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Abstract “Why are there so many kinds of organizations?” Hannan and Freeman (1977:936) posed this question in their seminal article on population ecology. Essentially they are asking why we observe variability among organizations. At first, the answer to this question appears obvious: Organizations have different purposes, goals, building blocks, and so on. But this response is incomplete-it does not explain the causal mechanism underlying the process of organizational heterogeneity. To understand organizational heterogeneity fully, two additional components need to be introduced: the assertion of organizational evolution and the theory of natural selection. We refer to organizational evolution as an assertion because it is essentially a descriptive statement about change at multiple levels. Organizations are assumed to come from a common “pool”; over time they “descend with modifications.” Consequently, we see changes occur within populations of organizations (microevolution), or the emergence of different and distinct sub-groups of organizations (speciation), or the evolution of entire populations (macroevolution).1 While evolutionary change is a useful framework, it does not address how the process occurs-for that we need the theory of natural selection.
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