This paper uses the paleontological model of punctuated equilibrium to construct a more dynamic model of entrepreneurial action. The paleontological model aids in exploring which firms are most likely to succeed after environmental shocks, and how entrepreneurs on market frontiers may indirectly generate discontinuous environmental shifts through a process of feedforward. Examples from the airline industry are used to demonstrate these applications.
Several authors have incorporated the punctuated equilibrium model into discussions of entrepreneurial action (Gersick, 1994; Lawless & Anderson, 1996; Tushman & Anderson, 1986). However, these authors' conceptualizations significantly differ from the discussion in paleontology, where the term "punctuated equilibrium" first appeared (Eldredge, 1989; Eldredge & Gould, 1972). This paper suggests that applying the paleontological model of punctuated equilibrium to entrepreneurial innovations improves our understanding because it aids in explaining entrepreneurial behavior during both placid and turbulent periods. Previous uses of punctuated equilibrium in organizational science model entrepreneurial behavior only during turbulent periods. This paper extends Lawless and Anderson (1996), who suggests that placid periods of equilibrium are only less-turbulent times that appear placid in contrast with the turbulent change periods. Specifically, this paper suggests that relatively placid periods serve as incubators for entrepreneurial innovations. Paradoxically, mature innovations may aid in creating environmental shocks that punctuate relatively placid environmental periods, destroying the conditions necessary for their own incubation.
Exploration of this process begins with a brief explanation of paleontological punctuated equilibrium, a theory first identified by Eldredge and Gould (1972) as an alternative to Darwinian evolution. Second, the paper reviews how organizational science coopted the term "punctuated equilibrium" to describe a distinctly different phenomenon (Gersick, 1991, 1994; Romanelli & Tushman, 1994; Tushman & Anderson, 1986; Tushman 8c Romanelli, 1985), and contrasts the paleontological and organizational punctuated equilibrium. Paleontological punctuated equilibrium is then used as a metaphor to explore how entrepreneurs may develop internal efficiency and external legitimacy during relatively placid periods as a means to improve survival probability during discontinuous shocks. The paper then explores complexity theorybased explanations (Gleick, 1988), especially feedforward, based on the application of the paleontological punctuated equilibrium metaphor to organizations and concludes with recommendations for entrepreneurs and researchers based on these discussions and explorations.
Punctuated equilibrium was proposed by paleontologists Niles Eldredge and Stephen Jay Gould to explain biological evolution consistent with their interpretation of fossil records (Eldredge 8c Gould, 1972). They suggested that evolution is characterized by long periods of environmental homeostasis during which the distribution of species in the environment and the genetic makeup of species changes very little. New forms or species emerge during homeostatic periods and survive, but only as recessive forms within niches along the environmental periphery. Sudden environmental jolts may punctuate the environmental equilibrium, shifting resource constraints. As a result, formerly dominant forms may not continue to thrive or even survive, and formerly recessive forms may thrive and dominate. This theory contrasts sharply with Darwin's phyletic gradualism which holds that evolution is the product of the slow transformation of species over time (Darwin, 1859).
As noted above, paleontological punctuated equilibrium (PPE) holds that new forms or species develop at the environmental periphery and have little effect on dominant species during homeostatic periods (Eldredge, 1989). …