1 Department of Marketing & Management, Faculty of Business and Social Sciences, SDU2 Strategic Organizational Design, Department of Marketing & Management, Faculty of Business and Social Sciences, SDU3 London Business School4 Department of Marketing & Management, Faculty of Business and Social Sciences, SDU
In the 1980s, organization theory witnessed a decade long debate about the incentives and consequences of organizational change. Though the fountainhead of this debate was the observation that reliable organizations are the “consequence” rather than the “cause” of selection forces, much of the ensuing work examined only corollary implications of this observation. We treat the observation as a research question and ask: when and why are reliable organizations favored by evolutionary forces? Using a simple theoretical model, we direct attention at a minimal set of variables that are implicated in this assertion. Principally, we show that whether reliable organizations are favored depends on the nature of the environment. When environments are complex, reliability is selected out. In more complex environments, variability is more valued by selection forces. Further, we also examine the consequences of change following a large, exogenous shock to the prevailing environment. We show that reliable organizations have the potential to search and learn differently than less reliable organizations. Whereas reliability favors distant search, variability favors local search. Thus, following large, exogenous shocks, reliable organizations can in fact outperform their less reliable counterparts if they can take advantage of the knowledge resident in their historical choices. While these results are counter-intuitive, the caveat is that our results are only an existence proof for our theory rather than a representation of reality. Thus, our attempt is best characterized as shining a spotlight on a small part of the larger canvas that constitutes the literature on organizational change.