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A market-process approach to corporate coherence


  • Nicolai J Foss

    (Department of Industrial Economics and Strategy, Copenhagen Business School, Copenhagen, Denmark)

  • Jens Frøslev Christensen

    (Department of Industrial Economics and Strategy, Copenhagen Business School, Copenhagen, Denmark)


We address the notion of corporate coherence recently made prominent by Teece et al. (1994. Understanding corporate coherence: theory and evidence. Journal of Economic Behavior and Organization 23 : 1-30). We argue that the literature is confused on the meaning of this notion (and similar notions) along a number of dimensions. Drawing on insights from market-process theories, we propose a dynamic understanding of corporate coherence, an understanding that involves the corporate capacity to strike a favorable balance between the production and exploitation of new knowledge. This argument is elaborated drawing on Austrian economics, evolutionary economics, and post-Marshallian economics. Copyright © 2001 John Wiley & Sons, Ltd.

Suggested Citation

  • Nicolai J Foss & Jens Frøslev Christensen, 2001. "A market-process approach to corporate coherence," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 22(4-5), pages 213-226.
  • Handle: RePEc:wly:mgtdec:v:22:y:2001:i:4-5:p:213-226 DOI: 10.1002/mde.1012

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    References listed on IDEAS

    1. David J. TEECE, 2008. "Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy," World Scientific Book Chapters,in: The Transfer And Licensing Of Know-How And Intellectual Property Understanding the Multinational Enterprise in the Modern World, chapter 5, pages 67-87 World Scientific Publishing Co. Pte. Ltd..
    2. Henderson, Rebecca., 1994. "The evolution of integrative capability : innovation in cardiovascular drug discovery," Working papers 3711-94., Massachusetts Institute of Technology (MIT), Sloan School of Management.
    3. Masahiko Aoki, 2013. "Toward an Economic Model of the Japanese Firm," Chapters,in: Comparative Institutional Analysis, chapter 18, pages 315-341 Edward Elgar Publishing.
    4. Jens Frøslev Christensen, 1996. "Innovative Assets And Inter-Asset Linkages—A Resource-Based Approach To Innovation," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 4(3), pages 193-210.
    5. Teece, David J. & Rumelt, Richard & Dosi, Giovanni & Winter, Sidney, 1994. "Understanding corporate coherence : Theory and evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 23(1), pages 1-30, January.
    6. George J. Stigler, 1951. "The Division of Labor is Limited by the Extent of the Market," Journal of Political Economy, University of Chicago Press, vol. 59, pages 185-185.
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    Cited by:

    1. Jens Frøslev Christensen, 1998. "The Dynamics of the Diversified Corporation and the Role of Central Management of Technology," DRUID Working Papers 98-4, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    2. J. Krafft & J. -L. Ravix, 2008. "Corporate Governance And The Governance Of Knowledge: Rethinking The Relationship In Terms Of Corporate Coherence," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 17(1-2), pages 79-95.
    3. Michael Dietrich & Jackie Krafft & Jacques-Laurent Ravix, 2008. "Regulation and governance of the firm," Post-Print hal-00203479, HAL.
    4. Nicolai J. Foss & Peter G. Klein, 2010. "Austrian Economics and the Theory of the Firm," Chapters,in: The Elgar Companion to Transaction Cost Economics, chapter 27 Edward Elgar Publishing.
    5. Karthik, D. & Upadhyayula, Rajesh, 2011. "Performance Implications of Diversification in Professional Service Firms: The Role of Synergies," IIMA Working Papers WP2011-01-01, Indian Institute of Management Ahmedabad, Research and Publication Department.
    6. Stefano Valvano & Davide Vannoni, 2003. "Diversification Strategies and Corporate Coherence Evidence from Italian Leading Firms," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 23(1), pages 25-41, August.
    7. repec:spr:scient:v:82:y:2010:i:1:d:10.1007_s11192-009-0039-5 is not listed on IDEAS
    8. Jackie Krafft & Jacques-Laurent Ravix, 2009. "The Governance of the Knowledge-Intensive Firm in an Industry Life Cycle Approach," Chapters,in: Corporate Governance, Organization and the Firm, chapter 3 Edward Elgar Publishing.
    9. Jackie Krafft & Jacques-Laurent Ravix, 2005. "The governance of innovative firms: an evolutionary approach," Post-Print hal-00203620, HAL.
    10. Walter E. Block, 2010. "Is There A Ph.D. Glut In Economics In Academia?," Romanian Economic Business Review, Romanian-American University, vol. 5(1), pages 9-26, March.
    11. Piaskowska, D., 2005. "Essays on firm growth and value creation," Other publications TiSEM 89053610-79c6-4c52-9d1c-6, Tilburg University, School of Economics and Management.

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