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The Red Queen Among Organizations How Competitiveness Evolves William P. Barnett William P. Barnett is the university educator and researcher. He currently is Thomas M. Siebel Professor of Business Leadership, Strategy, and Organizations and BP Faculty Fellow in Global Management at the Graduate School of Business, Stanford University. He serves also as a Director of GSB Center for Global Business and the Economy. |
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Besides he is a Senior Fellow of the Woods Institute for the Environment, Stanford University, and Affiliated Faculty, Stanford Interdisciplinary Program in Environment and Resources. Dr. Barnett has published numerous articles on organizational development, learning and business strategy. Dr. Barnett is a graduate of the University of California, Berkeley. MAIN IDEA The book's central image «Red Queen competition» comes from Lewis Carroll's classic children's story "Through the Looking-Glass", in which the Red Queen explains to Alice that in her country, "it takes all the running you can do, to keep in the same place." In traditional evolutionary theory, the success of one species in adapting to the environment will cause the environment to worsen for other species, which must struggle harder to cope with the new situation. |
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The overall effect of Red Queen adaptation is that competition by one successful organization forces a competing organization to "run faster," improving its own performance and forcing rival organizations in turn to "run faster" themselves, creating an effectiveness-enhancing cycle of adaptive learning and competition within the population of organizations. If organization "stops running" in the Red Queen process of ongoing dynamic of competition and organizational learning e.g. |
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by decreasing or eliminating competition through forming a "strategic alliances" or limiting its activity to a market niche the results gained often will be decreased innovativeness and weaker competitiveness. William Barnett examines and confronts the long-held belief that "competition makes you strong". Main insights: Competition concerns relative performance, not absolute performance. A company's competitiveness is context specific, and contexts can change, giving rise to the competency trap; Learning comes about from competing, not isolation from competition. |
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Differentiation is desirable as a way to secure rents, but must be pursued in the context of competition, not in the vain hopes of avoiding it. "Competing organizations engage in an ongoing cycle of cause and effect, becoming stronger competitors – but in so doing making their rivals stronger, too. By this account, we do learn over time, but it is precisely this learning that prevents successful organizations from sustaining their advantage. |
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Rather, even as organizations often are improving, relative to one another they appear to be standing still – or sometimes even falling behind. Managers just as routinely carve out strategies in an attempt to isolate themselves from competition, as prescribed by books on strategic management, without understanding the developmental consequences of such a move. We know that individuals tend to make inferential errors when apprising the reasons for success and failure once the results are known, demonizing even the good practices of poor performers and admiring the questionable practices of winners" - William P. |
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Barnett THE LOGIC OF THE BOOK ONE: Why are some organizations more competitive than others? Main Idea Two main processes forming the results of competition on a market are selection and adaptation among organizations. The selection is eliminating inefficient organizations from the market. And the adaptation is enabling essential organizational changes to happen. Both processes are inseparable contributors to the final results rather then alternatives. |
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In Red Queen competition adaptation through organizational learning does not lead to sustained advantage; to the contrary, learning is the reason that advantage repeatedly is lost. Supporting Ideas Competitiveness is not a property of markets but rather a property that can vary from organization to organization. The more competitive organization j is the more viable it is, and the stronger is its competitive effect on organization k. |
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Organizations are intendedly rational adaptive systems. People in organizations are trying to make their organizations perform at a satisfactory level. But their understanding of what is going on is limited with what they have learned by inferring from previous experience. Unfortunately, learning not always leads to improved performance. - Adaptations come at cost, in terms of both resources and disruptions to organizational routines. |
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- Due to significant uncertainty related to the process of adaptation the actual consequences of a change may turn out to be negative. Organizations compete with similar organizations over similar resources. - Competition is "zero sum" in that one organization's gain is another's loss. - The similarity of organizations increases shared reliance on common resources. This is known as ecological competition and could occur even among organizations which are in cooperative arrangements. |
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