A basic theory of inheritance: how bad practice prevails

Vermeulen, F (2018) A basic theory of inheritance: how bad practice prevails. Strategic Management Journal, 39 (6). pp. 1603-1629. ISSN 0143-2095


This paper develops an inheritance theory explaining the diffusion and persistence of detrimental management practice. Received wisdom, in both management theory and practice, would suggest that a practice that lowers the life expectancy of adopting firms, over time, will vanish because it puts those firms at a competitive disadvantage. In this paper, I challenge this view. I develop a conceptual model that details how a practice that lowers the survival chances of adopting organizations may still spread and continue to exist across a population of firms. I propose that a combination of three basic conditions is sufficient to bring about this phenomenon: if the practice is somehow associated with success, if there exists causal ambiguity, and if the rate of its diffusion is high compared with the rate at which it accelerates firms’ demise, the practice may continue to thrive and become a widespread and persistent feature in an industry. A pivotal conceptual insight is that the endurance of particular management practices and strategies is not merely a corollary of the competitiveness of the organizations that use them but that they have fitness levels of their own.

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Item Type: Article
Subject Areas: Strategy and Entrepreneurship
Additional Information: This is the peer reviewed version of the following article: Vermeulen, Freek (2017) A Basic Theory of Inheritance: How Bad Practice Prevails, Strategic Management Journal which has been published in final form at http://dx.doi.org/10.1002/smj.2713 This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving.
Subjects: M > Management
M > Managerial attitudes
Date Deposited: 06 Oct 2017 15:27
Last Modified: 16 Sep 2019 12:12
URI: http://lbsresearch.london.edu/id/eprint/896

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