Organizational ecology

Organizational ecology is a branch of organizational studies that draws from biology, economics, and sociology to examine how organizations emerge, evolve, and decline.

Organizational ecology is divided into many levels like community, population, and organization. The community level involves interacting populations, the population level includes organizations engaged in similar activities, and the organization level focuses on individual organizations. When people talk about organizational ecology in research, they usually mean population ecology, which focuses on the second level, studying how groups of organizations change over time.

Development:

Before the 1970s, most research on organizations focused on how they adapt to change. But in the mid-1970s, researchers like William Evan and Eric Trist started looking at how the environment affects organizations. Trist defined population ecology as studying how groups of organizations interact and create a system. Then, in 1977, Michael T. Hannan and John H. Freeman developed a theory of population ecology, explaining how organizations compete and evolve, similar to natural selection. This approach examines how organizations start, end, and change over time.

Organizational ecology has since become a major field in studying organizations, known for its use of big data over long periods. Some key books in this field are "The Demography of Corporations and Industries" and "Logics of Organization Theory."

Niche theory:

1. Two Types of Organizations: There are two main kinds of organizations: generalists and specialists.
2. Generalists vs. Specialists:
   • Generalist organizations try to take advantage of everything in their environment and are okay with taking risks if things change.
   • Specialist organizations focus on doing one thing really well and prefer stability over taking big risks.
3. When to Specialize: Niche theory says that it's usually better to specialize when the environment is stable and predictable.
4. Exceptions to the Rule: However, niche theory also teaches us that being a generalist isn't always the best choice, especially when the environment is unpredictable and changes often.
5. Industry Structures: Niche theory helps us understand why some industries have mostly generalist organizations while others have more specialists. It depends on what the environment demands from them.