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Organisation Theory (Subject) / Population Ecology Theory (Lesson)
- Intellectual roots Hannan/Freeman Theory of evolution Adaption theories
- research questions Why is there such a variety of organizational forms? How do organisational forms emerge, develop over time and eventually cease to exist Why are certain organizational forms more likely to survive than others? to what extent is organization' adaptive flexibility contrained by inertial forces? When are inertial forces likely to be particularly strong? To what extent is change in organizational forms driven by firm-level adaption or by population-level selection processes?
- Research approach Focus on populations of organizations not on individual firms Development of evolutionary odels that explain variation, and retention within a population of organizations Investigation of inertial pressures and its effect on the probability of survival Formulation of theory with broad applicability not restricted to specific firms or populations
- Key assumptions Bounded rationality Organizations as inert adapting to environmental changes only imperfectly Adaptive efforts of organizations as being random with respect to their future value Selection advantage of stable, reproducible structures Organizational change as occuring at population-level due to selection processes rather than at firm-level due tp adaption processe Limited scope of managerial agency in influencing organizational change and adpation
- Definition population Consists of similar organizations common form
- Key environmental forces for change Ethical pressure Social pressure Demoraphic pressure Global pressure Political pressure Economic pressure Competitive pressure
- Internal and external constraints for adaptive flexibility Internal Sunk costs Internal information constraints Internal political constraints External Legal and fiscal barriers External information constraints Organizational legitimacy
- The stages of organizational evolution Variation Birth of organizational form as a result of Entrepreneurial activity, inter-population imitation, spin-off from existing firm, governmental intervention Variations can be part of same population and random with regards to future value Selection Some organizational forms compete more successfully for scarce resources than others Reliability and accountability essential for resource access Environment selects fittest organizations and forms Death of organizational forms with inadequate fit with environment Retention Survival of the fittest conservation in stable, recurring patterns of activities and institutionalization Inertia as by-product
- Retention by routinization and institutionalization Routinization Standardization of roles, hierachies and processes i form of routines conserves organizational knowledge Institutionalization Institutionalization of organizational knowledge in organizational structures and mental models as well as in the socialization apparatus of societies, cultural beliefs and values
- Paradx of inertia Inertia is both beneficial and detrimental to survive
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