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   Source : Handbook of Strategy and Management   

Evolutionary Theory

Van de Ven and Poole (1995) restrict ‘evolution’ to cumulative and probabilistic changes in populations of organizational entities. As in biological evolution, change proceeds through a continuous cycle of variation, selection, and retention (Hannan and Freeman, 1989). Variations, the creation of novel forms, are often viewed to emerge by random chance; they just happen. Selection occurs principally through competition among forms, and the environment selects those forms that are best suited to the resource base of an environmental niche. Retention involves the forces (including inertia and persistence) that perpetuate and maintain certain organizational forms. Retention serves to counteract the self-reinforcing loop between variation and selection (Aldrich, 1979). Thus, evolutionary theory explains changes as recurrent, cumulative, and probabilistic progression of variation, selection, and retention processes.

Alternative theories of social evolution distinguish how traits can be inherited, whether change proceeds incrementally or radically, and whether the unit of analysis focuses on populations or species. A Darwinian perspective argues that traits can be inherited only through inter-generational processes, whereas a Lamarkian argues that traits can be acquired within a generation through learning and imitation. A Lamarkian view appears more appropriate than strict Darwinism applications of social evolution theory to organization and management (March, 1997). As McKelvey (1982) discusses, few solutions have been developed to operationally identify an organizational generation and an intergenerational transmission vehicle.

Social Darwinian theorists emphasize a continuous and gradual process of evolution. In The Origin of Species, Darwin (1936) wrote, ‘as natural selection acts solely by accumulating slight, successive, favorable variations, it can produce no great or sudden modifications; it can act only by short and slow steps’. Other evolutionists posit a saltational theory of evolution, such as punctuated equilibrium (Gould, 1989), which Tushman and Romanelli (1985) introduced to the management literature. Whether an evolutionary change proceeds at gradual versus saltational rates is an empirical matter, for the rate of change does not fundamentally alter the theory of evolution - at least as it has been adopted thus far by organization and management scholars.

Summary

Life cycle, teleology, dialectics, and evolutionary theories provide four useful ways to think about and study strategic change in organizations. The relevance of the four theories varies depending upon the conditions surrounding organizational change. Specifically, Van de Ven and Poole (1995) posit that the four theories explain processes of organizational change under the following conditions. Life cycle theory explains change processes within an entity when natural, logical, or institutional rules exist to regulate the process. Teleological theory explains change processes within an entity or among a cooperating set of entities when a desired end-state is socially constructed and consensus emerges on the means and resources to reach the desired end-state. Dialectical theory explains change processes when aggressor entities are sufficiently powerful and choose to engage opposition entities through direct confrontation, bargaining, or partisan mutual adjustment. Evolutionary theory explains change processes within and between a population of entities as they compete for similar scarce resources in an environmental niche.

These theories are a useful way of thinking about strategic change. In this chapter, we use these theories to understand how change is ‘driven’ by underlying motors or generative mechanisms. These motors, as we have described earlier, are inferred from a systematic analysis of the sequence of events underlying the development of phenomena. Such an assessment reveals a set of motors that determine the scope and nature of strategic change.

In our use of strategic change one can see how we both build upon and depart from common uses of the term in the strategic management field. For instance, strategic change has been commonly used to denote ‘key’ organizational changes. Complementing this view is the use of strategic change as being purposive and goal oriented. Strategic change has also been used to denote changes undertaken to align an organization with its environment. The perspective that we have adopted suggests that one applies the theory that best fits the specific conditions to explain change processes.

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