Flier, B., Van Den Bosch, FransA.J. and Volberda, HenkW. (2003). Co-evolution in Strategic Renewal Behaviour of British, Dutch and French Financial Incumbents: Interaction of Environmental Selection, Institutional Effects and Managerial Intentionality Journal of Management Studies, 40(8):2163--2187.

How do incumbent firms and environments co-evolve and how are firm-level adaptation and selection at industry level interrelated? Can and do large established organizations renew themselves to adapt to their environment? Three single-lens theories, relating to environmental selection, institutional theory, managerial intentionality, and a co-evolutionary perspective are used to investigate strategic renewal of incumbent firms. We derive propositions and distinguish between three dimensions of strategic renewal and develop metrics to investigate our propositions in a multi-level, multi-country, longitudinal study of the European financial services industry. Our results provide the following insights. From an environmental selection perspective, we found incumbents have a preference for exploitation renewal actions. Country institutional environments appear to explain to what extent incumbents prefer internal and/or external renewal actions. Managerial intentionality seems to explain outlier behaviour and firm-specific frequency and timing of renewal actions. From a co-evolutionary perspective, interaction effects explain deviations from predictions derived from the single-lens theories applied in this paper.