Organizational lifespan LO17775

Dr Uri Merry (
Wed, 15 Apr 1998 11:52:26 +0300

Re: Organizational lifespan

Dealing with the problem of organizational sustainability from a New
Science perspective has lead me into thinking about the length of
organizational life span in our times.

My impression is that one of the major issues facing most organizations at
the end of the century is sustainability. Sustainability can be understood
as adaptiveness over time. That is not being "excellent" for some years,
but having high fitness over many years. Sustainability can also be seen
as the ability of an organization to constantly renew itself after every
life cycle.

In short my hypothesis is that conditions at the end of the century in the
Knowledge/Network Era are creating greater difficulty in adaptation for
organizations and especially businesses and this is leading to two trends:

1 ) An increasingly shorter life span for organizations and especially
2 ) A increase in the rate of organizational "infant mortality"

If this is correct than it means that organizational life span, in our
times, is more like marriage life span and less like individual life span.
About 50% of marriages break up in our times and this is far more than at
the beginning of the century. In contrast individual life span in modern
countries has lengthened throughout this century and is now around about
75-80 years.

On another occasion I might explain what are the environmental factors
that I think are creating the above two trends. But in this mail I am
seeking research support (or disconfirmation) of these trends.

The statistics I know about are the following:

1 . In the past 22 years the longevity of Texas businesses has dropped
by half since 1970. (University of Texas study)
2 . In Canada, in the last few years there is a doubling of
3 . One third of the Fortune 500 companies of 1970 disappeared by 1983.

4 . The average life span of companies in Japan and most of Europe is
now 12.5 years.
5 . In the US, small companies disintegrate 50% within 4 years, 70%
within 8 years, 98% within 11 years.
6 . Of all new companies 50% breakdown in their first five years.

The first two studies do give support to the trends I have described
above. The other four studies while significant, lack comparative numbers
from earlier periods.

Can anyone on this list tell us about other studies that either give some
support or disconfirm the hypotheses.

When you write to the LO list on this subject, please send me personally a
copy of your mail. My email is

Uri Merry

-- (Dr Uri Merry)

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