Complexity-based view of the firm: theoretical perspectives, methodological framework and empirical evidence

Abstract

The progress made by the theory of the firm has been outstanding in the last 80 years, its central concepts having become foundational for any theoretical and practical work focused on understanding the behavior of the firm. However, in spite of this remarkable achievement, most of the firm?s real problems remain intractable. Furthermore, an increasing new class of issues emerge which seemingly fall out of managers? control, relentless challenging our current theories and methods. The above are traits of what investigators call complexity, and a new paradigm centered on tackling and managing it is being formed in the social sciences. To explore the applicability, opportunities and consequences that this paradigm may have for increasing our understanding of the firm, this thesis examines two distinct lines of inquiry: theoretical and methodological. Building upon a novel theoretical characterization of the firm as a complex system, whose fundamental units continuously create and exchange value, and a comprehensive 4-stage methodological approach, both lines converge to form a robust framework to practically grasp, envision and influence the behavior of the firm. Furthermore, empirical evidence from a field research carried out at an international scale by the author on the airline industry is provided that supports the applicability of our proposed complexity-based view in practical areas such as scenario testing, planning and decision-making, using knowledge from experts and Fuzzy Cognitive Mapping. Finally, given the extensive theoretical and practical background covered by our approach and the limitations exposed, guidelines for further research are provided in the thesis that should encourage the next rounds of investigators to dig deeper and seize the yet unrealized opportunities offered by a complexity-based view of the firm.