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RESOURCE DEPENDENCE & ORGANIZATIONAL ECOLOGY

Q: Five ways to cope with uncertainty in RDT

1. Mergers -> vertical integration ->Reduce competition 2. Joint ventures -> Only partial absorption of resources to reduce uncertainty and interdependence 3. Boards of directors -> Provide information, access to channels of information, preferential access to resources, legitimacy 4. Political action -> “Firms actively seek to “create” their environment by trying to shape government regulations that produce a more favorable environment” 5. Executive succession ->Make sure CEO / executives can cope with environmental demands.

Q: How can stakeholders be identified (three circles)

(1) the stakeholder’s power to influence the firm, (2) the legitimacy of the stakeholder’s relationship with the firm, and (3) the urgency of the stakeholder’s claim on the firm

Q: Criticism on Organizational Ecology

• How to define a relevant population ? Where to draw the boundaries? What exactly constitutes birth and decay? • How to keep track of the starting period? • How about managerial discretion? • Works with existing data / debate about precision • Debate about formal logics involved

Q: Core concepts Ecology Model

POPULATION : all organizations of a given type (“population density”) INERTIA : inflexibility / difficulty to adapt to new environmental conditions DENSITY : total number of organizations in the population at time t LEGITIMATION : a specific organizational form becomes institutionalized / gains “constitutive legitimacy” (but also follow the rules!) COMPETITION : rivalry within an industry for resources

5 important questions on RESOURCE DEPENDENCE & ORGANIZATIONAL ECOLOGY

Five ways to cope with uncertainty in RDT

1. Mergers -> vertical integration ->Reduce competition
2. Joint ventures -> Only partial absorption of resources to reduce uncertainty and interdependence
3. Boards of directors -> Provide information, access to channels of information, preferential access to resources, legitimacy
4. Political action -> “Firms actively seek to “create” their environment by trying to shape government regulations that produce a more favorable environment”
5. Executive succession ->Make sure CEO / executives can cope with environmental demands.

How can stakeholders be identified (three circles)

(1) the stakeholder’s power to influence the firm,
(2) the legitimacy of the stakeholder’s relationship
with the firm, and
(3) the urgency of the stakeholder’s claim on the
firm

Describe organization ecology

Organizational ecology theory (earlier: population ecology) provides macro-level explanations for rates of organizational population change
Organizational ecology doesn’t look at separate organizations but at ‘populations’ (groups of similar organizations)
provides macro-level explanations for rates of organizational population change
Starts with the assumption that organizations tend not to change internally once they are firmly established

Criticism on Organizational Ecology

• How to define a relevant population? Where to draw the
boundaries? What exactly constitutes birth and decay?
• How to keep track of the starting period?
• How about managerial discretion?
• Works with existing data / debate about precision
• Debate about formal logics involved

Core concepts Ecology Model

POPULATION: all organizations of a given type (“population density”)
INERTIA: inflexibility / difficulty to adapt to new environmental conditions
DENSITY: total number of organizations in the population at time t
LEGITIMATION: a specific organizational form becomes institutionalized / gains “constitutive legitimacy” (but also follow the rules!)
COMPETITION: rivalry within an industry for resources