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The following text is taken from Julio Mario De Leon´s Masters Degree Thesis (work in progress). Feel free to make all the observations in this first draft. I´ll be glad of having your feedback.



I consider important to present three statements that where my motto when thinking about organizations that innovate. I believe the following arguments permits the reader have its firsts expectations of what will come next.

1. There is not such a thing as market equilibrium.


2. Customers are changing and if you don’t change you are out the game.


3. Being proactive does not mean following the market; it means changing it.




Why even think about organizations

The initial concern to bring into discussion is to consider the possible benefits of having organizations. So the main task should be approaching the why of the organizations. First of all, and in the need to set a framework in an evolutionary context, it is important to define the firm as a “productive socially organized unit'”(Dopfer, 2005, p. 34).

Recognizing the firm as a social organized unit (and not just as a productive unit) implies that there is an interaction between agents. As a result, we might think of the firm as a consequence of the coordination of these agents trying to withstand the environment selection pressure. Hölzl (2005) suggests that this “coordination can only be achieved by means of the definition of a common set of rules and codes which are understood and shared by the members of the organization involved in economic interaction” (p. 2, italics added).

In its interaction with the environment the organization will search to fit (2005, p. 25). As I see it, the adaptation problem becomes an efficacy problem; as it focuses on the feasibility that a firm X has to survive on an environment Y. As I am concerned, some management literature have already approach the efficacy problem by introducing the concept of competitive strategy. Thus, competitive strategy will be considered as the way that an organization decides to coordinate a business unit in order to fit the environment. As Porter (1996) presents it, “fit is important because discrete activities often affect one another”(p. 70) further more, he argues that “the most valuable fit is strategy-specific because it enhances a positions’ uniqueness and amplifies trade-offs”(p. 71).

So, if we consider an adaptation to be an accumulation of knowledge (quote, Campell? Mayr?), and accept the organization to be in a constant attempt to fit into the environment; then the firm can be described as an “entity processing, storing and producing knowledge” (Hölzl, 2005, p. 2). Considering these assumptions, we can state that the why on the organization resides in its need to process, store and produce knowledge. Hence, a priori we can judge more probable to have better results having organizations as it becomes an enhanced source of variation.

Final remark

What becomes appealing is that the efficiency problem[1] happens to be only relevant when the efficacy problem is “resolved”. In this order of ideas, suggestions about the firm being relevant as it is efficient in the reduction of transaction costs, seems just to be part of the explanation of the why of an organization.


[1] The efficiency problem is thought to be the only problem in Neoclassical production theory (Dopfer, 2005, p. 25) (+quotes?)

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