Benefiting from Others in Organizational Adaptation

Organizational adaptation is typically analyzed in simulation settings where organizations strive to improve their own past performance, without regard to the relative performance, fitness or capabilities of others. In this paper, we introduce the notion of interactive search, which we define as an intentional process of adaptation that is guided by the outcomes of the efforts of both the organization itself and those of others. Using an agent-based simulation model we consider how less successful organizations benefit from observing and considering the adaptive trajectories already established by more successful organizations. Our findings show not only that taking into account the behavior of others, accrues benefits in adaptive fitness, but also that the strongest benefit comes from observing and following others in ways that are much more subtle than pure emulation. Organizations that use others’ behavior merely as a preferential direction for their own adaptive choices fare even better. This result stems from the more general finding that the impediments to an organization’s ability or inclination to observe or follow others do not necessarily affect adaptation negatively. In many cases their impact is even beneficial.