The firm as a system

In Chapter 8 it was suggested that organisational objectives can be understood in terms of the structure of organisational power, and that in a capitalist firm this leads to a general long-run attempt to increase profitability. This idea will be developed in this chapter and in particular the nature and dynamics of intra-firm activity will be discussed. As the title suggests, this involves examining the firm as a system. In response to existing approaches in this area, which as argued in the next section tend to view intra-firm activity in terms of reactions to exogenous changes, this chapter will stress the proactive or creative nature of decision making. This implies that the way organisational power is structured endogenises opportunities and defines, or enables, what is possible. In other words, it will be concluded, the firm should be treated as a locus of strategic control.