Complexity-Based View of the Firm : Evidence, Features and Method

Understanding the behavior of the firm continues to be one of the key challenges of economic theory today, yet it remains elusive. Few other problems in the history of economics has persuaded the interest of so many economists, sociologists, psychologists, mathematicians, and even philosophers, as the endeavor to describe and somehow predict the behavior of the firm. However, a conspicuously lack of progress in terms of theoretical and practical outcomes shows that our theories are wrong or incomplete. In this paper the author highlights one key reason is that we fail to understand what complexity entails for the economic system and the firm, and suggests the need for an entirely new theoretical and methodological view of the firm based on complexity thinking. The evidence provided and the characterization made of the firm as a complex system are the prelude to a method to tackle complexity. The complexity-based view of the firm has strong implications for figuring out how to think about complexity of the firm, draft reality-bounded theories, and set the grounds for further research