Background Where it started What the Theories Suggest Principles Applications /Lessons Defects Conclusions

DefinitionsEcology involves interactions of living organisms and their environments. Life sets ecology apart from the inanimate physical sciences.

Population ecology is the discipline in ecology that deals with the structure and dynamics (e.g. growth and decline) of biological populations. The focus may be on a single population in isolation, or one of a few interacting species.

According to Hannan and Freeman (1977) a population of organizations is defined as "all the organizations within a particular boundary that have a common form". Industry is the closest counterpart in economics and strategy management literature.

In the late 1700s, Reverend Thomas Malthus’ in An Essay on the Principle of Population argued that population increases exponentially if unchecked whilst the food supply grows only arithmetically; hence inevitable limitations of vital resources would have demographic implications, leading to a "struggle for existence".

Adam Smith, an 18th century political economist, in his The Wealth of Nations, identified a regulating mechanism in free markets, which he referred to as the "invisible hand", which suggests that supplies and demand are the key determinants of prices .

Charles Darwin was influenced by both Smith and Malthus, and thus Darwin ‘continued the conversation’ on the "struggle for existence" in nature. Darwin determined that as population outgrew resources, "favorable variations would tend to be preserved and unfavorable ones to be destroyed.

The principle of geometric growth: In general exponential growth can apply to population ecology. The

law is The Malthusian law

Exponential Growth-this model :Predicts the rate of growth, or decay, of any population where the

per capita rates of growth and death are constant over time. *Births, deaths, emigration and immigration take place

continuously *For the growth of most biological populations *Human populations grow exponentially when resources

are plentiful

The principle of cooperation: Arises from the basic ecological premise that individuals can receive

increasing benefits, in terms of higher reproduction and/or survival (or higher R), from increases in population density (Berryman 1999). For example, a higher probability of finding a mate, obtaining food (group hunting), or escaping enemies (group defense)

The principle of limiting factors: populations can be affected by many feedback loops

involving many different species and physical factors. If all these potential feedback processes were to operate simultaneously, then the dynamics would usually be extremely complex, or even chaotic

The principle of interacting species: inter-specific interactions between predators and their

prey can create negative feedback between the two species, in the sense that increases in prey numbers results in higher predator numbers (through increased reproduction) and this feeds back to reduce prey numbers (through increased mortality).

The principle of competition: It arises from the basic ecological premise that

organisms have problems acquiring resources, or become more vulnerable to natural enemies, as their populations become larger, and these results in lowered reproduction and/or survival.

Inertia and Change: It implies that organizations that are both reliable and accountable are those that can survive (favored by “natural selection”). A negative by-product, however, of the need for reliability and accountability is a high degree of inertia and a resistance to change.

Niche Theory: It distinguishes broadly between two types of organizations: generalists and specialists. specialist organizations maximize their exploitation of the environment and accept the risk of experiencing a change in that environment, while generalist organizations accept a lower level of exploitation in return for greater security.

Resource Partitioning: It develops the relationship between generalists and specialist organizations. This model includes predictions about the founding and mortality rates of both specialists and generalists as a function of market concentration.

Density Dependence: It predicts that the rates of founding and the rates of mortality are dependent on the number of organizations (density) in the market. This density dependency sub-theory seemed rather intuitive and related to Smith concepts of “supply and demand”.

Liability of newness. Here, the risk of failure is high initially but declines as the organization ages environmental change experienced by an organization, and if the risk of failure increases with the cumulative environmental change, then the probability of failure will increase with age if environmental change is uncontrolled.

Liability of adolescence. The risk of mortality will be low at first as the organization is buffered from failure due to support by external constituents and initial endowments. But when these initial resources become depleted, the mortality hazard shoots up and then declines following the liability of newness pattern

Liability of aging. Here, the risk of failure increases with organizational age. This could be due to a liability of obsolescence (a growing external mismatch with the environment).

Structural inertia model advanced by Hannan and Freeman (1984):

This theory agrees that an organization’s strategy is the “core competence” of the organization, an enterprise’s internal pressure tends to prevent sharp changes of present strategy, once the strategy is established,organizational leaders would not like to deviate from it since it may destroy the original organization system, disturb the connections of former interest-related parties, and decrease the efficiency and effect of the organization.

Evolution of Organizational Forms: It holds the idea that 'long-run changes in organizational diversity reflect the accumulated effects of short-run differences in net mortality rates of populations facing limited resource environments, Evolutionary theory means three things.

1. Organizations have descended from past organizations . 2. Big differences seen now have arisen gradually. 3. The processes of change are still around us and can be examined experimentally.

Dynamic and Comparative Analysis: "The diversity of organizations in society depends on the both the number of organizational forms and the distribution of organizations over forms".

This is a dynamic process, with new forms being created, some orgs changing into other forms, and some forms going away. Organizations are created and disbanded or merged. organization that cannot change strategy and structure as quickly as their environments can change.

The Demography and Ecology of Organizations: is appropriate when organizations are subject to strong inertial pressures and face changeable, uncertain environments." membership, capital, and legitimacy.

1. demography of organizations, concerns the variations in vital rates

for organizational populations (founding rates, merger rates, disbanding rates, etc.) 2. population ecology of organizations, tries to show how the vital rates of one population are affected by other organizational populations. 3. community ecology of organizations. This looks as interacting communities of populations (like firms, labor unions, and regulatory agencies)

Organizational Age: An organization can form an inherent institution and tradition in

a long-term management and build a stable relationship with interest-related parties. Aged” organizations will face more pressures as they change the original strategies. So, they prefer to adjust their strategies continuously in order to adapt to the changeable environment needs.

Population Thinking: Ecological density as important factors influencing strategy

change. They think that the high-density industry can worsen the competition and the fierce competition will enhance all enterprises’ strategy differentiation (Hannan and Freeman, 1989).

a) Darwin’s evolutionism regards natural selection as the only engine for biological evolution, neglecting the possibility of complex system generating orders spontaneously. The evolvement of an organization and its operational model is the result of natural selection and self-organization (Min Luo, 2006). An introduction of the complexity theory to complement the organizational ecology-based strategy change theory is necessary.

Under this circumstance, strategy change behavior includes not only transformation of enterprise’s resource capabilities but also changes of organizational learning (Ancheng Pan, 2007)

b) The so-called “self-organize” refers to a process in which things become organized or ordered spontaneously. In other words, the self-organized system organizes, survives, evolves, innovates, and develops by itself without depending on external orders. It is a process from disorder to order.

c) Macintosh and Maclean use the complexity theory to re-explain the motives for corporate strategy change. Therefore, to introduce the complexity theory into the research on strategy change theory is a right theoretical complement.

The concept of fitness is not clearly defined by the theory, its insufficient to state that only organizations that the environment determines as fit survive. A more meaningful and causal pattern must be presented for a theory to be acceptable

Most theoretical and empirical work in population ecology has focused on explaining the striking similarity of the growth trajectories of very different organizational populations, varying from banks and breweries to labor unions and voluntary social service organizations. The number of organizations in a population typically grows slowly initially, and then increases rapidly to a peak. Once the peak is reached, there is usually a sharp decline and occasionally stabilization.

Density is a remote measure of the processes of legitimating and competition. Legitimacy grows with density, at a decreasing rate, while competition grows at an increasing rate. At low levels of density, growth in numbers serves primarily to legitimize a population's goals and chosen form. At high levels of density, increases in density strengthen competition far more than legitimation. The net effect shifts from legitimation at low density to competition at high density. Therefore the relationship between density and the founding rate has the form of an inverted-U.

Market concentration has critical implications for entry and exit rates (which are called founding and mortality rates in population ecology, respectively), as well as profitability. It should be noted that high market concentration and entry barriers often lead to low entry rates and high mortality rates for disadvantageous firms.

The debates between selection and adaptation theories are far from over, although some reconciliation has been made (e.g., Baum and Singh, 1993; Usher and Evans, 1996). Debating whether organizational action is the product of opportunistic choice or environmental constraint is like debating whether a glass is half empty or half full (Astley, 1985).

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