Comparing evolutionary and contingency theory approaches to organizational structure

Evolutionary research is beginning to fulfill the promise of the behavioral theory of the firm and explore the impact of administrative structure on adaptation and change in firms. This chapter compares the evolutionary approach to structure with contingency theory, the most prominent stream of organizational research focused on administrative structure. In comparing evolutionary and contingency approaches to organizations, I find that both build from the foundations of information processing and behavioral theories of the firm, and that adaptation plays an important role in both theories. More recent evolutionary work differs from contingency theory in its approach to the selection environment and the efficiency of managerial decision-making in organizations. These differences lead to radically different predictions concerning the causal relationship of structure and strategic choices: administrative structure shapes the information environment in firms, which in turn affects strategic decisions such as market entry and exit. The chapter concludes by examining the theoretical and empirical challenges faced by evolutionary studies of structure and strategic change, as well as considering the new theoretical questions that arise from this approach