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This paper proposes a distance-based characterization of age-related structural inertia as an increasing constraint on the speed of change as organizations age. Our framework regards organizations as points in multidimensional metric spaces of architectures. Organizational change means movement in this space. The speed of change is the ratio of the distance between positions in a space and the time it took for the organization to make the move. We illustrate how our distance-based approach can be used to formulate theories of age-related organizational inertia by using this representation to develop a model for a possible mechanism: age-related cultural resistance to change based on the dynamics of exposure of organizational members to architectural features. Our proposed mechanism is distinct from prevailing explanations and leads to new predictions. We also illustrate the value of our distance-based approach in a reanalysis of Sørensen and Stuart's study of age variations in firms' patenting behavior [Sørensen JB, Stuart TE (2000) Aging, obsolescence, and organizational innovation. Admin. Sci. Quart. 45(1):81–112]. On the basis of patent citations, we construct a space that allows us to characterize the positions of organizations and the speed at which they change. We find that organizational age has a negative effect on the speed of change.

Various patterns of age dependence in hazards of organizational failure have been documented: liabilities of newness, adolescence, and obsolescence. Prior efforts at providing a unified theory that can accommodate these patterns as special cases have not dealt properly with obsolescence. We tackle this problem by proposing a new model that builds on the most recent unification attempt while integrating the core intuition behind obsolescence: organizations have trouble adapting to drifting environments, which leads to declining performance and, in turn, to decreasing viability. In doing so, we develop a comprehensive representational framework to precisely characterize obsolescence. Our perspective builds on recent theory and research that treats categories as constructions by audiences. We characterize environmental drift as changing audience tastes in a multidimensional feature space and organizational inertia as a decreasing ability for producers to move quickly in that space. This combination creates obsolescence with aging. We then integrate this perspective with prior theory to make novel predictions regarding the age dependence in life chances over the life courses of organizations. We also show how the predictions of our theory can be tested empirically by adapting Levinthal's random walk model [Levinthal DA (1991) Random walks and organizational mortality. Admin. Sci. Quart. 36(3):397–420] to incorporate the possibility of organizational obsolescence.

Empirical evidence about the relation between organizational age and failure is mixed, and theoretical explanations are conflicting. We show that a simple model of organizational evolution can explain the main patterns of age dependence and reconcile the apparently conflicting theoretical predictions. In our framework, the predicted pattern of age dependence depends crucially on the quality of organizational performance immediately after founding and its subsequent evolution, which in turn depends on the intensity of competition. In developing our theory, we clarify issues of levels of analysis as well as the relations between organizational fitness, endowment, organizational capital, and the hazard of failure. We show that once organizational learning is considered, founding conditions affect the fate of organizations in ways more complex than previously acknowledged. We illustrate how the predictions of our theory can be tested empirically and evaluate the effect of aging on the mortality hazards of American microbreweries and brewpubs by estimating the parameters of a random walk with time-varying drift. We also make some conjectures about expected patterns in other empirical settings.

This article develops a formal theory of the structural aspects of organizational change. It concentrates on changes in an organization's architecture, depicted as a code system. It models the common process whereby an initial architectural change prompts other changes in the organization, generating a cascade of changes that represents the full reorganization. The main argument ties centrality of the organizational unit initiating a change to the total time that the organization spends reorganizing and to the associated opportunity costs. The central theorem holds that the expected deleterious effect of a change in architecture on the mortality hazard increases with viscosity and the intricacy of the organizational design.

Initial architectural change in organizations often induces other subsequent changes, generating lengthy cascades of changes in subordinate units. This article extends a formal model of cascading organizational change by examining the implications for organizational change of the limited foresight of those who initiate such change about unit interconnections (structural opacity) and the normative restrictiveness imposed on architectural features by organizational culture (cultural asperity). Opacity leads actors to underestimate the lengths of periods of reorganization and the associated costs of change, thereby prompting them unwittingly to undertake changes with adverse consequences. Increased opacity and asperity lengthen the total time that the organization spends reorganizing and the associated opportunity costs; and the expected effect of an architectural change on mortality hazards increases with the intricacy of the organizational design, structural opacity, and the asperity of organizational culture. We illustrate the theory with an interpretation of the 1995 collapse of Baring Brothers Bank.