ABSTRACT
This chapter discusses the role of four major variables of organizations—age, size, niche, and performance. It presents empirical research findings of rates and patterns of organizational mortality, explained by the factor of age. The basic empirical regularity that emerges is that the risk of mortality tends to decline with organizational age. The data on organizational mortality in the United States, the United Kingdom, and the European Union reveal that new business organizations are much more likely to collapse than old ones. Organizational environments have long been classified into various types such as "placid," "dynamic," and "turbulent". Yet, for the study of organizational mortality at least, the concept of environment needs to be more accurately specified. Students of the population-ecology perspective have chosen the concept of organizational niche for the purpose of studying organizations' birth and death rates. So bankruptcy-prediction models consist of performance indicators that can also serve as warning signals of probable organizational failure.
