Study On The Interactive Relationship Between Firm And Its Environment

No firm exists independently. A firm is a system that has interactive and interdependent relationships with its environment. This kind of interaction relations acts at all times and in all places, and plays a very important role on the survival and the development of the firm.Along with the deepening of reform on economic institution in our country, socialistic market economy systems have been established initially, and market mechanism has been playing even more foundational role on the allocation of resources. At the same time, economy globalization, competition internationalization and the development of IT technology have increased the dynamism, complexity, and uncertainty of firm's environment. All of these have made an unprecedented impact on the firm. To a firm, competitors, competitive scope, competitive rules and competitive forms etc. are changing markedly and putting much pressure on firm's selection. Therefore, how to understand the interactive relationship between a firm and its environment, to apply the corresponding methods in business management, to fit and control the environment, and to improve firm's competitive advantage, have been becoming critical problems faced by domestic firms.At present, there are many theoretical mistakes in cognition of the relationship between a firm and its environment in theoretical and practical community. For example, "the environment is out of the control of a firm", or "a firm can do nothing about its environment". Accordingly, it also makes firm practice in wrong ways, for instance, depends entirely on the government to create well development environment. All of these theoretical understanding and practical behaviors have bad impact on the positivity and creativity of firm, and are adverse to the development of firm. So, it is urgent to make exploration and innovation in both theory and methods.Therefore, making a thorough research on the mechanism of interactive relationship and adaptation methods between a firm and its environment is much rewarding in theoretical exploration and practice. It helps to exploit research area inmanagement, and it is helpful for firms to recognize and understand environment correctly and comprehensively. It also helps firms improve ability in decision-making, execution, adaptation to and controlling of the environment, as well as ability in market competition. At the same time, it is useful for the government to create well environment supply for the firms.A lot of scholars, such as theoreticians in organization theory and management, economists and sociologists have paid much attention to the interactive relationship between a firm and its environment. Based on the different subjects and research levels, they have put forward different core questions from different perspectives, and gained different answers, which forms a flourish jungle of theories.In this article, on the basis of review and allround comparisons of different theories, including contingency theory, new institution theory, population ecology, resources dependence theory, strategic choice theory, transaction cost economics, relational network theory and business ecosystem theory, the author put forward an integrated model, which reflects the relationship between a firm and its environment comprehensively. Then, the author discussed the (disequilibrium character between a firm and its environment, and how it works in the evolution of a firm and its environment. Finally, the author discussed how a firm fits and controls the environment.In chapter one, the author gives an outline introduction of firm's environment, including the conception, different perspectives, dimensionalities, and classifications. Then, the author discusses the importance of research on the relationship between a firm and its environment. Cognition process of the relationship is also briefly reviewed. In succession, the author discusses the practical meaning of the research in contemporary China and reviews the involved domestic literatures at present. Finally, the author gives an introduction of this paper's frame, innovation and insufficiency.Chapter two is begun with the review of eight involved schools, which include contingency theory, new institution theory, population ecology, resources dependence theory, strategic choice theory, transaction cost economics, relational network theory and business ecosystem theory. Core literatures and scholars in each school are mentioned, as well as the latest progress. Then the author summarizes common groundin the schools, gives allround comparisons from multiple perspectives and discusses how difference arises.The purpose of chapter three is to put forward an integrated frame to describe relationship between a firm and its environment. In the first place, the author discusses the necessity and possibility of the integration, and reviews present integrated literatures, which can be divided into two ways. Seeking intrinsic logical relation in different theories and establishing an integrated organic frame, which contains different thoughts, is the method of the first way. In the second way, the researchers always compare, position, and classify different theories in a particular dimension or standard. Following the first way, the author fragments the dynamics relationship between a firm and its environment into several parts: how a firm emerges from its environment, why and how a firm alienates, how a firm fits and controls the technique and institution environment, how the dominant coalitions works in the process, the evolution of a firm and its environment, the selection mechanism of environment. The integrated frame contains core viewpoints of different theories and reflects the relationship between a firm and its environment comprehensively.In the fourth chapter, the author introduces the conception of (dis)equilibrium to discuss the character of relationship between a firm and its environment and the evolution of a firm and its environment. (Dis)Equilibrium not only describes static nature of the relationship, but also explains the mechanism of evolution of a firm and its environment and the interactive relationship between them. First, the author reviews the usage of equilibrium in sciences, early organization theory and economics. Then the (dis)equilibrium between a firm and its environment is discussed from the perspective of self-organization theory, including sources, universality, forms, states, the comparison of short-term and long-term equilibrium. In succession, the author points out that firm innovation is a very important source of disequilibrium, and it plays a crucial role on the development and evolution of firm itself. Firm innovation can be classified as incremental innovation, architectural innovation and discontinuous innovation. Finally, the author discusses the macro-effect and micro-mechanism of evolution of firm and its environment and relationship between them—how (dis)equilibrium works.Firm's adaptation is discussed in chapter five. It includes a lot of activities of adjusting the relationship between a firm and its environment. Finn's adaptation is on the basis of given macro-background and micro-agents. Well environment, which the government is responsible for, is helpful for firm's adaptation. Adaptation also requires the focal agent to be a self-organization system with the ability of self-adaptation and positive adjustment. Adaptation is a basic function of firm, and it is interactive, dynamic and innovative. The (disequilibrium between a firm and its environment is the reason and end-result of a firm's adaptation. The selection of adaptation point and direction and impediments in adaptation are also discussed. Finally, in consideration of the importance of strategy, the author discusses fours strategy models: following environment, fitting environment, changing environment and shaping environment. By the comparison of four strategies and the analyses of contingency factors, the author advances a contingent strategy choice model.The author attempt to innovate in the following aspects:To put forward an integrated model, which can reflect the relationship between a firm and its environment comprehensively, on the basis of allround comparisons of different theories.To put forward and analyze the (disequilibrium between a firm and its environment, and discuss the working mechanism in evolution of a firm and its environment and relationship between them.To discuss the selection of adaptation point and direction, and advance a contingent strategy choice model, on the basis of the (dis)equilibrium between a firm and its environment.The key chapters of the dissertation are chaper3,4 and 5. Innovative parts are also in these chapters.