Organizational demography and culture: Insights from a formal model and simulation

We review studies of organizational demography that show empirical relationships between the length of service (tenure) distribution and organizational outcomes. Our theoretical reformulation of the typical explanation offered for these relationships posits a link between heterogeneity in the length of service distribution and heterogeneity in organizational culture. We examine the plausibility of this explanation using a computer simulation of a mathematical model. The model implies that the tenure-culture link is usually positive, as assumed by organizational demographers, but that the strength of this link varies by context. The modeling effort also uncovered several limitations of the conventional research framework. These include (1) the plausibility of simple alternative explanations based on unobserved heterogeneity; (2) the inability to distinguish disruption effects caused by individual entry and exit from diversity effects based on internal social processes; and (3) the conflation of several different hypothesized processes into a single variable measuring tenure heterogeneity. We develop and evaluate three alternative measures, each linked to a different social process.