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The Organization of Large, Complex Firms: An Austrian View


  • Frédéric E. Sautet
  • Nicolai J. Foss


We argue that the discovery process perspective, developed in the context of Austrian economics, is helpful for understanding the organization of large complex firms, even though the perspective has traditionally been applied to the analysis of market activities. The stress put in the perspective on genuine uncertainty, dispersed, tacit and subjectively held knowledge, rules, and entrepreneurial alertness to hitherto unnoticed opportunities provides new insights that are not captured by contemporary agency, transaction cost, rent-seeking, etc. models. We illustrate our reasoning by focusing on the case of the M-form corporation.

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  • Frédéric E. Sautet & Nicolai J. Foss, "undated". "The Organization of Large, Complex Firms: An Austrian View," IVS/CBS Working Papers 99-7, Department of Industrial Economics and Strategy, Copenhagen Business School.
  • Handle: RePEc:ivs:iivswp:99-7

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    entrepreneurial discovery; the theory of the firm;

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups


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