The Evolution of Collective Strategies Among Organizations

William Ocasio [*]

Abstract

Many organizations are made up of other organizations that have decided to act collectively -- as with research and development consortia, industrial alliances, trade associations, and formal political coalitions. These collective organizations can be characterized by their differing strategies: some are general in scope, while others specialize on a more narrow purpose. What explains the prevalence of generalism and specialism among collective organizations? We develop an ecological model in which collective organizations compete over member organizations. Assuming that an organization joins a collective when its objectives match that of the collective, our model predicts a generalism bias in the ecology of founding and growth among collective organizations. This outcome is predicted to be path dependent, however, emerging over time according to relatively minor differences in initial conditions. These predictions are supported in an analysis of founding and growth rates among US R&D consortia, and the model helps to account for the numbers, sizes, and strategic diversity of these consortia.

Descriptors: community ecology, collective organization, organizational ecology, research and development consortia, organizational cooperation, collective strategy

Introduction

Collective action among organizations is often coordinated by other formal organizations such as trade associations, formal political coalitions, producer or agricultural cooperatives, research and development consortia, formal industrial alliances, associations of cultural organizations or government agencies, federations of trade unions, and the like. Although various theories have been applied to understand these collective institutions, by and large our focus has been on how such associations help to facilitate exchange and cooperation among member organizations (Streeck and Schmitter 1985; Katz and Ordover 1990; Williamson 1991; Granovetter 1995). Consequently, research has tended to emphasize member organizations as the primary units of analysis, looking at how their strategies, objectives, and performance are affected by their inter-organizational relationships (e.g. Keister 1998). Far less research has focused primarily on collective organizations themselves, so we know very little about their strateg ies and structures and even less about the dynamics of their formation and growth.

Yet theory and research in organizational ecology suggest that there is much to be gained by studying these collective associations as formal organizations in their own right (e.g. Aldrich and Staber 1988). This shift in the level of analysis follows from the fact that when organizations cooperate, their fates become linked. The resulting 'communities' of organizations with shared fates then have unit properties of their own: forming, growing, and failing as they compete with other collectives for resources and member organizations (Barnett and Carroll 1987). In this way, cooperation among individual organizations gives rise, at the next level of analysis, to competition among organizational communities. We conjecture that this ecology of collective organizations shapes the observed diversity of collective forms. Our objective here is to develop and test an ecological model of collective organizations in order to explain observed patterns of diversity among them.

Our starting point is the notable, if neglected, fact that collective organizations vary considerably in the strategies they pursue as they compete for members. In some instances, collective organizations follow a generalist strategy, as with trade associations that coordinate action on a wide variety of issues. By comparison, more specialized collectives, such as special-interest political coalitions, focus on a more restricted range of objectives. This strategic difference among collective organizations is important, because it is likely to determine the numbers and sizes of collective organizations that exist. Where collective organizations pursue more of a broad, generalist strategy, collective action will be coordinated by fewer, larger institutions. A proliferation of specialists, in contrast, would imply numerous, but smaller, collective organizations. By explaining the mix of strategies pursued by collective organizations, then, we may also be able to explain their numbers, diversity, and sizes (Hawle y 1950). So how can we explain the strategic breadth of collective organizations?

We address this question using a synthesis of ideas from organizational ecology (Hannan and Freeman 1989; Hannan and Carroll 1992) and from the theory of organizational decision making advanced by March and his colleagues (March and Simon 1958; March 1988, 1994). We propose that collective organizations develop from an ecology of cooperation as matches occur between individual organizations and collectives. By assuming that the likelihood of a satisfactory match hinges on the strategies of collective organizations, we develop an ecological model where the strength of competition among collective organizations hinges on their strategies. These models, in turn, predict that rates of founding and growth among collective organizations depend both on their strategies and on the strategies of rival collectives.