ORGANIZATIONAL NICHES AND THE DYNAMICS OF ORGANIZATIONAL FOUNDING

In this paper we argue that patterns of organizational niche overlap a nd nonoverlap influence the organizational niches in which entrepreneu rs create organizations. Organizational niches characterize the differ ent resource requirements and productive capacities of individual orga nizations in a population. Depending on which organizational niches ar e targeted, entrepreneurs will face different competitive landscapes. For a population of day care centers (DCCs), we measure organizational niches and compute organizational niche overlaps in terms of the ages of children they are licensed to enroll. Using weights based on organ izational niche overlaps, we disagregate population density (i.e., the number of DCCs) into overlap density and nonoverlap density to measur e the potential for competition and cooperation among DCCs. The overla p density of an organizational niche is equal to population density we ighted by the overlaps of the focal organizational niche with all othe r organizational niches. Conversely, non-overlap density is equal to p opulation density weighted by the absence of overlaps of a focal organ izational niche with all other organizational niches. We hypothesize t hat overlap density will be negatively related to the founding rate. W e expect entrepreneurs will be much less likely to target or be capabl e of founding organizations in crowded parts of the resource space tha n parts that are less densely populated. We also hypothesize that nono verlap density will be positively related to the founding rate. This i s because differentiated DCCs do not compete directly for resources, a nd, at the same time, their presence can have facilitative influences through complementary demand enhancement and widening social acceptanc e of the organizational form. Supporting these predictions, a dynamic analysis showed that overlap density had a competitive effect on the f ounding rate, while nonoverlap density had a positive effect. Parallel effects were obtained when overlap and nonoverlap densities were furt her disaggregated on the basis of geographic proximity into local and diffuse components. Overall, our findings are consistent with earlier research on organizational foundings at the population level, but reve al intrapopulation patterns of mutualism and competition that influenc e the likelihood of organizations being established in different organ izational niches. The key result of this study, that location in a mul tidimensional resource space, together with the distribution of other competitors and noncompetitors, has a significant impact on founding p robabilities serves to illuminate some of the underlying dynamics of c ompetition and mutualism that impact strategic and entrepreneurial pro cesses.