Path-Dependence

Abstract

The intertemporal linkages that both constrain and enable an organization are central to its adaptive properties. The most narrow expression of path-dependence is the process of state-dependence—having a particular asset stock at one point in time impacts the distribution of asset stocks that can be reached at a subsequent period. Development, how an organizational form unfolds over time, can change those dynamics. A considerable literature has sprung up around the idea of “dynamic capabilities.” This broad idea is broken down into five distinct facets: accessibility of organizational states, robustness of organizations to changes in the state of nature, capacity to influence future states of “nature,” cost of accessing future sets of attributes, and capacity to value the set of organizational attributes. However, this discourse tends to treat “capabilities” as isolated attributes and not to view the organization as a complex adaptive system, a perspective developed here.