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The firm as an environment-constructing entity Pavel O. Luksha http://www. luksha.ru pavel.luksha@gmail.com   Analyse(s) and transformation(s)  of the firm Lyon, France 22-23 November 2007
Agenda ,[object Object],[object Object],[object Object],[object Object],[object Object]
‘ Nature of the firm’ debate ,[object Object],[object Object],[object Object],[object Object]
Firm as a real entity ,[object Object],[object Object],[object Object],[object Object],[object Object]
Firm as a real entity (2) ,[object Object],[object Object]
Cases ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Summary of cases THE FIRM Demand side : 1. differentiation of products 2. modification of preferences 3. building of recognizable brands Supply side : 1. creation of specialized suppliers 2. creation of specialized workforce Rivals : industrial leadership, oligopolic games, technological spillovers, … Investors management of investor expectations Legal environment : lobbying for more favourable laws, regulations, standards etc.  Mass media / public opinion projection of favourable images of the firm
Firm-environment relationship ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Adaptationist ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Selectionist ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Fictionalist ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Evolutionary non-reductionist ,[object Object],[object Object],[object Object],[object Object],[object Object]
Niche construction: inspirations from evolutionary biology ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Consideration of environment in adaptationist / selectionist paradigm E E’ G G’ natural selection natural selection genetic  inheritance variation disturban- ces G – gene pool of a given population of organisms E – environment for given population of organisms G’  =  f (G, E,  ∆ (G)) ∆  (E) ∆  (G) Much of the traditional evolutionary studies treat environment as complex and independent from impact of population (adaptationist / selectionist view) [from (Laland et al.,2000), amended by the present author] E’  =  h (E,  ∆ (E))
Concept of niche construction E E’ G G’ ∆  (E) ∆  (G) natural selection niche construction niche construction natural selection E’  =  h(G, E,  ∆ (E)) G’  =  f(G, E,  ∆ (G)) genetic  inheritance environment  inheritance [from (Laland et al.,2000), amended by the present author] Niche construction: the process whereby organisms, through their metabolism, their activities, and their choices, modify their own and each other’s niches. Niche construction may result in changes in one or more natural selection pressures.
Niche construction: transplantation of a concept R’ = f (R, E, ∆(R)) E’ = h (R, E, ∆(E)) Niche construction: a change made to the environment (outside the boundary of the firm) that seriously impacts upon the decision making of firm’s counterparts, implying long-lasting alterations in their behavioural patterns E E’ R R’ ∆  (E) ∆  (R) environmental pressures production of environment production of environment environmental pressures institutional  inheritance routine  inheritance
Niche construction: transplantation of a concept (2) ,[object Object],[object Object],[object Object]
General classification of niche construction unintended change of environment (self-organization effects)   coordinated collective change of environment   collective  [=multiple niche constructors]   innovative construction of environment (animal / human)   ‘ extended phenotype’: routine reconstruction of necessary environment  individual  [= single niche constructor]   Dawkins (2004): ‘niche changing’   Dawkins (2004): ‘niche construction’   not prescribed / not controlled   prescribed / controlled   action is…
Classified examples of niche construction in business - tacit collusion in oligopoly - pollution and overuse of common resources - financial crises   - collusion (cartels etc.) - lobbying for necessary governmental decisions - establishment of rules for business community (e.g. in the financial market)   collective  [=multiple niche constructors]   - spillover effects of innovation - externalities of individual production   - differentiation - brand building, loyal customer base - lobbying - establishment of particular model of supply   individual  [= single niche constructor]   not prescribed / not controlled   prescribed / controlled   action is…
Organizational mechanisms of niche construction ,[object Object],[object Object],[object Object]
Institutional vehicles of niche construction ,[object Object],[object Object],[object Object],[object Object]
Institutional vehicles of niche construction (2) emergent inter-organizational practices & resources THE FIRM COUNTERPART   (individual/  collective) SUPPORTING AGENCIES routines & resources committed to the activity routines & resources committed to the activity habits/routines & resources invoked & affected by learning INSTITUTIONAL SET-UP contracts
Conclusions ,[object Object],[object Object],[object Object]
Conclusions (cont.) ,[object Object],[object Object]
Firm as an environment-constructing entity ,[object Object],[object Object]

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Firm as a Niche-Constructing Entity

  • 1. The firm as an environment-constructing entity Pavel O. Luksha http://www. luksha.ru pavel.luksha@gmail.com Analyse(s) and transformation(s) of the firm Lyon, France 22-23 November 2007
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  • 7. Summary of cases THE FIRM Demand side : 1. differentiation of products 2. modification of preferences 3. building of recognizable brands Supply side : 1. creation of specialized suppliers 2. creation of specialized workforce Rivals : industrial leadership, oligopolic games, technological spillovers, … Investors management of investor expectations Legal environment : lobbying for more favourable laws, regulations, standards etc. Mass media / public opinion projection of favourable images of the firm
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  • 14. Consideration of environment in adaptationist / selectionist paradigm E E’ G G’ natural selection natural selection genetic inheritance variation disturban- ces G – gene pool of a given population of organisms E – environment for given population of organisms G’ = f (G, E, ∆ (G)) ∆ (E) ∆ (G) Much of the traditional evolutionary studies treat environment as complex and independent from impact of population (adaptationist / selectionist view) [from (Laland et al.,2000), amended by the present author] E’ = h (E, ∆ (E))
  • 15. Concept of niche construction E E’ G G’ ∆ (E) ∆ (G) natural selection niche construction niche construction natural selection E’ = h(G, E, ∆ (E)) G’ = f(G, E, ∆ (G)) genetic inheritance environment inheritance [from (Laland et al.,2000), amended by the present author] Niche construction: the process whereby organisms, through their metabolism, their activities, and their choices, modify their own and each other’s niches. Niche construction may result in changes in one or more natural selection pressures.
  • 16. Niche construction: transplantation of a concept R’ = f (R, E, ∆(R)) E’ = h (R, E, ∆(E)) Niche construction: a change made to the environment (outside the boundary of the firm) that seriously impacts upon the decision making of firm’s counterparts, implying long-lasting alterations in their behavioural patterns E E’ R R’ ∆ (E) ∆ (R) environmental pressures production of environment production of environment environmental pressures institutional inheritance routine inheritance
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  • 18. General classification of niche construction unintended change of environment (self-organization effects) coordinated collective change of environment collective [=multiple niche constructors] innovative construction of environment (animal / human) ‘ extended phenotype’: routine reconstruction of necessary environment individual [= single niche constructor] Dawkins (2004): ‘niche changing’ Dawkins (2004): ‘niche construction’ not prescribed / not controlled prescribed / controlled action is…
  • 19. Classified examples of niche construction in business - tacit collusion in oligopoly - pollution and overuse of common resources - financial crises - collusion (cartels etc.) - lobbying for necessary governmental decisions - establishment of rules for business community (e.g. in the financial market) collective [=multiple niche constructors] - spillover effects of innovation - externalities of individual production - differentiation - brand building, loyal customer base - lobbying - establishment of particular model of supply individual [= single niche constructor] not prescribed / not controlled prescribed / controlled action is…
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  • 22. Institutional vehicles of niche construction (2) emergent inter-organizational practices & resources THE FIRM COUNTERPART (individual/ collective) SUPPORTING AGENCIES routines & resources committed to the activity routines & resources committed to the activity habits/routines & resources invoked & affected by learning INSTITUTIONAL SET-UP contracts
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