Presentation to Central European
University Business School
Niche Width Theory and Competitive
Strategy: Exploring Polymorphism
John Usher
University of Lethbridge
Agenda
• Backgrounder
• Research Presentation:
Niche Width Theory and
Competitive Strategy:
Exploring Polymorphism
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Recent Pub’s & WP’s
Teaching
Grad student projects
Questions & Answers
Backgrounder
Once Upon a Time
My Years with
General Motors
Academia Calls
Edmonton: 1988-1994
St. John’s: 1994-2002
Lethbridge: 2002-
Once Upon a Time
• Born Grimsby,
England
• Came to Canada at 10
months of age
• Grew up in Oshawa,
Ontario, Canada
• Father at GM
• Brother still at GM
My (13) Years with General Motors
• G. M. I.
• HR / IR
• Out on the Floor:
Manufacturing, Q.C.
• Forensic Accounting
• Manufacturing Sales
• Strategic Planning
• Northwestern U.
Academia Calls
• BIA thesis
• MBA research project
• University of Toronto
alumni newsletter
• The Great Adventure
• Bob House
• ABD & Away!
Edmonton: 1988-1994
• Bob Hinings and
Royston Greenwood
• Edmonton: the great
Gretzky bait & switch
• UofA
• Strategy & Org
Theory
• TIM
St. John’s: 1994-2002
• Memorial University
of Newfoundland
• OB / OT / Strategy
• Associate Dean of
Graduate Programs &
Research
• MBA: 200 ft/pt
• AACSB accreditation
drive
Lethbridge: 2002•
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University of Lethbridge
Dean and Professor
2000 students / 3 campus
Exchange partners in
Argentina, Belgium,
Chile, France, Germany,
Japan, Malaysia, Mexico,
the Netherlands, Poland,
South Korea and Taiwan
• Center: Social Marketing
Research Presentation…
Niche Width Theory and
Competitive Strategy: Exploring
Polymorphism
Niche Width Theory
• Hannan & Freeman (1977,
1989)
• Specialist/Generalist
• Narrow, deep resource
exploitation vs. broad
exploitation with some
contingent capability
• Do-nut shop or steak
house vs. full menu
restaurant
Niche Width Theory
• Existing theory…
• Makes predictions as to which strategies will be favored
under particular environmental states, but…
• Considers niche width strategies of single-unit specialism
and single-unit generalism only
• Fitness of strategies is based on temporal definitions of
variation (no change, small change, large change) and
grain* (fine, coarse) in environmental resource flows
• * the patterning or patchiness of resources
Niche Width Strategies
• Specialist
- single-unit
- multiunit
• Generalist
- single-unit
- multiunit
• Polymorph
- multiunit
Niche Width Theory… Critiqued
• Herriott (1987); Usher (1999)
• Freeman & Hannan (1983) eliminate all multiunit
organizations from their sample to make the ‘problem of
polymorphism’ less serious.
• Hannan & Freeman (1989) and others define generalism as
participation in multiple product categories, thus blurring
the distinction between generalism and polymorphism.
• Failure to consider spatial dimensioning of environmental
resources limits generalizability. Spatial context is crucial
to service sector, particularly chain organizations.
Niche Width Theory… Extended
• Usher (1999)
• Considers niche width strategies of single-unit specialism,
multiunit specialism, single-unit generalism, multiunit
generalism and polymorphism.
• Fitness of strategies based on both temporal and spatial
definitions of variation in environmental resource flows.
Ex: demand based on location factors plus seasonality.
• Definition of grain returned to bio-ecological roots.
Experience of grain is important: ability to discriminate
among states is coarse, inability to discriminate is fine.
Specialist Strategies
• Single-unit
• Seeks exact fit with customer
• Deep exploitation of market
• Examples: Ferrari, Sam’s Sushi
• Multiunit
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Honed efficiency of routines
Scale economies
Identical subunits
Examples: AAMCO, Benihana
Generalist Strategies
• Single-unit
• Single approach to average
customer at center of market
• Broad exploitation with some
embedded contingent slack
• Examples: L.L.Bean, Joe’s Eats
• Multiunit
• Center of market but efficient
delivery emphasized
• Scale economies
• Identical subunits
• Examples: Wal-Mart, Denny’s
What’s a Polymorph?
• Biological term:
single species with
locally adapted subspecies
• Example: birds of
same species
specialized to
variations in available
food along vertical
gradients in habitat
What’s a Polymorph?
• Organizational term:
multiunit structure
(chains, franchises)
with locally adapted
outlets or units
• Example: Best
Western hotel chain
- smaller units stress
local character
Best Western International
• More than 4,000
properties throughout
North, Central and South
America, Europe, Asia,
Africa, the Middle East,
and the South Pacific
make Best Western
International the world’s
largest hotel chain.
• While each individual
Best Western hotel reflects
the charm and appeal of
its local culture, every
property has the advantage
of the brand’s strong
global presence and
consumer recognition.
•
© 2002-2004 Best Western
International, Inc.
Best Western
Grand Hotel Hungaria
The Polymorph Balancing Act
• Maximizing the
tradeoff:
• Establishment-level
advantages
• System-wide
advantages
Establishment-level Advantages
• Adaptation to
variations in:
• Consumer needs and
desires
• Site conditions
• Political / legal
structures
• Social norms
System-wide Advantages
• Economies of scale in
purchasing and
advertising
• System-wide learning
and knowledge
transfer
• Cross-sectional
reliability
• Reputation capital
Losing the Balance
• Over-emphasizing
local adaptation blurs
the benefits of the
‘species’
• Over-emphasizing
system-wide factors
presents a generalist
response that ignores
specialized needs
Polymorph Strategy
• Single-unit
• Undefined: polymorphism is a
multiunit strategy only
• Multiunit
• Locally adapted aspects
(ex: aesthetics, traffic flow)
• Scale economy aspects
(ex: advertising, procurement)
• Differentiated subunits
• Examples: Best Western,
McDonald’s
Spatial – Temporal Dimensions of
Environments
• Two features:
• Variance of a spatial or
temporal series about its mean
• Pattern of variation or grain
• Four conditions:
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No change
Small change
Large Change / Fine Grain
Large Change / Coarse Grain
No Change
• MS > S > P > MG > G
• Environment is stable and
homogeneous
• Contingent capacities of
generalist and polymorph
are wasted, but polymorph
operates as specialist at
unit level
• Certainty permits scale
exploitation by multiunits
Small Change
• MG > G > P > S > MS
• Contingent resources of
generalist allow spanning
of small changes that
overwhelm specialist
• Spatial heterogeneity
engages MS on multiple
fronts to ill effect
• Small change doesn’t
reward polymorph
Large Change / Fine Grain
• S, MS > P > G, MG
• Fine grain means that
changes are not well
understood which works
against systematization by
multiunits and adaptation
by polymorphs
• Changes are too large for
generalists to span, but try
anyway losing fitness
• Some specialist locations
are serendipitously
rewarded, some not
• Temporally, specialists
stay focused and ride out
adverse periodicities
• Alternate multi strategy:
acquisition of other
blindly successful similar
operations
Large Change / Coarse Grain
• P>MG>G>MS>S
• Coarse grain means that
patterns of change are
understood which
facilitates systematization
by multiunits and
adaptation by polymorphs
• Size of / time spent in
patches is sufficient to
reward generalist changes
• Size of / time spent in
patches may initially
support specialists, but
induce failure as too large
/ too long in adverse state
• Polymorph combines
multiunit system
advantages and local
adaptation for best of both
worlds
Niche-width Predictions of Favored Forms
Fine Grain
Coarse Grain
No Change
MS > S > P > MG > G
Small Change
MG > G > P > S > MS
Large Change
S, MS > P > G, MG
P > MG > G > MS > S
Empirical Test of the Theory
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Three phases:
Competitive strategies
Environments
Test of propositions
Population
• Edmonton, Alberta
Canada: 1959-1988
• Population growth:
227,381=>567,446
• All retail gasoline
service stations in
operation during
period: 638
Change in Diversity and Distribution of Population Forms in Gasoline Retail
Edmonton 1958-1988
400
350
300
250
200
150
100
50
0
1958
1960
1962
1964
1966
1968
Gas Bar
1970
Conv Store
1972
Car Wash
1974
1976
Service Station
1978
Other/Mixed
1980
1982
1984
1986
1988
Phase 1: Competitive Strategies
• Categorize
organizations as one of
the 5 niche strategies:
S, MS, G, MG, P
• Spatial coordinates
(location in XY space)
determined for each
Phase 2: Measure Environments
• Critical resources
identified for industry
sub-sector: traffic flow
• Variation and
patterning of resources
measured:
• 1) across space
• 2) for 30 year period
Phase 3: Test of Propositions
• Dependent variables:
failure / change rates of
firms for each of 5 fitness
strategies during each year
of 30 year study period
• Independent variables:
- traffic flows
- car ownership by sex
- import / domestic mix
- self-serve adoption
Research Implications
• Add explicit spatial
dimension to niche
width theory
• Clarify polymorph vs.
generalist distinction
• Add multiunit
expressions of
specialism and
generalism
Managerial Implications
• Contribute to
understanding of chain
and franchise success
• Provide insight into
best strategy for
competitive context
• Identify ineffectively
exploited industry subsectors
Major Publications
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Wolfe, Richard, Karl Weick, John Usher, Jim Terborg, Laura Poppo, Audrey
Murrell, Janet Dukerich, Deborah Crown, Kevin Dickson, Jessica Jourdan,
“Sport and Organizational Studies: Exploring Synergies.” Journal of
Management Inquiry. 14: 2, June 2005.
Baum, Joel, Stan Li and John Usher, “Making the Next Move: How
Experiential and Vicarious Learning Shape the Locations of Chains’
Acquisitions” Administrative Science Quarterly*. 45: 4, Dec. 2000.
Usher, John, "Dust in the Wind: A Lesson from Maslow’s Monkeys" Academy
of Management Review*. 25: 4, Oct. 2000.
Usher, John, "Monkeys to managers: A bridge too far?" Academy of
Management Review*. 24: 4, Oct. 1999.
Usher, John M., “Specialists, generalists and polymorphs: Spatial advantages
of multiunit organization in a single industry.” Academy of Management
Review*. Vol. 24, No 1, Jan. 1999.
Usher, John M. and Martin G. Evans, “Life and Death Along Gasoline Alley:
Darwinian and Lamarckian Processes in a Differentiating Population,”
Academy of Management Journal*, Special Forum: Extending the Frontiers of
Organizational Ecology. Vol. 21, No 4, Oct 1996
*Financial Times Top 40 Journal
Working Papers
• Basil, Michael; Usher, John; Deshpande, Sameer; Basil, Debra. Fast
Food Business Strategies: Responding to Nutritional Concerns and
Competition=> How has the fast food industry responded to public
pressure over health? An analysis of 298 newspaper articles from 1984
and 2004. McDonalds & others vs. Subway
• Wolfe, Richard; Usher, John. Survival of the Fittest? Studying Multi level Evolutionary Change Through the Lens of Sport=> Following
Wolfe et al. 2005, we look in greater depth at a particular context for
multi-level change research: the impact on US intercollegiate athletics
of pressures to achieve gender equity under Title IX.
Teaching
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Organisational Behavior
Strategic Management
Managing Change
Human Issues in
International Management
Organization Theory
Technology & Innovation
Management
Management Skills
Managing Responsibly in
a Global Environment
Current Graduate Students
• Weijian Lin
• Salvador Barragan
• Experiential and vicarious
organizational learning:
A comparison of relative
influence in the foreign
entry mode decision
• Canadian post-secondary
entry into mainland China
• Coercive=>Mimetic=>
Exp vs. Vic critical test
• Critiquing Porter’s
Diamond Model after ten
years of NAFTA in Mexico
• Automobile vehicle and
parts industry cluster in
Puebla, Mexico
• Knowledge / technology
transfer from MNC’s to
indigenous firms
Q&A
The Experience of Grain
• (MacArthur and Levins, 1964: 1207-8):
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“.... consider an imaginary habitat in which there is a
scattering of uniform units or grains of resource 1 and
another scattering of uniform grains of resource 2. In such
an environment we can distinguish as "fine-grained" an
individual or a species which utilizes both resources in the
proportion in which they occur. (If the actual grain size of
the resources were so fine that the species could not
discriminate and select, then the species would have to be
"fine-grained," hence the terminology.) An individual or
species will be "coarse-grained" if it discriminates and
selects only grains of one of the resources.” (parentheses
in the original)