A genealogical approach to organizational life chances: The parent-progeny transfer among Silicon Valley law firms, 1946-1996

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Citation: Damon J. Phillips (2002) A genealogical approach to organizational life chances: The parent-progeny transfer among Silicon Valley law firms, 1946-1996. Administrative Science Quarterly (RSS)




Tagged: Sociology (RSS) entrepreneurship (RSS), genealogy (RSS), organizational ecology (RSS), organizational capabilities (RSS), organization theory (RSS)


Summary:

Phillips offers a genealogical approach to understanding organizational life chances. Building and speaking to a literature on spinoffs, Phillips looks at the transfer or routines between organizations using a "parent-progeny" metaphor and model. The hypotheses, and the analysis that tests them, argue that organizations will transfer of resources (through a person) will result in decreased life chances for the parent and increased life changes for the child. The results support this basic suggestion but are contingent on the position that the person moving held in the firm being transferred from and on the time since the parenting event. Parents from failing firms and progeny of multiple parents correspond with lower life chances.

The paper attempts to provide a bridge from a more population ecological literature on the consequences of transferring resources between parents and progeny with a literature on the effect of founders affiliations on firm success (e.g., Burton, Sorensen, and Beckman's (2002) Coming from good stock: Career histories and new venture formation).

Phillips offers 7 hypotheses (many have subparts) on the effect on parents and children and on several contingencies:

  • H1a: The greater the parent-progeny transfer (the higher the previous rank of founders), the greater the likelihood of parent failure. (Support)
  • H1b: The parent failure rate due to a parenting event increases with the similarity the parent's and offspring's scope or niche overlap. (Support)
  • H2: The likelihood of parent failure will decrease over time.
  • H3a: The greater the proportion of founding members coming from parent organizations, the lower the likelihood of failure (as compared to de novo organizations). (Support)
  • H3b: An offspring's likelihood of failure is lowest in its earliest years. (Support)
  • H4: The greater the P-P transfer, the the lower the likelihood of progeny failure. (Support)
  • H5: Progeny firms whose founders recently departed from failed parent organizations are more likely to fail. (Support)
  • H6a: The larger the parent, the lower chance of offspring failure. (Support)
  • H6b: Parent size is less advantageous the greater the greater the transfer is (i.e., the higher the previous rank of the founders). (Support)
  • H7a: The older the parent, the lower the chance of offspring failure. (No support)
  • H7b: Parent age is less useful the greater the transfer is. (No support')
  • H8: Progeny with multiple parents have a higher likelihood of failure. (Moderate support)

Empirically, the paper uses the same dataset on Silicon Valley law firms as Phillips and Zuckerman's (2001) Middle-status conformity: Theoretical restatement and empirical demonstration in two markets. He tracks the movements of partners, named partners, and associates in law firms as they move between firms.

Theoretical and practical relevance:

Phillips article has been cited more than 140 times since it was published 8 years ago. Most of these citations have come in the literature on entrepreneurship and on founding teams and spinoffs in particular.