Resilience in organizational
communities
Factors that influence resilience
Name: Else Vissers
Student number: 3494853
Course: Bachelor thesis NWI- GEO3-2228
Supervisor: Allard van Mossel
Date: 27-06-2013
Word count: 6.311
1
English summary
In this article the subject of resilience is discussed. Resilience was first discussed in the organizational
ecology literature. Nowadays, resilience is also be used in explaining industry structures. Resilience
looks at the capability of a system or industry to absorb shocks without changing the organizational
community. The organizational community changes when the populations in this community change.
Populations can change because of perturbations in the environment. The research conducted so far
stops at these perturbations. These perturbations are caused by underlying factors, therefore it is
important to review this. By using a systematic literature review several cases are discussed, these
cases showed different underlying factors that influence the degree of resilience in an organizational
community. In the results section of the article several factors are discussed. These factors are
divided into three categories; organizational factors, populational factors and environmental factors.
Some of the factors discussed lower the resilience of an organizational community, and some factors
indicate a high organizational community resilience. The goal of this research is to search for many
different factors that influence the degree of resilience in an organizational community.
2
Nederlandse samenvatting
In dit artikel wordt het onderwerp 'resilience' besproken. 'Resilience' werd voor het eerst
geïntroduceerd in de organizatorische ecologische literatuur. Momenteel wordt het concept
'resilience' ook gebruikt in studies naar industrie structuur en samenhang hierbinnen. 'Resilience'
kijkt naar de capaciteit van een systeem of industrie om schokken te kunnen absorberen zonder dat
de organisatorische gemeenschap veranderd. De organisatorische gemeenschap veranderd wanneer
de populaties in deze gemeenschap veranderen. Populaties kunnen veranderen door verstoringen in
de omgeving. Het gedane onderzoek naar 'resilience' stopt bij het identificeren van deze
verstoringen. Echter, deze verstoringen worden veroorzaakt door onderliggende factoren, daarom is
het van belang van deze factoren te onderzoeken. Dit artikel is geschreven aan de hand van een
'systematic literature review'. Verschillende de cases en industrieën worden besproken, deze laten
allen verschillende onderliggende factoren zien die van invloed zijn op de mate van 'resilience' in een
organisatorische gemeenschap. In de resultaten sectie worden verschillende factoren besproken.
Deze factoren zijn opgedeeld in drie verschillende categorieën. Factoren op organisatie niveau,
populatie niveau en op omgevingsniveau. Sommige van de factoren liggen ten grondslag aan een
lage 'resilience' in de gemeenschap, terwijl andere factoren juist voor een hoge 'resilience' zorgen.
Het doel van dit onderzoek is om verschillende factoren te vinden die invloed hebben op de mate
van 'resilience' in een organisatorische gemeenschap.
3
Contents
English summary ..................................................................................................................................... 2
Nederlandse samenvatting ..................................................................................................................... 3
Introduction............................................................................................................................................. 5
Theory...................................................................................................................................................... 7
Methodology ........................................................................................................................................... 9
Type of review ..................................................................................................................................... 9
Literature search and selection ........................................................................................................... 9
Method of analysis .............................................................................................................................. 9
Results ................................................................................................................................................... 11
Discussion & Conclusion ........................................................................................................................ 17
Bibliography........................................................................................................................................... 19
Acknowledgements ............................................................................................................................... 21
4
Introduction
In some organizational communities -set of organizational populations that interact regularly and
are integrated- fundamental breakthroughs have occurred during the last 50 years. For example, in
DNA cloning, the automobile industry and in jet aircrafts. These fundamental breakthroughs are
short bursts of radical change alternated with long periods of stability (Brown & Eisenhardt, 1997).
These bursts of radical change are typically triggered by environmental change. This environmental
change is an important subject in the population ecology perspective on organization-environment
relations (Hannan & Freeman, 1977). Environmental effects on organization structure, took a more
important role in organizations theory (Hannan & Freeman, 1977). An example of an environmental
change resulting in changed organizational structure is the Bell company. The company was founded
as a small research and development (hereafter: R&D) company. This long period with R&D as the
only incentive can be seen as a long period of stability. Over the years the company expanded and
the environment changed (Tushman & Romanelli, 1985). These environmental changes included:
political, legal, technological and competitive changes, these changes triggered the company into a
radical change after 100 years of incremental changes(Tushman & Romanelli, 1985). The changes
described are caused by factors from the environment. Therefore the change in this example can be
described as an exogenous perturbation. These exogenous perturbations, are complex processes
that can trigger change in an industry or environment, resulting in a radically changed organizational
landscape (Tushman & Romanelli, 1985; Walker, Holling, Carpenter, & Kinzig, 2004).
Similarly, endogenous perturbations can also be a source of a changed organizational environment,
with a changed organizational structure as a result(Walker et al., 2004). If these changes in
organizational structure seem beneficial for the organization, it can act as a trigger for the rest of the
organizational community to follow. If this happens, the first organization that changed can be seen
as the internal trigger or: endogenous perturbation.
Yet, there are also branches that did not respond to a changing environment. An example of this is
the making of horseshoes. Back in the days horseshoes were made out of iron. Horseshoes were
made by blacksmiths, nowadays horseshoes are still custom made by blacksmiths. This industry
hasn't changed much over the years although its environment changed. From the prior examples it is
clear that environmental change affects some organizational communities more than others.
The focus of the article will lie on the organization-environment relations discussed earlier. To get a
better understanding of these relations, it's important to look at some terms. The organizational
form of a company or organization can be seen as a blueprint for their actions, or how they get from
their input, to their output (Hannan & Freeman, 1977). Organizations with the same organizational
form are grouped together in organizational populations. The possibility exists that these populations
develop relationships with other populations that are engaged in other activities. Together they form
an organizational community (Baum & Rao, 2004). These organizational communities have a lot of
things in common. Despite that, changes in an organizational community occur: populations grow,
populations get replaced, populations take different organizational forms. These changes in
community structure are often the result of disturbances (also: perturbations) in the environment of
the organizational community. These perturbations can be endogenous or exogenous.
To what extent these perturbations influence the community, depends on the resilience of the
community. Resilience was first introduced by Holling (1973) related to organizational ecology, over
5
the years resilience was also used in an organizational perspective (Brand & Jax, 2007). Resilience can
be defined as: "The ability of the system to withstand either market or environmental shocks without
losing the capacity to allocate resources efficiently"(Brand & Jax, 2007, page 3). If these
environmental shocks are too heavy and lower the resilience of an industry or population too much,
there is a possibility that populations get replaced. Because of this, the rise of new organizational
forms occur. According to Baum and Rao (2004), organizational forms are the basis of an
organizational community. To get a clear understanding of the resilience in organizations and
communities, it's important to know what causes this high or low resilience, with a possible change
in an organizational community structure. Most of the research conducted so far focuses only on
these shocks and trigger events that caused organizational change (Suarez, 2005). To get a better
understanding how these shocks can be survived, it is important to look at the exact factors causing
these shocks. These underlying factors of resilience are part of the research on resilience that still has
to be done.
What factors influence the degree of resilience in an organizational community?
This research is of importance because of the lack of research on this subject. The recent use of
resilience in organization structures can be beneficial for a better understanding of the replacement
of populations in an organizational community. So far most of the research in industry evolution
focused only on the trigger events that led to organizational change(Dobrev & Kim, 2006; Suarez,
2005). If the factors of this low resilience are identified, communities can face these factors and try
to overcome them. It can be beneficial at organizational level (for example for companies, if a
company survives a period of low resilience in the community it's beneficial for the organization).
When looking at resilience from a government point of view it is also important to know these
underlying factors. If the government subsidizes a community it is important to know for the
government if these subsidies will have the desired effect. When subsidies do not improve the
resilience of a community it is important for the government to look at the factors that caused this.
There is also a scientific relevance in this research, this research on resilience shows how populations
grow, why populations disappear. From this point of view, it is interesting to see the different results
in communities that look quite similar. This can be explained by the underlying factors that influence
the resilience of a community. In science, organizational ecology and industry evolution can be linked
to get a better understanding of why the resilience of a community is high or low. According to
Walker & Salt (2006), resilience can be used as an approach to get a better understanding of
complexity and uncertainty.
This research consists of a systematic literature review. In this literature review several articles are
going to be reviewed in order to get a better understanding of the factors, that cause a high or low
resilience in an organizational community. The change in resilience related to these factors is also
explored. This research is an exploratory research.
6
Theory
The most prominent theory on the dynamics of organizational communities is organizational ecology.
In organizational ecology, organizational evolution is an important concept. For this organizational
evolution it is important to look at how organizational forms change over time. This process of
change occurs through the selection and replacement of existing organizational forms, with new
organizational forms (Baum & Rao, 2004). These organizational forms of organizations can be seen as
a blueprint for their actions (Hannan & Freeman, 1977). New organizational forms reflect their used
technologies, beliefs, values and norms, social movements, new institutions and new technologies.
They help to reflect and explain cultural and technical changes in society (Baum & Rao, 2004). New
organizational forms arise from novel combinations of goals, authority relations, technologies and
markets. They arise because of the opportunities to create new resource spaces, and their
characteristics. The creativity and competition amongst already existing organizations also creates
new organizational forms (Baum & Rao, 2004). This begins with the different variations within
existing populations. Eventually this leads to organizational founding, from innovative thoughts. This
creation of new organizational forms plays a big role in organization variation and in the creation of
organizational diversity (Baum & Rao, 2004).
These organizational forms are organized in organizational populations. Organizational populations
are groups of organizations that have the same organizational form. Organizational populations can
be grouped together in organizational communities. Organizational populations that have
relationships with other organizational populations and that are engaged in other activities, form an
organizational community.(Baum & Rao, 2004). These organizational communities interact to form
organizational ecosystems. Most of the research conducted is at the level of populations in
established organizational forms (Baum & Rao, 2004). In community-ecology models the emphasis
lies on the creation or extinction of organizational populations. What makes the community-ecology
models useful, is that they address the evolution of the community structures (that bind together the
organizational populations), in organizational communities (Baum & Rao, 2004).
The factors and processes that happen prior to the rise of new organizational forms are still partly
unknown. But there are aspects that can trigger organizational variation (that leads to new
organizational forms)(Baum & Rao, 2004). Baum & Rao (2004) mention some of these possible
triggers: the role of institutional change is seen as a possible trigger, technological innovation cycles,
entrepreneurs and social movements are possible triggers of organizational variation as well . Baum
& Rao (2004) look at how institutional and technological change can transform the dynamics of
organizational communities. They explore this by looking at the changing organizational forms and
community structures. (Baum & Rao, 2004). These aspects or factors are important for the resilience
of an organizational community. The changes in these factors are possible triggers in the
replacement of one organizational population, with a new organizational population. This shows that
the resilience of the system was too low to absorb the change in the system.
In an organizational community the different populations affect each other, so all members in an
organizational community share the organizational success or organizational failure (Hannan &
Freeman, 1977). Because all organizations are different, there are no two organizations that are
affected in the same way by an exogenous shock. However, we can identify several classes of
organizations that are almost homogeneous if we look at environmental vulnerability (Hannan &
7
Freeman, 1977). These 'groups' of organizations are seen as the organizational population in an
organizational community. Organizations can shift from one organizational form to another, due to
extreme structural changes. The result of this, is that extreme adoption of organizational form and
structure gives rise to observed changes that imitate selection. This is also the case for populations, if
this extreme adoption of an organizational form, is the adoption of a wrong organizational form, the
population gets weaker. This problem of extreme adoption can destroy populations and therefore
change the organizational community. This problem occurs more frequently when populations or
organizations are similar on many dimensions.(Hannan & Freeman, 1977). An organization with a low
fitness will disappear from the organizational population. If a lot of organizations disappear, it can
affect the resilience of the entire organizational community. This can happen because of a
disturbance in the environment.
There are different factors in this environment that affect the fitness of an organizational
community. Examples of this are: systematic selection, resist selection, competitive situation,
capacity to adapt to evolution, adaptation to cost of lowered performance levels, chance of mobility
(Hannan & Freeman, 1977). There is a possibility that these factors also influence the resilience of an
organizational community. Resilience was first introduced by Holling (1973), this concept related to
"behavior of ecological systems in terms of the probability of extinction of their elements, and by
shifting emphasis from the equilibrium states to the conditions for persistence"(Holling, 1973, page
2). Later in the article Holling (1973) speaks of the behavior of two interacting populations, and the
effects of the environment on these populations (Holling, 1973). These populations can be seen as
the elements of ecological systems. From an ecology perspective, Holling defined resilience: "But
there is another property, termed resilience, that is a measure of the persistence of systems and of
their ability to absorb change and disturbance and still maintain the same relationships between
populations or state variables" (Holling, 1973, page 14). In this definition resilience is seen as the
property of the system and persistence, or the probability of extinction, is seen as the result (Holling,
1973). The change and disturbance Holling (1973) describes, is the result of underlying factors. For
example: changes in fish populations, in the Great Lakes. The resilience of the fish population
lowered due to:" intense fishing pressure, changes in the physical and chemical environment, and
the appearance of a foreign predator and foreign competitors"(Holling, 1973, page 8-9). The
population decreased and got extremely small. These factors Holling (1973) mentioned can be seen
as the underlying factors that changed the degree of resilience in the ecosystem. Due to a sudden
perturbation some of the fish populations in the lake got extinct. This could happen because of the
underlying factors (Holling, 1973). The underlying factors that have an effect on the resilience of an
organizational community are still unknown. In this field no research is conducted yet.
8
Methodology
Type of review
The research in this paper will be conducted on the basis of a systematic literature review(Bryman,
2008). The literature used for this research consists of case studies, quantitative work and qualitative
work on changed organizational communities. The exact methodology strategy of every article is
listed in a table at the beginning of the results section. I chose this type of literature review to get a
clear view of the changes in organizational communities. To conduct as many factors as possible in
this short time period, a broad selection of different industries is reviewed. These factors have to be
factors that influence the degree of resilience of an organization.
Literature search and selection
The literature for this article is peer reviewed and searched by using electronic bibliographic
databases. The database used for most of the articles is ISI Web of ScienceSM. The first search
included the keywords: "Organization", "firm". I used this first set of keywords to describe what the
subject is about. These keywords are combined with "change", "transition", "discontinuous" This
second set of keywords show that there has to be a changing, moving, discontinuous environment.
The third set of keywords used were: "disruptive", "perturbation", "trigger", indicating the occasion
for a change in resilience. The last set of keywords used were: "industry", "community",
"organizational population", these keywords indicate that the article has to be about an entire
industry or organizational community or population. These sets of keywords were checked in the
title, abstract, author keywords or keywords plus of the article. To get a more specified result I
selected the articles on field of study: management, business, economics, ecology, social sciences
interdisciplinary, sociology. After this search 142 articles appeared. To sort the articles I put them in
order of times cited - from the highest to the lowest-. To find useful articles I read the titles of the
articles, when the title seemed useful, I read the abstract. I chose this method to sort out the articles
that weren't useful at all. Most of the times this was already clear when looking at the title, I deleted
around 50-70% of the articles after this first selection. To continue the search for good literature I
read the abstracts of the remaining articles. The criteria I used to review the abstract of the article:
clues that the article was about an industry (or: organizational community) that changed, clues that
this change was induced by a perturbation in the environment and clues that this change was caused
by underlying factors. Again, a lot of the articles were not useful. When the abstract seemed useful I
downloaded the PDF file of the article. After this selection I read the whole article, some of the
articles turned out to be not useful. The final number of articles used in the result section is: 17.
Method of analysis
The goal of this analysis is to find the factors that influence or influenced the degree of resilience in
an organizational community. To find these factors I made a list of criteria to find out whether a
factor influenced the resilience of a community or not, this was necessary because the concept of
resilience is not mentioned in that exact words in the article. Signs that can indicate resilience are:
change in industry, changing community, changed populations, changes in organizational
form/structure. More of this keywords will come forward when reviewing the articles.
9
When reading the articles there were some questions I tried to answer: What exactly changed in the
structure of the community or population?, What triggered this change in structure?, What factors
influenced this change? I highlighted the answers to this questions in the articles, to get a clear
overview of the parts that were useful for the results section.
10
Results
The first part of this results section consists of a table with general information about the articles.
The industry in the article is mentioned, the second part of the table indicates the changes that
occurred in the populations of the community. The rest of table 1 consists of the method of research
and the author and year the article is written in. The second part of the results section shows
multiple tables. The factors found when reviewing the articles are divided in different layers of
factors. Some of the factors are properties of organizations, therefore table 2 with organizational
factors is constructed. In table 3, the factors with properties of populations are mentioned. In the
fourth table factors with the properties of communities are mentioned.
Table 1: General information of the articles
Industry
Prospector and
defender banks
US Brewery
UK Insurance
Thrift industry
What changed?
Mergers appeared in
population, 2 distinct
populations
Decline population, change
large/small,
Disappearing large companies
New entrants to population,
inert companies died
Entry and exit appeared in
population
German TV
industry
US Airline
industry
Growing population, larger
size of firms
Founding and failure in
populations increased
Hollywood
movie industry
Decline population, from
vertical integration to
horizontal integration
Changes in relevant actors in
population
Globalized population, more
entry in population
Expanded population,
globalized population
Four large firms to more
smaller firms, bigger market
From small dominant
population, to large sized new
entrants in population,
globalized population
Monopolistic population,
more entrants in population
Expanded population,
globalized population, change
population structure
From stable population to
US Chemical
industry
US Auto
industry
AAA baseball
franchises
NCR Computer
industry
Fashion
industry
US electric
power industry
Dutch
accounting
industry
Spanish
Method of research
Multiple research:
Interview, questionnaire,
case research
Theory development and
testing on single case
Author/year
(Fox-wolfgramm,
Boal, & Hunt, 1998)
Cross-correlational time
series analysis
Analysis of historical
development: comparing
of 2 plans
Qualitative network
perspective
Event history technique
with multivariate pointprocess model
Quantitative hypothesis
testing
(Webb & Pettigrew,
1999)
(Haveman & Rao,
1997)
Longitudinal analysis, field
level analysis
Identify factors by using
hypothesis
Interviews of five case
studies
Historical single case
study
Comparative project with
empirical and historical
focus
(Hoffman, 1999)
Historical and field-level
analysis
Statistical research,
individual level and
population level data
Quantitative research,
(Sine & David,
2003)
(Lee & Pennings,
2002)
(Hatten & Schendel,
1977)
(Windeler & Sydow,
2001)
(Brown &
Eisenhardt, 1997)
(Lampel & Shamsie,
2003)
(Oliver, 1992)
(Cousens, 1977)
(Rosenbloom,
2000)
(Djelic & Ainamo,
1999)
(Zúñiga-Vicente,
11
banking
industry
many births and deaths in
population
hypothesis testing,
historical analysis
US Cement
industry
US Bicycle
industry
Stable population, periods of
adapting populations
Stable population to
overpopulation with many
births and deaths in
population, to stable
population
Longitudinal research
Event-history technique
with hazard rate model
with Gompertz model
Fuente-Sabaté, &
Rodríguez-Puerta,
2004)
(Tushman &
Rosenkopf, 1996)
(Dowell &
Swaminathan,
2000)
The articles reviewed showed some factors that are related to resilience. In the following table, table
2: Factors related to organizations are cited. The factor and nature of relationship with resilience are
mentioned.
Table 2: Factors related to organizations
Factor
Organizational age
Degree of institutionalization
Changes in organizational form
Nature of relationship with
resilience
Older organizations are more
inert, corresponding to higher
community resilience
The higher the degree of
institutionalization the more
inert, leading to higher
community resilience
The higher the degree of
changes in organizational form,
the lower the community's
resilience
Apparent in
(Brown & Eisenhardt, 1997;
Dowell & Swaminathan, 2000)
(Brown & Eisenhardt, 1997;
Djelic & Ainamo, 1999;
Haveman & Rao, 1997;
Hoffman, 1999; Lee &
Pennings, 2002; Oliver, 1992;
Sine & David, 2003; Webb &
Pettigrew, 1999; Windeler &
Sydow, 2001)
(Cousens, 1977; Lampel &
Shamsie, 2003; Lee & Pennings,
2002; Windeler & Sydow, 2001)
The review also indicated that several organizational level factors clearly influence the resilience of a
community. The case of the US airline industry (Brown and Eisenhardt, 1997) provides a good
example; here, organizational age was strongly related to the speed with which airline carriers
adapted to environmental change. This provides evidence that, as organizations grow older, they
become increasingly inert (Brown and Eisenhardt, 1997, page 606). As a result, older organizational
communities are expected to have a higher resilience than younger communities. In this particular
case, institutionalization was also high, in the years 1938 to 1978 there were controlled industry
entries, exits and pricing. As a result of this high institutionalization it is difficult for an organizational
community to adapt, because of the restrictions that were active in those years. At the time, airline
carriers were expected to be highly reliable and accountable. Because frequent organizational
change was perceived as the opposite, carriers were reluctant to initiate organizational change and
became very inert. In these years the founding and failure rates of US airlines were low, as a result of
a high resilience. In 1978 the Airline deregulation act was introduced. This acted as a trigger for the
12
community. It was difficult for the currently active organizations to deal with the big change because
of the inert character of the industry. As a result of this, the founding and failure rates increased. This
indicates the lowered resilience of the community.
Another example is provided with the case of the German TV Industry (Windeler & Sydow, 2001).
Until the mid 1980's this industry was considered a non-commercial industry with an emphasis on
information. The industry had a duopolistic structure. This structure, with two vertically integrated
firms was characterized by a lot of in-house production. This form was present until the mid 1980's.
Due to deregulation and liberalization, private broadcasting stations were approved, this acted as a
trigger for a change in the current organizational form of the community: . "[...]the dominant
organizational form has changed from in-house production to project networks"(Windeler & Sydow,
2001, page 1047). Due to this changed organizational form, options for new TV production firms
increased. The two existing firms experienced more competition from firms with a different
organizational form, based on project networks. The overall market of the German TV industry
expanded due to the introduction of this new organizational form. This indicates the lowered
resilience of the industry.
Table 3: Factors related to populations
Factor
Degree of diversification
Increased competition
Modernization
Nature of relationship with
resilience
The higher the degree of
diversification the higher the
resilience of the community
Reduced entry and exit barriers
are the effect of increased
competition, indicating a lower
degree of resilience in the
community
Changes in population
structure occur, therefore
lowering the degree of
resilience in a community
Apparent in
(Dowell & Swaminathan, 2000;
Hatten & Schendel, 1977; Sine
& David, 2003)
(Djelic & Ainamo, 1999; Dowell
& Swaminathan, 2000;
Haveman & Rao, 1997; Lampel
& Shamsie, 2003; Lee &
Pennings, 2002; Rosenbloom,
2000; Sine & David, 2003;
Tushman & Rosenkopf, 1996;
Windeler & Sydow, 2001;
Zúñiga-Vicente et al., 2004)
(Cousens, 1977; Haveman &
Rao, 1997; Lampel & Shamsie,
2003; Windeler & Sydow, 2001)
The review also indicated that several populational level factors clearly influence the resilience of a
community. The case of the US brewing industry(Hatten & Schendel, 1977) provides a good example;
here, the industry deals with very low diversification and a lack of heterogeneity, this extreme
adoption of an organizational form in a population, results in a community that is less flexible and
therefore less able to absorb shocks from the environment(Hannan & Freeman, 1977). As a result,
more homogeneous organizational communities are expected to have a lower resilience than
heterogeneous communities. The market structure of the US Brewing industry changed dramatically
during the years 1952 to 1971. Due to the introduction of a multiple brand strategy, a more
heterogeneous population was created. The research shows that few brewers adopted this strategy,
this population of brewers survived. The majority of the brewers who didn't got extinct. After the
13
introduction of the new more heterogeneous market structure, there was a major decline in the
number of breweries. This happened as the result of a low community resilience due to extreme
adoption.
Increased competition is a factor that occurred in several articles, in most of the articles increased
competition was closely related to reduced entry and exit barriers. Reduced entry and exit barriers
make a community less resilient to change. For example the case of the Spanish banks(ZúñigaVicente et al., 2004), competition increased in years of higher environmental instability. This
environmental instability was triggered by: a financial crisis, new regulation or different clientele
behavior(Zúñiga-Vicente et al., 2004, page 227). Increased competition occurred and the entry and
exit barriers were substantially reduced in the years of environmental instability. In this years the size
of the market stayed the same. Due to the reduced barriers, a lot of new companies entered and left
the market, resulting in a highly unstable organizational community. Therefore, increased
competition can be seen as a factor that has a negative influence on the degree of resilience in an
organizational community.
Another example that is related to increased competition is found in the US electric power
industry(Sine & David, 2003). In this industry, a monopolistic structure was present from 1935 to
1978. In this period, there were strict regulations for the community due to the monopolistic
structure. A monopolistic structure indicates a strict set of rules that is the same for the entire
community because, in a monopoly the organizational form, the organizational population and the
organizational community are the same actor. Having only one actor in the community made it highly
resilient to change. In the 1970's a energy crisis occurred, this crisis acted as a trigger for the
community to change. This energy crisis resulted in new policies that allowed other players on the
market, which led to increased competition. The monopolistic structure was no longer present. As a
result the community structure changed dramatically. This increased competition therefore lowered
the resilience of the community.
The case of the thrift industry (Haveman & Rao, 1997) provides a good example; here, lack of
modernization was strongly related to a high degree of institutionalization and strict regulations. As a
result of this high institutionalization and these strict regulations, it is difficult for an organizational
community to adapt. This led to an inert community, therefore the resilience of the industry at this
point in time was high. The thrift industry was strongly resilient for incumbents. A new influence
came from two aspects of modernization: the progressive movement accompanied with advances in
transportation and communication, together this fostered immigration and internal migration.
Demographic changes were of importance during this period. The thrift industry used to be a very
controlled community with no outsiders, so this changed due to modernization. The ongoing changes
in this industry, due to modernization, lowered the resilience of the industry. A small group of
Institutional entrepreneurs saw opportunities to enter this industry, they acted as a trigger for more
entrepreneurs to enter the community. Because of this new entrants the community structure
changed.
14
Table 4: Factors related to the environment
Factor
Government (de)regulation
Highly resource dependant
Changing customer
demand/loss of public
confidence
Technological advancements
Nature of relationship with
resilience
Restrictive regulation makes
the community unable to
adapt, leading to a higher
degree of resilience. When
government imposes
deregulation this leads to a
lower resilience
Lack of resources results in the
need of new ways of producing,
therefore lowering the
resilience of a community
Changing customer demand
leads to dissatisfaction, this
leads to critical questions
resulting in the search for
alternatives, this results in a
lowered resilience of the
community
Technological advancements
make a community more
vulnerable to change, therefore
lowering the resilience of the
community
Apparent in
(Brown & Eisenhardt, 1997;
Fox-wolfgramm et al., 1998;
Hoffman, 1999; Lampel &
Shamsie, 2003; Sine & David,
2003; Tushman & Romanelli,
1985; Windeler & Sydow, 2001;
Zúñiga-Vicente et al., 2004)
(Oliver, 1992; Sine & David,
2003; Zúñiga-Vicente et al.,
2004)
(Djelic & Ainamo, 1999; Dowell
& Swaminathan, 2000;
Hoffman, 1999; Lee &
Pennings, 2002; Oliver, 1992;
Rosenbloom, 2000; Sine &
David, 2003; Zúñiga-Vicente et
al., 2004)
(Djelic & Ainamo, 1999; Dowell
& Swaminathan, 2000;
Haveman & Rao, 1997;
Hoffman, 1999; Lampel &
Shamsie, 2003; Lee & Pennings,
2002; Oliver, 1992;
Rosenbloom, 2000; Sine &
David, 2003; Tushman &
Rosenkopf, 1996; Webb &
Pettigrew, 1999; Windeler &
Sydow, 2001; Zúñiga-Vicente et
al., 2004)
This review also indicated some environmental factors that influence the resilience of a community.
The German TV industry (Windeler & Sydow, 2001) was highly regulated by the government until the
mid 1980's. Public TV broadcasting stations were the only stations approved by the government.
Because of these strict regulations, the industry prohibits deviant behavior. Therefore, the industry
didn't change. This indicates the highly resilient character of the industry until the mid 1980's. In the
1980's the government imposed deregulations. These deregulations were imposed because of the
pressure of globalization and digitalization of technologies. Because of these deregulations entry
barriers were reduced and a new market of private broadcasting appeared. Due to this reduced
barriers the community changed and expanded. Nowadays public and private broadcasting stations
have to compete for viewers and advertisers (Windeler & Sydow, 2001, page 1035-1036). This
indicates the lowered resilience after the deregulations were imposed.
In the US electric power industry (Sine & David, 2003) a combination of different underlying factors
were present. In the US electric power industry, a sudden environmental jolt occurred; The Oil crisis
15
of 1973. As a result of this oil crisis an extreme rise in oil prices occurred. This industry is highly
dependent on resources, without oil energy cannot be produced. As a result of the high oil prices,
producing electric power got very expensive. An indirect result triggered by the oil crisis, was the
opening of the (at first monopolistic) industry to new entrants. Due to the increased prices of
electricity in the US, the consumers were dissatisfied. As a result, a new government policy was
introduced. Alternative power generation became widely adopted. This policy was also a solution for
the criticism on the environmental damage caused by the oil needed to produce electricity. In this
industry a lot of changes occurred due to one trigger event. Technological advancements are also
apparent in this case, at first the technological advancements didn't have any influence on the
industry. Because the "monopoly structure is based on building larger centralized plants in order to
take advantage of economies of scale, and because existing plants predominantly used coal and oil as
fuels, utility research and development focused on these technologies"(Sine & David, 2003, page
193-194). After the oil crisis, new ways for producing had to be implemented. Due to this new policy,
organizations started producing alternative power. The old monopolistic structure diminished and
more entrants started to produce energy using these new technologies. These changes could happen
due to the low resilience of the industry and the trigger of the oil crisis in 1973.
16
Discussion & Conclusion
In the results section an extensive list of factors is given, the factors are divided between three
categories: factors on organizational level, factors on populational level, and factors on
environmental level. It is good to notice that in most of the articles several factors per article came
forward. A part of the factors were related to a high degree of resilience and some factors were
related to a low degree of resilience. Some of the factors seem related, for example the factors
"organizational age" and "degree of institutionalization" are related to inertia. An important finding
in this research are those factors. For inert industries it is difficult to deal with changes in the
environment. Therefore, industries that are inert show a high degree of resilience. Until a tipping
point, caused by an internal or external perturbation, these industries stay the same and absorb
these shocks. Due to the inert character, at a sudden point, a shock can result in losing the capacity
to allocate resources efficiently. In the introduction resilience was defined as: "The ability of the
system to withstand either market or environmental shocks without losing the capacity to allocate
resources efficiently"(Brand & Jax, 2007, page 3). A factor that can be compared to this is
"government regulation or deregulation". Because of strict regulations, the industry prohibits deviant
behavior. When the regulations are lifted it gives the industry opportunities for change. Therefore,
government regulation relates to a high degree of resilience and government deregulation indicates
a low resilience of the industry.
Some of the factors found are clearly related to the theory of organizational ecology. Organizational
evolution looks at the changes in organizational forms over time. This occurs through selection and
replacement of organizational forms (Baum & Rao, 2004). Some of the factors are related to
maintaining a stable organizational form. If populations can maintain this organizational form
resilience of the community stays at a high level. When changes in organizational form occur this can
lower the resilience of the community. As a result of this lowered resilience in combination with a
trigger event, populations can disappear and get replaced from an organizational community.
This research also has some limitations to it, because of the short time span it is not possible to
review all the industries and articles written about resilience. Therefore, not all factors that made
these industries vulnerable to organizational change are indicated. Another limitation is the difficulty
to give value to a factor. It's not possible to conclude that a factor that appeared in five articles is
more important than a factor that appeared in three articles. Therefore, the results cannot be
generalized to other industries. However, the factors conducted give an overview of possible factors
the industry has to take in account, in order to keep the resilience of the industry at a high level.
Industries can also look at the exogenous or endogenous perturbations that can affect their
community. A final limitation is the fact that some factors interact, for example the factors related to
inertia, it is almost impossible to look at these factors as separate factors. In some of the industries
discussed, it is the combination of factors that influence the degree of resilience in a community.
In this research some underlying factors of resilience are determined, this is an expansion from the
existing literature that only addressed the trigger events that led to organizational change. With the
factors determined, communities can use this information to evaluate their own industry and the
challenges they face concerning resilience. This research is the start of more research on these
factors, it can improve our understanding of factors underlying industry vulnerability.
17
For further research there is another good suggestion; In some cases internal or external
perturbations have no influence on an industry. The environment of these industries changed, but
the industry structures stayed the same. This type of industries have a high resilience. There is still a
lack of research on this type of industries. It is interesting to know why these specific industries didn't
change even though they had to deal with the same environmental changes. It isn't clear why those
industries react so different from other industries. An example of an industry that wasn't influenced
by the environment, is the industry of making horseshoes. More of this industries should be taken
into account when conducting a new research on resilience.
For policy makers suggestions for improvement can be abstracted from this research. For example, in
the industries were a lot of governmental regulations are present. Due to these strict regulations the
community can't change at all. At some point, a part of these industries had to change so
dramatically in the end that it took the industry some time to be profitable again. To prevent this, the
government can induce regulations that don't support monopolistic or duopolistic structures. These
structures aren't the most profitable options for the entire community. In other examples the
government can impose strict regulations in order to structure the organizational form of an
industry. This can be necessary if the government wants these organizations to obtain more market
power. This can be beneficial for countries and companies. Especially due to quick technological
changes and globalization. Industries that are lacking behind can get back on track due to stricter
regulations.
The research also has some social implications to it. As earlier said in Walker & Salt (2006), resilience
research can be used as an approach to get a better understanding of the complexity and uncertainty
of organizational community structure. When this complex structure is better understood it can
improve the economy of the industries and therefore improve the economy of countries and the rest
of the world.
In total the research of 17 different industries led to 10 contributing factors at different levels. Some
of these factors were related to a high degree of resilience in the organizational community and
some were related to a low degree of resilience in a community. At the organizational level:
"organizational age", "degree of institutionalization" and "changes in organizational form" are found.
At the population level: "degree of diversification", "increased competition" and "modernization" are
found. The factors I found at the environmental level: "government (de)regulation", "highly resource
dependant", "change in customer demand/loss of public confidence" and "technological
advancements". If further research is conducted there are probably more factors found concerning
the degree of resilience in an organizational community.
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Acknowledgements
This article benefited from comments and meeting with my supervisor Allard van Mossel, I want to
thank him for the extensive feedback on my drafts and the overall support given. I also want to thank
my fellow resilience students for the co-references, the meetings and the support in writing this
article.
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