The Organizational Ecology of a Technological System

Abstract

An abbreviated, early version of this paper received the 1988 Lou Pondy Award for the best paper based on a dissertation from the Organization and Management Theory Division of the Academy of Management. This research was supported, in part, by the AT&T Fellowship in Telephone History and by a grant from the Chancellor's Patent Fund of the University of California, Berkeley. I thank Glenn Carroll for advising me in this research and many others for their suggestions: Terry Amburgey, Joan Booth, Jacques Delacroix, Claude Fischer, John Freeman, Michael Hannan, Anne Miner, Will Mitchell, Richard Nelson, Charles O'Reilly, Jitendra Singh, Anand Swaminathan, Michael Tushman, and Jim Wade. Thanks to Gerry Barrett of the Telephony Publishing Company and to Robert Lewis, Robert Garnet, and Mildred Ettlinger of the AT&T Historical Archives for assistance in data collection. This paper investigates organizational mortality in the early American telephone industry, in which thousands of companies proliferated and failed under conditions of technological change. Drawing on the theory of community ecology, it is predicted that when technologies are systemic, technological change does not necessarily favor advanced organizations. Instead, mutualism is predicted among both advanced and primitive firms, as long as they are technologically standardized and differentiated. Competition is expected when organizations are technologically incompatible or noncomplementary. The hypotheses are supported by dynamic models of organizational mortality, estimated using archival data describing the life histories of all telephone companies that operated in Pennsylvania up to 1934 and in southeast Iowa from 1900 to 1930.-