Using insights from `embodied cognition' and a resulting `cognitive theory of the firm', The paper aims to contribute to the further development of evolutionary theory of organizations, in the specification of organizations as `interactors' that carry organizational competencies as `replicators', within industries as `populations'. The paper, in particular, analyzes how, if at all, `dynamic capabilities' can be fitted into evolutionary theory, and proposes that the prime purpose of an organization is to serve as a cognitive `focusing device'. Here, cognition has a wide meaning, including perception, interpretation, sense making, and value judgments. The paper examines how cognition integrates organizations on the one hand, and creates differences within and between industries on the other, and proposes the following sources of variation: replication in communication, novel combinations of existing knowledge, and a path of discovery by which exploitation leads to exploration. These sources yield a proposal for dynamic capabilities. The paper also discusses in what sense, and to what extent these sources of variation are `blind', as postulated in evolutionary theory.
Outside biology, a generalized evolutionary framework, with its basic principles of variety generation, selection and replication, has been applied to a wide range of socioeconomic phenomena such as organizations (McKelvey, 1982; Baum and Singh, 1994; and Aldrich, 1999), industries (Hannan and Freeman, 1977; 1984; and 1989), economies (Veblen 1919; Nelson and Winter, 1982; Hodgson, 1993; Witt, 1993; Metcalfe, 1998; Hodgson, 2002b; Witt, 2004; and Hodgson and Knudsen, 2005), knowledge (Campbell, 1974), neural structures (Edelman, 1987) and culture (Boyd and Richerson, 1985; and Hull 1988).
The evolutionary perspective has a number of attractions. It accounts for development of forms under limited foresight. In economics and management, it not only keeps us from the error of an unrealistically rational, magical view of development as the achievement of somehow prescient, or even clairvoyant, managers, entrepreneurs and scientists, but also from the opposite error of institutional or technological determinism (McKelvey, 1982). It helps to deal with what in sociology is called the problem of agency and structure. |
