IDEAS home Printed from https://ideas.repec.org/a/nup/jrmdke/v3y2015i4p645-674.html
   My bibliography  Save this article

Capitalistic Firms as Cognitive Intelligent and Explorative Agents. The Beer’s VSM and Mella’s Moest Views

Author

Listed:
  • Piero MELLA

    (Department of Economics and Management, University of Pavia)

  • Patrizia GAZZOLA

    (Department of Economics, Insubria University)

Abstract

In this paper we propose a general model to understand (not merely describe) the operating logic of Business Value-Creating Organizations and, in particular of the capitalistic firm - that is, the business for-profit organization. When viewed as autopoietic and teleological organizations, firms can be interpreted both as viable systems (following Beer’s Viable System Model, or VSM) and as operating systems for efficient transformation (following Mella’s MOEST, or Model of the Organization as an Efficient System of Transformation).Beer believes that organizations must be viewed as viable systems, which, through their structure, which is capable of learning and cognition, can achieve an enduring structural coupling with the environment, continuing in this way to exist for a long time through continually adapting to the environment. Mella asserts that organizations must be conceived of as transformation systems that carry out five parallel transformations: (1) a productive transformation of factors into production; this is a transformation of utility, governed by productivity and by quality; (2) an economic transformation of costs and revenues into operating income; this is a transformation of value, governed by prices and therefore by the market; (3) a financial transformation of risks, which transforms capital into returns and guarantees the maintenance of its financial integrity; (4) an entrepreneurial transformation of information into strategies, which leads to a continual readjustment of the firm's strategic position; (5) a managerial (organizational) transformation of strategies into actions of management control. The MOEST proposes a system of performance indices and measures and highlights the mutual relationships among these indexes. Based on VSM and MOEST, we will try to demonstrate that, just as individuals in a Social System are responsible for their own actions and behavior with respect to the other individuals in the system, Organizations, as vital entities that make up the Social System, must also necessarily be held accountable for the economic and non-economic consequences of their actions. The complex “thinking-action†interaction leads the organization to behave as a cognitive entity, as a vital unitary system, that must be held “socially responsible†for its own actions, as these are produced, in turn, by its own decisions. This results in the necessity and inevitability of CSR.Specifically, the MOEST shows that the action of every BVCO assumes a Corporate Governance that specifies stakeholder objectives and environmental constraints, in this way defining the various levels of CSR. The CSR thus represents a fundamental variable in the strategy of BVCOs, as corporate ethics and reputation is based on this. For this reason we have enlarged the original structure of the Kaplan & Norton’s Balanced Scorecard (BSC) by including in the model of four scorecards a fifth scorecard that measures the firm’s capacity to create well-being for the collectivity and demonstrate the firm’s social utility by indicating its capacity to achieve social and environmental objectives.

Suggested Citation

  • Piero MELLA & Patrizia GAZZOLA, 2015. "Capitalistic Firms as Cognitive Intelligent and Explorative Agents. The Beer’s VSM and Mella’s Moest Views," Management Dynamics in the Knowledge Economy, College of Management, National University of Political Studies and Public Administration, vol. 3(4), pages 645-674, December.
  • Handle: RePEc:nup:jrmdke:v:3:y:2015:i:4:p:645-674
    as

    Download full text from publisher

    File URL: http://www.managementdynamics.ro/index.php/journal/article/download/154/104
    Download Restriction: no

    File URL: http://www.managementdynamics.ro/index.php/journal/article/view/154/104
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Griliches, Zvi, 1997. "Education, Human Capital, and Growth: A Personal Perspective," Journal of Labor Economics, University of Chicago Press, vol. 15(1), pages 330-344, January.
    2. Patrizia GAZZOLA, 2014. "Corporate Social Responsibility And Companies’ Reputation," Network Intelligence Studies, Romanian Foundation for Business Intelligence, Editorial Department, issue 3, pages 74-84, April.
    3. James P. Walsh, 1995. "Managerial and Organizational Cognition: Notes from a Trip Down Memory Lane," Organization Science, INFORMS, vol. 6(3), pages 280-321, June.
    4. Piero Mella & Patrizia Gazzola, 2015. "Ethics builds reputation," International Journal of Markets and Business Systems, Inderscience Enterprises Ltd, vol. 1(1), pages 38-52.
    5. Gazzola Patrizia & Colombo Gianluca, 2013. "Stakeholder Engagement Between Managerial Action And Communication," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(2), pages 97-105, December.
    6. Eduardo TOMÉ & Paula FIGUEIREDO, 2015. "Knowledge Management and Politics at the Highest Level: An Exploratory Analysis," Management Dynamics in the Knowledge Economy, College of Management, National University of Political Studies and Public Administration, vol. 3(2), pages 193-212, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Alina Badulescu & Daniel Badulescu & Tomina Saveanu & Roxana Hatos, 2018. "The Relationship between Firm Size and Age, and Its Social Responsibility Actions—Focus on a Developing Country (Romania)," Sustainability, MDPI, vol. 10(3), pages 1-21, March.
    2. Stefano AMELIO, 2017. "CSR and Social Entrepreneurship: The Role of the European Union," Management Dynamics in the Knowledge Economy, College of Management, National University of Political Studies and Public Administration, vol. 5(3), pages 335-354, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yildiz, H. Emre & Murtic, Adis & Zander, Udo, 2024. "Re-conceptualizing absorptive capacity: The importance of teams as a meso-level context," Technological Forecasting and Social Change, Elsevier, vol. 199(C).
    2. Glen Dowell & Brad Killaly, 2009. "Effect of Resource Variation and Firm Experience on Market Entry Decisions: Evidence from U.S. Telecommunication Firms' International Expansion Decisions," Organization Science, INFORMS, vol. 20(1), pages 69-84, February.
    3. Johan Hauknes & Per M. Koch, "undated". "Two sides – one coin?," STEP Report series 200318, The STEP Group, Studies in technology, innovation and economic policy.
    4. Stea, Diego & Foss, Nicolai J. & Christensen, Peter Holdt, 2015. "Physical separation in the workplace: Separation cues, separation awareness, and employee motivation," European Management Journal, Elsevier, vol. 33(6), pages 462-471.
    5. Shehla Najib & Rashidi.Z, 2018. "Student Protests In Universities: Exploring The Model For Crisis Management, Crisis Leadership And Organizational Learning," IBT Journal of Business Studies (JBS), Ilma University, Faculty of Management Science, vol. 14(1), pages 143-159.
    6. Charles H. Cho & Jonathan Maurice & Emmanuelle Nègre & Marie-Anne Verdier, 2016. "Is environmental disclosure good for the environment? A meta-analysis and research agenda," Post-Print halshs-01369422, HAL.
    7. Quatraro, Francesco & Scandura, Alessandra, 2020. "Regional patterns of unrelated technological diversification: the role of academic inventors," Department of Economics and Statistics Cognetti de Martiis LEI & BRICK - Laboratory of Economics of Innovation "Franco Momigliano", Bureau of Research in Innovation, Complexity and Knowledge, Collegio 202001, University of Turin.
    8. Maggie Chuoyan Dong & Yulin Fang & Detmar W. Straub, 2017. "The Impact of Institutional Distance on the Joint Performance of Collaborating Firms: The Role of Adaptive Interorganizational Systems," Information Systems Research, INFORMS, vol. 28(2), pages 309-331, June.
    9. F Ackermann & C Eden & T Williams & S Howick, 2007. "Systemic risk assessment: a case study," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 58(1), pages 39-51, January.
    10. Dean A. Shepherd & Jeffery S. Mcmullen & William Ocasio, 2017. "Is that an opportunity? An attention model of top managers' opportunity beliefs for strategic action," Strategic Management Journal, Wiley Blackwell, vol. 38(3), pages 626-644, March.
    11. Niittymies, Aleksi, 2020. "Heuristic decision-making in firm internationalization: The influence of context-specific experience," International Business Review, Elsevier, vol. 29(6).
    12. Neill, Stern & Rose, Gregory M., 2006. "The effect of strategic complexity on marketing strategy and organizational performance," Journal of Business Research, Elsevier, vol. 59(1), pages 1-10, January.
    13. Joern Hoppmann & Alice Sakhel & Marcel Richert, 2018. "With a little help from a stranger: The impact of external change agents on corporate sustainability investments," Business Strategy and the Environment, Wiley Blackwell, vol. 27(7), pages 1052-1066, November.
    14. Jong Uk Kim & Rajiv Kishore, 2019. "Do we Fully Understand Information Systems Failure? An Exploratory Study of the Cognitive Schema of IS Professionals," Information Systems Frontiers, Springer, vol. 21(6), pages 1385-1419, December.
    15. Dena Lawrence & Federica Pazzaglia & Karan Sonpar, 2011. "The Introduction of a Non-Traditional and Aggressive Approach to Banking: The Risks of Hubris," Journal of Business Ethics, Springer, vol. 102(3), pages 401-420, September.
    16. Ng, Desmond W., 2011. "Thinking Outside the Box: An Absorptive Capacity Approach to the Product Development Process," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 14(3), pages 1-28, September.
    17. Delia Ionascu & Klaus E. Meyer & Saul Estrin, 2004. "Institutional Distance And International Business Strategies In Emerging Economies," William Davidson Institute Working Papers Series wp728, William Davidson Institute at the University of Michigan.
    18. Milenko Popovic, 2007. "Rising Wage Inequality, Rate Of Return On Investment In Education, And Cost Of Education," Montenegrin Journal of Economics, Economic Laboratory for Transition Research (ELIT), vol. 3(5), pages 35-58.
    19. John W. Budd & Dionne Pohler & Wei Huang, 2022. "Making sense of (mis)matched frames of reference: A dynamic cognitive theory of (in)stability in HR practices," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 61(3), pages 268-289, July.
    20. Fran Ackermann & Colin Eden & Igor Pyrko, 2016. "Accelerated Multi-Organization Conflict Resolution," Group Decision and Negotiation, Springer, vol. 25(5), pages 901-922, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nup:jrmdke:v:3:y:2015:i:4:p:645-674. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Cristian-Mihai VIDU (email available below). General contact details of provider: https://edirc.repec.org/data/fmsnsro.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.