Interorganizational Linkages and Population Dynamics: Buffering and Transformational Shields

Abstract

This research was partially supported by the University of Wisconsin Graduate Fund and the University of WisconsinMadison Business School Research Fund. Helpful suggestions during the paper's evolution were provided by William Barnett, Jack Brittain, Dan Levinthal, James March, Cora Marrett, Craig Olson, Jitendra Singh, and three anonymous reviewers. The order of authorship was determined randomly. This paper examines evidence concerning the existence of organizational buffers, which insulate an organization from environmental disturbances, and transformational shields, which insulate an organization from the risk of failure due to transformation. It proposes that interorganizational linkages in particular can (1) buffer organizations from failure, (2) affect the likelihood of organizational transformation, and (3) modify the effect of organizational transformation on failure. These propositions are examined using event-history analysis of data on approximately 1,000 Finnish newspapers over a 200-year period. In this population, linkages reduced failure, increased organizational transformations, and altered the chances for failure after transformation. More generally, the findings support the existence of organizational buffers and transformational shields, suggesting further work on their role in population dynamics.'