Chain affiliation and the failure of Manhattan hotels, 1898-1980

This study of chain affiliation in the Manhattan hotel industry examines the benefits and drawbacks of affiliation with a chain, which can be a source of operating knowledge and economies of scale for components but also a potential source of strategic constraint. Our analysis demonstrates the effects of chain affiliation on the failure of component organizations and competitive dynamics in the Manhattan hotel industry from 1898 to 1980. Under most circumstances, chain affiliation improves the survival chances of component hotels in Manhattan. All chain memberships are not equal, however, and the survival benefits to components vary systematically with the nature of the operating experience and the number and distribution of components of hotel chains. Our findings show how understanding the role of chains can inform both learning and ecological models of organization.