Strategic Search: Organizational adaptation with competitive positioning
Strategy & Business Policy
Speaker: Aseem KAUL
Associate Professor (UMN)
In this paper, we study how competitive pressures shape organizational adaptation in complex environments. To do so, we combine a standard NK simulation with a differentiated duopoly competition game to model firms simultaneously engaging in an internal search for superior technical proficiency and an external search for differentiated competitive positions. We show that searching strategically limits innovation in low complexity environments, as firms sacrifice technical proficiency in order to differentiate from each other, but boosts it in high complexity environments, and examine the implications of this pattern for competitive advantage and consumer welfare. We also explore how these findings are moderated by the number of choice dimensions that are salient to consumers, as well as asymmetric exposure to competition among firms. Our study integrates research on competitive positioning and organizational adaptation, contributing insights to organizational shaping, innovation, and competitive advantage.