Roundtable discussion: The Theory of the Firm in Business Administration: Challenges and Opportuniti

1
Roundtable discussion The Theory of the Firm
in Business Administration Challenges and
Opportunities

• Nicolai Foss, Peter Klein, Joseph Mahoney

2
Econ-ToF Bashing

• Thriving industry.
• Traditional incumbents Heterodox economists and
  sociologists.
• Management scholars are more recent entrants.
• Charles Perrow. 1986. Complex Organizations.
• Ghoshal and Moran 1996, AMR.
• Lex Donaldsson. 1995. American Anti-Management
  Theories of Organization.
• Many critical papers in AMR, ASQ, Org Studies.

3
Critical Issues

• Cognition and motivation?
• Process issues (including efficiency)?
• Formal and informal relations and organization?
• Discrete Structural Alternatives?
• Firm heterogeneity and capabilities?
• How much does econ-ToF tell us about management?
• Power?
• Etc.

4
A General Model of Social Science Explanation
Social facts (e.g., institutions)
4
Social outcomes
?
?
macro
1
3
micro
?
?
Individual action
Conditions of individual action
2
Source James Coleman 1990 Foundations of Social
Theory
5
The Explanatory Structure of TCE
Shift parameters
4
Governance structures
?
?
macro
1
3
micro
?
?

• Individual action
• Opportunism
• Bounded rationality

Asset spec. Frequency Uncertainty
2
6
The Explanatory Structure of TCE
Shift parameters
4
Governance structures
?
?
macro
1
3
micro
?
?

• Individual action
• Opportunism
• Bounded rationality

Asset spec. Frequency Uncertainty
2

• Cognitive and
• motivational issues

7
The Explanatory Structure of TCE
Shift parameters
4
Governance structures
?
?
macro
Process issues (including efficiency)
1
3
micro
?
?

• Individual action
• Opportunism
• Bounded rationality

Asset spec. Frequency Uncertainty
2
8
The Explanatory Structure of TCE
Shift parameters
4
Governance structures
?
?
macro

• Formal and informal relations and organization?

1
3
micro
?
?

• Individual action
• Opportunism
• Bounded rationality

Asset spec. Frequency Uncertainty
2
9

• Discrete Structural Alternatives?

The Explanatory Structure of TCE
Shift parameters
4
Governance structures
?
?
macro
1
3
micro
?
?

• Individual action
• Opportunism
• Bounded rationality

Asset spec. Frequency Uncertainty
2
10

• Firm hetero-geneity and capabilities?

The Explanatory Structure of TCE
Shift parameters
4
Governance structures
?
?
macro
1
3
micro
?
?

• Individual action
• Opportunism
• Bounded rationality

Asset spec. Frequency Uncertainty
2