The open system of four dynamic bio-socio-economic processes of the firm: The diamond of the black box

The ‘discovery’ of the black box of production has opened Pandora's box of adjustments, rectifications, and denials. This paper transforms these boxes into a diamond of inputs that creates unique and differentiable firms. Their moving force is human beings which have brain, spirit, emotions, and body to perform organized purposeful body movements. An open negentropic and dynamic system of four non-overlapping but interdependent processes completely describes the evolution of firms. These four processes correspond to four opportunity costs, namely wisdom, strategic, kinetic, and transaction costs that determine the costs of tangible inputs such as capital and labor.