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The Organizational Approach of Capability Theory: A Review Essay

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  • Garzarelli, Giampaolo

Abstract

Richard Langlois, Tony Yu & Paul Robertson have assembled a collection of previously published papers that move beyond textbook production theory. This essay discusses work by Frank Knight and Hendrik Houthakker not reproduced in LYR in relation to the capability theory of economic organization. Knight identified the problem of organization as the search for and the coordination of different dispersed capabilities. Houthakker helps us to see more clearly that the benefits of specialization are not brought at zero cost; whatever is the governance structure employed, there will inevitably be coordination costs due to differences in capabilities.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 4362.

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Date of creation: Jun 2006
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Handle: RePEc:pra:mprapa:4362

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Keywords: Capabilities; Coordination Costs; Division of Labor; Economic Organization; Extent of the Market;

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  1. Giampaolo Garzarelli, 2005. "Cognition, Incentives, and Public Governance:Laboratory Federalism from the Organizational Viewpoint," Public Economics 0512013, EconWPA.
  2. Richard Langlois, 1995. "Do firms plan?," Constitutional Political Economy, Springer, vol. 6(3), pages 247-261, October.
  3. Richard N. Langlois & Nicolai J. Foss, 1996. "Capabilities and Governance the Rebirth of Production in the Theory of Economic Organization," Working papers 1996-02, University of Connecticut, Department of Economics.
  4. Heiner, Ronald A, 1983. "The Origin of Predictable Behavior," American Economic Review, American Economic Association, vol. 73(4), pages 560-95, September.
  5. Dietrich, Michael, 1991. "Firms, Markets and Transaction Cost Economics," Scottish Journal of Political Economy, Scottish Economic Society, vol. 38(1), pages 41-57, February.
  6. Young, Allyn A., 1928. "Increasing Returns and Economic Progress," History of Economic Thought Articles, McMaster University Archive for the History of Economic Thought, vol. 38, pages 527-542.
  7. Teece, David J., 1980. "Economies of scope and the scope of the enterprise," Journal of Economic Behavior & Organization, Elsevier, vol. 1(3), pages 223-247, September.
  8. 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.
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Cited by:
  1. Garzarelli, Giampaolo & Limam, Yasmina Reem & Thomassen, Bjørn, 2007. "Open Source Software and Economic Growth: A Classical Division of Labor Perspective," MPRA Paper 3849, University Library of Munich, Germany.

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