Population-Ecology/ Organizational Ecology Report by: John Marc B. Estoque Bernadette Garce

I. Major Proponent of the Theory Dr. Michael T. Hannan Michael Hannan is the Stratacom Professor of Management in the Graduate School of Business and Professor of Sociology in the School of Humanities and Sciences.  He received his PhD in sociology from the University of North Carolina, Chapel Hill in 1970. He came to Stanford as Assistant Professor of Sociology in 1969, moved to Cornell in 1984 where he was the Scarborough Professor of Social Sciences, and returned to Stanford in 1991. His major research interests include categories in markets, organizational ecology, sociological methodology, and formal sociological theory. His current theoretical research applies dynamic logics to organization theory. His current empirical research investigates the emergence of organizational categories and the implications of category membership for organizational identity in several domains, including winemaking in the Italian regions of Piedmont and Tuscany as well as Alsace in France. Source: http://www.gsb.stanford.edu/users/hannan

II. Definition of Theory What is Population-Ecology Organizational Theory?

III. Key Principles of the Theory Population-Ecology/ Organizational Ecology Theory Inertia and Change Niche Theory and Resource Partitioning Density Dependence Age Dependence

A. Inertia and Change Thomas Malthus (1700’s) Charles Darwin (1800’s) “Unchecked population increases exponentially; Whereas the food supply grows only arithmetically. Thus inevitable limitations of vital resources would have demographic implications leading to a STRUGGLE FOR EXISTENCE” “As population outgrew resources, STRUGGLE FOR EXISTENCE plays a role where favourable variations would lead to be preserved and unfavourable ones to be destroyed. Thus the result would be the formation of new species to survive”

A. Inertia and Change Natural Selection Adaptation Speciation

A. Inertia and Change Environment Michael Hannan (1900’s) “The Population-Ecology of Organization” Organization Organism Affects Affects Environment

(+) Adaptive Behaviours A. Inertia and Change Similar to Darwin’s Theory Symbiotic Relationship: Both Organization and Environment changes as they influence each other In this sense, the organization is viewed analogue to an organism. It has collective means of adapting to environmental situations. Environment Structure/ Organization (+) Adaptive Behaviours (+) Learning

A. Inertia and Change Inertia The property of any object remain at rest or in uniform motion unless acted upon by some external pressures Whereas: Object = Organization Motion = Movement of the Organization (Growth, Development and Decline) External Force = Environment

A. Inertia and Change Environmental Pressure Organization’s Adaptive Flexibility Environmental Selection Constraints To Adaptation COMPETITION Internal Pressure External Pressure “arise” Internal and External Environment

A. Inertia and Change Internal Pressures External Pressures Organization’s investment in plant, equipment, technology and specialize personnel Internal Information that Decision Makers receive Internal Political System Organizational Culture Legal and Fiscal Barriers Availability of External Information Competition with Other Organization

A. Inertia and Change Internal and External Pressures gives way to every organization to generate their own “Blue Print” as a way to respond to a certain environment, the same strategy that an organism applies in order to survive. (Ex…) A Blue Print has two functions: an information function that describes the rules used in obtaining, processing, and transmitting information about the states of external environments, and an activity function that states the rules used in acting on received information so as to produce an organizational response. An Organization Form, therefore, is a blueprint for organizational action, for transforming inputs into outputs.

A. Inertia and Change The Blueprint can usually be inferred through the following components: The Formal Structure of the Organization which includes tables of organization, written rules of operation, etc. The Patterns of Activity within the Organization The Normative Order – the ways of organizing that are defined as right and proper by both members and relevant sectors of the environment.

A. Inertia and Change Environmental Pressures (External and Internal) Approach Adaptation and Change Disadaptation Blueprint Survival Extinction Birth of New Organization Modification of Existing Organization Death of Organization

A. Inertia and Change Environmental Selection  Competition A focus on selection invites an emphasis on competition. Organizational forms presumably fail to flourish in certain environmental circumstances because other forms successfully competes with them for essential resources. As long as the resources which sustain organizations are finite and populations have unlimited capacity to expand, competition ensues. Four Stages of Competition Demand for Resources exceeds Supply Emergence of Competitors Environmental Selection eliminates the Weakest Competitors The Weakest Competitors either disbands or yields to a Stronger Competitors. The Strongest Competitors grew larger

B. Niche Theory and Resource Partitioning a habitat supplying the factors necessary for the existence of an organism Niche of an Organization Is defined as an in a constrained space (the space whose dimensions are levels of resources, etc.) in which the population outcompetes all other local populations. The niche, then, consists of all those combinations of resource levels at which the population can survive and reproduce, itself.

B. Niche Theory and Resource Partitioning Each population occupies a distinct niche: Generalist Organization Changing Niche Changing and Unpredictable Demands “Continuous Production” Stable Demands Stable Niche Specialist Organization “Manufactures Limited Products based-on Job Order Basis

B. Niche Theory and Resource Partitioning Generalism may be observed in a population of organization either in its reliance upon a wide variety of resources simultaneously or in its maintenance of excess capacity allows such organizations to change in order to take advantage of resources which become more readily available. However under stable environmental circumstances, generalists will be outcompeted by specialists. Specialists differ from generalists in how they distribute the fixed quantity of fitness over environmental outcomes. In other words, Specialists outcompete Generalists over the range of outcomes to which they have specialized (because of fixed level of fitness assumption).

B. Niche Theory and Resource Partitioning The distinction between specialism and generalism refers to whether population of organizations flourishes because it maximizes its exploitation of environment change or because it accepts a lower level of exploitation in return for greater security. If in the fact the environment were unchanging, all participants were procedurally skilled, and the procedures were perfectly tuned, there would be no need for any control structure for all, except to monitor behaviour. However when certainty is low, organizational operations are less routine. Under these circumstances, a greater allocation of resources to develop and maintain procedural systems is counterproductive and optimal organizational forms will allocate resources to less formalized systems capable of more innovative responses. Ex…

C. Density Dependence D. Age Dependence Next Principle… C. Density Dependence D. Age Dependence