In search of a dynamic theory of the firm: An evolutionary perspective on competition under conditions of technological change with an application to the semiconductor industry

                         Stoelhorst, Jan-Willem; Dr

                         UNIVERSITEIT TWENTE (THE NETHERLANDS), 1997


                         This thesis is motivated by the static nature of theory in business administration. It is argued that a central
                         reason for the static nature of theory in business administration is the fact that those parts of economics
                         and sociology that have been most influential in business administration (neo-classical micro-economics
                         and functionalist sociology respectively), have largely neglected the role of technology. The starting
                         point of the thesis is that an incorporation of technological change is an important step towards making
                         theory in business administration more dynamic. The thesis looks for theoretical building blocks from
                         which a more dynamic theory of the firm might be constructed. The metaphor of evolution is central to
                         this search, and patterns of punctuated equilibria, as well as mechanisms of variation, selection and
                         retention are used as heuristic. In three theoretical chapters, an evolutionary perspective on competition
                         between firms is developed by drawing upon the literatures on marketing, strategy, and technology
                         dynamics. Important building blocks are the resource-based view of the firm, which gives insight in what
                         may be called 'organizational genetics', and the notions of technological paradigms and regimes. This
                         theoretical perspective is subsequently applied to a retrospective, multi-level case study of the
                         semiconductor industry. Three chapters describe and analyze the development of semiconductor
                         technology, competition in the semiconductor industry, and strategy formation at Intel. The case study
                         seeks to discern patterns of change in technology and competition, and explores the mechanisms that
                         may explain these patterns. The thesis concludes by formalizing the evolutionary perspective resulting
                         from the theoretical chapters and the case study. Competition under conditions of technological change
                         is modelled in terms of a nested structure of social systems that are interlinked by multi-level variation,
                         selection and retention mechanisms. This model gives insight into the dynamics of competition and may
                         thus inform the development of a more dynamic theory of the firm. An extended resource-based model
                         of the firm is offered as a starting point for developing such theory.


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