The organization enacts the environment and the environment feeds back : mortality rates in the UK motorcycle industry, 1895-1993

Abstract

This paper uses the information on 648 manufacturers during the period included between 1895 and 1993 to explore the interaction of different levels of analysis in developing of the United Kingdom motorcycle industry. It provides three general results. First, it demonstrates how long term changes of the organizational environment can be related to the microevolution of firms’ strategies. Second, it sheds light on the fact that organizations and population act in the opposite way in determining the survival of firms. On the one hand, organizations diversify their production in order to obtain economic advantages of scale and superior profits. On the other, the evolution of the population constrains organizational expansion by increasing the level of competition. These two contrasting forces drive the coevolution of niches of generalist and specialist producers within the population. Third, while the increasing age of a population’s members tend to reduce the level of competition, ages’ heterogeneity represents a powerful selective force acting within an organizational population. The implications stemming from this work are related to both the literatures of business strategy and of population ecology.