Echoes of the Past: Organizational Foundings as Sources of an Institutional Legacy of Mutualism

Echoes of the Past: Organizational Foundings as Sources of an Institutional Legacy of Mutualism

By
Henrich R. Greve, Hayagreeva Rao
American Journal of Sociology.
2012, Vol. 118, Issue 3, Pages 635-675

Conventional wisdom in organization theory holds that the environment imprints organizations at the time of their birth. We reverse the imagery and propose that early founding of a nonprofit organization in one domain imprints a community with a general institutional legacy of collective civic action. Consequently, the community is more likely to later establish new nonprofit organizations in a different domain. Empirically, we show that Norwegian communities that were the earliest to establish mutual fire insurance organizations and mutual savings banks in the 19th century were more likely to experience foundings of cooperative stores in the 20th century. We discuss how the founding of formal nonprofit organizations creates an institutional legacy that amplifies variations in the civic capacity of communities and outline how it complements accounts of organizational imprinting.