CHAPTER SEVENTEEN Inertia and Change in the Early Years Employment Relations in Young, High Technology Firms MICHAEL T. HANNAN, M. DIANE BURTON, AND JAMES N. BARON 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. How- ever, the alignment has deteriorated over time, due to changes in the distribution of employment models. In particular, the 'star' model and 'commitment' model are less stable than the 'engineering' model and the 'factory' model. Despite their instability, these two blueprints for the employment relation have strong effects in shaping the early evolution of these firms. In particular, firms that embark with these models have significantly higher rates of replacing the founder chief executive with a non-founder as well as higher rates of completing an initial public stock offering. Some implica- tions of these findings for future studies of imprinting and inertia in organizations are discussed. 1. Imprinting, Inertia and Organizational Change How much do origins matter for organizations? This question has pivotal importance for understanding organizational change. Despite its theoretical importance, little effort has been directed at gaining evidence that speaks directly to it. This paper takes a first step in an effort to rectify this gap in our knowledge. It reports some early results from an effort to examine pro- cesses of imprinting in a sample of young, high technology companies. Current theory and research on organizations and industries reflect two polar views on the importance of origins. One perspective holds that organ- izational structures reflect mainly current internal and external exigencies: -465- |