Michael Hannan

Stanford University | SU · Graduate School of Business

This article proposes a cognitive sociological account of the emergence of social worlds that coordinate producers and audiences. The proposed model considers the emergence process in three stages. The first stage concerns the arrival of new labeled clusters of producers and objects. The second involves the conceptualization of the labeled clusters...

The ability of recent Large Language Models (LLMs) such as GPT-3.5 and GPT- 4 to generate human-like texts suggests that social scientists could use these LLMs to construct measures of semantic similarity that match human judgment. In this article, we provide an empirical test of this intuition. We use GPT-4 to construct a measure of typicality—the...

The ability of recent Large Language Models (LLMs) such as GPT-3.5 and GPT-4 to generate human-like texts suggests that social scientists could use these LLMs to construct measures of semantic similarity that match human judgment. In this article, we provide an empirical test of this intuition. We use GPT-4 to construct a measure of typicality—the...

Social scientists have long been interested in understanding the extent to which the typicalities of an object in concepts relate to its valuations by social actors. Answering this question has proven to be challenging because precise measurement requires a feature-based description of objects. Yet, such descriptions are frequently unavailable. In...

Theory and research on the ecology of organizations has taken a cognitive turn over the past fifteen years. The most recent development in organizational ecology builds explicit bridges to cognitive science. This reconstructs the core of the original theories in light of the new knowledge. It builds on a probabilistic view of concepts and categorie...

This paper deals with a central challenge in organization and management research: to predict the evolution of an organization's adaptive capability. We address both theoretical and methodological gaps in existing research. First, focusing on the largely overlooked external constraints on adaptive capability, we model how ties between an organizati...

We propose a synthesis of two lines of sociological research on boundary spanning in cultural production and consumption. One, research on cultural omnivorousness, analyzes choice by heterogeneous audiences facing an array of crisp cultural offerings. The other, research on categories in markets, analyzes reactions by homogeneous audiences to objec...

A general finding in economic and organizational sociology shows that objects that span categories lose appeal to audiences. This paper argues that the negative consequences of crossing boundaries are more severe when the categories spanned are distant and have high contrast. Available empirical strategies do not incorporate information on the dist...

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...

Organizational ecology refers to a sociologically oriented research program on organizations. It involves the empirical study of populations of organizations and a theoretical emphasis on processes of selective replacement of relatively inert organizations. Much organizational ecology research uses common methodological presumptions and practices,...

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 o...

This article proposes that meaningful social classification emerges from an ecological dynamic that operates in two planes: feature space and label space. It takes a dynamic view of classification, allowing objects' movements in both spaces to change the meaning of social categories. The first part of the theory argues that agents assign labels to...

We build on recent theory and research on the role of categories in resource partitioning. We analyze Scotch whisky making between 1826 and 2009-a case that seemed initially to fail to conform to the pattern of the beer industry now treated as prototypical. On close examination (both qualitative and quantitative), we find that high concentration in...

Research in the sociology of markets finds that shared meanings facilitate valuation and exchange by providing frameworks for perceiving and evaluating products and producers. Whereas studies of local sensemaking explain how meanings emerge in market interaction, and macro sociological accounts explain how meanings embodied in conventions, structur...

We propose that category membership can operate as a collective market signal for quality when low-quality producers face higher costs of gaining membership. The strength of membership as a collective signal increases with the distinctiveness, or contrast, of the category. Our empirical study focuses on biodynamic and organic viticulture in Alsace.

This paper proposes that social categorization is driven by an ecological dynamic that operates in two planes: feature space and category space. It develops a theoretical model that links positions in feature space to label assignments in category space. The first part of the model predicts that movements in feature space affect label assignments i...

We propose that category membership can operate as a collective market signal for quality. This requires that gaining category membership is more costly for low-quality producers. The strength of such signals increases with the distinctiveness, or contrast, of the category. Our empirical study focuses on biodynamic and organic viticulture in Alsace...

W hen two groups of market actors differ in how to interpret a common label, each can make claims over the label. One categorical interpretation and the group that supports it risk disappearance if the rival interpretation gains ground. We argue that when members of the endangered category become partial defectors that span categories, their histor...

A general finding in economic and organizational sociology states that producers and products that span categories lose appeal to audiences. This paper argues that the negative consequences of crossing category boundaries are more severe when the categories spanned are distant and have high contrast. Available empirical strategies do not incorporat...

Why do organizations generally lose their competitive edge as they get older? Recent theory and research on the dynamics of audiences and categories in markets sheds some new light on issues of organizational obsolescence.

We propose a formal theory of multiple category memberships. This theory has the potential to unify two seemingly unconnected theories: typecasting and identity-based form emergence. Typecasting, a producer-level theory, considers the consequences of specializing versus spanning across category boundaries. Identity-based form emergence considers th...

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...

Recent research finds that producers assigned to multiple categories receive less attention and legitimacy and have lower chances of success and survival. We argue that the effect of category spanning on the reception from the audience depends on the fuzziness of the categories. When a set of categories lacks contrast (have very fuzzy boundaries),...

Previous studies show that producers that span category boundaries exhibit lower fit to category schemas, accumulate less expertise, and elicit negative reactions from both critics and consumers. We propose that the negative reaction to category spanning also depends on another mechanism: widespread category spanning lowers categorical contrast—the...

This paper proposes a novel theoretical framework to model the dynamics of organizational mortality. The main theoretical contribution is a clarification of the relations between organizational fitness, endowment, organizational capital and mortality hazard. If the mortality hazard is a function of the stock of organizational capital, and the rate...

Recent theory and research have reconceptualized categories in markets and in other settings as part of the languages developed to characterize roles in a producer-audience interface. An important development in this work is the characterization of memberships in producer categories and in audiences as potentially partial. Producers often are regar...

This article introduces modal logics for a sociological audience. We first provide an overview of the formal properties of this family of models and outline key differences with classical first-order logic. We then build a model to represent processes of perception and belief core to social theories. To do this, we define our multimodal language an...

This article examines the effects of market specialization on economic and social outcomes. Integrating two perspectives, we explore why products that span multiple categories suffer social and economic disadvantages. According to the audience-side perspective, audience members refer to established categories to make sense of products. Products tha...

This paper introduces modal logics to a sociological audience. We first provide an overview of the formal properties of this family of models and outline key differences with classical first-order logic. We then build a model to represent processes of perception and belief core to social theories. To do this, we define our multi-modal language and...

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Research in the sociology of markets finds that schemas and category systems in markets provide frameworks for perceiving and evaluating prod- ucts and producers, thus making valuation and exchange possible. These meanings need to be shared by market participants to create order. This raises the question: How do consensual schemas and category syst...

We develop a unifying framework to integrate two of organizational sociology's theory fragments on categorization: typecasting and form emergence. Typecasting is a producer-level theory that considers the consequences producers face for specializing versus spanning across category boundaries. Form emergence considers the evolution of categories and...

Theory formalization, once positioned at center stage in sociology, currently plays little role in general sociological work. For about a decade beginning in the mid- 1960s, the promise was held out that formalizationespecially mathematization-would improve the quality of sociological theorizing and promote the development of cumulative theoretical...

Building theories of organizations is challenging: theories are partial and "folk" categories are fuzzy. The commonly used tools--first-order logic and its foundational set theory--are ill-suited for handling these complications. Here, three leading authorities rethink organization theory. Logics of Organization Theory sets forth and applies a new...

This paper integrates two perspectives on why producers who span categories suffer social and/or economic disadvantage. According to the audience-side perspective, audience members refer to established categories to make sense of producers; they perceive producers who incorporate features from multiple categories to be poor fits with category expec...

?How does contention over authenticity unfold through social movement processes of mobilization and counter-mobilization? We address this issue by studying how the rise of “modern” winemaking practices embodied authenticity as creativity, how the success of the modernists triggered a counter-movement seeking to preserve “traditional” wine-making pr...

Perspectives on inequality differ greatly regarding whether the logic of bureaucracy undermines sex-based ascription in work organizations by reducing subjectivity in personnel decisions, or instead merely serves to obscure or “scientize” inequality. Past research has tended to operationalize bureaucratization in terms of the adoption of formal pro...

Building theories of organizations is challenging: theories are partial and "folk" categories are fuzzy. The commonly used tools--first-order logic and its foundational set theory--are ill-suited for handling these complications. Here, three leading authorities rethink organization theory. Logics of Organization Theory sets forth and applies a new...

Logics of Organization Theory: Audiences, Codes, and Ecologies By Michael T. Hannan, László Pólos, Glenn R. Carroll Princeton University Press, Princeton, 2007 Organizational Behavior, Management Building theories of organizations is challenging: theories are partial and “folk” categories are fuzzy. The commonly used tools— first-order logic and it...

We examine how the life chances and financial performance of nascent high-technology firms were affected by two kinds of organizational changes: altering founders' blueprints for the employment relation and replacing a founder--chief executive officer (CEO) by an outsider. We argue that both events destabilize organizations but that changes in empl...

In recent years, there has been an increasing emphasis within organizational ecology on identity as a fundamental basis for the conceptualization and identification of organizational forms. This paper highlights the benefits of an identity-based conceptualization of organizational forms and outlines an identity-based agenda for organizational ecolo...

This essay introduces the basic methodology of organizational ecology and sketches some key insights arising from that work. For example, the paper will consider the extent of diversity of organizational forms; whether organizations can easily shift their defining characteristics; what happens to organizations as they age; the extent to which organ...

Most analysts of corporations and industries adopt the focal perspective of a single prototypical organization. Many analysts also study corporations primarily in terms of their internal organizational structures or as complex systems of financial contracts. Glenn Carroll and Michael Hannan bring fresh insight to our understanding of corporations a...

This article examines some evolutionary consequences of architectural inertia in organizations. The main theorem holds that selection favors architectural inertia in the sense that the median level of inertia in a closed population of organizations increases over time. The other key theorems hold that the selection intensity favoring architectural...

This article examines some evolutionary consequences of architectural inertia in organizations. The main theorem holds that selection favors architectural inertia in the sense that the median level of inertia in a closed population of organizations increases over time. The other key theorems hold that the selection intensity favoring architectural...

Although the concept of niche has been extremely useful in sociological theory and research, some aspects of the concept have not been clearly developed. This article advances a theoretical reconstruction of the concept of niche, with special application to organizations. The proposed formal model unifies several active lines of sociological theory...

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 re...

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 interc...

Over the last seven years, the Stanford Project on Emerging Companies has tracked a large sample of high-technology start-ups in California's Silicon Valley. The project has examined how the founders of those enterprises approached key organizational and human resource challenges in the early days of building their companies, and how it affected th...

Sociologists have long recognized that stable patterns of exchange within a market depend on the ability of market actors to solve the problem of cooperation. Less well recognized and understood is a second problem that must be solved - the problem of Knightian uncertainty. This chapter posits that the problem of Knightian uncertainty occurs not on...

This article applies two new criteria, desirability and faithfulness, to evaluate Péli et al.'s (1994) formalization of Hannan and Freeman's structural inertia argument (1984, 1989). We conclude that this formalization fails to meet these criteria. We argue that part of the rational reconstruction on which this formalization builds does not reflect...

We investigate how sociological argumentation differs from classical first-order logic. We focus on theories about age dependence of organizational mortality. The overall pattern of argument does not comply with the classical monotonicity principle: Adding premises overturns conclusions in an argument. The cause of nonmonotonicity is the need to de...

This paper develops a formal theory of the structural aspects of organizational change. It concentrates on the significance of changes in an organization's architecture and culture, each represented as a code system. A change is significant when it prompts other changes and generates a cascade of change. The argument ties significance to the time t...

Building on a formal theory of the structural aspects of organizational change initiated in Hannan, Polos, and Carroll (2002a, 2002b), this paper focuses on structural inertia. We define inertia as a persistent organizational resistance to changing architectural features. We examine the evolutionary consequences of architectural inertia. The main t...

Over the last seven years, the Stanford Project on Emerging Companies has tracked a large sample of high-technology start-ups in California's Silicon Valley. The project has examined how the founders of those enterprises approached key organizational and human resource challenges in the early days of building their companies, and how it affected th...

Sociologists frequently invoke the concept of form when analyzing organizations, collective action, art, music, culture and other phenomena. Nonetheless, the form concept has not received careful theoretical analysis, either generally or in specific context. Using the tools of formal logic and set theory, we propose a language for defining social f...

This paper extends a formal theory of structural aspects of organizational change initiated by Hannan, Polos, and Carroll (2002a, hereafter HPCa). This analysis focuses on the implications of limited foresight of the cascades of consequences of architectural changes. Foresight is generally limited by complexity (defined with respect to calculative...

This article examines the effects of crowding in a market center on rates of change in organizational niche width and on organizational mortality. It proposes that, although firms with wide niches benefit from risk spreading and economies of scale, they are simultaneously exposed to intense competition. An analysis of organizational dynamics in aut...

[Excerpt] Organizational theories, especially ecological perspectives, emphasize the disruptive effects of change. However, the mechanisms producing these effects are seldom examined explicitly. This article ex-amines one such mechanism-employee turnover. Analyzing a sample of high-technology start-ups, we show that changes in the employment models...

Although several attempts were made in the 1950s and 1960s to develop a demography of organizations, none were successful. While recent work shows more promise, it is still the case that organizational demography does not really exist, either as an academic field or as an institutionalized component of policy making. Unsurprisingly, detailed knowle...

In the early transition era in Russia entry barriers for commercial banks were about absent. It resulted in the mushrooming of hundreds of small, poorly-endowed and inexperienced banks. In this paper we address the question whether the claimed benefits of low entry barriers - competition and market dynamics - have resulted. We use a sample of comme...

Considers the impact of founding conditions on the later administration and management of technology startups in Silicon Valley. Data were collected in 1994-1995 by survey and interviews with 173 technology firms that had at least 10 employees and were no more than 10 years old. This research draws on the Stanford Project on Emerging Companies. The...

This paper examines the impact of organizational founding conditions on several facets of bureaucratization--managerial intensity, the proliferation of specialized managerial and administrative roles, and formalization of employment relations. Analyzing information on a sample of technology start-ups in California's Silicon Valley, we characterize...

This book examines transaction cost economics, the influential theoretical perspective on organizations and industry that was the subject of Oliver Williamson’s seminal book, Markets and Hierarchies (1975). Written by leading economists, sociologists, and political scientists, the essays collected here reflect the fruitful intellectual exchange tha...

A central concern of transaction cost economics (TCE) has been to understand how employment relationships and governance structures develop around productive activities. Williamson’s (1975) operating hypothesis has been that organizational forms and employment systems develop so as to minimize the transaction costs and hold-up problems facing emplo...

This paper presents the results of research on the effects of organizational level and population or industry-level clocks on organizational mortality rates. It reports estimates of a model in which the effect of organizational age varies by organizational size and the effect of density varies by population age. Analysis of data on the mortality ex...

Recent research on organizational mortality controls for the effect of age-varying organizational size and yields divergent results. Some studies find that ageing lowers mortality rates; others find the opposite pattern. We argue that this divergence reflects partly an overly simple specification of the effects of age and size. We argue that the ef...

This article explores the use of logical formalization to clarify an area of research characterized by conflicting claims and divergent empirical findings. The substantive focus concerns the relation between organization age and the hazard of mortality. The literature contains claims that the hazard (a) falls with age (a "liability of newness"), (b...

Deregulation has stimulated much economic and political interest. This paper develops a framework for understanding the effects of deregulation from an ecological perspective and reports empirical studies of financial institutions (banks, thrifts and mutual funds) at two levels of analysis: the system and the population. These both show that deregu...

Existing theories of density dependence in organizational evolution treat the key processes as timeless functions of density. This paper revises the theory by specifying that the effects of density on legitimation and competition change systematically as organizational populations age. It argues that these changes in effects reflect population-leve...

The authors develop a conception of an organization-specific niche in a technological network. This niche is defined by two properties: crowding and status. The authors hypothesize that crowding suppresses an organization's life chances and that status enhances life chances, especially for those organizations in uncrowded niches. They operationaliz...

Uses information regarding the process oforganization-building to identify several distinct models for organizingemployment and work, in order to gain insight into how organizational designersapproach the issue of consistency and complementarities in human resourcesmanagement. Two goals of this research are to understand: (a) how earlydecisions reg...

[Excerpt] This paper considers processes of organizational imprinting in a sample of 100 young, high technology companies. It examines the effects of a pair of initial conditions: the founders' models of the employment relation and their business strategies. Our analyses indicate that these two features were well aligned when the firms were founded...

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This paper examines the entries of firms into the automobile manufacturing industry in Europe from 1886 through 1981. It replicates and compares estimates of the basic model of density-dependent legitimation and competiton for Belgium, Britain, France, Germany, and Italy. The predictions of the model hold for each country. It also seeks to clarify...