Some of the great issues of our time are climate change, systemic financial risk, socio-economic disparity, privacy and ensuing control issues, and, urgently at this time, the effects of the Corona pandemic on the globalized economy. The background to my motivation to engage with the firm as a subject is a concern about the shelf life of the way humanity currently operates. While people’s behavior, large and by, is founded on morally acceptable principles, it appears to be turning against itself, thereby reducing their relevance. Firms play an important part in people’s existence and they are a part of these issues: Who can honestly say she has performed any conscious action without any involvement of a firm at all? And yet firms are resistant to change, and more specifically to external perturbations counter to their interests. Against this backdrop I set out to research the relation between the behavior of people and the behavior of firms.
The traditional assumption is that the person controls the firm, and that the firm is malleable, the person’s instrument. This assumption denies evidence that the influence of an individual person on the behavior of the firm is limited and that the firm can have control over the person. I suggest a second perspective to oppose the traditional one, namely that the firm is autonomous and the control of the person is limited. Moreover, I hypothesize that the autonomy of person and firm vary with the stages of development of the latter. The nature of my research is exploratory: it concerns a conceptual foundation and conditions for the development of a theory to address the second perspective. Its ultimate goal is to explain the nature of the firm: What is a firm? , and answering its sub-questions: How does a firm come to be? How does it cease to be? and: What are its ‘substance’ and its behavior?
This foundational work for a theory of the firm is based on the notion that a variable yet persistent pattern of behavior arises from an evolving coherent system of memes (formally an idea is defined as an answer to a question, representing real solutions to problems, and a meme as a connoted species of ideas) as they are enacted. Specifically, the subject of evolution, what evolves, is the complex of memes which belongs to a firm in conjunction with the behavior they induce in people. This evolutionary notion is applied instead of the traditional view of a firm as an object whose convergence to a monadic ideal is deviated by circumstance: a practical organization as an aberration of an ideal ‘type’ and every deviation is assumed to be manageable to reach that ideal [Mintzberg 1983 i.a.].
A hypothesis is devised as a basis for the explanation of coherence of human behavior into a behavioral unitary organization, the behavioral pattern which can be recognized, and, because it is autopoietic it is itself autonomous and cognitive [cf. Varela 1997]. A widespread body of memes originating from Western culture is conjugated with the developed hypothesis, namely those encompassed by the market system and belief in progress [Goudzwaard 1982, Galbraith 2004, Schliesser 2018]. These memes are derived from a decomposition of the belief system ‘the market system’ which includes elements such as: liberal capitalism, humanism, utilitarianism, belief in progress, ownership and self-propagation. It is shown how these memes motivate people to enact them.
The firm is modeled as a complex of coherent memes co-evolving with other bodies of culture in society.If firms are autopoietic systems then they are operationally closed: the memeplex it operates with remains stable. This means that the firm perpetuates its autonomous existence through individual people’s enactments of those memes. As autopoietic systems they are themselves autonomous and cognitive, instead of people’s mere instruments. According to the second perspective, contrary to communis opinio, firms are not controlled by people in the same way a tool is wielded by say a carpenter. This implies that the autonomy of people is not binary but relative to that of the firm: some control and autonomy is relinquished and other control and autonomy gained. This outcome is consequential for the relation between persons with various roles vis-a-vis firms (stakeholders), and those firms, and for the effects that can realistically be expected of interventions by people into the operations of a firm.