Cultural adaptation and institutional change: The evolution of vocabularies of corporate governance, 1972-2003

Drawing on content analysis, text interpretation, and historical analysis, we develop a grounded theory to explain the evolution of vocabularies of corporate governance. The term corporate governance emerged in the 1970s as frame to explain contemporary corporate scandals. While the word has increased in usage and became institutionalized, its meaning has evolved, as other words that co-occur in the vocabulary have shifted both in response to subsequent environmental events and to framing processes. We propose an evolutionary theory of cultural adaptation as meanings evolve through (1) path-dependent conceptual blending (variation); (2) differential adoption shaped by the cultural resonance of words (selection); and (3) increased persistence due to institutionalized theorization (retention). Our evolutionary theory of cultural adaptation posits a recursive relationship between culture and the economy, where cultures adapt to economic change, and the "stickiness" of culture and path dependence results in its relative autonomy as an explanatory force in economic change.