Modeling serendipity in opportunity search by born-global firms: Performance implications from a computer simulation of evolutionary drift using NKC methodology

Although the importance of serendipity in international entrepreneurship is well established, no one has yet inquired into what level of serendipity best enables firms to discover and exploit opportunities. This paper conceptualizes serendipity as evolutionary drift and draws on the theory of neutrality from evolutionary biology to quantify the degree of serendipity that born-global firms (BGs) adopt in pursuit of opportunities modeled as a set of performance peaks on an evolutionary performance landscape. Using an enhanced version of NKC methodology, computer simulations test variations among BGs in terms of their organizational structure, levels of complexity, and the degree of neutrality, which is used as a proxy for reliance on serendipity in opportunity search. Contrary to expectations of an inverted U-shaped relationship between serendipity and BG performance, the simulations provide strong evidence for a U-shaped relationship. In other words, performance is higher when BGs rely on either a high degree of serendipity (high neutrality, wide scope of opportunity search, high level of exploration) or a low degree of serendipity (low neutrality, narrow scope of opportunity search, low level of exploration). In more practical terms, this finding suggests that BGs can achieve high performance in their opportunity search by putting their employees or subunits either on a “tight leash” (low serendipity) or on a “loose leash” (high serendipity) in pursuit of opportunities but should avoid medium degrees of serendipity.