Externalities
Costs or benefits that affect parties not directly involved in a transaction. Negative externalities impose costs on others (pollution); positive externalities provide benefits (education, vaccinations).
Used in the Books
This term appears in 2 chapters:
"...rganizational Flocking Adapt biological flocking rules for organizational context: Rule 1: Separation (Avoid Conflicts) - Don't create negative externalities for adjacent teams/processes - Maintain boundaries: clear ownership, don't overlap or interfere - Example: Engineering teams don't deploy changes tha..."
"...r strategies often bear higher costs, face technical constraints, and compete with linear alternatives subsidized by not accounting for environmental externalities. Transformation requires not just innovative companies but policy frameworks (extended producer responsibility, recycled content mandates, landfill t..."
Biological Context
Ecosystems are full of externalities. Bees pollinating flowers create positive externalities for plants. Overgrazing by one herbivore degrades habitat for all. Ecosystem engineers like beavers create massive externalities—ponds, wetlands, habitat—affecting countless other species.
Business Application
Markets often fail to account for externalities, leading to overproduction of negative externalities (pollution) and underproduction of positive ones (basic research). Regulation, taxes, and subsidies attempt to internalize externalities into market prices.