Organizational and technological paradigms: asynchronized structural breaks, uneven evolution of paradigms and firm growth between complementarities and substitutabilities

The paper develops an analysis of the interaction between organizational innovations (from Taylor-Fordism to Toyotism) and technological innovations (from electromechanical to electronic), arguing that these constitute the primary drivers of changes in productivity, efficiency and consequently in the structure of costs and in the potential mark-ups of single firms. These innovations sometimes completely overturn the existing order and at other times simply reshape it. In both cases (but much more likely in the first) the initial conditions for a crisis are generated within the business system, with all the consequences that Ferri and Minsky have extensively studied. Complicating the picture of the foreseeable consequences is the hypothesis of complementarity between not just the two factors per se, but between bundles of technological devices and organizational practices (where both the ingredients and their intensity of adoptions matter). In such a context, relative price is not an applicable tool to assess how the two factors combine. Taken in isolation, the two factors (but also each ingredient of a given performing bundle) are unable to entirely explain the consequences of internal structural breaks on firm economic activity since the concausal links are lost from sight. A formalization of the possible combinations of technology and organization through the mathematical concepts of convexity and concavity for the study of optimality conditions requires assuming hypotheses that are hardly plausible: the infinite divisibility of choices, the possibility that a choice may be exercised on a single variable, the economies of scale and learning, and spurious combinations within bundles are incompatible with the concavity of the objective function. In addition, the distinction between technology and organization as artefacts and technology and organization in use, the role of the knowledge-gap and problem-solving gap in daily operational activities, combined with the non-ergodic nature of the real context in which technological and organizational innovations take place, make it more realistic - according to the analysis carried out - to assume that these changes occur along stochastic sequential processes, more precisely, discrete-time sequential stochastic processes. The foreseeable outcome is a set of ‘local’ optimal positions of firms, each of which reflects a certain consistency of the various ingredients used. With the addition of historical time, these local positions change, giving rise to completely different topographic profiles.