‫ﻣﻘﺎل ﻣطﻠوب ﻋرﺿﮫ‬

Population Ecology Theory of Organizations

• Michael R. Ford

Introduction
Much of the history of the field of public and nonprofit administration
organizations were studied internally in order to answer pressing public and
nonprofit management questions. Relevant research topics included bureaucratic
structures, group dynamics, and the decision-making process within organizations.
The normative goals of organizational theory were to find ways to manipulate
structures, group dynamics, and decision-making processes in order to improve
organizational performance. The contextual questions in organizational theory
tended to focus on the interaction between administrative actors and political
actors, issues of regulation, changing policy preferences, and revenue streams.
However, scholars like Paul Peterson (1981), Vincent Ostrom (2011), and E.S.
Savas (2000) called attention to the varying ways in which local government and
nongovernment organizations impact one another. Though Peterson, Ostrom, and
Savas did not specifically touch on population ecology, their insights into
governments and networks reflect a recognition that understanding public and
nonprofit organizations requires studying both their internal environments and
their external environments. The organizations comprising the public and
nonprofit sector do not operate in a vacuum but rather as part of a larger
organizational ecosystem.

What Is Population Ecology?

The basic premise of population ecology is that the environment (or marketplace)
in which an organization exists affects that organization’s operations and trajectory
in predictable ways. Michael Hannan and John Freeman (1977) authored the first
seminal piece on the subject, in which they challenged the dominant unit of
analysis guiding organizational theory, i.e., the organization itself. Instead, they
advocated a population ecology approach that uses the entire population of
organizations as the unit of analysis. This approach informs several theoretical
propositions that continue to guide empirical studies of public and nonprofit
organizations.
The first theory is isomorphism, which refers to the belief that organizations
operating in a common marketplace begin to resemble one another over time. In
order to effectively study isomorphism, and really any of the dominant theories
used in population ecology, longitudinal data is needed. The underlying
supposition of isomorphism theory is that common goals, regulations, and
customers naturally lead to organizations in common populations resembling one
other. For example, nonprofit charter schools theoretically have unique offerings
to attract parents, but nonetheless begin to resemble one another over time due to
their high dependence on government funding, common regulatory frameworks,
and participation and membership in common advocacy networks.

The second theory is competition theory, which states that organizations in a

common marketplace can be understood primarily by how they compete with one
another for customers and resources. Municipal taxation policies and economic
development approaches could be understood through competition theory, i.e.,
municipalities set policies to attract residents. In the nonprofit sector, competition
theory could be used to explain service offerings and grant-seeking behaviors.

The third theory is niche theory, in which organizations are assumed to seek out
new space in which to reach an underserved population. Thus, the current level of
services offered by existing organizations, as well as consumer need, can be used to
predict why an organization is created or decides to offer a new service
(Amburgey and Rao 1996). A theoretical government example might include the
decision to build a new public pool in a suburb within a metropolitan area. Under
niche theory the local government in question would determine that there is a
demand for a public pool in the region and hence choose to build one in reaction
to other local governments’ failures to do so. The government identified an area it
could be a niche provider and took action to fill that niche.

The fourth theory refers to the issue of public legitimacy. Ford and Andersson
(2016) utilize this approach in their study of the lifecycle of private voucher
schools in Milwaukee, speculating that the quick failure rate of many
entrepreneurial private schools is a result of their failure to gain legitimacy in the
eyes of parents. Studies premised on questions of public legitimacy rely on external
stakeholder perceptions of a public or nonprofit organization. In other words, the
fate of an organization is determined by external actor’s willingness to grant
legitimacy to their operations, rather than the quality of that organization’s
internal operations.

The fifth theory is inertia theory. Hannan and Freeman (1984) and Betton and
Dess (1985) both cite inertia as a key principle guiding population ecology
research. Inertia could arguably be an asset or a liability in terms of organizational
survival, depending on factors existing in the larger population of organizations.
Consider the Milwaukee school voucher example used by Ford and Andersson
(2016), who found that well-established private schools had higher survival rates
than new entries into the voucher school marketplace. In that case inertia was an
asset, and older schools were household names with a parent-accepted and
established approach to educating students. However, if Milwaukee parents
suddenly expressed an interest for more online offerings and project-based
learning, the inertia of long-established schools could prevent adaptation to
consumer demand, and hence, inertia would become a liability.

The sixth theory is liability of newness theory, which states that new
organizations into a sector must overcome the challenges of being a new provider
before gaining a permanent foothold into the sector. Hager et al. (2004) utilized
liability of newness theory to explain how the age of Minnesota nonprofit
organizations impacts the likelihood of their survival. Importantly, age serves as a
marker for all of the issues that arise from newness, including misalignment of
services provided and customer needs, legitimacy, and level of development of
organizational systems and staff. All of these issues are relevant from an
organizational perspective because they occur relative to other members of the
population. For example, for a new social service agency attempting to gain
government funding, the challenge of developing effective systems that aid in
obtaining a government grant makes the process more difficult relative to other
well-established organizations.

The seventh theory is density theory, which uses the density of organizations
within a population to explain the behaviors and trajectory of those organizations.
For example, Andersson and Ford (2015) applied density theory to explain when
new voucher schools open in Milwaukee. They found that new schools were less
likely to enter the marketplace during times the market was saturated by existing
education providers. Simply, when there is already a critical mass of providers in
place, it becomes more difficult for a new provider to enter the marketplace.

While other theories (or alternative names for existing theories) do exist under the
population ecology umbrella, they all have the common thread, like the seven
presented theories, of explaining organizational behavior and/or trajectory in the
context of the communities or marketplaces in which they operate (Astley 1985).

How Can Population Ecology Be Applied?

Despite its roots in the study of for-profit firms, population ecology has wide-
ranging applications for the field of public and nonprofit administration. A basic
application is modeling the entry of an organization into an existing population. A
core tenet of network governance is the supposition that private and nonprofit
sector organizations can aid in public service delivery in ways that create
efficiencies and help to solve wicked public problems (Savas 2000). But
understanding the applicability of network governance arrangements requires
knowing the conditions in which nonprofit and private organizations emerge. The
entry of entrepreneurial actors is likely dependent on resource availability, larger
regulatory environment, perceived opportunity, and other factors exogenous to
the organization itself. The application of population ecology to market entry gives
policymakers a roadmap for creating conditions that encourage public
entrepreneurship. Similarly, theories of population ecology can be used to model
organizational exits. If nonprofit and private sector organizations are to be
effective network governance actors, policymakers will naturally want to ensure
they remain viable organizations over time. Many of the same factors leading to
organizational entry, like regulation and resource availability, can also be applied
models predicting organizational failure (see Anderson and Ford 2015; Ford and
Andersson 2016).

Population ecology can also be used to study the factors that lead to innovation, be
it in the public or nonprofit sector. A classical organizational theory approach to
understanding innovation would look internally at organizational structure and
incentives that encourage or discourage innovation. Population ecology allows
external factors, such as competition between firms, regulation, and external
incentives such as foundation funding, to be considered. From a policymaker
perspective, such research can give guidance on how to spur innovation through
policy. An example is the federal race-to-the-top funding competition that created
financial incentives to create competition between state departments of education
for purposes of spurring innovation.

The population ecology approach also encourages the differentiation of

organizations by function in studies of organizational behavior and lifecycles. The
species approach, discussed in detail by Amburgey and Rao (1996), recognizes that
different types of organizations have different environmental factors that impact
their behaviors and lifecycles. For example, the factors leading to the exit and
entry of schools in Milwaukee’s school voucher program (Ford and
Andersson 2016) should logically be different than the factors determining entry
and exit for human service organization populations (Twombly 2003) or mutual
aid organization populations (Archibald 2007). Being able to account for
environmental differences allows for a more precise assessment of the factors
leading to nonprofit behaviors. While a population ecology approach may limit
generalizability, it does so because it is often more precise.

Population ecology can also be used to measure the stability of functional sectors.
In an era where all levels of government engage in contracting and are hence
dependent on nonprofit and private sector organizations in key service delivery
areas, it is important to know when sectors are stable and/or likely to change.
Economic cycles, health-care costs, disruptive technology, climate change, etc. all
have the capacity to affect a population’s equilibrium and hence impact the
function (or even existence) of organizations with the population. The stability of
an organizational population can impact the extent to which governments contract
out for services, budgeting decisions, and staffing decisions.

Finally, population ecology can be applied to the historical development of

organizations. The necessity of longitudinal data means that population ecology
studies often look into the past to trace the historical development of organizations
(Ruef 2002). Looking at the past can provide insight into how positive
developments can be replicated in new contexts and how negative impacts can be
thwarted in new contexts. In other words, population ecology is a tool that
policymakers and public and nonprofit administration scholars can use to learn
from the past.
Conclusion
Population ecology is a relatively young idea in the field of public and nonprofit
administration. Notably, the foundations of population ecology are consistent with
the ideals of early public administration scholars who argued that the field cannot
be understood outside of its context. Organizations, be they public, nonprofit, or
private, all operate within populations of other similar organizations. Logically,
organizational decision-making is guided, in part, by the characteristics of the
population. Importantly, population ecology exists to supplement traditional
organizational theories, not to supplant them.

Cross-References
• Motivation-Based Theories of Organization

References