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Author(s) -
Ioannides Stavros
Publication year - 2003
Publication title -
american journal of economics and sociology
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.199
H-Index - 38
eISSN - 1536-7150
pISSN - 0002-9246
DOI - 10.1111/1536-7150.00227
Subject(s) - theory of the firm , schema (genetic algorithms) , order (exchange) , spontaneous order , set (abstract data type) , economics , relevance (law) , organizational theory , neoclassical economics , business , positive economics , microeconomics , sociology , management , political science , market economy , law , computer science , finance , machine learning , programming language
A BSTRACT . We explore the relevance to the theory of economic organization of the distinction introduced by Hayek between two kinds of social order: spontaneous orders and organizations. We argue that Hayek's ideas lead to an understanding of the business firm as a process, which comes very close to some of the core notions of the evolutionary theory of the firm, while they still view the firm as the outcome of a contract among asset owners. First of all, we put forth a simple conceptual schema in order to differentiate between contracts that lead to the formation of an organization and ordinary market contracts. We then explore the conditions for an understanding of the firm as a set of interconnected processes, rather than as an end state. Finally, we introduce the concept of purposeful direction as an important condition for the existence of the firm and we show the history‐contingent character of the firm's growth.