Institutional Evolution Within A Firm: An Analysis In The Perspective Based On Organizational Learning

For the different philosophical opinion on the human rationality, there are two kinds of research paradigms about the theory of institutional evolution. One is tool rationalism represented by North, the other is evolutionary rationalism represented by Hayek. It seems to be no right or wrong between them, but North's turning is meaningful. It indicates a trend and shows that new classical economics cannot explain institutional evolution faultlessly with its limitation. This paper upholds evolutionary rationalism from organizational learning perspective. Through organizational learning based on individual Learning, Shared Mental Model and then institution in a firm is established.As the representative of organization with economic nature, the firm is firstly a division of labor system; it's also an opened system and meanwhile an interest-distribution mechanism. On the base of this comprehension, organizational learning can be divided into two parts: knowledge-shared part reflects efficiency and benefit-shared part reflects equity. The relationship between them is mutually promotive but also mutual conflict. Institution, considered as the temporary result of organizational learning, will be changed as the organizational learning going. Here, the shared mental model is an important conception that is one step away from the institution. Although this paper neither deny the meaning of people's subjective initiative nor the possibility of the success of institutional transplantation with bounded rationality, the purposeful activity should also obey the evolution process in the long run, because, even if the forced institutional change's desirable embedding can't leave inverse organizational learning.This paper attempts to analyze institutional evolution within a firm on the basis of organizational learning, shared mental model and so on. There are seven parts: Chapter 1 is an introduction of the above two research paradigms; Chapter 2 refers to the theory of organizational learning both in economy and management science; Beyond these, chapter 3 and chapter 4 offer a new analysis thought and explanation model of Institutional Evolution from the perspective of organizational learning. The last chapter is conclusion.