Michael T. Hannan

“Michael T. Hannan, Stanford Graduate School of Business”

“[In the early 1900s, ecologists Alfred Lotka and {{w|Vito Volterra}}] independently proposed models of populations dynamics that incorporate effects of competition between populations.”

“The existing literature usually stresses the capacity of organizations to learn about and adapt to uncertain, changing environments. We think this emphasis is misplaced. The most important issues about the applicability of evolutionary-ecological theories to organizations concern the timing of changes. Learning and adjusting structure enhance the chance of survival only if the speed of response is commensurate with the temporal patterns of relevant environments.”

“Inertial pressures prevent most organizations from radically changing strategies and structures.”

“Natural selection, as it is actually used in evolutionary population biology, serves mainly as an optimization process. In fact, the reasoning that underlies much evolutionary biology often strikes social scientists as strongly reminiscent of neoclassical economics.”

“A system with greater organizational diversity has a higher probability of having in hand some form that does a reasonably satisfactory job of dealing with the changed environmental conditions. Adaptation in such a system means reallocating resources from one type of existing organization to another, either by command or by market mechanisms, rather than trying to identify and create appropriate organizational forms.”

“For wide classes of organizations there are very strong inertial pressures on structure arising from both internal arrangements (for example, internal politics) and from the environment (for example, public legitimation of organizational activity). To claim otherwise is to ignore the most obvious feature of organizational life. Failing churches do not become retail stores nor do firms transform themselves into churches.”

“The concept of "niche," initially borrowed by biologists from early social science, plays a central role in ecological theory... The niche... consists of all those combinations of resource levels at which the population can survive and reproduce itself.”

“We argue that in order to deal with the various inertial pressures the adaptation perspective must be supplemented with a selection orientation. We consider first two broad issues that are preliminary to ecological modelling. The first concerns appropriate units of analysis. Typical analyses of the relation of organizations to environments take the point of view of a single organization facing an environment.”

“Legitimacy constraints also emanate from the environment. Any legitimacy an organization has been able to generate constitutes an asset in manipulating the environment. To the extent that adaptation (e.g., eliminating undergraduate instruction in public universities) violates the legitimacy claims, it incurs considerable costs. So external legitimacy considerations also tend to limit adaptation.”

“Once standards of procedures and the allocation of tasks and authority become the subject of normative agreements, the cost of change greatly increased. Normative agreements constrain adaptation in at least two ways. First, they provide a justification and an organizing principle for those elements that wish to resist reorganization (i.e. they can resist in terms of a shared principle). Second, normative agreements preclude the serious consideration of many alternative responses.”

“A population ecology perspective on organization-environment relations is proposed as an alternative to the dominant adaptation perspective. The strength of inertial pressures on organizational structure suggests the application of models that depend on competition and selection in populations of organizations. Several such models, as well as issues arising in attempts to apply them to the organization-environment problem, are discussed.”

“Hannan and Freeman examine the ecology of organizations by exploring the competition for resources and by trying to account for rates of entry and exit and for the diversity of organizational forms. They show that the destinies of organizations are determined more by impersonal forces than by the intervention of individuals by the intervention of individuals.”