Selection

Firms receive profits and losses, while individuals and initiatives generally only receive awards as mediated by an organization’s accounting system and reward structure. In that sense, a firm can be considered to be a credit assignment mechanism. Three basic challenges are considered: the problem of diversity of selection criteria, the challenge of the timing of selection relative to developmental processes, and the issue of units of aggregation and selection. Selection inevitably must be made on the basis of various imperfect indicators of broader objectives. The diversity of these selection criteria is argued to be an under-appreciated facet of diversity as prior work has tended to focus attention on the degree of diversity of underlying initiatives and activities. Further, it is recognized that the environment, or contexts, in which the organization operates, is itself an object of selection, which in turn influences the feedback processes the organization experiences.