Gábor Péli

A Logical Approach to Formalizing Organizational Ecology

Theories should be consistent and coherent. Unfortunately, inconsistency, incoherence, and other defects in logic are difficult to detect when a theory is stated in natural language (e.g., English). Translation into a formal logical language makes the theorys structure more explicit, and better accessible for repair Furthermore, new hypotheses are more easily derived in a logical language. We formalize Hannan and Freemans theory of organizational inertia in first-order logic. We then examine the logical properties of the formalized theory, provide new theorems about organizational inertia, and discuss the implications of logicalformalization for sociological theorizing.

THE NICHE HIKER'S GUIDE TO POPULATION ECOLOGY: A LOGICAL RECONSTRUCTION OF ORGANIZATION ECOLOGY'S NICHE THEORY

Logical formalization is a formal method for the analysis of theoretical arguments in the social sciences. Hannan and Freemans organizational niche theory (1989) is rebuilt by means of First-Order Logic, and its predictions are derived as theorems. Translation into a formal language makes the theorys inference structure transparent and accessible to discussion, repair, and development. The consistency of the model can be checked by computational means. The logical approach helps to specify niche theorys domain; it points out hidden assumptions, highlights spots where the reasoning has to be modified, and provides solid foundations for further theory building. Moreover, the established premise set also allows for the deduction of some new results. Logical formalization supports empirical research by delineating constraints on and explicit relations between sociological concepts, facilitating their appropriate operationalization

Back to inertia : Theoretical implications of alternative styles of logical formalization

This article applies two new criteria, desirability and faithfulness, to evaluate Péli et al.‘s (1994) formalization of Hannan and Freemans structural inertia argument (1984, 1989). We conclude that this formalization fails to meet these criteria. We argue that part of the rational reconstruction on which this formalization builds does not reflect well the substantive argument in translating the natural language theory into logic. We propose two alternative formalizations that meet both of these criteria. Moreover, both derive the inertia theorem from much weaker, so much less constraining, premises. While both new formalizations draw information only from the original statement of the inertia theory, they reflect two different interpretations of inertia accumulation. The two new formalizations are compatible with some recent theory extensions in organizational ecology. However, they lead to substantially different consequences when additional sociological considerations are added to their premise sets. The interplay between logical formalization and sociological content is highlighted using the example of Stinchcombes (1965) liability-of-newness theorem. Even modest extensions of the proposed models lead to contrary implications about the age dependence in organizational mortality rates. Even “faithful” logical formalizations of arguments ordinarily involve implicit theory building.

Simulation of Learning in Supply Partnerships

A model is designed and used to simulate how partners in a supplyrelationship identify and reach a common target in the form of an ideal endproduct. They cooperate fully and share returns. They learn by interaction,as follows. From their different perspectives, they complement each othersidentification of the target. They adapt their productive competencies tothe target, in order to conform to demand (quality), and to each other, inorder to achieve efficient complementarity in production (efficiency). Asthey approach the target, their accuracy of identifying the targetincreases. Also, their speed of adaptation increases, and thus they can besaid to be learning by doing. The model allows two different patterns ofacceleration: a routine and a radical type of development. At some distancefrom the target they start to produce. A longer distance from the targetyields earlier returns, but also entails a greater compromise on quality andthereby yields lower returns. Unpredictable changes in market and technologyyield random shifts of the target. In the analysis, the returns from singleand dual sourcing are compared under different parameter settings. Thesimulations show that in line with expectations dual sourcing can be moreadvantageous if development is of the radical type. However, the advantageonly arises if conditions of market and technology are neither too volatilenor too stable.

Policy agendas and births and deaths of political parties

The standard model of political party density emphasizing the interaction of social cleavages and district magnitude (M) is incomplete in accounting for number of parties in cases of high values of M in an arbitrary way. We explore an alternative model for such cases emphasizing the slack in the issue agenda available to parties with which to construct viable identities or niches they can employ to mobilize cognitively-limited voters. The model is tested with time series data and event history analysis on the sizes of the public policy agenda and the political party system in the Netherlands, an extreme case of large district magnitude given its single national district. Change in the slack of the issue agenda influences the births and deaths of political parties, a result that may also have implications for cases of lower district magnitude.

Networks embedded in n-dimensional space: The impact of dimensionality change

Social networks can be embedded in an n-dimensional space, where the dimensions may reveal or denote underlying properties of interest. When the pertaining actors occupy niches of resources in this space, e.g., organizational niches of affiliates, we show there exists a non-monotonic effect of dimensionality change. Depending on niche width, relatively narrow or wide, dimensionality change has opposing effects on niche volume.

The cricket and the ant : Organizational trade-offs in changing environments

Organizations face trade-offs when they adopt strategies in changing resource environments. The type of trade-off depends on the type of resource change. This paper offers an organizational trade-off model for quantitative resource changes. We call it the “Cricket and Ant” (CA) model, because the pertaining strategies resemble the cricket and ants behavior in La Fontaines famous fable. We derive theorems in this CA model in First Order Logic, which we also use to demonstrate that two theory fragments of organizational ecology, i.e., niche width theory and propagation strategy theory, obtain as variant cases of CA; their predictions on environmental selection preferences derive as theorems once their respective boundary conditions are represented in the formal machinery.

Micro-Level Adaptation, Macro-Level Selection, and the Dynamics of Market Partitioning

This paper provides a micro-foundation for dual market structure formation through partitioning processes in marketplaces by developing a computational model of interacting economic agents. We propose an agent-based modeling approach, where firms are adaptive and profit-seeking agents entering into and exiting from the market according to their (lack of) profitability. Our firms are characterized by large and small sunk costs, respectively. They locate their offerings along a unimodal demand distribution over a one-dimensional product variety, with the distribution peak constituting the center and the tails standing for the peripheries. We found that large firms may first advance toward the most abundant demand spot, the market center, and release peripheral positions as predicted by extant dual market explanations. However, we also observed that large firms may then move back toward the market fringes to reduce competitive niche overlap in the center, triggering nonlinear resource occupation behavior. Novel results indicate that resource release dynamics depend on firm-level adaptive capabilities, and that a minimum scale of production for low sunk cost firms is key to the formation of the dual structure.

Analyzing Complex Organizational Arguments with Logical Model Building

This chapter demonstrates the application of a qualitative formal method, logical formalization, to organization and management theory. Organizational arguments are usually phrased out in some natural language in the first place. After separating the premises (facts, definitions) of a natural language argument from its conclusions (predictions), this preprocessed text is translated into a logical language. Then, experimentation can begin if the logical formulae standing for the verbal premises imply the putative conclusions as formal theorems. If not, what kind of modifications can make these outcomes follow? What other theorems are implied from the same argument core? A substantial advantage of using symbolic logic over many branches of applied mathematics is that logical models can quite closely map the intended meaning of assertive sentences, while the deduction of conclusions can proceed with the rigor of mathematical proofs. The examples highlight how different logical languages, different dialects, can be used to the idiosyncrasies of the subject. The proof and the translation process from natural language statements to logical models are supported by user-friendly theorem-prover softwares. The appliers of the method need not be logic experts; what they need are analytical skills, sharp eyes at formula evaluation, and some stamina. The promise of using symbolic logic is combining the flexibility of qualitative reasoning with exactness in drawing conclusions from complex arguments. The chapter is to show how and in which extent logical formalization can fulfill this promise.

THE LOGIC OF PROPAGATION STRATEGIES: AXIOMATIZING A FRAGMENT OF ORGANIZATIONAL ECOLOGY IN FIRST-ORDER LOGIC.

As a part of a larger effort to apply formal logic to Organization Theory, this paper investigates the possibility of axiomatizing the theory of life history strategies (propagation strategies) of Organizational Ecology. The resulting axiomatic system increases our understanding of the scope and limits of Organizational Ecology.