anizations (1965), the American sociologist Arthur L. Stinchcombe compared the American textile industry (one of the oldest industries in the country) with the newer automotive industry to argue that the key features of organizations in any industry are related to the era in which the industry emerges. Stinchcombe called this relation a “correlation of age and social structure.”
Ecological research finds that the dynamics of the organizational world get shaped by processes of legitimation and competition. In this context, legitimation refers to the extent to which a group or procedure is taken for granted. That is to say, an organizational form is legitimated when there is little or no dispute over the suitability of the form for the accomplishment of certain tasks. Competition refers to the “crowding” that occurs when multiple units (such as businesses and individuals) try to gain the same resources (such as customers and investors). More organizations will be created, and fewer organizations will fail, when the legitimation of the form is high and competition is weak. Extensive research shows that situations of high legitimation and low competition contribute strongly to the profusion and longevity of organizations.
As indicated by the preceding discussion, research on management has identified a strong interdependence among environment, organizational design, and strategy. Contemporary management scholars judge the quality of a company by the degree to which its strategy and organizational structure are symbiotic, yet they also consider whether the firm’s strategy and structure meet the demands of the external environment. As the speed of technological change accelerates and many firms seek to operate across diverse global environments, it becomes more difficult to achieve these complementary relationships. Organizational analysts document the ways in which firms face these challenges, and the outcomes of their studies ultimately cast light on the management approaches that appear to be the most effective. See also work; social structure; time-and-motion study.