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The Multiple Boundaries of the Firm

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  • Luis Araujo
  • Anna Dubois
  • Lars-Erik Gadde
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    Abstract

    The notion of firm boundaries has received considerable attention in theories of the firm that address the problems of investment incentives and mitigation of hold-up problems. In this paper we attempt to develop a different approach to the problem of vertical firm boundaries, based on recent advances in the capabilities view of the firm. Our arguments rely on the pioneering insights of Penrose, Richardson and Loasby to elaborate a view of the boundaries determined by the interaction of the firm's direct and indirect capabilities with other actors. We develop the notion of indirect capabilities to highlight how firm boundaries respond to the distribution of capabilities in the economy as well as the modes of access to complementary and external capabilities. We conclude that the evolution of firm boundaries must be understood in the context of decisions on how the firm relates to other actors in its environment. Copyright Blackwell Publishing Ltd 2003.

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    Bibliographic Info

    Article provided by Wiley Blackwell in its journal Journal of Management Studies.

    Volume (Year): 40 (2003)
    Issue (Month): 5 (07)
    Pages: 1255-1277

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    Handle: RePEc:bla:jomstd:v:40:y:2003:i:5:p:1255-1277

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    Web page: http://www.blackwellpublishing.com/journal.asp?ref=0022-2380

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    Cited by:
    1. Huemer, Lars, 2012. "Unchained from the chain: Supply management from a logistics service provider perspective," Journal of Business Research, Elsevier, vol. 65(2), pages 258-264.
    2. Kotabe, Masaaki & Jiang, Crystal Xiangwen & Murray, Janet Y., 2011. "Managerial ties, knowledge acquisition, realized absorptive capacity and new product market performance of emerging multinational companies: A case of China," Journal of World Business, Elsevier, vol. 46(2), pages 166-176, April.
    3. Ciabuschi, Francesco & Perna, Andrea & Snehota, Ivan, 2012. "Assembling resources when forming a new business," Journal of Business Research, Elsevier, vol. 65(2), pages 220-229.
    4. Pierre Mathieu & Dominique Geoffroy-Terryn, 2012. "L'Expertise Du Gestionnaire Des Ressources Humaines A L'Interface De Multiples Influences," Post-Print halshs-00769067, HAL.
    5. Kasch, Silja & Dowling, Michael, 2008. "Commercialization strategies of young biotechnology firms: An empirical analysis of the U.S. industry," Research Policy, Elsevier, vol. 37(10), pages 1765-1777, December.
    6. Bustinza, O.F. & Arias-Aranda, D. & Gutierrez-Gutierrez, L., 2010. "Outsourcing, competitive capabilities and performance: an empirical study in service firms," International Journal of Production Economics, Elsevier, vol. 126(2), pages 276-288, August.
    7. Dara K. Dimitrov & Howard Davey, 2011. "Sustainable development: what it means to CFOs of New Zealand," Asian Review of Accounting, Emerald Group Publishing, vol. 19(1), pages 86-108, May.
    8. Finch, John & Wagner, Beverly & Hynes, Niki, 2012. "Resources prospectively: How actors mobilize resources in business settings," Journal of Business Research, Elsevier, vol. 65(2), pages 164-174.
    9. Cécile Cézanne & Marianne Rubinstein, 2010. "La RSE comme instrument de la gouvernance d'entreprise," Post-Print hal-00628645, HAL.
    10. Andersson, Ulf & Holm, Desiree Blankenburg & Johanson, Martin, 2007. "Moving or doing? Knowledge flow, problem solving, and change in industrial networks," Journal of Business Research, Elsevier, vol. 60(1), pages 32-40, January.

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