CONTINUOUS "MORPHING": COMPETING THROUGH DYNAMIC CAPABILITIES, FORM, AND FUNCTION.

Abstract

In hypercompetitive environments, the established paradigms of sustainahility of competitive advantage and stability of organizational form may have limited applica-bility. Using an in-depth case analysis of the firms Yahoo! and Excite, this study examines how the organizational form, function, and competitive advantage of these firms dynamically coevolved. Tbe study introduces the concept of continuous mor-phing to descrihe the comprehensive ongoing transformations through wbicb the focal firms sought to regenerate their transient competitive advantage on the Internet. The study of organizational form is at the core of organization science. Organizational scholars use the term "form " to descrihe structural features or patterns of organizations (McKelvey. 1982); econo-mists use it to contrast two alternative coordinating mechanisms, markets and hierarchies (Williamson, 1975); and ecologists, to descrihe organizational characteristics that identify an organization as a memher of a group of similar organizations (Ro-manelli, 1991). Population ecologists, in particular, have advanced the view that stahility and standard-ization of a form positively affect an organization's access to resources (Hannan & Freeman, 1984). Ac-cording to this view, stability leads to consistent actions and outcomes, which resource holders value and reward (Delacroix & Rao, 1993; Hannan & Freeman, 1989), and standardization enhances the legitimacy of a form (Hannan & Carroll, 1992). However, when environmental or resource condi-tions change, the organizational inertia associated with a particular organizational form impedes adaptive change and survival (Hannan & Freeman,