The concept of Niche

The main point of contact between existing organization theory and modern ecological theory is the concept of the niche. The concept provides a useful general way to express how environmental variations and competition affect the growth rates of populations. The imagery of the niche expresses the role of a population (or species) in a community, a population’s “way of earning a living.” Elton (1927, pp. 63-64), the most important pioneer in niche analysis in bioecology, put it this way: “It is . . . convenient to have some term to describe the status of an animal in its community, to indicate what it is doing and not merely what it looks like, and the term is ‘niche’ . . . When an ecologist says ‘there goes a badger’ he should include in his thoughts some definite idea of the animal’s place in the community to which it belongs, just as if he had said ‘there goes the vicar.’ ”

Although Elton’s metaphor proved useful in naturalistic studies, it was not sufficiently precise for theoretical development. Modern niche theories began with Hutchinson’s (1957) abstract geometric definition (see also Hutchinson 1978). He defined the niche as the set of environmental conditions within which a population can reproduce itself. That is, the niche is the set of conditions in which the population’s growth rate is non-negative. Because growth rates usually respond to numerous environmental dimensions, the relevant environment consists of an ^-dimensional space with each dimension telling the level of some relevant environmental condition, such as average rainfall or average diurnal temperature fluctuation. Each point in this space corresponds to a particular state of the iV-dimensional environment. Hutchinson defined thQ fundamental niche of a population as the hypervolume formed by the set of points for which the population’s growth rate (fitness) is non-negative. In other words, the fundamental niche consists of the set of all environmental conditions in which the population can grow or at least sustain its numbers. It is called the fundamental niche because it refers to the physiological capacities of the members of the population.

The analogue for populations of organizations is straightforward. Classical theorists, notably Marx and Weber, paid much attention to the social, economic, and political conditions required to sustain particular organizational forms, such as a capitalist business enterprise or a rational-legal bureaucracy. They suggested, for example, that the environmental dimensions that affect the growth of populations of rational-legal bureaucracies include the fraction of exchanges that are monetized, the availability of literate employees, and stability in flows of resources to the state. Taking the various dimensions together defines an A-dimensional social environment. The niche of rational- legal bureaucracy (or of any other organizational form) consists of the set of social arrangements in which this population can grow or at least not decline.

Specifying the niche of an organizational form requires intensive analysis of its natural history. Learning about the social, economic, and political conditions required to sustain a form of organization requires study of the details of the organizational form and the functioning of organizations that embody it. In fact, the concept of the fundamental niche of a form provides a felicitous device for incorporating institutional knowledge about kinds of organizations into systematic theory about population dynamics and evolution. It fits well with the actual practice of social scientists and others who provide detailed accounts of the functioning of various kinds of organizations.

A fundamental niche characterizes growth rates of isolated populations. The next step in the development of niche theory adds the effects of interactions among populations. From an ecological perspective, two or more populations interact if the presence of one affects the growth rate of the other(s). These effects may be either positive or negative. The term “competition” is often restricted to the case in which the negative effect is mutual, that is, to situations in which the presence of each population lowers the growth rate of the other. The predator-prey (or host-parasite) case has one negative and one positive link. The case in which both links are positive is called commensalism (or sometimes symbiosis).

We consider organizational instances of each of these kinds of situations in the chapters that follow. Many of the situations we analyze involve two populations competing for the same limited resources. For example, we contrast the life chances of populations of specialist and generalist restaurant firms competing for the business of the same set of consumers. We also find examples of a predator-prey pattern; we show, for example, that the growth of the population of craft unions stimulated the founding rate of industrial unions, but that the subsequent spread of industrial unionism depressed the founding rate of craft unionism. There are many obvious examples of commensalism in the organizational world. The creation of a new industrial form such as the semiconductor industry creates conditions for the establishment and growth of a set of related industries, such as the firms that produce the boards on which chips are placed.

When populations interact, the expansion of one population changes the niche of the others. If two populations compete, the presence of the competitor reduces the set of environments in which a population can sustain itself. Hutchinson called this restricted set of environments the realized niche. Two populations compete if and only if their fundamental niches intersect. The assumed equivalence of niche overlap and competition has played a crucial role in allowing ecologists to relate naturalistic observations on realized niches to dynamic models of population growth and expansion. We think that it can play a similarly central role in empirical and theoretical analysis of organizational dynamics. In order to make the potential connections clear, we first review classical theories of population growth and interaction and then discuss theories of niche width.

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

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