forget the environment, everything is endogenous
Teppo is too humble to let us know that he’s the guest editor of a new special issue of Managerial and Decision Economics. The issue’s theme is the “emergent nature of organization, market, and wisdom of crowds.” The special issue has an impressive lineup of authors, including Nicolai Foss, Robb Willer, Bruno Frey, Peter Leeson, and Scott Page. Teppo’s introduction, as you might expect, is provocative, challenging learning theory and behavioral theories of the firm. Here’s a little teaser:
My basic thesis is that capabilities develop from within—they are endogenous and internal. In order to develop a capability, it must logically be there in latent or dormant form. Capabilities grow endogenously from latent possibility. In some respects, capabilities should be thought about as organs rather than as behavioral and environmental inputs. Experience, external inputs and environments are, in important respects, internal to organisms, individuals and organizations. Although environmental inputs play a triggering and enabling role in the development of capability, the environment is not the cause of capability. Furthermore, the latency of capabilities places a constraint on the set of possible capabilities that are realizable. But these constraintsare scarcely deterministic; rather, they also provide the means and foundation for generating noveltyand heterogeneity (285).
Teppo offers a real challenge to the typical “blank slate” approaches that dominate organizational theory and sociology. Social construction has limits if you assume that some capabilities are simply latent and waiting to be triggered into action. This reminds me of what my graduate school contemporary theory instructor, Al Bergesen, used to say about the deficiency of most sociological theory. (In fact, he repeated the whole bit to me again when I ran into him in Denver’s airport Monday evening.) Sociology, he’d say, has never fully come to grips with the cognitive revolution of psychology or linguistics. We still assume that individuals are completely shaped by their social world and ignore cognitive structure and the limits this imposes on how we communicate and who we can become. Teppo and Al would have a lot to talk about.
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