A computational theory of enterprise transformation

This paper translates a qualitative theory of enterprise transformation into a quantitative, mathematical theory. This enables computational exploration of the phenomena outlined in the theory, as well as the sensitivity of these phenomena to a range of parameters intended to reflect the elements of the theory. The overall question addressed is, “What should an enterprise do in response to perceptions of impending substantial change?” A mixture of three types of responses is considered—predict better, learn faster, and act faster. As these responses all require investments, it is not the case that an enterprise should always pursue all of them. Indeed, there are conditions under which an enterprise should not pursue any of them. This paper elaborates the nature of these conditions, explains why they arise, and discusses the implications for enterprises entertaining transformation. © 2011 Wiley Periodicals, Inc. © 2011 Wiley Periodicals, Inc.