Systems Thinking and Population Ecology

bubble-19329_1920 [We’re pleased to welcome authors Karen Macmillan and Jennifer Komar of Wilfrid Laurier University. They recently published an article in the Journal of Management Education entitled “Population Ecology (Organizational Ecology): An Experiential Exercise Demonstrating How Organizations in an Industry Are Born, Change, and Die,” which is currently free to read for a limited time. Below, Macmillan speaks about population (organizational ecology) and its applications:]

Organizations are embedded within complex, interdependent networks. Yet it can be challenging for business students to conceptualize how organizations interact with others on a broad scale. This type of systems thinking does not come naturally. Most individuals tend to have difficulty understanding non-linear, interdependent connections when the relationships are distant in time and space.

One line of management study that takes a systems view is population (or organizational) ecology. Rather than observing how an individual company evolves over a brief period, population ecologists look at all of the organizations within an industry and examine how certain characteristics (e.g., size), the environment, and random chance affect organizational outcomes. Population ecologists identify how industries change over many years, often finding patterns across industries in how organizations are born, change, and die. This approach differs from traditional management theory in two key ways. First, all members of a targeted population are included in the analysis. The premise is that to focus only on the most successful organizations (e.g., the Fortune 500) leads to an understanding of only a small portion of the total range of organizations. It can be useful to examine not only the winners, but also the losers, and even the runners-up. Second, population ecologists examine how processes evolve over relatively long periods of time. This can lead to different insights than a cross-sectional approach.

In order to help students develop systems thinking through a consideration of population ecology, we have developed an in-class exercise that allows participants to see first-hand in one class how all of the organizations within an industry interact over a long period. Full details are included so instructors can easily integrate this activity into the classroom. This process makes the theory come alive by asking students to put themselves directly into the role of an organizational decision maker in an evolving industry.

The exercise dramatically highlights how an organization affects, and is affected by, its context, and will help to prepare students to operate effectively within a multi-faceted business environment. This activity could fit within discussions on organizational design, organizational structure, organizational change, or inter-organizational relationships, and it complements instruction on more micro organizational behavior topics, or more linear or analytical approaches to management. It challenges the idea that management is solely about control, and helps students see that each internal decision influences how the organization fits within a broader system, and affects, ultimately, its ability to survive.