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.

Chapter 6: Evolution

Bart Nooteboom

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


INTRODUCTION This chapter concerns evolutionary theory of the firm. Does evolutionary theory help, with its core processes of variety generation, selection and transmission, for a cognitive theory of the firm? It does, to some but also limited extent. Evolutionary theories of economies, and of culture, have acquired considerable following, but have also been subject to considerable criticism. Most criticism has been aimed at inappropriate biological analogies, but recently it has been claimed that a ‘universal Darwinism’, purged of all such mistaken analogy, is both useful and viable. Why should we try to preserve evolutionary theory, and will such theory stand up to sustained critical analysis? How useful is it for the theory of the firm? Evolutionary theory appears to be the most adequate theory around for solving the problem of agency and structure, avoiding both an overly rational, managerial ‘strategic choice’ view of organizations and a ‘contingency’ view of organizations as fully determined by their environment. Whether universal Darwinism stands up to critical analysis remains to be seen. Here, the focus is on evolutionary theory of organization and of knowledge. Two of the subjects that will not be considered here are evolution of institutions more generally, beyond organizations, and evolutionary game theory. In evolutionary theory there is a distinction between the ontogenetic development of an individual and the phylogenetic development of a species or population of individuals. In Chapter 3 I paid considerable attention to the ontogenetic development of firms, and in the present chapter attention also turns to the...

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