Carlo Salvato (2006)

Micro-Foundations of Organizational Adaptation. A Field Study in the Evolution of Product Development Capabilities in a Design Firm

The aim of this dissertation is to improve knowledge of how organizations adapt to their dynamic environments, by developing a detailed understanding of the configuration and evolution of organizational replicators.

Among open questions in the literature on organizational adaptation, I have explored the following: How can the structure of organizational replicators and the nature of their components be realistically described? How do different organizational replicators interact with each other at different levels within and across organizational boundaries? How do replicators evolve? Why do firms need dynamic capabilities?

I’ve addressed these questions by means of an embedded, longitudinal field study of Alessi, an Italian family firm founded in 1921, active in the development and production of hundreds of design household products. Data analysis has been carried out in two steps. First, a longitudinal analysis of available primary and archival data has provided an in-depth understanding of the composite nature of organizational replicators, their mutual relationships, their evolution, their outcome stability. Second, a more structured investigation relying on Optimal Matching Analysis allowed to reliably develop an understanding of replicators complexity and of the mechanisms behind their evolution.

There are four key findings. First, replicators are not simply behavioral entities—routines in the “narrow sense”. Reliable performance of a capability requires additional elements of physical, intellectual and social capital, which are essential components of replicators (or “Replication Base—RB”, as I suggest to label these more articulated organizational traits). Second, interactions among components of Replication Bases at different levels within and outside the organization suggest a more articulated perspective on how organizational knowledge develops. Components of Replication Bases are often located at different positions within the organization. Over time, knowledge of a particular organizational process takes different forms across the organizational hierarchy. What is local search at one level of analysis, gradually becomes sophisticated foresight at different, typically higher, levels. Third, over time Replication Bases evolve by means of a complex interplay between random mutations and intentional interventions, supported by articulated learning processes. Finally, development of higher-level replicators is not the ultimate answer to the challenge of adaptation. Rather, it allows managers to focus their intentional interventions to the higher-level problems posed by the dynamism of competitive environments. Part of this liberated managerial attention and resources are focused on the crucial, non-routine task of understanding how the organization’s idiosyncratic attributes affect its prospects in the specific competitive context. Taken together, these findings outline the microfoundations of a framework for interpreting organizational adaptation.