Heterogeneous Population and Evolutionary Dynamics of Subpopulations

Despite a long-running debate about the existence and nature of the nonprofit sector, scholars rarely make clear how organizations constitute the sector, nor do they describe how this sector evolves. Scholars have typically focused on one of two conceptions about the sector -- either as a unitary sector or as individual sub-areas of a nonprofit sector. The following questions emerge: is there a nonprofit sector as has been asserted by some scholars? If there is a nonprofit sector, how does the nonprofit sector evolve? What is problematic about this inquiry is that there exist various distinctive types of nonprofit organizations that cannot easily be integrated into a notion of a unitary nonprofit sector. On the other hand, they cannot be treated as being completely different from others. So, how can this diversity of nonprofit organizations be understood? And how can the organizational dynamics of nonprofit organizations be explained? Does a "broad," unitary nonprofit sector have its own dynamics of organizational change regardless of sub-components within the sector? Or do sub-population nonprofit organizations have their unique dynamics regardless of the existence of a "broad" nonprofit sector? If so, are there distinguishable effects of a "broad" nonprofit sector on the evolution of sub-populations of nonprofits? These questions are not only related to nonprofit studies, but also to the main questions of the population ecology perspective. Cooperative and competitive interrelationships are central to organization theory. Organizational ecology, and density-dependence theory in particular, investigates how large-scale mutualistic and competitive processes affect the entry, or birth, -of new organizations, and thus large-scale organizational evolution. To date, existing ecological research has focused on populations of organizations that are relatively homogeneous with respect to their organizational form – often defined through salient product markets. However, some organizational forms are complex, thus resulting in heterogeneous populations, as illustrated by the nonprofit sector. The nonprofit sector holds a common cognitive base that has been accepted by the public but operates in diverse arenas with different strategies and organizational forms. From a theoretical perspective that uses population ecology and density dependence theory, the present study investigates what implications such heterogeneity has on the mutualistic and competitive relationships within a population, and how this affects the predictions of nonprofit organization entry. The identity approach to organizational forms is used as a basis for conceptualizing complex forms as systems of hierarchically nested sub-forms. Furthermore, the issue of hierarchical form complexity is extended by combining the differences of geographical location that have been studied by ecologists. Hypotheses are derived regarding density-dependent entry in heterogeneous populations characterized by complex organizational forms. The hypotheses are tested with comprehensive data on nonprofit organizations in Florida counties from 1994 to 2007, including ten sub-forms and eight geographical boundaries of sub-forms. This study anticipates that the systemic hierarchical structures in terms of both form and location of populations have impacts on the entry of sub-forms. The key findings of the study can be summarized as follows. First, the systemic structure of the underlying complex form has clear implications for the operation of the processes of density-dependent legitimation and competition. The different units and levels have clear communal interdependencies and exert mutualistic and competitive forces on one another. Second, legitimation tends to operate on a broader scale than competition. Within the simple systemic structure with the sub-populations nested directly under the main population, virtually all ecological competition is contained at the sub-population level. However, the main population has a much stronger legitimizing effect on sub-population entry than the individual sub-populations themselves. Third, the regional density variables show no effects in most models, unlike a number of earlier studies based on the empirical tests of industrial organizations in the geographical context. This may be interpreted as meaning that nonprofit organizations are strongly rooted in the local community. The present study contributes to organization theory by shedding additional light on the mechanisms creating organizational diversity, how such diversity is structured, and what implications such diversity has on the large-scale mutualistic and competitive interdependencies between organizations. Density dependence theory is extended by proposing how legitimation and competition operate in settings with complex organizational forms and underlying multilevel systems of forms. For a nonprofit sector study, most importantly, this study provides a significant clue about understanding the existence and nature of the nonprofit sector. Unlike the dominating two conceptions about the sector -- either as a unitary sector or as individual sub-areas of the nonprofit sector without considering other nonprofit dimensions, this study shows that a nonprofit sector is in fact a heterogeneous population with significant constituent nonprofit sub-populations. This study also has implications for nonprofit managerial practice. For potential entrepreneurs' decisions to create organizations, it is possible to infer which kinds of external settings are most favorable for entrepreneurial activity, and where the entry of new nonprofit organizations is at its toughest. For nonprofit managers, it may be advantageous for individual organizations to follow and even replicate existing organizational forms that have attained considerable amounts of legitimation. The study also has important implications for nonprofit managers who seek to expand service boundaries of a nonprofit organization.