Technology and the nature of the firm

The purpose of this paper is to show how a better understanding of the role played by technology in the decision–making process of a business changes our conception of the nature of the firm. According to the role played by technology in decision–making, the author distinguishes five grades of firm: Grade zero represents a world of optimal and stationary technology. Grade one describes a firm whose growth is endowed with an implicit technological progress through productivity gains. Grade two refers to the "Schumpeterian" firms which display an exceptional thrust for innovation. Grade three firms integrate technology and knowledge management in their strategies. Grade four stresses features of a specific category of firms, groups or networks which are focusing their activities in technology mixes.