Markets, Networks and Hierarchies
New Horizons in Institutional and Evolutionary Economics series
Edited by Olivier Favereau and Emmanuel Lazega
Chapter 5: Organizational ecology
David N. Barron INTRODUCTION Reviews of organizational ecology usually start by making reference to Hannan and Freeman’s (1977) now famous article.1 Along with work published around the same time by authors such as Aldrich (1979) and McKelvey (1982), this article was the foundation for the large body of research that has developed over the past 20 years or so. The central question posed by Hannan and Freeman (1977) was ‘Why are there so many kinds of organizations?’ Although little, if any, empirical research has sought to answer this question directly, ecologists are always concerned with explaining how ‘social, economic, and political conditions affect the relative abundance and diversity of organizations and attempt to account for their changing composition over time’ (Baum, 1996, p.77). To this end, most empirical research in this tradition has concentrated on explaining the rates at which new organizations are founded and/or the rate at which existing organizations disband, a sub-branch of organizational ecology that is sometimes called organizational demography (Carroll and Hannan, 2000). The other main subbranch of the field has been concerned with changes in individual organizations. This sub-branch has developed out of the work of another American sociologist, Miller McPherson (1983). Recently, a few scholars have been attempting to combine some of the features of these two sub-branches of ecological research. The encapsulation of the concerns of ecological researchers quoted above summarizes some of the key characteristics of ecological research. First, it is concerned with the effect of the environment on organizations. In...
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