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Pragmatic Collaborations: Advancing Knowledge While Controlling Opportunism

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Author Info
Helper, Susan
MacDuffie, John Paul
Sabel, Charles

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Abstract

This paper starts from the observation that firms are increasingly engaging in collaborations with their suppliers, even as they are reducing the extent to which they are vertically integrated with those suppliers. This fact seems incompatible with traditional theories of the firm, which argue that integration is necessary to avoid the potential for hold-ups created when non-contractible investments are made. Our view is that pragmatist mechanisms such as benchmarking, simultaneous engineering and "root cause" error detection and correction make possible "learning by monitoring"--a relationship in which firms and their collaborators continuously improve their joint products and processes without the need for a clear division of property rights. We argue that pragmatic collaborations based on "learning by monitoring" both advance knowledge and control opportunism and thus align interests between the collaborators. Copyright 2000 by Oxford University Press.

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Publisher Info
Article provided by Oxford University Press in its journal Industrial & Corporate Change.

Volume (Year): 9 (2000)
Issue (Month): 3 (September)
Pages: 443-87
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Handle: RePEc:oup:indcch:v:9:y:2000:i:3:p:443-87

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  1. Geoffrey M. Hodgson, 2002. "The Legal Nature of the Firm and the Myth of the Firm-Market Hybrid," International Journal of the Economics of Business, Taylor and Francis Journals, vol. 9(1), pages 37-60, February. [Downloadable!] (restricted)
  2. Nicolai J. Foss, 2002. "'Coase vs Hayek': Economic Organization and the Knowledge Economy," International Journal of the Economics of Business, Taylor and Francis Journals, vol. 9(1), pages 9-35, February. [Downloadable!] (restricted)
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  3. Puga, Diego & Trefler, Daniel, 2002. "Knowledge Creation and Control in Organizations," CEPR Discussion Papers 3516, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  4. Gerald A. McDermott, 2004. "The Politics of Institutional Learning and Creation: Bank Crises and Supervision in East Central Europe," William Davidson Institute Working Papers Series wp726, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
  5. Gérard Charreaux, 2000. "Nouvelle économie et gouvernance," Working Papers FARGO 1000801, Université de Bourgogne - LEG/Fargo (Research center in Finance,organizational ARchitecture and GOvernance). [Downloadable!]
  6. Michael R. Darby & Lynne G. Zucker & Andrew Wang, 2003. "Universities, Joint Ventures, and Success in the Advanced Technology Program," NBER Working Papers 9463, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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