The Ecological Interdependence of Emergent and Established Organizational Populations: Legitimacy Transfer, Violation by Comparison, and Unstable Identities

We know that organizations of different but related kinds greatly influence each other’s evolution. Although empirical findings abound, the theories behind them are still being developed. We advance a model of ecological interdependence between emergent and established populations. Our model is based on three main ideas. First, we consider related populations to be those that overlap in identity and resource space and that simultaneously exhibit competitive and mutualistic relationships, the latter leading to legitimacy transfer. Second, we build on the idea that legitimated forms codify prescriptive sanctions for deviations from identity blueprints, and predict that when an emergent population overlaps with an established one in identity space, its early proliferation will manifest violations of established social identities and will trigger prescriptive sanctions. Third, we rely on the notion of a focused identity to argue that organization-level changes affect external perceptions of the population’s collective identity, and hamper legitimacy. Analysis of the survival rates of financial cooperatives in Singapore—a population overlapping the identity and resources of commercial banks—confirms our predictions.