The Evolution of Organizational Niches: U.S. Automobile Manufacturers, 1885–1981

Abstract

Although the niche figures prominently in contemporary theories of organization, analysts often fail to tie micro processes within the niche to long-term changes in the broader environment. In this paper, we advance arguments about the relationship between an organization's niche and evolution in the structure of its organizational population over time. We focus on the technological niche and processes of positioning and crowding among firms in the niche space, relating them to the level of concentration among all firms in the market. Building on previous empirical studies in organizational ecology, we study the evolution of concentration in the American automobile industry from 1885 to 1981 and estimate models of the hazard of exit of individual producers from the market. The findings show that niche and concentration interact in complex ways, yielding a more unified depiction of organizational evolution than typically described or reported.