In mid-June I spoke at a meeting in Helsinki on “Micro-origins (or, in some titles, 'Micro-foundations') of Routines and Capabilities". There is a substantial literature – and community – around the topic of organizational capabilities, with the idea that routines are a large component of what organizations are able to do, and therefore we might not expect firms to behave like rational individuals. This is a congenial perspective for economists who are dissatisfied the conventional theory of the firm.
Nearly every participant hoped to be illuminating some aspect of organizational capabilities. I thought a while about this phrase and found myself noticing that it is actually somewhat redundant. ‘To organize’, after all, means to create capabilities (organs, which are instruments, tools, or capabilities to perform functions). So an organization already is a set of capabilities, and the language we use – without attending to that root sense – actually means something like “the capabilities of a system of capabilities”. There’s nothing wrong, of course with saying “organizational capabilities” to draw attention to the capabilities themselves and away from the system they constitute. Still, the invisibility of the redundancy did provide a clear reminder of how far into our mental background the root meaning of ‘organization’ has receded.
