Ecologists and Institutionalist:
Friends or Foes
MGT 6381- Advanced Organizational Theory
Authors: Heather A. Haveman and
Robert J. David

Heather A. Haveman
◦ Professor at Haas Business School
◦ Research interests – organizational theory
(ecology & institutionalism), economic sociology,
social movements, social history,
entrepreneurship, organizational demography,
gender, careers, social mobility

Robert J. David
◦ Associate Professor at McGill University
◦ Research interests - evolution of practices,
organizations, and industries from an institutional
perspective
Organizational Ecology
Seeks to understand the distribution of
organizations across different environments
 Core assumption – understanding organizational
diversity requires ‘population thinking’
 Populations – aggregates of organizations that
share a common dependence on material and
cultural environments
 Empirically, populations are sets of organizations
that produce similar goods or services, use similar
resources, and have similar identities

Ecology – Main Assumptions
Density dependence
 Resource portioning
 Inertia
 Organizational form as identity

Density Dependence
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Organization founding and failure depend on
population density
When density is low, increasing density increases
legitimacy
At higher levels, more organizations compete for
resources
As density increases, competition begins to
overwhelm legitimacy as the primary mechanism
driving vital rates
Density –dependence models can be applied to
subpopulations and to compare organizational
similarities and differences
Are there times when this model does not apply?
Resource Partitioning
Focuses on competition and mutualism between
organizations that serve a wide range of clients with a
diverse array of products (generalists) and
organizations that focus on a limited clientele, offering
a narrower set of products (specialists)
 When there are economies of scale and a resource
distribution with a single rich centre and poor
peripheral region, the resource ‘space’ becomes
partitioned with generalist occupying the centre and
specialist occupying the periphery
 Increased competition between generalists leads to
higher failure rates for generalist and lower failure
rates for specialists
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Inertia
Organization ecology assumes that the core features of an organization
change slowly, if at all
 8 constraints on adaption
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1.
2.
3.
4.
5.
6.
7.
8.
Investment in plant, equipment, and specialized personnel
Limits on the internal information received by decision-makers
Vested interests
Organizational history
Legal and economic barriers to entry and exit
Constraints on external information gathered by decision-makers
Legitimacy considerations
Problem of collective rationality and the general equilibrium
These constraints favor inert organizations
 When organizations change, resources are diverted from operating to
reorganizing, reducing effectiveness and increasing the likelihood of failing
 Though change can be detrimental, organizations can learn to change
 General consensus is that failure rates generally decline with size and
increase with age. Is this still true in the current economy?
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Organizational Form As Identity
Analyzes organizational forms as identities or social
codes, which are recognizable patterns that take on
rule-like standing and get by social agents
 Rules of conduct provide guidelines for members of a
population by delimiting what they should and should
not be and do
 Signals generate a cognitive understanding about the
populations because they define what observers
understand the members of an organizational
population are and what they do
 Works in tandem with other strands of organizational
ecology
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Big OT questions:
Why do organizations exist?
 Why are firms the same/different?
 What causes changes in organizations?
 Why do some firms survive and others
don’t?
 Emerging issue?
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Institutionalism
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3 of the most important subjects in
organizational institutionalism are
◦ Legitimation and institutionalization
◦ Isomorphism and diffusion
◦ Strategic action
Legitimation and Institutionalization
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Organizations are legitimate with they are comprehensible and
taken for granted as the natural way to achieve some collective
goal, when they are justified and explained on the basis of prevailing
values, role models, and cultural agents, when they are sanctioned
or mandated by authorized actors, and when those involved cannot
conceive other alternatives
Legitimacy can rest of any of 3 foundations
◦ Regulative
◦ Normative
◦ Cognitive
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Legitimacy improves access to resources and acceptance from
customers, thereby contributes to organization’s ability to persist
Deinstitutionalization and delegitimation
Is deinstitutionalization inevitable?
Isomorphism and Diffusion
Study of why organizations are similar
 The more prevalent an organizational
structure, practice, or tactic, the more
legitimate it is
 3 processes driving isomorphism
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1. Coercive pressures – based on regulatory
legitimacy
2. Normative pressures – based on normative
legitimacy
3. Mimetic pressures – based on cognitive
legitimacy
Strategic Action
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Based on premise that organizations are
often proactive and control their
environments, so institutionalist place
conformity on a continuum of responses
to the environment
1.
2.
3.
4.
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Compromise
Avoidance
Defiance
Manipulation
Examples?
Big OT questions:
Why do organizations exist?
 Why are firms the same/different?
 What causes changes in organizations?
 Why do some firms survive and others
don’t?
 Emerging issue?

Points of Similarity
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Developed as corrections to rationalist and
adaptationalist theories
◦ Both theories contend that organizations could not be
adapted to external conditions in a technically rational way
Concerned about the variety or lack of variety of
organizations
 Study similar phenomena
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◦ Legitimacy
◦ Organizational form
◦ Emergence and spread of new organizational forms and
features
◦ Organizational change
◦ Organizational survival
Points of Difference
Ecologist
Institutionalist
Scope
Parsimony & generality
Richness & contextual
specificity
Ontological Stance
Empirical realists
Social constructivists
Theory development
Collection of
More emergent and
overlapping theories that diffuse research agenda
build upon each other
Definition of legitimacy
The degree to which an
organizational form is
taken for granted
Legitimacy encompasses
cognitive, normative, and
regulative dimensions