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The Organizational Approach of Capability Theory

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  • Giampaolo Garzarelli

Abstract

Richard Langlois, Tony Yu & Paul Robertson (LYR) (2003) 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.

Suggested Citation

  • Giampaolo Garzarelli, 2008. "The Organizational Approach of Capability Theory," Review of Political Economy, Taylor & Francis Journals, vol. 20(3), pages 443-453.
  • Handle: RePEc:taf:revpoe:v:20:y:2008:i:3:p:443-453
    DOI: 10.1080/09538250802170475
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    References listed on IDEAS

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    1. Fu-Lai Tony Yu, 2001. "Firms, Governments and Economic Change," Books, Edward Elgar Publishing, number 2083, April.
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    Cited by:

    1. Giampaolo Garzarelli & Matthew Holian, 2014. "Parchment, guns, and the problem of governance," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 27(1), pages 71-80, March.
    2. Giampaolo Garzarelli & Riccardo Fontanella, 2011. "Open Source Software Production, Spontaneous Input, and Organizational Learning," American Journal of Economics and Sociology, Wiley Blackwell, vol. 70(4), pages 928-950, October.

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