Organizational Ecology, A Review

ECOLOGY

Org ecology is an open natural systems model at the ecological level of analysis.

Open systems consists of coalitions of interest groups highly influenced by the environment and natural systems consist of collectivities seeking survival (Scott 03).

The ecological level of analysis examines relations of organizations to the environment or relations that develop between organizations (Selznick 49, Pfeff & Sal 78).

Resource dependence, Marxist theory, institutional theory and postmodern theory all operate at the ecological level.

Community ecology, inter/intra-organizational ecology and institutional ecology are different variants of the organizational ecology stream of literature but I will focus on population ecology (Astley 85; Zucker 89; HannnanFreem 77; Aldrich 79).

The difference between population, community and institutional ecology is primarily organizational grouping. Community ecology uses the areal organizational field level focusing on network relations between organizations in the same geographical area.

Institutional ecology uses the functional organizational field viewing the societal sector as a collection of orgs that influence the focal organization, and constitute a recognized area of organizational life (Scott Meyer 91, Di & Powell, 83).

Population ecology studies populations of orgs the key research question why some org forms survive over others and why there are some many kinds of organization (H&F 77).

H&F 89 describe org populations as having similar blueprints, unitary character and common dependence on the environment.

Natural selection theory of organizations contends that org forms best fit to the environment are selected and proliferate.

Baum & Amburgey (02) argue the field is based on 3 main observations: 1. Aggregates of orgs exhibit diversity, 2. Orgs are inert compared to environmental changes and 3. Orgs appear and disappear continuously.

Population ecology studies the birth and death rates of a population determined by variation, selection, and retention effects of the environment.

Population ecology assumes variations provide raw material for selection processes, but orgs find difficulty in identifying and replicating successful variations.

Org ecologists argue that environmental constraints don’t allow firms to adapt and that selection is more likely.

The question then becomes what underlying change mechanisms cause birth or death of organizations in a niche and how niches evolve.

Key mechanisms of org ecology are inertia, niche width, resource partitioning, population dynamics and density dependence.

Inertia theory (Carroll 85; H&F 84) assumes that individual firm do not change due to both internal and external constraints.

Internal constraints consist of core and peripheral characteristics, peripheral protecting the core.

Core characteristics such as goals, forms of authority, core technology, and market strategy are difficult to reflect and act on.

External constraints are the firm characteristics that are signaled to the environment when growing, such as reliability and accountability.

These characteristics develop routinization, preventing change.

Even pop ecologists that accept orgs can change argue legitimacy selects out orgs without reliability or accountability resulting in a population resistance to change.

Niche width theory describes a niche as a particular combination of resources required to support a given type of population (H&F77).

A niches is realized when the equilibrium of the system support optimal org forms into which all organizations are isomorphic.

Systems are rarely in equilibrium and niche theory attempts to predict what happens when the environment varies.

Generalists and specialists are a popular typology in niche theory; generalists feed on varied features of the environment, give priority to exploitation, while specialists exploit optimally narrow environmental resources.

Resource partitioning theory (Carrol 85) proposes that as markets increase, large generalists move to the center of the market, due to economies of scale, freeing peripherial resources for specialists to develop.

Carrol & Swam (01) supported the theory in the brewery market.

Population dynamics (Carrol & Dela 82) offer that given a population, previous founding or failure signal opportunity or threat to potential entrants and the effect is informational, however it has not been well supported empirically.

Density is the number of orgs present at a given time in the population.

Density dependence argues that at low densities the increase of density increases legitimacy in turn increasing resources available to the population resulting in a mutualistic effect.

However, at high densities, competition decreases legitimacy reducing the resources available to the population resulting in a competitive effect.

Competitive and mutual effects are added in the main prediction of density dependence.

H&F (89) found a curvilinear inverse U-shaped effect of density on births.

B&P (95) found a curvilinear U-shaped relationship of density on deaths.

Hannan et al’s (95) study on the automotive industry demonstrates range differences between legitimacy effects which are earlier and on a larger geographic scale as compared to competition.

ECOLOGY