Edited by Markus C. Becker
Chapter 6: Problem Solving and Governance in the Capability-based View of the Firm: The Roles and Theoretical Representations of Organizational Routines
6 Problem solving and governance in the capability-based view of the ﬁrm: the roles and theoretical representations of organizational routines Giovanni Dosi, Marco Faillo and Luigi Marengo This chapter will ﬁrst discuss the relationship between the notion of organizational routines and the capability-based view of the ﬁrm. Next, we address their double function both as problem-solving arrangements and as governance devices. Third, we review some recent eﬀorts to formalize the processes of search and organizational adaptation, leading to routines themselves.1 1 The capability-based view of the ﬁrm Business organizations are behavioural entities2 which embody speciﬁc and rather inertial compromises between diﬀerent functions like (i) resource allocation; (ii) information processing; (iii) eﬀorts elicitation; (iv) coordination (largely through non-price devices) among multiple cognitive and ‘physical’ tasks; (v) governance of competing claims upon the total generated surplus; (vi) experimentation and learning.3 In turn, these diﬀerent organizational ‘functions’ yield also multiple coexisting levels of interaction amongst organizational members. Clearly, a thorough understanding of what organizations are and how they operate ought to take on board the analysis of all these mechanisms of interaction. The current literature still falls well short of such an objective. However, over the last four decades one has witnessed multiple endeavours enriching our understanding of the nature of economic organizations. As is discussed at greater length in Dosi et al. (2003),4 quite diverse interpretative eﬀorts range between two extreme archetypes. On the one hand, the dominant strand of contemporary analysis interprets the nature...
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