Paul L. Robertson and Gianmario Verona
- Published in print:
- 2006
- Published Online:
- May 2006
- ISBN:
- 9780199290475
- eISBN:
- 9780191603495
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199290474.003.0008
- Subject:
- Economics and Finance, Economic Systems
This chapter explores the reciprocal relationship between technological innovation and the boundaries of the firm, and the paths in which firm boundaries might be expected to follow under different ...
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This chapter explores the reciprocal relationship between technological innovation and the boundaries of the firm, and the paths in which firm boundaries might be expected to follow under different circumstances. It argues that while one might follow Langlois (2003) in believing that there will be a tendency for large, vertically-integrated firms to become less common in the technological environment that is currently unfolding, other tendencies will also be afoot, leading to a spectrum of different types of inter- and intra-firm relationships. This includes the creation of new giant enterprises whose evolution in the early 20th century was described by Chandler (1962, 1977) as the imposition of a ‘visible hand’ to reduce uncertainties in market-based relationships.Less
This chapter explores the reciprocal relationship between technological innovation and the boundaries of the firm, and the paths in which firm boundaries might be expected to follow under different circumstances. It argues that while one might follow Langlois (2003) in believing that there will be a tendency for large, vertically-integrated firms to become less common in the technological environment that is currently unfolding, other tendencies will also be afoot, leading to a spectrum of different types of inter- and intra-firm relationships. This includes the creation of new giant enterprises whose evolution in the early 20th century was described by Chandler (1962, 1977) as the imposition of a ‘visible hand’ to reduce uncertainties in market-based relationships.
Franco Malerba, Richard Nelson, Luigi Orsenigo, and Sidney Winter
- Published in print:
- 2006
- Published Online:
- May 2006
- ISBN:
- 9780199290475
- eISBN:
- 9780191603495
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199290474.003.0007
- Subject:
- Economics and Finance, Economic Systems
This chapter analyzes the changing boundaries of firms in terms of vertical integration and dis-integration (specialization) in dynamic and uncertain technological and market environments. In ...
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This chapter analyzes the changing boundaries of firms in terms of vertical integration and dis-integration (specialization) in dynamic and uncertain technological and market environments. In particular, it addresses the question of stability and change in firms’ decisions to ‘make or buy’ in contexts characterized by periods of technological revolutions punctuating periods of relative technological stability and smooth technical progress. The chapter is inspired by the case of the computer and semiconductor industries, and proposes the building blocks of a model in the ‘history-friendly’ style, showing how alternative dynamics of demand and technical change might generate profoundly different patterns of evolution in the two industries. The main argument proposed concerns the role of co-evolution in the upstream and downstream industries in explaining the changing boundaries of firms.Less
This chapter analyzes the changing boundaries of firms in terms of vertical integration and dis-integration (specialization) in dynamic and uncertain technological and market environments. In particular, it addresses the question of stability and change in firms’ decisions to ‘make or buy’ in contexts characterized by periods of technological revolutions punctuating periods of relative technological stability and smooth technical progress. The chapter is inspired by the case of the computer and semiconductor industries, and proposes the building blocks of a model in the ‘history-friendly’ style, showing how alternative dynamics of demand and technical change might generate profoundly different patterns of evolution in the two industries. The main argument proposed concerns the role of co-evolution in the upstream and downstream industries in explaining the changing boundaries of firms.
Eric W. Orts
- Published in print:
- 2013
- Published Online:
- September 2013
- ISBN:
- 9780199670918
- eISBN:
- 9780191749599
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199670918.001.0001
- Subject:
- Business and Management, Organization Studies
This book explains the legal structure of business firms as they operate in the world today. It describes the legal foundations or “matrix” from which all firms are built, managed, and governed. The ...
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This book explains the legal structure of business firms as they operate in the world today. It describes the legal foundations or “matrix” from which all firms are built, managed, and governed. The legal theory of the firm presented here provides a counterweight to the currently dominant economic approaches to understanding firms. The book describes how business enterprises work, the laws governing them, and how they change over time in terms of their institutional purposes and values. Basic legal ideas emphasized in the book include the “real fictions” of firms, the role of constructed “entities,” and the recognition of firms as “persons.” Other foundations of the firm include agency law, organizational contracts, and private property—and an appreciation of how these legal elements fit together to compose the “business persons” of modern firms. An institutional legal theory of the firm is developed that embraces both the “bottom-up” perspective of business participants and the “top-down” rule-setting perspective of government. The book discusses the important feature of limited liability of both firms themselves and participants in them, as well as the shifting legal boundaries of firms in different circumstances. A typology of different kinds of firms is presented ranging from entrepreneurial one-person start-ups to complex corporate groups. New forms of hybrid social enterprises are also reviewed. Practical applications include recommendations about two contemporary problems: executive compensation and rights of political speech of business corporations highlighted in the landmark Citizens United case.Less
This book explains the legal structure of business firms as they operate in the world today. It describes the legal foundations or “matrix” from which all firms are built, managed, and governed. The legal theory of the firm presented here provides a counterweight to the currently dominant economic approaches to understanding firms. The book describes how business enterprises work, the laws governing them, and how they change over time in terms of their institutional purposes and values. Basic legal ideas emphasized in the book include the “real fictions” of firms, the role of constructed “entities,” and the recognition of firms as “persons.” Other foundations of the firm include agency law, organizational contracts, and private property—and an appreciation of how these legal elements fit together to compose the “business persons” of modern firms. An institutional legal theory of the firm is developed that embraces both the “bottom-up” perspective of business participants and the “top-down” rule-setting perspective of government. The book discusses the important feature of limited liability of both firms themselves and participants in them, as well as the shifting legal boundaries of firms in different circumstances. A typology of different kinds of firms is presented ranging from entrepreneurial one-person start-ups to complex corporate groups. New forms of hybrid social enterprises are also reviewed. Practical applications include recommendations about two contemporary problems: executive compensation and rights of political speech of business corporations highlighted in the landmark Citizens United case.
Eric W Orts
- Published in print:
- 2013
- Published Online:
- September 2013
- ISBN:
- 9780199670918
- eISBN:
- 9780191749599
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199670918.003.0007
- Subject:
- Business and Management, Organization Studies
This chapter examines the legal boundaries of the firm, which shift depending on questions that are asked (an organizational version of the “uncertainty principle”). The legal boundaries of firms ...
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This chapter examines the legal boundaries of the firm, which shift depending on questions that are asked (an organizational version of the “uncertainty principle”). The legal boundaries of firms refer to the management and regulation of firms both internally and externally. From an internal perspective, the setting and exercise of legal rules allow for the self-governance of most business firms. From an external perspective, different legal rules or “choice architectures” may prohibit or encourage particular behaviors of firms and their participants. These internal and external perspectives correspond to the “bottom-up” and “top-down” perspectives described in previous chapters. Considerable variation is possible with respect to the management and regulation of the boundaries of the firm. Managers and policy makers may choose to advance different objectives and values when addressing issues concerning the boundaries of the firm.Less
This chapter examines the legal boundaries of the firm, which shift depending on questions that are asked (an organizational version of the “uncertainty principle”). The legal boundaries of firms refer to the management and regulation of firms both internally and externally. From an internal perspective, the setting and exercise of legal rules allow for the self-governance of most business firms. From an external perspective, different legal rules or “choice architectures” may prohibit or encourage particular behaviors of firms and their participants. These internal and external perspectives correspond to the “bottom-up” and “top-down” perspectives described in previous chapters. Considerable variation is possible with respect to the management and regulation of the boundaries of the firm. Managers and policy makers may choose to advance different objectives and values when addressing issues concerning the boundaries of the firm.
Lalita Som
- Published in print:
- 2014
- Published Online:
- December 2014
- ISBN:
- 9780199452736
- eISBN:
- 9780199084548
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199452736.003.0011
- Subject:
- Economics and Finance, Behavioural Economics
This chapter uses the concepts of human capital, social capital, and institutional capital to explain the existence of the firm and boundaries of the firm. In addition, it provides a brief literature ...
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This chapter uses the concepts of human capital, social capital, and institutional capital to explain the existence of the firm and boundaries of the firm. In addition, it provides a brief literature review of the existing studies on the theory of the firm.Less
This chapter uses the concepts of human capital, social capital, and institutional capital to explain the existence of the firm and boundaries of the firm. In addition, it provides a brief literature review of the existing studies on the theory of the firm.
Eric W Orts
- Published in print:
- 2013
- Published Online:
- September 2013
- ISBN:
- 9780199670918
- eISBN:
- 9780191749599
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199670918.003.0001
- Subject:
- Business and Management, Organization Studies
The introduction discusses the role of law in the social recognition, conceptual definition, and historical evolution of business enterprises, also known as firms. It describes firms as social ...
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The introduction discusses the role of law in the social recognition, conceptual definition, and historical evolution of business enterprises, also known as firms. It describes firms as social institutions evolving in a global historical context. Law distinguishes firms from other institutions (such as charities and nation-states). Law also enables business participants to construct internal authority structures. Governments use law to set the external “rules of the game” for firms in terms of their management, financing, and legal liability. After outlining the chapters of the book, the introduction describes the overall project as both “conservative” in the sense of recovering forgotten foundational knowledge about business firms and “progressive” in the sense of emphasizing the considerable flexibility available for business participants as well as governments with respect to the objectives, purposes, and values of firms.Less
The introduction discusses the role of law in the social recognition, conceptual definition, and historical evolution of business enterprises, also known as firms. It describes firms as social institutions evolving in a global historical context. Law distinguishes firms from other institutions (such as charities and nation-states). Law also enables business participants to construct internal authority structures. Governments use law to set the external “rules of the game” for firms in terms of their management, financing, and legal liability. After outlining the chapters of the book, the introduction describes the overall project as both “conservative” in the sense of recovering forgotten foundational knowledge about business firms and “progressive” in the sense of emphasizing the considerable flexibility available for business participants as well as governments with respect to the objectives, purposes, and values of firms.
Lionel Fontagné and Aurélien D’Isanto
- Published in print:
- 2017
- Published Online:
- April 2017
- ISBN:
- 9780198779162
- eISBN:
- 9780191824333
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780198779162.003.0007
- Subject:
- Economics and Finance, Macro- and Monetary Economics
Chapter 6 by Fontagné and D’Isanto focuses on which core competence to retain within the firm and what to outsource or offshore. Using a 2012 fragmentation survey of global value chains in fifteen ...
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Chapter 6 by Fontagné and D’Isanto focuses on which core competence to retain within the firm and what to outsource or offshore. Using a 2012 fragmentation survey of global value chains in fifteen European countries, they focus on 28,000 firms located in France with over 50 employees in 2008, belonging to industry, trade, and non-financial services sectors. This rich data reveals the strategic choices made by firms to perform activities within the firm, in France, or abroad (offshoring). The chapter identifies why leading firms decide not to offshore certain activities, and considers the consequences for employment of firms’ offshoring strategies. Reasons for offshoring conform to the usual theories addressing the boundaries of multinational firms: transport, transaction, and information costs are important barriers to offshoring. Strategic segments of the value chain, when offshored, are kept within the firm's boundaries due to potential problems of incomplete contracts. Offshoring firms are shown to be larger, confirming that in cases of incomplete contracts, only the largest and most efficient firms benefit from offshoring.Less
Chapter 6 by Fontagné and D’Isanto focuses on which core competence to retain within the firm and what to outsource or offshore. Using a 2012 fragmentation survey of global value chains in fifteen European countries, they focus on 28,000 firms located in France with over 50 employees in 2008, belonging to industry, trade, and non-financial services sectors. This rich data reveals the strategic choices made by firms to perform activities within the firm, in France, or abroad (offshoring). The chapter identifies why leading firms decide not to offshore certain activities, and considers the consequences for employment of firms’ offshoring strategies. Reasons for offshoring conform to the usual theories addressing the boundaries of multinational firms: transport, transaction, and information costs are important barriers to offshoring. Strategic segments of the value chain, when offshored, are kept within the firm's boundaries due to potential problems of incomplete contracts. Offshoring firms are shown to be larger, confirming that in cases of incomplete contracts, only the largest and most efficient firms benefit from offshoring.
Sunyoung Leih, Greg Linden, and David J. Teece
- Published in print:
- 2015
- Published Online:
- April 2015
- ISBN:
- 9780198701873
- eISBN:
- 9780191771606
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780198701873.003.0002
- Subject:
- Business and Management, Innovation, Strategy
Dynamic capabilities are deeply enmeshed with business model innovation and implementation. They reside partly in the collective learning and culture of the organization as well as in the ...
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Dynamic capabilities are deeply enmeshed with business model innovation and implementation. They reside partly in the collective learning and culture of the organization as well as in the entrepreneurial skill of the top management team. Entrepreneurial managers bear the primary responsibility for recognizing the need for business model change, for adjusting or inventing business models, for orchestrating the necessary assets, and, more generally, for (re)structuring the organization when,needed. The top management team is also responsible for strategy formulation, which is separate from, but related to, dynamic capabilities. The organization’s structure, incentives, and culture can, in turn, be more or less well suited to the recognition of new opportunities and the implementation of new structures that are integral to the dynamic capabilities of the firm. The design of new business models requires attention to balancing customer needs and technological possibilities consistent with an overarching logic of organization.Less
Dynamic capabilities are deeply enmeshed with business model innovation and implementation. They reside partly in the collective learning and culture of the organization as well as in the entrepreneurial skill of the top management team. Entrepreneurial managers bear the primary responsibility for recognizing the need for business model change, for adjusting or inventing business models, for orchestrating the necessary assets, and, more generally, for (re)structuring the organization when,needed. The top management team is also responsible for strategy formulation, which is separate from, but related to, dynamic capabilities. The organization’s structure, incentives, and culture can, in turn, be more or less well suited to the recognition of new opportunities and the implementation of new structures that are integral to the dynamic capabilities of the firm. The design of new business models requires attention to balancing customer needs and technological possibilities consistent with an overarching logic of organization.