Niche Theory
The theory fragment on niche width distinguishes broadly between two types of organizations: generalists and specialists. Specialist organizations maximize their exploitation of the environment and accept the risk of experiencing a change in that environment. On the other hand, generalist organizations accept a lower level of exploitation in return for greater security (Hannan and Freeman 1977: 948).
Niche theory shows that specialisation is generally favoured in stable or certain environments. However, the main contribution of the niche theory is probably the finding that “generalism is not always optimal in uncertain environments” (Hannan and Freeman 1977: 958). The exception is produced by environments which “place very different demands on the organization, and the duration of environmental states is short relative to the life of the organization” (Hannan and Freeman 1977: 958).
Thus, the niche theory explains variations in industrial structure in different industries. The theory shows how different structures in different industries (generalist vs specialist organizations) are shaped by relevant environments.
Read more about this topic: Organizational Ecology
Famous quotes containing the words niche and/or theory:
“You’re neither unnatural, nor abominable, nor mad; you’re as much a part of what people call nature as anyone else; only you’re unexplained as yet—you’ve not got your niche in creation.”
—Radclyffe Hall (1883–1943)
“There could be no fairer destiny for any physical theory than that it should point the way to a more comprehensive theory in which it lives on as a limiting case.”
—Albert Einstein (1879–1955)