Information, Knowledge and the Evolutionary Theory of the Firm

  • Pascal Petit


According to Fransman (1994), there are two main approaches for conceiving the theory of the firm:
  • 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.

  • 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).


Evolutionary Theory Tacit Knowledge Incentive Scheme Incentive Mechanism Traditional Theory 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Alchian A. (1951), “Uncertainty, evolution and economic theory”, Journal of Political Economy, vol. 57, 211–221.Google Scholar
  2. Aoki M. (1986), “ Horizontal vs. Vertical Information Structure of the Firm ”, American Economic Review, vol. 76, 971–983.Google Scholar
  3. Aoki, M. (1988), Information, Incentives and Bargaining in the Japanese Economy, Cambridge, Cambridge University Press.CrossRefGoogle Scholar
  4. Argyris C. & Schön D. A. (1978), Organisational Learning: a Theory of Action Perspective,Addison-Wesley Publishing Company.Google Scholar
  5. Burkhart R., Cohen M.D., Dosi G., Egidi M., Marengo L, Warglien M., Winter S. (1996): “Routines and other Recurring Action Patterns of Organizations: Contemporary Research Issues”, Industrial and Corporate Change, Vol. 5, n°3, 653–698.Google Scholar
  6. Casson M. (1998), “An entrepreneurial theory of the firm” presented at the Conference “Competences, Gorvernance and Entrepreneurship”, DRUID, Bornholm, June 1998.Google Scholar
  7. Chandler A.D. Jr (1992), “Corporate Strategy, Structure and Control Methods in the United States during the 20th Century”, Industrial and Corporate Change, vol 1, n°2, 263–284.Google Scholar
  8. Coase R.M. (1937), The Nature of the Firm, Economica, vol.4, 386–405.Google Scholar
  9. Cohendet P., Kern F., Mehmapazir B. & Munier E (1997), “Organisation of Transnational Firms and Networks of Telecommunications” EMOT Workshop (European Science Fondation), Learning and Embeddedness: Evoluting Transnational Firm Strategies in Europe; Collingwood College, University of Durham Newcastle UK, 27–29 June 1996.Google Scholar
  10. Cohendet P., Llerera P, & Marengo L. (1994), “Learning and Organizational Structure in Evolutionary Models of the Firm”; EUNETIC Conference Evolutionary of Technological Change, European Parliament Strasbourg, October 1994.Google Scholar
  11. Coriat B. & Dosi G. (1995), “Learning how to Govern and Learning how to Solve Problems: On the Co-evolution of Competences, Conflicts and Organizational Routines”, Luxenburg. Austria IIAS A, Working paper 95–06.Google Scholar
  12. Coriat B., Weinstein O. (1995): Les nouvelles théories de l’entreprise, Livre de Poche, Collection Références.Google Scholar
  13. Dosi G, Egidi M, (1991), “Substantive and procedural uncertainty”, Journal of Evolutionary Economics, 1, pp. 145–168CrossRefGoogle Scholar
  14. Dosi G, Marengo L, (1994), “Towards a theory of Organizational Competencies”, in England R.W (ed), Evolutionary concepts in contemporary economics, Michigan University PressGoogle Scholar
  15. Dosi G., Teece D.J., Winter S.G. (1991), “Toward of Theory of Corporate Coherence “, in Dosi G., Giannetti R. and Toninelli P.A. (eds), Technology and the Enterprise in a Historical Perspective, Oxford, Oxford University Press.Google Scholar
  16. Favereau O. (1989): “ Marchés internes, marchés exterrnes”, Revue Économique, n°2, p. 273–328.Google Scholar
  17. Favereau O. (1993): “Suggestions pour reconstruire la théorie du salaire sur une théorie des règles”, WP Laedis, Uni. Paris X, April.Google Scholar
  18. Favereau O. (1995): “Apprentissage collectif et coordination par les règles: application à la théorie des salaires”, in, Lazaric N., Monnier J. M. (eds), Coordination économique et apprentissage des firmes Economica, Paris, pp. 23–38.Google Scholar
  19. Foss N.J. (1996): “The ‘alternative’ theories of Knight and Coase, and the modern theory of the firm”, Journal of the History of Economic Thought, Vol. 18, Spring„ pp. 1–20.Google Scholar
  20. Fransman M. (1994), “Information, Knowledge, Vision and Theories of the Firm”, Industrial and Corporate Change, vol. 3 no 3.Google Scholar
  21. Guilhon B. (1994), “Le processus d’apprentissage de la firme: contenu et limites”, Revue d’Economie Industrielle, n° 74.Google Scholar
  22. Hayek F.A. von (1937), “ Economics and Knowledge”, Economica, vol. 4, pp. 33–54.CrossRefGoogle Scholar
  23. Héraud J. A. & Garrouste P. (1993), “Auto-organisation et création technologique” in Ancori B (ed), Apprendre, se souvenir, décider, CNRS éditions, Paris.Google Scholar
  24. Jensen M.C. and Meckling W.H. (1976), “Theory of the Firm: Managerial Behaviour, Agency Costs and Ownership Structure “, Journal of Financial Economics,vol. 3, 305–360.Google Scholar
  25. Knight F (1921), Risk, Uncertainty, and Profit, Reprint 1971, Chicago, The Chicago University Press.Google Scholar
  26. Langlois R., Foss N. (1996), “Capabilities and governance: the rebirth of production in the theory of economic organisation”, working paper Uni. of Connecticut/Copenhagen Business School.Google Scholar
  27. Levinthal, D. (1997), “Adaptation on rugged landscapes”, Management Science, vol. 43, pp. 934–50.CrossRefGoogle Scholar
  28. Lesourne J. (1991), Economie de l’ordre et du désordre, Economica, Paris.Google Scholar
  29. Loasby B. J. (1989), “Organization, Competition, and the Growth of Knowledge”, in Langlois R. (ed), Economics as process,Cambridge University Press.Google Scholar
  30. March J, Simon H, (1993), “Organizations revisited”, Industrial and Corporate Change, 2, 3, pp. 299–316CrossRefGoogle Scholar
  31. Marschak J., Radner R. (1972), Economic Theory of Teams, New Haven, CT, Yale University Press.Google Scholar
  32. Milgrom P., Roberts J. (1988), “Economic theories of the firm: past, present, future”, Canadian Journal of Economics, vol. 21, pp. 444–458.CrossRefGoogle Scholar
  33. Marengo L. (1994), “Knowledge Distribution and Coordination on Organization: On some Social Aspects of the Exploitation vs. Exploration Trade-off’, Revue Internationale de systèmique, n° 1.Google Scholar
  34. Nelson R. (1994), “The Co-evolution of Technology, Industrial Change and supporting Institutions”, Industrial and Corporate Change vol. 3.Google Scholar
  35. Nelson R. & Winter S. (1982): “An Evolutionary theory of economic Change”, Belknap Press of Harvard, Cambridge.Google Scholar
  36. Nonaka I. (1994), “A Dynamic Theory of Organizational Knowledge Creation”, Organisation science, vol 5.Google Scholar
  37. Nonaka I., Takeuchi H. (1995): The Knowledge Creating Company, New York, Oxford University Press.Google Scholar
  38. Penrose E. (1959): The theory of the growth of the firm, Oxford Uni. Press.Google Scholar
  39. Polanyi M. (1966), The Tacit Dimension, Doubleday & Co, Inc Garden City New York.Google Scholar
  40. Postrel S., Rumelt R.P (1992): “Incentives, routines and self-command”, Industrial and Corporate Change, vol. 1, n°3, 397–425.Google Scholar
  41. Radner R. (1986), “ The Internal Economy of Large Firms “, Economic Journal, vol. 96 (Supplement), 1–22.Google Scholar
  42. Richardson G (1960), Information and Investment,Clarendon PressGoogle Scholar
  43. Richardson G (1972), “The Organization of Industry”, The Economic Journal, September.Google Scholar
  44. Schelling T. (1978), Micromotives and Macrobehavior, Norton.Google Scholar
  45. Simon H.A. (1957), Models of man, New York, Wiley.Google Scholar
  46. Teece D. (1988), “Technological Change and the Nature of the Firm”, in Dosi et al. (eds), Technical Change and Economic Theory. Frances Pinter, London.Google Scholar
  47. Walliser B. (1988), “Systémique et Economie’, Revue Internationale de Systémique, op. 2, n°3, pp. 245–260.Google Scholar
  48. Williamson O.E. (1975), Markets and Hierarchies: Analysis and Antitrust Implications, New York, The Free Press.Google Scholar
  49. Williamson O.E. (1985), The Economic Institutions of Capitalism: Firms, Markets, Relational Contracting, London, Mac Millan.Google Scholar
  50. Williamson O.E. (1993), “Transaction costs economics and organisation theory”, Industrial and Corporate Change, vol.2, n° 2, pp. 107–156.Google Scholar
  51. Williamson. O. E. (1996), Mechanisms of Governance, Oxford University Press.Google Scholar
  52. Zuscovitch E. (1993), “Evolutionary Economics and the Lamarkian Hypothesis: Towards a Social Imperfect Competition?, Revue Internationale de Systémique. vol 7.n°5.Google Scholar

Copyright information

© Springer Science+Business Media New York 2001

Authors and Affiliations

  • Pascal Petit
    • 1
  1. 1.ParisFrance

Personalised recommendations