Identifying and explaining environmental complexity

Objective: This paper aims to introduce the reader to a simple, yet challenging process of reconceptualising the dimensions of any firm's environment. In doing so, it is the intention of this paper to challenge the manner in which resource movement within a given environment is accounted for. Prior Work: This paper builds upon the author's recent work focused upon restaurant survival in Australia and the UK (i.e. North Yorkshire) that have demonstrated the importance of defining the ecological, selective and general dimensions of the environment experienced and influenced by individual firms. Approach: The epistemological foundations of this paper are guided by the principles of the critical realism approach, specifically transcendental realism. Using a mixed method approach has allowed firm survival data (from 2,440 firms) for the period 1975 to 2004 to be combined with researcher observations, qualitative interviews and local archival data. Results: It is argued that once we can determine the nature of the environment experienced by individual firms, we are able to better understand the flow of resources (or energy) upon which firm survival is dependent. This paper demonstrates (via high levels of triangulation) that the nature of interaction (deliberate or otherwise) occurring between firms in isolated towns can be reconciled to their capacity to capture vital resources directly related to their survival. Implications and Value: This paper is highly innovative, introducing numerous ecological concepts not previously used in the social sciences to explain firm survival. For example, the issue of ecological scale is used to reduce the researcher's focus from regional to town specific survival factors. Such fine grained investigation allows causal factors to be discovered and confirmed empirically. Rather than assuming that (resource specific) networks are visible, this paper demonstrates the importance of identifying invisible networks that may operate and therefore influence firm survival at different levels of ecological scale. Researchers discussing/researching the nature of complex environments make various assumptions about the composition of such environments. Likewise, when the issue of resource networks is considered, assumptions are made about the flows of resources between entrepreneurs and their environments. This paper challenges these assumptions, offering new ways to think about both.