Adaptation to dynamic environments

For managers, coping with today’s dynamic environment is challenging, especially because changes occur more frequently and are less and less predictable. Unlike day-to-day choices, strategic decisions involve a significantly increased level of complexity due to the commitment of various resources and major impact on shaping a firm’s course, making the study of managerial decision processes in the context of unstable environments vital for understanding organizational success.

My project seeks to develop knowledge about adaptation to exogenous changes in dynamic environments. On one hand, it focuses on clarifying the inconsistencies found in the extant literature on adaptation to dynamic environments regarding the exploration-exploitation balance, by considering frequency of change in a given environment relative to the frictions and temporal constraints of decision and strategy implementation. On the other hand, it contributes to the existing knowledge on learning and adaptation in dynamic environments by looking at the dynamics that govern the transition to different firm behaviors (especially the balance between exploration and adaptation) in response to changes in the dynamic regime of the business environment (e.g., how firms adapt to environments that increase their velocity over time).

My study will address these issues through experimental and computational methods.