State Formation, Ideological Competition, and the Ecology of Israeli Workers' Cooperatives, 1920-1992
Ingram, Paul, Simons, Tal, Administrative Science Quarterly
We investigate the effect of community-wide political and ideological interests on the failure rate of Israeli workers' cooperatives. Political order may be provided by the state or through membership in a federation. Independently, both conditions should reduce organizational failure, but when they coexist, the influence of the state should dominate due to its comparative advantages as a supplier of order. Organizations that represent rival ideologies cause ideological competition, which should increase failure, while organizations that represent shared ideologies cause ideological mutualism, which should decrease failure. The context of Israeli workers' cooperatives provides a natural laboratory for testing these ideas, as it spans the formation of the Israeli state. It also includes a powerful federation, the Histadrut, to which many cooperatives belonged, as well as significant populations of organizations representing both capitalist and socialist ideologies. The analysis supports all of the above argume nts, indicating the relevance of interdependence, broadly defined, for the evolution of organizational populations. [*]
Interdependence between organizational populations is an understudied topic (Astley, 1985; Baum, 1996; Hunt and Aldrich, 1998). What research there is has tended to focus on economic and technological interdependencies (e.g., Barnett, 1990; Carroll and Swaminathan, 1992; Hunt and Aldrich, 1998), to the exclusion of political and ideological ones (Carroll, Delacroix, and Goodstein, 1990). Yet both political structures and ideologies can have dramatic effects on organizational outcomes. These effects are illustrated throughout history, for example, by the marked economic improvements that accompanied the reordering of power between the Parliament and the king in England's Glorious Revolution of 1689. Those changes have been attributed both to efforts to build a more economically effective structure of state power (North and Weingast, 1989) and to religious rivalry (Carruthers, 1990). Contemporary illustrations are also available, such as the differences in organizational behavior and performance that result fro m changes in and variance among political and ideological regimes in the transitioning economies of Eastern Europe (Stark and Bruszt, 1998).
The state, and federations of organizations that perform some of the same political functions, plays an important role in generating the ordered institutional framework that is necessary for organizations to flourish. Exchanges with the environment that organizations rely on are facilitated by an institutional framework that improves the efficiency and surety of transactions, generally speaking, order, and such a framework can be provided by the state or a federation. When a state and a federation compete to provide order, however, the effectiveness of the federation will be undermined.
Interdependence on the ideological dimension is also important. Other organizational populations can have an effect on the failure rate of a focal population as a function of the similarity or dissimilarity of their dominant ideologies. An ideology is a set of beliefs about how the social world operates, including ideas about what outcomes are desirable and how they best can be achieved. Just as organizations are used by participants to pursue economic goals, they are also used to pursue ideological goals. One way an organization can pursue its ideological goals is to discourage organizations that represent rival ideologies, suggesting that failure may increase as a function of the growth of organizational populations with rival ideologies.
In this paper, we investigate how political and ideological interdependencies affect the failure rate of Israeli workers' cooperatives.  The context of our analysis, spanning the period of state creation in Israel, amounts to a natural laboratory for examining the effect of state and federation on organizational stability. …