Selection and Variation in Organizational Evolution

Abstract

Many organizational populations display increasing variation over time in characteristics thought to be central to survival, as we show here for hard disk drive producers. We develop a simple model that might account for this pattern. In it, technological advance follows a trajectory consistent with a proportionate random process (akin to a Gibrat process) that favors technology leaders but only stochastically. We demonstrate through computer simulations that evolution in an organizational population with selection favoring a characteristic evolving as a proportionate random process can, under plausible conditions, generate increased variation over time.