Path Dependence in Organizational Learning: The Role of Social Power Abstract

This paper examines the path dependent characteristics of organizational learning. The agent-based simulation study builds on the well known tension between exploration and exploitation in organizational adaptation (MARCH 1991). I argue that social power severely affects the trade-off between exploration and exploitation and thus the likelihood for an organization to become path dependent. In a similar spirit to that of FANG ET AL. (2010), RODAN (2008), and MILLER ET AL. (2006), organizations are captured as complex, adaptive systems in which individuals as the carriers of knowledge interact with other individuals. Organizational learning emerges from the interaction of the individuals in which one actor influences another to adopt new or to discard old ideas. Social power is reflected in the potential of actors to influence how their peers perceive the value of ideas. Organizational learning is further impacted by contextual conditions. Complexity and turbulence of the organizational environment dramatically influence the learning task the organization faces. Following prominent approaches in organization theory (SIGGELKOW ET AL. 2005; FANG ET AL. 2010), the learning task of the organization is represented as an NK space.