Inertia and Change in the Early Years: Employment Relations in Young, High Technology Firms

[Excerpt] This paper considers processes of organizational imprinting in a sample of 100 young, high technology companies. It examines the effects of a pair of initial conditions: the founders\u27 models of the employment relation and their business strategies. Our analyses indicate that these two features were well aligned when the firms were founded. However, the alignment has deteriorated over time, due to changes in the distribution of employment models. In particular, the \u27star\u27 model and \u27commitment\u27 model are less stable than the \u27engineering\u27 model and the \u27factory\u27 model. Despite their instability, these two blueprints for the employment relation have strong effects in shaping the early evolution of these firms. In particular, firms that embark with these models have significantly higher rates of replacing the founder chief executive with a non-founder as well as higher rates of completing an initial public stock offering. Some implications of these findings for future studies of imprinting and inertia in organizations are discussed

Engineering Bureaucracy: The Genesis of Formal Policies, Positions, and Structures in High-Technology Firms

[Excerpt] This article examines the impact of organizational founding conditions on several facets of bureaucratization—managerial intensity, the proliferation of specialized managerial and administrative roles, and formalization of employment relations. Analyzing information on a sample of technology start-ups in California\u27s Silicon Valley, we characterize the organizational models or blueprints espoused by founders in creating new enterprises. We find that those models and the social composition of the labor force at the time of founding had enduring effects on growth in managerial intensity (i.e., reliance on managerial and administrative specialists) over time. Our analyses thus provide compelling evidence of path dependence in the evolution of bureaucracy—even in a context in which firms face intense selection pressures—and underscore the importance of the logics of organizing that founders bring to new enterprises. We find less evidence that founding models exert persistent effects on the formalization of employment relations or on the proliferation of specialized senior management titles. Rather, consistent with neo-institutional perspectives on organizations, those superficial facets of bureaucracy appear to be shaped by the need to satisfy external gatekeepers (venture capitalists and the constituents of public corporations), as well as by exigencies of organizational scale, growth, and aging. We discuss some implications of these results for efforts to understand the varieties, determinants, and consequences of bureaucracy

Determinants of Managerial Intensity in the Early Years of Organizations

This paper examines how founding conditions shape subsequent organizational evolution— specifically, the proliferation of management and administrative jobs. Analyzing quantitative and qualitative information on a sample of young technology start-ups in California’s Silicon Valley, we examine the enduring imprint of two aspects of firms’ founding conditions: the employment blueprints espoused by founders in creating new enterprises; and the social capital that existed among key early members of the firm—their social composition and social relations. We find that the initial gender mix in start-ups and the blueprint espoused by the founder influence the extent of managerial intensity that develops over time. In particular, firms whose founders espoused a bureaucratic model from the outset subsequently grew more administratively intense than otherwise-similar companies, particularly companies whose founders had initially championed a “commitment” model. Also, firms with a higher representation of women within the first year subsequently were slower to bureaucratize than otherwise-similar firms with a predominance of males. Our analyses thus provide compelling evidence of path-dependence in the evolution of organizational structures and underscore the importance of the “logics of organizing” that founders bring to new enterprises. Implications of these results for organizational theory and research are discussed

Approaches to the Aggregation Problem

The author describes and analyzes different sorts of problems from aggregation bias, a type of composition errors, that can result when shifting from group-level data to individual-level effects. He develops three approaches, grouping, causal modeling, and specification error approach. The analysis shows that all approaches are satisfactory for simple cases, and the latter two are preferable (although not entirely satisfactory) for cases where ordinary methodological difficulties appear

Models of Change in Quantitative Variables, Part I: Deterministic Models

The author explores methodological issues in developing stochastic models for changes in quantitative variables. The general approach here is to treat observed distributions as reflecting distributions of probabilities of different qualitative states, and to perform the stochastic modeling on the probabilities. The approach treats standard linear structural equation systems as steady state outcomes of continuous time models of change. There is reference to “chapters” so it may have been written for a book. Related publications include Tuma, Hannan, and Groeneveld (1979) and Tuma and Hannan (1984)

The Road Taken: Origins and Evolution of Employment Systems in Emerging Companies

[Excerpt] Drawing on a unique archive of qualitative and quantitative data describing 100 Bay Area high technology firms within their first decade, this paper examines the models of employment relations espoused by company founders and bow those models shaped the evolution of human resource management within their organizations. Information gleaned from interviews suggests that founders and others involved in designing and launching these companies had blueprints for the employment relation that varied along three key dimensions: the primary basis of employee attachment and motivation, the primary means for controlling and coordinating work, and the primary criterion emphasized in selection. Based on combinations of these three dimensions, firms in our sample cluster fall into one of four distinct types, which we label the star, factory, engineering, and commitment models. Multivariate statistical analyses document how the founder\u27s employment model shaped the subsequent adoption and timing of various human resource policies and documents over these companies\u27 early histories, as well as the speed with which the first full-time human resource manager was appointed The findings are strongly suggestive of complementarities and a tendency toward internal consistency among dimensions of human resource management, and of strong path dependence in the evolution of employment systems in organizations. Some implications of these findings for transactions cost perspectives on the employment relationship are discussed

Dynamics of Formal Political Structure: An Event-History Analysis

The authors apply event history analysis to records on 90 countries from 1950-1975 to test hypotheses consistent with world systems and modernization hypotheses. The hypotheses predict factors associated with political change from/to one-party and multi-party governments. Modernization hypotheses predict that changes making a society more modern (that is, more like European societies) increase the chances for multi-party democratic governments. World systems hypotheses predict that governments are more affected by a country’s place in the world economic system than by internal changes. Results here show small effects of modernizing on government form, and event history methods show a complex relationship between GNP per capita and form of government

Methods for Temporal Analysis

The authors review sociological literature describing different perspectives and uses of studies of change in discrete (qualitative) and quantitative outcomes. They show that, contrary to many injunctions, temporal analysis is not always superior to cross-sectional analysis for studying change, particularly for two-wave panel measures. The main factor is whether confounding influences vary more over time than over measured outcomes. Modeling change processes and event history methods use more of the data and provide a better picture of change using temporal data

Estimation in Panel Models: Results in Pooling Cross-Sections and Time Series

The authors describe methodological issues of panel analysis designs; in particular, autocorrelation of errors across waves. They recommend constructing a “pooled” model of data from all waves to deal with design and estimation problems, and present results from a simulation of the behavior of alternate estimators for pooled models

The Causal Approach to Measurement Error in Panel Analysis: Some Further Contingencies

The authors describe and analyze some issues in understanding causality from panel designs. They focus on complications that arise when multivariate panel models are measured with either random or systematic errors. The analysis is illustrated with panel from the U.N. of education and economic data from 96 countries. They conclude that new statistics, to be developed or imported from other disciplines are needed to deal with measurement error in substantive panel data