In developing theoretical co-evolutionary frameworks, Baum and Singh (1994) stress the importance of defining units of analysis at each level within an organizational hierarchy. These co-evolving units are discrete classes of “entities” with their own evolutionary path, which at the same time interact with “entities” at other levels. While a number of scholars have adopted the word “co-evolution” to describe the multi-level interactions within organizations, few have drawn from other domains to further develop the theoretical foundations of such a co-evolutionary approach (Breslin 2015; Dollimore and Gomes 2014).

As noted above, some scholars have suggested mechanisms of variation, selection and retention to provide a conceptual account of co-evolution in organizations. More recently, a consensus amongst a group of these scholars has emerged around the use of these three mechanisms and the additional concepts of the “replicator” and “interactor”. The replicators-interactors are the abstract concepts from biological evolution, where the replicator is defined as anything in the universe of which copies are made, such as genes in the biological world. Interactors have been defined as entities that interact as a cohesive whole with their environment in a way that causes a differential replication of these elements (Hull 1988). The use of the replicator-interactor concept, alongside variation-selection-retention, has been labelled the “Generalized Darwinist” approach, which argues that, at a sufficiently general level of abstraction, a core set of general Darwinian principles can be used to describe evolution within a variety of domains (Aldrich et al. 2008; Breslin 2011; Campbell 1965; Hodgson and Knudsen 2010), including biology, psychology, culture and economics. In this manner, whilst the details of socio-economic evolution may be different from biological evolution, the concept of Generalized Darwinism can nonetheless be used as the starting point for the development of theory in both.

Scholars who have studied organizational co-evolution through this heuristic lens have focused on the routine as the unit that co-evolves. In many respects, the adoption of the routine dates back to the notion of the “routine as gene” introduced in Nelson and Winter’s (1982) seminal work An Evolutionary Theory of Economic Change. While the concept is generally defined as a collective phenomenon, whose enactment results in recurrent patterns of action (Becker 2005; Nelson and Winter 1982), different conceptualizations have led to quite distinct evolutionary narratives. Some have tended to conceptualize the routine as a capability or entity (Breslin 2015), with a focus on how these phenomena influence wider organizational performance. For instance, Nelson and Winter (1982) conceptualize the routine as a reflex-like, automatic process in which individuals within a group respond to certain stimuli with a particular set of repeated actions. As a result, it is assumed that routines are enacted in an automatic sense, with little variation over time, and so their evolution largely depends on external selection forces affecting the organization, as opposed to endogenous change by the individuals enacting them (Feldman and Pentland 2003). It is thus argued that the fate of these routines is inextricably linked to that of the organization (Hodgson and Knudsen 2010). However, this routine-organization dualism (and associated evolutionary accounts) has been criticized, as the voice of the individual and agency is lost, excluding the possibility of intentionality, learning (Witt 2004), motivation, creativity, imagination and deliberate adaptations (Cordes 2006).

In the light of this criticism, other researchers have suggested a “practice” view of routines, in which the focus shifts to parts of routines (Rerup and Feldman 2011), how they are enacted on a day-to-day basis, and their internal dynamics. Parmigiani and Howard-Grenville (2011) argue that the practice perspective opens the black box of routines and their internal workings in specific organizational contexts. While the definition of the routine as a repetitive pattern of actions is similar to the entity approach, the emphasis here is on how these patterns are produced and reproduced, and to what extent the patterns remain stable over time (Parmigiani and Howard-Grenville 2011). Pentland and Feldman (2005) introduced the “ostensive-performative” duality to conceptualize this adaptive, improvisational nature of routines. They define the performative aspect of the routine as the “actual performances by specific people, at specific times, in specific places”, as opposed to the ostensive aspect of routines which are “abstract or generalized patterns that participants use to guide, account for and refer to specific performances of a routine” (Pentland and Feldman 2005: 795). Evolutionary accounts have likewise been developed in which the replicator-interactor is defined through the ostensive-performative duality (Breslin 2015). In this manner, behaviours (as represented by the performative aspect) are varied and selectively retained through the ostensive aspect over time, or, in other words, variations in performance are selectively retained through the guiding story or ostensive aspect (Feldman and Pentland 2003).

This “practice” focus marks a conceptual shift in emphasis within research on organizational change and co-evolution. In the entity approach, change is seen as occurring through the birth and death of routines as entities. In the practice view, the routine itself evolves and changes over time. In the entity view, the focus of attention thus remains largely on the level of organization, with managers making choices on behalf of the firm (Levitt and March 1988), and, as a result, above the level of individual learning (Schulz 2002). This entity-based view is consistent with a “gradualism” interpretation of evolution as we discuss later, with population-level change occurring through organizational births and deaths. If one assumes that change occurs in this manner, then it becomes difficult to explain the phenomenon of punctuated equilibrium (Gould and Eldredge 1977) seen in nature and economic life. On the other hand, if one assumes that change occurs at multiple levels (including group- and individual-level learning), then evolutionary accounts can produce patterns of change that can be both gradual and punctuated, as Breslin (2014) demonstrated using computational modelling techniques. Addressing this problem, some have expanded the entity view by identifying units of evolution at different levels of analysis (Baum and Singh 1994; Hodgson and Knudsen 2010).

Despite the multi-level nature of these proposed solutions, there is still a key assumption that evolving routines are ultimately tied to the individuals, groups and organizations concerned (Breslin 2015). On the contrary, some have recently argued that change and innovation are enacted and effectuated through interactions between individuals. With practice-based evolutionary accounts, the replicator-interactor concept is represented as a mutually constituted duality of cognitive representations and manifest behaviors/narratives respectively. However, most of these accounts again tend to focus exclusively on only one level of analysis. For example, Pentland et al. (2012) focus on the group as a level of analysis, with routines evolving and adapting in a mutually constitutive relationship between the ostensive guide and performative aspect. However, as noted above, some have identified units of analysis at different levels in the development of co-evolutionary accounts. So, individuals and collective cognitive structures represent the replicators at the level of the individual, group and organization respectively (Breslin 2008). The corresponding interactor depends on the “micro-environment within which selection occurs, namely the set of actions performed by individuals, groups or firms” (Breslin 2008: 412). Disconnecting the fate of routines and knowledge from the groups and those individuals enacting them opens up new evolutionary paths, including those unrelated to historical developments, as knowledge becomes adapted to new uses through a process known, as we explain in Sect. 4, as “exaptation” (Dennett 1995).

To summarize, the co-evolutionary narratives differ, depending on whether one uses an entity- or practice-based interpretation of the replicator-interactor. In the first case, routines are viewed as repositories tied to the life of individuals and groups. The evolution of these entities is experiential and, as a result, path dependent. In these entity-based accounts, if one assumes that population change occurs through births and deaths alone, then punctuated equilibrium becomes problematic. In practice-based narratives, knowledge is viewed as being enacted in practice, and having an existence through those actions. As a result, these narratives are not necessarily tied to the fate of the individuals and groups concerned. Knowledge can thus co-evolve between levels of analysis, resulting in both gradual and punctuated change patterns at the population level (Breslin 2014). In addition, freed from the ties of specific individuals and groups, knowledge can evolve, as it becomes adapted to new uses and environmental challenges. Examining these differences in approach, the choice to use a practice- or entity-perspective depends on the relationship between organizational and environmental change. Within the entity view, it is assumed that the external environment (or that external to the entity in question) changes more rapidly than the associated individual or group. On the other hand, within the practice view, one assumes that individuals and groups can adapt dynamically (and indeed prospectively) to external change. So, while multi-level narratives can be developed using both approaches, the different positions reflect the long-standing dichotomy between deterministic and voluntaristic perspectives. In the former it is assumed that structural inertia and environmental change have primacy, whereas in the latter adaptation and strategic choice dominate (Abatecola 2012b; Breslin 2008).