Organizational ecologists wonder “Why are there so many kinds of organizations?” and seek to understand the distribution of organizations across different environment (Hannan and Freeman, 1977). To this end, ecologists have adapted and applied theories and formal models to explain population biology and human demography to explain the evolution of organizational systems – rate of founding, failure, growth, performance, and change.
The core logic is population thinking (Hannan and Freeman, 1989). Populations are aggregates of organizations that share a common dependence on material and cultural environments
There are mainly four domains of research:
Density dependence:
The main argument is that organizations’ vital rate depends on the population density. At low density, increasing density increases legitimacy and taken-for-grantedness of the organizations. At high density, increasing density increases vie for resources. Freeman’s (1987) studies of labor unions in United States show that unions’ founding and failure rates followed the predicted non-monotonic patterns. This line of research has developed to assess the effect of density in subpopulations. The whole population can be divided in two ways. First, along the key dimensions of organizational forms, such as goals, sizes, technology and location. Second, along different digree (similarity by their domain overlap). High overlap increases high failure rates with increasing density.
Along degree dimension
Generalists (organizations that serve a wide range of clients with a diverse array of products) and specialists (organizations that serve a more limited clientele, offering them a narrower set of products) receive great attention. The basic argument is that when there are economies of scale and a resource distribution with a single rich center and poor peripheral regions, the resource “space” (the combination of inputs and demand for output) becomes partitioned, with generalist occupying the center and specialists occupy the peripheral ( Carroll, Dobrev and Swaminathan, 2003). This has been tested along newspapers (Carroll, 1985); breweries (Carroll and Swaminathan, 2000)
Inertia
the core assumptions is that the core features of organizations change slowly, because of inertial pressures (Hannan and Freeman, 1984), because of four internal constrains (investment in plants, equipment, and specialized personnel; limits on the internal information received by decision-makers; vested interests; organizational history) and four external constrains (legal and economic barriers to entry and exit; constraints on the external information gathered by decision-makers; legitimacy considerations; the problem of collective rationality and the general equilibrium). These pressures favor organizations that are reliable and reproductable. There are mainly two reasons:
a. it is usually harmful for organizations to change, because it requires reorganizing the resources, or may not fit the environment. But it can be beneficial if it fit the environment (Barnett and Carroll, 1995) or the organizations’ constituencies support the content of change and are willing to supply resources to effect change (Minkoff, 1999) or ties with state or communities, supplying resources and legitimacy (Baum and Oliver, 1991).
b. Organizations do change a lot. Changes depends on prior history and well or poorly-performed organizations (Greve, 1999)
Criticism: the age and size of the organizations have confounded influence on organizational survival. For example, research on New York credit unions: age has negative effects on failure, but when adding size, the age effect becomes positive. Size decreased failure. The age effect may be nonlinear: increasing in the first few years after founding, as fledgling organizations use up their initial stores of resources, then decreasing, as organizations learn how to operate efficiently and develop solid reputations.
Identity -> organizational form:
they analyze organizational forms as identities or social codes –“recognizable patterns that take on rule-like standing and get enforced by social agents” (Polos, Hannan and Carroll, 2002). Identity: rules of conduct and signals to internal and external observers.
Rules of conduct: provide guidelines for members of a population by delimiting what they should and should not be and do. Signals generate a cognitive understanding about the population because they define what observers understand the members of organizational population are and what they do.
It benefit three other streams: 1) resource-partition, it is difficult for organizations with established identities to present themselves as totally different kinds of organizations, even the identity is based on intangible authenticity. 2) density and fatal rates: disk-array producers do not legitimate the disk-array-producer form, but only legitimize disk-arrage producers, because they have different origins and derive their identities from other fields (McKendrick and Carroll, 2001). Therefore, increase in density of focused identities will lead to organizational form
Strength of ecologists: 1) high level of paradigmatic consensus . They agree on what outcomes to study (founding, failure, growth, performance, and change), what explanatory variables to consider (density, size, age, location, technology, networks and identities), and what analytical strategies to employ (survival analysis). Even though the empirical results are not consistent, the theory can be refined on the basis of the paradigmatic development.
Weakness: organizational ecology is so paradigmatic that it has subtle influence outside of its own field.
References:
Hannan, M., & Freeman, J. (1977). The population ecology of organizations. American Journal of Sociology, 82(5), 929–964.
Hannan, M. T., & Freeman, J. (1987). The ecology of organizational founding: American labor unions, 1836-1985. American Journal of Sociology, 910-943.
Carroll, G. R., & Swaminathan, A. (1992). The organizational ecology of strategic groups in the American brewing industry from 1975 to 1990. Industrial and Corporate Change, 1(1), 65-97.
Carroll, G. R., Dobrev, S. D., & Swaminathan, A. (2002). Organizational processes of resource partitioning. Research in organizational behavior, 24, 1-40.
Carroll, G. R., Dobrev, S. D., & Swaminathan, A. (2002). Organizational processes of resource partitioning. Research in organizational behavior, 24, 1-40.
Barnett, W. P., & Carroll, G. R. (1995). Modeling internal organizational change. Annual review of sociology, 217-236.
Minkoff, D. C. (1999). Bending with the Wind: Strategic Change and Adaptation by Women's and Racial Minority Organizations 1. American Journal of Sociology, 104(6), 1666-1703.
Baum, J. A., & Oliver, C. (1991). Institutional linkages and organizational mortality. Administrative science quarterly, 187-218.
Greve, H. R. (1999). The effect of core change on performance: Inertia and regression toward the mean. Administrative Science Quarterly, 44(3), 590-614.
McKendrick, D. G., Jaffee, J., Carroll, G. R., & Khessina, O. M. (2003). In the bud? Disk array producers as a (possibly) emergent organizational form. Administrative Science Quarterly, 48(1), 60-93.
Pólos, L., Hannan, M. T., & Carroll, G. R. (2002). Foundations of a theory of social forms. Industrial and Corporate Change, 11(1), 85-115.
Hsu, G., & Hannan, M. T. (2005). Identities, Genres, and Organizational Forms. Organization Science, 16(5), 474–490.
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