Darwinism, Organisational Evolution and Survival

12th EURAM Conference, Rotterdam, Netherlands, June 2012

 

Organizational Adaptation: An Evolving Debate

Gianpaolo Abatecola (Tor Vergata University, Italy)
This paper discusses where the literature about organizational adaptation is, and where it could be moving towards in the future. In particular, the paper reviews the state of the art regarding some key topics within this literature, such as the challenges pertaining to the firms’ environmental fit along their life cycle, as well as the more specific problems concerning organizational survival. Moreover, the paper provides its readers with food for thought about some possible avenues for the future research and practice within this field. For example, the possible connections between organizational adaptation and organizational ambidexterity, exaptation, or path dependence are prospected. Also, some hypotheses for considering organizational failures as final deteriorations of the organizational adaptation process are proposed.

 

Modular Exaptation: a missing link in the synthesis of artificial form

Pierpaolo Andriani (Euromed Management, France) and Giavanni Carignani (University of Udine and ISIS Malignani, Italy)
It is almost thirty years since the term exaptation („characters evolved for other usages (or for no function at all) and later co-opted for their present role‟) was coined in a seminal paper by Gould and Vrba (1982). It has since spread in several social sciences disciplines, among which: economics, history of technology (Mokyr 1991), technology and innovation studies (Arthur 2009)(Kauffman 2000), psychology (Buss et al. 1998), linguistics and origin of languages (Lass 1990)(Closs Traugott 2004), economics and management studies (Dew et al. 2004)(Cattani 2005)(Marquis and Huang 2010), evolutionary economics (refs), [more refs and disciplines?]. But despite its ubiquity, exaptation has failed to become an accepted and pervasive concept in the social sciences arena and an accepted tool in the social sciences research. A Google n-gram comparative search1 reveals that the term exaptation is nearly five orders of magnitude (100000 times) less frequent than adaptation. This raises the question of why the term, concepts and tools related to exaptation have failed to gain ground despite the inherent importance and potential of the concept. There are likely several reasons behind the relative failure of exaptation, among which we cite, resistance to concepts imported from the natural sciences; the dominance of Neo-darwinism in evolutionary biology based on what Gould called the Selectionistprogram that has blocked the adoption of 2 non-adaptive concepts such as exaptation; the dominance of Neoclassical Economics with its reliance on a closed systems and its influence upon other social sciences. But there are also endogenous factors: a number of theoretical problems and conceptual ambiguities are still haunting a broader application of the concept, limiting its huge potential for providing insight into the systemic mechanisms of innovation, advice in innovation management and entrepreneurship, possibly even new approaches to design theory and tools for engineering practice. Most of these problems are connected to the very origin of the concept from evolutionary biology. In fact, the application of the same concept to other fields is bridged by analogy: although a powerful cognitive tool, complex analogies require to be soundly founded and mapped (Gentner, 1983). Others descend from the application of exaptation to technologies intended as independent blocks, thereby ignoring their strongly nested nature. In this paper we try to clarify some conceptual issues and discuss its applicability to the technology area. The aim of our work is twofold: first, to discuss the ambiguities inherent in the concept of exaptation as applied to the technological and not the biological world and offer a more general and robust definition of exaptation; and second, to discuss the important link between modular systems and exaptation. The paper is organized as follows First, we introduce exaptation in relation to technological change. Second we discuss the first of the areas that have plagued the application of exaptation to technological change: namely problems related to the biology/technology analogy and the lack of proper consideration of the nested nature of technologies. We also specify some features of technological arena that differ from its biological counterpart. Third, we turn to the nested nature of technology and introduce modularity as a systemic concept. Fourth, we introduce a new definition of exaptation in modular systems and show a dynamic model, describing a feedback circle between technological exaptation and modularization processes. In particular we describe the correlation between processes operating on the modular level and occurrence of exaptation at the system level. We briefly show how the ideas presented can help understand the innovativeness of industrial districts and innovation following the collapse of industrial systems. Finally, we discuss how our model could be further explored and propose some exploitation opportunities: modular exaptation for a better insight into the nature of technological change and the systemic mechanisms of innovation, a more pragmatic usage of the concept in innovation management and entrepreneurship, in design theory and engineering practice.

 

Evolving through exaptation: the case of L’Oreal

Fiorenza Belussi (Padua University, Italy), Andrea Ganzaroli (Milan University, Italy) and Sylvia Sedita (Padua University, Italy)
The paper aims to explore the role of exaptation in explaining the evolutionary trajectories of firms. Our contribution is rooted in the evolutionary theory of the firm. This theory has focused on the concept of adaptation, which is the capacity of the firm to develop knowledge and capabilities in response to external changes of the business environment. However, this concept is mostly used to explain continuities in the firm innovation process, but is not well suited to describe the interplay between continuities and discontinuities in innovation. Recent literature has pointed out that adaptation should be complemented with exaptation for better investigating discontinuous innovation patterns. The paper offers an empirical illustration of how exaptation can shape the innovation strategy of firms. The empirical setting is L’Oreal, the world leader in the beauty industry. We reconstruct the historical pattern of innovations developed by the firm, by means of a collection of information coming from secondary sources. In particular, we identify the conditions that allowed L’Oreal to enter the nutricosmetics, by means of the creation of a new product out of an exaptation process.

 

Evolving innovation through office knowledge networks: Mapping the ephemeral architecture of organizational creativity

Stephen Dobson (Sheffield Hallam University, UK), Dermot Breslin (University of Sheffield, UK), Louise Suckley (Sheffield Hallam University, UK), Rachel Barton (Sheffield Hallam University, UK) and Liliana Rodriguez (Sheffield Hallam University, UK)
This paper explores positive conditions for the evolution of creative innovation through informal social networks in the office. By drawing on both Social Network Analysis (SNA) and the abstracted evolutionary mechanisms of variation, selection and retention, a multilevel conceptualization of the evolutionary processes underpinning the emergence and development of ideas within an organization is put forward. In this way SNA is used to visualize not just the connectivity of individuals within the company who exchange 'expert advice' and 'new ideas' in order to progress the development of products, but also the role of mediators in this process at a digital media company, Dataco. The principle aim of this research is to construct an image of the otherwise tacit architecture of the organization; this structure is not of bricks and mortar but the flow of communication and transformation of ideas. It is described here as the ephemeral architecture of organizational creativity.

 

Evolving Manufacturing Systems: Hierarchical and Cladistic Classifications

James Baldwin (University of Sheffield, UK), Chris Rose-Anderssen (University of Sheffield, UK) and Keith Ridgway (University of Sheffield, UK)
The overall aim of the research reported here is to develop comprehensive classification systems applicable to the wide-ranging systems of manufacturing. The classifications will form the basis for the next practical step of the research – the COPERNICO project’s web-based expert system and diagnostic tool for the rapid design and virtual prototyping of factories of the future (www.copernico.co). Several important objectives would also be achieved: 1) by organising the various manufacturing species and their character states will help make sense of manufacturing variety and presents potential opportunities for change and survival; 2) a graphical presentation of knowledge on manufacturing complexity - a tool for enlightening the understanding of the change process that connects the development of manufacturing processes and technologies; 3) the development of a useful benchmarking tool so manufacturing organisations locate where they are in evolutionary history, identify where they want to be, and how to get there.

 

The strategic and the stratigraphic: A working paper on the dynamics of organisational evolution

Ilfryn Price (Sheffield Hallam University, UK)
Despite large debates over fundamental issues a broadly evolutionary paradigm of organisations is growing in legitimacy. It may though be preferable to replace the metaphor of the organisation as an organism with the literal assertion that both social organisations are ecologies (Weeks and Galunic, 2003). They are still classes of complex systems maintained, and specified by, replicators (or schemata Gell Mann 1994) but the interactor is not necessarily the individual organisation, or population of organisations. Conceptual evolution has been argued as a post-Kuhnian analysis of the scientific process (Hull 1988), a rival economic paradigm (references in Hodgson 1993), a view of strategy (e.g. Lloyd 1990) and an explanation of organisational transformation and learning (Price and Evans 1993, Price 1994, 1995).My concern in this paper is to raise awareness of events, both external and systemic, in the stratigraphic record and argue for more attention to their equivalents in what we might call the strategy graphic. The causes of extinction events may be genuinely external to the system affected or they may be internal when the success of a particular replicator system disturbs a wider systemic balance. Strategic scale parallels of both forms of extinction event can be argued in commercial and technological history.

 

The Evolution of Manufacturing Man and his Manufacturing Species

Chris Rose-Anderssen (University of Sheffield, UK), James Baldwin (University of Sheffield, UK) and Keith Ridgway (University of Sheffield, UK)
Earlier manufacturing cladistic research has simply presented the most ancient manufacturing species as Ancient Craft System without reference to any characteristics. The paper tries therefore to explore ancient species through literature research based on archaeological and anthropological accounts. Thereby a useful out-group for cladogram construction could be created. Ancient evolutionary steps are brought together by applying cladistics. The paper shows that ancient manufacturing forms can be represented by character states. Their relationships are, however, based on the character states they share and not on geographical relationships. There is a continuous adaptation of the specie to the environment.

 

Bridging Adaptation Perspectives to Explore the Determinants of Corporate Crisis

Gianpaolo Abatecola (Tor Vergata University, Italy)
Although scholars have developed a plethora of heterogeneous research perspectives on corporate crisis, to date, the literature still lacks a rigorous methodological and holistic approach to account for the factors determining corporate failure. The aim of this paper is to contribute to filling this gap by proposing an interpretative conceptualization of corporate crisis based on the literature about organizational adaptation. First, the theoretical background on crises is presented. Second, the dichotomy between determinists and voluntarists in organizational adaptation is discussed and it is highlighted how the co-evolutionary approach has reduced this dichotomy. The co-evolutionary approach is then used to develop the conceptual framework proposed. As it is explained, a key role in the framework is played by some milestones, such as the concepts of hidden traps and heuristics in decision making, developed by the behavioural literature descending from Herbert Simon’s bounded rationality.

 

Fit or failure: Strategic fit by employee-market-connection

Jack Crielaard (Stenden University, The Netherlands), R. Kemp (Wageningen University, The Nethrlands), O. Omta (Wageningen University, The Nethrlands) and E. Wubben (Wageningen University, The Nethrlands)
This study investigates the fit between people, working in an organisation, and the markets of the organisation. Based on an ecological system model the term ‘strategic fit’ is applied to the direct relationship between the organisation’s human resources and the characteristics of the relevant market. This study provides new insights in the debate between the positioning school and the resource based view (RBV) of the firm to enhance high performing organisations, open innovation and self-direction of employees. According to our results from small and medium enterprises (SME’s) the RBV needs enrichment with a connection between employee and market. A good fit between these two indicators enhance results in the field of people and profit, and, still lagging, planet. This might contribute to a business practice where people and their relations are the starting point for corporate social responsibility.

 

Generalized Darwinism:A Metatheoretical Framework for the Study of Organizational Selection, Adaptation and Change

Jan Willem Stoelhorst (Amsterdam University, The Netherlands), Howard Aldrich (University of North Carolina, US), Geoffrey Hodgson (University of Hertfordshire, UK) and Thorbjorn Knudsen (University of Southern Denmark, Denmark)
This paper develops ‘generalized Darwinism’ as a meta-theory to ground, integrate, and inspire theory development on organizational selection, adaptation and change. We show that the causal logic of Darwinism can accommodate a large class of organizational development and change theories, and that it is a necessary touchstone for any theory of organizational selection and adaptation. When combined with a multi-level selection framework, Darwinism makes the interaction between agency and structure amenable to analysis and can help overcome the fragmentation that is characteristic of theory development on organizational change by capturing the relationships between change processes involving varying levels of human intentionality at different levels of analysis.

 

The Emergence and Evolution of Routines: A Study of a Growing Care Provider

Dermot Breslin (University of Sheffield, UK)
This explorative research seeks to address a current gap in knowledge related to the emergence of routine behaviors within small growing businesses, and the role of the entrepreneur in this development process. Using a longitudinal case study approach, the behavior of a group of employees in a fast growing domiciliary care company is tracked over a period of 12 months. Analysis of the findings reveal that while the founder was actively involved in the creation of collective behaviors in the completion of client assessment and control activities, she put in place control and selection mechanisms to oversee the development of behaviors in the core service of care delivery itself. In evolutionary language, the founder acted like an artificial breeder recruiting and then carefully selecting and pruning behaviors within her growing team.

 

Between Populations and Communities: Organizational Groups and the Case of UK University Spinoffs

Konstantinos Pitsakis (Tilburg University, The Netherlands) and A. Gotsopoulos (IE Business School, Spain)
The study of organizational populations has occupied a central position in economic sociology over the last decades. Some authors have suggested that to fully understand the dynamics of individual populations, scholars need to focus not only on individual populations, but also on communities of interdependent populations. However, communities, or groups also exist within populations. Organizations within such groups may be linked to the same parent organization or the same locale, or they may share a common goal. Interdependencies among them foster intra-group learning and legitimacy, may mute intra-group competition, and partially shield group members from external competition. Factoring such group dynamics into our studies of emergent organizational forms is important for fully understanding the dynamics and effects of legitimacy and competition at the population level. We explore these dynamics in the population of British university spinoffs.

 

New Approaches to Heuristic Processes and Entrepreneurial Cognition the the Market

Simone Guercini (Florence University, Italy)
The aim of this paper is to examine the contribution that the study of heuristic processes can make to a better understanding of the gap between marketing theory and practice, particularly in small and medium-sized enterprises (SMEs). The term entrepreneurial marketing is used to refer to the marketing content of the entrepreneurial role. More specifically, the paper investigates how entrepreneurs generate and share heuristics to produce and use knowledge about markets. Based on an in-depth review of the literature, the paper develops the idea that this evolution of heuristics studies is of prime interest to an understanding of the specific features of the marketing content of the entrepreneurial role. The literature review is supplemented with the results of an empirical research study conducted by the author over the last ten years on SMEs in the fashion industry.

 

Network evolution in global expansion: The Toyota Group's entry into emerging markets

Faith Hatani (Manchester University, UK) and S. Mcgaughey (University of Strathclyde, UK)
This paper examines cohesion of an inter-firm network in the process of global expansion by applying an evolutionary perspective. In particular, we focus on the importance of cohesion among member firms of a supply network when they enter emerging markets. We conceptualize the process of variation-selection-replication-retention as one cycle of a network-level routine of global expansion. Drawing on a longitudinal analysis of the Toyota Group from founding through to its more recent entry into emerging markets, we identify the dangers of a diversion in any stage of this network routine, with a loss in cohesion leading to fragmentation, impediments to learning and a threat to global competitiveness. Importantly, our findings point to the on-going, and possibly increased, importance of the core firm’s role in maintaining network cohesion in the face of increased market uncertainty and speed of competition, and caution against inappropriately applying insights derived from production-side studies to network evolution in global expansion.

 

Intrafirm Embeddedness and the Effect of Family Membership on Hedge Fund Survival

Emanuel Kastl (CASS Business School, UK)
While existing research investigated the impact of financial metrics (e.g. returns, assets under management, etc.) on hedge fund survival, little attention was devoted to the impact of social factors (e.g. family membership and family size) as vital parameters for hedge fund survival. This investigation is important, since prior research (e.g. Kolokolova, 2011 and Boyson, 2008) indicates that more than half of the funds in the hedge fund industry belong to a fund family. Utilizing a large-scale dataset, I investigate the effect of family membership on fund survival whilst holding constant key explanatory variables identified by extant literature. The results, which are consistent across two selected econometric models, show that family membership and growing family size positively influence hedge fund survival. To explain this result, I build on the embeddedness literature and augment its theoretical scope to intraorganizational relationships.

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