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The Organizational Approach of Capability Theory: A Review Essay

  • Garzarelli, Giampaolo

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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File URL: http://mpra.ub.uni-muenchen.de/4362/1/MPRA_paper_4362.pdf
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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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  1. 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.
  2. 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.
  3. Richard N. Langlois, 1994. "Do Firms Plan?," Industrial Organization 9406002, EconWPA.
  4. Giampaolo Garzarelli, 2005. "Cognition, Incentives, and Public Governance:Laboratory Federalism from the Organizational Viewpoint," Public Economics 0512013, EconWPA.
  5. 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.
  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. Heiner, Ronald A, 1983. "The Origin of Predictable Behavior," American Economic Review, American Economic Association, vol. 73(4), pages 560-95, September.
  8. Dietrich, Michael, 1991. "Firms, Markets and Transaction Cost Economics," Scottish Journal of Political Economy, Scottish Economic Society, vol. 38(1), pages 41-57, February.
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