Essay About Organizational Ecology And Similar Vein

Gaming Theory
Organizational ecology (OE) is a sociological theory of what happens to and within
populations of organizations. OE has produced an impressive and still rapidly increasing
number of empirical studies (Baum, 1996). For example, the number of studies that have
tested density-dependence hypotheses reaches infinity. No doubt, the empirical tradition that
has been established by OE, is an important enrichment of organization sciences. In recent
years, a cry for increased theoretical precision has emerged, however. For example, Baum
(1996: 107-108) concludes his impressive review of OE with a plea for such precision with
reference to the need for “asking new kinds of research questions that develop links with other
streams in organization theory”. We believe that the organizational subdisciplines within
economics are specifically promising in this respect. Here we fully agree with Amburgey &
Rao (1996: 1280), who in a recent special issue of the Academy of Management Journal
observe that organizational economics is one area of overlap with OE that remains to be
explored. This is precisely what this paper does. In effect, we merge OE with the dominant
subbranche of industrial organization (IO): game theory. We strongly believe that the
mathematical tools of game theory are particularly applicable to OE-issues. That is, the very
nature of game theory makes this modeling technique well-suited to explore the impact of
between-firm (or between-population) differences in inertia on direct competition and
ultimately on firm performance and survival.
Thematically, this paper confronts the standard flexibility and efficiency favor selection
logic with OE-reasoning. Carroll & Harrison (1993: 92) summarize the efficiency-favorssurvival
story line by arguing that “[t]his logic holds, first, that when an organizational form
emerges and spreads, it is because of the forms efficiency and, secondly, that when an
organizational form disappears, it is because of its inefficiency” (Carroll & Harrison, 1993: 92).
In a similar vein, advocates of the strategic choice theory argue that