Introduction. The scaling programme associated with Geoffrey West and Luís Bettencourt looks for quantitative regularities in organisms, cities and firms that any general theory must explain. Daepp, Hamilton, West and Bettencourt applied survival analysis to more than 25,000 publicly traded North American companies between 1950 and 2009 and found an approximately constant hazard rate: the probability that a firm disappears in the next year—by failure, merger or acquisition—does not depend on its age. Lifespans are therefore exponentially distributed, with a half-life of about ten years, and the pattern holds across sectors and causes of exit. Constant hazard means no ageing effect and no accumulated survival advantage: whatever firms learn and whatever regulatory apparatus they build, in aggregate it does not lower their mortality. The result sits alongside older findings in organisational ecology (liability of newness, age dependence, density dependence) and in the economics of firm growth (Gibrat’s law, Zipf-distributed sizes, Laplace-distributed growth rates). West’s conjecture about mechanism—that success forces a firm from a diverse, open state into a constrained, bureaucratic one—is explicitly flagged as conjecture and must be cited as such. Survival analysis methods (Kaplan–Meier estimation, Cox proportional hazards) are the tools a cohort study would use.
Important authors. Geoffrey West, distinguished professor at the Santa Fe Institute and formerly its president, leads the scaling programme; Luís Bettencourt, then at SFI and later director of the Mansueto Institute for Urban Innovation at the University of Chicago, and Marcus Hamilton are the other principals; Madeleine Daepp was first author. Robert Axtell (George Mason University) established the Zipf distribution of US firm sizes; H. Eugene Stanley’s group at Boston University produced the growth-rate scaling results. In organisational sociology, Glenn Carroll (Stanford) with Michael Hannan built the demographic approach to corporations.
Importance for cybernetics and the VSM. Viability is the VSM’s central claim, and firm survival is its most direct observable. The tradition has never used it: Schwaninger and Scheef (§5) proxied viability with a culture rating from the same respondent who rated the predictors. Public, dated, sector-coded survival data make a cohort study feasible—VSM-diagnosed or VSM-designed organisations against matched controls on survival. Constant hazard is also a standing challenge to any design theory of viability, since it says that, in aggregate, no accumulated organisational learning moves firms off the curve; and West’s conjecture is a VSM pathology stated in another vocabulary (System Three crushing System One variety and starving System Four), with no contact between the traditions.
Importance for the article. §10.5, stage four, adds the firm-survival cohort study to the staged programme and calls it the only test of viability rather than of a proxy; the constant-hazard result and the ten-year half-life are quoted there. It bears on §2.1’s first sense of viability, persistence, and on the survivorship rival of §3.3 and §11.3, since a cohort design is the only form in which selection and design can be compared on the same outcome. The import is from VSM vs Complexity Science §3 (C6). A reviewer will press on the sample (publicly traded firms only; exit includes acquisition, which is not failure), on how a “VSM-diagnosed cohort” would be identified without selection bias (organisations that commission VSM work are not a random sample), on power (a ten-year half-life implies long follow-up), and on the fact that persistence is only one of the five senses in §2.1, so a null survival result does not touch autonomy or adaptive capacity claims.
Sources in the reading list.
- the constant hazard, the ten-year half-life, the sector invariance and the caveat about West’s mechanism.
Other important sources and authors.
- Freeman, J., Carroll, G. R., & Hannan, M. T. (1983). The liability of newness: age dependence in organizational death rates. American Sociological Review, 48(5), 692–710 — the earlier finding that young organisations die faster; the contrast with constant hazard a reviewer will raise.
- Stinchcombe, A. L. (1965). Social structure and organizations. In J. G. March (Ed.), Handbook of Organizations (pp. 142–193). Rand McNally — the origin of the liability-of-newness argument.
- Carroll, G. R., & Hannan, M. T. (2000). The Demography of Corporations and Industries. Princeton University Press — the standard treatment of organisational vital rates and how to estimate them.
- Axtell, R. L. (2001). Zipf distribution of U.S. firm sizes. Science, 293(5536), 1818–1820 — the size regularity of the same population.
- Stanley, M. H. R., Amaral, L. A. N., Buldyrev, S. V., Havlin, S., Leschhorn, H., Maass, P., Salinger, M. A., & Stanley, H. E. (1996). Scaling behaviour in the growth of companies. Nature, 379(6568), 804–806 — growth-rate scaling; the physics side of the firm-scaling literature.
- West, G. (2017). Scale: The Universal Laws of Growth, Innovation, Sustainability, and the Pace of Life in Organisms, Cities, Economies, and Companies. Penguin Press — the programme’s synthesis, where the mechanism conjecture is stated at length.