Evolutionary theory of the firm
What is the evolutionary theory of organisation: Change, adapt.
just like netflix, store -> streaming service -> production studio
when organisations change: they can keep on doing what they still do, or try
something new -> innovation. We are going to explore if trying something new is a
good thing.
Organisation does not go out of business!!
Old perspective: mechanistic / closed system -> just change the programme of the
firm
New perspective: organisation / open system -> organisations are not alive!! They
somewhat represent metabolisms.
Open systems: graph of the article: Morgan. only focus on what happens what
happens on the outside. Inflows and outflows of all sides.
The outputs influence the inputs and change.
The other is not better than the one itself, adhocratic or organic are both suited for
both situations. it depends on dynamism.
competitive pressure,
not every organisation can adapt:
- inertia
- path dependence (you can change, but your company is not in an industry
(netflix does not make hardware, not an oil exploiter)
- unwilling
- unable
, Stijn Bottema ~ TAO
Not every adaptation is successful. (see Polaroid, with razorblade model)
Novelty is always uncertainty.
The overall model for this course:
Organisations and their environment
Two perspectives on change:
- Determinism (the environment determines whether you are successful)
- Voluntourism (organisations are being capable of being proactive)
The evolutionary process
variation -> selection -> retention
misfit: companies doing the old things fail.
Determinism:
, Stijn Bottema ~ TAO
Voluntarism: The internal selection. instead of external
variation:
external selection:
internal selection: protocols, someone has to decide to come up with a certain idea.
Retention: requires some degree of learning. What it is what allowed success.
Polaroid failed here.
Co-evolution: the external selection are the internal selection
-> environmental fitness (you are making the right choice)
, Stijn Bottema ~ TAO
Strategy is being the nucleous between the internal and external environment.
Polaroid internal could not keep up with external.
Part three of the lesson
Routines: repetitive, recognisable pattern of interdependent actions involving multiple
actors (feldman and pentland)
routines persist over time
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