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Evolutionary Theory

Evolutionary Theory. Proposition 1: Not a Theory of Strategy By: Mahua Guha Elena Vidal. Proposition.

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Evolutionary Theory

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  1. Evolutionary Theory Proposition 1: Not a Theory of Strategy By: Mahua Guha Elena Vidal

  2. Proposition Evolutionary theory is not an appropriate theory of strategy since the core constructs of routines and local search are impossible to observe (or manage) in practice. Moreover, the notion of Variation-Retention-Selection (VRS) can be used to classify the mechanisms in any theory.

  3. Evolutionary Theory - Definition • An overarching framework that brings theories together – Not a theory by itself • Explains how organizations form, change, persist or disband – Under what conditions? • Result of four processes: variation, selection, retention, struggle. Is it unique to organizations? Alternative explanations?

  4. Evolutionary Theory and Search Search is irreversible – what is found is found. Can it be explained? Source of competitive advantage. Explains the search process, but conclusions are unrealistic – invest in what is profitable? Maximize returns? “Firms cannot hope to find optimal strategies” (Nelson and Winter, 1982) – bounded rationality.

  5. Evolutionary Theory – Ex-post study • All studies in this approach are ex-post analyses – impossible to manage or understand the underlying causes a posteriori. What did really happen? • Does not distinguish between Effective Judgements and Good Guesses (Winter, 2003). • Strategic Management needs to understand the success factors, needs to distinguish between good judgements and good guesses so that organizations are well prepared for the future .

  6. Evolutionary Theory – Ex-post study • Helpful in understanding the historical past of organizations or their collections and their transformations through the processes of Variation, Selection, Retention and Struggle  Research methods (ethnography, historical analysis) that can supplant this “theory”. • Need to look at whether the same formulae were present in unsuccessful organizations.

  7. Evolutionary Theory – Not a Theory of Strategy • It does not provide sufficient links between micro and macro processes (Murmann et al. 2003). • Strategic Management needs to ensure links between business unit level strategies and firm-level strategies. • It ignores the role of managers – bounded emotionality, interprets decision rules ex-post as well. • Easier to observe in smaller firms than in large firms, like Fortune 500 firms (Aldrich, 2003). Strategic Management deals a lot with large firms.

  8. Exploitation Exploration Evolutionary Theory Neoclassical Theory Evolutionary Theory – Theory of Exploration • Neoclassical Theory and Evolutionary Theory at two extreme ends. • Solution for Evolutionary Theory: • Multiple levels of adaptation and selection. • Experimentation can be present at some low level, while the subset of these experiments that prove successful can be exploited at a higher level in the entity (Levinthal, 2003)

  9. Evolutionary Theory – Needs to tell more More information required from Evolutionary Theory Requirements from Strategic Management What worked in the past, will it work in the future? Future directions and context recognition If yes, then under what conditions will this work? What are the lessons that we can learn from Selection? Selection What are the criteria for Exogenous and Endogenous Selection? What can we learn from disbanding of organizations that we can use in Strategic Management to caution existing organizations? Lessons from disbandings

  10. Evolutionary Theory – Needs to inform Strategy • In order to become a valuable Theory of Strategic Management, Evolutionary Theory needs to inform about (Levinthal, 2003): • The role of foresight • Use of discretion • Choice of processes • Building blocks to define the criteria of the search process.

  11. Thanks.

  12. Future research areas • Routines – their rates of change in an open-source technology environment • How does Selection play a role in Serial Entrepreneurship? • Variation and Selection for Academic Journal Article Publishing – (compare between earlier publishing and publishing now) • Dependent variable – to be published or not • Independent variables • Geography of Publishing Body • Geography of authors (American, International) • Geography of studies (America, B,R,I,C) • Tools or methods used (Quantitative or Qualitative or Combination) • Applicability of research question in number of domains • Number or earlier publications by the same author(s)

  13. Future research areas • Variation and Selection for Academic Journal Article Publishing (contd.) • Hypothesis 1 - Higher chances of getting published if the author is from the same geography as the publishing body. • Hypothesis 2 – Higher chances of getting published if the geography of study is any of the BRIC countries. • Hypothesis 3 – If quantitative modelling is used, it will get published • Hypothesis 4 - If the research question is applicable to more than one domain then it will get published. • Hypothesis 5 – The higher number of earlier published work by the same author, higher is the chance to get published.

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