Organizational Evolution and Dynamic Capabilities

Daniel A. Levinthal, Management, The Wharton School, and Alessandro Marino, Department of Business and Management, LUISS Business School

Article in The Oxford Handbook of Dynamic Capabilities, edited by David J. Teece and Sohvi Leih

Abstract: This article examines the importance of plasticity and diversity in organizational adaptation and with respect to dynamic capabilities. It begins by conceptualizing what elements comprise a dynamic capability within an evolving organization using the contrast between templates (genotypes) and realized practices (phenotypes). It then introduces a model of hierarchical learning inside organizations with the goal of elucidating the interrelationships underlying the adaptive properties of the internal ecology of organizational evolution. In particular, it compares higher-level selection/recombination mechanisms with lower-level learning capabilities. This article highlights the importance of recognizing the interplay among the mechanisms and forces at work in the evolutionary dynamics of organizations. It shows that processes of variation and selection can be a valuable substitute for the capacity to adapt individual behaviors and that plasticity of templates may mitigate the effective selection of more or less promising templates.

Read more here.