Environmental change and organizational selection in semiconductor manufacturing

Organization theory's adaptation perspectives and organizational ecology depict radically different social worlds. The adaptation argument treats organizations as extensions of individuals, while organizational ecology argues organizations are an element of social structure that is influenced by individuals, but not necessarily controlled by them. From the adaptation standpoint, organizations evolve as the individuals that control them recognize and adapt to opportunities and threats in the social environment, a process that suggests a stable pattern of organizational participation over time. Organizational ecology, on the other hand, argues organizational participation evolves through organization entry and exit, an expectation that suggests instabilities in the development of social structure.; At the conceptual level, these two theories are clearly different. But neither dominates, because the empirical pattern of organizational participation is influenced by events in the social environment that obscure the relative contribution of adaptation and selection processes. This research monograph addresses this problem by developing a theoretically derived model that captures the pattern of environmental development, making it possible to link organizational events with changes in the social environment.; Empirical analysis of the historical patterns of firm entry, exit, and strategic transformation in semiconductor manufacturing indicates that firm participation in the industry has largely evolved through organization entry and exit linked with changes in the social environment. Organizational transformations occur, but they are infrequent and randomly patterned over time, which suggests they are produced by firm-level processes. A separate firm-level analysis, however, indicates that attempted strategic transformations increase the probability that most firms will exit the industry, a finding that is inconsistent with the "adaptation" label attached to this process.; In general, the results presented in this monograph indicate that organizational participation in semiconductor manufacturing is the result of selection. This selection dynamic is driven by the opportunities for entry created by technical change and market expansion, while the overall balance of participation reflects the survival patterns that characterize different firm strategies. While the semiconductor industry has unique features that limit the scope of the selection generalization, but the findings presented in this monograph indicate that adaptation theories do not capture the fundamental processes underlying social change and social structure.