1,721,230 research outputs found
JOM793196_DS – Supplemental material for Social Entrepreneurship Research: Past Achievements and Future Promises
No full textSupplemental material, JOM793196_DS for Social Entrepreneurship Research: Past Achievements and Future Promises by Tina Saebi, Nicolai J. Foss and Stefan Linder in Journal of Management</p
The (proper) microfoundations of routines and capabilities: a response to Winter, Pentland, Hodgson and Knudsen
No full textAbstract:Sidney Winter (2011), Brian Pentland (2011), and Geoffrey Hodgson and Thorbjørn Knudsen (2011) take issue with the arguments in Teppo Felin and Nicolai J. Foss (2011), along with more generally critiquing the ‘microfoundations project’ related to routines and capabilities. In this rejoinder we argue that the responses of our critics reinforce a number of the points stated in our writings on the routines and capabilities literature. In response to their many points we address the following key issues in the debate: (1) lack of construct clarity; (2) universal mechanisms or comparative chauvinism; (3) models of mind and man; (4) levels of analysis; (5) agency and uncaused causes; and then further discuss (6) a rationalist alternative.</jats:p
Nicolai J. Foss recommends “Economics and Identity” by George A. Akerlof and Rachel E. Kranton
No full textSocial identity has entered the discourse of social scientists, pundits, and politicians to an extent that no one could have anticipated only about a decade ago. Thus, recent electoral events have strongly pointed to the importance of identity
The Problem With Bounded Rationality On Behavioral Assumptions in the Theory of the Firm
Full text linkI discuss and compare alternative approaches to integrating bounded rationality with the theory of economic organization, concentrating on the organizational capabilities approach, which is strongly influenced by the works of Nelson and Winter, organizational economics, particularly transaction cost economics, and, finally, a small subset of the literature on biases to judgment and cognition. I argue that, contrary to the conventional view, both the organizational capabilities approach and transaction cost economics treat bounded rationality rather “thinly,” the former being in actuality more taken up with organizational routines than individual boundedly rational behavior, the latter only invoking bounded rationality to the extent that it helps explaining incompleteness of contracting. The rich literature on cognitive biases, etc. suggests a “thick” approach to bounded rationality that may be helpful with respect to furthering the theory of economic organization. Examples pertaining to the internal organization of firms are provided.capability, organizations, transaction costs
Creating, Capturing and Protecting Value A Property Rights-based View of CompetitiveStrategy
Full text linkThis paper develops a property rights-based view of strategy (the “PRV”). A property right (or economic right) is an individual’s net valuation, in expected terms, of the ability to directly consume the services of an asset (including, e.g., a monopoly position) or consume it indirectly through exchange. Resources expended on exchanging, protecting and capturing such rights are transaction costs; thus, we directly link property rights, transaction costs, and economic value. We assume that all relevant exchange is costly and that all agents maximize their property rights. This implies that economizing with transaction costs may be a distinct source of value, and potentially of sustained competitive advantage. Moreover, strategizing may be understood as revolving around influencing impediments (i.e., transaction costs) to value creation. Expectations and contracting also become crucial parts of processes of creating, protecting and capturing value. We use these insights to derive a number of refutable propositions, and argue that key insights from both industrial organization economics and the resource-based view are consistent with the PRV.Property rights, transaction costs, industrial organization
Selective Intervention and Internal HybridsInterpreting and Learning from the Rise and Decline of the Oticon Spaghetti Organization
Full text linkInfusing hierarchies with elements of market control has become a much-used way of simultaneously increasing entrepreneurialism and motivation in firms. However, this paper argues that such “internal hybrids,” particularly in their radical forms, are inherently hard to successfully design and implement, because of fundamental credibility problems related to managerial promises to not intervene in delegated decision-making ¾ an incentive problem that is often referred to as the “problem of selective intervention.” This theoretical theme is developed and illustrated, using the case of the world-leading Danish hearing aids producer, Oticon. In the beginning of the 1990s, Oticon became famous for its radical internal hybrid, the ”spaghetti organization.” Recent work has interpreted the spaghetti organization as a radical attempt to foster dynamic capabilities by imposing loose coupling on the organization, neglecting, however, that about a decade later, the spaghetti organization has given way to a more traditional matrix organization. This paper presents an organizational economics interpretation of organizational changes in Oticon, and argues that a strong liability of the spaghetti organization was the above incentive problem. Motivation in Oticon was strongly harmed by selective intervention on the part of top-management Changing the organizational structure was one means of repairing these motivational problems. Refutable implications are developed, both for the understanding of efficient design of internal hybrids, and for the more general issue of the distinction between firms and markets, as well as the choice between internal and external hybrids.Internal hybrids, organizational change, delegation, managerial commitment problems, new organizational forms
Authority in the Context of Distributed Knowledge
Full text linkThe notion of distributed knowledge is increasingly often invoked in discussions of economic organization. In particular, the claim that authority is inefficient as a means of coordination in the context of distributed knowledge has become widespread. However, very little analysis has been dedicated to the relation between economic organization and distributed knowledge. In this paper, we concentrate on the role of authority as a coordination mechanism under conditions of distributed knowledge, and also briefly discuss other issues of economic organization. We clarify the meanings of authority and distributed knowledge, and criticize the above claim by arguing that authority may be a superior mechanism of coordination under distributed knowledge. We also discuss how distributed knowledge influences the boundaries of firms. Our arguments rely on insights in problem-solving and on ideas from organizational economics.Distributed knowledge, existence of authority, problem-solving, the boundaries of the firm
The MNC as a Knowledge Structure The Roles of Knowledge Sources and Organizational Instruments in MNC Knowledge Management
Full text linkRecent research on the differentiated MNC has concerned knowledge flows between MNC units. While linking up with this literature, we extend in two directions. First, we argue that conceptualizing the MNC as a knowledge structure furthers the understanding of intra-MNC knowledge flows. Thus, we see MNC knowledge elements as being structured along such dimensions as their type and degree of complementarity to other knowledge elements, and their sources, for example, whether they are mainly developed from external or internal knowledge sources. These dimensions matter in terms of knowledge flows, because they influence the costs and benefits of knowledge transfer and, hence, the actual level of knowledge transferred. Second, based on this conceptualization, we argue that MNC management can influence the development, characteristics and transfer of knowledge through choices regarding organizational instruments (control, motivation and context). We test six hypotheses derived from these arguments against a unique dataset on subsidiary knowledge development. The dataset includes information on organizational instruments, sources of subsidiary knowledge, and the extent of knowledge transfer to other MNC units. It covers more than 2,000 subsidiaries located in seven different European countries.Knowledge structure, complementarity, knowledge transfer, the MNC
Entrepreneurshoip and the Economic Theory of the Firm Any Gains from Trade?
Full text linkAlthough they have developed very much in isolation from each other, we argue the theory of entrepreneurship and the economic theory of the firm are closely related, and each has much to learn from the other. In particular, the notion of entrepreneurship as judgment associated with Frank Knight and some Austrian school economists aligns naturally with the theory of the firm. In this perspective, the entrepreneur needs a firm, that is, a set of alienable assets he controls, to carry out his function. We further show how this notion of judgment adds to the key themes in the modern theory of the firm (i.e., the existence, boundaries, and internal organization). In our approach, resource uses are not data, but are created as entrepreneurs envision new ways of using assets to produce goods. The entrepreneur’s decision problem is aggravated by the fact that capital assets are heterogeneous. Asset ownership facilitates experimenting entrepreneurship: Acquiring a bundle of property rights is a low cost means of carrying out commercial experimentation. In this approach, the existence of the firm may be understood in terms of limits to the market for judgment relating to novel uses of heterogeneous assets; and the boundaries of the firm, as well as aspects of internal organization, may be understood as being responsive to entrepreneurial processes of experimentation.Entrepreneurship, heterogeneous assets, judgment, ownership, firm boundaries, internal organization
The Strategy and Transaction Cost Nexus Past Debates, Central Questions, and Future Research Possibilities
Full text linkThe role of transaction cost economics in developing research in strategy has been a hotly debated topic over the last decade. This paper presents the radical argument that transaction cost insights are more than merely useful complements to existing approaches to strategy. Rather, they are necessary for adequately understanding the nature of strategizing. This is because transaction costs are essential aspects of processes of creating, capturing and protecting value. If transaction costs are zero, these processes do not pose any strategic problems; strategizing is trivialized in such a world. When transaction costs are positive, on the other hand, opportunities for value creation through the reduction of inefficiencies caused by transaction costs exist, and protecting and appropriating value are costly activities that dissipate value. Also, contracting and expectations enter as central aspects of strategizing. Arguments are provided for why economizing (with transaction costs) is more fundamental than strategizing (in the sense of exploiting market power). Thus, the paper argues that models in which the fullest possible account of transaction costs is made be used as the proper foundations and benchmarks for economics-based strategy research, rather than the patched-up competitive equilibrium models that are now used, more or less implicitly, as the benchmark in important parts of strategy research, most notably in the resource-based view.Transaction costs, firm strategy, industrial organization.
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