3 1.1 Introduction The notion of path dependence has become so popular that it is almost commonplace to describe the development of institutions and organ- izations as being path dependent. 1 This is as true for strategic man- agement and organization theory as it is for economic geography and institutional analysis of society. With its increasing popularity, how- ever, the notion of path dependence has progressively lost a specific meaning. Most often it is merely used as a metaphor accentuating that history matters when explaining cultural artefacts. This is all the more regrettable as problems of path dependence seem to trouble an increas- ing number of institutions and organizations. No doubt explanations of persistence and rigidity can profit a lot from a re-sharpened con- cept of path dependence building on the ideas as originally put for- ward by Paul David (1975, 1985, 1986) and W. Brian Arthur (1989, 1994) in their economic investigation of the diffusion of technologies, the QWERTY keyboard layout being their most prominent example. Some institutional and evolutionary economists have taken up this analytical understanding of path dependence and extended its usage to the insti- tutional area (e.g., North, 1990; Witt, 1997). The same is true for stud- ies in historical institutionalism and comparative politics (e.g., Pierson, 2000), but the bulk of research in these areas, as well as in the field of organizational analysis, refers to the notion of path dependence only in a rather loose way. As a result of this tendency, the analytical power of (concepts from) the theory of path dependence, by and large, remains underutilized. It 1 Understanding Institutional and Organizational Path Dependencies* Georg Schreyögg and Jörg Sydow G. Schreyögg et al. (eds.), The Hidden Dynamics of Path Dependence © Palgrave Macmillan, a division of Macmillan Publishers Limited 2010