Speed, Search, and the Failure of Simple Contingency

47 Pages Posted: 2 Dec 2003

See all articles by Jan W. Rivkin

Jan W. Rivkin

Harvard Business School, Strategy Unit

Nicolaj Siggelkow

University of Pennsylvania - Management Department

Date Written: October 2003

Abstract

It is widely accepted that an organization's internal design should be contingent on the nature of its external environment. Yet attempts to construct simple contingency relationships - i.e., one-to-one mappings from environmental conditions to appropriate design elements - have met with limited success. We shed light on this lack of success by means of an agent-based simulation in which modeled firms of different designs face various environmental conditions. We find robustly that turbulent environments call for organizational features that generate high speed of improvement, and complex environments call for features that engender diverse search. The precise design features that produce speedy improvement and diverse search, however, vary dramatically from one decision-making archetype to another. A feature that accelerates improvement in a decentralized firm, for instance, may slow it down in a hierarchical firm. It is this subtlety that undermines simple contingency relationships. We argue that the intermediate constructs speed of improvement and diversity of search clarify the mapping between environment and appropriate design and may point the way to more nuanced contingency hypotheses.

Suggested Citation

Rivkin, Jan and Siggelkow, Nicolaj, Speed, Search, and the Failure of Simple Contingency (October 2003). Strategy Unit Working Paper No. 04-019. Available at SSRN: https://ssrn.com/abstract=475165 or http://dx.doi.org/10.2139/ssrn.475165

Jan Rivkin (Contact Author)

Harvard Business School, Strategy Unit ( email )

Harvard Business School
Soldiers Field Road
Boston, MA 02163
United States
617-495-6690 (Phone)
617-495-0355 (Fax)

Nicolaj Siggelkow

University of Pennsylvania - Management Department ( email )

The Wharton School
Philadelphia, PA 19104-6370
United States
215-573-7137 (Phone)
215-898-0401 (Fax)

HOME PAGE: http://www-management.wharton.upenn.edu/siggelkow/

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