A Cognitive Theory of the Firm

A Cognitive Theory of the Firm

Learning, Governance and Dynamic Capabilities

Bart Nooteboom

In this important and timely book, Bart Nooteboom develops and applies a social cognitive theory of firms and organizations with a focus on learning and innovation.

Preface

Bart Nooteboom

Subjects: business and management, organisation studies, economics and finance, economic psychology, industrial economics, institutional economics

Extract

In this book I develop and apply a social cognitive theory of firms and organizations more generally and of organization between organizations, with a focus on learning and innovation. Cognition here is a wide notion, going beyond rational inference, know-what and know-how, to include perception, interpretation, value judgements, morality, emotions and feelings. This wide notion of cognition is associated with a denial of Cartesian separation of body and mind (Merleau-Ponty, 1964; Damasio, 1995) and goes back to the work of Spinoza (Damasio, 2003). It is consistent with modern social psychology, which demonstrates how judgements and actions are driven by feelings and impulse, in a variety of decision heuristics (Bazerman, 1998; Kahneman and Tversky, 1979), often with post hoc rationalizations (Damasio, 2003) that distort what happened (such as ‘cognitive dissonance’). Decision heuristics may be seen as procedurally rational in the sense that they are adaptive, contributing to survival in the course of the evolution of man, under conditions that judgements and decisions (for example of danger, flight, opportunity, attack) had to be made swiftly and under uncertainty, while substantively they often do not conform to canons of rationality (Barkow et al., 1992; Nooteboom, 2002). In the theory used in this book cognition is social in that it is constructed mostly in interaction between people (Mead, 1934). Economists have been wary to enter into psychology but such a move is inevitable in order to avoid an ongoing blindness to realities of motivation and behaviour. Institutional economists have been wary to go into...