From techno-scientific grammar to organizational syntax. New production insights on the nature of the firm

Abstract

The paper aims at providing the conceptual building blocks of a theory of the firm which addresses its "ontological questions" (existence,boundaries and organization) by placing production at its core. We draw on engineering for a more accurate description of the production process itself, highlighting its inner complexity and potentially chaotic nature, and on computational linguistics for a production-based account of the nature of economic agents and of the mechanisms through which they build ordered production sets. In so doing, we give a "more appropriate" production basis to the crucial issues of how firm's boundaries are set, how its organisational structure is defined, and how it changes over time. In particular, we show how economic agents select some tasks to be performed internally, while leaving some other to external suppliers, on the basis of criteria based on both the different degrees of internal congruence of the tasks to be performed (i.e. the internal environment), and on the outer relationships carried out with other agents (i.e. the external environment)