AN ECOLOGICAL PERSPECTIVE ON STRATEGIC MANAGEMENT OF ENVIRONMENTAL CHANGE: AN ANALYSIS OF THE U.S. AIRLINE INDUSTRY, 1972-1981 (UNITED STATES)

The quality of the match between a firm and its environment is generally regarded as a prime determinant of firm performance. Business policy/strategic management has traditionally viewed this alignment as resulting from actions taken by the top management group of the firm. The ecological perspective posits that firms change due to external forces. The purpose of this research was to investigate how ideas drawn from population ecology models might be integrated into the strategic management area, thereby increasing our understanding of the strategic change process.;Firm size was an important factor in that the effects of individual environmental attributes on the firm varied according to the firm's position on the size continuum. In addition, competitive conditions in the new environment suggested the future structure of the industry would contain a few large, full-service carriers and many relatively small, regional carriers specializing in high density markets.;Two trends in strategic planning activities suggested by the population ecology model were also discerned in the industry. The first of these was the conscious effort to decentralize the planning function as uncertainty in the environment increased. The second trend was a movement away from an emphasis on the longer term, strategic activity toward the shorter-term, tactical response. Both of these trends were direct responses to the turbulence and uncertainty caused by deregulation.;Among the contributions to strategic management made by the ecological perspective were the increased precision in differentiating between environmental states so that the repercussions of changes in individual attributes can by analyzed, recognition of the role of unplanned variation in firm success and failure, and the implications of past choices for the ability of firms to adapt to changing conditions.;The research setting was the U.S. domestic airline industry, which faced deregulation in the late 1970's. The environment was measured in terms of five attributes. Hypotheses concerning the effects of environmental change on the performance of firms in the industry and firm response to deregulation were tested using statistical tests for homogeneity of variances and equality of means as well as regression analysis. Firms in the industry were classified into small, medium, and large carriers, and the analyses compared extreme groups.