Most prominent organization theories explain
variability in organizational characteristics,
that is, diversity, through reference to
the history of adaptations by individual organizations,
Earlier (Hannan and Freeman, 1977),
we challenged this view and argued that adaptation
of organizational structures to environments
occurs principally at the population
level, with forms of organization replacing
each other as conditions change. This initial
statement of population ecology theory rested
on a number of simplifying assumptions. A
major one was the premise that individual organizations
are subject to strong inertial forces,
that is, that they seldom succeeded in making
radical changes in strategy and structure in the
face of environmental threats.