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Things Change: Dynamic Resource Constraints and System-Dependent Selection in the Evolution of Organizational Populations

Author

Listed:
  • Alessandro Lomi

    (University of Bologna and University of Italian Switzerland)

  • Erik R. Larsen

    (Cass Business School, City University, London, United Kingdom)

  • John H. Freeman

    (Haas School of Business, University of California, Berkeley, California)

Abstract

An extensive empirical literature has demonstrated the existence of density-dependent selection in organizational vital rates. This research has also shown that historical trajectories followed by organizational populations only partly conform to the predictions of the original model. Inconsistencies with the model's predictions prompt a series of questions: Why do organizational populations suddenly collapse after reaching a peak? Why do organizational populations oscillate after collapsing? What causes extinction of organizational forms? To address these questions, scholars have proposed a variety of modifications to the original model of density dependence. All have merit, but none is completely satisfying. The main objective of this study is to narrow the gap between theories, models, and observed historical trajectories by identifying a unitary analytical framework that can account for the variety of empirical trajectories typically followed by mature organizational populations. The model that we present is based on the hypothesis of system-dependent selection, according to which patterns of resource availability are produced by processes that are partly endogenous to organizational populations. The main analytical insight of the study is that under conditions of dynamic resource constraints introduced by system-dependent selection, the presence of population-level inertia leads to a rich variety of historical trajectories during population maturity. We show that this result holds in the absence of any particular assumption about the microstructure of organizational populations. Possible trajectories include sustained oscillations, resurgence, and extinction.

Suggested Citation

  • Alessandro Lomi & Erik R. Larsen & John H. Freeman, 2005. "Things Change: Dynamic Resource Constraints and System-Dependent Selection in the Evolution of Organizational Populations," Management Science, INFORMS, vol. 51(6), pages 882-903, June.
    • Handle: RePEc:inm:ormnsc:v:51:y:2005:i:6:p:882-903
    DOI: 10.1287/mnsc.1050.0364
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