15:40

Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at .http://www.jstor.org/page/info/about/policies/terms.jsp

.JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range ofcontent in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new formsof scholarship. For more information about JSTOR, please contact [email protected].

.

Sage Publications, Inc. and Johnson Graduate School of Management, Cornell University are collaboratingwith JSTOR to digitize, preserve and extend access to Administrative Science Quarterly.

http://www.jstor.org

This content downloaded from 200.14.85.85 on Sun, 27 Apr 2014 15:40:25 PMAll use subject to JSTOR Terms and Conditions

http://www.jstor.org/action/showPublisher?publisherCode=sage

http://www.jstor.org/action/showPublisher?publisherCode=cjohn

http://www.jstor.org/action/showPublisher?publisherCode=cjohn

http://www.jstor.org/stable/2393353?origin=JSTOR-pdf

http://www.jstor.org/page/info/about/policies/terms.jsp


Institutional Linkages and Organizational Mortality

Joel A. C. Baum New York University Christine Oliver York University

? 1991 by Cornell University. 0001-8392/91/3602-01 87/$1 .00.

This research was supported in part by a grant from the Office of Research Admin- istration, University of Toronto. For helpful comments on this paper, we thank John Freeman and three anonymous ASO reviewers. For assistance with data collection and coding, we also thank Deb- bie Freeman, Brian Gaon, Gayle Green- baum, and Sonja Saksida.

This study examined the impact of institutional linkages on the failure of child care service organizations in Met- ropolitan Toronto, Canada, between 1971 and 1987. A dynamic analysis shows that organizations with institutional linkages exhibited a significant survival advantage that increased with the intensity of competition. The effectiveness of institutional linkages in contributing to survival also depended on the characteristics of organizations that established ties and theexternal legitimacy of the ties themselves. Institutional linkages also had a significant moderating influence on the relationship between organizational transformation and the risk of failure. The findings of this study suggest that efforts to establish the prepotency of institutional versus ecological explanations of organizational survival should not preclude inquiry into the causal consistencies and interactions between these theories' predictions.'

The insights that institutional and population ecology theories of organizations have contributed to our understanding of organizational failure suggest that these two distinct approaches are potentially complementary. Institutional theorists have proposed that an organization is more likely to survive if it obtains legitimacy, social support, and approba- tion from external constituents of its institutional environment (Meyer and Rowan, 1977; DiMaggio and Powell, 1983; Meyer and Scott, 1983; DiMaggio, 1988; Powell, 1988). This external legitimation elevates the organization's status in the community, facilitates resource acquisition, and deflects questions about an organization's rights and competence to provide specific products or services (Oliver, 1991). Popula- tion ecology theory suggests that organizational survival is the result of environmental pressures that differentially se- lect adaptive forms for retention in an organizational population (Hannan and Freeman, 1977). Among the environmental selection criteria that population ecologists have recently elaborated are external pressures for legitimacy and the forces of competition and institutionalization in organizational populations (Hannan and Freeman, 1984, 1988a, 1989; Car- roll, Delacroix, and Goodstein, 1988; Baum and House, 1990). However, research on organizational mortality has only recently begun to build on the potential for convergence or rapprochement between institutional and ecological perspectives (Singh, Tucker, and House, 1986; Zucker, 1987b; Carroll and Huo, 1988; Hannan and Freeman, 1988b; Carroll and Hannan, 1989a; Baum and Oliver, 1990).

The purpose of this paper is to investigate the impact of organizations' institutional linkages to legitimated community and public institutions on their mortality rates. An institutional linkage is defined here as a direct and regularized relationship between an organization and an institution in the organization's environment. Institutions are defined as government or community constituents in the organization's task environment (Turk, 1973; Zucker, 1987a) that possess either communitywide and uncontested social acceptance (e.g., public schools, churches) or legislative and administrative authority in the organization's domain (e.g., government agencies, regulatory commissions).

187/Administrative Science Quarterly, 36 (1991): 187-218



Our investigation addresses four broad research questions: (1) Do organizational linkages to the institutional environment reduce the likelihood of organizational mortality? (2) If so, do the protective effects of these relationships shelter organizations from competitive threats to survival? (3) Does the strength of these effects depend on the characteristics of organizations and the external legitimacy of the linkages themselves? and (4) Do these institutional linkages also insulate organizations from the risk of failure from transformation?

Investigation of the effects of institutional linkages on organizational mortality is potentially important, for several reasons. First, the institutional framework has been criticized for its lack of empirical attention to the prediction of failure (Zucker, 1987a: 458). Second, empirical studies of legitimacy and institutionalization from an ecological perspective have been limited almost exclusively to density-dependent models and to theoretical inferences of legitimation processes from the mutualism found at lower levels of population density (Han- nan and Freeman, 1988a, 1988b, 1989; Carroll and Hannan, 1989a, 1989b; Delacroix, Swaminathan and Solt, 1989; Zucker, 1989). While these studies have made a significant contribution to our understanding of institutionalization in populations, additional insights may be gained from an exam- ination of the more specific institutional relations that organizations establish with legitimated institutions and the capabilities of these relations to protect organizations from threats to survival.

Third, the study of institutional relations and their effect on the mortality rate of organizations may shed additional light on Hannan and Freeman's (1984) contention that selection forces in contemporary populations favor reliable, account- able organizations. Establishing collaborative linkages to legitimated community and public institutions may be an important means by which organizations achieve reliability and accountability and increase their survival prospects. Fourth, this paper is the first to examine how the influence of institutional ties interacts with specific organizational characteristics to affect an organization's chances of survival. As this research attempts to demonstrate, examining the interaction of institutional linkages with organizational characteristics, including age, size, strategy, and profit orientation, may offer new insights into the liabilities of newness and small size, the differential survival of specialist and generalist organizations, and the external legitimacy of institutional relationships themselves. Finally, by investigating the moderating influence of institutional linkages on the risk of failure associated with organizational transformation we attempt to show that, in addition to being an important cause of differential failure rates in organizational populations, institutional linkages alter the ability of organizations to accomplish major changes and, in doing so, alter the underlying dynamics of population-level change.

The predicted effects of institutional linkages on organizational mortality were investigated in two populations of child care service organizations-day care centers and nursery schools-in Metropolitan Toronto, Canada from 1971 to 1987. Child care service organizations (CCSOs) are required

188/ASQ, June 1991



Institutional Linkages

to conform to a variety of institutional rules and requirements at municipal and provincial levels of government in order to operate and receive support from parents, the community, and the public sector. These organizations must also maintain the strict appearance of reliability and high-quality service in response to stringent societal expectations sur- rounding the care of young children. Since these CCSOs are characterized by ambiguous technologies, operate in a highly institutionalized environment, and offer social services that rely heavily on external legitimacy and social approval to attract and retain resources and clientele, we expected institutional linkages to be a critical influence on their likelihood of survival (Singh, Tucker, and House, 1986). At the same time, these organizations compete among themselves relatively intensely for limited resources and social endorsement. Therefore, these populations appeared to provide an appropriate empirical setting within which to test the impact of institutional relations on the differential mortality of competing organizations.

INSTITUTIONAL LINKAGES

According to institutional theory, an organization's life chances are significantly improved by organizational demon- strations of conformity to the norms and social expectations of the institutional environment (Meyer and Rowan, 1977; Scott and Meyer, 1983). When an organization develops ties to well-established societal institutions, it signals its adher- ence to institutional prescriptions of appropriate conduct and obtains a variety of rewards that are predicted to contribute to its likelihood of survival, including greater invulnerability to questioning (Meyer and Scott, 1983), enhanced legitimacy and status (Meyer and Rowan, 1977; Scott and Meyer, 1983; Oliver, 1990), greater stability and predictability (Meyer and Rowan, 1977, 1983; DiMaggio, 1988), and greater ease of access to resources (Pfeffer and Salancik, 1978; DiMag- gio and Powell, 1983). For example, corporations that build linkages with charitable organizations are able to publicize their social responsiveness. Social service agencies that join federations such as The United Way, increase their stability, public visibility, and community status (Provan, 1983). Institu- tional relations that provide more specific resources (e.g., grants, subsidies, donations) can also serve as resource buff- ers (Scott, 1987a; Miner, Amburgey, and Stearns, 1990) that protect organizations from environmental threats and uncertainty (Pfeffer and Salancik, 1978; DiMaggio and Powell, 1983) and ensure higher and more predictable flows of resources (Aiken and Hage, 1968; Aldrich and Auster, 1986). Thus, the resource and social support an organization obtains from the establishment of institutional linkages may be the result of either legitimacy by association with organizations that already possess high legitimacy (Galaskiewicz, 1985) or the conferral of more specific resources and endorsements (Wiewel and Hunter, 1985).

The institutional premise that legitimating linkages to well- established societal institutions reduce the likelihood of organizational failure is also consistent with recent ecological theory. Hannan and Freeman (1984, 1989) have proposed that selection pressures favor organizations that are able to

189/ASQ, June 1991



demonstrate their reliability and accountability. Reliability, the capacity to produce products or services of a given quality repeatedly, and accountability, the appearance of compliance with institutional norms of rational and acceptable behavior, are more likely to characterize organizations with institutional attachments than free-standing organizations that compete without the benefit of institutional linkages.

Both institutional and ecological frameworks thus suggest that institutional relations increase an organization's survival prospects. However, with few exceptions (Zucker, 1 987b; Miner, Amburgey, and Stearns, 1990), institutional theorists and ecologists have not examined empirically the presumed effects of institutional relations on organizational mortality. We therefore hypothesize: Hypothesis 1: Institutional linkages will reduce the likelihood of organizational mortality.

While hypothesis 1 predicts that institutionally linked organizations will exhibit lower mortality rates than unlinked organizations, we expect institutional relations to be most beneficial to organizations under particularly hazardous environmental conditions. Specifically, we propose that the survival advantage that institutional relations confer on organizations will increase with the intensity of competition. Competition occupies a central role in ecological theory. The differential ability of organizations to obtain scarce resources under competitive conditions is argued to determine which organizations survive (Hannan and Freeman, 1977, 1984, 1989). As competition increases and environmental resources become increasingly scarce, the enhanced ability of institutionally linked organizations to mobilize resources and social support is expected to provide these organizations with an increasing survival advantage over unlinked competitors: Hypothesis 2: Institutional linkages will significantly reduce the effect of competition on mortality rates.

Organizational Characteristics

Although it is predicted here that the establishment of ties to socially endorsed institutions will be associated with improved life chances for organizations, we propose that the ability of institutional linkages to protect organizations from failure will depend on the basic characteristics of the organizations and the external legitimacy of the relationships themselves. More specifically, we expected that the protective effects of institutional linkages would differ significantly, for reasons that will be explained, depending on the age, size, strategy, and profit orientation of an organization.

Organizational age: The liability of newness. Empirical studies have consistently demonstrated that mortality rates tend to decline with increased organizational age (Carroll and Delacroix, 1982; Carroll, 1983; Freeman, Carroll, and Han- nan, 1983). Underlying the explanation for this population- level pattern of age dependence is the assumption that young organizations confront a liability of newness (Stinch- combe, 1965) that increases their vulnerability to mortality because younger organizations have to learn new roles as social actors and create organizational routines at a time

190/ASQ, June 1991




when organizational resources are stretched to the limit (Singh, Tucker, and House, 1986; Hannan and Freeman, 1989). New organizations are also assumed to lack broad bases of influence and endorsement, stable relationships with important external constituents, and the legitimacy that years of experience in providing particular products or services confers on older organizations (Stinchcombe, 1965; Aldrich and Auster, 1986). Similarly, since selection processes are expected to favor highly reproducible structures, which are proposed to increase as organizations age (Han- nan and Freeman, 1984), older organizations are predicted to be less likely to fail than young organizations. The liability of newness hypothesis assumes that a lack of social approval, stability, and sufficient resources typifies recent entrants into a population and that these shortcomings increase their risk of failure. To date, these assumptions have not been examined. In the only study to explore the potential for variation in liability of newness effects, Singh, Tucker, and House (1986) found that external legitimacy de- creased the liability of newness in a population of voluntary social service organizations. It is predicted here that a direct link to a socially endorsed community or public institution will reduce the liability of newness.

When young organizations are able to secure ties to the institutional environment, these institutional attachments are predicted to mitigate the risks associated with youth, because the legitimacy, stability, and resources that institutional constituents provide to newer organizations will tend to compensate for the disadvantages of organizational inexperience. A young organization that receives a grant from a government agency not only increases its level of resources but also demonstrates its worthiness to receive these resources and conduct its services. Institutional linkages have consequences for young organizations that have been prima- rily associated with the privilege of advanced age, including the endorsement of its actions by important institutional actors (Stinchcombe, 1968), the ability to account rationally for its products or services (Hannan and Freeman, 1984), and the establishment of a stable relationship with an external constituent (Stinchcombe, 1965). Therefore, younger organizations are proposed to benefit more from institutional linkages than older organizations: Hypothesis 3: Institutional linkages will reduce the mortality rate of younger organizations significantly more than older organizations. Organizational size: The liability of smallness. In the same way that institutional linkages are hypothesized to be particularly effective in sheltering young organizations from failure, smaller organizations may be protected to a greater extent than large organizations with similar institutional attachments. Empirical evidence indicates that organizational mortality rates tend to decline with increased size (Freeman, Carroll, and Hannan, 1983; Singh, Tucker, and House, 1986). Since large size increases inertial tendencies in organizations (Hannan and Freeman, 1977, 1984; Aldrich and Auster, 1986), and selection pressures are proposed to favor struc- turally inert organizations (Hannan and Freeman, 1984), large organizations are expected to be less vulnerable to the risk of failure. The propensity of small organizations to fail is also

191 /ASQ, June 1991



argued to be the consequence of several liabilities of smallness, including problems of raising capital, recruiting and training a workforce, and handling the administrative costs of compliance with government regulations (Aldrich and Auster, 1986). Large size also tends to legitimate organizations, to the extent that large size is interpreted by external stake- holders as an outcome of an organization's prior success.

Explanations for the negative size dependence of death rates have neglected the potential for institutional processes to moderate this causal relationship. If institutional linkages improve an organization's chances for survival by reducing the problems of obtaining cultural and resource support, then institutional linkages should be especially helpful in reducing the failure rates of small organizations. A small manufacturer that secures the endorsement of its products by a powerful consumer organization will increase its legitimacy and capability to attract customers. A small nonprofit organization that obtains office space, nominal sponsorship, or membership lists from a pre-existing high-profile community association will improve its image as a socially viable community actor and increase its chances of securing resources (Wiewel and Hunter, 1985). We therefore hypothesize: Hypothesis 4: Institutional linkages will reduce the mortality rate of small organizations significantly more than large organizations. Organizational strategy: Specialism versus generalism. Investigation of the distinction'between generalism (broad adaptive capacity in diverse conditions) and specialism (high growth rates in a limited set of conditions) has been an important research agenda in population ecology (Freeman and Hannan, 1989: 433). Studies of specialist versus generalist strategies have shown that the proclivity of environmental selection criteria to favor generalists over specialists de- pends on the pattern or grain of variation in the environment, that is, the typical length or duration of environmental fluctuations (e.g., seasonal versus weekly fluctuations in demand) (Freeman and Hannan, 1983, 1987; Hannan and Freeman, 1989).

Institutional processes may also affect the differential survival of specialists and generalists (Wholey and Brittain, 1989). We propose that institutional linkages serve to buffer organizations from environmental change and that this protection reduces the propensity of specialist organizations to fail to a significantly greater extent than generalist organizations. The beneficial effects of institutional linkages are expected to be greater for specialists than generalists because it is the specialist's vulnerabilities of limited slack resources and a narrow target environment in particular that institutional relations are likely to minimize. Institutional relations tend to confer legitimacy and resources on organizations, reduce environmental uncertainty, stabilize resource flows, and provide protective assistance to organizations in adjust- ing to environmental changes (Meyer and Rowan, 1977; Pfeffer and Salancik, 1978; Miner, Amburgey, and Stearns, 1990). When organizations become more institutionally em- bedded in a field of interorganizational relations, success or survival may be determined less by adaptive capacity than by the buffering effects of institutional linkages. For example, guaranteed state approval for a social service agency to

1 92/ASQ, June 1991




operate for several years in a narrowly specified service domain may encourage the state to maintain its commitment to, and legitimation of, this service, enabling the agency to continue providing its service, regardless of changes in demand for its services. Similarly, a subsidy from the government may be used as a reserve of slack resources if a specialist organization has to begin moving into new product areas in response to changes in consumer demand. In both cases, it is the specialist's connection to a state institution that protects it from the vulnerabilities that specialists confront. An institutionally linked organization may thus remain successful, largely insulated from the hazards of environmental change (Fombrun, 1988). Since specialist organizations lack excess resources and the protection of a broad strategic focus, they are predicted to benefit more from the establishment of institutional relations:

Hypothesis 5: Institutional linkages will reduce the mortality rate of specialist organizations significantly more than generalist organizations.

External legitimacy of institutional linkages. We propose that the capability of institutional linkages to reduce mortality rates will also depend on the external legitimacy of the linkages. A fundamental premise of institutional theory is that an organization is the target of external assessments of its legitimacy and rationality. Society and the general public are assumed to evaluate the degree to which an organization's structural and procedural characteristics are aligned with pre- vailing institutional values and beliefs. Notably lacking from the institutional literature is the notion that societal constituents and the general public judge interorganizational relations as well as organizations. However, linkages between organizations and institutions may be the target of societal evaluations, and these evaluations may have important implications for the ability of institutional relations to contribute to organizational survival.

We hypothesize, therefore, that the ability of an institutional linkage to improve an organization's life chances will depend significantly on whether the linkage is perceived as legitimate or consistent with the normative expectations of the organization's social environment. For example, in the community of child care service organizations of this study, the distinction between nonprofit and for-profit organizations is critical because it reflects the organization's mission and values. Nonprofit child care has been increasingly perceived as more socially acceptable than for-profit child care. As a result, influential child care advocacy groups and the general public have viewed unfavorably the establishment of linkages between for-profit child care organizations and government or community institutions. Since the social validity of these linkages to for-profit organizations has been questioned, they would be less likely to enhance the legitimacy and survival prospects of these organizations. Although network researchers have focused on the functional benefits of linkages, including resource and information exchange, uncertainty reduction, and increased organizational efficiency (Oliver, 1990), they have largely overlooked the external legitimacy of network linkages and the effects of the institutional context on the potential for these linkages to enhance

193/ASQ, June 1991



or impede survival. We suggest that when linkages are nor- matively ratified or viewed as legitimate by the wider institutional environment, they will be more likely to increase an organization's legitimacy and survival chances. By the same token, when the social validity of institutional linkages is questioned, the ability of these linkages to enhance an organization's legitimacy and survival prospects may be compro- mised. Hypothesis 6: Institutional linkages viewed as legitimate by the wider institutional environment will reduce mortality rates significantly more than those linkages viewed as illegitimate.

Organizational Transformation

Recent research has shown that interorganizational linkages also affect the ability of organizations to accomplish fundamental transformations (Miner, Amburgey, and Stearns, 1990). By altering the relationship between organizational transformation and the risk of failure, institutional linkages can fundamentally affect the nature of the processes underlying the dynamics of population-level change.

Traditional adaptationist perspectives in organization theory suggest that most intended organizational changes should improve organizational survival chances (Child, 1972; Pfeffer and Salancik, 1978; Bourgeois, 1984). In contrast, structural inertia theory (Hannan and Freeman, 1984) posits that fundamental transformations disrupt organizations and result in increased performance variability and lowered public legitimacy. Thus, even changes that might eventually reduce the risk of failure by better aligning the organization with its environment are expected to increase an organization's risk of failure in the short run (Hannan and Freeman, 1984). Research on the effects of transformation on the risk of organizational failure has provided inconclusive results. Some studies report that transformation reduces the risk of failure (Zucker, 1987b), some report increases in the risk (Carroll, 1984; Miner, Amburgey, and Stearns, 1990), some report no effect (Kelly and Amburgey, 1991), and still others report outcomes that depend on the type of change (Singh, House, and Tucker, 1986; Baum, 1990; Haveman, 1990) or amount of time since change (Amburgey, Kelly, and Barnett, 1990; Baum, 1990). One possible explanation for this inconsistency is that interorganizational linkages are capable of providing organizations with a "transformational shield" that "insulates an organization against the probability of failure resulting from transformation" (Miner, Amburgey, and Stearns, 1990: 695).

Institutional relations can insulate organizations from the risks of transformation through a variety of mechanisms. The external legitimacy provided by institutional relations can lower an organization's risk of failure as a result of transformation by increasing the organization's ability to acquire social support for the rationality of undertaking the change, by providing a source of stability during the transition, and by allowing the organization to demonstrate its continued conformity to social expectations during the transition. The more specific resources provided by institutional linkages can be used to prevent a reduction in reliability following organizational transformation (by maintaining both old and new ways

194/ASQ, June 1991




of doing things during the period of transition, for example). Extra resources can also sustain the organization through short-term deprivations associated with undertaking the change (Miner, Amburgey, and Stearns, 1990). We therefore hypothesize: Hypothesis 7: Institutional linkages will significantly reduce the risk of failure associated with transformation.

METHOD

Data

The sample included the 1,028 child care service organizations (CCSOs) that were licensed by the Ontario Ministry of Community and Social Services (MCSS) to operate in Metro- politan Toronto, Canada during the period from January 1971 to December 1987. We used two sources to compile life histories for CCSOs. The Community Information Center of Metropolitan Toronto's annual Directory of Day Cares and Nursery Schools in Metropolitan Toronto, which began publi- cation in 1971, provided detailed information on all CCSOs in Metropolitan Toronto. The MCSS maintains annual licensing records of all CCSOs in Ontario, starting January 1979, in its Day Nurseries Information System. These archives provided additional information on CCSOs and a cross reference to the Directory.

Since the establishment of the Day Nurseries Act (DNA) in 1946, CCSOs operating in Ontario have been required to obtain an annual operating license from the MCSS. Among other things, the minimum standards for licensing include program director and staff qualifications, staff/child ratios, program content, and wide-ranging facility requirements. The DNA distinguishes two types of CCSOs: day care centers and nursery schools. Day cares are licensed to provide full- time (more than six consecutive hours) collective care to five or more children from birth up to and including nine years of age. The first day care center on record in Metropolitan To- ronto was founded in 1892 in recognition of the "plight of widowed and deserted working mothers" (Stapleford, 1976: 1). Today, day cares continue to provide day-long care services for the children of low-income and single-parent families and, increasingly, for dual-income families. In contrast, nurseries are licensed to provide part-time (less than six consecutive hours) educational programs to five or more children aged 31 months up to and including five years. Nurseries provide pre-school-aged children with an enriching educational environment for a few hours each day. The part- time and educational nature of the services provided by nurseries limits their clients to relatively high-income families who value early enrichment experiences for their children but do not require full-time care for them.

As a result of the differences in their services, day cares and nurseries also possess distinct configurations of human and capital assets (Baum, 1989). In part, these differences result from staff and facility requirements specified in the DNA for different ages of children and program length. The staff of these two kinds of CCSOs also tend to differ in their educational backgrounds. Consistent with the educational orienta- -tion of nurseries-, their staff tend to have university degrees

195/ASQ, June 1991



in early childhood or primary-level education or certification in a particular theory or approach to early-childhood education (Montessori and Adlerian, for example). In contrast, the staff at day cares tend to have community college diplomas in child care work or early-childhood education. In recognition of their distinct services, client niches, and configurations of human and capital resources, day cares and nurseries are treated as two populations (McKelvey, 1982). We report separate analyses for each population.

During the 1971-1987 period, 621 day cares and 180 nurseries were founded. For CCSOs founded during the 1979- 1987 period, the date of founding was defined as the year in which the MCSS issued the original operating license to a CCSO. Since CCSOs require this license to begin operations, and over 95 percent of all license applications are approved,' original license approval provides a useful estimate of both the date of founding and the level of CCSO organizing activ- ity. For CCSOs founded during the 1971-1978 period, for which original licensing dates were unavailable, the date of founding was defined as the year in which the CCSO first appeared in the Community Information Center's Directory.2 Of the CCSOs founded during the observation period, 106 day cares and 60 nurseries ceased operations by the end of 1987. A CCSO was defined to have failed on the earliest date of closing reported in the MCSS archives or Directory listings.

At the beginning of 1971, 109 day cares and 118 nurseries already existed in Metropolitan Toronto. The event histories for these CCSOs were thus left-censored, because they were in operation at the time the study began. Thirty-nine of these day cares and 67 of these nurseries failed during the observation period. In order to incorporate as many organizations as possible in the study, we recorded the founding dates of CCSOs existing at the start of 1971. Through telephone interviews and searches of Ontario Incorporation In- dexes and telephone directories, we were able to confirm founding dates for all but two day cares and eight nurseries. Therefore, 10 of the 1,028 CCSOs could not be incorporated in the analysis.3 The final sample included 728 day cares, of which 143 failed, and 290 nurseries, of which 119 failed.


This study investigated two types of linkages between organizations and institutions: linkages to government and linkages to community institutions. Singh, Tucker, and House's (1986) operationalization of legitimation as the listing of a social service agency in a charitable registry has been criticized for lacking generality and for reflecting a post hoc indi- cator of the factors that tend to legitimate organizations (Carroll and Hannan, 1989b). We attempted to minimize these potential problems. Because the predictions about the effects of ties to state and community institutions on organizations' survival prospects are general, the institutions with which linkages are established could be determined, as in any population, by identifying the government agencies that formally regulate the population and the community institutions in the environment whose legitimacy is generally un- questioned (e.g., churches, professions) and who possess

1 96/ASQ, June 1991

I

Personal communication, Michael Nix, Ontario Ministry of Community and Social Services.

2 Of the 496 CCSOs founded during the 1979-1987 period, 27 (5.4 percent) were actually licensed in the year prior to their first Directory appearance. The low error rate is partly due to a seasonal pattern in CCSO foundings: most are founded between June and August. Therefore, first Directory appearance should represent a good proxy for original licensing dates.

3 These 10 CCSOs failed during the observation period. Sample-selection-bias equations (Berk, 1983) indicated that the organizational characteristics and institutional linkages of these CCSOs were not statistically different from failed CCSOs whose founding dates were known. While this suggested that excluding these CCSOs would not significantly bias estimates obtained from substantive models (Heckman, 1979), it is often not possible to confidently predict the consequences of sample-selection bias (Berk, 1983). In this study, this is especially true for the age-related hypothesis, since the ages of the 10 excluded CCSOs could not be used to inform the selection-bias equations.




the capacity to enter into relations with population members. For CCSOs, we studied linkages with the government regu- lating agency and with community institutions with which the CCSOs had site-sharing arrangements.

Purchase of service agreements (POSAs). A purchase of service agreement links a CCSO to the Municipality of Met- ropolitan Toronto Children's Services Division (CSD). Through these linkages, the CSD provides subsidized child care for the children of city residents who qualify for financial assistance. The CSD is only authorized to enter into POSAs with day cares to provide full-time child care and enable assisted parents to maintain full-time employment. In order to qualify for a POSA, a day care must have a current, unconditional license and meet additional rigorous and detailed operating criteria prescribed by the CSD. The CSD monitors day cares with POSAs through unannounced, full-day, on-site inspec- tions up to three times each year. Day cares with POSAs are eligible to enroll children whose parents receive the assistance of the CSD. Parents receiving CSD assistance are free to purchase services from any day care with a POSA.

During the 1986-1987 period, for which aggregate data are available from the CSD, the average day care with a POSA obtained approximately 62 percent of its revenues from subsidized fees. This average was approximately 57 percent for nonprofit centers and 75 percent for for-profit centers, a difference that CSD officials suggest has persisted historically as the result of a disproportionate number of for-profit day care centers operating in low-income areas. We were unable to obtain detailed information on the income that individual centers derived from subsidized fees and, therefore, were unable to distinguish empirically the resource and institutional effects of POSAs. While this does not preclude a test of the hypotheses of this study, we provide descriptive evidence that POSAs are not established solely for economic benefit.

First, in addition to providing access to subsidized clients, a link to the CSD provides external legitimacy for day cares in several ways. The CSD refers all parents (subsidized and full-fee) to day cares with POSAs. Legitimacy is further enhanced by the public's belief that because day cares with POSAs must satisfy stringent requirements, these day cares will provide more reliable, higher quality care. The CSD ac- tively promotes the idea that centers with POSAs offer the highest possible quality care to the general public. Even though assisted parents are referred to day cares with POSAs in their local communities, centers with POSAs in- variably display evidence of this linkage with the CSD promi- nently on their premises and describe this affiliation in promotional materials. In the child care sector, external legitimation in the form of referrals, endorsements, and accredita- tion that raise organizational status is critical, since potential clients frequently rely on such indirect social indicators when evaluating a day care center.

Second, the CSD places strict limits on the fees paid to day cares for services to the children it assists. Day cares cannot receive more than their regular full fee and frequently receive a lower amount for these services. Therefore, POSAs

197/ASQ, June 1991



are often economically disadvantageous from the perspective of revenue generation. In addition, POSAs do not guar- antee a stable flow of resources. POSAs do not entail the CSD reserving or purchasing a predetermined number of spaces for a specified period of time. Rather, as described above, parents assisted by the CSD are free to purchase services for their children from any day care with a POSA. Moreover, the demand for child care has consistently ex- ceeded the supply of spaces available in Metropolitan Toron- to. In 1986, there were an estimated 90,000 children in the metropolitan area whose parents would choose licensed day care if it were available (Metropolitan Toronto Day Care Plan- ning Task Force, 1986), but in 1987 there were slightly fewer than 27,500 licensed spaces in the municipality. Therefore, access to subsidized fees does not necessarily provide a strong incentive to day cares to establish these linkages. Consequently, the establishment of these linkages is not exclusively driven by economic or resource consider- ations.

Site-sharing arrangements (SSAs). Another institutional relation that confers legitimacy on CCSOs is permission to operate within the physical facilities of a well-established community institution. CCSOs may operate on their own independent premises or in space leased from or provided by community-based, educational and social-service-oriented organizations, including community centers, public schools, and churches. SSAs provide CCSOs with enhanced legitimacy as a result of the visible association with legitimated institutions (Wiewel and Hunter, 1985). Since CCSO technologies are ambiguous and difficult to scrutinize on a day-today basis, parents are typically forced to rely on more generalized indicators of the legitimacy of child care services. CCSOs connected to institutions that evoke values of compassionate or responsible care, such as churches, well- known social service agencies, community centers, and public schools, reinforce parents' perceptions that these particular CCSOs are legitimate and reliable providers of high-quality care.

In addition to the legitimacy that SSAs confer, CCSOs may receive direct financial support from the host institution, avoid costs associated with site maintenance, and, additionally, when operating space is provided by the host, secure a substantial reduction in overhead costs. CCSOs may also gain relatively exclusive access to demand for services from the potential client population of the host institution. How- ever, the excess demand for child care services in the metropolitan area, described above, suggests that gaining access to the clientele associated with the host organization is likely not the primary rationale for the establishment of site-sharing relations.

We examined empirically the possibility that the effects of SSAs were exclusively resource-based. Using the MCSS archives, we were able to determine that, between 1979 and 1987, 38 percent of day cares and 29 percent of nurseries with SSAs were operated by their hosts. To determine whether the resource advantages of CCSOs operated by their host institutions provided a distinct survival advantage,

198/ASQ, June 1991




we estimated a model that examined the relative mortality rates of CCSOs operated by their SSA hosts and CCSOs operated independently of their SSA hosts. The results for both day cares and nurseries indicate that the mortality rates of CCSOs with these two types of SSA linkages were not significantly different. This strongly suggests that the effects of SSAs are not exclusively resource-based.

Table 1 gives the number of POSAs and SSAs established by day cares and nurseries (by profit orientation) in each observation year. POSAs and SSAs were defined to start in the year they were first reported in the MCSS archives or Com- munity Information Center Directory. Over 95 percent of day cares that established POSAs did so in their first year. While on several occasions POSAs have been revoked, the CSD prefers to help day cares improve the quality of the care they provide rather than disrupt their clients. In the few cases in which the CSD actually terminated POSAs, the centers involved were on the verge of failing (and closed shortly after the POSA's termination) and were not good prospects for "rehabilitation".4 Our data indicate that all SSAs were established at the time of founding and that no CCSOs broke an SSA by moving location.

Table 1

Number of CCSOs with Institutional Linkages*

For-profit Nonprofit For-profit Nonprofit day care day care nursery nursery

Year N SSA POSA Both N SSA POSA Both N SSA N SSA

1971 62 5 29 7 47 2 19 4 35 16 82 53 1972 69 2 41 1 1 52 0 27 7 36 16 83 50 1973 76 1 47 14 65 0 34 8 33 16 85 50 1974 87 0 51 19 88 3 39 10 35 18 81 47 1975 103 5 61 18 124 12 43 34 34 16 89 52 1976 108 9 64 19 134 13 47 42 36 18 86 50 1977 114 12 64 18 142 1 1 55 42 33 17 80 50 1978 126 14 66 21 158 15 62 51 37 24 78 50 1979 139 17 70 24 178 19 70 65 43 29 73 49 1980 140 16 69 25 193 22 64 86 39 25 77 55 1981 150 21 68 27 226 35 65 104 41 28 87 66 1982 151 25 67 27 252 39 63 116 43 31 92 72 1983 153 25 66 29 263 46 59 126 42 32 105 84 1984 165 32 69 29 283 57 63 132 47 37 114 92 1985 178 35 74 31 319 67 64 157 54 43 119 97 1986 189 44 78 35 362 64 75 193 55 41 124 101 1987 190 42 78 35 397 67 91 208 51 38 122 100

* N is the number of CCSOs of the indicated type; SSA is the number of CCSOs that only had SSAs; POSA is the number of CCSOs that only had POSAs; Both is the number of CCSOs that had both SSAs and POSAs.

To test hypothesis 1, dummy variables were created for POSA and SSA linkages. The POSA linkage variable was set equal to 1 in each year a day care had a POSA and 0 otherwise. The SSA linkage variable was set equal to 1 for CCSOs with SSAs and 0 otherwise.

Population Density

In Hannan and Freeman's (1988a, 1988b, 1989) density-dependence model, organizational mortality rates vary according to the number or density of organizations in a population.

199/ASQ, June 1991

4

Personal communication, John Mitchell, Program Supervisor, Municipality of Met- ropolitan Toronto, Children's Services Di- vision.



If an increase in population density lowers mortality, this indicates mutualism, and organizations improve one another's survival chances. However, if an increase in population density increases mortality, this indicates competition. In a useful extension of this model, density has been disaggregated to examine whether specific theoretically discerned types of organizations are competitively or mutualistically interrelated (Barnett and Carroll, 1987; Hannan and Freeman, 1988b; Barnett, 1990). For example, Barnett (1990) disaggregated the density of telephone companies in order to model competition and mutualism among and between technologically differentiated firms. We use a similar approach. The densities of day cares and nurseries were calculated separately. We examined for interdependence both among and between day cares and nurseries. If increases in day care or nursery density increased mortality rates, then there is evidence of competition. Conversely, if mortality rates declined as the density of day cares or nurseries increased, then there is evidence of mutualism.

Day care and nursery densities were defined as the number of each type of CCSO at the start of each observation year. We controlled for the nonmonotonic relationship between density and failure rates proposed by Hannan and Freeman (1988a, 1988b, 1989) by including density-squared terms (di- vided by 1000 for rescaling) in the models.

Organizational Characteristics

Organizational age and size. Organizational age was defined as the number of years since a CCSO was founded. Organizational size was defined as the maximum capacity specified in a CCSO's annual operating license. As a result of the DNA, licensed capacity is highly correlated with many aspects of organizational size (e.g., enrollment, number of qualified and unqualified program staff, and size of physical facilities, playground, and equipment inventory).

Organizational strategy. The generalism of CCSO strategies was measured by the number of age ranges served by CCSOs. Four age ranges are defined in the DNA: infants, birth to 18 months; toddlers, 19 to 30 months; preschool, 31 months to 5 years; and school-aged, 6 to 9 years. A CCSO's license specifies the particular age range(s) that it may enroll. To obtain a license to serve a given number of children in a particular age range, a CCSO is required to have a unique configuration of staff, program, equipment, and facilities geared to the developmental needs of children. Addi- tionally, CCSOs licensed to serve multiple age ranges are required to allocate these configurations exclusively to the care of children in the specified age group. Therefore, CCSOs have separate and unique configurations of human and material resources for each age range they are licensed to serve.

Thus, in addition to differences in the breadth and complexity of environmental domains, several organizational differences are associated with the number of age ranges a CCSO is licensed to serve. Compared to CCSOs licensed to serve multiple age ranges, those licensed to serve a single age range require few talents, skills, and resources to create and maintain them, face limited internal differentiation, and

200/ASQ, June 1991




have simple structures. Generalist CCSOs are also required to commit to human and material resource allocations that may result in excess capacity in one age range and excess demand in another. Consequently, more generalized CCSOs face higher costs in maintaining excess capacity and must be cautious in allocating slack resources.

Importantly, as noted above, nursery licenses are only conferred on CCSOs offering half-day educational programs to pre-school-aged children (31 months to five years). No such restriction applies to day cares. Consequently, a specialized strategy is imposed on nurseries, while day cares can pursue specialized or more generalized strategies. For day cares, generalism was set equal to the number of age ranges a day care was licensed to serve in each year of its existence. A separate analysis showed that this measure of generalism does not spuriously capture the effects of operating in specific combinations of age ranges.

Profit orientation and the external legitimacy of institutional linkages. To estimate the effect of profit orientation on CCSO mortality, we created a dummy variable that was set equal to 1 for nonprofit CCSOs and 0 for profit-oriented CCSOs. In the child care sector, profit orientation is important, because influential institutional constituents and the public in general have been increasingly opposed to for-profit child care in Metropolitan Toronto and elsewhere in Canada. They contend that nonprofit CCSOs are social service organizations that pursue the laudable goal of providing a needed service without regard to profitability, while for-profit CCSOs are businesses in pursuit of profits at the expense of their employees and the children they serve. Those in the institutional environment increasingly perceive that for-profit CCSOs provide poorer quality care because the lower wages they offer fail to attract high quality, experienced care-givers and generate higher turnover rates. For-profit CCSOs have also been criticized for providing only the bare minimum in terms of licensing requirements in their attempts to reduce operating costs and increase profitability.

These challenges to the legitimacy of for-profit CCSOs have achieved high public visibility and increasing political acceptance. Indicators of the social perception that for-profit child care is less acceptable are reflected in a 1986 not-for-profit advocacy group slogan, "Kids Not for Profit," newspaper headlines such as "100% Profit Possible With Help of Low Pay" (Calgary Herald, 1985), and, more dramatically, in legislative changes in certain parts of Canada now banning for- profit care. Even in Ontario, the only province in Canada to purchase child care from for-profit organizations, a municipal government task force studying child care services in Metro- politan Toronto concluded the following:

The requirement to meet Metro operating criteria and still generate a profit means that commercial centers must spend less on the provision of care than comparable Metro not-for-profit organizations.... Ultimately, the decision as to what role, if any, commercial operations are to play within the child care system will be made at the political level within senior governments. In the meantime, however, the services provided through these operations are needed in Metropolitan Toronto, and attention should be focused

201 /ASQ, June 1991



on measures to ensure that the quality of their services meets Metro's Operating Criteria. (Metropolitan Toronto Day Care Planning Task Force, 1986: 10)

The continued use of POSAs with for-profit day cares has been defended on the basis of a shortage of day care services in the Metropolitan Toronto area. However, the decline in the proportion of for-profit day care centers with POSAs and the increase in the proportion of nonprofit centers with POSAs (see Table 1) suggest that while, in theory, any day care should have equal access to the establishment of a POSA, in practice, there may be an increasing bias toward nonprofit centers at the CSD.5 The lower proportion of for- profit CCSOs with SSAs (see Table 1) may also reflect these public perceptions. Additional evidence of the influence of growing societal opposition to for-profit day care may be reflected, in particular, in the Ontario government's recent (June 1988) implementation of a salary-grant program that provides financial assistance to for-profit day cares at one- half the rate provided to equivalent nonprofit centers.

Because those in the institutional environment judge POSAs with for-profit day cares as increasingly illegitimate and in- compatible with institutionalized definitions of appropriate and acceptable day care provision, we expected that POSAs with profit-oriented day cares would be less legitimating to the organization and, therefore, less capable of contributing to their likelihood of survival. Similarly, SSAs were expected to be less effective in reducing the mortality rates of for-profit than nonprofit CCSOs as a consequence of the institutionally perceived illegitimacy of permitting profit- driven CCSOs to attach themselves to nonprofit, social service, and community-oriented institutions. Accordingly, these negative assessments were expected to reduce the legitimacy of these relationships and, hence, their effectiveness in reducing the mortality rate of for-profit CCSOs. Therefore, to test hypothesis 6, which predicts that the external legitimacy of institutional linkages will influence their effectiveness in reducing the risk of mortality, we examined the moderating influence of profit orientation on the relationship between POSA and SSA linkages and CCSO mortality.

Left-censoring. In order to examine if the left-censored CCSOs in the data set had systematically different mortality rates as a result of having survived an earlier selection process, a dummy variable was created, coded 1 for CCSOs founded prior to 1971 and 0 for CCSOs founded during the observation period. Descriptive information on this and the other measures is presented in the Appendix.

Organizational Transformation: Age-Range Entry and Exit

To change the age range(s) it can serve, a day care must submit to reinspection by provincial authorities and obtain a new license. As described above, entering a new age range requires a day care to make substantial investments in capital and human resources to meet the licensing requirements. In addition, entering a new age range requires day cares to support a more diverse, complex, and internally differentiated configuration of human and material resources. Entering a new age range also requires day cares to deal with a

202/ASQ, June 1991

5 Personal communication, Angela Cox and Cheryl Bethune-Sutherland, Program Su- pervisors, Municipality of Metropolitan Toronto, Children's Services Division.




broader and more complex environment and to face important resource-allocation problems. By comparison, dropping an age range frees resources, reduces the complexity of managerial problems, and may serve as a short-term cost- reduction measure for day cares unable to support a more diversified strategy. Thus, while having distinct resource implications, both changes are associated with changes in the breadth and complexity of environmental domains, intraorganizational diversity, complexity and differentiation, management of slack resources, and required management and staff competencies. Therefore, age-range entry and exit are proposed to represent fundamental or core changes for day cares (Hannan and Freeman, 1984).

Archival data were collected on all age-range changes each day care made between 1971 and 1987. Two hundred and thirty-nine entries and 119 exits occurred. To examine the average effects of age-range entry and exit on the risk of failure, two dummy variables were constructed. In each year prior to the occurrence of a change, the dummy variables were set equal to 0. After a change (if any), the dummy variables were set equal to 1.

Environmental Measures

To rule out alternative explanations, measures reflecting environmental munificence and demand for services were obtained for each year of the observation period. The first measure was the interest rate for small-business loans. Staff salaries account for approximately 85 percent of the average CCSO's operating costs (Maynard, 1985). Consequently, CCSOs are sensitive to revenue and cost variation and vulnerable to interest rates on short-term loans to cover cash- flow shortages or unexpected costs. The second control measure was the value of the CSD budget in constant dol- lars. This budget amount measures the level of government resources provided to the day care population and affects the ability of the CSD to provide subsidized child care and establish POSAs with day cares. The number of graduates from Ontario community college programs in early childhood education (ECE) was the third control variable. These graduates represent the pool of new labor that meets the staff qualification requirements of the DNA. The number of new graduates affects the ability of CCSOs to recruit qualified staff members, meet staff requirements specified in the DNA, and may affect the salary levels commanded by qualified staff members.

The remaining three control variables included the percentage of Metropolitan Toronto's women participating in the workforce on a full-time basis and the number of children in Metropolitan Toronto from birth to 10 years of age that re- side in (a) dual-parent households and (b) single-parent households. To a large extent, the demand for CCSO services is a function of the nature of the family. During the observation period, the increased need for a dual income to maintain the family economically, the changing role of women in society and their movement into the workforce, and the increased incidence of single parenthood meant that women were increasingly likely to be required to work, to

203/ASQ, June 1991



think in terms of life-long employment, or to be eager to re- turn to work shortly after having a child, to maintain valued careers. In combination, these trends resulted in a shift in demand for child care from part-time nursery and school- aged day care (e.g., mothers remaining out of the workforce to raise their children until compulsory school age or older) to full-time, preschool, toddler, and infant day care. In general, these trends have increased the demand for day cares relative to nurseries.

Model and Analysis

CCSO mortality was modeled using, r(t), the instantaneous rate of mortality. The hazard rate of a CCSO failing is defined as

r(t) = lim [Pr(tt + AtIt)]/At,

where Pr(tt + At/t) is the probability of a failure in the inter- val [tt + At] given the CCSO is still alive at t. The rate was modeled using the following specification:

rjk(t) = exp [aXW(t)I,

where rjk is the instantaneous rate of transition from state j (alive) to state k (failed), X(t) is a vector of covariate values at time t and ajk is a vector of parameter estimates. In this model, transition rates are postulated to be log-linear func- tions of the variables X. In order to incorporate time variation in the covariates, a multiple-spells formulation of this model was used. In the multiple-spells formulation, each CCSO event history is broken down into one-year observations in which the CCSO is at risk of failure. Each of these annual spells is treated as right-censored unless the CCSO fails. RATE (Tuma, 1980) was used to estimate the vector of parameter estimates ajk by the method of maximum likelihood. Following Amburgey, Kelly, and Barnett (1990) and Barnett (1990), we used a single model with interaction-terms approach to contrast the effects of competition and organizational characteristics and transformation on the mortality rate of institutionally linked and detached nursery schools and day cares.

RESULTS

Nursery Schools

Model 1 in Table 2 shows the effects of organizational characteristics on nursery mortality. The significant negative estimates for organizational age and size indicate that the mortality rate declined as age and size increased. The estimate for nonprofit orientation is significant in the expected negative direction, indicating that nonprofit nurseries had a lower mortality rate than for-profit nurseries. The significant positive estimate for the left-censored variable indicates that nurseries founded prior to 1971 had a higher rate of mortality than those founded in the observation period. This is sur- prising, since these nurseries might be expected to have a lower death rate because they were already "survivors."

The density measures are introduced in model 2. The estimates indicate that increases in nursery density served to

204/ASQ, June 1991




Table 2

Models of Nursery Mortality*

Model

Variable 1 2 3 4 5 6 7

Constant -.242 3.533 2.194 1.195 2.448 1.493 1.201 (.541) (3.725) (3.730) (.988) (3.719) (1.002) (1.907)

Organizational age -.042- -.044- -.045- -.045- -.062- -.064- -.067- (.015) (.017) (.017) (.017) (.021) (.022) (.023)

Log size -1.541- - 1.491- -1.204- - 1.125- - 1.663- - 1.534- - 1.469- (.381) (.381) (.363) (.367) (.418) (.415) (.420)

Nonprofit -.336- -.321 - -.244 -.238 -.117 -.094 -.078 (.173) (.173) (.162) (.165) (.169) (.174) (.177)

Left-censored .652- .447 .469- .444 .506- .471 - .499- (.209) (.290) (.282) (.281) (.285) (.284) (.281)

Nursery density -.055- - .059- .018- - .055- .016- .017- (.022) (.027) (.008) (.023) (.008) (.010)

Nursery density2/1000 .211- .226- .212-

(.103) (.111) (.105) Day care density .002- .003- .005- .003- .005- .005-

(.001) (.0014) (.003) (.0015) (.003) (.003)

SSA -1 .139- -1.078- -3.272- -2.842- -2.841 - (.194) (.223) (1.173) (1.179) (1.191)

SSA x Nursery density - .007- - .007- - .007- (.003) (.003) (.003)

SSA x Day care density -.003- -.003- -.003- (.0014) (.0015) (.0016)

SSA x Age .041- .043- .044- (.020) (.022) (.023)

SSA x Log size 1.538- 1.390- 1.392-

(.776) (.795) (.796) SSA x Nonprofit -.479- -.466- -.460-

(.246) (.257) (.251)

Bank rate .087- (.044)

CSD budget/1 00000 .027 (.045)

ECE graduates/1 00 .104 (.207)

Percentage working women .043 (.046)

Dual-parent children/1 00000 -.296-

(.152) Single-parent children/10000 .188

(.127)

x 2 48.91 63.91 91.35 103.16 100.38 112.27 121.93 d.f. 4 7 8 9 11 12 18

*p < .05. * Standard errors are in parentheses; the sample consisted of 2,281 annual spells and 119 failures.

both increase and decrease the nursery mortality rate, consistent with the predictions of the density-dependence model (Hannan and Freeman, 1989), while increases in day care density had a competitive effect and increased the failure rate of nurseries. Notably, introducing the density measures caused the left-censored variable to fall from significance. We used model 2 as a baseline to examine the effects of institutional linkages on nursery mortality.

In model 3, the SSA linkage measure is introduced. In support of hypothesis 1, the estimate for SSA linkages is significant and negative, indicating that nurseries with SSAs had a lower mortality rate than those without them. It is noteworthy that when the SSA linkage measure was introduced,

205/ASQ, June 1991



the effect of nonprofit orientation fell from significance. This suggests that earlier significant estimates were artifacts of nonprofit nurseries being more likely to have SSA linkages (see Table 1).

Terms for the interaction of SSA linkages and nursery and day care densities are introduced in model 4. In model 4, the effect of nursery density is purely competitive. Including a quadratic specification of nursery density does not improve the fit of the model (X2 difference = 0.11, 1 d.f., n.s.). This suggests that the nonmonotonic relationship between nursery density and mortality found in earlier models resulted from the distinct effects of nursery density on the mortality rates of nurseries with and without SSAs. In support of hypothesis 2, with nursery and day care densities controlled, the significant negative estimates for the interactions between the SSA linkage and density measures indicate that as the number of nurseries and day cares increased, the survival advantage of nurseries with SSA linkages increased. These interactive effects are large. The competitive effect of day care density on nursery mortality is reduced more than half for nurseries with SSAs. In addition, while increases in nursery density have a competitive effect on unlinked nurseries, the effect is mutualistic for nurseries with SSAs.

The effects of the interaction of SSA linkages with organizational age, size, and profit orientation are introduced in model 5. The significant positive estimates for the interactions between SSA linkages and organizational age and size indicate that SSA linkages increased the survival chances of young and small nurseries to a greater extent than older and larger nurseries. These interactive effects are also large. While nurseries without SSAs displayed age- and size- dependent patterns of mortality consistent with the liabilities of newness and small size, those with SSA linkages were protected from the survival risks associated with being new and small but gained a smaller survival advantage from aging and size increases. This suggests that the advantages of age and size were rendered at least partly redundant by SSA linkages. As a result, the mortality rates of nurseries with and without SSAs tend to converge with increases in age and size as those without SSAs benefit more from the increases. Thus, in support of hypotheses 3 and 4, young and small nurseries benefitted more from SSA linkages than larger and older ones. To test for possible bias in the estimates for organizational age and its interaction with SSA linkages caused by the left-censored data, we used separate analyses to re- estimate the age effects, using only data for the cohort of nurseries founded after 1971. While the estimates were similar without the left-censored cases, the age effects may still reflect biases introduced by left-censoring.

In support of hypothesis 6, the significant negative estimate for the interaction of nonprofit orientation and SSA linkages indicates that nonprofit nurseries obtained a larger survival advantage from SSAs than for-profit nurseries. Given the insignificance of the main effect of profit orientation, this interaction suggests that only those nonprofit nurseries that established SSA linkages had lower failure rates than for- profit nurseries.

206/ASQ, June 1991




Figure 1. Estimated age effects of SSAs on nursery mortality rates.

0.34 0.32

0.30

0.28 0.26 -

0.24 - 0.22 -No SSA

0.20 - , 0.18 _

0.16 - 0.14 -

0.12 -

0.10 _

0.08 _

0.06 SSA

0.04

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Organizational Age

To this point, the interactive effects of SSA linkages have been modeled separately. To examine the possibility that this leads to specification bias in the estimates, models 4 and 5 were combined and re-estimated in model 6. The estimates for the various interactive effects of SSA linkages are unchanged when modeled together, confirming the support for our hypotheses. Finally, the environmental control measures are introduced in model 7. Only decreases in the bank rate and increases in the number of children in dual-parent households significantly lowered the mortality rate. The prior estimates for the main and interactive effects of SSA linkages are not changed by the introduction of the environmental measures. In Figures 1, 2, and 3 we graphically present the estimated mortality rates for nurseries operating with and without the benefit of SSA linkages. The estimated mortality rates presented in these figures control for the mean values of all measures with significant coefficient estimates in model 7.

Figure 2. Estimated size effects of SSAs on nursery mortality rates.

0.6

0.5

0.4 -

0.3 - \No SSA

0.2-

0.1 L SSA > ~ ~ - _

5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100

Organizational Size (Licensed Capacity)

207/ASQ, June 1991



Figure 3. Estimated competition effects of SSAs on nursery mortality rates.

0.6

0.5 -

0.4-

0.2 -No SSA/

0.1 SSA

110/100 170/115 230/130 290/145 350/160 410/175

Day Care Density/Nursery Density

The combinations of the values for day care and nursery densities in Figure 3 are hypothetical, but in the observed range. We do not present the results for profit orientation, since the effect of its interaction with SSA linkages can be readily derived from Table 2,

Figure 1 contrasts the estimated mortality rates of nurseries with and without SSAs at various ages. Figure 2 compares the estimated mortality rates for nurseries of various sizes that operate with and without SSAs. Finally, Figure 3 compares the estimated mortality rates of nurseries operating with and without SSAs at different levels of competition.

Day Care Centers

We followed a similar strategy in our analysis of day care mortality. The results of the analysis are reported in Table 3. Model 1 shows the effects of organizational characteristics on day care mortality. Organizational size has a significant negative effect on the mortality rate. However, the estimate for organizational age, while negative, is insignificant. Non- profit orientation is significant in the expected negative direction. The significant negative estimate for generalism indicates that day cares licensed to serve larger numbers of age ranges had lower mortality rates. Finally, the left- censored control is insignificant. The age-range change measures are introduced in model 2. Age-range entry and exit have significant and contrasting effects on the day care mortality rate. The negative estimate for age-range entry indicates that day cares that entered a new age range had a lower risk of mortality, while the positive estimate for age-range exit indicates that day cares that discontinued an age range had a higher risk.

Model 3 introduces the day care and nursery density measures. The density measures are insignificant. Including a quadratic specification of day care density does not improve the model's fit (X2 difference = 1.29, 1 d.f., n.s.). One explanation for the independence of day care mortality from day care and nursery densities is that day care did not reach its

208/ASQ, June 1991




Table 3

Models of Day Care Mortality*

Model Variable 1 2 3 4 5 6 7 8 9

Constant .747 .841 1.449" 1.595" 3.91 0 1.380 1.463" 3.703" 1.542 (.530) (.534) (.779) (.761) (1.073) (.941) (.770) (1.212) (1.507)

Organizational age -.011 -.008 -.009 -.014 -.016 -.037" -.013 -.036" -.040" (.014) (.015) (.016) (.016) (.015) (.01 9) (.016) (.020) (.022)

Log size - 2.51 1 - 2.521 - 2.545" - 2.262" - 2.287" - 2.445" - 2.202" - 2.435" - 2.491 (.348) (.349) (.342) (.333) (.334) (.517) (.336) (.509) (.520)

Nonprofit - .489" -.449* - .448" - .364" - .359" .521 - .362" .521 .518" (.180) (.183) (.184) (. 190) (. 190) (.307) (.192) (.309) (.310)

Generalism - .283" - .352" -3370 - .438" - .430" -5340 -.4590 -.4940 - .488" (.142) (.152) (.152) (.156) (.157) (.211) (.158) (.215) (.215)

Left-censored - .010 - .027 - .243 - .319 - .337 - .266 - .321 - .349 - .366 (.252) (.253) (.314) (.313) (.314) (.312) (.316) (.321) (.324)

Age-range entry - .521" -5430 -.5550 - .5510 - .541" - .561" - .564" - .556" (.287) (.287) (.287) (.290) (.288) (.317) (.323) (.320)

Age-range exit .509" .508" .645" .656" .647" .802" .827" .81 2 (.287) (.286) (.286) (.290) (.296) (.476) (.487) (.485)

Day care density - .001 .000 .007" .001 .000 .007" .008" (.002) (.002) (.003) (.003) (.002) (.003) (.003)

Nursery density -.001 -.002 .0 16" -.005 -.004 .017" .0 1 5 (.004) (.005) (.007) (.005) (.005) (.007) (.008)

SSA -1.1 14" - 4.501 -1. 51 8 - 1. 1550 - 2.499" - 2.495" (.202) (1.320) (.564) (.217) (1.380) (1.385)

POSA -.360" - 2.352" -.898" -.371 - 2.128" - 2.126" (.181) (1.160) (.405) (.201) (1.191) (1.193)

SSA x Day care density - .007" - .006" - .006" (.0035) (.0035) (.0036)

POSA x Day care density - .004 - .004" - .004" (.002) (.002) (.002)

SSA x Nursery density -.01 3 -.oil" -.01 2 (.006) (.006) (.007)

POSA x Nursery density - .006* - .006" - .006" (.003) (.003) (.003)

SSA x Organizational age .031 .027" .026" (.012) (.013) (.013)

SSA x Log size .415* .405" .404" (.211) (.215) (.215)

SSA x Generalism .084 .013 .023 (.132) (.153) (.154)

SSA x Nonprofit -i1.418" 1.483" 1.426" (.406) (.418) (.419)

POSA x Organizational age .022 .020 .019 (.018) (.020) (.020)

POSA x Log size .547" .545* .5510* (.257) (.269) (.271)

POSA x Generalism .3174 .3414 .3424 (.181) (.194) (.198)

POSA x Nonprofit -.342 -.344 -.316 (.214) (.228) (.233)

SSA x Age-range entry -.026 -.013 -.051 (.474) (.489) (.493)

SSA x Age-range exit -.61 1 -.631 -.634" (.359) (.366) (.370)

POSA x Age-range entry .508 .531 .517 (.509) (.522) (.525)

POSA x Age-range exit -.71 1 " 7390 -.741

(.374) (.399) (.400)

Bank rate .1 15" (.061)

CSD budget/i100000 - .089" (.037)

ECE graduates/i100 - .070 (.205)

Percentage working women - .0684 (.030)

Dual-parent children/i100000 -.187 (.327)

Single-parent children/i10000 - .243 (.227)

X 2 ~~~~~60.56 69.96 72.42 101.02 113.87 122.01 109.07 141.88 155.72 dV. 5 7 9 ii1 1 5 1 9 1 5 27 33

*p < .05. *Standard errors are in parentheses; the sample consisted of 5,430 annual spells and 143 failures.

carrying capacity during the observation period. The estimated excess demand for licensed day care services, described earlier, supr ts thise +k expaain Anothekrr is, the



and Hannan, 1989a). Below, we examine whether institutionally linked and detached day cares are affected differently by population density as nurseries are. We use model 3 as a baseline to examine the effects of institutional linkages on day care mortality.

The SSA and POSA institutional linkage measures are introduced in model 4. In support of hypothesis 1, the significant negative estimates for both SSA and POSA linkages indicate that institutionally linked day cares had significantly lower mortality rates than those operating without these linkages.

Terms for the interaction of the SSA and POSA linkage and day care and nursery density measures are introduced in model 5. In support of hypothesis 2, the estimate for each interaction term is significant and negative. Notably, when these interactions are included, the estimates for the day care and nursery density measures both become significant and positive (i.e., competitive). This suggests that the insignificance of day care and nursery densities in earlier models resulted from the distinct effects of density on institutionally linked and detached day cares. The effects of the interactions are strong. Relative to day cares operating without institutional linkages, the mortality rate of day cares with SSA linkages is virtually independent of increases in the number of competing day cares and nurseries. Additionally, the effects of increases in day care and nursery densities on day cares with both linkages are mutualistic.

The effects of the interactions of SSA and POSA linkages with organizational age, size, generalism, and profit orientation are introduced in model 6. In support of hypothesis 3, the significant positive estimate for the interaction of SSA linkages with organizational age indicates that these linkages increased the survival chances of young day cares to a greater extent than older day cares. It is noteworthy that the estimate for organizational age is significant and negative in model 6. This suggests that the insignificance of age in prior models may have resulted because the effects of aging were different for day cares with and without SSAs. The interactive effect was powerful. The estimates show that while day cares without SSAs had age-dependent mortality patterns consistent with the liability of newness hypothesis, those with SSAs had initially low mortality rates but gained minimal survival advantages from aging. To check for possible bias in the estimates for organizational age and its interaction with SSA linkages because of the left-censored data, we ran separate analyses to re-estimate the age effects, using only data for the cohort of day cares founded after 1971. While these estimates were similar, the age effects in the left-censored data may still reflect biases.

The significant positive estimates for the interactions of POSA and SSA linkages with size indicate, in support of hypothesis 4, that institutional linkages were significantly more effective in reducing the mortality rates of smaller day cares. While day cares without linkages displayed patterns of mortality consistent with the liability of small size, small day cares with linkages had lower mortality rates and obtained less of a survival advantage from increased size.

210/ASQ, June 1991




In addition, with the effect of generalism controlled, the significant, positive estimate for the interaction of POSA linkages and generalism indicates that, while generalist day cares had significantly lower mortality rates than specialists, POSAs reduced the mortality rates of more specialized day cares to a greater extent. This provides support for hypothesis 5. Finally, the interaction between nonprofit orientation and SSA linkages was significant and negative. With the effect of nonprofit orientation controlled, this indicates, as predicted by hypothesis 6, that nonprofit day cares benefitted more from SSA linkages than for-profit day cares. The re- versed direction of the estimate for nonprofit orientation in model 6 is also noteworthy. This reversal suggests that the estimates for nonprofit orientation in prior models may have resulted spuriously from the different effects of SSA linkages on nonprofit and for-profit day cares. In combination with the negative interaction term estimate, the positive estimate for nonprofit orientation indicates that only nonprofit day cares with SSAs had lower mortality rates than for-profit day cares. The positive effect of nonprofit orientation weak- ened but did not eliminate the extra advantage conferred by SSAs on nonprofit day cares.

The final hypothesis of this study, which predicts that institutional linkages provide protection from the risk of failure associated with organizational transformation, is examined in model 7. The interactions between POSA and SSA institutional linkages and the age-range exit measure are significant and negative. However, the interactions with age-range entry are insignificant, and model 7 only provides a marginal im- provement over model 4 (X2 difference = 8.05, 4 d.f., p < .10). In support of hypothesis 7, the significant negative interactions of POSA and SSA linkages and age-range exit indicate that institutionally linked day cares were protected from the risk of mortality associated with having discontinued an age range. Notably, among day cares with both linkages, the mean effect of having dropped an age range was a lower mortality rate.

Figure 4. Estimated age effects of SSAs on day care mortality rates.

0.26

0.24

0.22-

0.20-

0.18- No SSA

0.16_

0.14-_

0.12__

0.10

0.08

0.06

0.04_

SSA 0.02 S

1 4 7 10 13 16 19

Organizational Age

21 1/ASQ, June 1991



Figure 5. Estimated size effects of SSAs and POSAs on day care mortality rates.

0.26

0.24 -

0.22

0.20

0.18

0.16

0.14

< 0.12

0.10 \ \POSA

0.08 \ No Linkage

0.04 SSA h^* ..

0.02_ **-_

5 20 35 50 65 80 95

Organizational Size (Licensed Capacity)

To examine the possibility that the foregoing estimates con- tain specification biases as a result of being modeled separately, models 5, 6, and 7 are combined and re-estimated in model 8. The coefficient estimates for the various interactive effects of POSA and SSA linkages are unchanged when combined in model 8, confirming support for the hypotheses of this study. Finally, to rule out alternative explanations for the prior results, the environmental measures are introduced in model 9. Decreases in the bank rate, increases in the constant-dollar value of the CSD budget, and increases in the percentage of women in the workforce significantly lowered the day care mortality rate. The earlier estimates for the main and interactive effects of POSA and SSA linkages are unchanged after the environmental measures are introduced in model 9.

Figure 6. Estimated competition effects of SSAs and POSAs on day care mortality rates.

0.6

0.5-

0.4-

0.1 No Linkage

0.2 -

o- == t a-t t---t__r---lSSA_-r----r l-l

110/100 170/1 15 230/130 290/145 350/160 410/175

Day Care Density/Nursery Density

21 2/ASQ, June 1991




In Figures 4, 5, and 6 we graphically present the estimates of mortality rates for day cares operating with and without the benefits of institutional linkages. The estimated mortality rates presented in these figures control for the mean values of all measures with significant coefficient estimates in model 9. The combinations of the values for day care and nursery densities in Figure 6 are hypothetical, but in the observed range. We do not present the results for generalism, profit orientation, or age-range exit, since the effects of their interactions with institutional linkages can be readily derived from Table 3.

Figure 4 shows the estimated age effects. Figure 5 shows the estimated size effects. Finally, Figure 6 shows the estimated effects of competition.

DISCUSSION

Explanations for the survival of organizations are central to both institutional and population ecology theories of organizations. This study was prompted by the assumption that we may learn more about the conditions under which organizations survive or fail from an investigation of the convergent contributions of these two theories than from the application of either theory in isolation. Institutional theorists have done little empirical work on the effect of institutional relations on organizational survival and mortality, despite the tenacity of the theory's basic assumption that institutional relations enhance an organization's survival chances. Population ecologists have neglected to study the effect of direct interorganizational linkages between organizations and institutions on organizational failure, despite the theory's recognition that legitimacy, institutionalization, and intrapopulation relations are all important to the mortality rates of organizations. This study attempted to address these gaps in three ways: first, by establishing some common ground or theoretical consistency between the two approaches for predict- ing organizational failure (the first hypothesis of this study); second, by examining the convergent or interactive effects of institutional and ecological factors on differential failure rates in a population (hypotheses 2 to 6); and, finally, by ex- ploring the implications of institutional linkages for population dynamics (hypothesis 7).

The results of this research suggest that institutional relations play a very significant role in reducing the likelihood of organizational mortality. CCSOs with institutional linkages exhibited a distinct survival advantage over competing organizations without the benefit of these linkages. This advantage also increased significantly with the density of competitors. These results are consistent with the predictions of institutional theory, which suggests that institutional attachments confer a variety of survival advantages on organizations, such as increased stability, social support, legitimacy, access to resources, and invulnerability to questioning (Meyer and Rowan, 1977, 1983; DiMaggio and Powell, 1983; Meyer, Scott, and Deal, 1983; DiMaggio, 1988; Oliver, 1991). This study is 'among the first to substantiate the theoretical claim that institutional attachments enhance the likelihood of survival.

21 3/ASQ, June 1991



Overall, this study's results suggest strongly the necessity for further investigation of organizational embeddedness in institutional fields and its impact on the likelihood of organizational failure. Especially in highly institutionalized sectors, the institutional environment may prescribe the environmental selection criteria for judging whether an organization or entire population is worthy of continued survival. When these criteria define and enforce the meaning of organizational effectiveness and legitimacy, then external validation may be as important as competition in determining the differential survival of organizations and organizational forms.

It was also our intention in this paper to determine when institutional linkages might be most effective in reducing mortality rates. We proposed that the effectiveness of institutional linkages in contributing to survival prospects would vary significantly, depending on the age, size, and strategy of organizations. Results showed that the beneficial effects of institutional relations do vary significantly and that institutional relations may alter the basic causal relationships between these characteristics and mortality that have been proposed by population ecologists.

In this study, young organizations that confronted a liability of newness were shown to benefit to a significantly greater extent from institutional linkages than older organizations. This suggests that the liability of newness is not necessarily invariant across all population members and that recent entrants into a population do not experience inevitable and in- tractable difficulties in obtaining legitimacy from their institutional environment. Young organizations may be capable of obtaining early legitimacy and access to resources through the formation of institutional attachments, and these stable relations with important external constituents may succeed in sheltering young organizations from the risks of youth and inexperience. In a similar way, the establishment of institutional linkages was also shown to diminish the liability of small size.

The study's findings also suggest the need for more research on the role of institutional linkages in moderating the differential failure rates of specialists and generalists. POSA institutional linkages were significantly more helpful to specialists than generalists in reducing the likelihood of mortality. It may be that some highly institutionalized environments tend to become populated by predominantly specialist organizations over time and that specialists should seek out institutionalized contexts with extensive opportunities for the establishment of institutional relationships.

We also proposed that both the attributes and the relations of organizations are the target of external pressures toward normative conformity with the institutional environment (Scott, 1987b; Oliver, 1988). Relationships will be viewed more favorably to the extent that they are perceived to be consistent with the normative expectations imposed on these relationships. This study found support for the hypothesis that legitimated linkages isomorphic with institutional beliefs about the appropriate provision of child care (i.e., nonprofit orientation) reduce mortality rates more than noniso-

214/ASQ, June 1991




morphic linkages. This implies that network ties are more likely to insulate organizations from failure when these ties have been endorsed by the wider institutional environment. It also suggests that environmental selection pressures may be exerted not only on organizations but on the institutional linkages between organizations as well. To date, ecological theory has focused exclusively on the former. This research showed that the institutional context of linkage formation plays an important role in determining the external legitimacy of these linkages and their ability to contribute to the organization's success.

Finally, this research investigated the possibility that institutional linkages moderate population dynamics by altering the relationship between organizational transformation and failure (Miner, Amburgey, and Stearns, 1990). Our analysis showed that institutional linkages significantly reduce or even reverse the risk of failure confronted by day cares that discontinue the service of an age range. This suggests that the population-level result of combined transformation and selection processes may not be the simple aggregate of each process separately.

This empirical research is among the first to examine the influence of linkages between organizations and institutions on organizational failure. While this study has suggested that the convergent contributions of ecological and institutional theories may shed light on the dynamics of organizational populations and differential mortality among competing organizations, our intention has not been to overestimate the commonalities between these two theories. Rather, this study has attempted to demonstrate that investigation of the consistencies and interactions between these theories may provide new insights into the causes of organizational failure that would be overlooked by the application of either theory alone. Given the potential for both institutional and competitive processes to coexist in shaping organizational destinies, further rapprochement between institutional and ecological perspectives seems warranted.

REFERENCES

Aiken, Michael, and Jerald Hage 1968 "Organizational interdepen-

dence and intraorganizational structure." American Sociolog- ical Review, 33: 912-931.

Aldrich, Howard, and Ellen R. Auster 1986 "Even dwarfs started small:

Liabilities of age and size and their strategic implications." In Barry M. Staw and Larry L. Cummings (eds.), Research in Organizational Behavior, 8: 165-198. Greenwich, CT: JAI Press.

Amburgey, Terry L., Dawn Kelly, and William P. Barnett 1990 "Resetting the clock: The dy-

namics of organizational change and failure." Academy of Management Best Papers Proceedings: 160-164. San Francisco: Academy of Man- agement.

Barnett, William P. 1990 "The organizational ecology of

a technological system." Ad- ministrative Science Quarterly, 35: 31-60.

Barnett, William P., and Glenn R. Carroll 1987 "Competition and mutualism

among early telephone companies." Administrative Science Quarterly, 32: 400- 421.

Baum, Joel A. C. 1989 "A population perspective on

organizations: A study of diversity and transformation in child care service organizations." Unpublished Ph.D. dissertation, University of Toronto, Faculty of Man- agement Studies.

1990 "Adaptation and selection in organizational populations." Unpublished manuscript, Stern School of Business, New York University.

Baum, Joel A. C., and Robert J. House 1990 "On the maturation and aging

of organizational populations." In Jitendra V. Singh (ed.), Or- ganizational Evolution: New Directions: 127-142. Newbury Park, CA: Sage.

215/ASQ, June 1991



Baum, Joel A. C., and Christine Oliver 1990 "Field structuration and the

dynamics of organizational populations." Unpublished manuscript, Stern School of Business, New York Univer- sity.

Berk, Richard A. 1983 "An introduction to sample

selection bias in sociological data." American Sociological Review, 48: 386-398.

Bourgeois, L. J. 1984 "Strategic management and

determinism." Academy of Management Review, 9: 586- 596.

Calgary Herald 1985 " 1 00% profit possible with

help of low pay." 20 Novem- ber: A14.

Carroll, Glenn R. 1983 "A stochastic model of organi-

zational mortality: Review and reanalysis." Social Sciences Research, 12: 303-329.

1984 "Dynamics of publisher suc- cession in newspaper organizations." Administrative Science Quarterly, 29: 93- 113.

Carroll, Glenn R., and Jacques Delacroix 1982 "Organizational mortality in

the newspaper industries of Argentina and Ireland: An ecological approach." Administra- tive Science Quarterly, 27: 169-1 98.

Carroll, Glenn R., Jacques Delacroix, and Jerry Goodstein 1988 "The political environments of

organizations: An ecological view." In Barry M. Staw and L. L. Cummings (eds.), Re- search in Organizational Be- havior, 10: 359-392. Greenwich, CT: JAI Press.

Carroll, Glenn R., and Michael T. Hannan 1989a "Density dependence in the

evolution of populations of newspaper organizations." American Sociological Re- view, 54: 524-541.

1989b "On using institutional theory in studying organizational populations." American So- ciological Review, 54: 545- 548.

Carroll, Glenn R., and Y. Paul Huo 1988 "Losing by winning: The para-

dox of electoral success by organized labor parties in the Knights of Labor era." In Glenn R. Carroll (ed.), Ecologi- cal Models of Organizations: 175-193. Cambridge, MA: Ballinger.

Child, John 1972 "Organization structure, envi-

ronment and performance: The role of strategic choice." Sociology, 6: 1-22.

Delacroix, Jacques, Anand Swaminathan, and Michael E. Solt 1989 "Density dependence versus

population dynamics: An ecological study of failings in the California wine industry." American Sociological Review, 54: 245-262.

DiMaggio, Paul 1988 "Interest and agency in insti-

tutional theory." In Lynne Zucker (ed.), Institutional Pat- terns and Organizations: Cul- ture and Environment: 3-21. Cambridge, MA: Ballinger.

DiMaggio, Paul J., and Walter W. Powell 1983 "The iron cage revisited: Insti-

tutional isomorphism and collective rationality in organizational fields." Ameri- can Sociological Review, 48: 147-1 60.

Fombrun, Charles J. 1988 "Crafting an institutionally in-

formed ecology of organizations." In Glenn R. Carroll (ed.), Ecological Mod- els of Organizations: 223-239. Cambridge, MA: Ballinger.

Freeman, John H., Glenn R. Carroll, and Michael T. Hannan 1983 "The liability of newness: Age

dependence in organizational death rates." American Socio- logical Review, 48: 692-710.

Freeman, John H., and Michael T. Hannan 1983 "Niche width and the dynam-

ics of organizational populations." American Jour- nal of Sociology, 88: 1116- 1145.

1987 "The ecology of restaurants revisited." American Journal of Sociology, 92: 1214-1220.

1989 "Setting the record straight on organizational ecology: Rebut- tal to Young." American Jour- nal of Sociology, 95: 425-438.

Galaskiewicz, Joseph 1985 "Interorganizational relations."

Annual Review of Sociology, 11: 281-304.

Hannan, Michael T., and John H. Freeman 1977 "The population ecology of

organizations." American Jour- nal of Sociology, 83: 929-984.

1984 "Structural inertia and organizational change." American Sociological Review, 49:149- 164.

1988a "Density dependence in the growth of organizational populations." In Glenn R. Carroll (ed.), Ecological Mod- els of Organizations: 7-32. Cambridge, MA: Ballinger.

1 988b "The ecology of organizational mortality: American labor unions." American Journal of Sociology, 94: 25- 52.

1989 Organizational Ecology. Cam- bridge, MA: Harvard Univer- sity Press.

Haveman, Heather A. 1990 "Between a rock and a hard

place: Organizational change under conditions of fundamental environmental transformation." Unpublished manuscript, Duke University.

Heckman, James J. 1979 "Sample selection bias as a

specification error." Econo- metrica, 45: 153-161.

Kelly, Dawn, and Terry L. Amburgey 1991 "Organizational inertia and

momentum: A dynamic model of strategic change." Acad- emy of Management Journal, vol. 34 (in press).

Maynard, F. B. 1985 The Child Care Crisis. Toron-

to: Viking.

McKelvey, Bill 1982 Organizational Systematics:

Taxonomy, Evolution, Classifi- cation. Berkeley and Los An- geles, CA: University of California Press.

Metropolitan Toronto Day Care Planning Task Force 1986 "Blueprint for childcare ser-

vices: Realistic responses to the need." Toronto: Metropol- itan Toronto Day Care Plan- ning Task Force.

Meyer, John W., and Brian Rowan 1977 "Institutional organizations:

Formal structure as myth and ceremony." American Journal of Sociology, 83: 340-363.

1983 "The structure of educational organizations." In John W. Meyer and W. Richard Scott (eds.), Organizational Environ- ments: Ritual and Rationality: 199-215. Beverly Hills, CA: Sage.

216/ASQ, June 1991




Meyer, John W., and W. Richard Scott 1983 "Centralization and the legiti-

macy problems of local government." In John W. Meyer and W. Richard Scott (eds.), Organizational Environ- ments: Ritual and Rationality: 199-215. Beverly Hills, CA: Sage.

Meyer, John W., W. Richard Scott, and Terrence E. Deal 1983 "Institutional and technical

sources of organizational structure: Explaining the structure of educational organizations." In John W. Meyer and W. Richard Scott (eds.), Organizational Environ- ments: Ritual and Rationality: 45-70. Beverly Hills, CA: Sage.

Miner, Anne S., Terry L. Amburgey, and Timothy Stearns 1990 "Interorganizational linkages

and population dynamics: Buffering and transformational shields." Administrative Sci- ence Quarterly, 35: 689-713.

Oliver, Christine 1988 "The collective strategy

framework: An application to competing predictions of isomorphism." Administrative Science Quarterly, 33: 543- 561.

1990 "Determinants of interorganizational relationships: Integra- tion and future directions." Academy of Management Re- view, 15: 241-265.

1991 "Strategic responses to institutional processes." Academy of Management Review, 16: 145-179.

Pfeffer, Jeffrey, and Gerald R. Salancik 1978 The External Control of Orga-

nizations. New York: Harper and Row.

Powell, Walter W. 1988 "Institutionial effects on orga-

nizational structure and performance." In Lynne Zucker (ed.), Institutional Pat- terns and Organizations: Cul- ture and Environment: 1 1 5- 136. Cambridge, MA: Ballinger.

Provan, Keith G. 1983 "The federation as an interor-

ganizational linkage network." Academy of Management Re- view, 8: 79-89.

Scott, W. Richard 1987a Organizations: Rational, Nat-

ural and Open Systems. En- glewood Cliffs, NJ: Prentice- Hall.

1 987b "The adolescence of institutional theory." Administrative Science Quarterly, 32: 493- 511.

Scott, W. Richard, and John W. Meyer 1983 "The organization of societal

sectors." In John W. Meyer and W. Richard Scott (eds.), Organizational Environments: Ritual and Rationality: 129- 153. Beverly Hills, CA: Sage.

Singh, Jitendra V., David J. Tucker, and Robert J. House 1986 "Organizational legitimacy and

the liability of newness." Ad- ministrative Science Quarterly, 31: 171-193.

Singh, Jitendra V., Robert J. House, and David J. Tucker 1986 "Organizational change and

organizational mortality." Ad- ministrative Science Quarterly, 31: 587-611.

Stapleford, Elsie M. 1976 History of the Day Nurseries

Branch. Toronto: Ontario Min- istry of Community and Social Services.

Stinchcombe, Arthur L. 1965 "Organizations and social

structure." In James G. March (ed.), Handbook of Organiza- tions: 142-193. Chicago: Rand McNally.

1968 Constructing Social Theories. New York: Harcourt, Brace & World.

Tuma, Nancy B. 1980 Invoking Rate, 2d ed. Menlo

Park, CA: SRI International. Turk, Herman 1973 "Comparative urban structure

from an interorganizational perspective." Administrative Science Quarterly, 18: 37-55.

Wholey, Douglas R., and Jack W. Brittain 1989 "Characterizing environmental

variation." Academy of Man- agement Journal, 32: 867- 882.

Wiewel, Wim, and Albert Hunter 1985 "The interorganizational net-

work as a resource: A comparative case study on organizational genesis." Ad- ministrative Science Quarterly, 30: 482-496.

Zucker, Lynne G. 1987a "Institutional theories of

organizations." Annual Re- view of Sociology, 13: 443- 464. Palo Alto, CA: Annual Reviews.

1987b "Normal change or risky business: Institutional effects on the 'hazard' of change in hospital organizations, 1959-79." Journal of Management Studies, 24: 671-701.

1989 "Combining institutional theory and population ecology: No legitimacy, no history." American Sociological Review, 54: 542-545.

APPENDIX: Descriptive Statistics Table A.1

Descriptive Statistics, Nursery Schools*

Variable Mean S.D. 1 2 3 4

1. Age 10.720 9.940 2. Log size 1.515 .256 .290 3. Nonprofitt .725 .132 -.017 4. SSAt .690 .014 .034 .045 5. Left-censoredt .534 .478 .353 .154 -.065

* N = 2281 annual observations; correlation coefficients >.036 are significant at p < .05. t Mean is the proportion of observations for which the variable equals 1.

217/ASQ, June 1991



Table A.2

Descriptive Statistics, Day Care Centers*

Variable Mean S.D. 1 2 3 4 5 6

1. Age 7.696 6.751 - 2. Log size 1.635 .237 .382 3. Nonprofit .597 .491 -.044 -.223 4. Generalism 1.617 .764 .108 .348 -.062 5. SSAt .497 -.171 -.249 .317 -.288 6. POSAt .726 .219 .145 .114 .080 -.012 7. Left-

censoredt .287 .483 .309 - .170 .105 - .273 .179

* N = 5430 annual observations; correlation coefficients >.022 are significant at p < .05. t Mean is the proportion of observations for which the variable equals 1.

218/ASQ, June 1991



institutional linkages and organizational morlity. baum and oliver

Documents

prepotency of institutional

university of toronto

jstor terms

jstor archive

institutional theo rists

collaboratingwith jstor

organizational mortality

institu tional linkages