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Strategy and structure in interaction: What determines the boundaries of the firm?

Author

Listed:
  • Staffan Canback

    (Henley Management College)

  • Phillip Samouel

    (Kingston Business School)

  • David Price

    (Henley Management College)

Abstract

This paper analyzes empirically the boundaries of the firm based on Williamson's perspective on what determines firm size. It uses firm performance (risk-adjusted profitability and growth) as dependent variable; and firm organization, diseconomies of scale (atmospheric consequences, bureaucratic insularity, incentive limits, and communication distortion), economies of scale, and asset specificity as independent variables in a structural equation model. Data were collected from the 784 largest US manufacturing firms in 1998. The results confirm Williamson's framework and show that strategy and structure interact concurrently to determine the boundary of the firm.

Suggested Citation

  • Staffan Canback & Phillip Samouel & David Price, 2003. "Strategy and structure in interaction: What determines the boundaries of the firm?," Industrial Organization 0303003, University Library of Munich, Germany, revised 17 Mar 2003.
    • Handle: RePEc:wpa:wuwpio:0303003
    Note: Type of Document - Acrobat PDF; pages: 7; figures: included
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    References listed on IDEAS

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    Cited by:

    1. Vidal Vieira, José Geraldo & Fransoo, Jan C., 2015. "How logistics performance of freight operators is affected by urban freight distribution issues," Transport Policy, Elsevier, vol. 44(C), pages 37-47.

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    More about this item

    Keywords

    transaction cost economics;

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior

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