Response Diversity
Organizations need business units that perform similar functions (revenue generation) but respond differently to market conditions.
Response diversity is insurance against unpredictable disturbances. You can't predict which disturbance will strike, but if your community contains species with diverse responses, you're insured against whichever arrives.
Species performing similar ecological roles respond differently to disturbances - they're functionally redundant but environmentally distinct. Imagine a coral reef with ten fish species that all eat algae. Five tolerate warm water but not turbidity; five tolerate turbidity but not warm water. When a storm brings sediment, warm-specialists disappear but turbidity-specialists persist - and total algae consumption continues. Function is maintained despite species loss because functionally similar species have different environmental envelopes. Response diversity is what makes biodiversity insurance against unpredictable disturbances.
Business Application of Response Diversity
Organizations need business units that perform similar functions (revenue generation) but respond differently to market conditions. Berkshire's portfolio contains businesses with different economic sensitivities - retail is recession-sensitive while insurance float grows during downturns. When recession strikes, some businesses suffer while others stabilize, maintaining aggregate function.