Cognitive Time Distortion on the Performance of Economic Organizations

This paper introduces a novel conception of an economic organization, where its Total Profit Equation accounts for the phenomenon of cognitive time distortion–this being understood as the discrepancy between physical and cognitive time. Cognitive time distortion is unconditionally inherent in all human beings and everything they do, and typically produces economic inefficiencies as well as human stress; all this may now be conceptualized, detected, and acted upon. The novel Total Profit Equation as introduced here, including its underlying Total Revenue Equation and the Total Cost Equation, echoes a call of the founders of Systems Sciences that non‐trivial systems manifest several kinds of temporal experiences. This call has largely been ignored by the various disciplines that study organizations and their management, particularly economic organizations, where the temporal experience of economic organizations is reduced to physical time. In this sense, this contribution offers an alternative to remedy that reductionism.