Butterfly companies are unstable organizations that are unable to work as institutions. They might be the consequence of an unstable market or the need of the owners to avoid the separation between them and the company.
When they are based on unstable markets there might be two different situations:
1) It is the natural consequence of the market, for example unique projects.
2) It is the consequence of the market instability of a country or region.
In the first case there is no butterfly company, just a transitory business that doesn’t pretend to work as an institution.
In the second case there is a butterfly company that tends to disappear when the conjuncture changes. The permanent threat of the market hinders the separation of the company from its owner so the company cannot evolve but based on the owner’s actions.
Archetypical butterfly companies are those working in stable markets but not separated from their owners.
Their purpose is to obtain profit at any price having the necessary conjunctural justifications to obtain it and exerting the necessary power to ensure it.
NOTE: The Unicist Research Institute was the pioneer in complexity science research and became a global decentralized world-class research organization in the field of human adaptive systems. http://www.unicist.org