the population and from adaptation to selection. (p. 95)
The population ecology approach, according to Hannan (1988) was constructed and developed based upon an analysis of existing research on the effects of social conditions and population composition on rates of founding and mortality. This examination revealed that rates of founding and mortality were primarily shaped by competitive and institutional processes.
Population ecology theory has particularly addressed the areas of organizational boundaries and of organizational change. Regarding boundaries, Hannan (1988) reports that much contemporary theory and empirical research is concerned with organizations and their environments.
However, the classic or traditional approach has been to treat organizations as unitary forms and the processes within them as "black boxes;" in other words, these processes are completely without influence from their surrounding environment. This view has been maintained despite the fact that much of the existing research explicitly acknowledges that the behavior of organizations and their environment affect each other and that organizations are interdependent to varying degrees.
A central issue in organizational research in general and population ecology theory in particular is how to partition the universe of organizations into subsets that are suitable for theoretical and empirical analysis. However, identifying appropriate boundaries of organizational populations can be problematic.
Population ecology provides a model for this identification, being a theory of organizational selection that has explicitly bounded populations by industry for analysis (Hannan and Freeman, 1989). To this end, the theory employs three key concepts: carrying capacity, legitimation, and competition.
Carrying capacity is the maximum number of organizations that can be supported given the level of resources available for sustaining the popul...