Abstract
According to Fransman (1994), there are two main approaches for conceiving the theory of the firm:
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On the one side, the traditional theories of the firm (transaction costs theory, agency theory, theory of teams, etc...) consider the firm as a « processor of information ». For these traditional approaches, the behaviour of the firm can be understood as an optimal reaction to the environmental signals that are detected by the firm. The focus is thus on the process of allocation of resources needed to cope with this adaptation to external information. As Langlois and Foss (1996) pointed out, this vision led to a contractual approach of the firm, where « firms and other institutions are alternative bundles of contracts understood as mechanisms for creating and realigning incentives », in order to better cope with the information that comes from the environment.
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On the other side, the firm is conceived as “ a processor of knowledge ” (Fransman, 1994). In this perspective, the firm is viewed as a locus of setting up, construction, selection, usage and development of knowledge. It is more sensitive to the sharing and distribution of knowledge than it is to the distribution of information. In this approach, the key role is played by the concept of competence, which relies on that of routines and rules, and refers to a view of the firm as a social institution, the main characteristic of which is to « know (well) how to do » certain things. In fact, considering the firm as a processor of knowledge leads to the recognition that the cognitive mechanisms are essential, and that routines play a major role in keeping the internal coherence of the organisation. In other terms, the governance of the firm is not focused on the resolution of informational asymmetries, but on the co-ordination of distributed pieces of knowledge and distributed learning processes. “It is not so much the saturation of its abilities to deal with information which concerns the firm, as the risk of becoming too confined by inefficient routines” (Cohendet et al., 1997).
This contribution results from long discussions with Patrick Llerena and Luigi Marengo. It also benefited from the comments of the two discussants of the paper, Philippe Lorino and Olivier Weinstein, when I presented it at the working session of Commisariat Général du Plan.
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Petit, P. (2001). Information, Knowledge and the Evolutionary Theory of the Firm. In: Petit, P. (eds) Economics and Information. Springer, Boston, MA. https://doi.org/10.1007/978-1-4757-3367-9_8
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