The Origin And The Evolution Of Firms

The firms and markets of today's complex socio-economic system developed in a spontaneous process termed evolution, in just the same way as the universe, the solar system, the Earth and all that lives upon it. Darwin's theory of evolution clearly demonstrated that evolution involved increasing organization. As we began to explore the molecular basis of life and its evolution, it became equally clear that it depended on the processing and communication of information. This book develops a consistent theory of evolution in its wider sense, examining the information based laws and forces that drive it. Exploring subjects as diverse as economics and the theories of thermodynamics, the author revisits the paradox of the apparent conflict between the laws of thermodynamics and evolution to arrive at a systems theory, tracing a continuous line of evolving information sets that connect the Big-Bang to the firms and markets of our current socio-economic system.

This book brings together some of the world's leading experts to present an interdisciplinary, critical perspective on current issues surrounding the economics of the firms. It eschews standard approaches to the economics of the firm (including analysis of transaction costs) in favour of a more interdisciplinary outlook, with evolutionary economics taken into account. Central to this is the concept of trust and the belief that any approach to the firm must recognize cultural and political factors. The chapters emphasize the themes of change and evolution and explore issues arising from the history and organization of firms. An important book, with contributions from Bart Nooteboom, Stavros Ioannides and Werner Holzl, this is an invaluable resource for postgraduate students of economics.

This volume features a series of essays which arose from a conference on economics, addressing the question: what is the nature of the firm in economic analysis? This paperback edition includes the Nobel Lecture of R.N. Case.

What is this mysterious activity we call entrepreneurship? Does success require special traits and skills or just luck? Can large companies follow their example? What role does venture capital play? In a field dominated by anecdote and folklore, this landmark study integrates more than ten years of intensive research and modern theories of business and economics. The result is a comprehensive framework for understanding entrepreneurship that provides new and penetrating insights. Examining hundreds of successful ventures, the author finds that the typical business has humble, improvised origins. Well-planned start-ups, backed by substantial venture capital, are exceptional. Entrepreneurs like Bill Gates and Sam Walton initially pursue small, uncertain opportunities, without much capital, market research, or breakthrough technologies. Coping with ambiguity and surprises, face-to-face selling, and making do with second-tier employees is more important than foresight, deal-making, or recruiting top-notch teams. Transforming improvised start-ups into noteworthy enterprises requires a radical shift, from "opportunistic adaptation" in niche markets to the pursuit of ambitious strategies. This requires traits such as ambition and risk-taking that are initially unimportant. Mature corporations have to pursue entrepreneurial activity in a much more disciplined way. Companies like Intel and Merck focus their resources on large-scale initiatives that scrappy entrepreneurs cannot undertake. Their success requires carefully chosen bets, meticulous planning, and the smooth coordination of many employees rather than the talents of a driven few. This clearly and concisely written book is essential for anyone who wants to start a business, for the entrepreneur or executive who wants to grow a company, and for the scholar who wants to understand this crucial economic activity.

What is this mysterious activity we call entrepreneurship? Does success require special traits and skills or just luck? Can large companies follow their example? What role does venture capital play? In a field dominated by anecdote and folklore, this landmark study integrates more than ten years of intensive research and modern theories of business and economics. The result is a comprehensive framework for understanding entrepreneurship that provides new and penetrating insights. Examining hundreds of successful ventures, the author finds that the typical business has humble, improvised origins. Well-planned start-ups, backed by substantial venture capital, are exceptional. Entrepreneurs like Bill Gates and Sam Walton initially pursue small, uncertain opportunities, without much capital, market research, or breakthrough technologies. Coping with ambiguity and surprises, face-to-face selling, and making do with second-tier employees is more important than foresight, deal-making, or recruiting top-notch teams. Transforming improvised start-ups into noteworthy enterprises requires a radical shift, from "opportunistic adaptation" in niche markets to the pursuit of ambitious strategies. This requires traits such as ambition and risk-taking that are initially unimportant. Mature corporations have to pursue entrepreneurial activity in a much more disciplined way. Companies like Intel and Merck focus their resources on large-scale initiatives that scrappy entrepreneurs cannot undertake. Their success requires carefully chosen bets, meticulous planning, and the smooth coordination of many employees rather than the talents of a driven few. This clearly and concisely written book is essential for anyone who wants to start a business, for the entrepreneur or executive who wants to grow a company, and for the scholar who wants to understand this crucial economic activity.

The book begins by reviewing the connection between firm size, innovation and market structure from a theoretical and an empirical point of view, with emphasis on the 'complexity' that defines this relationship. It then goes on to build an evolutionary model which explores different Schumpeterian propositions regarding the positive and negative feedback between firm size and innovation as well as the role of idiosyncratic random events on industry market structure. The concluding chapter uses 100 years in the history of the US automobile industry to explore the relationship between market share instability and stock price volatility and the degree to which this relationship is connected to industry specific factors. This innovative new book will prove invaluable to researchers, lecturers and scholars of industrial organisation, technology and market structure.

Firm growth. This concept has interested researchers for generations. Economists have sought to predict and measure firm growth using a host of different variables, while strategic management scholars depict growth as the result of clever analyses and rational resource exploitation. Entrepreneurship scholars - ever engrossed by successful start-ups - have pondered why growth sometimes comes fast and sometimes never at all, while the field of business history has given countless examples of growing firms in a range of different settings. Yet despite research across fields, our knowledge of how growth in a firm actually comes about is limited and we still know little about the process. This book offers a new reading of economist Edith Penrose's The Theory of the Growth of the Firm. The bold statement is that although Penrose's work - across fields and generations - is amongst the most quoted on firm growth, the basic points of her work have yet to be realized and explored empirically. Essentially, growth is created by a dynamic interrelation between the firm's self-conception and its image of context. Based on these two subjective categories, the firm makes decisions and its actions lead it to develop along a particular path. To Penrose this is the basic engine that drives the growth and development of firms. This book discusses how the engine of firm growth can be captured in empirical analysis using interpretative theory and narrative methods inspired by recent streams of research in business history.