The Objective, Nature and Essence of the Firm: An Alternative Integration

    Publikation: Working paperForskning

    1 Downloads (Pure)

    Resumé

    In a recent article in European Management Review, Pitelis and Teece (2009) argue that extant explanations of the nature and scope of firms, such as transaction costs, property rights, metering team production, and resource-based, can be integrated into a more general (capability-based) theory of the firm. Despite acknowledging their account offers new insights on the issue, I am critical of their claim that the (dynamic) capability-based perspective can integrate the existing theories, which they in fact have failed to substantiate for three reasons. Firstly, they downplay the role of opportunism and simply categorize it as a kind of market failure, which they suspect its explanatory power. Secondly, their account is entrepreneur-centric, ignoring the role of employees in the formation of the firm, a problem they see in the transaction cost theory but nevertheless fail to address themselves. Thirdly, their critique of the market-failure-based explanation is problematic. I briefly introduce my own relationship-based theory as an alternative integration of the existing theories.
    OriginalsprogEngelsk
    Udgivelses stedFrederiksberg
    UdgiverDepartment of International Economics and Management, Copenhagen Business School
    Antal sider8
    StatusUdgivet - 2010

    Emneord

    • Theory of the Firm
    • Integration
    • Opportunism
    • Optimism
    • Relationship
    • Harmony

    Citer dette

    Li, X. (2010). The Objective, Nature and Essence of the Firm: An Alternative Integration. Frederiksberg: Department of International Economics and Management, Copenhagen Business School.
    Li, Xin. / The Objective, Nature and Essence of the Firm : An Alternative Integration. Frederiksberg : Department of International Economics and Management, Copenhagen Business School, 2010.
    @techreport{255f36e06d5c11df958f000ea68e967b,
    title = "The Objective, Nature and Essence of the Firm: An Alternative Integration",
    abstract = "In a recent article in European Management Review, Pitelis and Teece (2009) argue that extant explanations of the nature and scope of firms, such as transaction costs, property rights, metering team production, and resource-based, can be integrated into a more general (capability-based) theory of the firm. Despite acknowledging their account offers new insights on the issue, I am critical of their claim that the (dynamic) capability-based perspective can integrate the existing theories, which they in fact have failed to substantiate for three reasons. Firstly, they downplay the role of opportunism and simply categorize it as a kind of market failure, which they suspect its explanatory power. Secondly, their account is entrepreneur-centric, ignoring the role of employees in the formation of the firm, a problem they see in the transaction cost theory but nevertheless fail to address themselves. Thirdly, their critique of the market-failure-based explanation is problematic. I briefly introduce my own relationship-based theory as an alternative integration of the existing theories.",
    keywords = "Theory of the Firm, Integration, Opportunism, Optimism, Relationship, Harmony, Theory of the Firm, Integration, Opportunism, Optimism, Relationship, Harmony",
    author = "Xin Li",
    year = "2010",
    language = "English",
    publisher = "Department of International Economics and Management, Copenhagen Business School",
    type = "WorkingPaper",
    institution = "Department of International Economics and Management, Copenhagen Business School",

    }

    Li, X 2010 'The Objective, Nature and Essence of the Firm: An Alternative Integration' Department of International Economics and Management, Copenhagen Business School, Frederiksberg.

    The Objective, Nature and Essence of the Firm : An Alternative Integration. / Li, Xin.

    Frederiksberg : Department of International Economics and Management, Copenhagen Business School, 2010.

    Publikation: Working paperForskning

    TY - UNPB

    T1 - The Objective, Nature and Essence of the Firm

    T2 - An Alternative Integration

    AU - Li, Xin

    PY - 2010

    Y1 - 2010

    N2 - In a recent article in European Management Review, Pitelis and Teece (2009) argue that extant explanations of the nature and scope of firms, such as transaction costs, property rights, metering team production, and resource-based, can be integrated into a more general (capability-based) theory of the firm. Despite acknowledging their account offers new insights on the issue, I am critical of their claim that the (dynamic) capability-based perspective can integrate the existing theories, which they in fact have failed to substantiate for three reasons. Firstly, they downplay the role of opportunism and simply categorize it as a kind of market failure, which they suspect its explanatory power. Secondly, their account is entrepreneur-centric, ignoring the role of employees in the formation of the firm, a problem they see in the transaction cost theory but nevertheless fail to address themselves. Thirdly, their critique of the market-failure-based explanation is problematic. I briefly introduce my own relationship-based theory as an alternative integration of the existing theories.

    AB - In a recent article in European Management Review, Pitelis and Teece (2009) argue that extant explanations of the nature and scope of firms, such as transaction costs, property rights, metering team production, and resource-based, can be integrated into a more general (capability-based) theory of the firm. Despite acknowledging their account offers new insights on the issue, I am critical of their claim that the (dynamic) capability-based perspective can integrate the existing theories, which they in fact have failed to substantiate for three reasons. Firstly, they downplay the role of opportunism and simply categorize it as a kind of market failure, which they suspect its explanatory power. Secondly, their account is entrepreneur-centric, ignoring the role of employees in the formation of the firm, a problem they see in the transaction cost theory but nevertheless fail to address themselves. Thirdly, their critique of the market-failure-based explanation is problematic. I briefly introduce my own relationship-based theory as an alternative integration of the existing theories.

    KW - Theory of the Firm

    KW - Integration

    KW - Opportunism

    KW - Optimism

    KW - Relationship

    KW - Harmony

    KW - Theory of the Firm

    KW - Integration

    KW - Opportunism

    KW - Optimism

    KW - Relationship

    KW - Harmony

    M3 - Working paper

    BT - The Objective, Nature and Essence of the Firm

    PB - Department of International Economics and Management, Copenhagen Business School

    CY - Frederiksberg

    ER -

    Li X. The Objective, Nature and Essence of the Firm: An Alternative Integration. Frederiksberg: Department of International Economics and Management, Copenhagen Business School. 2010.