Organizational ecology, economic freedom and the imperative of innovation

02/01/2018


The perspective of Organizational Ecology theory is based on the ability of organizations to adapt to their environment. This occurs, therefore, the organizations are considered limited rational actors, with high degree of organizational inertia interacting with a competitive environment. Depending on this interaction there may be environmental variations that result in restrictions for organizations.

 

In this approach, the organization has little influence on its destination, the environment having a deterministic character. This interaction determines environmental variations that impose restrictions on the population of firms, selecting those that are most apt to survive and, of course, eliminating the weaker ones (Hannan and Freeman, 1977, 1989;

 

On the other hand, the market economy approach, as proposed by Mises (2010, p. 315) "is the social system based on the division of labor and private ownership of the means of production." Therefore, it is a fundamental condition that this system be governed by market forces. Mises (2010: 316) also proposes that "the market is the focal point where the activities of individuals converge and where they radiate. "

 

In this sense, both theories advocate that companies operating in free market scenarios need to present strategies and mechanisms of adaptation and rapid reaction that allow them to overcome market forces and overcome the inertia that naturally leads them to repeat strategies and successful models of the market. past.

 

Therefore, making them capable of navigating the open sea of ​​free competition requires constant monitoring of changes in the environment and real time responses through innovations of various orders, in some cases open innovation via partnerships with other organizations and startups when solution involves the use of technologies outside their scope of knowledge.