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Capabilities and the Theory of the Firm

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  • Nicolai J. Foss

Abstract

The recent decade has witnessed a strong expansion of work on the firm, both from a capabilities perspective and from a contractual perspective. These two bodies of theories are often thought to be fundamentally different, because their domains of applications are different (knowledge-accumulation vs contracts and incentives). However, we need to integrate propositions from capabilities perspectives with ideas about economic organization (markets, hybrids, firms). This is because only a more unified theory will allow us to understand such issues as the dynamics of the modern corporation, and, more topically, the costs and benefits of outsourcing. I discuss the relations between these two bodies of theories. It is possible to argue in favor of a relation of complementarity between the two and pursue a research strategy on this basis. However, it is also possible two claim that they are rivals. Along this line, it is argued that the capabilities perspective contains propositions about economic organization that are not to be found within the modern Coasian approach to economic organization, and thus may be seen as a distinct emerging perspective on economic organization.

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Bibliographic Info

Paper provided by DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies in its series DRUID Working Papers with number 96-8.

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Date of creation: 1996
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Handle: RePEc:aal:abbswp:96-8

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Keywords: Economic organization; capability; tacit knowledge;

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References

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  7. Teece, David J., 1982. "Towards an economic theory of the multiproduct firm," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 3(1), pages 39-63, March.
  8. Nicolai J. Foss, 1996. "Firms, Incomplete Contracts and Organizational Learning," DRUID Working Papers, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies 96-2, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
  9. Coase, Ronald H., 1990. "Accounting and the theory of the firm," Journal of Accounting and Economics, Elsevier, Elsevier, vol. 12(1-3), pages 3-13, January.
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  12. Cheung, Steven N S, 1983. "The Contractual Nature of the Firm," Journal of Law and Economics, University of Chicago Press, University of Chicago Press, vol. 26(1), pages 1-21, April.
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Citations

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Cited by:
  1. repec:rej:journl:v:15:y:2012:i:43:p:61-96 is not listed on IDEAS
  2. Dieter Ernst, 1999. "Responses to the Crisis Constraints to a Rapid Trade Adjustment in East Asia�s Electronics Industry," DRUID Working Papers, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies 99-2, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
  3. Gérard Charreaux, 2002. "Variation sur le thème:"À la recherche de nouvelles fondations pour la finance et la gouvernance d'entreprise"," Revue Finance Contrôle Stratégie, revues.org, revues.org, vol. 5(3), pages 5-68, September.
  4. Keld Laursen, 1998. "Do Export and Technological Specialisation Patterns Co-evolve in Terms of Convergence or Divergence? Evidence From 19 OECD Countries, 1971-1991," DRUID Working Papers, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies 98-18, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
  5. Gamal Atallah, 2002. "Production Technology, Information Technology, and Vertical Integration Under Asymmetric Information," Working Papers, University of Ottawa, Department of Economics 0203EClassification-JEL: , University of Ottawa, Department of Economics.
  6. Bull, Lyndall & Ferguson, Ian, 2006. "Factors influencing the success of wood product innovations in Australia and New Zealand," Forest Policy and Economics, Elsevier, Elsevier, vol. 8(7), pages 742-750, October.
  7. Santangelo, Grazia D., 2001. "The impact of the information and communications technology revolution on the internationalisation of corporate technology," International Business Review, Elsevier, Elsevier, vol. 10(6), pages 701-726, December.
  8. Kirsten Foss & Nicolai J. Foss, 1999. "Organizing Economic Experiments The Role of Firms," DRUID Working Papers, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies 99-5, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
  9. St-Amant, Gilles & Renard, Laurent & Ben Dhaou, Soumaya, 2006. "Proposition d'une classification de l'approche basée sur les ressources," Economics Papers from University Paris Dauphine 123456789/2809, Paris Dauphine University.
  10. Fikret Adaman & Pat Devine, 2002. "A Reconsideration of the Theory of Entrepreneurship: A participatory approach," Review of Political Economy, Taylor & Francis Journals, Taylor & Francis Journals, vol. 14(3), pages 329-355.
  11. Richard N. Langlois & Nicolai J. Foss, 1996. "Capabilities and Governance the Rebirth of Production in the Theory of Economic Organization," Working papers, University of Connecticut, Department of Economics 1996-02, University of Connecticut, Department of Economics.
  12. Bougrain, Frederic & Haudeville, Bernard, 2002. "Innovation, collaboration and SMEs internal research capacities," Research Policy, Elsevier, Elsevier, vol. 31(5), pages 735-747, July.
  13. Bengt-Åke Lundvall & Frank Skov Kristensen, 1997. "Organisational Change, Innovation and Human Resource Development as a Response to Increased Competition," DRUID Working Papers, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies 97-16, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
  14. Jukka Kaisla, 1998. "The Market Process and the Emergence of the Firm Some Indications of Entrepreneurship Under Genuine uncertainty," DRUID Working Papers, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies 98-17, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
  15. Frédéric MAZAUD (LEREPS-GRES) & Marie LAGASSE (AIRBUS-FRANCE), 2007. "Vertical sub-contracting relationships strategy, the Airbus First-tier suppliers\' coordination," Cahiers du GRES, Groupement de Recherches Economiques et Sociales 2007-02, Groupement de Recherches Economiques et Sociales.
  16. Kapás, Judit, 1999. "Szükséges-e többdimenziós vállalatelmélet?. Az evolúciós vállalatelmélet kritikai összefoglalása
    [Is a multi-dimensional theory of the firm necessary?. A critical summary of the evoluti
    ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(9), pages 823-841.
  17. Frederic Bougrain, 1998. "Impact of regional technology policy on local economic development," ERSA conference papers ersa98p211, European Regional Science Association.

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