Managing A Steady-State Firm. A Cybernetic Framework

Abstract

Conventional managerial wisdom conceives of a firm as a mechanism that converts resources into products and services via a process of continuous and uninterrupted growth which fits an exponential pattern. Recent research on real or apparent ‘crises’ has demonstrated beyond any doubt that the growth pattern of complex systems resembles a logistic growth curve more than it does an exponential growth curve. This paper presents a cybernetic framework which describes the interplay between positive feedback (or growth creating) mechanisms and negative feedback (or controlling) devices. The outcome of this interplay is a growth strategy for the firm which is labeled sustainable growth.