ABSTRACT
The dominant production capital of a business organization is a difficult to characterize, and therefore also to measure human embodied competence capital. The best characterization of a firm therefore is that of a competent team (Eliasson 1990).
However competent a firm is, it still operates in complex markets populated by rival firms, each of which is constantly having to make up its mind, not only about what their customers want to buy and about what technologies to choose, but also about what other firms and the Government plan to do. This in turn depends on what they expect you to plan to do. The totality of that market game has no determinate solution. The market situation of the individual actor therefore becomes a never-ending life in for them fundamentally unpredictable markets that may suddenly and unexpectedly threaten their very existence (Eliasson 1991a, 2020). Business agents are therefore boundedly rational in the sense of Herbert Simon (1955), or even fundamentally ignorant and failure prone in the sense that their ex ante expectations rarely come true ex post. Economic mistakes become a normal (transactions) cost of economic development. Hence, decisions of firms are best characterized as business experiments based on decision models about their environment (Eliasson 1992), designed to be confronted with those of other firms and thus tested in markets. Firms are therefore best understood as experimentally organized decision makers (Eliasson 1996:Ch.III).
