Professor Shmuel(Mulli) Ellis
Faculty of Management,
The effect of imprinting and inheritance on potency
Genealogical approach to the study of founding new firms
We developed a theoretical framework of genealogical evolution of an industrial sector, exploring the ways in which new ventures are created along generational lines. We argued that the evolutionary trajectory of organizational genealogy is influenced by the initial conditions at time of founding and nature of members' affinity which affect the inheritance of organizational characteristics from parent to progenies. We mapped the nine main genealogies of the communication sector in Israel and divided them into two groups – those that were established during the institutional-cooperative economy period of Israel (1951- 1977) and those that were founded during the competitive-economy period (1977 - 2005). Our findings showed that competitive environmental conditions led to more entrepreneurial inclination of the founding parents. Furthermore, this imprinting effect was then disseminated throughout the genealogy trajectory. Genealogies that were founded during the period of competitive environmental conditions tend to grow faster than genealogies that were formed during the institutional/competitive period. Finally, we found that the entrepreneurial inclinations of the founding parents mediated the effect of the type of environment on genealogical potency.