The Structure of Consensus: Network Ties, Legitimation and Exit Rates of U.S. Feature Film Producer Organizations

Recent research emphasizes that legitimacy depends on consensus among actors (audiences) about the features and activities of organizations (candidates) that become taken-for-granted elements in a social domain. This study examines how consensus is affected by the structure of interaction in the network connecting social audiences to candidate organizations. It analyzes how audience members reach, reinforce and preserve consensus about candidates’ features and behavior, affecting a crucial organizational outcome, survival. We argue that survival depends positively on 1) the degree of connectivity and 2) the repeatedness of interactions between audience members and candidate organizations, and negatively on 3) the degree of turnover of audience members. We situate our analysis in the motion picture industry, where we trace the inter-organizational network between feature film producer organizations (candidates) and distributor organizations (audience), and its influence on producer organizations’ exit rates over the period 1912-1970. The findings support the hypotheses. We discuss how they contribute to the dialogue between ecological and network theories of organizations.