GREVE, HENRICH R.; PHD
STANFORD UNIVERSITY, 1994
SOCIOLOGY, GENERAL (0626); MASS COMMUNICATIONS (0708)
Organizational strategies are abandoned as well as adopted. Received theory
of adoption and
abandonment emphasize different causal factors, with the social context being
more important in theory
of adoption (Rogers, 1981). This dissertation suggests that both abandonment
and adoption are
heterogeneous diffusion processes influenced by contagion among organizations
and tests this by
doing parallel analyses of the diffusion of an adoption event and an abandonment
event. Studies on the
adoption of innovations have yielded (at least) three ideas on the diffusion
process: First, the ability of
the innovation to solve the organization's competitive problems influences the
propensity to adopt.
Second, contagion from socially proximate organizations add to the adoption
risk (Meyer and Rowan,
1977). Finally, organizations have different levels of inertia (Hannan and Freeman,
1984), which
determines their susceptibility to contagion. While these competitive and institutional
forces are
recognized to affect adoption, this dissertation argues that they also influence
abandonment. Contagion
of abandonment occurs because the future performance of current and alternative
strategies is
uncertain, causing decision-makers to examine the actions of other organizations
for clues to the correct
action. This means that contagion from socially proximate organizations operates
along with competition
in determining strategy abandonment. To study these ideas, a sample of radio
stations was taken and
both the diffusion of a new format and the diffusion of abandonment of an old
format were analyzed with
a heterogeneous diffusion model (Strang and Tuma, 1993; Greve, Strang and Tuma,
1994). The
suggestion that contagion of abandonment and adoption occurs through the influence
of reference
group organizations was supported. The effect was particularly strong for abandonment,
and was
moderated by differences in reference group size and organizational inertia.
The role of competition was
evident in the choice of future strategy, but not in abandoning the present.
The findings support
institutional interpretations of organizational change and illustrate how contagion
among organization
facilitates the organizational learning of new practices and the abandonment
of old. Contagion of
adoption and abandonment generate and destroy diversity of strategies, creating
mimetic isomorphism
or polymorphism in the organizational field (DiMaggio and Powell, 1983).
Social
Systems Simulation Group
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