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).


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