M. T. Hannan and J. Freeman, "Organizations and Social Structure" in Organizational Ecology, Cambridge, Harvard, U. Press, 1989, 3-27


Hannan & Freeman: Organizational Ecology

Population ecology is the study of dynamic changes within a given set of organizations. Using the population as their level of analysis, population ecologists statistically examine the birth and mortality of organizations and organizational forms within the population over long periods.

Hannan & Freeman believe that long-term change in the diversity of organizational forms within a population occurs through selection rather than adaptation. Most organizations have structural inertia that hinders adaptation when the environment changes. Those organizations that become incompatible with the environment are eventually replaced through competition with new organizations better suited to external demands .

Analysis in population ecology has three levels:

In general, population ecologists ascribe to an evolutionary view of organizational change. Organizations descend from previous or existing organizations, and population-level change in organizational forms is usually slow and continual. Unlike evolution in animals, natural selection in organizations does not necessarily lead to optimization. Optimized change often depends on the "coupling" between intent and outcome.

Insights on Population Ecology

I'm curious whether the popularity of population ecology is in part due to the increasing ease of analysis of large datasets. The surge in computing power in the 1980's allows more sophisticated statistical analyses and easier model building than ever before. More and more archival data is now appearing on-line from both public agencies, institutions, and commercial vendors.

For one of my critical essays, I've been examining the methodology section of all articles in Administrative Science Quarterly from 1975-1995. The use of existing datasets (from government agencies, institutions, etc.) for statistical analysis has risen dramatically in the past 20 years. In 1975-78, only 10% of articles relied on existing datasets (compared to 45% using questionnaires). In 1991-94 over 50% of all ASQ articles were based on models derived from large datasets.

Clearly, organizational theory has strongly embraced the ecological level of analysis. I wonder how much of it's popularity is the ease of data accessibility and low resource cost. Downloading a governmental database might allow more researcher control than the uncertainties of questionnaire return rates and codifying structured interviews.


Notes

Chapter 1: Organizations and Social Structure

"Because organizations play key roles in modern societies, the speed and direction of social change depend onthe dynamics of organizations In particular, the ability of society as a whole to respond to changing conditions depend on the responsiveness of its consitituent organizations and on the diversity of its organizational populations".

"The theory and research we report the replacement of outmoded organizations by new forms when environmental conditions and competitive relations are favorable".

Organizational Diversity

Why are there so many (few) forms of organizations? What are the sources of increasing and decreasing diversity? A stock of organizational forms is of value to a society when the future is uncertain. Rather than waiting for a new adaptive form to appear, there may already be a org form suitable for new environmental conditions -- all that needs to be done is to reallocate resources to the more optimal form.

More diversity means more varied career opportunities for people, which may help reduce inequality.

Much of the variation comes in "packets" called organizationsl forms, with less variation withing a form than between forms.

Population ecology is often focused on longer-timespans than other organizational theories, which allow the theory to have much in common with social history.

Since the late 70's organizational sociology has returned to the fundamental questions of 1) how social and historical transformation has affected the world of organizations and 2) what role organizational diversity and change plan in creating and shaping social change.

 

Selection Theories

The authors believe that most of the variability in core structures of organizations come from the creation of new forms and the demise of old ones as the environmental demands change

Adaptation Theories

Contingency theory, resource dependence theories, marxist theories hold that organizations can adopt strategies to adapt organizational structures to environmental demands.

Random transformation Theories

Theorists like March and Olsen see organizational change as often random walks.

The Demography and Ecology of Organizations

"Ecological analysis is appropriate when organizations are subject to strong inertial pressures and face changeable, uncertain environments." "(Population ecology) pays considerable attention to population dynamics, especially the processes of competition among diverse organizations for limited resources such as membership, capital, and legitimacy."

The first level, demography of organizations, concerns the variations in vital rates for organizational populations (founding rates, merger rates, disbanding rates, etc.). The model attempts to relate these changes to the environment.

The second level, population ecology of organizations, tries to show how the vital rates of one population are affected by other organizational populations.

The third level is community ecology of organizations. This looks as interacting communities of populations (like firms, labor unions, and regulatory agencies).

 

Population Thinking

Researchers can measure behavior and survival rates of organizations in similar ways to individuals. They collect life histories of samples of organizations in a population . For example, age is a big predictor of organizational longevity. The population is the level of analysis.

 

Evolution of Organizational Forms

Population ecology works the idea that 'long-run changes in organizational diversity reflect the accumulated effects of short-run differences in net mortality rates of populations facing limited resource environments".

Evolutionary theory means three things. 1. Organizations have descended from past organizations 2. big differences seen now have arisen gradually 3. The processes of change are still around us and can be examined experimentally.

Natural selection serves mainly as an optimization process. However, the authors don't feel that the selection process in organizations is necessarily optimal. This assumption is rarely justified given the constant environmental (social) changes going on today.

While there is some understanding of dynamic organizational processes of selection, there is little known about inheritance and transmission of organizational forms. They are much more complex than in the biotic world.

Darwin's theories of adaptation however have been difficult to apply to organizations. Natural selection does not necessarily lead to greater adaptability. Also, there is little conscious adaptation in the animal world, while researchers assume more consciousness in organizations struggling to survive in their enviornment. Organizations can learn and copy other, more adaptive forms (known as the Larmarkian view). Still, the authors believe the selection process (Darwinian view) is stronger than organization's ability to quickly adapt.

They also ascribe to the belief that much organizational change is random and not necessarily matching expected future states. "The applicability of Darwinian arguments to changes in organizational populations thus depends partly on the tightness of coupling between individual intentions and organizational outcomes". Two situations that create weak couplings are diversity of interest among members and uncertainty about means-ends chains. Internal politics often affect the ability of the organization to adapt to external demands. Uncertain between means and ends can cause unexpected results to changes.

 

Dynamic and Comparative Analysis

"The diversity of organizations in society depends on the both the number of organizational forms and the distribution of organizations over forms". This is a dynamic process, with new forms being created, some orgs changing into other forms, and some forms going away. Organizations are created and disbanded or merged.

"We argue that organizational selection processes favor organizations with relatively inert structures, organizationa that cannot change strategy and structure as quickly as their environments can change".