Survival of organizations
Not every organization survives in today’s society. Many organizations fail when they try to start something new. Others fail when they try to compete. These failures can lead to the downfall of our economic. Thus, it is crucial to explore the factors that can increase the survivability of any organization. One of the most common issues in any organization is the lack of resources. Understanding this issue will help increase organizational vitality. In order to understand the factors that lead to the survival of organization, first we have to explore the relationship between the organization and its environment. The organizations’ vitality is density dependent. Glenn R. Carroll and Michael T. Hannan identified two forces that drive the survival rate of any organizations: legitimacy and competition. When the density is low, competition is also low. However, the organization also has low legitimacy which results in low founding rate and high death rate. In contrast, a high organization density means that the organizations’ legitimacy and competition are both high. The high competition leads to low benefit, leading to low founding rates and high death rate. A situation with high founding rate and low death rate happens when the density is at a medium level. This is due to low competition and medium legitimacy.
Carroll and Hannan categorizes legitimacy into two forms. One is that the organization’s structure and routines follow the prevailing institutional rules. Another is that the organization attains a socially taken-for-granted character. The second form has a clear-cut link with density. When a new organizational form appears, it usually lacks constructive legitimacy. This makes it difficult to organize. However, as the form is more widespread, the legitimacy increases, causing the form to be easier organized. Thus, it is easier for a similar organization to form.
Competition can also be divided into two forms, direct and indirect...
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