North (1994)

Management > Comparative Management > Lectures > Independent Research > North > Inefficient behaviour? > institutions/organisations

Institutions and organisations

The interaction between organisations and institutions shapes the institutional evolution of an economy. "If institutions are the rules of the game, organisations and their entrepreneurs are the players".

Organisations that appear and are successful will reflect the opportunities provided by the institutions. For example, in China, piracy is rampant, so stores selling pirated copies of films and computer games are successful.

Economic change is a continuing process that is the result of the day-to-day choices made by people in organisations.

Learning is a link between institutions and organisations. Competition intensifies learning, changing the organisation while monopoly power reduces it. A learning culture in an institution can affect the competitive strength of a firm.

Ideas, ideologies, myths and prejudices affect an organisation. The rational approach is that people will always act with the best interests and know what is in their own self-benefit. This is untrue, as people nearly always make choices with a degree of uncertainty.

Learning

Rules