Dynamics of Organizational Populations
- An Ecological Analysis of the Corporate Identity Consultancy in Shenzhen, China

Abstract

This thesis addresses two main theoretical issues within the field of organizational ecology, namely: (1) competition dynamics of organizations in a fuzzy-set construction, and (2) emergence of organizational forms, in the context of corporate identity consultancy in Shenzhen, China. The empirical setting is significantly different from existing organizational studies, in that the population under observation is constructed following the recently developed fuzzy-set theory. Fuzzy-set concept is the foundation of this thesis, upon which hypotheses and theories are constructed.

Firstly, I revisit density-dependent theory in the new fuzzy setup, using the reformulated specification of fuzzy density. I find that the well-known theory does not hold in a fuzzy context. I speculate that the inconsistence is perhaps due to missing information in the fuzzy density measure. As such, I argue that density-dependent theory alone might not be sufficient to explain organizational dynamics in a fuzzy population. I proceed by investigating the competitive relationship among firms with varying degree of grade of membership (GoM). I find that population with neutral valence (i.e., it is at its initial stage of operation) favours organizations that are less focused on the offer that associated with the population, since the potency of cultural classification at such stage is largely dormant. As the population ages, the potency of cultural classification is triggered and now poses significant constraints on population members, therefore population with positive valence (i.e., it is aged) favours organizations with higher GoM (i.e., those that are more focused on the offer), thanks to their higher level of intrinsic appeal.

Secondly, I examine the possibility that CI industry may become a (cognitive) organizational form. Following the recently developed theory of contrast dependence (Hannan, Pólos et al. 2007), I find that the underlying mechanism of legitimation is more delicate than predicted by the theory. In particular, I find that if carrying capacity of an environment is small, a conglomeration of members with high GoM will (temporarily) intensify competition and hamper legitimation of the population. However, if carrying capacity is sufficiently expanded, population-level legitimation will work hand in hand with the contrast level. The results show that environment is endogenous, rather than exogenous, as assumed in all available ecological models. Given the (increasingly) low level of population contrast at late stage, I suggest that the CI population may never become an organizational form.

Taken together, the thesis shows that bringing fuzzy-set theory into organizational study opens the door to the development of abundant theories, and it appears that the dynamics of the world of organizations can be better explained by the fuzzy approach.