ON THE HISTORICAL EFFICIENCY OF COMPETITION BETWEEN ORGANIZATIONAL POPULATIONS

Much organizational theory and research uses an equilibrium assumption known as historical efficiency. This assumption implies that observed distributions of organizations at any point in time reflect the unique outcomes of underlying systematic processes, independent of historical details. In an attempt to assess the plausibility of this assumption in the context of organizational evolution, the authors use a well-established model to simulate trajectories of competing organizational populations. The findings show that path-dependent processes can often generate outcomes other than those implied by historical efficiency. Implications for theory and research are discussed.