Cultural Evolution in Business

Why Socially Responsible Businesses Prosper and Related Puzzles
A Collins Family Foundation Project

The objective of this project is to help leaders of businesses and other organizations make strategic, tactical, and operational decisions based on sound science. Using the theory of gene-culture coevolution as a tool, we provide a framework within which executives can understand the processes by which human social psychology evolved in the remote past and corporate cultures evolve to accomplish their objectives in the present. Evolutionary tools provide a way to examine the processes of socioeconomic change and the phenomenon of human cooperation. These topics are of fundamental importance for organizational management, yet the heretofore most powerful theory of human behavior—rational choice theory from neoclassical economics—treats them poorly. The evolutionary theory explains why human nature is the complex mixture of cooperation, selfishness and conflict that we observe in the laboratory and in real life. The cooperative element of human nature generates a moral hidden hand that is the main motor for the evolution of the cultural rules that we actually use to operate complex human organizations. The management of organizations is mainly a matter of ensuring that the moral hidden hand functions in the face of individual selfishness and organizational complexities that tend to frustrate its action. Businesses, and similar mid-sized human organizations, are superorganisms that are similar in some important ways to the tribes in which our ancestors lived. Humans are adapted to live in tribes. Business organizations that mimic tribes, but at the same time creatively work around their limitations, function best.

One of the most important results of the theory of cultural evolution and related empirical work is the support that it provides for the concept of socially responsible business. Contrary to rational choice theory, evolutionary investigations suggest that profits should be positively, not negatively, correlated with social responsibility and environmental friendliness. Emerging evidence from the study of socially responsible businesses finds that they do indeed perform better financially than businesses that make no special effort to be responsible to these non-traditional bottom lines. We review the emerging science and draw from it seven applied principles, each generating several socially responsible strategies managers can use to improve the performance of their organizations.

Further Information

• Biographies of the project’s staff
• Why Managers Need an Evolutionary Theory of Organizations manuscript (PDF format)
• Managing the Evolution of Business Cultures manuscript (PDF format)
• Additional background manuscripts and papers on this topic at Prof. Richerson’s UC Davis personal website