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This essay explores evolutionary and competence‐based theories of the firm. Evolutionary theories can be regarded as a subset of a wider class of theories, variously described as “capabilities”, “resource‐based”, or “competence‐based” theories of the firm. These contrast with a different set of contractarian theories, emanating largely from the work of Coase. It is argued that the contractarian theories of the firm misleadingly assume given individuals thus neglecting processes of individual learning and transformation. Similarly underestimated is importance of technology and the persistence of variety in firm structure and performance. The genesis of the alternative, competence‐based approach is outlined, including the important subset of “evolutionary” approaches of the Nelson‐Winter type. The paper concludes with a discussion of the relevance of the competence‐based approach to strategic management.

A synthesis of the various strands of macro-sociology that is commensurate with a more robust theory of evolutionary institutionalism.

Drawing from what may be conceived of as classical institutionalism and from neo-evolutionary sociology and other related traditions, this chapter endeavors to provide a general theory of evolutionary institutionalism as an overview of institutions and institutional autonomy (along with the underlying forces driving the process of autonomy), to present a theory of institutional evolution that delineates the relevant units of selection and evolution, the types of mechanisms that facilitate institutional evolution, and a typology of the sources of variation.

The chapter constitutes the attempt to provide a theoretical framework intended to engender an improved historical-comparative institutionalism inspired by the works of Max Weber and Herbert Spencer.

The purpose of the theoretical framework presented should not be misconstrued as a general, “grand” theory for the discipline of the sociology as a whole, but rather understood as the model of a common vocabulary for sociologists interested in macro-sociology, institutions, and socio-cultural evolution designed to complement other available models.

As a synthesis, the originality of the theoretical framework presented lies in (1) elucidation of the idea that institutional autonomy as the “master” process of institutional evolution, (2) more precise delineation of the link between meso-level institutional entrepreneurs and institutional evolution, and (3) combination of a body of complementary – yet often loosely linked – bodies of scholarship.

This chapter introduces evolutionary neuroscience and its organizational applications, especially its usefulness for motivation analysis in macrolevel disciplines such as strategic management. Macrolevel organizational disciplines have mostly lacked a theory of motivation beyond self-interest assumptions, which fail to explain many important macrolevel organizational phenomena. Evolutionary neuroscience provides an empirically grounded, parsimonious perspective on the human brain and brain evolution which helps clarify the profound complexities of motivation. Evolutionary neuroscience’s theory of the physiological causes of self- and other-interested motivation can support better macrolevel motivation analysis and unify disparate, potentially conflicting motivation theories. Examples are offered of how neuroscience-based motivation theory can support more comprehensive strategic management analysis of competences and competitive advantage.

This paper aims to explain how the dynamic demand environment influences strategic firm behavior along an industry’s evolutionary path. A conceptual gap concerning the influence of demand-side environmental factors (vis-à-vis changes in technology and policy) on firms’ strategic choices motivates the theory developed herein. The paper’s contribution to the literature on “evolutionary perspective in strategy” also addresses an important gap in the emerging literature on “strategy dynamics”.

The conceptual framework in this paper features a dynamic demand environment that provides the structural context for firms’ strategic choices. It conceptualizes demand-side competence as a mediating firm-specific construct to explain the endogenous relationship between the characteristics of the demand environment and firms’ path dependent demand-side investments.

A review of the literature on evolutionary perspective in strategy reveals an important conceptual gap concerning the structural determinants of dynamic firm behavior. There is no explanation of the endogenous relationship between dynamic demand structure, firms’ dynamic demand-side competence, and temporally heterogeneous strategic choices.

The demand-side explanation of how idiosyncratic firm behavior is endogenously determined, with both structural characteristics (demand structure) and firm competences (demand-side competence), addresses an important conceptual gap. The novelty of the theory developed herein lies in its explication of the effect of dynamic demand environment on the evolution of idiosyncratic strategic firm behavior – entry, investment and exit – along the evolutionary path of an industry. The theory developed herein not only explains the effect of both determinants of idiosyncratic strategic firm behavior – the external industry environment (dynamic market structure) and internal firm environment (dynamic firm competences) – but also explains how the determinants evolve along the industry’s lifecycle.

The approach is based on an evolutionary interpretation of the fundamental concepts of cybernetics, general systems theory, information theory, theory of automata, autopoiesis, etc. In the author's view, this enables us to formulate principles of the evolutionary theory of cybernetic systems which is visualised as the theory of structures, functions and evolution of cybernetic or control systems. This suggests a heuristic idea of cybernetic evolution as the higher stage of negentropic universal evolution of open systems.

Owing to multiple superiorities to traditional counterparts, prefabricated construction (PC) has gained increasing attention worldwide. The development of PC projects reflects the effects of both policy supervision and PC practice, which aids the government in reasonably identifying the key issues of PC's promotion and rationally improving the policy deployment. However, existing studies fail to address this aspect, especially lacking quantitative exploration. This study explores the micro mechanism of PC's promotion, from the perspective of developing PC projects.

A tripartite evolutionary game model based on prospect theory of the government, developers and contractors is constructed. After rigorous theoretical deduction, this study adopts Changchun in China as a case city and collects the data using the Delphi technique, policy documents and literature analysis.

Results indicate that contractors are generally willing to implement PC projects and the government chooses to actively supervise PC's promotion. The negative investment behavior of developers is the main obstacle to promote PC in Changchun currently.

The conclusions are applicable to other comparable regions. This study is of value to promote PC with high efficiency and effect.

The tripartite evolutionary game model based on prospect theory proposed in this study is conducive to reveal the essence of PC's promotion. This is an important breakthrough in extant studies, with a broad applicability in the PC domain beyond China.

Purpose – Conflict models in international relations, particularly foreign policy decision-making models, have relied extensively upon the logic and explanatory power of rational choice theories. These models suggest that actors select a strategy, or foreign policy, that will maximize expected utility given the information available at the time and the beliefs about the state of the international system. However, prospect theory has shown us that context during conflict matters and evolutionary theory, supported by biopolitical science, has revealed how individual characteristics, and human nature in general, influence the decision-making process. Through these approaches, we can begin to understand that a comprehensive model of foreign policy analysis (FPA) requires an examination of how human behavioral traits are affected by different conflict scenarios, such as a context of ambiguity and risk as opposed to one of certainty.

Approach – Drawing from recent neuroscience findings and taking a life sciences approach, this chapter seeks to challenge the rational choice theories of FPA by constructing a model of international conflict inclusive of a neural theory of decision-making.

Findings – With a model founded on an evolutionary analysis and a neural theory of decision-making, we can begin to better understand not only the causes of war and deterrence failures, but also the frequency and intensity of genocide and ethnic conflict in the international system.

Originality/value – Recent advances and technological breakthroughs in the fields of behavioral genetics and social neuroscience have revealed a plethora of new information valuable to the study of international conflict that shed light on brain-behavior processes within different decision-making contexts.

Despite the growing importance of young, entrepreneurial ventures in modern economic systems, many such ventures fail quite early in their lifecycles. While both evolutionary theory and organizational learning theory yield important insights for the literature on young venture survival, questions remain as to why ventures facing similar environments experience differential rates of survival. In response, I propose a theory of entrepreneurial agency – defined as the emergence and/or transformation of firms, markets, industries governed by the evolving interaction of temporally situated, intentional strategic action with a malleable external environment – to complement prevailing viewpoints on the causes of young venture survival. My central thesis in this chapter is that to develop more comprehensive explanations of differential survival rates, a theory of entrepreneurial agency – illuminating the transformative potential of entrepreneurial action – is necessary to complement evolutionary perspectives in the literature on firm survival. With this objective in mind, I construct a theoretical model linking diverse perspectives on the duality of human agency and theories of environmental selection, and offer several theoretical and empirical suggestions to guide future research.

The purpose of this paper is to determine how high-tech firms should choose between independent research and development and technology introduction as well as to ascertain the effects of the three elements of competitive dynamics on the evolution of innovative behavior-based decisions and competitive results.

This paper describes the construction of an evolutionary game model and a multi-agent-based model of innovative behavior-based decisions by heterogeneous high-tech firms. The models are used to analyze the evolution path and evolutionarily stable strategy of innovative behavior-based decisions. In addition, multi-agent-based simulation is used to gain insight into the effects of competitive dynamics on the dynamic evolution of innovative behavior-based decisions.

This paper reveals four evolutionary equilibrium states of the innovation behavior-based decisions of high-tech firms. Based on the findings, these overall evolutionary trends are not affected by the timing of competitive market entry or the intensity of competition. In addition, simulated evidence is added that the timing of competitive market entry is an important factor affecting market-leading innovative strategies and dynamic competition results, and competition intensity is closely related to the evolutionary speed of innovation behavior-based decisions.

The key contribution of this paper is its new view of innovative behavior-based decisions from a competitive dynamics perspective. The new competitive dynamics-based framework for innovative behavior-based decisions of high-tech firms proposed in the paper can resolve the problem of obtaining a sustainable competitive advantage for high-tech firms in a competitive dynamics context.