Why the microbrewery movement? Organizational dynamics of resource partitioning in the U.S. brewing industry

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Citation: Glenn R. Carroll, Anand Swaminathan (2000) Why the microbrewery movement? Organizational dynamics of resource partitioning in the U.S. brewing industry. The American Journal of Sociology (RSS)



Tagged: Sociology (RSS) organization theory (RSS)


Summary:

Carroll and Swaminathan begin their argument with a empirical puzzle. The market for beer had, over a period of 20 years, become increasingly concentrated and dominated by a small number of very large players. At the same time, they was explosion of small brewpubs and micro-brewers. The authors attempt to use the concept of resource partitioning from population ecology to explain the phenomena and use this to make a more specific, organization-focused, argument, about generalists and specialist organizations. The paper links identity-based research to the ecological literature on resource partitioning.

Essentially, the authors argue that as the density of generalists decreases as they become increasing concentrated, there is an increasingly large resource space that lies outside their target areas. In other words, by serving as many customers as possible, the big beer companies open a resource space for other new forms that can take advantages of those unclaimed resources.

A bit part of the analysis is connected to arguments about identity -- making a deep connection between the literatures on organizational identity and the literature on ecology. The authors argue that competition can happen based on scale, but it can also happen based around identity claims.

In the context of the beer community, microbreweries were launched specifically as a way of providing a more tradition-bound and less commercial alternative to mass-market beers -- essentially carving out a space within the resources space that the large firms could not easily compete with. The authors look at the example of contract brewers as example of inauthentic -- or perhaps less authentic -- means of brewing beer.

The authors test three formal hypotheses using quantitative ecological data on founding and exit of brewpubs, micro-brewers, major brewers, and contract brewers (which are essentially less authentic micro-brewers who do not have their own equipment but rent it out):

H1: Under conditions of resources partitioning, as market concentration rises, more specialist organizations will be founded, specialist mortality rates will fall.
H1: Under conditions of resources partitioning, as market concentration rises, more specialist organizations will be founded, specialist mortality rates will fall.
H2: Under scale based competition, the greater a firm's distance from large competitors on a size gradient, the higher its mortality rate will be.
H3: Under resource-partitioning based on identity, the legitimating effects of specialists density depend on the form's normatively valuation relatively to identify claims and its social visibility.