Advanced Search
MyIDEAS: Login to save this paper or follow this series

"Coase vs Hayek": Economic Organization in the Knowledge Economy

Contents:

Author Info

  • Nicolai J. Foss

Abstract

Many writers argue that economic organization will be strongly transformed in the emerging knowledge economy. Thus, authority relations will wither, or at least undergo significant changes; legal and ownership-based definitions of the boundaries of firms will become irrelevant; and there will be very few or no constraints on the set of feasible combinations of coordination mechanisms, as manifested in the increasing proliferation of “new organizational forms.” The increased importance of specialist knowledge and the strategic imperative of rapidly adjusting to constantly changing contingencies mean that firms lose power over employees and that knowledge-based networks that cut across the boundaries of firms become as, or more, important as intra-firm relations. The present paper critically deals with these claims, beginning from the basic idea that they may be analyzed as turning on the implications for the Coasian firm of the Hayekian notion that the distributed and subjective character of economically relevant knowledge is a strongly binding constraint on the use of planned coordination. Based on organizational economics, it is argued that efficiency reasons for the existence of authority under Hayekian distributed knowledge may be given; that the increasing importance of knowledge assets does not render legal and ownership-based notions of the boundaries of the firm irrelevant; and that coordination mechanisms will also cluster in certain, predictable combinations in the emerging knowledge economy.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://ep.lib.cbs.dk/download/ISBN/8778690730.pdf
Our checks indicate that this address may not be valid because: 404 Not Found. If this is indeed the case, please notify (J. Petur Joensen)
Download Restriction: no

Bibliographic Info

Paper provided by Department of Industrial Economics and Strategy, Copenhagen Business School in its series IVS/CBS Working Papers with number 2001-6.

as in new window
Length:
Date of creation:
Date of revision:
Handle: RePEc:ivs:iivswp:01-08

Contact details of provider:
Web page: http://www.cbs.dk/forskning_viden/fakulteter_institutter_centre/institutter/oekonomi/ivs/

Related research

Keywords:

Other versions of this item:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Todd Zenger, 2002. "Crafting Internal Hybrids: Complementarities, Common Change Initiatives, and the Team-Based Organization," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 9(1), pages 79-95.
  2. Anna Grandori, 1997. "Governance Structures, Coordination Mechanisms and Cognitive Models," Journal of Management and Governance, Springer, Springer, vol. 1(1), pages 29-47, March.
  3. Kirk Monteverde, 1995. "Technical Dialog as an Incentive for Vertical Integration in the Semiconductor Industry," Management Science, INFORMS, INFORMS, vol. 41(10), pages 1624-1638, October.
  4. Mendelson, Haim & Pillai, Ravindran R., 1999. "Information Age organizations, dynamics and performance," Journal of Economic Behavior & Organization, Elsevier, vol. 38(3), pages 253-281, March.
  5. Mark Tomlinson, 1999. "The learning economy and embodied knowledge flows in Great Britain," Journal of Evolutionary Economics, Springer, Springer, vol. 9(4), pages 431-451.
  6. Foss, Kirsten, 2001. "Organizing Technological Interdependencies: A Coordination Perspective on the Firm," Industrial and Corporate Change, Oxford University Press, vol. 10(1), pages 151-78, March.
  7. Paul R. Milgrom., 1987. "Employment Contracts, Influence Activities and Efficient Organization Design," Economics Working Papers, University of California at Berkeley 8741, University of California at Berkeley.
  8. Kirsten Foss & Nicolai Foss, 2001. "Assets, Attributes and Ownership," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 8(1), pages 19-37.
  9. Keld Laursen, 2001. "The Importance of Sectoral Differences in the Application of (Complementary) HRM Practices for Innovation Performance," DRUID Working Papers 01-11, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
  10. Oliver Hart & John Moore, 1988. "Property Rights and the Nature of the Firm," Working papers 495, Massachusetts Institute of Technology (MIT), Department of Economics.
  11. Mark Casson, 1994. "Why are Firms Hierarchical?," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 1(1), pages 47-76.
  12. Fama, Eugene F & Jensen, Michael C, 1983. "Separation of Ownership and Control," Journal of Law and Economics, University of Chicago Press, University of Chicago Press, vol. 26(2), pages 301-25, June.
  13. Masten, Scott E, 1988. "A Legal Basis for the Firm," Journal of Law, Economics and Organization, Oxford University Press, Oxford University Press, vol. 4(1), pages 181-98, Spring.
  14. Demsetz, Harold, 1988. "The Theory of the Firm Revisited," Journal of Law, Economics and Organization, Oxford University Press, Oxford University Press, vol. 4(1), pages 141-61, Spring.
  15. Rajan, Raghuram G & Zingales, Luigi, 1998. "Power in a Theory of the Firm," CEPR Discussion Papers 1777, C.E.P.R. Discussion Papers.
  16. Liebeskind, Julia Porter, 1997. "Keeping Organizational Secrets: Protective Institutional Mechanisms and Their Costs," Industrial and Corporate Change, Oxford University Press, vol. 6(3), pages 623-63, September.
  17. Kochan, Thomas A., 1996. "What works at work : overview and assessment," Working papers 3886-96., Massachusetts Institute of Technology (MIT), Sloan School of Management.
  18. Nicolai J. Foss, 1999. "The Use of Knowledge in Firms," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, Mohr Siebeck, Tübingen, vol. 155(3), pages 458-, September.
  19. Wernerfelt, Birger, 1997. "On the Nature and Scope of the Firm: An Adjustment-Cost Theory," The Journal of Business, University of Chicago Press, vol. 70(4), pages 489-514, October.
  20. Bolton, Patrick & Farrell, Joseph, 1990. "Decentralization, Duplication, and Delay," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 98(4), pages 803-26, August.
  21. Milgrom, Paul & Roberts, John, 1990. "The Economics of Modern Manufacturing: Technology, Strategy, and Organization," American Economic Review, American Economic Association, vol. 80(3), pages 511-28, June.
  22. Margit Osterloh & Jetta Frost & Bruno Frey, 2002. "The Dynamics of Motivation in New Organizational Forms," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 9(1), pages 61-77.
  23. Putterman, Louis, 1995. "Markets, hierarchies, and information: On a paradox in the economics of organization," Journal of Economic Behavior & Organization, Elsevier, vol. 26(3), pages 373-390, May.
  24. Baker, George & Gibbons, Robert & Murphy, Kevin J, 1999. "Informal Authority in Organizations," Journal of Law, Economics and Organization, Oxford University Press, Oxford University Press, vol. 15(1), pages 56-73, April.
  25. Rabin, Matthew, 1991. "Information and the Control of Productive Assets," Department of Economics, Working Paper Series, Department of Economics, Institute for Business and Economic Research, UC Berkeley qt6b7492v1, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
  26. Erik Brynjolfsson, 1994. "Information Assets, Technology and Organization," Management Science, INFORMS, INFORMS, vol. 40(12), pages 1645-1662, December.
  27. Hermalin, Benjamin E, 1999. "The Firm as a Noneconomy: Some Comments on Holmstrom," Journal of Law, Economics and Organization, Oxford University Press, Oxford University Press, vol. 15(1), pages 103-06, April.
  28. Holmstrom, Bengt & Milgrom, Paul, 1994. "The Firm as an Incentive System," American Economic Review, American Economic Association, vol. 84(4), pages 972-91, September.
  29. 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.
  30. Peter Cappelli & David Neumark, 2001. "Do "high-performance" work practices improve establishment-level outcomes?," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 54(4), pages 737-775, July.
  31. Herbert A. Simon, 1991. "Organizations and Markets," Journal of Economic Perspectives, American Economic Association, vol. 5(2), pages 25-44, Spring.
  32. Nickerson, J.A. & Zenger, T.R., 1999. "Being Efficiently Fickle: a Dynamic Theory of Organizational Choice," Washington University, Business, Law and Economics Center, John M. Olin School of Business, Washington University 99-01, Business, Law and Economics Center, John M. Olin School of Business, Washington University.
  33. Israel M. Kirzner, 1997. "Entrepreneurial Discovery and the Competitive Market Process: An Austrian Approach," Journal of Economic Literature, American Economic Association, vol. 35(1), pages 60-85, March.
  34. Geoffrey Hodgson, 2002. "The Legal Nature of the Firm and the Myth of the Firm-Market Hybrid," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 9(1), pages 37-60.
  35. Minkler, Alanson P., 1993. "Knowledge and internal organization," Journal of Economic Behavior & Organization, Elsevier, vol. 21(1), pages 17-30, May.
  36. Helper, Susan & MacDuffie, John Paul & Sabel, Charles, 2000. "Pragmatic Collaborations: Advancing Knowledge While Controlling Opportunism," Industrial and Corporate Change, Oxford University Press, vol. 9(3), pages 443-87, September.
  37. Bengt Holmstrom & John Roberts, 1998. "The Boundaries of the Firm Revisited," Journal of Economic Perspectives, American Economic Association, vol. 12(4), pages 73-94, Fall.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Vitor Braga, 2004. "Business networking for SMEs as a means to promote regional competitiveness: A Theoretical Framework," ERSA conference papers ersa04p455, European Regional Science Association.
  2. Ciabuschi, Francesco & Forsgren, Mats & Martín Martín, Oscar, 2012. "Headquarters involvement and efficiency of innovation development and transfer in multinationals: A matter of sheer ignorance?," International Business Review, Elsevier, vol. 21(2), pages 130-144.
  3. Kirsten Foss & Nicolai J. Foss, 2003. "Authority in the Context of Distributed Knowledge," DRUID Working Papers 03-08, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
  4. Lars Lindkvist, 2004. "Governing Project-based Firms: Promoting Market-like Processes within Hierarchies," Journal of Management and Governance, Springer, Springer, vol. 8(1), pages 3-25, March.
  5. Ciabuschi, Francesco & Dellestrand, Henrik & Kappen, Philip, 2012. "The good, the bad, and the ugly: Technology transfer competence, rent-seeking, and bargaining power," Journal of World Business, Elsevier, vol. 47(4), pages 664-674.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:ivs:iivswp:01-08. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (J. Petur Joensen) The email address of this maintainer does not seem to be valid anymore. Please ask J. Petur Joensen to update the entry or send us the correct address.

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.