Organization-Environment Coevolution

Abstract

Abstract In his influential treatment of organizational theory, Scott (1987) distinguishes among organizations as natural, rational, and open systems. This last view of organizations as open systems, which emerged over roughly the last three decades as a counterpoint to earlier closed systems thinking, has been a dominant theme in theories of organization. Thus, structural contingency theory (Lawrence and Lorsch, 1967), strategic contingency theory (Hickson et al., 1971), institutionalization theory (Meyer and Rowan, 1977; Meyer and Scott, 1983), resource dependence theory (Pfeffer and Salancik, 1978), and population ecology theory (Hannan and Freeman, 1977, 1989) have all emphasized the relationships between organizations and their external environments, although specific treatments differ by theory. In most approaches organizations tend to become isomorphic with their environments through processes of either adaptation or selection (or combination of the two). In large part, most theories have studied organizational change in relation to exogenous environmental change.1 Examined less frequently is how organizations (and populations) systematically influence their environments, and how organizational environments, fundamentally comprised of other organizations and populations (DiMaggio and Powell, 1983), in turn influence those organizations. The essence of feedback is a circle of interactions; the patterns of behavior of any two variables in a feedback loop are linked, each influencing the other and in tum being influenced by the behavior of the other. The concept of feedback is intimately linked with the concepts of interdependence and mutual or circular causality (Richardson, 1991). In a feedback perspective, the unidirectional view of cause-and-effect relationships gives way to a circular, looplike view of mutual causality. In this chapter we attempt to study the simultaneous evolution, or coevolution, of organizations and their environments. The chapters by Rosenkopf and Tushman and Van de Ven and Garud in this volume also adopt broadly similar coevolutionary approaches.