Transcript SOC 8311 Basic Social Statistics

ORGANIZATIONAL ECOLOGY
Organizational ecology theory provides macro-level explanations
for rates of organizational population change. In common with
evolution, variation-selection-retention dynamics result in growth
of a new org’l form adapted to a specific environmental niche.
Michael Hannan and John Freeman
launched their program by in 1970s,
based on human ecology principles
developed by Amos Hawley, a UNC
sociologist. Carroll & Hannan (2000)
manifesto called for creation of
corporate demography as a discipline.
As it gained academic legitimacy through numerous publications,
OET grew to a high density of scholars, courses, and students. It’s
an example of how an aggressively pursued theory construction
agenda can ultimately achieve successful institutionalization.
Forms of Organizations
Population comprised of all the orgs with an identical form
FORMdf A blueprint for action: “rules or procedures for
acting upon inputs in order to produce an org’l product
or response.”
Altho four attributes are mission, authority structure, technology,
market strategy, empirically org forms are equivalent to an industry
EX: Newspapers, unions, semiconductors, banks, day-care
centers, restaurants, HMOs, automakers
C&H (2000) reformulated form as a socially constructed identity
based on institutional “codes” (rules & signals) specifying the
features are legitimated by other population members
• College program accreditation by peer institutions
• Brewpubs & microbreweries are new identities distinct from
traditional mass-produced beer makers
Core Concepts
OET’s core concepts drawn from bioecology (niche, carrying
capacity, competition), with institutional additions (legitimation)
FOUNDING of orgs de novo, merger, spin-off, in-migration
MORTALITY thru disbanding, merger, out-migration
INERTIA Inflexibility means most orgs unable to change
form by adapting to new environmental conditions
Wright Bros bike shop into airplane factory was exceptional
DENSITY total N of orgs in the population at time t
LEGITIMATION org form becomes institutionalized,
socially taken-for-granted (constitutive legitimation)
COMPETITION rivalry within an industry for resources
Growth Dynamics
OET explains org population growth dynamics by the nonlinear impact
of changing population size on subsequent new-form founding and
mortality rates. The density-dependence model involves interaction
between opposing legitimation and competition processes.
• Population change occurs via selective replacement of existing organizations
by a newly founded org’l form, not by adaptive changes of existing orgs
• At low population density, the new org’l form struggles to acquire
legitimacy
• Once sufficiently legitimated, form expands rapidly in its niche as plentiful
resources (capital, skilled workers) attract entrants to exploit those
opportunities
• With higher population density, rising resource competition slows the
founding rate, and resource scarcity increases the new form’s mortality rate
• After overshooting its niche’s carrying capacity, the population density
crashes, then recovers to stabilize at a density sustainable by the environment
Growth Graphs
Foundingrate: r(t)  exp(1Nt   2 Nt2 )
Mortality rate
Founding rate
Density dependence equations yield curvilinear rate patterns:
Time
Mortalityrate: r(t)  exp(1Nt  2Nt2 )
Time
Population N
Combine these founding-mortality rates for population growth trend:
Carrying capacity
Time
Logical Coherence
Peli et al. (1994) used first-order logic to uncover an inferential flaw in
Hannan & Freeman theory linking three propositions to the first theorem:
Assumption 1: Selection in populations of orgs favors forms
with high reliability of performance & high levels of
accountability. (hi_rel ∩ hi_acc → hi_survival chance)
Inertia
Assumption 2: Reliability and accountability require that
organizational structures be highly reproducible. (hi_rel ∩
hi_acc → hi_reproducibility)
Reproducibility
Assumption 3: High levels of reproducibility of structures
generate strong inertial pressures. (hi_reprod → hi_inertia)
Theorem 1: Selection within populations of orgs favors
organizations whose structures have high inertia. (hi_inertia
→ hi_survival chance)
(A3)
(A2)
Reliab/Account.
(A1)
Survival Chance
To enable the transitive deduction A3 → A2 → A1 → T1, two propositions
must reverse causal directions: A3 & A2 (or else A1 & T1). Instead, Peli et al.
save T1 by restating bi-directional implications for A2 (the more reliable/
accountable an org, the more reproducible it is and vice versa) & A3 (high
reproducibility is always accompanied by high inertia and vice versa).
Liabilities
Rates of founding, growth, and mortality vary with orgl age & size.
Several liabilities affect these vital rates, form’s environmental fit
NEWNESS - younger orgs fail more, due to internal lack of
trust, selection processes favoring reliable orgl structures
SMALLNESS - smaller orgs fail more, due absence of
slack resources, poor economies of scale in production
Adolescence peak mortality follows “honeymoon”, exhaustion
of initial capital and participant enthusiasm
Obsolescence older orgs more susceptible to external shocks
as inertia prevents adapting to changed environment
Senesence persistence of routines & structures reduces older
org’s efficiency even in stable environments
Research findings are mixed, often lacking size data; newness
liability may occur because most young orgs are also very small
Theory Critiques
OET criticized for simplification, ambiguity of density as proxy
for both unobserved legitimacy and competition effects
• Legitimacy may matter most at beginning of a new form, not later
• Within population, some orgs are less vulnerable to competition
• Older, larger orgs may be more adaptable, less inertial than believed
• Density may hide effects of other influences on population dynamics,
e.g., institutional interdependencies, social networks, learning
opportunities, entrepreneurial activities
Institutionalists (Zucker 1989; Baum & Powell 1995) demanded direct
measures of socio-political legitimation, e.g., events which may be
unrelated to new form population density
EX Road races gained wide acceptance for 1900s automobiles
Hannan & Carroll terse reply that (a) OE does include some measures
of institutional environments (b) stronger theory is created when
analysts use concepts that are generalizable across diverse populations
Empirical Evidence
OE researchers generated an exceptional volume of empirical studies
by applying event history methods to data on diverse org’l populations.
Although results usually supportive, much remains to be learned about
ecological & demographic processes of organizational change.
After initial discovery of density dependence…, many other analyses were
conducted. … on a highly diverse set of populations, the overwhelming
majority of these tests yield the non-monotonic patterns described above. …
The disconfirming tests have apparently come from analyses of data produced
by flawed research designs, notably left-truncated observation schemes that
exclude the early history of a population.” (Carroll & Hannan 2000:218-19)
Baum & Amburgey (2002:322) concluded that OE researchers
sacrificed precision & realism to gain broader generality in density
dependence and inertia studies. “Accumulated empirical estimates
for such variables as org’l age, size, and density reveal little about
theoretical explanations underlying the empirical regularities. This
fosters skepticism regarding the inferred processes because
supportive findings cannot be interpreted precisely, and contradictory
findings are difficult to account for on theoretical grounds.”
Theory Comparisons
Evolution and OE theories are very similar at population level
OET structural inertia principle assumes little adaptability by
individual orgs to survive by changing – an MBA’s nightmare!
But evolutionists see potential for restructuring (by changing
routines), enabling orgs to survive by adaptive transformation
Institutional isomorphism originally contrasted with OET
diversification; now they borrow one another’s concepts
Instead of org’l forms converging around one common type,
quex is “Why are there so many kinds of organizations?”
(Hannan and Freeman 1976:936)
Communities of orgs rarely remain in long run equilibrium because
high rates of vital processes  great population turnover
Uncertain & rapidly changing org’l environments steadily generate
new resource niches entered and colonized by new org forms
An Ecological Theory of Association
Organizational ecology theory is premised on an atomistic actor model
that ignores the interorganizational networks linking competitor firms.
J. Miller McPherson’s multilevel ecological theory of association
explains temporal changes in membership composition -- of voluntary
assns, social movements, religious cults – by the interplay between
organizational characteristics & individuals’ joining-departure behaviors.
• Organizations compete ecologically within a niche space defined by the social
attributes of people living in a community. They seek to acquire control over
the resources (participation, money, time, political support, legitimation) held
by potential members possessing the assn’s target demographics.
• Interpersonal connections through social networks of kin, friends,
acquaintances are mechanisms to recruit replacements & new assn members.
Homophily
→ Homogeneity
Homophily principle: people prefer to associate with others with
similar sociodemographic attributes (gender, age, race, religion, class).
H0: Probability of a tie between two persons decreases with social
dissimilarity, i.e., greater distance in a multidimensional space
• Via network recruitment, most new members’ attributes replicate older ones’
• Although assn recruits members within a niche, boundaries should spread
outward as people’s contacts span niche edges to recruit diverse new persons
• Yet most assns remain highly homogeneous in their social characteristics
S
E
S
HIGH
SCHOOL
GROUP
YOUNG
ADULT
CLUB
YUPPIE
ASS’N
AGES OF TARGET MEMBERS
McPherson: Assn homogeneity
is reinforced by networkmediated selective attrition:
• Longer membership durations at
niche centers, where denser ties
occur among assn members
• Higher departure rates at niche
edges where intra-assn ties are
sparser & assns compete fiercely
recruit new members
Competitive Dynamics
Assns are “hyperboxes” in K-dimensional spaces as defined by member
attributes. Competition produces a push-pull dynamic equilibrium:
• Assns are pushed away from highly overlapped regions where
competition creates difficulties to recruit new members & hold old ones
• Assns are pulled into under-abundant regions by better opportunities
to recruit more members than they lose through competition
Data to support social ecology hypotheses came from McPherson’s 10-town
Nebraska study in 1980s; he proposes to replicate using 2004 GSS hypernetwork.
Hypernetwork: a two-mode matrix linking row
persons to column assns. Respondents identify
their associations, whose informants are then
surveyed. Assns are weighted by member-size to
estimate organizational population parameters.
EX: Both 1991 National Organizations Study & 1998
National Congregations Study used GSS respondents to
generate org lists, thus selected proportional to their size.
References
Baum, Joel A. C. and Terry L. Amburgey. 2002. “Organizational Ecology.” Pp. 304-326 in
Blackwell Companion to Organizations, edited by Joel Baum. Malden, MA: Blackwell.
Baum, Joel A.C. and Walter W. Powell. 1995. “Cultivating an Institutional Ecology of
Organizations.” American Sociological Review 60:529-538.
Carroll, Glenn and Michael T. Hannan. 2000. The Demography of Corporations and Industries.
Princeton, NJ: Princeton University Press.
Hannan, Michael T. and John Freeman. 1977. “The Population Ecology of Organizations.”
American Journal of Sociology 82:929-964.
Hannan, Michael T. and John Freeman. 1984. “Structural Inertia and Organizational Change.”
American Sociological Review 49:149-164.
Hannan, Michael T. and John Freeman. 1988. “The Ecology of Organizational Mortality: American
Labor Unions, 1836-1985.” American Journal of Sociology 94:25-52.
Hannan, Michael T. and John Freeman. 1989. Organizational Ecology. Cambridge, MA: Harvard
University Press.
Peli, Gabor, Jeroen Bruggeman, Michael Masuch and Breanndan O. Nuallain. 1994. “A Logical
Approach to Formalizing Organizational Ecology.” American Sociological Review 59:571-593.
Zucker, Lynne G. 1989. “Combining Institutional Theory and Population Ecology: No Legitimacy,
No History.” American Sociological Review 54:542-545.