Dynamics of Selection of Firms in Organizational Populations

As we have noted in previous chapters, evolutionary selection refers to processes of differential replacement in populations. A characteristic conveys a selective advantage if it increases the likelihood that actors with the characteristic will be represented in future populations. In the biotic case, where lifetimes are reasonably tightly controlled by genes and structural characteristics are passed from parent to offspring, selection processes can be identified with differences in net reproductive value of populations with differing characteristics. A characteristic can contribute to net reproductive value because actors with the characteristic are more likely to survive to a reproductive age, are more likely to engage in reproductive attempts, or are more likely to produce viable offspring. One can either treat these components of reproductive success separately or combine them into an overall measure of fitness (expected number of offspring in the next generation of reproducing actors), depending on the analytic purposes.

Organizational ecology and evolution are more complicated than compa- rable processes in bioecology for several reasons. We have already mentioned the fact that forms of organization are not coded in inert genetic material. Individual organizations can and sometimes do change their forms. In addition, information about building structure does not pass from parent to offspring. There is often no clear-cut parallel to a parent. Moreover, there is no reason why individual organizations cannot live forever. This means that an organization can contribute to future generations directly, by persisting. Many generations of formal religious organizations have included the same subpopulation: for instance, the Roman Catholic Church and its constituent orders.

Because of these complexities, we do not attempt to combine the various dimensions of organizational selection processes into a single index such as net reproductive value. Instead we concentrate on the various rates that comprise the process: founding rates, merger rates, disbanding rates, and rates of structural change. Our theoretical and empirical work concentrates on the effects of environments and competition within and between populations on these rates.

In addition to concentrating on the component rates rather than on fitness, we also deal with local dynamics of change in organizational ecology rather than with the equilibria implied by certain selection processes. Population- ecology theory in biology usually tries to characterize the equilibria implied by a selection process and sometimes also tries to treat the global dynamics of the system. Our goals here are more modest. Because we knew little about the local dynamics of organizational ecology (for example, how changes in density affect founding rates) when we began, we did not set out to characterize the long-run implications of the local changes we study. We think it is complicated enough to model local dynamics in ways that can be studied empirically. We leave to later research the task of putting together the pieces and drawing implications about global properties of processes of evolution and change in the world.

The remainder of this book seeks to implement the main ideas of this chapter empirically. In Part II we describe our research designs and data and introduce the models and estimators that we use; in Part III we report our findings.

Source: Hannan Michael T., Freeman John (1993), Organizational Ecology, Harvard University Press; Reprint edition.

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