Elements of a Cognitive Theory of the Firm

Abstract

In this paper I employ the perspective of embodied cognition to develop a ‘cognitive’ theory of the firm and organisations more in general. An organisation is any form of coordinated behavior, while a firm is a special form of organisation, with a legal identity concerning property rights, liability and employment. A possible misunderstanding of terminology should be eliminated from the start. In this paper, the terms ‘knowledge’ and ‘cognition’ have a wide meaning, going beyond rational calculation. They denote a broad range of mental activity, including proprioception, perception, sense making, categorisation, inference, value judgments, and emotions. Following others, and in line with the perspective of embodied cognition, I see cognition and emotion (such as fear, suspicion), and body and mind, as closely linked (Merleau-Ponty, 1942, 1964; Simon, 1983; Damasio, 1995, 2003; Nussbaum, 2001).

Citation

Nooteboom, B. (2006), "Elements of a Cognitive Theory of the Firm", Krecké, E., Krecké, C. and Koppl, R.G. (Ed.) Cognition and Economics (Advances in Austrian Economics, Vol. 9), Emerald Group Publishing Limited, Leeds, pp. 145-175. https://doi.org/10.1016/S1529-2134(06)09006-5