Dynamics of Niche Width and Resource Partitioning

Abstract

This article examines the effects of crowding in a market center on rates of change in organizational niche width and on organizational mortality. It proposes that, although firms with wide niches benefit from risk spreading and economies of scale, they are simultaneously exposed to intense competition. An analysis of organizational dynamics in automobile manufacturing firms in France, Germany, and Great Britain shows that competitive pressure not only increases the hazard of disbanding but also prompts organizational transformations that give rise to processes of resource partitioning. Emphasizing the content/process distinction in conceptualizing organizational change, the article finds that the process effect of changes in niche width and position increases mortality hazards. We discuss our findings in light of the processes investigated by the ecological theories of density dependence, resource partitioning, and structural inertia, and point to the theoretical links that help to integrate these theories.