1. MGMT 861 Week 12 (Population Ecology and Interorganizational Fields)

2. Discussion of the environment and an open systems approach to OT. Point out that OT ecologists and institutionalists differ from those who view organizations from a contingency or transaction cost perspective in that they do not believe organizations can “change their basic structural features.” (p. 246). Ecologists examine the “selection” process of the environment and they focus on survival (not performance or effectiveness) of organizations. SCOTT & DAVIS (2007)

3. There is a brief discussion of entrepreneurship and the importance of social networks (increase access to information). Imprinting – new organizations usually look similar to their cohorts and the forms and properties of these organizations tend to be imprinted and stay the same over time – this creates inertia which prevents change. Couple of factors to consider within ecological approaches: 1.Niche-width – specialists vs. generalists 2.Density dependence – u-shape between density and failure SCOTT & DAVIS (2007)

4. Institutions also have an impact on organizations. Authors break down three types of institutions: 1.Regulative – laws of society, government 2.Normative – accrediting bodies, social obligations to society 3.Cultural-Cognitive – common shared beliefs about collective action The authors point out that all of these have an impact and they often overlap. Filiation, or copying all or parts of an organization, is why we have many reproductions of the same type of organization. SCOTT & DAVIS (2007)

5. Organizational fields are diverse organizations which are interlinked – e.g., government, government contractors, and banks. (Populations are limited to just one type of firm.) Examining how fields evolve, change, and restructure – which may be the result of exogenous or endogenous factors is an important part of OT. SCOTT & DAVIS (2007)

6. Discusses the impact of social environments on the structure of organizations. Makes assertions along 5 topic areas: 1.The effects of social structure on startups and continued existence 2.The correlation of historical time of startup & contemporary from of similar types of organizations. 3.The relation of orgs to societal violence, particularly violence in unrestrained competition in the political arena. 4.The impact of org arrangements on the relation between social classes in the larger society. 5.The effect of the mere presence or absence of orgs on the solidarity & feeling of identity of “communal” groups. STINCHCOMBE (1965)

7. The main point I want you to focus on is Liability of Newness - hypothesized that newly-formed organizations suffered from what he labeled the liability of newness, which is a direct result of budding, but incomplete, social structures. Firms created at a particular time have the same form (p. 154). Discusses the motivations to organize – efficiency in completing required tasks. Efficiency in any organization requires coordinated action between interdependent actors. STINCHCOMBE (1965)

8. L of N – 4 problematic social structure issues: 1.Roles - Individuals must learn new roles consistent with the organization’s specific goals. 2.Norms - Once roles established individuals must develop and follow standard social routines. 3.Relationships between Employees - Trust, kinship, and loyalty between organization members (or a corporate culture) must develop. 4.Social Ties to Clients/Customers - Relationships with those who use or purchase organizational goods/ services must be cultivated – stability must be achieved. STINCHCOMBE (1965)

9. Variables Affecting Organizing Capacity: 1.General literacy and specialized advanced schooling 2.Urbanization 3.A money economy 4.Political revolution 5.Density of social life, including especially a rich organizational life Over time certain structural characteristics of a type of organization are stable over time – showed differences in labor force over time. STINCHCOMBE (1965)

10. Only firms that are fit to survive do so and succeed (selection not adaptation). It is the environment which optimizes. Structural inertia tends to build up over time making it hard to change. Fitness – “the probability that a given form of organization would persist in a certain environment.” Isomorphism – firms tend to become similar in appearance and structure over time. Specialists (niche players) and Generalists (broad product/ service lines) are better suited for certain environments. HANNAN & FREEMAN (1977)

11. Course-grained (e.g. legal changes) and fine-grained (e.g. demand changes) environments also select structures. Stability versus radical change selects structures. They listed factors which can lead to structural inertia: Internal: investment in plan, equipment, and specialized personnel; constraints on information; political constraints; standard procedures are hard to change. External: Legal and fiscal barriers to entry/exit; legitimacy constraints; collective rationality problem

12. Examined density dependence – to explain the concave pattern of growth in organizations Studied newspaper founding and failure rates in nine cities. Specifically related to the failure discussion, the researchers assumed that density was a function of the social processes of legitimation (proportional) and competition (inversely proportional). Ultimately, density dependence explained failure rates of org. populations. CARROLL & HANNAN (1989)

13. Reviews interorganizational relations literature. Points out 3 arenas: resource procurement and allocation, political advocacy, and organizational legitimation. Resource Procurement and Allocation Exchange behaviors affected by resource dependency and power dependency. Points out market imperfections and groups (cartels, oligopolies, etc.) exist. Managing uncertainty is a challenge (perceptions, objective realities, incomplete info) and strategies such as forestalling, forecasting, and absorption are useful. Also boundary-spanning and cooptation. A “sub-optimal choice” may be the best available at the time GALASKIEWICZ (1985)

14. Political Advocacy Mobilization of coalitions as political interest groups. Orgs within political coalitions have preexisting relationships and centrality of networks affects mobilization. Incentives have not been well researched. Organizational Legitimation Linking to cultural symbols/companies/individuals (advertising), and charitable organizations. “Legitimacy” is difficult to operationalize. Understand the systems in which organizations operate and the challenge is to develop theory when the 3 overlap. GALASKIEWICZ (1985)