ORGANISATIONAL ECOLOGY AND DYNAMIC CAPABILITIES AN EXPLANATION FOR PERFORMANCE OF A FIRM AND ITS SURVIVAL B.V.L.NARAYANA-- FPM II IIMA

ORGANISATIONAL ECOLOGY AND DYNAMIC CAPABILITIES "Om Poornamadah Poornamidam Poornat Poornamudachyate Poornasya Poornamadaya Poornamevavasishyate.“ "What is whole, this is whole; what has come out of the whole is also whole. When the whole is taken out of the whole, the whole still remains whole." (RAMAYANA– C RAJAGOAPALCHARI)

ORGANISATIONAL ECOLOGY AND DYNAMIC CAPABILITIES GENESIS OF ORGANISATIONAL ECOLOGY- 1970’S PREDOMINANT VIEW THAT OF ADAPTATION BASED ON RATIONALITY AND ACTIVE MANAGERIAL CHOICES POPULATION ECOLOGY LAID EMPAHSIS ON DETERMINISM BY THE ENVIRONMENT(HANNAN AND FREEMAN 1977) ADAPTATIO PERSPECTIVE SUPPLEMENTED WITH A SELECTION ORIENATATION

ORGANISATIONAL ECOLOGY AND DYNAMIC CAPABILITIES ASSUMPTIONS OF THE THEORY; Diversity is a property of aggregates of organizations Organizations often have difficulty devising and executing changes fast enough to meet the demands of uncertain, changing environments The community of organizations is rarely stable. (Baum 1999)

ORGANISATIONAL ECOLOGY AND DYNAMIC CAPABILITIES COMPONENTS OF THE THEORY FOCUS ON SELECTION UNIT OF ANALYSIS ARE POPULATIONS OF ORGANISATIONS USE EXPLICIT COMPETITION MODELS EXPLAIN ISOMORPHISM USE NICHE THEORY TO EXTEND TO DYNAMIC ENVIRONMENTS USE LONGITUDINAL DATA AIM TO UNDERSTAND WHY THERE ARE SO MANY TYPES OF ORGANISATIONS(BAUM 1999)

ORGANISATIONAL ECOLOGY AND DYNAMIC CAPABILITIES EVOLUTION OVER TIME (AMBURGEY AND RAO 1996) EMPHASIS ON VITAL RATES AND THEIR UNDERSATNDING CHANGE NOT CONSIDERED ACKNOWLEDGED IMPORTANCE OF INSTITUTIONAL FACTORS ENSURED METHODOLOGICAL CONSISTENCY

ORGANISATIONAL ECOLOGY AND DYNAMIC CAPABILITIES (AMBURGEY AND RAO 1996) SHIFT OF FOCUS FROM VITAL RATES TO CHANGE USE OF ALTERNATIVE MODELS --TECHNOLOGICAL AND MARKET DYNAMIC MODELS INCREASED EMPIRICAL STUDIES INTRODUCTION OF MASS DEPENDENCE MODEL VARIATION IN THE LIABILITY OF NEWNESS MODEL CONTRIBUTIONS FROM FIELDS OF ECONOMICS, STRATEGIC MANAGEMENT INCORPORATED CONCEPTS FROM RESOURCE DEPENDENCE,TCE, STRATEGIC MANAGEMENT

ORGANISATIONAL ECOLOGY AND DYNAMIC CAPABILITIES 1990-TILL DATE(AMBURGEY AND RAO 1996) PREDOMINANCE OF THEORY OVER EMPIRICISM ATTEMPT TO INTEGRATE PROCESSES AT DIFFERENT LEVELS OF ANALYSIS DIVERSITY OF CONTRIBUTORS FURTHER INCREASED

ORGANISATIONAL ECOLOGY AND DYNAMIC CAPABILITIES CONTRIBUTIONS AND OUT LOOK FOR FUTURE CONCEPTS ARE ABLE TO TACKLE WIDE VARIETY OF PROBLEMS METHODOLOGICAL RIGOR AND STRENGTH OF GENERALISATION FUTURE OUT LOOK(AMBURGEY AND RAO 1996) –explore area of organizational economics –Look at growth of network forms to study rise and fall of intermediary forms. –Look at co evolution of institution and technology with organizations. –Look at endogenous population change –co evolution of populations.

ORGANISATIONAL ECOLOGY AND DYNAMIC CAPABILITIES RESOURCE BASED VIEW COMPETITIVE BASED ON DIFFERENCES IN RESOURCES AND CAPABILITIES(PETERAF 1993) Teece et al. (1997 :) define dynamic capabilities as ‘the firm’s ability to integrate, build, and reconfigure internal and external competences to address rapidly changing environments

ORGANISATIONAL ECOLOGY AND DYNAMIC CAPABILITIES Source : Helfat and Peteraf 2003

ORGANISATIONAL ECOLOGY AND DYNAMIC CAPABILITIES A firm’s absorptive capacity is the ability of a firm to recognize the value of new, external information, assimilate it, and apply it to commercial ends. (COHEN LEVINTHAL 1990) Dynamic capabilities are shaped by the co- evolution of learning mechanisms (organizations absorptive capacity) such as experience accumulation, knowledge articulation and knowledge codification. (ZOLLO AND WINTER 2002)

ORGANISATIONAL ECOLOGY AND DYNAMIC CAPABILITIES The organizational ecology theory studies phenomenon at the population and community level but essentially misses out the mechanics at the intra firm level. The resource based view looks at the intrafirm level processes but does not explore processes at the population and community level. Organizational ecology theory has its strengths in using dynamic models and strong empirics using longitudinal data while resource based view uses more of case methodology and uses cross section data.

ORGANISATIONAL ECOLOGY AND DYNAMIC CAPABILITIES Organizational ecology hAs already incorporated the concepts of institutional theories and transaction cost economics, and by incorporating the concepts of resource based view it thus creates a Meta paradigm which is in a position to look at organizational theory holistically.

ORGANISATIONAL ECOLOGY AND DYNAMIC CAPABILITIES This organizational capability arises out of the collective abilities of the individual’s memory (variety in his stored enactments or experience including knowledge and skills) and the organizational communication processes of sensing, transmission, storage and retrieval of the collective memory of the organization. These processes also involve rules for selection, replication, recombination and retention of these variations in the behavior. It is these processes which form the dynamic capabilities (WIECK 1979 )

ORGANISATIONAL ECOLOGY AND DYNAMIC CAPABILITIES Adaptive evolutionary processes are often rooted in Core Micro-strategies. Adaptive evolutionary processes of innovation and growth are pursued through recombination of existing micro-strategies according to a limited repertoire of recursive recombination patterns The organization leaders purposefully guide evolutionary processes—strategic intent (Salvato 2003 )

ORGANISATIONAL ECOLOGY AND DYNAMIC CAPABILITIES Continuous ability to respond to the environment in appropriate fashion with desired efficiency and speed enables continuous adaptation or change. Thus the dynamic capabilities define the organizational capability to enable the identified change on a continuous basis.

ORGANISATIONAL ECOLOGY AND DYNAMIC CAPABILITIES INTRAFIRM PROCESSES ORGANISATIONS POPULATIONS COMMUNITIESORG ECO+INSTTHEORIES ORG ECO THEORY ORG ECO +RBV ORG ECO+STR CHOICE VOLITION AND ADAPTATI ON DETRMINISM AND SELECTION

ORGANISATIONAL ECOLOGY AND DYNAMIC CAPABILITIES RAYS OF KNOWLEDGE(GNANA)– VARIATION INTELLIGENCE MATURES –WISDOM—SELECTION -- ENACTMENT WISDOM INTEGRATES INTO LIFE—ISSUES AS ACTION—BHAKTI– RETENTION AND RECOMBINATION—ROUTINES—processes to ensure recombinations IMMATURE KNOWLEDGE IS USELESS TINSEL– VARIATIONS NOT INTEGRATED INTO MMEMORY OF ENACTMENTS—ARE LOST PERCEPTION—MEANING—KNOWLEDGE—WISDOM- ACTION– SUSTAINED PERFORMANCE SOURCE—C RAJAGOPALACHRI—BHAJA GOVINDAM

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