Martin Ruef

A Multidimensional Model of Organizational Legitimacy: Hospital Survival in Changing Institutional Environments

Using data on 143 hospital organizations, this article examines the antecedents and effects of two forms of organizational legitimacy (managerial and technical) over a 46-year period. Results show that both the managerial and technical forms provide notable improvements in organizational survival chances but that the strength of each effect varies over time depending on the nature of the institutional environment. Variation also appears in the antecedents of legitimacy - for example, the ability of a hospital to secure approval for its managerial practices depends on the correspondence between its mission and the logic of the surrounding institutional environment. The results suggest that a multidimensional model can reveal nuances of organizational legitimacy that are missed by more unitary conceptions.

The Structure of Founding Teams: Homophily, Strong Ties, and Isolation among U.S. Entrepreneurs

In: AMERICAN SOCIOLOGICAL REVIEW, 2003, Vol. 68 (April:195–222) In the following excerpt from Appendix A (page 219 of original article), there were two errors in equation A-2. Two instances of “K” should have been replaced with ellipses ( . . . ). The correct equation is as follows: Provided that the roles included in a particular structural event are events in N occurring with probability p(n1), p(n2), . . . p(nk), the sampling distribution of joint structural events is given by the multinomial formula: r! p(E | r) = | n1 |!| n2 |! . . . | nk |! [p(n1) |n1| p(n2) |n2| . . . p(nk) |nk|], (A-2) where r = |n1| + |n2| + . . . |nk|.

The Emergence of Organizational Forms: A Community Ecology Approach1

This article introduces a new ecological approach to the study of form emergence based on the notion of an organizational community—a bounded set of forms with related identities. Applying the approach to 48 organizational forms in the health care sector, this study suggests that the development of novel forms is affected by the positioning of their identities with respect to existing form identities in the community, by the aggregate density and size of organizations matching those existing identities, and by the amount of attention directed at identity attributes by sector participants. Findings show that the process of form emergence is subject to population‐dependent effects akin to those noted previously for organizational entries within established populations. The aggregate density and size of organizations with similar identities increase the probability of form emergence to a point (cross‐form legitimation), but highly saturated regions of the identity space tend to be uninviting to new forms (cross‐form competition).

Credit and Classification: The Impact of Industry Boundaries in Nineteenth-Century America:

In this article, we examine how issues of multi-category membership (hybridity) were handled during the evolution of one of the first general systems of industrial classification in the United States, the credit rating schema of R. G. Dun and Company. Drawing on a repeated cross-sectional study of credit evaluations during the postbellum period (1870–1900), our empirical analyses suggest that organizational membership in multiple categories need not be problematic when classification systems themselves are emergent or in flux and when organizations avoid rare combinations or identities involving ambiguous components. As Duns schema became institutionalized, boundaries between industries were more clearly defined and boundary violations became subject to increased attention and penalty by credit reporters. Our perspective highlights the utility of an evolutionary perspective and tests its implications for the salience of distinct mechanisms of hybridity.

ASSESSING ORGANIZATIONAL FITNESS ON A DYNAMIC LANDSCAPE: AN EMPIRICAL TEST OF THE RELATIVE INERTIA THESIS

This paper proposes an empirical framework for evaluating the relative structural inertia hypothesis, a central assumption of organizational ecology theories. In stark contrast to the tenets of strategic management, the relative inertia thesis claims that organizations are typically unable to match structural changes to their competitive environments in a timely fashion. The hypothesis is tested for the hospital industry in California during the 1980–90 time frame. Strategic movements in a competition ‘landscape’ are tracked using a variant of the Jaccard similarity coefficient, which has been applied in numerous studies of biological competition. Findings indicate that few hospitals are able to overcome inertial forces in adapting their service portfolios; furthermore, the ability of hospitals to strategically reposition themselves decreases markedly with provider density. Analyses also investigate the relation between organizational attributes (e.g., age, size, mission, and portfolio scope) and adaptability. Implications for both ecological and strategic theory are pursued.

The myth of the risk-tolerant entrepreneur:

Entrepreneurs have long been assumed to be more risk-tolerant than the general population. In this article, we analyze the financial risk propensity of business founders using a unique, representative dataset of nascent entrepreneurs in the United States. We deploy two models of entrepreneurial behavior: a strategic model of risk tolerance, based on investment choices; and a non-strategic model of risk tolerance, based on information bias about business success. For both models, our empirical results consistently show that nascent entrepreneurs are more risk-averse than non-entrepreneurs. To reconcile the financial risk aversion of entrepreneurs with the high risk of financial loss among startups, we suggest that many of the motivations that individuals have for founding business ventures are non-pecuniary in nature.

Community Social Capital and Entrepreneurship

The literature on social capital and entrepreneurship often explores individual benefits of social capital, such as the role of personal networks in promoting self-employment. In this article, we instead examine social capital’s public good aspects, arguing that the benefits of social trust and organization memberships accrue not just to the individual but to the community at large. We test these arguments using individual data from the 2000 Census that have been merged with two community surveys, the Social Capital Benchmark Survey and the General Social Survey. We find that individuals in communities with high levels of social trust are more likely to be self-employed compared to individuals in communities with lower levels of social trust. Additionally, membership in organizations connected to the larger community is associated with higher levels of self-employment, but membership in isolated organizations that lack connections to the larger community is associated with lower levels of self-employment. Further analysis suggests that the entrepreneurship-enhancing effects of community social capital are stronger for whites, native-born residents, and long-term community members than for minorities, immigrants, and recent entrants.

Legacies of American Slavery: Status Attainment among Southern Blacks after Emancipation

This study examines the legacy of American slavery at the individual, intragenerational level by analyzing life-history data from roughly 1,400 ex-slaves and free blacks covering the antebellum and postbellum periods. We test a model of durable inequality that considers the potentially vicious circle created by status persistence across institutional regimes. Our findings suggest that the antebellum regime evidenced partial institutional reproduction in the late nineteenth and early twentieth centuries, owing to the fact that the antebellum distinction of free blacks and slaves had durable status effects long after emancipation, but over time, black status attainment became largely decoupled from the internal hierarchy of slavery. Mediating effects, for example, the Freedmen Bureaus educational interventions and the black diaspora, also served to curtail the reproduction of antebellum status. Implications are pursued with respect to both institutional theory and stratification research.

The Demise of an Organizational Form: Emancipation and Plantation Agriculture in the American South, 1860–18801

This article addresses factors affecting the disappearance of organizational forms, particularly in regard to arguments derived from organizational ecology and the literature on social movements. These perspectives are used to explain the disappearance of the Southern plantation in the decades following the American Civil War. Findings suggest that there is limited support for exogenous explanations of plantation demise, emphasizing damage from the Civil War and population pressures. Ecological dynamics, especially challenges from alternative forms of labor organization and interdependencies with mid‐size farms, play a greater role. Another crucial influence involves the decisions made by laborers in the plantation system with respect to incentive structures and the reconstruction of their social networks. These findings lead to a perspective on organizational forms that brings lower‐level members back in as agents of grass‐roots change and contestation.

Origins of Organizations: The Entrepreneurial Process

This chapter combines insights from organizational theory and the entrepreneurship literature to inform a process-based conception of organizational founding. In contrast to previous discrete-event approaches, the conception argues that founding be viewed as a series of potential entrepreneurial activities – including initiation, resource mobilization, legal establishment, social organization, and operational startup. Drawing on an original data set of 591 entrepreneurs, the study examines the effect of structural, strategic, and environmental contingencies on the relative rates with which different founding activities are pursued. Results demonstrate that social context has a fairly pervasive impact on the occurrence and sequencing of founding processes, with one possible exception being the timing of legal establishment.