Organizations in industry: Strategy, structure, and selection (original) (raw)

In the United States, local, state, and federal governments played central roles in the evolution of the railway industry. Although the industry evolved incrementally in terms of track mileage, passenger and freight traffic, and capitalization, i t changed drarnaticdly at several points in terms of strategy, selection, and structure in the wake of major shifts in public policy. As a result, analysts have organized railway history into several, discrete periods marked by changes in public policy that bmught about sea changes in the industry. Of course, public policies were responsive to the industry's economic peculiarities, such as capital intensity and asset specificity, and the problems and evils that policymakers perceived in those peculiarities. This chapter focuses on business strategy, industry structure. and selection mechanisms ktween 1825 and 1990. The main environmental changes during this period were generated by rhe interaction between the industry's economic characteristics and public poIicy, Whereas the organizational environment is conceived as the market in most of the chapters in this book, in this chapter it is conceived as government regulation and public policy. In such heavily regulated industries as the railroads, the state is a particularly salient part of the environment. For instance. in some periods American policy made the rail industry exceptionally cooperative and in others it produced cutthroat competition. Public policy generated very different hnds of environments over timedifferent kinds of markets? in effect. This chapter underscores the special role of public policy in the rail industry, but it also points to the broader importance of public policy in creating the organizational environment. Whereas some of the policies that governed the rail industry were unique, a number now govern most U.S. industries. Antitrust law is a prime example. Organization theorists typically set aside public policy in examining the environment. on the ~rinciple that today most industries operate in similar public policy environments. This chapter highlights the Table 4-1 Stratem, structure,