Understanding a Firm in a Holonic Conceptual Framework

In history, production has been organized in mainly two different ways: Hierarchical or heterarchical (as network and/or modularized). However, a third way has been introduced by using the concept a holonic system of production (Brussel, 1999). This concept is introduced and a model of a holonic system of production is used in analysing a concrete firm to demonstrate the advantages of this concept. Where the traditional analysis of a firm focus on capital, labour and raw material etc. (input) and the combination of these inputs in order of achieving a certain goal (output), the holonic approach sees machines and equipment as one of many artefacts where coordination and cooperation between human beings and between human beings and artefacts comes into focus. Analysing a production system using the holonic concept starts with the entity of a firm, the holon. The holon is defined as the smallest possible unit of production, which is able to produce on its own for a period of time, is self-regulating/autonomous and can communicate with other holons. The communication between holons in and outside a firm, ex stakeholders, is shown to be a very fruitful way to understand the existence of firms and why firms perform differently.