Principles of Emergence - A Generic Framework of Firms as Agent-Based Complex Adaptive Systems

The concept of emergence is closely related to complexity theory. While this agentbased approach is on its way of becoming a new paradigm in management science, the system dynamics approach is suffering from a lack of management attention, although both are applied to similar problems with similar outcomes. In previous research, scholars have compared system dynamics and agent-based modeling. This paper steps back from the modeling aspect and looks at the requisite conditions, as identified by complexity science, that make emergent phenomena happen in complex adaptive systems. These are agentbased systems that balance emergent efficiency and innovation without central control. We give a comprehensive overview of principles of emergence in such systems and propose a generic framework of these systems for use in management science. This framework then serves to assess exemplary literature applying complexity science to firms and to discuss research implications for both agent-based and system dynamics approaches.