Evolutionary theory revisited

de Giovanni Gavetti

Building on a field study of Polaroid's transition from analog to digital imaging, this article identifies important lacunae in evolutionary research on capabilities. It argues that this research has focused excessively on the emergent, quasi-automatic nature of capability development, thus neglecting the role of cognition and deliberation. Furthermore, because it conceives capabilities as developing from below, this view grants no role, or a very restricted role, to influence from the top and therefore underplays the role of organizational hierarchy in capability development. This paper begins to fill these twin gaps. The field study grounds the development of an agent-based simulation model that focuses on processes of cognition and experimental learning at different levels of an organizational hierarchy. The model shows how these processes differ by hierarchical level, how they interact, and how corporate executives can influence these interactions. This conceptual apparatus allows me to build theory at two levels. On the one hand, I delineate the traits of a micro-foundation for research on capabilities that address these lacunae. On the other hand, I shed light on the role of corporate executives in the development of capabilities and, more broadly, in strategic decision-making.