THE GEOMETRY OF ORGANIZATIONAL ADAPTATION: DRIFT, INERTIA, AND VIABILITY GAËL LE MENS, MICHAEL T. HANNAN, AND LÁSZLÓ PÓLOS 1. Introduction Why do organizations generally lose their competitive edge as they get older? Recent theory and research on the dynamics of audiencesand categories in markets shed some new light on issues of organizational obsolescence. ő Inertia and environmental drift lie at the core of theoretical thinking about organizational obsolescence (Barron, West, and Hannan 1994; Hannan 1998; Carroll and Hannan 2000). The basic story holds that environments drift, but aging organizations cannot adapt well to change. As a result, fitness declines with age at some point, and viability then declines with further aging. Prior theoretical work on this issue suffers two important limitations. First, it does not specify clearly what drift means and why it affects fitness. Second, it relies on very strong—possibly unrealistic—assumptions of imprinting and inertia. According to this line of reasoning (Hannan and Freeman 1977, 1989), organi- zations get pre-selected at time of founding to fit to prevailing environmental conditions but have little ability to adapt to changing conditions. We develop a model that seeks to improve these two aspects of the obso- lescence argument. We clarify the notion of drift by building on new thinking about fitness, rooted in a model of what makes an offer appealing to an au- dience. And we relax the strong assumption about organizational inertia. Instead of assuming that organizations can never adapt their core features to changing environments, we propose that organizations do possess some adap- tive capacity but growing inertial pressures degrade this capacity as organiza- tions age. Date : December 8, 2012. 1