Download ORGANISATIONAL ECOLOGY AND DYNAMIC CAPABILITIES

ORGANISATIONAL ECOLOGY
AND DYNAMIC CAPABILITIES
AN EXPLANATION FOR
PERFORMANCE OF A FIRM
AND ITS SURVIVAL
B.V.L.NARAYANA-- FPM II IIMA
ORGANISATIONAL ECOLOGY
AND DYNAMIC CAPABILITIES
"Om Poornamadah Poornamidam
Poornat Poornamudachyate Poornasya
Poornamadaya Poornamevavasishyate.“
"What is whole, this is whole; what has
come out of the whole is also whole.
When the whole is taken out of the whole,
the whole still remains whole."
(RAMAYANA– C RAJAGOAPALCHARI)
ORGANISATIONAL ECOLOGY
AND DYNAMIC CAPABILITIES
• GENESIS OF ORGANISATIONAL ECOLOGY• 1970’S PREDOMINANT VIEW THAT OF
ADAPTATION BASED ON RATIONALITY AND
ACTIVE MANAGERIAL CHOICES
• POPULATION ECOLOGY LAID EMPAHSIS ON
DETERMINISM BY THE
ENVIRONMENT(HANNAN AND FREEMAN
1977) ADAPTATIO PERSPECTIVE
SUPPLEMENTED WITH A SELECTION
ORIENATATION
ORGANISATIONAL ECOLOGY
AND DYNAMIC CAPABILITIES
ASSUMPTIONS OF THE THEORY;
• Diversity is a property of aggregates of
organizations
• Organizations often have difficulty
devising and executing changes fast
enough to meet the demands of
uncertain , changing environments
• The community of organizations is rarely
stable. (Baum 1999)
ORGANISATIONAL ECOLOGY
AND DYNAMIC CAPABILITIES
• COMPONENTS OF THE THEORY
• FOCUS ON SELECTION
• UNIT OF ANALYSIS ARE POPULATIONS OF
ORGANISATIONS
• USE EXPLICIT COMPETITION MODELS
• EXPLAIN ISOMORPHISM
• USE NICHE THEORY TO EXTEND TO DYNAMIC
ENVIRONMENTS
• USE LONGITUDINAL DATA
• AIM TO UNDERSTAND WHY THERE ARE SO MANY
TYPES OF ORGANISATIONS(BAUM 1999)
ORGANISATIONAL ECOLOGY
AND DYNAMIC CAPABILITIES
• EVOLUTION OVER TIME (AMBURGEY AND
RAO 1996)
• 1977-1988
• EMPHASIS ON VITAL RATES AND THEIR
UNDERSATNDING
• CHANGE NOT CONSIDERED
• ACKNOWLEDGED IMPORTANCE OF
INSTITUTIONAL FACTORS
• ENSURED METHODOLOGICAL
CONSISTENCY
ORGANISATIONAL ECOLOGY
AND DYNAMIC CAPABILITIES
• 1988-1990(AMBURGEY AND RAO 1996)
• SHIFT OF FOCUS FROM VITAL RATES TO CHANGE
• USE OF ALTERNATIVE MODELS --TECHNOLOGICAL
AND MARKET DYNAMIC MODELS
• INCREASED EMPIRICAL STUDIES
• INTRODUCTION OF MASS DEPENDENCE MODEL
• VARIATION IN THE LIABILITY OF NEWNESS MODEL
• CONTRIBUTIONS FROM FIELDS OF ECONOMICS,
STRATEGIC MANAGEMENT
• INCORPORATED CONCEPTS FROM RESOURCE
DEPENDENCE,TCE, STRATEGIC MANAGEMENT
ORGANISATIONAL ECOLOGY
AND DYNAMIC CAPABILITIES
• 1990-TILL DATE(AMBURGEY AND RAO
1996)
• PREDOMINANCE OF THEORY OVER
EMPIRICISM
• ATTEMPT TO INTEGRATE PROCESSES
AT DIFFERENT LEVELS OF ANALYSIS
• DIVERSITY OF CONTRIBUTORS
FURTHER INCREASED
ORGANISATIONAL ECOLOGY
AND DYNAMIC CAPABILITIES
• CONTRIBUTIONS AND OUT LOOK FOR FUTURE
• CONCEPTS ARE ABLE TO TACKLE WIDE VARIETY
OF PROBLEMS
• METHODOLOGICAL RIGOR AND STRENGTH OF
GENERALISATION
• FUTURE OUT LOOK(AMBURGEY AND RAO 1996)
– explore area of organizational economics
– Look at growth of network forms to study rise and fall of
intermediary forms.
– Look at co evolution of institution and technology with
organizations.
– Look at endogenous population change –co evolution of
populations.
ORGANISATIONAL ECOLOGY
AND DYNAMIC CAPABILITIES
• RESOURCE BASED VIEW
• COMPETITIVE BASED ON
DIFFERENCES IN RESOURCES AND
CAPABILITIES(PETERAF 1993)
• Teece et al. (1997 :) define dynamic
capabilities as ‘the firm’s ability to
integrate, build, and reconfigure internal
and external competences to address
rapidly changing environments
ORGANISATIONAL ECOLOGY
AND DYNAMIC CAPABILITIES
Source : Helfat and Peteraf 2003
ORGANISATIONAL ECOLOGY
AND DYNAMIC CAPABILITIES
• A firm’s absorptive capacity is the ability of
a firm to recognize the value of new, external
information, assimilate it, and apply it to
commercial ends. (COHEN LEVINTHAL 1990)
• Dynamic capabilities are shaped by the coevolution of learning mechanisms (organizations
absorptive capacity) such as experience
accumulation, knowledge articulation and
knowledge codification. (ZOLLO AND WINTER
2002)
ORGANISATIONAL ECOLOGY
AND DYNAMIC CAPABILITIES
• The organizational ecology theory studies
phenomenon at the population and
community level but essentially misses out
the mechanics at the intra firm level. The
resource based view looks at the intrafirm
level processes but does not explore
processes at the population and community
level. Organizational ecology theory has its
strengths in using dynamic models and
strong empirics using longitudinal data while
resource based view uses more of case
methodology and uses cross section data.
ORGANISATIONAL ECOLOGY
AND DYNAMIC CAPABILITIES
• Organizational ecology hAs already
incorporated the concepts of
institutional theories and transaction
cost economics, and by incorporating
the concepts of resource based view it
thus creates a Meta paradigm which is
in a position to look at organizational
theory holistically.
ORGANISATIONAL ECOLOGY
AND DYNAMIC CAPABILITIES
• This organizational capability arises out of the
collective abilities of the individual’s memory
(variety in his stored enactments or experience
including knowledge and skills) and the
organizational communication processes of
sensing, transmission, storage and retrieval of
the collective memory of the organization. These
processes also involve rules for selection,
replication, recombination and retention of these
variations in the behavior. It is these processes
which form the dynamic capabilities (WIECK
1979 )
ORGANISATIONAL ECOLOGY
AND DYNAMIC CAPABILITIES
•
•
•
•
Adaptive evolutionary processes are often
rooted in Core Micro-strategies.
Adaptive evolutionary processes of innovation
and growth are pursued through recombination
of existing micro-strategies according to a
limited repertoire of recursive recombination
patterns
The organization leaders purposefully guide
evolutionary processes—strategic intent
(Salvato 2003 )
ORGANISATIONAL ECOLOGY
AND DYNAMIC CAPABILITIES
• Continuous ability to respond to the
environment in appropriate fashion with
desired efficiency and speed enables
continuous adaptation or change. Thus the
dynamic capabilities define the
organizational capability to enable the
identified change on a continuous basis.
ORGANISATIONAL ECOLOGY
AND DYNAMIC CAPABILITIES
ORG ECO+INSTTHEORIES
ORG ECO THEORY
COMMUNITIES
DETRMINISM
AND
SELECTION
POPULATIONS
ORG ECO +RBV
ORGANISATIONS
ORG
ECO+STR
CHOICE
INTRAFIRM PROCESSES
VOLITION
AND
ADAPTATI
ON
ORGANISATIONAL ECOLOGY
AND DYNAMIC CAPABILITIES
• RAYS OF KNOWLEDGE(GNANA)– VARIATION
• INTELLIGENCE MATURES –WISDOM—SELECTION -ENACTMENT
• WISDOM INTEGRATES INTO LIFE—ISSUES AS
ACTION—BHAKTI– RETENTION AND
RECOMBINATION—ROUTINES—processes to ensure
recombinations
• IMMATURE KNOWLEDGE IS USELESS TINSEL–
VARIATIONS NOT INTEGRATED INTO MMEMORY OF
ENACTMENTS—ARE LOST
• PERCEPTION—MEANING—KNOWLEDGE—WISDOMACTION– SUSTAINED PERFORMANCE
• SOURCE—C RAJAGOPALACHRI—BHAJA GOVINDAM
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