The Firm as an Experimental Machine -- Its Decision Problem

Abstract

In contrast to the classical model, the model of the experimentally organized economy is well supported by empirical evidence. Particularly convincing evidence is that top level CHQ departments of firms are organized as if the EOE is the market environment in which they operate. This chapter will illustrate how. Above all, business firms have by now all but abandoned the notion of a plannable, potentially full information economy, implicit in management practice of the 1960s, and closed down their strategic or long-range forecasting and planning departments. This development could be seen coming already by the mid-1970s, in the wake of the crisis years. The more biased towards planning machines the less successful the firms were in weathering the 1970s (Eliasson 1976a, 1984c).