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The Logic of Organizational Markets: Thinking Through Resource Partitioning Theory

Author

Listed:
  • Ivar Vermeulen

    (Universiteit van Amsterdam)

  • Jeroen Bruggeman

    (Twente University, PO Box)

Abstract

Resource partitioning theory claims that “Increasing concentration enhances the life chances of specialist organizations.” We systematically think through this theory, specify implicit background assumptions, sharpen concepts, and rigorously check the theory's logic. As a result, we increase the theory's explanatory power, and claim—contrary to received opinion'that under certain general conditions, “resource partitioning” and the proliferation of specialists can take place independently of organizational mass and relative size effects, size localized competition, diversifying consumer tastes, increasing number of dimensions of the resource space, and changing niche widths. Our analysis makes furthermore clear that specialist and generalist strategies are asymmetric, and shows that not concentration enhances the life chances of specialists but economies of scale instead. Under the conditions explicated, we argue that if scale economies come to dominate, the number of organizations in the population increases, regardless of the incumbents' sizes.

Suggested Citation

  • Ivar Vermeulen & Jeroen Bruggeman, 2001. "The Logic of Organizational Markets: Thinking Through Resource Partitioning Theory," Computational and Mathematical Organization Theory, Springer, vol. 7(2), pages 87-111, August.
    • Handle: RePEc:spr:comaot:v:7:y:2001:i:2:d:10.1023_a:1011300920816
    DOI: 10.1023/A:1011300920816
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    References listed on IDEAS

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    1. Gábor Péli & Michael Masuch, 1997. "The Logic of Propagation Strategies: Axiomatizing a Fragment of Organizational Ecology in First-Order Logic," Organization Science, INFORMS, vol. 8(3), pages 310-331, June.
    2. Jaap Kamps & Michael Masuch, 1997. "Partial Deductive Closure: Logical Simulation and Management Science," Management Science, INFORMS, vol. 43(9), pages 1229-1245, September.
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    Cited by:

    1. Brian W. Kulik & Timothy Baker, 2008. "Putting the organization back into computational organization theory: a complex Perrowian model of organizational action," Computational and Mathematical Organization Theory, Springer, vol. 14(2), pages 84-119, June.
    2. Fernando A. Ribeiro Serra & Martinho Ribeiro Almeida & Manuel Portugal Ferreira, 2012. "Organizational decline: A yet largely neglected topic in organizational studies," Working Papers 88, globADVANTAGE, Polytechnic Institute of Leiria.

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